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HF 3531

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/17/2022 02:18pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/17/2022

Current Version - as introduced

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A bill for an act
relating to education finance; requiring certain forecasted positive general fund
balances be allocated to increase the aid payment schedule for school district aids
and credits; adjusting the aid payment percentage; adjusting the special education
aid payment percentage; amending Minnesota Statutes 2020, section 127A.45,
subdivisions 2, 3, 6a, 7b, 13; Minnesota Statutes 2021 Supplement, section 16A.152,
subdivision 2.

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

Section 1.

Minnesota Statutes 2021 Supplement, section 16A.152, subdivision 2, is
amended to read:


Subd. 2.

Additional revenues; priority.

(a) If on the basis of a forecast of general fund
revenues and expenditures, the commissioner of management and budget determines that
there will be a positive unrestricted budgetary general fund balance at the close of the
biennium, the commissioner of management and budget must allocate money to the following
accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches
$350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches
$2,377,399,000;

(3) the amount necessary to increase the aid payment schedule for school district aids
and credits payments in section 127A.45 to not more than deleted text begin90deleted text endnew text begin 95new text end percent rounded to the
nearest tenth of a percent without exceeding the amount available and with any remaining
funds deposited in the budget reserve;

(4) the amount necessary to restore all or a portion of the net aid reductions under section
127A.441 and to reduce the property tax revenue recognition shift under section 123B.75,
subdivision 5
, by the same amount;

(5) the amount necessary to increase the Minnesota 21st century fund by not more than
the difference between $5,000,000 and the sum of the amounts credited and canceled to it
in the previous 12 months under Laws 2020, chapter 71, article 1, section 11, until the sum
of all transfers under this section and all amounts credited or canceled under Laws 2020,
chapter 71, article 1, section 11, equals $20,000,000; and

(6) for a forecast in November only, the amount remaining after the transfer under clause
(5) must be used to reduce the percentage of accelerated June liability sales tax payments
required under section 289A.20, subdivision 4, paragraph (b), until the percentage equals
zero, rounded to the nearest tenth of a percent. By March 15 following the November
forecast, the commissioner must provide the commissioner of revenue with the percentage
of accelerated June liability owed based on the reduction required by this clause. By April
15 each year, the commissioner of revenue must certify the percentage of June liability
owed by vendors based on the reduction required by this clause.

(b) The amounts necessary to meet the requirements of this section are appropriated
from the general fund within two weeks after the forecast is released or, in the case of
transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
schedules otherwise established in statute.

(c) The commissioner of management and budget shall certify the total dollar amount
of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education.
The commissioner of education shall increase the aid payment percentage and reduce the
property tax shift percentage by these amounts and apply those reductions to the current
fiscal year and thereafter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 2.

Minnesota Statutes 2020, section 127A.45, subdivision 2, is amended to read:


Subd. 2.

Definitions.

(a) "Other district receipts" means payments by county treasurers
pursuant to section 276.10, apportionments from the school endowment fund pursuant to
section 127A.33, apportionments by the county auditor pursuant to section 127A.34,
subdivision 2
, and payments to school districts by the commissioner of revenue pursuant
to chapter 298.

(b) "Cumulative amount guaranteed" means the product of

(1) the cumulative disbursement percentage shown in subdivision 3; times

(2) the sum of

(i) the current year aid payment percentage of the estimated aid and credit entitlements
paid according to subdivision 13; plus

(ii) 100 percent of the entitlements paid according to subdivisions 11 and 12; plus

(iii) the other district receipts.

(c) "Payment date" means the date on which state payments to districts are made by the
electronic funds transfer method. If a payment date falls on a Saturday, a Sunday, or a
weekday which is a legal holiday, the payment shall be made on the immediately preceding
business day. The commissioner may make payments on dates other than those listed in
subdivision 3, but only for portions of payments from any preceding payment dates which
could not be processed by the electronic funds transfer method due to documented
extenuating circumstances.

(d) The current year aid payment percentage equals deleted text begin90deleted text endnew text begin 95new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 3.

Minnesota Statutes 2020, section 127A.45, subdivision 3, is amended to read:


Subd. 3.

Payment dates and percentages.

(a) The commissioner shall pay to a district
on the dates indicated an amount computed as follows: the cumulative amount guaranteed
minus the sum of (1) the district's other district receipts through the current payment, and
(2) the aid and credit payments through the immediately preceding payment. For purposes
of this computation, the payment dates and the cumulative disbursement percentages are
as follows:

Payment date
Percentage
Payment 1
July 15:
5.5
Payment 2
July 30:
8.0
Payment 3
August 15:
17.5
Payment 4
August 30:
20.0
Payment 5
September 15:
22.5
Payment 6
September 30:
25.0
Payment 7
October 15:
27.0
Payment 8
October 30:
30.0
Payment 9
November 15:
32.5
Payment 10
November 30:
36.5
Payment 11
December 15:
42.0
Payment 12
December 30:
45.0
Payment 13
January 15:
50.0
Payment 14
January 30:
54.0
Payment 15
February 15:
58.0
Payment 16
February 28:
63.0
Payment 17
March 15:
68.0
Payment 18
March 30:
74.0
Payment 19
April 15:
78.0
Payment 20
April 30:
85.0
Payment 21
May 15:
90.0
Payment 22
May 30:
95.0
Payment 23
June 20:
100.0

(b) In addition to the amounts paid under paragraph (a), the commissioner shall pay to
a school district or charter school on the dates indicated an amount computed as follows:

Payment 3
August 15: the final adjustment for the prior fiscal year for the state paid
property tax credits established in section 273.1392
Payment 4
August 30: 30 percent of the final adjustment for the prior fiscal year for
all aid entitlements except state paid property tax credits
Payment 6
September 30: 40 percent of the final adjustment for the prior fiscal year
for all aid entitlements except state paid property tax credits
Payment 8
October 30: 30 percent of the final adjustment for the prior fiscal year for
all aid entitlements except state paid property tax credits

(c) Notwithstanding paragraph (b), if the current year aid payment percentage under
subdivision 2, paragraph (d), is less than deleted text begin90deleted text endnew text begin 95new text end, in addition to the amounts paid under
paragraph (a), the commissioner shall pay to a charter school on the dates indicated an
amount computed as follows:

Payment 1
July 15: 75 percent of the final adjustment for the prior fiscal year for all
aid entitlements
Payment 8
October 30: 25 percent of the final adjustment for the prior fiscal year for
all aid entitlements

(d) Notwithstanding paragraph (b), if a charter school is an eligible special education
charter school under section 124E.21, subdivision 2, in addition to the amounts paid under
paragraph (a), the commissioner shall pay to a charter school on the dates indicated an
amount computed as follows:

Payment 1
July 15: 75 percent of the final adjustment for the prior fiscal year for all
aid entitlements
Payment 8
October 30: 25 percent of the final adjustment for the prior fiscal year for
all aid entitlements

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 4.

Minnesota Statutes 2020, section 127A.45, subdivision 6a, is amended to read:


Subd. 6a.

Cash flow adjustment.

The board of directors of any eligible special education
charter school under section 124E.21, subdivision 2, may request that the commissioner of
education accelerate the school's cash flow under this section. The commissioner must
approve a properly submitted request within 30 days of its receipt. The commissioner must
accelerate the school's regular special education aid payments according to the schedule in
the school's request and modify the payments to the school under subdivision 3 accordingly.
A school must not receive current payments of regular special education aid exceeding deleted text begin90deleted text endnew text begin
95
new text end percent of its estimated aid entitlement for the fiscal year. The commissioner must delay
the special education aid payments to all other school districts and charter schools in
proportion to each district or charter school's total share of regular special education aid
such that the overall aid payment savings from the aid payment shift remains unchanged
for any fiscal year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 5.

Minnesota Statutes 2020, section 127A.45, subdivision 7b, is amended to read:


Subd. 7b.

Advance final payment.

(a) Notwithstanding subdivisions 3 and 7, if the
current year aid payment percentage, under subdivision 2, is less than deleted text begin90deleted text endnew text begin 95new text end, then a school
district or charter school exceeding its expenditure limitations under section 123B.83 as of
June 30 of the prior fiscal year may receive a portion of its final payment for the current
fiscal year on June 20, if requested by the district or charter school. The amount paid under
this subdivision must not exceed the lesser of:

(1) the difference between deleted text begin90deleted text endnew text begin 95new text end percent and the current year payment percentage in
subdivision 2, paragraph (d), in the current fiscal year times the sum of the district or charter
school's general education aid plus the aid adjustment in section 127A.50 for the current
fiscal year; or

(2) the amount by which the district's or charter school's net negative unreserved general
fund balance as of June 30 of the prior fiscal year exceeds 2.5 percent of the district or
charter school's expenditures for that fiscal year.

(b) The state total advance final payment under this subdivision for any year must not
exceed $7,500,000. If the amount request exceeds $7,500,000, the advance final payment
for each eligible district must be reduced proportionately.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 6.

Minnesota Statutes 2020, 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. For the purposes of this subdivision, a district's estimated
entitlement for special education aid under section 125A.76 for fiscal year 2014 deleted text beginand laterdeleted text endnew text begin
to fiscal year 2022
new text end equals 97.4 percent of the district's entitlement for the current fiscal year.new text begin
For the purposes of this subdivision, a district's estimated entitlement for special education
aid under section 125A.76 for fiscal years 2023 and later equals 100 percent of the district's
entitlement for the current fiscal year.
new 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 July 1, 2022.
new text end