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Minnesota Legislature

Office of the Revisor of Statutes

SF 403

as introduced - 91st Legislature (2019 - 2020) Posted on 01/24/2019 02:10pm

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 special education funding for school
districts; reducing the tuition billbacks to resident school districts; adding operating
referendum revenue to general education revenue for charter schools; appropriating
money;amending Minnesota Statutes 2018, sections 124E.20, subdivision 1;
124E.21, subdivision 3; 125A.76, subdivisions 1, 2a, 2c; 125A.79, subdivisions
1, 5; 127A.45, subdivision 13; 127A.47, subdivision 7.

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

Section 1.

Minnesota Statutes 2018, section 124E.20, subdivision 1, is amended to read:


Subdivision 1.

Revenue calculation.

(a) General education revenue must be paid to a
charter school as though it were a district. The general education revenue for each adjusted
pupil unit is the state average general education revenue per pupil unit, plus the referendum
deleted text begin equalization aid allowance in the pupil's district of residencedeleted text endnew text begin revenue per pupil unit for the
school district within which the charter school is located
new text end, minus an amount equal to the
product of the formula allowance according to section 126C.10, subdivision 2, times .0466,
calculated without declining enrollment revenue, local optional revenue, basic skills revenue,
extended time revenue, pension adjustment revenue, transition revenue, and transportation
sparsity revenue, plus declining enrollment revenue, basic skills revenue, pension adjustment
revenue, and transition revenue as though the school were a school district.

(b) For a charter school operating an extended day, extended week, or summer program,
the general education revenue in paragraph (a) is increased by an amount equal to 25 percent
of the statewide average extended time revenue per adjusted pupil unit.

(c) Notwithstanding paragraph (a), the general education revenue for an eligible special
education charter school as defined in section 124E.21, subdivision 2, equals the sum of
the amount determined under paragraph (a) and the school's unreimbursed cost as defined
in section 124E.21, subdivision 2, for educating students not eligible for special education
services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 2.

Minnesota Statutes 2018, section 124E.21, subdivision 3, is amended to read:


Subd. 3.

Special education aid for eligible special education charter schools.

(a)
Notwithstanding subdivision 1, the special education aid for an eligible special education
charter school equals the sum of the school's special education aid under subdivision 1,
paragraph (a), and the school's approved unreimbursed cost for educating students eligible
for special education services.

(b) The commissioner must review the budget data submitted by an eligible special
education charter school under subdivision 2 and notify the school of the approved
unreimbursed cost to be used for current aid payments within 30 days of receiving the budget
from the school.

deleted text begin (c) For purposes of section 127A.45, subdivision 13, the aid under this subdivision is
not subject to the 97.4 percent current fiscal year special education aid entitlement provision.
deleted text end

deleted text begin (d)deleted text endnew text begin (c)new text end Final aid payments must be calculated using the actual unreimbursed costs as
determined by the department based on year-end financial and student data submitted by
the charter school.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 3.

Minnesota Statutes 2018, section 125A.76, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section and section 125A.79,
the definitions in this subdivision apply.

(b) "Basic revenue" has the meaning given it in section 126C.10, subdivision 2. For the
purposes of computing basic revenue pursuant to this section, each child with a disability
shall be counted as prescribed in section 126C.05, subdivision 1.

(c) "Essential personnel" means teachers, cultural liaisons, related services, and support
services staff providing services to students. Essential personnel may also include special
education paraprofessionals or clericals providing support to teachers and students by
preparing paperwork and making arrangements related to special education compliance
requirements, including parent meetings and individualized education programs. Essential
personnel does not include administrators and supervisors.

(d) "Average daily membership" has the meaning given it in section 126C.05.

(e) "Program growth factor" means 1.046 for fiscal years 2012 through 2015, 1.0 for
fiscal year 2016, 1.046 for fiscal year 2017, and the product of 1.046 and the program growth
factor for the previous year for fiscal year 2018 and later.

(f) "Nonfederal special education expenditure" means all direct expenditures that are
necessary and essential to meet the district's obligation to provide special instruction and
services to children with a disability according to sections 124D.454, 125A.03 to 125A.24,
125A.259 to 125A.48, and 125A.65 as submitted by the district and approved by the
department under section 125A.75, subdivision 4, excluding expenditures:

(1) reimbursed with federal funds;

(2) reimbursed with other state aids under this chapter;

(3) for general education costs of serving students with a disability;

(4) for facilities;

(5) for pupil transportation; and

(6) for postemployment benefits.

deleted text begin (g) "Old formula special education expenditures" means expenditures eligible for revenue
under Minnesota Statutes 2012, section 125A.76, subdivision 2.
deleted text end

deleted text begin (h)deleted text endnew text begin (g)new text end For the Minnesota State Academy for the Deaf and the Minnesota State Academy
for the Blind, expenditures under deleted text beginparagraphsdeleted text endnew text begin paragraphnew text end (f) deleted text beginand (g) aredeleted text endnew text begin isnew text end limited to the salary
and fringe benefits of one-to-one instructional and behavior management aides and one-to-one
licensed, certified professionals assigned to a child attending the academy, if the aides or
professionals are required by the child's individualized education program.

deleted text begin (i) "Special education aid increase limit" means $80 for fiscal year 2016, $100 for fiscal
year 2017, and, for fiscal year 2018 and later, the sum of the special education aid increase
limit for the previous fiscal year and $40.
deleted text end

deleted text begin (j)deleted text endnew text begin (h)new text end "District" means a school district, a charter school, or a cooperative unit as defined
in section 123A.24, subdivision 2. Notwithstanding section 123A.26, cooperative units as
defined in section 123A.24, subdivision 2, are eligible to receive special education aid under
this section and section 125A.79.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 4.

Minnesota Statutes 2018, section 125A.76, subdivision 2a, is amended to read:


Subd. 2a.

Special education initial aid.

deleted text beginFor fiscal year 2016 and later,deleted text end A district's special
education initial aid equals the sum of:

(1) the deleted text beginleastdeleted text endnew text begin lessernew text end of deleted text begin62 percent of the district's old formula special education
expenditures for the prior fiscal year, excluding pupil transportation expenditures, 50 percent
of
deleted text end the district's nonfederal special education expenditures for the prior year, excluding pupil
transportation expenditures, or deleted text begin56deleted text endnew text begin 64new text end percent of the product of the sum of the following
amounts, computed using prior fiscal year data, and the program growth factor:

(i) the product of the district's average daily membership served and the sum of:

(A) deleted text begin$450deleted text endnew text begin $460new text end; plus

(B) deleted text begin$400deleted text endnew text begin $405new text end times the ratio of the sum of the number of pupils enrolled on October
1 who are eligible to receive free lunch plus one-half of the pupils enrolled on October 1
who are eligible to receive reduced-price lunch to the total October 1 enrollment; plus

(C) .008 times the district's average daily membership served; plus

(ii) deleted text begin$10,400deleted text endnew text begin $13,000new text end times the December 1 child count for the primary disability areas
of autism spectrum disorders, developmental delay, and severely multiply impaired; plus

(iii) deleted text begin$18,000deleted text endnew text begin $18,300new text end times the December 1 child count for the primary disability areas
of deaf and hard-of-hearing and emotional or behavioral disorders; plus

(iv) deleted text begin$27,000deleted text endnew text begin $25,400new text end times the December 1 child count for the primary disability areas
of developmentally cognitive mild-moderate, developmentally cognitive severe-profound,
physically impaired, visually impaired, and deafblind; plus

(2) the cost of providing transportation services for children with disabilities under
section 123B.92, subdivision 1, paragraph (b), clause (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 5.

Minnesota Statutes 2018, section 125A.76, subdivision 2c, is amended to read:


Subd. 2c.

Special education aid.

(a) deleted text beginFor fiscal year 2016 and later,deleted text end A district's special
education aid equals the sum of the district's special education initial aid under subdivision
2a and the district's excess cost aid under section 125A.79, subdivision 5.

deleted text begin (b) Notwithstanding paragraph (a), for fiscal year 2016, the special education aid for a
school district must not exceed the sum of the special education aid the district would have
received for fiscal year 2016 under Minnesota Statutes 2012, sections 125A.76 and 125A.79,
as adjusted according to Minnesota Statutes 2012, sections 125A.11 and 127A.47, subdivision
7
, and the product of the district's average daily membership served and the special education
aid increase limit.
deleted text end

deleted text begin (c) Notwithstanding paragraph (a), for fiscal year 2017 and later, the special education
aid for a school district must not exceed the sum of: (i) the product of the district's average
daily membership served and the special education aid increase limit and (ii) the product
of the sum of the special education aid the district would have received for fiscal year 2016
under Minnesota Statutes 2012, sections 125A.76 and 125A.79, as adjusted according to
Minnesota Statutes 2012, sections 125A.11 and 127A.47, subdivision 7, the ratio of the
district's average daily membership served for the current fiscal year to the district's average
daily membership served for fiscal year 2016, and the program growth factor.
deleted text end

deleted text begin (d)deleted text endnew text begin (b)new text end Notwithstanding paragraph (a), deleted text beginfor fiscal year 2016 and laterdeleted text end the special education
aid for a school district, not including a charter school or cooperative unit as defined in
section 123A.24, must not be less than the lesser of (1) the district's nonfederal special
education expenditures for that fiscal year or (2) the product of the sum of the special
education aid the district would have received for fiscal year 2016 under Minnesota Statutes
2012, sections 125A.76 and 125A.79, as adjusted according to Minnesota Statutes 2012,
sections 125A.11 and 127A.47, subdivision 7, the ratio of the district's adjusted daily
membership for the current fiscal year to the district's average daily membership for fiscal
year 2016, and the program growth factor.

deleted text begin (e)deleted text endnew text begin (c)new text end Notwithstanding subdivision 2a and section 125A.79, a charter school in its first
year of operation shall generate special education aid based on current year data. A newly
formed cooperative unit as defined in section 123A.24 may apply to the commissioner for
approval to generate special education aid for its first year of operation based on current
year data, with an offsetting adjustment to the prior year data used to calculate aid for
programs at participating school districts or previous cooperatives that were replaced by
the new cooperative. The department shall establish procedures to adjust the prior year data
and fiscal year 2016 old formula aid used in calculating special education aid to exclude
costs that have been eliminated for districts where programs have closed or where a
substantial portion of the program has been transferred to a cooperative unit.

deleted text begin (f)deleted text endnew text begin (d)new text end The department shall establish procedures through the uniform financial accounting
and reporting system to identify and track all revenues generated from third-party billings
as special education revenue at the school district level; include revenue generated from
third-party billings as special education revenue in the annual cross-subsidy report; and
exclude third-party revenue from calculation of excess cost aid to the districts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 6.

Minnesota Statutes 2018, section 125A.79, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

For the purposes of this section, the definitions in this
subdivision apply.

deleted text begin (a) "Unreimbursed old formula special education expenditures" means:
deleted text end

deleted text begin (1) old formula special education expenditures for the prior fiscal year; minus
deleted text end

deleted text begin (2) for fiscal year 2016 and later, the special education initial aid under section 125A.76,
subdivision 2a; minus
deleted text end

deleted text begin (3) for fiscal year 2016 and later, the amount of general education revenue, excluding
local optional revenue, plus local optional aid and referendum equalization aid for the prior
fiscal year attributable to pupils receiving special instruction and services outside the regular
classroom for more than 60 percent of the school day for the portion of time the pupils
receive special instruction and services outside the regular classroom, excluding portions
attributable to district and school administration, district support services, operations and
maintenance, capital expenditures, and pupil transportation.
deleted text end

deleted text begin (b)deleted text endnew text begin (a)new text end "Unreimbursed nonfederal special education expenditures" means:

(1) nonfederal special education expenditures for the prior fiscal year; minus

(2) special education initial aid under section 125A.76, subdivision 2a; minus

(3) the amount of general education revenue, excluding local optional revenue, plus
local optional aid, and referendum equalization aid for the prior fiscal year attributable to
pupils receiving special instruction and services outside the regular classroom for more than
60 percent of the school day for the portion of time the pupils receive special instruction
and services outside of the regular classroom, excluding portions attributable to district and
school administration, district support services, operations and maintenance, capital
expenditures, and pupil transportation.

deleted text begin (c)deleted text endnew text begin (b)new text end "General revenue" for a school district means the sum of the general education
revenue according to section 126C.10, subdivision 1, excluding transportation sparsity
revenue, local optional revenue, and total operating capital revenue. "General revenue" for
a charter school means the sum of the general education revenue according to section
124E.20, subdivision 1, and transportation revenue according to section 124E.23, excluding
referendum equalization aid, transportation sparsity revenue, and operating capital revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 7.

Minnesota Statutes 2018, section 125A.79, subdivision 5, is amended to read:


Subd. 5.

Excess cost aid.

deleted text beginFor fiscal year 2016 and later,deleted text end A district's excess cost aid
equals the greater ofdeleted text begin: (1) 56deleted text endnew text begin zero, or 62new text end percent of the difference between deleted text begin(i)deleted text endnew text begin (1)new text end the district's
unreimbursed nonfederal special education expendituresnew text begin,new text end and deleted text begin(ii) 7.0deleted text endnew text begin (2) 2.5new text end percent of the
product of the ratio of $5,831 to the formula allowance for the prior year and the district's
general revenuedeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (2) 62 percent of the difference between (i) the district's unreimbursed old formula special
education expenditures and (ii) 2.5 percent of the product of the ratio of $5,831 to the formula
allowance for the prior year and the district's general revenue; or
deleted text end

deleted text begin (3) zero.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 8.

Minnesota Statutes 2018, section 127A.45, subdivision 13, is amended to read:


Subd. 13.

Aid payment percentage.

Except as provided in subdivisions 11, 12, 12a,
and 14, each fiscal year, all education aids and credits in this chapter and chapters 120A,
120B, 121A, 122A, 123A, 123B, 124D, 124E, 125A, 125B, 126C, 134, and section 273.1392,
shall be paid at the current year aid payment percentage of the estimated entitlement during
the fiscal year of the entitlement. deleted text beginFor the purposes of this subdivision, a district's estimated
entitlement for special education aid under section 125A.76 for fiscal year 2014 and later
equals 97.4 percent of the district's entitlement for the current fiscal year.
deleted text end The final adjustment
payment, according to subdivision 9, must be the amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the fiscal year of the entitlement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 9.

Minnesota Statutes 2018, section 127A.47, subdivision 7, is amended to read:


Subd. 7.

Alternative attendance programs.

(a) The general education aid and special
education aid for districts must be adjusted for each pupil attending a nonresident district
under sections 123A.05 to 123A.08, 124D.03, 124D.08, and 124D.68. The adjustments
must be made according to this subdivision.

(b) For purposes of this subdivision, the "unreimbursed cost of providing special
education and services" means the difference between: (1) the actual cost of providing
special instruction and services, including special transportation and unreimbursed building
lease and debt service costs for facilities used primarily for special education, for a pupil
with a disability, as defined in section 125A.02, or a pupil, as defined in section 125A.51,
who is enrolled in a program listed in this subdivision, minus (2) if the pupil receives special
instruction and services outside the regular classroom for more than 60 percent of the school
day, the amount of general education revenue, excluding local optional revenue, plus local
optional aid and referendum equalization aid as defined in section 125A.11, subdivision 1,
paragraph (d), attributable to that pupil for the portion of time the pupil receives special
instruction and services outside of the regular classroom, excluding portions attributable to
district and school administration, district support services, operations and maintenance,
capital expenditures, and pupil transportation, minus (3) special education aid under section
125A.76 attributable to that pupil, that is received by the district providing special instruction
and services. For purposes of this paragraph, general education revenue and referendum
equalization aid attributable to a pupil must be calculated using the serving district's average
general education revenue and referendum equalization aid per adjusted pupil unit.

(c) deleted text beginFor fiscal year 2015 and later,deleted text end Special education aid paid to a resident district must
be reduced by an amount equal to deleted text begin90deleted text endnew text begin 50new text end percent of the unreimbursed cost of providing
special education and services.

(d) Notwithstanding paragraph (c), special education aid paid to a resident district must
be reduced by an amount equal to 100 percent of the unreimbursed cost of special education
and services provided to students at an intermediate district, cooperative, or charter school
where the percent of students eligible for special education services is at least 70 percent
of the charter school's total enrollment.

(e) Notwithstanding paragraph (c), special education aid paid to a resident district must
be reduced under paragraph (d) for students at a charter school receiving special education
aid under section 124E.21, subdivision 3, calculated as if the charter school received special
education aid under section 124E.21, subdivision 1.

(f) Special education aid paid to the district or cooperative providing special instruction
and services for the pupil, or to the fiscal agent district for a cooperative, must be increased
by the amount of the reduction in the aid paid to the resident district under paragraphs (c)
and (d). If the resident district's special education aid is insufficient to make the full
adjustment under paragraphs (c), (d), and (e), the remaining adjustment shall be made to
other state aids due to the district.

(g) Notwithstanding paragraph (a), general education aid paid to the resident district of
a nonspecial education student for whom an eligible special education charter school receives
general education aid under section 124E.20, subdivision 1, paragraph (c), must be reduced
by an amount equal to the difference between the general education aid attributable to the
student under section 124E.20, subdivision 1, paragraph (c), and the general education aid
that the student would have generated for the charter school under section 124E.20,
subdivision 1
, paragraph (a). For purposes of this paragraph, "nonspecial education student"
means a student who does not meet the definition of pupil with a disability as defined in
section 125A.02 or the definition of a pupil in section 125A.51.

(h) An area learning center operated by a service cooperative, intermediate district,
education district, or a joint powers cooperative may elect through the action of the
constituent boards to charge the resident district tuition for pupils rather than to have the
general education revenue paid to a fiscal agent school district. Except as provided in
paragraph (f), the district of residence must pay tuition equal to at least 90 and no more than
100 percent of the district average general education revenue per pupil unit minus an amount
equal to the product of the formula allowance according to section 126C.10, subdivision 2,
times .0466, calculated without compensatory revenue, local optional revenue, and
transportation sparsity revenue, times the number of pupil units for pupils attending the area
learning center.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2021 and later.
new text end

Sec. 10. new text beginAPPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin $....... in fiscal year 2021 is appropriated
from the general fund to the Department of Education for the fiscal years designated for
special education aid.
new text end

new text begin Subd. 2. new text end

new text begin Additional special education aid. new text end

new text begin In addition to other accounts appropriated
for special education aid:
new text end

new text begin $
new text end
new text begin .......
new text end
new text begin .....
new text end
new text begin 2021
new text end