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SF 3554

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/10/2022 10:01am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to education finance; increasing long-term facilities maintenance revenue;
increasing local optional revenue; providing enhanced debt service equalization
aid for consolidating school districts; reducing school district property taxes;
increasing equalization aids for school formulas; appropriating money; amending
Minnesota Statutes 2020, sections 123B.53, subdivisions 4, 5, 6; 123B.535;
123B.595, subdivisions 1, 2, 3, 7, 8; 126C.17, subdivisions 5, 6, 7; 126C.40,
subdivision 1; Minnesota Statutes 2021 Supplement, section 126C.10, subdivision
2e.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 123B.53, subdivision 4, is amended to read:


Subd. 4.

Debt service equalization revenue.

(a) The debt service equalization revenue
of a district equals the sum of the first tier debt service equalization revenue and the second
tier debt service equalization revenue.

(b) The first tier debt service equalization revenue of a district equals the deleted text begingreater of zero
or
deleted text endnew text begin lesser ofnew text end thenew text begin district'snew text end eligible debt service revenue deleted text beginminus the amount raised by a levy of
15.74
deleted text endnew text begin or tennew text end percent times the adjusted net tax capacity of the district deleted text beginminus the second tier
debt service equalization revenue of the district
deleted text end.

(c) The second tier debt service equalization revenue of a district equals the greater of
zero or the eligible debt service revenue, minus the deleted text beginamount raised by a levy of 26.24 percent
times the adjusted net tax capacity of the district
deleted text endnew text begin district's first tier of debt service equalization
revenue
new text end.

(d) Notwithstanding paragraphs (b) and (c), for a district with a capital loan under sections
126C.60 to 126C.72, the first tier debt equalization revenue equals zero, and the second tier
debt equalization revenue equals the portion of the district's eligible debt service levy under
subdivision 2 in excess of the district's maximum effort debt service levy under section
126C.63, subdivision 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 2.

Minnesota Statutes 2020, section 123B.53, subdivision 5, is amended to read:


Subd. 5.

Equalized debt service levy.

(a) The equalized debt service levy of a district
equals the sum of the first tier deleted text beginequalizeddeleted text end debt service levy and the second tier equalized debt
service levy.

(b) A district's first tier deleted text beginequalizeddeleted text end debt service levy equals the district's first tier debt
service equalization revenue deleted text begintimes the lesser of one or the ratio of:deleted text endnew text begin.
new text end

deleted text begin (1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to
deleted text end

deleted text begin (2) $3,400 in fiscal year 2016, $4,430 in fiscal year 2017, and the greater of $4,430 or
55.33 percent of the initial equalizing factor in fiscal year 2018 and later.
deleted text end

(c) A district's second tier equalized debt service levy equals the district's second tier
debt service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to

(2) deleted text begin$8,000 in fiscal years 2016 and 2017, and the greater of $8,000 ordeleted text end 100 percent of
the initial equalizing factor deleted text beginin fiscal year 2018 and laterdeleted text end.

(d) For the purposes of this subdivision, the initial equalizing factor equals the quotient
derived by dividing the total adjusted net tax capacity of all school districts in the state for
the year before the year the levy is certified by the total number of adjusted pupil units in
all school districts in the state in the year before the year the levy is certified.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 3.

Minnesota Statutes 2020, section 123B.53, subdivision 6, is amended to read:


Subd. 6.

Debt service equalization aid.

deleted text begin(a)deleted text end A district's debt service equalization aid deleted text beginis
the sum of the district's first tier debt service equalization aid and the district's second tier
debt service equalization aid.
deleted text end

deleted text begin (b) A district's first tier debt service equalization aid equals the difference between the
district's first tier debt service equalization revenue and the district's first tier equalized debt
service levy.
deleted text end

deleted text begin (c) A district's second tier debt service equalization aiddeleted text end equals the difference between
the district's second tier debt service equalization revenue and the district's second tier
equalized debt service levy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 4.

Minnesota Statutes 2020, section 123B.535, is amended to read:


123B.535 deleted text beginNATURAL DISASTERdeleted text endnew text begin ENHANCEDnew text end DEBT SERVICE
EQUALIZATION.

Subdivision 1.

Definitionsnew text begin; eligibilitynew text end.

(a) For purposes of this section, the eligible
deleted text begin natural disasterdeleted text endnew text begin enhancednew text end debt service revenue of a district is defined as the amount needed
to produce between five and six percent in excess of the amount needed to meet when due
the principal and interest payments on the obligations of the district new text beginissued under paragraphs
(b) and (c)
new text endthat would otherwise qualify under section 123B.53 deleted text beginunder the following
conditions:
deleted text endnew text begin.
new text end

new text begin (b) A district that has been negatively affected by a natural disaster qualifies for enhanced
debt service equalization under this section if:
new text end

(1) the district was impacted by a natural disaster event or area occurring January 1,
2005, or later, as declared by the President of the United States of America, which is eligible
for Federal Emergency Management Agency payments;

(2) the natural disaster caused $500,000 or more in damages to school district buildings;
and

(3) the repair and replacement costs are not covered by insurance payments or Federal
Emergency Management Agency payments.

new text begin (c) A district that consolidates on or after July 1, 2022, with an approved consolidation
plat and plan under section 123A.48, is eligible for enhanced debt service equalization under
this section if that plan identifies construction projects that have received a positive review
and comment.
new text end

deleted text begin (b)deleted text endnew text begin (d)new text end For purposes of this section, the adjusted net tax capacity equalizing factor equals
the quotient derived by dividing the total adjusted net tax capacity of all school districts in
the state for the year before the year the levy is certified by the total number of adjusted
pupil units in the state for the year prior to the year the levy is certified.

deleted text begin (c)deleted text endnew text begin (e)new text end For purposes of this section, the adjusted net tax capacity determined according
to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
generally exempted from ad valorem taxes under section 272.02, subdivision 64.

Subd. 2.

Notification.

A district eligible for deleted text beginnatural disasterdeleted text endnew text begin enhancednew text end debt service
equalization revenue under subdivision 1 must notify the commissioner of the amount of
its intended deleted text beginnatural disasterdeleted text endnew text begin enhancednew text end debt service revenue calculated under subdivision 1
for all bonds sold prior to the notification by July 1 of the calendar year the levy is certifiednew text begin,
or for a district newly consolidated as of July 1 of the calendar year, by September 30 of
the calendar year the levy is certified
new text end.

Subd. 3.

deleted text beginNatural disasterdeleted text endnew text begin Enhancednew text end debt service equalization revenue.

The debt
service equalization revenue of a district equals the greater of zero or the eligible debt service
revenue, minus the greater of zero or the difference between:

(1) the amount raised by a levy of ten percent times the adjusted net tax capacity of the
district; and

(2) the district's eligible debt service revenue under section 123B.53.

Subd. 4.

Equalized deleted text beginnatural disasterdeleted text endnew text begin enhancednew text end debt service levy.

A district's equalized
deleted text begin natural disasterdeleted text endnew text begin enhancednew text end debt service levy equals the district's deleted text beginnatural disasterdeleted text endnew text begin enhancednew text end
debt service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to

(2) 300 percent of the statewide adjusted net tax capacity equalizing factor.

Subd. 5.

deleted text beginNatural disasterdeleted text endnew text begin Enhancednew text end debt service equalization aid.

A district's deleted text beginnatural
disaster
deleted text endnew text begin enhancednew text end debt service equalization aid equals the difference between the district's
deleted text begin natural disasterdeleted text endnew text begin enhancednew text end debt service equalization revenue and the district's equalized
deleted text begin natural disasterdeleted text endnew text begin enhancednew text end debt service levy.

Subd. 6.

deleted text beginNatural disasterdeleted text endnew text begin Enhancednew text end debt service equalization aid payment
schedule.

new text beginEnhanced new text enddebt service equalization aid must be paid according to section 127A.45,
subdivision 10
.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2020, section 123B.595, subdivision 1, is amended to read:


Subdivision 1.

Long-term facilities maintenance revenue.

deleted text begin (a) For fiscal year 2017
only, long-term facilities maintenance revenue equals the greater of (1) the sum of (i) $193
times the district's adjusted pupil units times the lesser of one or the ratio of the district's
average building age to 35 years, plus the cost approved by the commissioner for indoor
air quality, fire alarm and suppression, and asbestos abatement projects under section
123B.57, subdivision 6, with an estimated cost of $100,000 or more per site, plus (ii) for a
school district with an approved voluntary prekindergarten program under section 124D.151,
the cost approved by the commissioner for remodeling existing instructional space to
accommodate prekindergarten instruction, or (2) the sum of (i) the amount the district would
have qualified for under Minnesota Statutes 2014, section 123B.57, Minnesota Statutes
2014, section 123B.59, and Minnesota Statutes 2014, section 123B.591, and (ii) for a school
district with an approved voluntary prekindergarten program under section 124D.151, the
cost approved by the commissioner for remodeling existing instructional space to
accommodate prekindergarten instruction.
deleted text end

deleted text begin (b) For fiscal year 2018 only, long-term facilities maintenance revenue equals the greater
of (1) the sum of (i) $292 times the district's adjusted pupil units times the lesser of one or
the ratio of the district's average building age to 35 years, plus (ii) the cost approved by the
commissioner for indoor air quality, fire alarm and suppression, and asbestos abatement
projects under section 123B.57, subdivision 6, with an estimated cost of $100,000 or more
per site, plus (iii) for a school district with an approved voluntary prekindergarten program
under section 124D.151, the cost approved by the commissioner for remodeling existing
instructional space to accommodate prekindergarten instruction, or (2) the sum of (i) the
amount the district would have qualified for under Minnesota Statutes 2014, section 123B.57,
Minnesota Statutes 2014, section 123B.59, and Minnesota Statutes 2014, section 123B.591,
and (ii) for a school district with an approved voluntary prekindergarten program under
section 124D.151, the cost approved by the commissioner for remodeling existing
instructional space to accommodate prekindergarten instruction.
deleted text end

new text begin (a) A school district's long-term facilities maintenance allowance equals $380 for fiscal
year 2022, $500 for fiscal year 2023, and for fiscal years 2024 and later, $500 times the
inflationary factor established in paragraph (b).
new text end

new text begin (b) The long-term facilities maintenance inflationary factor equals one plus the percentage
change in the Consumer Price Index for urban consumers, as prepared by the United States
Bureau of Labor Statistics, for the current fiscal year to fiscal year 2023.
new text end

(c) deleted text beginFor fiscal year 2019 and later,deleted text end Long-term facilities maintenance revenue equals the
greater of (1) the sum of (i) deleted text begin$380deleted text endnew text begin the long-term facilities maintenance allowancenew text end times the
district's adjusted pupil units times the lesser of one or the ratio of the district's average
building age to 35 years, plus (ii) the cost approved by the commissioner for indoor air
quality, fire alarm and suppression, and asbestos abatement projects under section 123B.57,
subdivision 6
, with an estimated cost of $100,000 or more per site, plus (iii) for a school
district with an approved voluntary prekindergarten program under section 124D.151, the
cost approved by the commissioner for remodeling existing instructional space to
accommodate prekindergarten instruction, or (2) the sum of (i) the amount the district would
have qualified for under Minnesota Statutes 2014, section 123B.57, Minnesota Statutes
2014, section 123B.59, and Minnesota Statutes 2014, section 123B.591, and (ii) for a school
district with an approved voluntary prekindergarten program under section 124D.151, the
cost approved by the commissioner for remodeling existing instructional space to
accommodate prekindergarten instruction.

(d) Notwithstanding paragraphs (a), (b), and (c), a school district that qualified for
eligibility under Minnesota Statutes 2014, section 123B.59, subdivision 1, paragraph (a),
for fiscal year 2010 remains eligible for funding under this section as a district that would
have qualified for eligibility under Minnesota Statutes 2014, section 123B.59, subdivision
1, paragraph (a), for fiscal year 2017 and later.

Sec. 6.

Minnesota Statutes 2020, section 123B.595, subdivision 2, is amended to read:


Subd. 2.

Long-term facilities maintenance revenue for a charter school.

deleted text begin (a) For fiscal
year 2017 only, long-term facilities maintenance revenue for a charter school equals $34
times the adjusted pupil units.
deleted text end

deleted text begin (b) For fiscal year 2018 only, long-term facilities maintenance revenue for a charter
school equals $85 times the adjusted pupil units.
deleted text end

deleted text begin (c) For fiscal year 2019 and later,deleted text endnew text begin (a) A school'snew text end long-term facilities maintenance deleted text beginrevenue
for a charter school
deleted text endnew text begin allowancenew text end equals $132 new text beginfor fiscal year 2022, $174 for fiscal year 2023,
and for fiscal year 2024 and later, $174 times the inflationary factor established in subdivision
1, paragraph (b).
new text end

new text begin (b) A charter school's long-term facilities maintenance revenue equals its long-term
facilities allowance for that year
new text endtimes deleted text beginthedeleted text endnew text begin itsnew text end adjusted pupil unitsnew text begin for that yearnew text end.

Sec. 7.

Minnesota Statutes 2020, section 123B.595, subdivision 3, is amended to read:


Subd. 3.

Intermediate districts and other cooperative units.

new text begin(a) new text endUpon approval through
the adoption of a resolution by each member district school board of an intermediate district
or other cooperative deleted text beginunitsdeleted text endnew text begin unitnew text end under section 123A.24, subdivision 2, new text beginor a joint powers
district under section 471.59,
new text endand the approval of the commissioner of education, a school
district may include in its authority under this section a proportionate share of the long-term
maintenance costs of the intermediate district deleted text beginordeleted text endnew text begin,new text end cooperative unitnew text begin, or joint powers districtnew text end.
The cooperative unit new text beginor joint powers district new text endmay issue bonds to finance the project costs
or levy for the costsdeleted text begin,deleted text end using long-term maintenance revenue transferred from member districts
to make debt service payments or pay project costsnew text begin or, for leased facilities, pay the portion
of lease costs attributable to the amortized cost of long-term facilities maintenance projects
completed by the landlord
new text end. Authority under this subdivision is in addition to the authority
for individual district projects under subdivision 1.

new text begin (b) The resolution adopted under paragraph (a) may specify which member districts will
share the project costs under this subdivision, except that debt service payments for bonds
issued by a cooperative unit or joint powers district to finance long-term facilities
maintenance project costs must be the responsibility of all member districts.
new text end

Sec. 8.

Minnesota Statutes 2020, section 123B.595, subdivision 7, is amended to read:


Subd. 7.

Long-term facilities maintenance equalization revenue.

deleted text begin (a) For fiscal year
2017 only, a district's long-term facilities maintenance equalization revenue equals the lesser
of (1) $193 times the adjusted pupil units or (2) the district's revenue under subdivision 1.
deleted text end

deleted text begin (b) For fiscal year 2018 only, a district's long-term facilities maintenance equalization
revenue equals the lesser of (1) $292 times the adjusted pupil units or (2) the district's
revenue under subdivision 1.
deleted text end

deleted text begin (c) For fiscal year 2019 and later,deleted text endnew text begin (a)new text end A district's long-term facilities maintenance
equalization revenue equals the lesser of (1) deleted text begin$380deleted text endnew text begin the long-term facilities maintenance
allowance for that year
new text end times the adjusted pupil units new text beginfor that year new text endor (2) the district's revenue
under subdivision 1.

deleted text begin (d)deleted text endnew text begin (b)new text end Notwithstanding deleted text beginparagraphsdeleted text endnew text begin paragraphnew text end (a) deleted text beginto (c)deleted text end, a district's long-term facilities
maintenance equalization revenue must not be less than the lesser of the district's long-term
facilities maintenance revenue or the amount of aid the district received for fiscal year 2015
under section 123B.59, subdivision 6.

Sec. 9.

Minnesota Statutes 2020, section 123B.595, subdivision 8, is amended to read:


Subd. 8.

Long-term facilities maintenance equalized levy.

(a) deleted text beginFor fiscal year 2017
and later,
deleted text end A district's long-term facilities maintenance equalized levy equals the district's
long-term facilities maintenance equalization revenue minus the greater of:

(1) the lesser of the district's long-term facilities maintenance equalization revenue or
the amount of aid the district received for fiscal year 2015 under Minnesota Statutes 2014,
section 123B.59, subdivision 6; or

(2) the district's long-term facilities maintenance equalization revenue times the greater
of (i) zero or (ii) one minus the ratio of its adjusted net tax capacity per adjusted pupil unit
in the year preceding the year the levy is certified to deleted text begin123deleted text endnew text begin 125new text end percent of the state average
adjusted net tax capacity per adjusted pupil unit for all school districts in the year preceding
the year the levy is certified.

(b) For purposes of this subdivision, "adjusted net tax capacity" means the value described
in section 126C.01, subdivision 2, paragraph (b).

Sec. 10.

Minnesota Statutes 2021 Supplement, section 126C.10, subdivision 2e, is amended
to read:


Subd. 2e.

Local optional revenue.

(a) deleted text beginFor fiscal year 2021 and later,deleted text endnew text begin A school district'snew text end
local optional revenue deleted text beginfor a school districtdeleted text endnew text begin allowancenew text end equals deleted text beginthe sum of the district's first
tier local optional revenue and second tier local optional revenue. A district's first tier local
optional revenue equals $300
deleted text endnew text begin $724 for fiscal year 2022, $825 for fiscal year 2023, and for
fiscal year 2024 and later, $825 times the ratio of the general education basic formula
allowance for that year to $6,863.
new text end

new text begin (b) A school district's local optional revenue equals the local optional revenue allowance
for that year
new text end times the adjusted pupil units of the district for that school year. deleted text beginA district's
second tier local optional revenue equals $424 times the adjusted pupil units of the district
for that school year.
deleted text end

deleted text begin (b) For fiscal year 2021 and later, a district's local optional levy equals the sum of the
first tier local optional levy and the second tier local optional levy.
deleted text end

(c) A district's deleted text beginfirst tierdeleted text end local optional levy equals the district's deleted text beginfirst tierdeleted text end local optional
revenue times the lesser of one or the ratio of the district's referendum market value per
resident pupil unit to deleted text begin$880,000deleted text endnew text begin 150 percent of the local optional revenue equalizing factor
defined in paragraph (d)
new text end.

deleted text begin (d) For fiscal year 2022, a district's second tier local optional levy equals the district's
second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $510,000. For fiscal year 2023, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $548,842. For fiscal year 2024 and later, a district's second tier local optional levy equals
the district's second tier local optional revenue times the lesser of one or the ratio of the
district's referendum market value per resident pupil unit to $510,000.
deleted text end

new text begin (d) A district's local optional revenue equalizing factor equals the quotient derived by
dividing the referendum market value of all school districts in the state for the year before
the year the levy is certified by the total number of resident pupil units in all school districts
in the state in the year before the year the levy is certified.
new text end

(e) The local optional levy must be spread on referendum market value. A district may
levy less than the permitted amount.

(f) A district's local optional aid equals its local optional revenue minus its local optional
levy. If a district's actual levy for deleted text beginfirst or second tierdeleted text end local optional revenue is less than its
maximum levy limit deleted text beginfor that tierdeleted text end, its aid must be proportionately reduced.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2023 and later.
new text end

Sec. 11.

Minnesota Statutes 2020, section 126C.17, subdivision 5, is amended to read:


Subd. 5.

Referendum equalization revenue.

deleted text begin(a)deleted text end A district's referendum equalization
revenue equals the deleted text beginsum of the first tierdeleted text endnew text begin product of the district'snew text end referendum equalization
deleted text begin revenuedeleted text endnew text begin allowance under subdivision 1new text end and the deleted text beginsecond tier referendum equalization revenuedeleted text endnew text begin
district's adjusted pupil units for that year
new text end.

deleted text begin (b) A district's first tier referendum equalization revenue equals the district's first tier
referendum equalization allowance times the district's adjusted pupil units for that year.
deleted text end

deleted text begin (c) A district's first tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or $460.
deleted text end

deleted text begin (d) A district's second tier referendum equalization revenue equals the district's second
tier referendum equalization allowance times the district's adjusted pupil units for that year.
deleted text end

deleted text begin (e) A district's second tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or 25 percent of the formula allowance,
minus the sum of $300 and the district's first tier referendum equalization allowance.
deleted text end

deleted text begin (f) Notwithstanding paragraph (e), the second tier referendum allowance for a district
qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or elementary
sparsity revenue under section 126C.10, subdivision 8, equals the district's referendum
allowance under subdivision 1 minus the district's first tier referendum equalization
allowance.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 12.

Minnesota Statutes 2020, section 126C.17, subdivision 6, is amended to read:


Subd. 6.

Referendum equalization levy.

(a) A district's referendum equalization levy
equals deleted text beginthe sum of the first tier referendum equalization levy and the second tier referendum
equalization levy.
deleted text end

deleted text begin (b) A district's first tier referendum equalization levy equalsdeleted text end the district's deleted text beginfirst tierdeleted text end
referendum equalization revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to deleted text begin$567,000deleted text endnew text begin 125 percent of the operating
referendum market value equalizing factor
new text end.

deleted text begin (c) A district's second tier referendum equalization levy equals the district's second tier
referendum equalization revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $290,000.
deleted text end

new text begin (b) A district's operating referendum market value equalizing factor equals the quotient
derived by dividing the referendum market value of all school districts in the state for the
year before the year the levy is certified by the total number of resident pupil units in all
school districts in the state in the year before the year the levy is certified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 13.

Minnesota Statutes 2020, section 126C.17, subdivision 7, is amended to read:


Subd. 7.

Referendum equalization aid.

(a) A district's referendum equalization aid
equals the difference between its referendum equalization revenue and levy.

(b) If a district's actual levy for deleted text beginfirst or second tierdeleted text end referendum equalization revenue is
less than its maximum levy limit deleted text beginfor that tierdeleted text end, aid shall be proportionately reduced.

(c) Notwithstanding paragraph (a), the referendum equalization aid for a district must
not exceed: (1) 25 percent of the formula allowance deleted text beginminus $300deleted text end; times (2) the district's
adjusted pupil units. A district's referendum levy is increased by the amount of any reduction
in referendum aid under this paragraph.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 14.

Minnesota Statutes 2020, section 126C.40, subdivision 1, is amended to read:


Subdivision 1.

To lease building or land.

(a) When an independent or a special school
district or a group of independent or special school districts finds it economically
advantageous to rent or lease a building or land for any instructional purposes or for school
storage or furniture repair, and it determines that the operating capital revenue authorized
under section 126C.10, subdivision 13, is insufficient for this purpose, it may apply to the
commissioner for permission to make an additional capital expenditure levy for this purpose.
An application for permission to levy under this subdivision must contain financial
justification for the proposed levy, the terms and conditions of the proposed lease, and a
description of the space to be leased and its proposed use.

(b) The criteria for approval of applications to levy under this subdivision must include:
the reasonableness of the price, the appropriateness of the space to the proposed activity,
the feasibility of transporting pupils to the leased building or land, conformity of the lease
to the laws and rules of the state of Minnesota, and the appropriateness of the proposed
lease to the space needs and the financial condition of the district. The commissioner must
not authorize a levy under this subdivision in an amount greater than the cost to the district
of renting or leasing a building or land for approved purposes. The proceeds of this levy
must not be used for custodial or other maintenance services. A district may not levy under
this subdivision for the purpose of leasing or renting a district-owned building or site to
itself.

(c) For agreements finalized after July 1, 1997, a district may not levy under this
subdivision for the purpose of leasing: (1) a newly constructed building used primarily for
regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed
building addition or additions used primarily for regular kindergarten, elementary, or
secondary instruction that contains more than 20 percent of the square footage of the
previously existing building.

(d) Notwithstanding paragraph (b), a district may levy under this subdivision for the
purpose of leasing or renting a district-owned building or site to itself only if the amount is
needed by the district to make payments required by a lease purchase agreement, installment
purchase agreement, or other deferred payments agreement authorized by law, and the levy
meets the requirements of paragraph (c). A levy authorized for a district by the commissioner
under this paragraph may be in the amount needed by the district to make payments required
by a lease purchase agreement, installment purchase agreement, or other deferred payments
agreement authorized by law, provided that any agreement include a provision giving the
school districts the right to terminate the agreement annually without penalty.

(e) The total levy under this subdivision for a district for any year must not exceed $212
times the adjusted pupil units for the fiscal year to which the levy is attributable.

(f) For agreements for which a review and comment have been submitted to the
Department of Education after April 1, 1998, the term "instructional purpose" as used in
this subdivision excludes expenditures on stadiums.

(g) The commissioner of education may authorize a school district to exceed the limit
in paragraph (e) if the school district petitions the commissioner for approval. The
commissioner shall grant approval to a school district to exceed the limit in paragraph (e)
for not more than five years if the district meets the following criteria:

(1) the school district has been experiencing pupil enrollment growth in the preceding
five years;

(2) the purpose of the increased levy is in the long-term public interest;

(3) the purpose of the increased levy promotes colocation of government services; and

(4) the purpose of the increased levy is in the long-term interest of the district by avoiding
over construction of school facilities.

(h) A school district that is a member of an intermediate school district new text beginor other
cooperative unit under section 123A.24, subdivision 2, or a joint powers district under
section 471.59
new text endmay include in its authority under this section the costs associated with leases
of administrative and classroom space for deleted text beginintermediate school districtdeleted text end programsnew text begin of the
intermediate school district or other cooperative unit under section 123A.24, subdivision
2, or joint powers district under section 471.59
new text end. This authority must not exceed $65 times
the adjusted pupil units of the member districts. This authority is in addition to any other
authority authorized under this section.new text begin The intermediate school district, other cooperative
unit, or joint powers district may specify which member districts will levy for lease costs
under this paragraph.
new text end

deleted text begin (i) In addition to the allowable capital levies in paragraph (a), for taxes payable in 2012
to 2023, a district that is a member of the "Technology and Information Education Systems"
data processing joint board, that finds it economically advantageous to enter into a lease
agreement to finance improvements to a building and land for a group of school districts
or special school districts for staff development purposes, may levy for its portion of lease
costs attributed to the district within the total levy limit in paragraph (e). The total levy
authority under this paragraph shall not exceed $632,000.
deleted text end

deleted text begin (j)deleted text endnew text begin (i)new text end Notwithstanding paragraph (a), a district may levy under this subdivision for the
purpose of leasing administrative space if the district can demonstrate to the satisfaction of
the commissioner that the lease cost for the administrative space is no greater than the lease
cost for instructional space that the district would otherwise lease. The commissioner must
deny this levy authority unless the district passes a resolution stating its intent to lease
instructional space under this section if the commissioner does not grant authority under
this paragraph. The resolution must also certify that the lease cost for administrative space
under this paragraph is no greater than the lease cost for the district's proposed instructional
lease.

new text begin (j) Notwithstanding paragraph (a), a district may include in its levy under this subdivision
the district's proportionate share of deferred maintenance expenditures for a district-owned
building or site leased to a cooperative unit under section 123A.24, subdivision 2, or a joint
powers district under section 471.59 for any instructional purposes or for school storage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2024 and later.
new text end

Sec. 15. new text beginAPPROPRIATIONS.
new text end

new text begin (a) $....... in fiscal year 2023 is appropriated from the general fund to the Department of
Education for additional local optional revenue.
new text end

new text begin (b) $....... in fiscal year 2023 is appropriated from the general fund to the Department of
Education for additional long-term facilities maintenance aid.
new text end