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SF 76

as introduced - 89th Legislature (2015 - 2016) Posted on 01/13/2015 08:43am

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Current Version - as introduced

A bill for an act
relating to education finance; establishing a long-term facilities maintenance
revenue program for school districts and charter schools; equalizing the
long-term maintenance levy; eliminating the alternative facilities, deferred
maintenance and health and safety revenue programs; appropriating money;
amending Minnesota Statutes 2014, section 123B.57; proposing coding for new
law in Minnesota Statutes, chapter 123B; repealing Minnesota Statutes 2014,
sections 123B.59; 123B.591.

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

Section 1.

Minnesota Statutes 2014, section 123B.57, is amended to read:


123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.

Subdivision 1.

Health and safety revenue application.

(a) To receive health
and safety revenue for any fiscal year a district must submit to the commissioner a
capital expenditure health and safety revenue application by the date determined by the
commissioner. The application must include a health and safety budget adopted and
confirmed by the school district board as being consistent with the district's health and
safety policy under subdivision 2. The budget must include the estimated cost of the
program per Uniform Financial Accounting and Reporting Standards (UFARS) finance
code, by fiscal year. Upon approval through the adoption of a resolution by each of an
intermediate district's member school district boards and the approval of the Department
of Education, a school district may include its proportionate share of the costs of health
and safety projects for an intermediate district in its application.

(b) Health and safety projects with an estimated cost of $500,000 or more per
site are not eligible for health and safety revenue. Health and safety projects with an
estimated cost of $500,000 or more per site that meet all other requirements for health and
safety funding, are eligible for alternative facilities bonding and levy revenue according
to section 123B.59. A school board shall not separate portions of a single project into
components to qualify for health and safety revenue, and shall not combine unrelated
projects into a single project to qualify for alternative facilities bonding and levy revenue.

(c) The commissioner of education shall not make eligibility for health and safety
revenue contingent on a district's compliance status, level of program development, or
training. The commissioner shall not mandate additional performance criteria such as
training, certifications, or compliance evaluations as a prerequisite for levy approval.

Subd. 2.

Health and safety policy.

To qualify for health and safety revenue, a
school board must adopt a health and safety policy. The policy must include provisions
for implementing a health and safety program that complies with health, safety, and
environmental regulations and best practices including indoor air quality management.

Subd. 3.

Health and safety revenue.

A district's health and safety revenue
for a fiscal year equals the district's alternative facilities levy under section 123B.59,
subdivision 5, paragraph (b), plus the greater of zero or:

(1) the sum of (a) the total approved cost of the district's hazardous substance
plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's
health and safety program for fiscal year 1990 through the fiscal year to which the levy
is attributable, excluding expenditures funded with bonds issued under section 123B.59
or 123B.62, or chapter 475; certificates of indebtedness or capital notes under section
123B.61; levies under section 123B.58, 123B.59, 123B.63, or 126C.40, subdivision 1 or
6; and other federal, state, or local revenues, minus

(2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years
1985 through 1989 under sections 124.245 and 275.125, subdivision 11c, plus (b) the
district's health and safety revenue under this subdivision, for years before the fiscal year
to which the levy is attributable.

Subd. 4.

Health and safety levy.

To receive health and safety revenue, a district
may levy an amount equal to the district's health and safety revenue as defined in
subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by
dividing the adjusted net tax capacity of the district for the year preceding the year the
levy is certified by the adjusted pupil units in the district for the school year to which
the levy is attributable, to $3,165.

Subd. 5.

Health and safety aid.

A district's health and safety aid is the difference
between its health and safety revenue and its health and safety levy. If a district does not
levy the entire amount permitted, health and safety aid must be reduced in proportion to
the actual amount levied. Health and safety aid may not be reduced as a result of reducing
a district's health and safety levy according to section 123B.79.

Subd. 6.

Uses of Health and safety revenue capital projects.

(a) Health and
safety revenue may be used only for approved capital projects may include expenditures
necessary for the correction of fire and life safety hazards; design, purchase, installation,
maintenance, and inspection of fire protection and alarm equipment; purchase or
construction of appropriate facilities for the storage of combustible and flammable
materials; inventories and facility modifications not related to a remodeling project
to comply with lab safety requirements under section 121A.31; inspection, testing,
repair, removal or encapsulation, and disposal of asbestos-containing building materials;
cleanup and disposal of polychlorinated biphenyls; cleanup and disposal of hazardous and
infectious wastes; cleanup, removal, disposal, and repairs related to storing heating fuel or
transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined in section
296A.01; correction of occupational safety and health administration regulated hazards;
indoor air quality inspections, investigations, and testing; mold abatement; upgrades or
replacement of mechanical ventilation systems to meet American Society of Heating,
Refrigerating and Air Conditioning Engineers standards and State Mechanical Code;
design, materials, and installation of local exhaust ventilation systems, including required
make-up air for controlling regulated hazardous substances; correction of Department of
Health Food Code violations; correction of swimming pool hazards excluding depth
correction; playground safety inspections, repair of unsafe outdoor playground equipment,
and the installation of impact surfacing materials; bleacher repair or rebuilding to comply
with the order of a building code inspector under section 326B.112; testing and mitigation
of elevated radon hazards; lead testing; copper in water testing; cleanup after major
weather-related disasters or flooding; reduction of excessive organic and inorganic levels
in wells and capping of abandoned wells; installation and testing of boiler backflow valves
to prevent contamination of potable water; vaccinations, titers, and preventative supplies
for bloodborne pathogen compliance; costs to comply with the Janet B. Johnson Parents'
Right to Know Act; automated external defibrillators and other emergency plan equipment
and supplies specific to the district's emergency action plan; compliance with the National
Emission Standards for Hazardous Air Pollutants for school generators established by the
United States Environmental Protection Agency; and health, safety, and environmental
management costs associated with implementing the district's health and safety program
including costs to establish and operate safety committees, in school buildings or property
owned or being acquired by the district. Testing and calibration activities are permitted for
existing mechanical ventilation systems at intervals no less than every five years.

(b) For fiscal years 2014 through 2017, a school district must not include expenses
related to emission compliance projects for school generators in its health and safety
revenue capital projects unless it reduces its approved spending on other qualified health
and safety projects by the same amount.

Subd. 6a.

Restrictions on health and safety revenue.

Notwithstanding subdivision
6, health and safety revenue must not be used:

(1) to finance a lease purchase agreement, installment purchase agreement, or other
deferred payments agreement;

(2) for the construction of new facilities, remodeling of existing facilities, or the
purchase of portable classrooms;

(3) for interest or other financing expenses;

(4) for energy-efficiency projects under section 123B.65, for a building or property
or part of a building or property used for postsecondary instruction or administration or for
a purpose unrelated to elementary and secondary education;

(5) for replacement of building materials or facilities including roof, walls, windows,
internal fixtures and flooring, nonhealth and safety costs associated with demolition of
facilities, structural repair or replacement of facilities due to unsafe conditions, violence
prevention and facility security, ergonomics, or public announcement systems and
emergency communication devices; or

(6) for building and heating, ventilating and air conditioning supplies, maintenance,
and cleaning activities. All assessments, investigations, inventories, and support
equipment not leading to the engineering or construction of a project shall be included in
the health, safety, and environmental management costs in subdivision 8, paragraph (a).

Subd. 6b.

Health and safety projects.

(a) Health and safety revenue applications
defined in subdivision 1 must be accompanied by a description of each project for which
funding is being requested. Project descriptions must provide enough detail for an auditor
to determine if the work qualifies for revenue. For projects other than fire and life
safety projects, playground projects, and health, safety, and environmental management
activities, a project description does not need to include itemized details such as material
types, room locations, square feet, names, or license numbers. The commissioner
may request supporting information and shall approve only projects that comply with
subdivisions 6 and 8, as defined by the Department of Education.

(b) Districts may request funding for allowable projects based on self-assessments,
safety committee recommendations, insurance inspections, management assistance
reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph
(b), and subdivision 8, paragraph (b), for projects under $500,000, individual project
size for projects authorized by this subdivision is not limited and may include related
work in multiple facilities. Health and safety management costs from subdivision 8 may
be reported as a single project.

(c) All costs directly related to a project shall be reported in the appropriate Uniform
Financial Accounting and Reporting Standards (UFARS) finance code.

(d) For fire and life safety egress and all other projects exceeding $20,000, cited
under the Minnesota Fire Code, a fire marshal plan review is required.

(e) Districts shall update project estimates with actual expenditures for each
fiscal year. If a project's final cost is significantly higher than originally approved, the
commissioner may request additional supporting information.

Subd. 6c.

Appeals process.

In the event a district is denied funding approval for
a project the district believes complies with subdivisions 6 and 8, and is not otherwise
excluded, a district may appeal the decision. All such requests must be in writing. The
commissioner shall respond in writing. A written request must contain the following:
project number; description and amount; reason for denial; unresolved questions for
consideration; reasons for reconsideration; and a specific statement of what action the
district is requesting.

Subd. 7.

Proration.

In the event that the health and safety aid available for any year
is prorated, a district having its aid prorated may levy an additional amount equal to the
amount not paid by the state due to proration.

Subd. 8.

Health, safety, and environmental management cost.

(a) "Health, safety,
and environmental management" is defined in section 123B.56.

(b) A district's cost for health, safety, and environmental management is limited to
the lesser of:

(1) actual cost to implement their plan; or

(2) an amount determined by the commissioner, based on enrollment, building
age, and size.

(c) The department may contract with regional service organizations, private
contractors, Minnesota Safety Council, or state agencies to provide management
assistance to school districts for health and safety capital projects. Management assistance
is the development of written programs for the identification, recognition and control of
hazards, and prioritization and scheduling of district health and safety capital projects. The
commissioner shall not mandate management assistance or exclude private contractors
from the opportunity to provide any health and safety services to school districts.

Sec. 2.

[123B.595] LONG-TERM FACILITIES MAINTENANCE REVENUE.

Subdivision 1.

Long-term facilities maintenance revenue.

(a) For fiscal year 2017
only, long-term facilities maintenance revenue equals the greater of (1) $300 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 or (2) the sum of 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.

(b) For fiscal year 2018 only, long-term facilities maintenance revenue equals the
greater of (1) $400 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 or (2) the sum of 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.

(c) For fiscal year 2019 only, long-term facilities maintenance revenue equals the
greater of (1) $500 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 or (2) the sum of 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.

(d) For fiscal year 2020 and later, long-term facilities maintenance revenue equals
the amount necessary annually to implement the ten-year plan under subdivision 4.

Subd. 2.

Long-term facilities maintenance revenue for a charter school.

(a)
For fiscal year 2017 only, long-term facilities maintenance revenue for a charter school
equals $59 times the adjusted pupil units.

(b) For fiscal year 2018 only, long-term facilities maintenance revenue for a charter
school equals $108 times the adjusted pupil units.

(c) For fiscal year 2019 and later, long-term facilities maintenance revenue for
a charter school equals (1) $163 times (2) one plus the greater of zero or the percentage
change in the Consumer Price Index for urban consumers, as prepared by the United States
Bureau of Labor Standards, for the current fiscal year to fiscal year 2019.

Subd. 3.

Intermediate districts and other cooperative units.

Upon approval
through the adoption of a resolution by each member district school board of an
intermediate district or other cooperative units under section 123A.24, subdivision 2,
and 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 or cooperative unit. The cooperative unit may issue bonds
to finance the project costs or levy for the costs, using long-term maintenance revenue
transferred from member districts to make debt service payments or pay project costs.
Authority under this subdivision is in addition to the authority for individual district
projects under subdivision 1.

Subd. 4.

Facilities plans.

(a) To qualify for revenue under this section, a school
district or intermediate district, not including a charter school, must have a ten-year facility
plan adopted by the school board and approved by the commissioner. The plan must include
provisions for implementing a health and safety program that complies with health, safety,
and environmental regulations and best practices, including indoor air quality management.

(b) The district must annually update the plan, biennially submit a facility
maintenance plan to the commissioner, and indicate whether the district will issue bonds
to finance the plan or levy for the costs.

Subd. 5.

Bond authorization.

(a) A school district may issue general obligation
bonds under this section to finance facilities plans approved by its board and the
commissioner. Chapter 475, except sections 475.58 and 475.59, must be complied with.
The authority to issue bonds under this section is in addition to any bonding authority
authorized by this chapter or other law. The amount of bonding authority authorized
under this section must be disregarded in calculating the bonding or net debt limits of this
chapter, or any other law other than section 475.53, subdivision 4.

(b) At least 20 days before the earliest of solicitation of bids, the issuance of bonds,
or the final certification of levies under subdivision 6, the district must publish notice
of the intended projects, the amount of the bond issue, and the total amount of district
indebtedness.

(c) The portion of revenue under this section for bonded debt must be recognized
in the debt service fund.

Subd. 6.

Levy authorization.

A district may levy for costs related to an approved
plan under subdivision 4 as follows:

(1) if the district has indicated to the commissioner that bonds will be issued, the
district may levy for the principal and interest payments on outstanding bonds issued
under subdivision 5 after reduction for any aid receivable under subdivision 9; or

(2) if the district has indicated to the commissioner that the plan will be funded
through levy, the district may levy according to the schedule approved in the plan after
reduction for any aid receivable under subdivision 9.

Subd. 7.

Long-term facilities maintenance equalization revenue.

(a) For fiscal
year 2017 only, a district's long-term facilities maintenance equalization revenue equals
the lesser of (1) $300 times the adjusted pupil units or (2) the district's revenue under
subdivision 1.

(b) For fiscal year 2018 only, a district's long-term facilities maintenance
equalization revenue equals the lesser of (1) $400 times the adjusted pupil units or (2)
the district's revenue under subdivision 1.

(c) For fiscal year 2019 only, a district's long-term facilities maintenance equalization
revenue equals the lesser of (1) $500 times the adjusted pupil units or (2) the district's
revenue under subdivision 1.

(d) For fiscal year 2020 and later, a district's long-term facilities maintenance
equalization revenue equals the district's revenue under subdivision 1.

Subd. 8.

Long-term facilities maintenance equalization levy.

A district's
long-term facilities maintenance equalization levy equals its long-term facilities
maintenance equalization revenue times the lesser of one or the ratio of its adjusted net
tax capacity per adjusted pupil unit in the year preceding the year the levy is certified to
125 percent of the state average adjusted net tax capacity per adjusted pupil unit in the
year preceding the year the levy is certified.

Subd. 9.

Long-term facilities maintenance equalization aid.

A district's long-term
facilities maintenance equalization aid equals the difference between its long-term
facilities maintenance equalization revenue and its long-term facilities maintenance
equalization levy.

Subd. 10.

Long-term facilities maintenance unequalized levy.

Each year, a
district may levy an amount equal to the difference between its total long-term facilities
maintenance revenue under subdivision 1 and its long-term facilities maintenance
equalization revenue.

Subd. 11.

Allowed uses for long-term facilities maintenance revenue.

(a) A
district may use revenue under this section for any of the following:

(1) deferred capital expenditures and maintenance projects necessary to prevent
further erosion of facilities;

(2) increasing accessibility of school facilities; or

(3) health and safety capital projects under section 123B.57.

(b) A charter school may use revenue under this section for any purpose related
to the school.

Subd. 12.

Restrictions on long-term facilities maintenance revenue.

Notwithstanding subdivision 11, long-term facilities maintenance revenue may not be used:

(1) for the construction of new facilities, remodeling of existing facilities, or the
purchase of portable classrooms;

(2) to finance a lease purchase agreement, installment purchase agreement, or other
deferred payments agreement;

(3) for energy-efficiency projects under section 123B.65, for a building or property
or part of a building or property used for postsecondary instruction or administration or for
a purpose unrelated to elementary and secondary education; or

(4) for violence prevention and facility security, ergonomics, or public announcement
systems and emergency communication devices.

Subd. 13.

Reserve account.

The portion of long-term facilities maintenance
revenue not recognized under subdivision 5, paragraph (c), must be maintained in a
reserve account within the general fund.

EFFECTIVE DATE.

This section is effective for revenue in fiscal year 2017 and
later.

Sec. 3. APPROPRIATIONS.

Subdivision 1.

Department of Education.

The sums indicated in this section are
appropriated from the general fund to the Department of Education for the fiscal years
designated.

Subd. 2.

Long-term maintenance equalization aid.

For long-term maintenance
equalization aid under Minnesota Statutes, section 123B.595:

$
-0-
.....
2016
$
.......
.....
2017

Sec. 4. REPEALER.

Minnesota Statutes 2014, sections 123B.59; and 123B.591, are repealed.

EFFECTIVE DATE.

This section is effective for revenue in fiscal year 2017 and
later.

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