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Key: (1) language to be deleted (2) new language

                            CHAPTER 398-H.F.No. 2874 
                  An act relating to state government; education and 
                  educational programs; kindergarten through grade 12; 
                  providing for general education; special education; 
                  interagency service, lifelong learning, and 
                  technology; facilities and organization; policies 
                  promoting academic excellence; education policy 
                  issues; libraries; state agencies; miscellaneous 
                  provisions; appropriating money; amending Minnesota 
                  Statutes 1996, sections 43A.17, subdivisions 9 and 10; 
                  120.03, subdivision 1; 120.06, subdivision 2a; 
                  120.064, subdivision 5; 120.101, subdivision 3; 
                  120.17, subdivisions 1, 2, 3, 3a, 3b, 6, 7, 7a, 9, and 
                  15; 120.1701, subdivisions 2, 5, 11, and 17; 120.173, 
                  subdivisions 1 and 6; 120.73, subdivision 1; 121.11, 
                  subdivision 7d; 121.1115, by adding a subdivision; 
                  121.14; 121.148, subdivision 3; 121.16, by adding 
                  subdivisions; 121.1601, subdivision 2; 121.908, 
                  subdivisions 2 and 3; 122.23, subdivisions 2b and 6; 
                  123.34, subdivision 9; 123.35, subdivision 19a; 
                  123.3514, by adding a subdivision; 123.39, subdivision 
                  1, and by adding a subdivision; 123.805, subdivision 
                  1; 123.935, subdivisions 1 and 2; 124.078; 124.14, 
                  subdivision 7, and by adding a subdivision; 124.17, 
                  subdivision 2; 124.225, subdivisions 7f and 8m; 
                  124.248, subdivisions 1 and 1a; 124.2713, subdivision 
                  6a; 124.2727, subdivisions 6a and 6c; 124.273, by 
                  adding a subdivision; 124.32, by adding a subdivision; 
                  124.3201, subdivision 5; 124.323, by adding a 
                  subdivision; 124.646, subdivision 4; 124.755, 
                  subdivision 1; 124.83, subdivision 8; 124.85, 
                  subdivision 4; 124.91, subdivision 6; 124.95, 
                  subdivision 6; 124A.03, subdivisions 2b and 3c; 
                  124A.034, subdivision 2; 124A.036, subdivisions 1a, 4, 
                  6, and by adding a subdivision; 124A.22, by adding a 
                  subdivision; 124A.29, subdivision 1; 124A.292, 
                  subdivision 3; 124A.30; 124C.45, subdivision 2; 
                  124C.47; 124C.48, by adding a subdivision; 125.183, 
                  subdivisions 1 and 3; 125.191; 126.12, subdivision 1; 
                  126.237; 126.70, subdivision 2a; 127.27, subdivision 
                  2; 128A.02, subdivisions 1, 3, 3b, 5, 6, and by adding 
                  subdivisions; 128A.022; 128A.023, subdivisions 1 and 
                  2; 128A.026, subdivisions 1 and 3; 128A.07, 
                  subdivision 2; 169.451, subdivision 5; 254A.17, 
                  subdivision 1, and by adding a subdivision; 256B.0625, 
                  subdivision 26; 260.015, subdivision 19; 260.131, 
                  subdivision 1b; 260.132, subdivision 1; 260A.05, 
                  subdivision 2; 260A.06; and 268.665, subdivision 3; 
                  Minnesota Statutes 1997 Supplement, sections 120.064, 
                  subdivision 3; 120.101, subdivision 5; 120.1701, 
                  subdivision 3; 120.181; 121.11, subdivision 7c; 
                  121.1113, subdivision 1; 121.15, subdivision 6; 
                  121.904, subdivision 4a; 124.17, subdivisions 4, 6, 
                  and 7; 124.195, subdivision 7; 124.248, subdivisions 
                  2a and 6; 124.2601, subdivisions 3 and 6; 124.2711, 
                  subdivision 2a; 124.2713, subdivision 6; 124.3111, 
                  subdivision 2; 124.3201, subdivision 2; 124.6475; 
                  124.648, subdivision 3; 124.91, subdivisions 1 and 5; 
                  124A.036, subdivision 5; 124A.22, subdivisions 1, 2, 
                  11, and 13b; 124A.23, subdivision 1; 124A.28, 
                  subdivisions 1 and 1a; 124C.46, subdivisions 1 and 2; 
                  126.79, subdivisions 3, 6, 7, 8, and 9; 127.27, 
                  subdivisions 10 and 11; 127.31, subdivision 15; 
                  127.32; 127.36, subdivision 1; 127.38; 128A.02, 
                  subdivision 7; 169.01, subdivision 6; 268.665, 
                  subdivision 2; and 290.0674, subdivision 1; Laws 1992, 
                  chapter 499, article 7, section 31; Laws 1993, chapter 
                  224, article 3, section 32; Laws 1996, chapter 412, 
                  article 12, section 12, subdivision 5; Laws 1997, 
                  chapter 157, section 71; Laws 1997, First Special 
                  Session chapter 4, article 1, sections 58 and 61, 
                  subdivision 3; article 2, section 51, subdivisions 2, 
                  4, 5, 25, 29, and 33; article 3, sections 23, by 
                  adding a subdivision, and 25, subdivision 4; article 
                  4, sections 34 and 35, subdivision 9; article 5, 
                  sections 24, subdivision 4, and 28, subdivisions 4, 9, 
                  10, 11, 12, and 17; article 6, section 20, subdivision 
                  4; article 8, section 4, subdivision 3; article 9, 
                  sections 11 and 12, subdivision 6; article 10, 
                  sections 3, subdivision 2, 4, and 5; proposing coding 
                  for new law in Minnesota Statutes, chapters 120; 121; 
                  123; 124A; and 145; repealing Minnesota Statutes 1996, 
                  sections 121.02; 121.11, subdivisions 5, 7, 7b, 7d, 9, 
                  11, 12, and 14; 121.904, subdivision 4c; 124.2601, 
                  subdivision 4; 124.2713, subdivision 6b; 124.2727, 
                  subdivision 6b; 124.647; and 124A.292, subdivisions 2 
                  and 4; Minnesota Statutes 1997 Supplement, sections 
                  121.11, subdivision 7e; 124.2601, subdivision 5; 
                  124.912, subdivisions 2 and 3; and 169.452; Laws 1993, 
                  chapter 146, article 5, section 20; and Laws 1997, 
                  chapter 231, article 1, section 17; Minnesota Rules, 
                  part 3525.2750, subpart 1, item B. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                               GENERAL EDUCATION
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        121.904, subdivision 4a, is amended to read: 
           Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
        settlement revenue" means the current, delinquent, and 
        manufactured home property tax receipts collected by the county 
        and distributed to the school district, including distributions 
        made pursuant to section 279.37, subdivision 7, and excluding 
        the amount levied pursuant to section 124.914, subdivision 1. 
           (b) In June of each year, the school district shall 
        recognize as revenue, in the fund for which the levy was made, 
        the lesser of:  
           (1) the May, June, and July school district tax settlement 
        revenue received in that calendar year; or 
           (2) the sum of: the state aids and credits enumerated in 
        section 124.155, subdivision 2, which are for the fiscal year 
        payable in that fiscal year plus an amount equal to the levy 
        recognized as revenue in June of the prior year plus 31 percent 
        of the amount of the levy certified in the prior calendar year 
        according to section 124A.03, subdivision 2; or 
           (3)(i) 7.0 percent of the lesser of the amount of the 
        general education levy certified in the prior calendar year 
        according to section 124A.23, subdivision 2, or the difference 
        between the amount of the total general fund levy certified in 
        the prior calendar year and the sum of the amounts certified in 
        the prior calendar year according to sections 124A.03, 
        subdivision 2; 124.315, subdivision 4; 124.912, subdivisions 1, 
        paragraph (2), 2, and 3; 124.916, subdivisions 1, 2, and 3, 
        paragraphs (4), (5), and (6); and 124.918, subdivision 6; plus 
           (ii) 31 percent of the referendum levy certified in the 
        prior calendar year according to section 124A.03, subdivision 2; 
        plus 
           (iii) the entire amount of the levy certified in the prior 
        calendar year according to sections 124.315, subdivision 4; 
        124.912, subdivisions 1, paragraph (2), 2, and 3; 124.916, 
        subdivisions 1, 2, and 3, paragraphs (4), (5), and (6); and 
        124.918, subdivision 6. 
           (i) 31 percent of the referendum levy certified in the 
        prior calendar year according to section 124A.03, subdivision 2; 
        plus 
           (ii) the entire amount of the levy certified in the prior 
        calendar year according to sections 124.912, subdivisions 1, 
        paragraph (2), 2, and 3; 124.315, subdivision 4; 124.916, 
        subdivisions 1, 2, and 3, paragraphs (4), (5), and (6); and 
        124.918, subdivision 6. 
           (c) In July of each year, the school district shall 
        recognize as revenue that portion of the school district tax 
        settlement revenue received in that calendar year and not 
        recognized as revenue for the previous fiscal year pursuant to 
        clause (b).  
           (d) All other school district tax settlement revenue shall 
        be recognized as revenue in the fiscal year of the settlement. 
        Portions of the school district levy assumed by the state, 
        including prior year adjustments and the amount to fund the 
        school portion of the reimbursement made pursuant to section 
        273.425, shall be recognized as revenue in the fiscal year 
        beginning in the calendar year for which the levy is payable. 
           Sec. 2.  Minnesota Statutes 1996, section 121.908, 
        subdivision 2, is amended to read: 
           Subd. 2.  Each district shall submit to the commissioner by 
        August September 15 of each year an unaudited financial 
        statement data for the preceding fiscal year.  This statement 
        These financial data shall be submitted on forms in the format 
        prescribed by the commissioner. 
           Sec. 3.  Minnesota Statutes 1996, section 121.908, 
        subdivision 3, is amended to read: 
           Subd. 3.  By December 31 November 30 of the calendar year 
        of the submission of the unaudited financial statement data, the 
        district shall provide to the commissioner and state auditor an 
        audited financial data for the preceding fiscal year.  An 
        audited financial statement prepared in a form which will allow 
        comparison with and correction of material differences in the 
        unaudited statement financial data shall be submitted to the 
        commissioner and the state auditor by December 31.  The audited 
        financial statement must also provide a statement of assurance 
        pertaining to uniform financial accounting and reporting 
        standards compliance and a copy of the management letter 
        submitted to the district by the school district's auditor. 
           Sec. 4.  Minnesota Statutes 1996, section 124.14, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPROPRIATION TRANSFERS.] If a direct 
        appropriation from the general fund to the department of 
        children, families, and learning for any education aid or grant 
        authorized in this chapter and chapters 121, 123, 124A, 124C, 
        125, 126, and 134, excluding appropriations under sections 
        124.26, 124.2601, 124.2605, 124.261, 124.2615, 124.2711, 
        124.2712, 124.2713, 124.2714, 124.2715, and 124.2716, exceeds 
        the amount required, the commissioner of children, families, and 
        learning may transfer the excess to any education aid or grant 
        appropriation that is insufficient.  However, section 124A.032 
        applies to a deficiency in the direct appropriation for general 
        education aid.  Excess appropriations shall be allocated 
        proportionately among aids or grants that have insufficient 
        appropriations.  The commissioner of finance shall make the 
        necessary transfers among appropriations according to the 
        determinations of the commissioner of children, families, and 
        learning.  If the amount of the direct appropriation for the aid 
        or grant plus the amount transferred according to this 
        subdivision is insufficient, the commissioner shall prorate the 
        available amount among eligible districts.  The state is not 
        obligated for any additional amounts.  
           Sec. 5.  Minnesota Statutes 1996, section 124.14, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [APPROPRIATION TRANSFERS FOR COMMUNITY EDUCATION 
        PROGRAMS.] If a direct appropriation from the general fund to 
        the department of children, families, and learning for an 
        education aid or grant authorized under section 124.26, 
        124.2601, 124.2605, 124.261, 124.2615, 124.2711, 124.2712, 
        124.2713, 124.2714, 124.2715, or 124.2716 exceeds the amount 
        required, the commissioner of children, families, and learning 
        may transfer the excess to any education aid or grant 
        appropriation that is insufficiently funded under these sections.
        Excess appropriations shall be allocated proportionately among 
        aids or grants that have insufficient appropriations.  The 
        commissioner of finance shall make the necessary transfers among 
        appropriations according to the determinations of the 
        commissioner of children, families, and learning.  If the amount 
        of the direct appropriation for the aid or grant plus the amount 
        transferred according to this subdivision is insufficient, the 
        commissioner shall prorate the available amount among eligible 
        districts.  The state is not obligated for any additional 
        amounts. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        124.17, subdivision 4, is amended to read: 
           Subd. 4.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
        enrolled in a learning year program under section 121.585, an 
        area learning center under sections 124C.45 and 124C.46, or an 
        alternative program approved by the commissioner, or a contract 
        alternative program under section 126.22, subdivision 3, 
        paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
        school year for a secondary student, more than 935 hours in a 
        school year for an elementary student, or more than 425 hours in 
        a school year for a kindergarten student without a disability, 
        that pupil may be counted as more than one pupil in average 
        daily membership.  The amount in excess of one pupil must be 
        determined by the ratio of the number of hours of instruction 
        provided to that pupil in excess of:  (i) the greater of 1,020 
        hours or the number of hours required for a full-time secondary 
        pupil in the district to 1,020 for a secondary pupil; (ii) the 
        greater of 935 hours or the number of hours required for a 
        full-time elementary pupil in the district to 935 for an 
        elementary pupil in grades 1 through 6; and (iii) the greater of 
        425 hours or the number of hours required for a full-time 
        kindergarten student without a disability in the district to 425 
        for a kindergarten student without a disability.  Hours that 
        occur after the close of the instructional year in June shall be 
        attributable to the following fiscal year.  A kindergarten 
        student must not be counted as more than 1.2 pupils in average 
        daily membership under this subdivision. 
           (b)(i) To receive general education revenue for a pupil in 
        an alternative program that has an independent study component, 
        a school district must meet the requirements in this paragraph.  
        The school district must develop with the pupil a continual 
        learning plan for the pupil.  A district must allow a minor 
        pupil's parent or guardian to participate in developing the 
        plan, if the parent or guardian wants to participate.  The plan 
        must identify the learning experiences and expected outcomes 
        needed for satisfactory credit for the year and for graduation.  
        The plan must be updated each year.  Each school district that 
        has a state-approved public alternative program must reserve 
        revenue in an amount equal to at least 90 percent of the 
        district average general education revenue per pupil unit less 
        compensatory revenue per pupil unit times the number of pupil 
        units generated by students attending a state-approved public 
        alternative program.  The amount of reserved revenue available 
        under this subdivision may only be spent for program costs 
        associated with the state-approved public alternative program.  
        Compensatory revenue must be allocated according to section 
        124A.28, subdivision 1a. 
           (ii) General education revenue for a pupil in an approved 
        alternative program without an independent study component must 
        be prorated for a pupil participating for less than a full year, 
        or its equivalent.  Each school district that has a 
        state-approved public alternative program must reserve revenue 
        in an amount equal to at least 90 percent of the district 
        average general education revenue per pupil unit less 
        compensatory revenue per pupil unit times the number of pupil 
        units generated by students attending a state-approved public 
        alternative program.  The amount of reserved revenue available 
        under this subdivision may only be spent for program costs 
        associated with the state-approved public alternative program.  
        Compensatory revenue must be allocated according to section 
        124A.28, subdivision 1a.  
           (iii) General education revenue for a pupil in an approved 
        alternative program that has an independent study component must 
        be paid for each hour of teacher contact time and each hour of 
        independent study time completed toward a credit or graduation 
        standards necessary for graduation.  Average daily membership 
        for a pupil shall equal the number of hours of teacher contact 
        time and independent study time divided by 1,020. 
           (iv) For an alternative program having an independent study 
        component, the commissioner shall require a description of the 
        courses in the program, the kinds of independent study involved, 
        the expected learning outcomes of the courses, and the means of 
        measuring student performance against the expected outcomes.  
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        124.17, subdivision 6, is amended to read: 
           Subd. 6.  [FREE AND REDUCED PRICED LUNCHES.] The 
        commissioner shall determine the number of children eligible to 
        receive either a free or reduced priced lunch on October 1 each 
        year.  Children enrolled in a building on October 1 and 
        determined to be eligible to receive free or reduced price lunch 
        by January 15 of the following year shall be counted as eligible 
        on October 1 for purposes of subdivision 1d.  The commissioner 
        may use federal definitions for these purposes and may adjust 
        these definitions as appropriate.  The commissioner may adopt 
        reporting guidelines to assure accuracy of data counts and 
        eligibility.  Districts shall use any guidelines adopted by the 
        commissioner. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        124.17, subdivision 7, is amended to read: 
           Subd. 7.  [LEP PUPIL UNITS.] (a) Limited English 
        proficiency pupil units for fiscal year 1998 and thereafter 
        shall be determined according to this subdivision. 
           (b) The limited English proficiency concentration 
        percentage for a district equals the product of 100 times the 
        ratio of: 
           (1) the number of pupils of limited English proficiency 
        enrolled in the district during the current fiscal year; to 
           (2) the number of pupils in average daily membership 
        enrolled in the district. 
           (c) The limited English proficiency pupil units for each 
        pupil enrolled in a program for pupils of limited English 
        proficiency in accordance with sections 126.261 to 126.269 
        equals the lesser of one or the quotient obtained by dividing 
        the limited English proficiency concentration percentage for the 
        pupil's district of enrollment by 11.5. 
           (d) Limited English proficiency pupil units shall be 
        counted by the district of enrollment. 
           (e) Notwithstanding paragraph (d), for the purposes of this 
        subdivision, pupils enrolled in a cooperative or intermediate 
        school district shall be counted by the district of residence. 
           Sec. 9.  Minnesota Statutes 1997 Supplement, section 
        124.195, subdivision 7, is amended to read: 
           Subd. 7.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
        fiscal year state general fund payments for a district 
        nonoperating fund shall be made at 90 percent of the estimated 
        entitlement during the fiscal year of the entitlement.  This 
        amount shall be paid in 12 equal monthly installments.  The 
        amount of the actual entitlement, after adjustment for actual 
        data, minus the payments made during the fiscal year of the 
        entitlement shall be paid prior to October 31 of the following 
        school year.  The commissioner may make advance payments of debt 
        service equalization aid or homestead and agricultural credit 
        aid for a district's debt service fund earlier than would occur 
        under the preceding schedule if the district submits evidence 
        showing a serious cash flow problem in the fund.  The 
        commissioner may make earlier payments during the year and, if 
        necessary, increase the percent of the entitlement paid to 
        reduce the cash flow problem. 
           Sec. 10.  Minnesota Statutes 1996, section 124.248, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] General 
        education revenue shall be paid to a charter school as though it 
        were a school district.  The general education revenue for each 
        pupil unit is the state average general education revenue per 
        pupil unit minus $170 an amount equal to the product of the 
        formula allowance according to section 124A.22, subdivision 2, 
        times .0485, calculated without compensatory basic skills 
        revenue, transportation sparsity revenue, and the transportation 
        portion of the transition revenue adjustment, plus compensatory 
        basic skills revenue as though the school were a school district.
           Sec. 11.  Minnesota Statutes 1996, section 124.248, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TRANSPORTATION REVENUE.] Transportation revenue 
        shall be paid to a charter school that provides transportation 
        services according to section 120.064, subdivision 15, according 
        to this subdivision.  Transportation aid shall equal 
        transportation revenue.  
           (a) In addition to the revenue under subdivision 1, a 
        charter school providing transportation services shall receive 
        general education aid for each pupil unit equal to the sum of 
        $170 an amount equal to the product of the formula allowance 
        according to section 124A.22, subdivision 2, times .0485, plus 
        the transportation sparsity allowance for the school district in 
        which the charter school is located, plus the transportation 
        transition allowance for the school district in which the 
        charter school is located.  
           (b) For the first two years that a charter school is 
        providing transportation services, the special programs 
        transportation revenue equals the charter school's actual cost 
        in the current school year for transportation services for 
        children with disabilities under section 124.223, subdivisions 
        4, 5, 7, and 8.  For the third year of transportation services 
        and later fiscal years, the special programs transportation 
        revenue shall be computed according to section 124.225, 
        subdivision 14.  
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        124.248, subdivision 2a, is amended to read: 
           Subd. 2a.  [BUILDING LEASE AID.] When a charter school 
        finds it economically advantageous to rent or lease a building 
        or land for any instructional purposes and it determines that 
        the total operating capital revenue under section 124A.22, 
        subdivision 10, is insufficient for this purpose, it may apply 
        to the commissioner for building lease aid for this purpose.  
        Criteria for aid approval and revenue uses shall be as defined 
        for the building lease levy in section 124.91, subdivision 1, 
        paragraphs (a) and (b).  The amount of building lease aid per 
        pupil unit served for a charter school for any year shall not 
        exceed the lesser of (a) 80 percent of the approved cost or (b) 
        the product of the actual pupil units served for the current 
        school year times the sum of the state average debt redemption 
        fund revenue plus capital revenue, according to section 124.91, 
        per actual pupil unit served for the current fiscal year. 
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        124.248, subdivision 6, is amended to read: 
           Subd. 6.  [START-UP COSTS.] During the first two years of a 
        charter school's operation, the charter school is eligible for 
        aid to pay for start-up costs and additional operating costs. 
        Start-up cost aid equals the greater of: 
           (1) $50,000 per charter school; or 
           (2) $500 times the charter school's pupil units served for 
        that year. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        124.2601, subdivision 3, is amended to read: 
           Subd. 3.  [REVENUE AID.] Adult basic education revenue aid 
        for each approved program equals 65 percent of the general 
        education formula allowance times the number of full-time 
        equivalent students in its adult basic education program. 
           Sec. 15.  Minnesota Statutes 1997 Supplement, section 
        124.2601, subdivision 6, is amended to read: 
           Subd. 6.  [AID GUARANTEE.] (a) For fiscal year 1994, any 
        adult basic education program that receives less state aid under 
        subdivisions 3 and 7 than from the aid formula for fiscal year 
        1992 shall receive the amount of aid it received in fiscal year 
        1992. 
           (b) For 1995, 1996, and 1997 fiscal years, an adult basic 
        education program that receives aid shall receive at least the 
        amount of aid it received in fiscal year 1992 under subdivisions 
        3 and 7, plus aid equal to the amount of revenue that would have 
        been raised for taxes payable in 1994 under Minnesota Statutes 
        1992, section 124.2601, subdivision 4, minus the amount raised 
        under subdivision 4. 
           (c) For fiscal year 1998, any adult basic education program 
        that receives less state aid than in fiscal year 1997 shall 
        receive additional aid equal to 80 percent of the difference 
        between its 1997 aid and the amount of aid under Minnesota 
        Statutes 1997 Supplement, section 124.2601, subdivision 5.  For 
        fiscal year 1999 and later, additional aid under this 
        paragraph must be reduced by 20 percent each year equals 80 
        percent of the additional aid computed for fiscal year 1998.  
        For fiscal year 2000, the additional aid under this paragraph 
        equals 60 percent of the additional aid computed for fiscal year 
        1998.  For fiscal year 2001, the additional aid under this 
        paragraph equals 40 percent of the additional aid computed for 
        fiscal year 1998.  For fiscal year 2002, the additional aid 
        under this paragraph equals 20 percent of the additional aid 
        computed for fiscal year 1998.  For fiscal year 2003 and later, 
        the additional aid under this paragraph equals zero. 
           Sec. 16.  Minnesota Statutes 1997 Supplement, section 
        124.2711, subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To 
        obtain early childhood family education revenue, a district may 
        levy an amount equal to the tax rate of .653 .45 percent times 
        the adjusted tax capacity of the district for the year preceding 
        the year the levy is certified.  If the amount of the early 
        childhood family education levy would exceed the early childhood 
        family education revenue, the early childhood family education 
        levy shall equal the early childhood family education revenue. 
           Sec. 17.  Minnesota Statutes 1997 Supplement, section 
        124.2713, subdivision 6, is amended to read: 
           Subd. 6.  [COMMUNITY EDUCATION LEVY.] To obtain community 
        education revenue, a district may levy the amount raised by a 
        tax rate of 1.09 .41 percent times the adjusted net tax capacity 
        of the district.  If the amount of the community education levy 
        would exceed the community education revenue, the community 
        education levy shall be determined according to subdivision 6a. 
           Sec. 18.  Minnesota Statutes 1996, section 124.2713, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [COMMUNITY EDUCATION LEVY; DISTRICTS OFF THE 
        FORMULA.] If the amount of the community education levy for a 
        district exceeds the district's community education revenue, the 
        amount of the community education levy is limited to the sum of: 
           (1) the district's community education revenue according to 
        subdivision 1; plus. 
           (2) the amount of the aid reduction for the same fiscal 
        year according to subdivision 6b.  
           For purposes of statutory cross-reference, a levy made 
        according to this subdivision is the levy made according to 
        subdivision 6.  
           Sec. 19.  Minnesota Statutes 1996, section 124.2727, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [FISCAL YEAR 1999 DISTRICT COOPERATION REVENUE.] 
        A district's cooperation revenue for fiscal year 1999 is equal 
        to the greater of $67 times the actual pupil units or $25,000. 
           Sec. 20.  Minnesota Statutes 1996, section 124.2727, 
        subdivision 6c, is amended to read: 
           Subd. 6c.  [FISCAL YEAR 1999 DISTRICT COOPERATION AID.] A 
        district's cooperation aid for fiscal year 1999 is the 
        difference between its district cooperation revenue and its 
        district cooperation levy.  If a district does not levy the 
        entire amount permitted, aid must be reduced in proportion to 
        the actual amount levied. 
           Sec. 21.  Minnesota Statutes 1996, section 124.273, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [ALLOCATIONS FROM COOPERATIVE UNITS.] For the 
        purposes of this section and section 124.321, pupils of limited 
        English proficiency enrolled in a cooperative or intermediate 
        school district unit shall be counted by the school district of 
        residence, and the cooperative unit shall allocate its approved 
        expenditures for limited English proficiency programs among 
        participating school districts.  Limited English proficiency aid 
        for services provided by a cooperative or intermediate school 
        district shall be paid to the participating school districts. 
           Sec. 22.  Minnesota Statutes 1996, section 124.3201, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] (a) 
        A school district's special education revenue for fiscal year 
        1996 and later equals the state total special education revenue, 
        minus the amount determined under paragraph (b), times the ratio 
        of the district's adjusted special education base revenue to the 
        state total adjusted special education base revenue.  If the 
        state board of education modifies its rules for special 
        education in a manner that increases a school district's special 
        education obligations or service requirements, the commissioner 
        of children, families, and learning shall annually increase each 
        district's special education revenue by the amount necessary to 
        compensate for the increased service requirements.  The 
        additional revenue equals the cost in the current year 
        attributable to rule changes not reflected in the computation of 
        special education base revenue, multiplied by the appropriate 
        percentages from subdivision 2. 
           (b) Notwithstanding paragraph (a), if the special education 
        base revenue for a district equals zero, the special education 
        revenue equals the amount computed according to subdivision 2 
        using current year data.  
           (c) Notwithstanding paragraphs (a) and (b), if the special 
        education base revenue for a district is greater than zero, and 
        the base year amount for the district under subdivision 2, 
        paragraph (a), clause (7), equals zero, the special education 
        revenue equals the sum of the amount computed according to 
        paragraph (a), plus the amount computed according to subdivision 
        2, paragraph (a), clause (7), using current year data. 
           Sec. 23.  Minnesota Statutes 1996, section 124.85, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISTRICT ACTION.] A district may enter into a 
        guaranteed energy savings contract with a qualified provider if, 
        after review of the report and the commissioner's evaluation if 
        requested, the board finds that the amount it would spend on the 
        energy conservation measures recommended in the report is not 
        likely to exceed the amount to be saved in energy and operation 
        costs over 15 years from the date of installation if the 
        recommendations in the report were followed, and the qualified 
        provider provides a written guarantee that the energy or 
        operating cost savings will meet or exceed the costs of the 
        system.  The guaranteed energy savings contract may provide for 
        payments over a period of time, not to exceed 15 years.  
        Notwithstanding section 121.912, a district annually may 
        transfer from the general fund to the capital expenditure fund 
        reserve for operating capital account an amount up to the amount 
        saved in energy and operation costs as a result of guaranteed 
        energy savings contracts. 
           Sec. 24.  Minnesota Statutes 1996, section 124A.03, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [REFERENDUM DATE.] In addition to the referenda 
        allowed in subdivision 2, clause (a), the commissioner may 
        authorize a referendum for a different day.  
           (a) The commissioner may grant authority to a district to 
        hold a referendum on a different day if the district is in 
        statutory operating debt and has an approved plan or has 
        received an extension from the department to file a plan to 
        eliminate the statutory operating debt.  
           (b) The commissioner may grant authority for a district to 
        hold a referendum on a different day if:  (1) the district will 
        conduct a bond election under chapter 475 on that same day; and 
        (2) the proceeds of the referendum will provide only additional 
        operating revenue necessitated by the facility complementing the 
        purpose for which bonding authority is sought.  The commissioner 
        may only grant authority under this paragraph if the district 
        demonstrates to the commissioner's satisfaction that the 
        district's ability to operate the new facility or achieve 
        efficiencies with the purchases connected to the proceeds of the 
        bond sale will be significantly affected if the operating 
        referendum is not conducted until the November general 
        election.  Authority under this paragraph expires November 30, 
        1998. 
           (c) The commissioner must approve, deny, or modify each 
        district's request for a referendum levy on a different day 
        within 60 days of receiving the request from a district. 
           Sec. 25.  Minnesota Statutes 1996, section 124A.03, 
        subdivision 3c, is amended to read: 
           Subd. 3c.  [REFERENDUM ALLOWANCE REDUCTION.] For fiscal 
        year 1998 and later, a district's referendum allowance for 
        referendum authority under subdivision 1c is reduced as provided 
        in this subdivision.  
           (a) For referendum revenue authority approved before June 
        1, 1996, and effective for fiscal year 1997, the reduction 
        equals the amount of the reduction computed for fiscal year 1997 
        under subdivision 3b.  
           (b) For referendum revenue authority approved before June 
        1, 1996, and effective beginning in fiscal year 1998, the 
        reduction equals the amount of the reduction computed for fiscal 
        year 1998 under subdivision 3b. 
           (c) For referendum revenue authority approved after May 31, 
        1996, there is no reduction.  
           (d) For districts with more than one referendum authority, 
        the reduction shall be computed separately for each authority.  
        The reduction shall be applied first to authorities levied 
        against tax capacity, and then to authorities levied against 
        referendum market value.  For districts with more than one 
        authority levied against net tax capacity or against referendum 
        market value, the referendum allowance reduction shall be 
        applied first to the authority with the earliest expiration date.
           (e) When referendum authority approved before June 1, 1996, 
        expires, the referendum allowance reduction for a district shall 
        be decreased by the amount of the decrease in the district's 
        total referendum allowance under subdivision 1c.  For districts 
        with more than one referendum authority remaining after the 
        expiration, the amount of any remaining allowance reduction 
        shall be reallocated among the remaining referendum authority 
        approved before June 1, 1996, according to paragraph (d). 
           (f) For a newly reorganized district created after July 1, 
        1996, the referendum revenue reduction equals the lesser of the 
        amount calculated for the combined district, or the sum of the 
        amounts by which each of the reorganizing district's 
        supplemental revenue reduction exceeds its respective 
        supplemental revenue allowances calculated for the year 
        preceding the year of reorganization. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, section 
        124A.036, subdivision 5, is amended to read: 
           Subd. 5.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
        education aid for districts must be adjusted for each pupil 
        attending a nonresident district under sections 120.062, 
        120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22.  
        The adjustments must be made according to this subdivision. 
           (a) General education aid paid to a resident district must 
        be reduced by an amount equal to the general education revenue 
        exclusive of compensatory basic skills revenue attributable to 
        the pupil in the resident district. 
           (b) General education aid paid to a district serving a 
        pupil in programs listed in this subdivision shall be increased 
        by an amount equal to the general education revenue exclusive of 
        compensatory basic skills revenue attributable to the pupil in 
        the nonresident district.  
           (c) If the amount of the reduction to be made from the 
        general education aid of the resident district is greater than 
        the amount of general education aid otherwise due the district, 
        the excess reduction must be made from other state aids due the 
        district. 
           (d) The district of residence shall pay tuition to a 
        district or an area learning center, operated according to 
        paragraph (e), providing special instruction and services to a 
        pupil with a disability, as defined in section 120.03, or a 
        pupil, as defined in section 120.181, who is enrolled in a 
        program listed in this subdivision.  The tuition shall be equal 
        to (1) the actual cost of providing special instruction and 
        services to the pupil, including a proportionate amount for debt 
        service and for capital expenditure facilities and equipment, 
        and debt service but not including any amount for 
        transportation, minus (2) the amount of general education aid 
        and special education aid, attributable to that pupil, that is 
        received by the district providing special instruction and 
        services. 
           (e) 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 tuition for pupils rather than to 
        calculate general education aid adjustments under paragraph (a), 
        (b), or (c).  The tuition must be equal to the greater of the 
        average general education revenue per pupil unit attributable to 
        the pupil, or the actual cost of providing the instruction, 
        excluding transportation costs, if the pupil meets the 
        requirements of section 120.03 or 120.181. 
           Sec. 27.  Minnesota Statutes 1996, section 124A.036, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CHARTER SCHOOLS.] (a) The general education aid 
        for districts must be adjusted for each pupil attending a 
        charter school under section 120.064.  The adjustments must be 
        made according to this subdivision. 
           (b) General education aid paid to a resident district must 
        be reduced by an amount equal to the general education revenue 
        exclusive of compensatory basic skills revenue. 
           (c) General education aid paid to a district in which a 
        charter school not providing transportation according to section 
        120.064, subdivision 15, is located shall be increased by an 
        amount equal to the product of:  (1) the sum of $170 an amount 
        equal to the product of the formula allowance according to 
        section 124A.22, subdivision 2, times .0485, plus the 
        transportation sparsity allowance for the district, plus the 
        transportation transition allowance for the district; times (2) 
        the pupil units attributable to the pupil.  
           (d) If the amount of the reduction to be made from the 
        general education aid of the resident district is greater than 
        the amount of general education aid otherwise due the district, 
        the excess reduction must be made from other state aids due the 
        district. 
           Sec. 28.  Minnesota Statutes 1997 Supplement, section 
        124A.22, subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
        years 1997 and 1998, the general education revenue for each 
        district equals the sum of the district's basic revenue, 
        compensatory education revenue, secondary sparsity revenue, 
        elementary sparsity revenue, transportation sparsity revenue, 
        total operating capital revenue, transition revenue, and 
        supplemental revenue. 
           (b) For fiscal year 1999 and thereafter, the general 
        education revenue for each district equals the sum of the 
        district's basic revenue, basic skills revenue, training and 
        experience revenue, secondary sparsity revenue, elementary 
        sparsity revenue, transportation sparsity revenue, total 
        operating capital revenue, graduation standards implementation 
        revenue, transition revenue, and supplemental revenue. 
           Sec. 29.  Minnesota Statutes 1997 Supplement, section 
        124A.22, subdivision 2, is amended to read: 
           Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
        district equals the formula allowance times the actual pupil 
        units for the school year.  The formula allowance for fiscal 
        year 1997 is $3,505.  The formula allowance for fiscal year 1998 
        is $3,581 and the formula allowance for fiscal year 1999 and 
        subsequent fiscal years is $3,530.  The formula allowance for 
        fiscal year 2000 and subsequent fiscal years is $3,597. 
           Sec. 30.  Minnesota Statutes 1997 Supplement, section 
        124A.22, subdivision 13b, is amended to read: 
           Subd. 13b.  [TRANSITION ALLOWANCE.] (a) A district's 
        transportation transition allowance for fiscal year 1998 and 
        later equals the result of the following: 
           (1) if the result in subdivision 13a, paragraph (a), clause 
        (iii), for fiscal year 1998 is less than the fiscal year 1996 
        base allowance, the transportation transition allowance equals 
        the fiscal year 1996 base allowance minus the result in 
        subdivision 13a, paragraph (a), clause (iii); or 
           (2) if the result in subdivision 13a, paragraph (a), clause 
        (iii), for fiscal year 1998 and later is greater than or equal 
        to the fiscal year 1996 base allowance, the transportation 
        transition allowance equals zero. 
           (b) For fiscal years 1997 and 1998, a district's training 
        and experience transition allowance is equal to the training and 
        experience revenue the district would have received under 
        Minnesota Statutes 1994, section 124A.22, subdivision 4, divided 
        by the actual pupil units for fiscal year 1997 minus $130.  For 
        fiscal year 1999 and later, a district's training and experience 
        transition allowance equals zero.  
           If the training and experience transition allowance is less 
        than zero, the reduction shall be determined according to the 
        following schedule: 
           (1) for fiscal year 1997, the reduction is equal to .9 
        times the amount initially determined; 
           (2) for fiscal year 1998, the reduction is equal to .75 
        times the amount initially determined; and 
           (c) A district's transition compensatory transition 
        allowance equals the greater of zero or the difference between:  
           (1) the amount of compensatory revenue the district would 
        have received under subdivision 3 for fiscal year 1998 computed 
        using a basic formula allowance of $3,281; and 
           (2) the amount the district receives under subdivision 3; 
        divided by 
           (3) the district's actual pupil units for fiscal year 1998. 
           (c) A district's cooperation transition allowance for 
        fiscal year 2000 and later equals the greater of zero or the 
        difference between:  
           (1) $25,000; and 
           (2) $67 times the district's actual pupil units for fiscal 
        year 2000. 
           (d) A district's transition allowance for fiscal year 1998 
        is equal to the sum of its transportation transition allowance, 
        its training and experience transition allowance, and its 
        transition compensatory allowance.  A district's transition 
        allowance for fiscal year 1999 and thereafter is equal to the 
        sum of its transportation transition allowance and its 
        transition compensatory transition allowance.  A district's 
        transition allowance for fiscal year 2000 and thereafter is 
        equal to the sum of its transportation transition allowance, its 
        compensatory transition allowance, and its cooperation 
        transition allowance. 
           Sec. 31.  Minnesota Statutes 1996, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [GRADUATION STANDARDS IMPLEMENTATION 
        REVENUE.] (a) A school district's graduation standards 
        implementation revenue is equal to $52 times its actual pupil 
        units for fiscal year 1999 plus $14 times its actual pupil units 
        for fiscal year 1999 if the district implements the graduation 
        rule under section 121.1114, paragraph (b), and $43 per pupil 
        unit for all districts for fiscal year 2000 and later.  
        Graduation standards implementation revenue is reserved and must 
        be used according to paragraphs (b) and (c). 
           (b) For fiscal year 1999, revenue must be reserved for 
        programs according to clauses (1) to (3). 
           (1) At least $20 per actual pupil unit plus $14 per actual 
        pupil unit for a district that implements the graduation rule 
        under section 121.1114, paragraph (b), must be allocated to 
        school sites in proportion to the number of students enrolled at 
        each school site weighted according to section 124.17, 
        subdivision 1, and is reserved for programs designed to enhance 
        the implementation of the graduation rule through intensive 
        staff development and decentralized decision making. 
           (2) At least $5 per actual pupil unit is reserved for 
        gifted and talented programs that are integrated with the 
        graduation rule.  This aid must supplement, not supplant, money 
        spent on gifted and talented programs authorized under Laws 
        1997, First Special Session chapter 4, article 5, section 24. 
           (3) Remaining aid under this paragraph must be used: 
           (i) for technology purposes including wiring, network 
        connections, and other technology-related infrastructure 
        improvements; purchase or lease of computer software and 
        hardware to be used in classrooms and for instructional 
        purposes; purchase or lease of interactive television network 
        equipment and network support; purchase or lease of computer 
        software and hardware designed to support special needs 
        programming and limited English proficiency programming; network 
        and technical support; and purchase of textbooks and other 
        instructional materials; or 
           (ii) to reduce class size. 
           (c) For fiscal year 2000 and later, revenue must be 
        allocated to school sites and reserved for programs designed to 
        enhance the implementation of the graduation rule through:  (1) 
        staff development programs; (2) technology purposes under 
        paragraph (b), clause (3); (3) gifted and talented programs; or 
        (4) class size reduction programs based at the school site. 
           (d) To the extent possible, school districts shall make 
        opportunities for graduation standards implementation available 
        to teachers employed by intermediate school districts.  If the 
        commissioner determines that the supplemental appropriation made 
        for this subdivision under section 40, subdivision 2, is in 
        excess of the amount needed for this subdivision, the 
        commissioner shall make equal payments of one-third of the 
        excess to each intermediate school district for the purpose of 
        paragraph (a). 
           (e) A district that qualifies for the referendum allowance 
        reduction under section 124A.03, subdivision 3c, shall receive a 
        graduation standards implementation equity adjustment.  In 
        fiscal year 1999, the equity adjustment aid is equal to $29 per 
        actual pupil unit.  In fiscal year 2001 and thereafter, the 
        equity adjustment is equal to $20 per actual pupil unit. 
           Sec. 32.  [124A.226] [RESERVED REVENUE FOR DISTRICT 
        COOPERATION.] 
           A district that was a member of an intermediate school 
        district organized pursuant to chapter 136D on July 1, 1996, 
        must place a portion of its general education revenue in a 
        reserved account for instructional services from entities formed 
        for cooperative services for special education programs and 
        secondary vocational programs.  The amount reserved is equal to 
        the levy made according to Minnesota Statutes 1993, section 
        124.2727, subdivision 6, for taxes payable in 1994 divided by 
        the actual pupil units in the intermediate school district for 
        fiscal year 1995 times the number of actual pupil units in the 
        school district in 1995.  The district must use 5/11 of the 
        revenue for special education and 6/11 of the revenue for 
        secondary vocational education.  The district must demonstrate 
        that the revenue is being used to provide the full range of 
        special education and secondary vocational programs and services 
        available to each child served by the intermediate.  The 
        secondary vocational programs and services must meet the 
        requirements established in an articulation agreement developed 
        between the state board of education and the board of trustees 
        of the Minnesota state colleges and universities. 
           A district that was a member of an education district 
        organized pursuant to section 122.91 on July 1, 1999, must place 
        a portion of its general education revenue in a reserve account 
        for instructional services from entities formed for cooperative 
        services.  Services may include secondary vocational programs, 
        special education programs, staff development, and gifted and 
        talented instruction.  The amount reserved is equal to $50 per 
        pupil unit times the actual number of pupil units in the 
        district. 
           Sec. 33.  Minnesota Statutes 1997 Supplement, section 
        124A.23, subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
        commissioner shall establish the general education tax rate by 
        July 1 of each year for levies payable in the following year.  
        The general education tax capacity rate shall be a rate, rounded 
        up to the nearest hundredth of a percent, that, when applied to 
        the adjusted net tax capacity for all districts, raises the 
        amount specified in this subdivision.  The general education tax 
        rate shall be the rate that raises $1,359,000,000 for fiscal 
        year 1998 and $1,385,500,000 for fiscal year 1999 and, 
        $1,384,900,000 for fiscal year 2000, and $1,387,100,000 for 
        fiscal year 2001, and later fiscal years.  The general education 
        tax rate may not be changed due to changes or corrections made 
        to a district's adjusted net tax capacity after the tax rate has 
        been established.  If the levy target for fiscal year 1999 or 
        fiscal year 2000 is changed by another law enacted during the 
        1997 or 1998 session, the commissioner shall reduce the general 
        education levy target in this bill section by the amount of the 
        reduction in the enacted law. 
           Sec. 34.  Minnesota Statutes 1997 Supplement, section 
        124A.28, subdivision 1, is amended to read: 
           Subdivision 1.  [USE OF THE REVENUE.] The compensatory 
        education revenue under section 124A.22, subdivision 3, and the 
        portion of the transition revenue adjustment under section 
        124A.22, subdivision 13c, attributable to the compensatory 
        transition allowance under section 124A.22, subdivision 13b, 
        paragraph (b), must be used to meet the educational needs of 
        pupils who enroll under-prepared to learn and whose progress 
        toward meeting state or local content or performance standards 
        is below the level that is appropriate for learners of their 
        age.  Any of the following may be provided to meet these 
        learners' needs: 
           (1) direct instructional services under the assurance of 
        mastery program according to section 124.3111; 
           (2) remedial instruction in reading, language arts, 
        mathematics, other content areas, or study skills to improve the 
        achievement level of these learners; 
           (3) additional teachers and teacher aides to provide more 
        individualized instruction to these learners through individual 
        tutoring, lower instructor-to-learner ratios, or team teaching; 
           (4) a longer school day or week during the regular school 
        year or through a summer program that may be offered directly by 
        the site or under a performance-based contract with a 
        community-based organization; 
           (5) comprehensive and ongoing staff development consistent 
        with district and site plans according to section 126.70, for 
        teachers, teacher aides, principals, and other personnel to 
        improve their ability to identify the needs of these learners 
        and provide appropriate remediation, intervention, 
        accommodations, or modifications; 
           (6) instructional materials and technology appropriate for 
        meeting the individual needs of these learners; 
           (7) programs to reduce truancy, encourage completion of 
        high school, enhance self-concept, provide health services, 
        provide nutrition services, provide a safe and secure learning 
        environment, provide coordination for pupils receiving services 
        from other governmental agencies, provide psychological services 
        to determine the level of social, emotional, cognitive, and 
        intellectual development, and provide counseling services, 
        guidance services, and social work services; 
           (8) bilingual programs, bicultural programs, and programs 
        for learners of limited English proficiency; 
           (9) all day kindergarten; 
           (10) extended school day and extended school year programs; 
           (11) substantial parent involvement in developing and 
        implementing remedial education or intervention plans for a 
        learner, including learning contracts between the school, the 
        learner, and the parent that establish achievement goals and 
        responsibilities of the learner and the learner's parent or 
        guardian; and 
           (12) other methods to increase achievement, as needed.  
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        124A.28, subdivision 1a, is amended to read: 
           Subd. 1a.  [BUILDING ALLOCATION.] (a) For fiscal years 1999 
        and 2000, upon approval by the commissioner, a district must 
        allocate at least the difference between its compensatory 
        revenue for that year and 95 percent of the amount of 
        compensatory revenue that the district would have received under 
        section 124A.22, subdivision 3, for fiscal year 1998 computed 
        using a basic formula allowance of $3,281 to each school 
        building in the district where the children who have generated 
        the revenue are served. 
           (b) A district may allocate compensatory revenue not 
        otherwise allocated under paragraph (a) to school sites 
        accordingly to a plan adopted by the school board. 
           (c) For the purposes of this section and section 124.17, 
        subdivision 1d, "building" means education site as defined in 
        section 123.951, subdivision 1. 
           (d) If the pupil is served at a site other than one owned 
        and operated by the district, the revenue shall be paid to the 
        district and used for services for pupils who generate the 
        revenue. 
           Sec. 36.  Minnesota Statutes 1996, section 124A.29, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STAFF DEVELOPMENT AND PARENTAL INVOLVEMENT 
        REVENUE.] A district is encouraged required to reserve general 
        education revenue an amount equal to at least one percent of the 
        basic formula allowance for in-service education for programs 
        under section 126.77, subdivision 2, for staff development 
        plans, including plans for challenging instructional activities 
        and experiences under section 126.70, and for curriculum 
        development and programs, other in-service education, teachers' 
        workshops, teacher conferences, the cost of substitute teachers 
        staff development purposes, and other related costs for staff 
        development efforts.  Districts may expend an additional amount 
        of basic revenue for staff development based on their needs.  
        The school board shall initially allocate 50 percent of the 
        revenue to each school site in the district on a per teacher 
        basis, which shall be retained by the school site until used.  
        The board may retain 25 percent to be used for district wide 
        staff development efforts.  The remaining 25 percent of the 
        revenue shall be used to make grants to school sites that 
        demonstrate exemplary use of allocated staff development 
        revenue.  A grant may be used for any purpose authorized under 
        section 126.70, 126.77, subdivision 2, or for the costs of 
        curriculum development and programs, other in-service education, 
        teachers' workshops, teacher conferences, substitute teachers 
        for staff development purposes, and other staff development 
        efforts, and determined by the site decision-making team.  The 
        site decision-making team must demonstrate to the school board 
        the extent to which staff at the site have met the outcomes of 
        the program.  The board may withhold a portion of initial 
        allocation of revenue if the staff development outcomes are not 
        being met. 
           Sec. 37.  Minnesota Statutes 1996, section 124A.292, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STAFF DEVELOPMENT LEVY.] A district's levy 
        equals its revenue times the lesser of one or the ratio of: 
           (1) the quotient derived by dividing the district's 
        adjusted net tax capacity for the year before the year the levy 
        is certified by the district's actual pupil units for the school 
        year to which the levy is attributable, to 
           (2) the equalizing factor for the school year to which the 
        levy is attributable the number of teachers at the site times 
        $8.15. 
           Sec. 38.  Minnesota Statutes 1996, section 124A.30, is 
        amended to read: 
           124A.30 [STATEWIDE AVERAGE REVENUE.] 
           By October 1 of each year the commissioner shall estimate 
        the statewide average adjusted general education revenue per 
        actual pupil unit and the range disparity in adjusted general 
        education revenue among pupils and districts by computing the 
        difference between the fifth and the ratio of the ninety-fifth 
        percentiles percentile to the fifth percentile of adjusted 
        general education revenue.  The commissioner must provide that 
        information to all school districts. 
           If the disparity in adjusted general education revenue as 
        measured by the difference between the fifth and ratio of the 
        ninety-fifth percentiles percentile to the fifth percentile 
        increases in any year, the commissioner must propose a shall 
        recommend to the legislature options for change in the general 
        education formula that will limit the disparity in adjusted 
        general education revenue to no more than the disparity for the 
        previous school year.  The commissioner must submit the proposal 
        recommended options to the education committees of the 
        legislature by January 15. 
           For purposes of this section, adjusted general revenue 
        means the sum of basic revenue under section 124A.22, 
        subdivision 2; supplemental revenue under section 124A.22, 
        subdivisions 8 and 9; transition revenue under section 124.22, 
        subdivision 13c; and referendum revenue under section 124A.03. 
           Sec. 39.  Laws 1992, chapter 499, article 7, section 31, is 
        amended to read: 
           Sec. 31.  [REPEALER.] 
           Minnesota Statutes 1990, sections 124A.02, subdivision 24; 
        124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3; 
        124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota 
        Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and 
        23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 
        124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9; 
        124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision 
        1; and 124A.29, subdivision 1, are repealed effective June 30, 
        1999 2001; Laws 1991, chapter 265, article 7, section 35, is 
        repealed. 
           Sec. 40.  Laws 1997, First Special Session chapter 4, 
        article 1, section 58, is amended to read: 
           Sec. 58.  [BUS PURCHASE LEVY.] 
           (a) For 1997 taxes payable in 1998, a school district may 
        levy the amount necessary to eliminate the deficit in the 
        reserved fund balance account for bus purchases in its 
        transportation fund as of June 30, 1996. 
           (b) For 1998 taxes payable in 1999, a school district that 
        had a positive balance in the reserved fund balance account for 
        bus purchases in its transportation fund as of June 30, 1996, 
        but that had already entered into a contract for new buses or 
        ordered new buses that had not been received prior to June 30, 
        1996, may levy an amount equal to the difference between the 
        purchase price of the buses and its balance in the reserve 
        account for bus purchases. 
           Sec. 41.  Laws 1997, First Special Session chapter 4, 
        article 1, section 61, subdivision 3, is amended to read: 
           Subd. 3.  [EQUALIZING FACTORS.] The commissioner shall 
        adjust each equalizing factor established using adjusted net tax 
        capacity per actual pupil unit under Minnesota Statutes, 
        chapters 124 and 124A, by dividing the equalizing factor by the 
        ratio of the statewide tax capacity as calculated using the 
        class rates in effect for assessment year 1996 to the statewide 
        tax capacity using the class rates for that assessment year. 
           Sec. 42.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 12, is amended to read: 
           Subd. 12.  [GRADUATION RULE IMPLEMENTATION AT THE SITE 
        AID.] For graduation rule implementation: 
             $10,000,000     .....     1998
           (a) This appropriation shall be paid to districts according 
        to paragraph (b).  The purpose of the aid is to accelerate the 
        implementation of the graduation rule throughout all education 
        sites in the district through intensive staff development and 
        decentralized decision making.  The board shall work with the 
        teaching staff in the district to determine the most effective 
        staff development processes to assure an acceleration of the 
        implementation.  This appropriation is one-time only. 
           (b) A district shall receive aid equal to $10 times the 
        number of fund balance pupil units in the district for fiscal 
        year 1998 excluding pupil units attributable to shared time 
        pupils.  At least 30 percent must be used for the purposes of 
        paragraph (a). 
           Sec. 43.  [COMPENSATION PUPIL UNITS; FISCAL YEAR 1998.] 
           Notwithstanding Minnesota Statutes, section 124.17, 
        subdivision 1d, paragraphs (a) to (c), for fiscal year 1998 
        only, compensation revenue pupil units for buildings with no 
        free or reduced price lunch counts for fiscal year 1997 because 
        the site did not participate in the national school lunch 
        program, or for a contracted alternative program for which no 
        count was reported to the department of children, families, and 
        learning, shall be computed using data for the current fiscal 
        year. 
           Sec. 44.  [ONE-TIME DISTRICT-LEVEL COMPENSATORY REVENUE FOR 
        TRANSITION.] 
           Subdivision 1.  [ELIGIBILITY.] For fiscal year 1999 only, a 
        district is eligible for supplemental compensatory revenue if 
        its growth factor is less than 35 percent. 
           Subd. 2.  [GROWTH FACTOR.] A school district's growth 
        factor equals the ratio of: 
           (1) its fiscal year 1999 compensatory revenue per actual 
        pupil unit for that year less the amount of compensatory revenue 
        divided by the district's actual pupil units for fiscal year 
        1998 that the district would have received under Minnesota 
        Statutes, section 124A.22, subdivision 3, for fiscal year 1998 
        computed using a basic formula allowance of $3,281; to 
           (2) the amount of compensatory revenue divided by the 
        district's actual pupil units for fiscal year 1998 that the 
        district would have received under Minnesota Statutes, section 
        124A.22, subdivision 3, for fiscal year 1998 computed using a 
        basic formula allowance of $3,281. 
           Subd. 3.  [REVENUE.] Supplemental compensatory revenue 
        equals the total number of compensation revenue pupil units 
        computed according to Minnesota Statutes, section 124.17, 
        subdivision 1d, at each site for fiscal year 1998, times $216. 
           Subd. 4.  [ALLOCATION.] Revenue under this section is 
        allocated to school districts, and must be used according to 
        Minnesota Statutes, section 124A.28, subdivision 1. 
           Sec. 45.  [SUPPLEMENTAL REVENUE.] 
           Supplemental revenue for fiscal years 1998 and later under 
        Minnesota Statutes, section 124A.22, subdivision 8, is increased 
        by the following amounts: 
           (1) for independent school district No. 593, Crookston, 
        $117,000; 
           (2) for independent school district No. 361, International 
        Falls, $107,000; 
           (3) for independent school district No. 706, Virginia, 
        $43,000; and 
           (4) for independent school district No. 2154, 
        Eveleth-Gilbert, $8,000. 
           Supplemental revenue increased under this section is not 
        subject to reduction under Minnesota Statutes, section 124A.22, 
        subdivision 9. 
           Sec. 46.  [INDEPENDENT SCHOOL DISTRICT NO. 2862, JACKSON 
        COUNTY CENTRAL; REFERENDUM AUTHORITY.] 
           Subdivision 1.  [REFERENDUM REVENUE ADJUSTMENT.] 
        Notwithstanding Minnesota Statutes, section 124A.03, referendum 
        equalization aid for fiscal year 1998 for independent school 
        district No. 2862, Jackson County Central, is $72,000, and the 
        district's net tax capacity referendum levy is $61,000. 
           Subd. 2.  [AID ADJUSTMENT.] The department of children, 
        families, and learning shall adjust the aid payments for fiscal 
        year 1998 to independent school district No. 2862, Jackson 
        County Central, according to subdivision 1. 
           Subd. 3.  [LEVY ADJUSTMENT.] For taxes payable in 1999, the 
        department of children, families, and learning shall make a levy 
        adjustment for the independent school district No. 2862, Jackson 
        County Central, referendum levy authority for fiscal year 1998, 
        according to subdivision 1. 
           Sec. 47.  [LA CRESCENT-HOKAH; DEBT SERVICE EQUALIZATION.] 
           For the purpose of calculating debt service equalization, 
        donations for capital improvements received before December 31, 
        2000, to independent school district No. 300, La Crescent-Hokah, 
        must be considered as part of the percentage that is required to 
        be raised locally under Minnesota Statutes, section 124.95, 
        subdivision 3. 
           Sec. 48.  [BUS LEVY; MAHTOMEDI.] 
           In addition to other levies, independent school district 
        No. 832, Mahtomedi, a district that was in statutory operating 
        debt, according to Minnesota Statutes, section 121.914, 
        subdivisions 1 and 2, may levy an amount up to $110,000 for the 
        purchase of four type III school buses.  This amount may be 
        levied over a period of three years. 
           Sec. 49.  [ELMORE LEVY ADJUSTMENT.] 
           For property taxes payable in 1999 only, the levy for 
        independent school district No. 2860, Blue Earth area, must be 
        reduced by an amount equal to the amount levied by independent 
        school district No. 219, Elmore, according to Laws 1996, chapter 
        412, article 5, section 18, subdivision 2, for taxes payable in 
        1997.  The levy reduction must be applied against all taxable 
        property in preexisting independent school district No. 219, 
        Elmore, only. 
           Sec. 50.  [APPROPRIATION.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated. 
           Subd. 2.  [GENERAL EDUCATION AID.] For general education 
        aid: 
                $257,000     .....     1998 
             $70,246,000     .....     1999 
           This aid is in addition to any other aid appropriated for 
        this purpose. 
           Subd. 3.  [SHIFT ELIMINATED.] For additional general 
        education aid for eliminating the property tax recognition shift 
        under this article: 
             $90,100,000    .....    1999 
           Notwithstanding the provisions of Minnesota Statutes, 
        section 124.195, the commissioner of children, families, and 
        learning shall pay the fiscal year 1999 appropriation on June 
        20, 1999.  
           Subd. 4.  [DISTRICT-LEVEL COMPENSATORY REVENUE.] For 
        one-time additional district level compensatory revenue:  
             $14,700,000     .....     1999
           Of this amount: 
           (1) $4,500,000 is for a grant to independent school 
        district No. 11, Anoka-Hennepin; 
           (2) $500,000 is for a grant to independent school district 
        No. 281, Robbinsdale; 
           (3) $400,000 is for a grant to independent school district 
        No. 625, St. Paul; 
           (4) $900,000 is for a grant to independent school district 
        No. 709, Duluth; 
           (5) $800,000 is for a grant to independent school district 
        No. 279, Osseo; and 
           (6) $200,000 is for a grant to independent school district 
        No. 535, Rochester. 
           Subd. 5.  [TECHNOLOGY INTEGRATION PROJECT.] For a grant to 
        independent school district No. 62, Ortonville, to implement a 
        technology integration program: 
               $200,000     .....     1999 
           The purpose of the technology integration pilot project is 
        to demonstrate successful and effective uses of technology for 
        students, teachers, guidance counselors, administrators, and 
        parents to implement Minnesota's graduation standards and track 
        student performance in meeting the standards. 
           Sec. 51.  [REPEALER.] 
           (a) Minnesota Statutes 1997 Supplement, section 124.912, 
        subdivisions 2 and 3, are repealed effective for taxes payable 
        in 1998. 
           (b) Minnesota Statutes 1996, sections 121.904, subdivision 
        4c; and 124.2601, subdivision 4, are repealed. 
           (c) Minnesota Statutes 1997 Supplement, section 124.2601, 
        subdivision 5, is repealed effective July 1, 1999.  
           (d) Minnesota Statutes 1996, section 124.2713, subdivision 
        6b, is repealed effective for taxes payable in 1999 and revenue 
        for fiscal year 2000.  
           (e) Minnesota Statutes 1996, section 124.2727, subdivision 
        6b, is repealed effective for taxes payable in 1999.  
           (f) Minnesota Statutes 1996, section 124A.292, subdivisions 
        2 and 4, are repealed effective for revenue for fiscal year 2000.
           (g) Laws 1997, chapter 231, article 1, section 17, is 
        repealed effective the day following final enactment. 
           Sec. 52.  [EFFECTIVE DATES.] 
           (a) Sections 1, 2, 15, 16, 17, 37, 38, and 40 are effective 
        July 1, 1998. 
           (b) Sections 4, 5, 8, 9, 12, 13, 25, 41, 42, and 43 are 
        effective for revenue for fiscal year 1998. 
           (c) Section 7 is effective retroactively to July 1, 1997, 
        for revenue for fiscal year 1999. 
           (d) Sections 10, 11, 26, 27, 28, 31, 34, and 35 are 
        effective for revenue for fiscal year 1999. 
           (e) Section 14 is effective July 1, 1999. 
           (f) Section 18 is effective for revenue for fiscal year 
        2000. 
           (g) Section 21 is effective retroactive for revenue for 
        fiscal year 1997. 
           (h) Sections 24, 33, and 46 are effective the day following 
        final enactment. 
                                   ARTICLE 2 
                               SPECIAL EDUCATION 
           Section 1.  Minnesota Statutes 1996, section 120.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Every child who has a hearing impairment, 
        visual disability, speech or language impairment, physical 
        handicap, other health impairment, mental handicap, 
        emotional/behavioral disorder, specific learning 
        disability, autism, traumatic brain injury, multiple 
        disabilities, or deaf/blind disability and needs special 
        instruction and services, as determined by the standards of the 
        state board, is a child with a disability.  In addition, every 
        child under age five three, and at local district discretion 
        from age three to age seven, who needs special instruction and 
        services, as determined by the standards of the state board, 
        because the child has a substantial delay or has an identifiable 
        physical or mental condition known to hinder normal development 
        is a child with a disability. 
           Sec. 2.  [120.031] [STATEWIDE DATA MANAGEMENT SYSTEM TO 
        MAXIMIZE MEDICAL ASSISTANCE REIMBURSEMENT.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        cooperative unit has the meaning given in section 123.35, 
        subdivision 19b, paragraph (d). 
           Subd. 2.  [STATEWIDE DATA MANAGEMENT SYSTEM.] The 
        commissioner of children, families, and learning, in cooperation 
        with the commissioner of human services, shall develop a 
        statewide data management system using the educational data 
        reporting system or other existing data management system for 
        school districts and cooperative units to use to maximize 
        medical assistance reimbursement for health and health-related 
        services provided under individual education plans and 
        individual family service plans.  The system must be 
        appropriately integrated with state and local existing and 
        developing human services and education data systems.  The 
        statewide data management system must enable school district and 
        cooperative unit staff to: 
           (1) establish medical assistance billing systems or improve 
        existing systems; 
           (2) understand the appropriate medical assistance billing 
        codes for services provided under individual education plans and 
        individual family service plans; 
           (3) comply with the Individuals with Disabilities Education 
        Act, Public Law Number 105-17; 
           (4) contract with billing agents; and 
           (5) carry out other activities necessary to maximize 
        medical assistance reimbursement. 
           Subd. 3.  [IMPLEMENTATION.] Consistent with Minnesota 
        Statutes 256B.0625, subdivision 26, school districts may enroll 
        as medical assistance providers or subcontractors and bill the 
        department of human services under the medical assistance fee 
        for service claims processing system for special education 
        services which are covered services under chapter 256B, which 
        are provided in the school setting for a medical assistance 
        recipient, and for whom the district has secured informed 
        consent consistent with section 13.05, subdivision 4, paragraph 
        (d), and section 256B.77, subdivision 2, paragraph (p), to bill 
        for each type of covered service.  A school district is not 
        eligible to enroll as a home care provider or a personal care 
        provider organization for purposes of billing home care services 
        under section 256B.0627 until the commissioner of human services 
        issues a bulletin instructing county public health nurses on how 
        to assess for the needs of eligible recipients during school 
        hours.  To use private duty nursing services or personal care 
        services at school, the recipient or responsible party must 
        provide written authorization in the care plan identifying the 
        chosen provider and the daily amount of services to be used at 
        school. Medical assistance services for those enrolled in a 
        prepaid health plan shall remain the responsibility of the 
        contracted health plan subject to their network, credentialing, 
        prior authorization, and determination of medical necessity 
        criteria.  The commissioner of human services shall adjust 
        payments to health plans to reflect increased costs incurred by 
        health plans due to increased payments made to school districts 
        or new payment or delivery arrangements developed by health 
        plans in cooperation with school districts. 
           Sec. 3.  Minnesota Statutes 1996, section 120.06, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [EDUCATION AND RESIDENCE OF HOMELESS.] (a) 
        Notwithstanding subdivision 1, a school district must not deny 
        free admission to a homeless person of school age solely because 
        the school district cannot determine that the person is a 
        resident of the school district.  
           (b) The school district of residence for a homeless person 
        of school age shall be the school district in which the homeless 
        shelter or other program, center, or facility assisting the 
        homeless person is located.  The educational services a school 
        district provides to a homeless person must allow the person to 
        work toward meeting the graduation standards under section 
        121.11, subdivision 7c.  
           Sec. 4.  Minnesota Statutes 1996, section 120.064, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CONTRACT.] The sponsor's authorization for a 
        charter school shall be in the form of a written contract signed 
        by the sponsor and the board of directors of the charter 
        school.  The contract for a charter school shall be in writing 
        and contain at least the following: 
           (1) a description of a program that carries out one or more 
        of the purposes in subdivision 1; 
           (2) specific outcomes pupils are to achieve under 
        subdivision 10; 
           (3) admission policies and procedures; 
           (4) management and administration of the school; 
           (5) requirements and procedures for program and financial 
        audits; 
           (6) how the school will comply with subdivisions 8, 13, 15, 
        and 21; 
           (7) assumption of liability by the charter school; 
           (8) types and amounts of insurance coverage to be obtained 
        by the charter school; and 
           (9) the term of the contract, which may be up to three 
        years; and 
           (10) if the board of directors or the operators of the 
        charter school provide special instruction and services for 
        children with a disability under section 120.17, a description 
        of the financial parameters within which the charter school will 
        operate to provide the special instruction and services to 
        children with a disability. 
           Sec. 5.  Minnesota Statutes 1996, section 120.101, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PARENT DEFINED; RESIDENCY DETERMINED.] (a) In 
        sections 120.101 to 120.103, "parent" means a parent, guardian, 
        or other person having legal custody of a child.  
           (b) In section 120.17, "parent" means a parent, guardian, 
        or other person having legal custody of a child under age 18.  
        For an unmarried pupil age 18 or over, "parent" means the pupil 
        unless a guardian or conservator has been appointed, in which 
        case it means the guardian or conservator. 
           (c) For purposes of section 120.17, the school district of 
        residence for an unmarried pupil age 18 or over who is a parent 
        under paragraph (b) and who is placed in a center for care and 
        treatment, shall be the school district in which the pupil's 
        biological or adoptive parent or designated guardian resides. 
           (d) For a married pupil age 18 or over, the school district 
        of residence is the school district in which the married pupil 
        resides. 
           Sec. 6.  Minnesota Statutes 1996, section 120.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SPECIAL INSTRUCTION FOR CHILDREN WITH A 
        DISABILITY.] (a) As defined in paragraph (b), to the extent 
        required in federal law as of July 1, 1999, every district shall 
        provide special instruction and services, either within the 
        district or in another district, for children with a disability 
        who are residents of the district and who are disabled as set 
        forth in section 120.03.  
           (b) Notwithstanding any age limits in laws to the contrary, 
        special instruction and services must be provided from birth 
        until September 1 after the child with a disability becomes 22 
        years old but shall not extend beyond secondary school or its 
        equivalent, except as provided in section 126.22, subdivision 
        2.  Local health, education, and social service agencies shall 
        refer children under age five who are known to need or suspected 
        of needing special instruction and services to the school 
        district.  Districts with less than the minimum number of 
        eligible children with a disability as determined by the state 
        board shall cooperate with other districts to maintain a full 
        range of programs for education and services for children with a 
        disability.  This subdivision does not alter the compulsory 
        attendance requirements of section 120.101. 
           Sec. 7.  Minnesota Statutes 1996, section 120.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [METHOD OF SPECIAL INSTRUCTION.] (a) As defined 
        in this subdivision, to the extent required by federal law as of 
        July 1, 1999, special instruction and services for children with 
        a disability must be based on the assessment and individual 
        education plan.  The instruction and services may be provided by 
        one or more of the following methods: 
           (1) in connection with attending regular elementary and 
        secondary school classes; 
           (2) establishment of special classes; 
           (3) at the home or bedside of the child; 
           (4) in other districts; 
           (5) instruction and services by special education 
        cooperative centers established under this section, or in 
        another member district of the cooperative center to which the 
        resident district of the child with a disability belongs; 
           (6) in a state residential school or a school department of 
        a state institution approved by the commissioner; 
           (7) in other states; 
           (8) by contracting with public, private or voluntary 
        agencies; 
           (9) for children under age five and their families, 
        programs and services established through collaborative efforts 
        with other agencies; 
           (10) for children under age five and their families, 
        programs in which children with a disability are served with 
        children without a disability; and 
           (11) any other method approved by the commissioner. 
           (b) Preference shall be given to providing special 
        instruction and services to children under age three and their 
        families in the residence of the child with the parent or 
        primary caregiver, or both, present. 
           (c) The primary responsibility for the education of a child 
        with a disability shall remain with the district of the child's 
        residence regardless of which method of providing special 
        instruction and services is used.  If a district other than a 
        child's district of residence provides special instruction and 
        services to the child, then the district providing the special 
        instruction and services shall notify the child's district of 
        residence before the child's individual education plan is 
        developed and shall provide the district of residence an 
        opportunity to participate in the plan's development.  The 
        district of residence must inform the parents of the child about 
        the methods of instruction that are available. 
           (d) Paragraphs (e) to (i) may be cited as the "Blind 
        Persons' Literacy Rights and Education Act." 
           (e) The following definitions apply to paragraphs (f) to 
        (i). 
           "Blind student" means an individual who is eligible for 
        special educational services and who: 
           (1) has a visual acuity of 20/200 or less in the better eye 
        with correcting lenses or has a limited field of vision such 
        that the widest diameter subtends an angular distance of no 
        greater than 20 degrees; or 
           (2) has a medically indicated expectation of visual 
        deterioration. 
           "Braille" means the system of reading and writing through 
        touch commonly known as standard English Braille.  
           "Individualized education plan" means a written statement 
        developed for a student eligible for special education and 
        services pursuant to this section and section 602(a)(20) of part 
        A of the Individuals with Disabilities Education Act, United 
        States Code, title 20, section 1401(a). 
           (f) In developing an individualized education plan for each 
        blind student the presumption must be that proficiency in 
        Braille reading and writing is essential for the student to 
        achieve satisfactory educational progress.  The assessment 
        required for each student must include a Braille skills 
        inventory, including a statement of strengths and deficits.  
        Braille instruction and use are not required by this paragraph 
        if, in the course of developing the student's individualized 
        education program, team members concur that the student's visual 
        impairment does not affect reading and writing performance 
        commensurate with ability.  This paragraph does not require the 
        exclusive use of Braille if other special education services are 
        appropriate to the student's educational needs.  The provision 
        of other appropriate services does not preclude Braille use or 
        instruction.  Instruction in Braille reading and writing shall 
        be available for each blind student for whom the 
        multidisciplinary team has determined that reading and writing 
        is appropriate. 
           (g) Instruction in Braille reading and writing must be 
        sufficient to enable each blind student to communicate 
        effectively and efficiently with the same level of proficiency 
        expected of the student's peers of comparable ability and grade 
        level.  
           (h) The student's individualized education plan must 
        specify: 
           (1) the results obtained from the assessment required under 
        paragraph (f); 
           (2) how Braille will be implemented through integration 
        with other classroom activities; 
           (3) the date on which Braille instruction will begin; 
           (4) the length of the period of instruction and the 
        frequency and duration of each instructional session; 
           (5) the level of competency in Braille reading and writing 
        to be achieved by the end of the period and the objective 
        assessment measures to be used; and 
           (6) if a decision has been made under paragraph (f) that 
        Braille instruction or use is not required for the student:  
           (i) a statement that the decision was reached after a 
        review of pertinent literature describing the educational 
        benefits of Braille instruction and use; and 
           (ii) a specification of the evidence used to determine that 
        the student's ability to read and write effectively without 
        Braille is not impaired. 
           (i) Instruction in Braille reading and writing is a service 
        for the purpose of special education and services under this 
        section. 
           (j) Paragraphs (e) to (i) shall not be construed to 
        supersede any rights of a parent or guardian of a child with a 
        disability under federal or state law. 
           Sec. 8.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RULES OF THE STATE BOARD.] (a) As defined in 
        this paragraph, but not to exceed the extent required by federal 
        law as of July 1, 1999, the state board shall promulgate rules 
        relative to qualifications of essential personnel, courses of 
        study, methods of instruction, pupil eligibility, size of 
        classes, rooms, equipment, supervision, parent consultation, and 
        any other rules it deems necessary rules for instruction of 
        children with a disability.  These rules shall provide standards 
        and procedures appropriate for the implementation of and within 
        the limitations of subdivisions 3a and 3b.  These rules shall 
        also provide standards for the discipline, control, management 
        and protection of children with a disability.  The state board 
        shall not adopt rules for pupils served in level 1, 2, or 3, as 
        defined in Minnesota Rules, part 3525.2340, primarily in the 
        regular classroom establishing either case loads or the maximum 
        number of pupils that may be assigned to special education 
        teachers.  The state board, in consultation with the departments 
        of health and human services, shall adopt permanent rules for 
        instruction and services for children under age five and their 
        families.  These rules are binding on state and local education, 
        health, and human services agencies.  The state board shall 
        adopt rules to determine eligibility for special education 
        services.  The rules shall include procedures and standards by 
        which to grant variances for experimental eligibility criteria.  
        The state board shall, according to section 14.05, subdivision 
        4, notify a district applying for a variance from the rules 
        within 45 calendar days of receiving the request whether the 
        request for the variance has been granted or denied.  If a 
        request is denied, the board shall specify the program standards 
        used to evaluate the request and the reasons for denying the 
        request.  
           (b) As provided in this paragraph, but not to exceed the 
        extent required by federal law as of July 1, 1999, the state's 
        regulatory scheme should support schools by assuring that all 
        state special education rules adopted by the state board of 
        education result in one or more of the following outcomes: 
           (1) increased time available to teachers and, where 
        appropriate, to support staff including school nurses for 
        educating students through direct and indirect instruction; 
           (2) consistent and uniform access to effective education 
        programs for students with disabilities throughout the state; 
           (3) reduced inequalities, and conflict, appropriate due 
        process hearing procedures and reduced court actions related to 
        the delivery of special education instruction and services for 
        students with disabilities; 
           (4) clear expectations for service providers and for 
        students with disabilities; 
           (5) increased accountability for all individuals and 
        agencies that provide instruction and other services to students 
        with disabilities; 
           (6) greater focus for the state and local resources 
        dedicated to educating students with disabilities; and 
           (7) clearer standards for evaluating the effectiveness of 
        education and support services for students with disabilities. 
           Sec. 9.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [SCHOOL DISTRICT OBLIGATIONS.] (a) As defined in 
        this subdivision, to the extent required by federal law as of 
        July 1, 1999, every district shall ensure that: 
           (1) all students with disabilities are provided the special 
        instruction and services which are appropriate to their needs.  
        Where the individual education plan team has determined 
        appropriate goals and objectives based on the student's needs, 
        including the extent to which the student can be included in the 
        least restrictive environment, and where there are essentially 
        equivalent and effective instruction, related services, or 
        assistive technology devices available to meet the student's 
        needs, cost to the school district may be among the factors 
        considered by the team in choosing how to provide the 
        appropriate services, instruction, or devices that are to be 
        made part of the student's individual education plan.  The 
        student's needs and the special education instruction and 
        services to be provided shall be agreed upon through the 
        development of an individual education plan.  The plan shall 
        address the student's need to develop skills to live and work as 
        independently as possible within the community.  By grade 9 or 
        age 14, the plan shall address the student's needs for 
        transition from secondary services to post-secondary education 
        and training, employment, community participation, recreation, 
        and leisure and home living.  In developing the plan, districts 
        must inform parents of the full range of transitional goals and 
        related services that should be considered.  The plan must 
        include a statement of the needed transition services, including 
        a statement of the interagency responsibilities or linkages or 
        both before secondary services are concluded; 
           (2) children with a disability under age five and their 
        families are provided special instruction and services 
        appropriate to the child's level of functioning and needs; 
           (3) children with a disability and their parents or 
        guardians are guaranteed procedural safeguards and the right to 
        participate in decisions involving identification, assessment 
        including assistive technology assessment, and educational 
        placement of children with a disability; 
           (4) eligibility and needs of children with a disability are 
        determined by an initial assessment or reassessment, which may 
        be completed using existing data under United States Code, title 
        20, section 33, et seq.; 
           (5) to the maximum extent appropriate, children with a 
        disability, including those in public or private institutions or 
        other care facilities, are educated with children who are not 
        disabled, and that special classes, separate schooling, or other 
        removal of children with a disability from the regular 
        educational environment occurs only when and to the extent that 
        the nature or severity of the disability is such that education 
        in regular classes with the use of supplementary services cannot 
        be achieved satisfactorily; 
           (5) (6) in accordance with recognized professional 
        standards, testing and evaluation materials, and procedures 
        utilized for the purposes of classification and placement of 
        children with a disability are selected and administered so as 
        not to be racially or culturally discriminatory; and 
           (6) (7) the rights of the child are protected when the 
        parents or guardians are not known or not available, or the 
        child is a ward of the state. 
           (b) For paraprofessionals employed to work in programs for 
        students with disabilities, the school board in each district 
        shall ensure that: 
           (1) before or immediately upon employment, each 
        paraprofessional develops sufficient knowledge and skills in 
        emergency procedures, building orientation, roles and 
        responsibilities, confidentiality, vulnerability, and 
        reportability, among other things, to begin meeting the needs of 
        the students with whom the paraprofessional works; 
           (2) annual training opportunities are available to enable 
        the paraprofessional to continue to further develop the 
        knowledge and skills that are specific to the students with whom 
        the paraprofessional works, including understanding 
        disabilities, following lesson plans, and implementing follow-up 
        instructional procedures and activities; and 
           (3) a districtwide process obligates each paraprofessional 
        to work under the ongoing direction of a licensed teacher and, 
        where appropriate and possible, the supervision of a school 
        nurse. 
           Sec. 10.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [PROCEDURES FOR DECISIONS.] As defined in this 
        paragraph, but not to exceed the extent required by federal law 
        as of July 1, 1999, every district shall utilize at least the 
        following procedures for decisions involving identification, 
        assessment, and educational placement of children with a 
        disability: 
           (a) Parents and guardians shall receive prior written 
        notice of:  
           (1) any proposed formal educational assessment or proposed 
        denial of a formal educational assessment of their child; 
           (2) a proposed placement of their child in, transfer from 
        or to, or denial of placement in a special education program; or 
           (3) the proposed provision, addition, denial or removal of 
        special education services for their child;. 
           (b) The district shall not proceed with the initial formal 
        assessment of a child, the initial placement of a child in a 
        special education program, or the initial provision of special 
        education services for a child without the prior written consent 
        of the child's parent or guardian.  The refusal of a parent or 
        guardian to consent may be overridden by the decision in a 
        hearing held pursuant to clause paragraph (e) at the district's 
        initiative;. 
           (c) Parents and guardians shall have an opportunity to meet 
        with appropriate district staff in at least one conciliation 
        conference, mediation, or other method of alternative dispute 
        resolution that the parties agree to, if they object to any 
        proposal of which they are notified pursuant to clause under 
        paragraph (a).  The conciliation process or other form of state 
        intends to encourage parties to resolve disputes through 
        mediation or other form of alternative dispute resolution.  A 
        school district and a parent or guardian must participate in 
        mediation using mediation services acceptable to both parties, 
        unless a party objects to the mediation.  Mediation shall remain 
        available to the parties until a party objects to the mediation, 
        or the mediator determines that further efforts to mediate a 
        dispute are not warranted.  All mediation is subject to the 
        confidentiality requirements under rule 114.08 of the general 
        rules of practice for the district courts.  Alternative dispute 
        resolution shall not be used to deny or delay a parent or 
        guardian's right to a due process hearing.  If the parent or 
        guardian refuses efforts by the district to conciliate the 
        dispute with the school district, the requirement of an 
        opportunity for conciliation or other alternative dispute 
        resolution shall be deemed to be satisfied.  Notwithstanding 
        other law, in any proceeding following a conciliation 
        conference, the school district must not offer a conciliation 
        conference memorandum into evidence, except for any portions 
        that describe the district's final proposed offer of service.  
        Otherwise, with respect to forms of dispute resolution, 
        mediation, or conciliation, Minnesota Rule of Evidence 408 
        applies.  The department of children, families, and learning may 
        reimburse the districts or directly pay the costs of lay 
        advocates, not to exceed $150 per dispute, used in conjunction 
        with alternative dispute resolution. 
           (d) The commissioner shall establish a mediation process to 
        assist parents, school districts, or other parties to resolve 
        disputes arising out of the identification, assessment, or 
        educational placement of children with a disability.  The 
        mediation process must be offered as an informal alternative to 
        the due process hearing provided under clause paragraph (e), but 
        must not be used to deny or postpone the opportunity of a parent 
        or guardian to obtain a due process hearing. 
           (e) Parents, guardians, and the district shall have an 
        opportunity to obtain an impartial due process hearing initiated 
        and conducted by and in the school district responsible for 
        assuring that an appropriate program is provided in accordance 
        with state board rules, if the parent or guardian continues to 
        object to:  
           (1) a proposed formal educational assessment or proposed 
        denial of a formal educational assessment of their child; 
           (2) the proposed placement of their child in, or transfer 
        of their child to a special education program; 
           (3) the proposed denial of placement of their child in a 
        special education program or the transfer of their child from a 
        special education program; 
           (4) the proposed provision or addition of special education 
        services for their child; or 
           (5) the proposed denial or removal of special education 
        services for their child.  
           A hearing officer may limit an impartial due process 
        hearing to an amount of time sufficient for each party to 
        present its case.  The party requesting the hearing shall plead 
        with specificity as to what issues are in dispute and all issues 
        not pleaded with specificity are deemed waived.  Parties must 
        limit evidence to the issues specifically pleaded.  A hearing 
        officer, at the officer's discretion, may exclude cumulative 
        evidence or may encourage parties to present only essential 
        witnesses. 
           Within five business days after the request for a hearing, 
        or as directed by the hearing officer, the objecting party shall 
        provide the other party with a brief written statement of 
        particulars of the objection, the reasons for the objection, and 
        the specific remedies sought.  The other party shall provide the 
        objecting party with a written response to the statement of 
        objections within five business days of receipt of the statement.
           The hearing shall take place before an impartial hearing 
        officer mutually agreed to by the school board and the parent or 
        guardian.  Within four business days of the receipt of the 
        request for the hearing, if the parties have not agreed on the 
        hearing officer, the school board shall request the commissioner 
        to appoint a hearing officer from a list maintained for that 
        purpose.  A retired judge, retired court referee, or retired 
        federal magistrate judge who is otherwise qualified under this 
        section and wishes to be a hearing officer may be put on the 
        list.  The school board shall include with the request the name 
        of the person requesting the hearing, the name of the student, 
        the attorneys involved, if any, and the date the hearing request 
        was received.  The hearing officer shall not be a school board 
        member or employee of the school district where the child 
        resides or of the child's school district of residence, an 
        employee of any other public agency involved in the education or 
        care of the child, or any person with a personal or professional 
        interest which would conflict with the person's objectivity at 
        the hearing.  A person who otherwise qualifies as a hearing 
        officer is not an employee of the district solely because the 
        person is paid by the district to serve as a hearing 
        officer.  Any party to a hearing, except an expedited hearing 
        under federal law, may make and serve upon the opposing party 
        and the commissioner a notice to remove a hearing officer 
        appointed by the commissioner.  The notice shall be served and 
        filed within two business days after the party receives notice 
        of the appointment of the hearing officer by the commissioner. 
           No such notice may be filed by a party against a hearing 
        officer who has presided at a motion or any other proceeding of 
        which the party had notice.  A hearing officer who has presided 
        at a motion or other proceeding may not be removed except upon 
        an affirmative showing of prejudice on the part of the hearing 
        officer.  
           After the party has once disqualified a hearing officer as 
        a matter of right, that party may disqualify the substitute 
        hearing officer only by making an affirmative showing of 
        prejudice or bias to the commissioner, or to the chief 
        administrative law judge if the hearing officer is an 
        administrative law judge. 
           Upon the filing of a notice to remove or if a party makes 
        an affirmative showing of prejudice against a substitute hearing 
        officer, the commissioner shall assign any other hearing officer 
        to hear the matter. 
           If the hearing officer requests an independent educational 
        assessment of a child, the cost of the assessment shall be at 
        district expense.  The proceedings shall be recorded and 
        preserved, at the expense of the school district, pending 
        ultimate disposition of the action. 
           (f) The decision of the hearing officer pursuant to clause 
        paragraph (e) shall be rendered not more than 45 calendar days 
        from the date of the receipt of the request for the hearing, 
        except that hearing officers are encouraged to accelerate the 
        timeline to 30 days for children birth through two whose needs 
        change rapidly and require quick resolution of complaints.  A 
        hearing officer may not grant specific extensions of time beyond 
        the 45-day period unless requested by either party for good 
        cause shown on the record.  Good cause includes the time 
        required for mediation under paragraph (c).  The decision of the 
        hearing officer shall be binding on all parties unless appealed 
        to the commissioner by the parent; guardian; school board of the 
        district where the child resides pursuant to clause 
        (g) paragraph (h); and also in the case of children birth 
        through two, by the county board. 
           The local decision shall: 
           (1) be in writing; 
           (2) state the controlling facts upon which the decision is 
        made in sufficient detail to apprise the parties and the hearing 
        review officer of the basis and reason for the decision; and 
           (3) be based on the standards set forth in subdivision 3a 
        and the rules of the state board. 
           (g) The hearing officer may require the resident school 
        district to provide compensatory educational services to the 
        child if the hearing officer finds that the school district has 
        not offered or made available to the child a free appropriate 
        public education in the child's educational program and that the 
        child has suffered a loss of educational benefit.  Such services 
        shall take the form of direct and indirect special education and 
        related services designed to address any loss of educational 
        benefit that may have occurred.  The hearing officer's finding 
        shall be based on a present determination of whether the child 
        has suffered a loss of educational benefit. 
           (g) (h) Any local decision issued pursuant to clauses 
        paragraphs (e) and (f) may be appealed to the commissioner 
        within 30 calendar days of receipt of that written decision, by 
        the parent, guardian, or the school board of the district 
        responsible for assuring that an appropriate program is provided 
        in accordance with state board rules.  The appealing party shall 
        note the specific parts of the hearing decision being appealed. 
           If the decision is appealed, a written transcript of the 
        hearing shall be made by the school district and provided by the 
        district to the parties involved and the hearing review officer 
        within five calendar days of the filing of the appeal.  The 
        hearing review officer shall conduct an appellate review and 
        issue a final independent decision based on an impartial review 
        of the local decision and the entire record within 30 calendar 
        days after the filing of the appeal.  However, the hearing 
        review officer shall seek additional evidence if necessary and 
        may afford the parties an opportunity for written or oral 
        argument; provided any hearing held to seek additional evidence 
        shall be an impartial due process hearing but shall be deemed 
        not to be a contested case hearing for purposes of chapter 14.  
        The hearing review officer may grant specific extensions of time 
        beyond the 30-day period at the request of any party for good 
        cause shown on the record. 
           The final decision shall: 
           (1) be in writing; 
           (2) include findings and conclusions; and 
           (3) be based upon the standards set forth in subdivision 3a 
        and in the rules of the state board. 
           (h) (i) The decision of the hearing review officer shall be 
        final unless appealed by the parent or guardian or school board 
        to the Minnesota court of appeals or federal district court as 
        provided by federal law.  State judicial review shall be in 
        accordance with chapter 14.  
           (i) (j) The commissioner of children, families, and 
        learning shall select an individual who has the qualifications 
        enumerated in this paragraph to serve as the hearing review 
        officer: 
           (1) the individual must be knowledgeable and impartial; 
           (2) the individual must not have a personal interest in or 
        specific involvement with the student who is a party to the 
        hearing; 
           (3) the individual must not have been employed as an 
        administrator by the district that is a party to the hearing; 
           (4) the individual must not have been involved in the 
        selection of the administrators of the district that is a party 
        to the hearing; 
           (5) the individual must not have a personal, economic, or 
        professional interest in the outcome of the hearing other than 
        the proper administration of the federal and state laws, rules, 
        and policies; 
           (6) the individual must not have substantial involvement in 
        the development of a state or local policy or procedures that 
        are challenged in the appeal; 
           (7) the individual is not a current employee or board 
        member of a Minnesota public school district, education 
        district, intermediate unit or regional education agency, the 
        department of children, families, and learning, the state board 
        of education; and 
           (8) the individual is not a current employee or board 
        member of a disability advocacy organization or group.  
           (j) (k) In all appeals, the parent or guardian of the pupil 
        with a disability or the district that is a party to the hearing 
        may challenge the impartiality or competence of the proposed 
        hearing review officer by applying to the hearing review officer.
           (k) (l) Pending the completion of proceedings pursuant to 
        this subdivision, unless the district and the parent or guardian 
        of the child agree otherwise, the child shall remain in the 
        child's current educational placement and shall not be denied 
        initial admission to school. 
           (l) (m) The child's school district of residence, a 
        resident district, and providing district shall receive notice 
        of and may be a party to any hearings or appeals under this 
        subdivision. 
           (m) (n) A school district is not liable for harmless 
        technical violations of this subdivision or rules implementing 
        this subdivision if the school district can demonstrate on a 
        case-by-case basis that the violations did not harm the 
        student's educational progress or the parent or guardian's right 
        to notice, participation, or due process. 
           (n) (o) Within ten calendar days after appointment, the 
        hearing officer shall schedule and hold a prehearing 
        conference.  At that conference, or later, the hearing officer 
        may take any appropriate action that a court might take under 
        Rule 16 of Minnesota Rules of Civil Procedure including, but not 
        limited to, scheduling, jurisdiction, and listing witnesses 
        including expert witnesses. 
           (o) (p) A hearing officer or hearing review officer 
        appointed under this subdivision shall be deemed to be an 
        employee of the state under section 3.732 for the purposes of 
        section 3.736 only. 
           (p) (q) In order to be eligible for selection, hearing 
        officers and hearing review officers shall participate in 
        training and follow procedures as designated by the commissioner.
           (q) (r) The hearing officer may admit all evidence which 
        possesses probative value, including hearsay, if it is the type 
        of evidence on which reasonable, prudent persons are accustomed 
        to rely in the conduct of their serious affairs.  The hearing 
        officer shall give effect to the rules of privilege recognized 
        by law.  Evidence which is incompetent, irrelevant, immaterial, 
        or unduly repetitious shall be excluded. 
           Sec. 11.  Minnesota Statutes 1996, section 120.17, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PLACEMENT IN ANOTHER DISTRICT; RESPONSIBILITY.] 
        The responsibility for special instruction and services for a 
        child with a disability temporarily placed in another district 
        for care and treatment shall be determined in the following 
        manner: 
           (a) The school district of residence of a child shall be 
        the district in which the child's parent resides, if living, or 
        the child's guardian, or the district designated by the 
        commissioner of children, families, and learning if neither 
        parent nor guardian is living within the state. 
           (b) When a child is temporarily placed for care and 
        treatment in a day program located in another district and the 
        child continues to live within the district of residence during 
        the care and treatment, the district of residence is responsible 
        for providing transportation and an appropriate educational 
        program for the child.  The district may provide the educational 
        program at a school within the district of residence, at the 
        child's residence, or in the district in which the day treatment 
        center is located by paying tuition to that district. 
           (c) When a child is temporarily placed in a residential 
        program for care and treatment, the nonresident district in 
        which the child is placed is responsible for providing an 
        appropriate educational program for the child and necessary 
        transportation while the child is attending the educational 
        program; and shall bill the district of the child's residence 
        for the actual cost of providing the program, as outlined in 
        subdivision 4, except that the board, lodging, and treatment 
        costs incurred in behalf of a child with a disability placed 
        outside of the school district of residence by the commissioner 
        of human services or the commissioner of corrections or their 
        agents, for reasons other than for making provision for the 
        child's special educational needs shall not become the 
        responsibility of either the district providing the instruction 
        or the district of the child's residence.  For the purposes of 
        this section, the state correctional facilities operated on a 
        fee-for-service basis are considered to be residential programs 
        for care and treatment. 
           (d) The district of residence shall pay tuition and other 
        program costs, not including transportation costs, to the 
        district providing the instruction and services.  The district 
        of residence may claim general education aid for the child as 
        provided by law.  Transportation costs shall be paid by the 
        district responsible for providing the transportation and the 
        state shall pay transportation aid to that district. 
           Sec. 12.  Minnesota Statutes 1996, section 120.17, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PLACEMENT IN STATE INSTITUTION; RESPONSIBILITY.] 
        Responsibility for special instruction and services for a child 
        with a disability placed in a state institution on a temporary 
        basis shall be determined in the following manner: 
           (a) The legal residence of such child shall be the school 
        district in which the child's parent resides, if living, or the 
        child's guardian.  
           (b) When the educational needs of such child can be met 
        through the institutional program, the costs for such 
        instruction shall be paid by the department to which the 
        institution is assigned with exception of children placed in 
        fee-for-service facilities operated by the commissioner of 
        corrections whose cost for such instruction shall be paid as 
        outlined in subdivision 6.  
           (c) When it is determined that such child can benefit from 
        public school enrollment, provision for such instruction shall 
        be made in the following manner: 
           (1) determination of eligibility for special instruction 
        and services shall be made by the commissioner of children, 
        families, and learning and the commissioner of the department 
        responsible for the institution; 
           (2) the school district where the institution is located 
        shall be responsible for providing transportation and an 
        appropriate educational program for the child and shall make a 
        tuition charge to the child's district of residence for the 
        actual cost of providing the program; 
           (3) the district of the child's residence shall pay the 
        tuition and other program costs excluding transportation costs 
        and may claim general education aid for the child.  
        Transportation costs shall be paid by the district where the 
        institution is located and the state shall pay transportation 
        aid to that district. 
           Sec. 13.  Minnesota Statutes 1996, section 120.17, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SPECIAL INSTRUCTION.] No resident of a district 
        who is eligible for special instruction and services pursuant to 
        under this section shall be denied provision of this instruction 
        and service on a shared time basis consistent with section 
        124A.034, subdivision 2, because of attendance at attending a 
        nonpublic school defined in section 123.932, subdivision 3.  If 
        a resident pupil with a disability attends a nonpublic school 
        located within the district of residence, the district shall 
        provide necessary transportation for that pupil within the 
        district between the nonpublic school and the educational 
        facility where special instruction and services are provided on 
        a shared time basis.  If a resident pupil with a disability 
        attends a nonpublic school located in another district and if no 
        agreement exists pursuant to under section 124A.034, subdivision 
        1 or 1a, for the provision of providing special instruction and 
        services on a shared time basis to that pupil by the district of 
        attendance and where the special instruction and services are 
        provided within the district of residence, the district of 
        residence shall provide necessary transportation for that pupil 
        between the boundary of the district of residence and the 
        educational facility.  The district of residence may provide 
        necessary transportation for that pupil between its boundary and 
        the nonpublic school attended, but the nonpublic school shall 
        pay the cost of transportation provided outside the district 
        boundary. 
           Sec. 14.  Minnesota Statutes 1996, section 120.17, 
        subdivision 15, is amended to read: 
           Subd. 15.  [THIRD PARTY PAYMENT.] (a) Nothing in this 
        section relieves an insurer or similar third party from an 
        otherwise valid obligation to pay, or changes the validity of an 
        obligation to pay, for services rendered to a child with a 
        disability, and the child's family.  A school district may pay 
        or reimburse copayments, coinsurance, deductibles, and other 
        enrollee cost-sharing amounts, on behalf of the student or 
        family, in connection with health and related services provided 
        under an individual educational plan.  
           (b) Beginning July 1, 1999, districts shall seek 
        reimbursement from insurers and similar third parties for the 
        cost of services provided by the district whenever the services 
        provided by the district are otherwise covered by the child's 
        health coverage.  Districts shall request, but may not require, 
        the child's family to provide information about the child's 
        health coverage when a child with a disability begins to receive 
        services from the district of a type that may be reimbursable, 
        and shall request, but may not require, updated information 
        after that as needed.  Districts shall request, but may not 
        require, the child's parent or legal representative to sign a 
        consent form, permitting the school district to apply for and 
        receive reimbursement directly from the insurer or other similar 
        third party, to the extent permitted by the insurer or other 
        third party and subject to their networking credentialing, prior 
        authorization, and determination of medical necessity criteria. 
           (c) Of the reimbursements received, districts may: 
           (1) retain an amount sufficient to compensate the district 
        for its administrative costs of obtaining reimbursements; 
           (2) regularly obtain from education- and health-related 
        entities training and other appropriate technical assistance 
        designed to improve the district's ability to determine which 
        services are reimbursable and to seek timely reimbursement in a 
        cost-effective manner; or 
           (3) reallocate reimbursements for the benefit of students 
        with special needs in the district. 
           (d) To the extent required by federal law, a school 
        district may not require parents of children with disabilities, 
        if they would incur a financial cost, to use private or public 
        health coverage to pay for the services that must be provided 
        under an individual education plan. 
           (e) When obtaining informed consent, consistent with 
        sections 13.05, subdivision 4, paragraph (d); and 256B.77, 
        subdivision 2, paragraph (p), to bill health plans for covered 
        services, the school district must notify the legal 
        representative (1) that the cost of the person's private health 
        insurance premium may increase due to providing the covered 
        service in the school setting, (2) that the school district may 
        pay certain enrollee health plan costs, including but not 
        limited to, copayments, coinsurance, deductibles, premium 
        increases or other enrollee cost-sharing amounts for health and 
        related services required by an individual service plan, or 
        individual family service plan, and (3) that the school's 
        billing for each type of covered service may affect service 
        limits and prior authorization thresholds.  The informed consent 
        may be revoked in writing at any time by the person authorizing 
        the billing of the health plan. 
           (f) To the extent required by federal law, no school 
        district may deny, withhold, or delay any service that must be 
        provided under an individual education plan because a family has 
        refused to provide informed consent to bill a health plan for 
        services or a health plan company has refused to pay any, all, 
        or a portion of the cost of services billed. 
           (g) A school district may disclose information contained in 
        a student's individual education plan, consistent with section 
        13.32, subdivision 3(a), including records of the student's 
        diagnosis and treatment, to a health plan company only with the 
        signed and dated consent of the student's parent, or other 
        legally authorized individual.  The school district shall 
        disclose only that information necessary for the health plan 
        company to decide matters of coverage and payment.  A health 
        plan company may use the information only for making decisions 
        regarding coverage and payment, and for any other use permitted 
        by law. 
           Sec. 15.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section 
        the following terms have the meaning given them.  
           (a) "Coordinate" means to provide ready access to a 
        community's services and resources to meet child and family 
        needs.  
           (b) "Core early intervention services" means services that 
        are available at no cost to children and families.  These 
        services include: 
           (1) identification and referral; 
           (2) screening; 
           (3) evaluation; 
           (4) assessment; 
           (5) service coordination; 
           (6) special education and related services provided under 
        section 120.17, subdivision 3a, and United States Code, title 
        20, section 1401; and 
           (7) protection of parent and child rights by means of 
        procedural safeguards. 
           (c) "County board" means a county board established under 
        chapter 375. 
           (d) "Early intervention record" means any personally 
        identifiable information about a child or the child's family 
        that is generated by the early intervention system, and that 
        pertains to evaluation and assessment, development of an 
        individualized family service plan, and the delivery of early 
        intervention services. 
           (e) "Early intervention services" means services provided 
        in conformity with an individualized family service plan that 
        are designed to meet the special developmental needs of a child 
        eligible under Code of Federal Regulations, title 34, part 303, 
        and the needs of the child's family related to enhancing the 
        child's development and that are selected in collaboration with 
        the parent.  These services include core early intervention 
        services and additional early intervention services listed in 
        subdivision 4 and services defined in Code of Federal 
        Regulations, title 34, section 303, et seq. 
           (f) "Early intervention system" means the total effort in 
        the state to meet the needs of eligible children and their 
        families, including, but not limited to: 
           (1) any public agency in the state that receives funds 
        under the Individuals with Disabilities Education Act, United 
        States Code, title 20, sections 1471 to 1485 (Part H, Public Law 
        Number 102-119); 
           (2) other state and local agencies administering programs 
        involved in the provision of early intervention services, 
        including, but not limited to: 
           (i) the Maternal and Child Health program under title V of 
        the Social Security Act, United States Code, title 42, sections 
        701 to 709; 
           (ii) the Individuals with Disabilities Education Act, 
        United States Code, title 20, sections 1411 to 1420 (Part B); 
           (iii) medical assistance under the Social Security Act, 
        United States Code, title 42, section 1396 et seq.; 
           (iv) the Developmental Disabilities Assistance and Bill of 
        Rights Act, United States Code, title 42, sections 6021 to 6030 
        (Part B); and 
           (v) the Head Start Act, United States Code, title 42, 
        sections 9831 to 9852; and 
           (3) services provided by private groups or third-party 
        payers in conformity with an individualized family service plan. 
           (g) "Eligibility for Part H" means eligibility for early 
        childhood special education under section 120.03 and Minnesota 
        Rules, part 3525.2335, subpart 1, items A and B. 
           (h) "Facilitate payment" means helping families access 
        necessary public or private assistance that provides payment for 
        services required to meet needs identified in a service plan, 
        individual education plan (IEP), individual service plan (ISP), 
        or individualized family service plan (IFSP), according to time 
        frames required by the plan.  This may also include activities 
        to collect fees for services provided on a sliding fee basis, 
        where permitted by state law. 
           (i) "Individualized family service plan" or "IFSP" means a 
        written plan for providing services to a child and the child's 
        family.  
           (j) "Interagency child find systems" means activities 
        developed on an interagency basis with the involvement of 
        interagency early intervention committees and other relevant 
        community groups to actively seek out, identify, and refer 
        infants and young children with, or at risk of, disabilities, 
        and their families. 
           (k) "Local primary agency" means the agency designated 
        jointly by the school and county board under subdivision 4. 
           (l) "Natural environments" means the child's home and 
        community settings in which children without disabilities 
        participate. 
           (m) "Parent" means the biological parent with parental 
        rights, adoptive parent, legal guardian, or surrogate parent. 
           (m) (n) "Part H state plan" means the annual state plan 
        application approved by the federal government under the 
        Individuals with Disabilities Education Act, United States Code, 
        title 20, section 1471 et seq. (Part H, Public Law Number 
        102-119). 
           (n) (o) "Pay for" means using federal, state, local, and 
        private dollars available for early intervention services. 
           (o) (p) "Respite" means short-term, temporary care provided 
        to a child with a disability due to the temporary absence or 
        need for relief of the family member or members or primary 
        caregiver, normally providing the care. 
           (p) (q) "State lead agency" means the state agency 
        receiving federal funds under the Individuals with Disabilities 
        Education Act, United States Code, title 20, section 1471 et 
        seq. (Part H, Public Law Number 102-119). 
           (q) (r) "Surrogate parent" means a person appointed by the 
        local education agency to assure that the rights of the child to 
        early intervention services are protected.  A person cannot be a 
        surrogate parent to a child for whom the person provides early 
        intervention services. 
           Sec. 16.  Minnesota Statutes 1997 Supplement, section 
        120.1701, subdivision 3, is amended to read: 
           Subd. 3.  [STATE INTERAGENCY COORDINATING COUNCIL.] An 
        interagency coordinating council of at least 17, but not more 
        than 25 members is established, in compliance with Public Law 
        Number 102-119, section 682.  The members shall be appointed by 
        the governor.  Council members shall elect the council chair.  
        The representative of the commissioner of children, families, 
        and learning may not serve as the chair.  The council shall be 
        composed of at least five parents, including persons of color, 
        of children with disabilities under age 12, including at least 
        three parents of a child with a disability under age seven, five 
        representatives of public or private providers of services for 
        children with disabilities under age five, including a special 
        education director, county social service director, local Head 
        Start director, and a community health services or public health 
        nursing administrator, one member of the senate, one member of 
        the house of representatives, one representative of teacher 
        preparation programs in early childhood-special education or 
        other preparation programs in early childhood intervention, at 
        least one representative of advocacy organizations for children 
        with disabilities under age five, one physician who cares for 
        young children with special health care needs, one 
        representative each from the commissioners of commerce, 
        children, families, and learning, health, human services, and 
        economic security a representative from the state agency 
        responsible for child care, and a representative from Indian 
        health services or a tribal council.  Section 15.059, 
        subdivisions 2 to 5, apply to the council.  The council shall 
        meet at least quarterly.  
           The council shall address methods of implementing the state 
        policy of developing and implementing comprehensive, 
        coordinated, multidisciplinary interagency programs of early 
        intervention services for children with disabilities and their 
        families. 
           The duties of the council include recommending policies to 
        ensure a comprehensive and coordinated system of all state and 
        local agency services for children under age five with 
        disabilities and their families.  The policies must address how 
        to incorporate each agency's services into a unified state and 
        local system of multidisciplinary assessment practices, 
        individual intervention plans, comprehensive systems to find 
        children in need of services, methods to improve public 
        awareness, and assistance in determining the role of interagency 
        early intervention committees.  
           Each year by June 1, the council shall recommend to the 
        governor and the commissioners of children, families, and 
        learning, health, human services, commerce, and economic 
        security policies for a comprehensive and coordinated system. 
           Notwithstanding any other law to the contrary, the state 
        interagency coordinating council shall expire on June 30, 2001. 
           Sec. 17.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 11, is amended to read: 
           Subd. 11.  [PAYOR OF LAST RESORT.] (a) For fiscal years 
        1995 and 1996, The state lead agency shall establish maintain a 
        reserve account from federal sources to pay for services in 
        dispute or to pay for early intervention services when local 
        agencies have exhausted all other public and private funds 
        available for Part H eligible children. 
           (b) The lead agency shall report to the legislature by 
        January 1, 1996, regarding county board expenditures for early 
        intervention services and the continuing need and funding of the 
        reserve account.  
           Sec. 18.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 17, is amended to read: 
           Subd. 17.  [MEDIATION PROCEDURE.] The commissioner, or the 
        commissioner's designee, of the state lead agency shall use 
        federal funds to provide mediation for the activities in 
        paragraphs (a) and (b). 
           (a) A parent may resolve a dispute regarding issues in 
        subdivision 16, paragraph (b), clause (5), through mediation.  
        If the parent chooses mediation, all public agencies involved in 
        the dispute shall participate in the mediation process.  The 
        parent and the public agencies must complete the mediation 
        process within 20 30 calendar days of the date the 
        commissioner office of dispute resolution receives a parent's 
        written request for mediation.  The mediation process may not be 
        used to delay a parent's right to a due process hearing.  The 
        resolution of the mediation is not binding on any party. 
           (b) Resolution of a dispute through mediation, or other 
        form of alternative dispute resolution, is not limited to formal 
        disputes arising from the objection of a parent or guardian and 
        is not limited to the period following a request for a due 
        process hearing. 
           (c) The local primary agency may request mediation on 
        behalf of involved agencies when there are disputes between 
        agencies regarding responsibilities to coordinate, provide, pay 
        for, or facilitate payment for early intervention services. 
           Sec. 19.  Minnesota Statutes 1996, section 120.173, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER APPROVAL.] The commissioner 
        of children, families, and learning may approve applications 
        from school districts to provide prevention services as an 
        alternative to special education and other compensatory programs 
        during three school years.  A district with an approved program 
        may provide instruction and services in a regular education 
        classroom, or an area learning center, to eligible pupils.  
        Pupils eligible to participate in the program are low-performing 
        pupils who, based on documented experience, the professional 
        judgment of a classroom teacher, or a team of licensed 
        professionals, would eventually qualify for special education 
        instruction or related services under section 120.17 if the 
        intervention services authorized by this section were 
        unavailable.  Pupils may be provided services during extended 
        school days and throughout the entire year and through the 
        assurance of mastery program under section 124.3111. 
           Sec. 20.  Minnesota Statutes 1996, section 120.173, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PUPIL RIGHTS.] A pupil participating in the 
        program must be individually evaluated according to the pupil's 
        actual abilities and needs.  A pupil who is eligible for 
        services under section 120.17 is entitled to procedural 
        protections provided under Public Law Number 94-142 United 
        States Code, title 20, section 33, in any matter that affects 
        the identification, evaluation, placement, or change in 
        placement of a pupil.  The district must ensure the protection 
        of a pupil's civil rights, provide equal educational 
        opportunities, and prohibit discrimination.  Failure to comply 
        with this subdivision will at least cause a district to become 
        ineligible to participate in the program.  Notwithstanding rules 
        of the state board of education, a pupil's rights under this 
        section cannot be waived by the state board. 
           Sec. 21.  Minnesota Statutes 1997 Supplement, section 
        120.181, is amended to read: 
           120.181 [PLACEMENT OF CHILDREN WITHOUT DISABILITIES; 
        EDUCATION AND TRANSPORTATION.] 
           The responsibility for providing instruction and 
        transportation for a pupil without a disability who has a 
        short-term or temporary physical or emotional illness or 
        disability, as determined by the standards of the state board, 
        and who is temporarily placed for care and treatment for that 
        illness or disability, shall be determined as provided in this 
        section.  
           (a) The school district of residence of the pupil shall be 
        the district in which the pupil's parent or guardian resides, or 
        when neither the pupil's parent nor guardian resides within the 
        state and tuition has been denied, the district designated by 
        the commissioner of children, families, and learning.  
           (b) Prior to the placement of a pupil for care and 
        treatment, the district of residence shall be notified and 
        provided an opportunity to participate in the placement 
        decision.  When an immediate emergency placement is necessary 
        and time does not permit resident district participation in the 
        placement decision, the district in which the pupil is 
        temporarily placed, if different from the district of residence, 
        shall notify the district of residence of the emergency 
        placement within 15 days of the placement.  
           (c) When a pupil without a disability is temporarily placed 
        for care and treatment in a day program and the pupil continues 
        to live within the district of residence during the care and 
        treatment, the district of residence shall provide instruction 
        and necessary transportation for the pupil.  The district may 
        provide the instruction at a school within the district of 
        residence, at the pupil's residence, or in the case of a 
        placement outside of the resident district, in the district in 
        which the day treatment program is located by paying tuition to 
        that district.  The district of placement may contract with a 
        facility to provide instruction by teachers licensed by the 
        state board of teaching.  
           (d) When a pupil without a disability is temporarily placed 
        in a residential program for care and treatment, the district in 
        which the pupil is placed shall provide instruction for the 
        pupil and necessary transportation while the pupil is receiving 
        instruction, and in the case of a placement outside of the 
        district of residence, the nonresident district shall bill the 
        district of residence for the actual cost of providing the 
        instruction for the regular school year and for summer school, 
        excluding transportation costs.  When a pupil without a 
        disability is temporarily placed in a residential program 
        outside the district of residence, the administrator of the 
        court placing the pupil shall send timely written notice of the 
        placement to the district of residence.  The district of 
        placement may contract with a residential facility to provide 
        instruction by teachers licensed by the state board of 
        teaching.  For purposes of this section, the state correctional 
        facilities operated on a fee-for-service basis are considered to 
        be residential programs for care and treatment. 
           (e) The district of residence shall include the pupil in 
        its residence count of pupil units and pay tuition as provided 
        in section 124.18 to the district providing the instruction.  
        Transportation costs shall be paid by the district providing the 
        transportation and the state shall pay transportation aid to 
        that district.  For purposes of computing state transportation 
        aid, pupils governed by this subdivision shall be included in 
        the disabled transportation category. 
           Sec. 22.  Minnesota Statutes 1996, section 123.935, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROVIDED SERVICES.] The state board of 
        education shall promulgate rules under the provisions of chapter 
        14 requiring each school district or other intermediary service 
        area:  (a) to provide each year upon formal request by a 
        specific date by or on behalf of a nonpublic school pupil 
        enrolled in a nonpublic school located in that district or area, 
        the same specific health services as are provided for public 
        school pupils by the district where the nonpublic school is 
        located; and (b) to provide each year upon formal request by a 
        specific date by or on behalf of a nonpublic school secondary 
        pupil enrolled in a nonpublic school located in that district or 
        area, the same specific guidance and counseling services as are 
        provided for public school secondary pupils by the district 
        where the nonpublic school is located.  The district where the 
        nonpublic school is located shall provide the necessary 
        transportation within the district boundaries between the 
        nonpublic school and a public school or neutral site for 
        nonpublic school pupils who are provided pupil support services 
        pursuant to under this section if the district elects to provide 
        pupil support services at a site other than the nonpublic school.
        Each request for pupil support services shall set forth the 
        guidance and counseling or health services requested by or on 
        behalf of all eligible nonpublic school pupils enrolled in a 
        given nonpublic school.  No district or intermediary service 
        area shall expend an amount for these pupil support services 
        which exceeds the amount allotted to it under this section. 
           Sec. 23.  Minnesota Statutes 1996, section 123.935, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LOCATION OF SERVICES.] Health and guidance and 
        counseling services may be provided to nonpublic school 
        pupils pursuant to under this section at a public school, a 
        neutral site, the nonpublic school or any other suitable 
        location.  Guidance and counseling services may be provided to 
        nonpublic school pupils pursuant to this section only at a 
        public school or a neutral site.  District or intermediary 
        service area personnel and representatives of the nonpublic 
        school pupils receiving pupil support services shall hold an 
        annual consultation regarding the type of services, provider of 
        services, and the location of the provision of these services.  
        The district board or intermediary service area governing board 
        shall make the final decision on the location of the provision 
        of these services. 
           Sec. 24.  Minnesota Statutes 1996, section 124.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AVERAGE DAILY MEMBERSHIP.] Membership for pupils 
        in grades kindergarten through 12 and for prekindergarten pupils 
        with disabilities shall mean the number of pupils on the current 
        roll of the school, counted from the date of entry until 
        withdrawal.  The date of withdrawal shall mean the day the pupil 
        permanently leaves the school or the date it is officially known 
        that the pupil has left or has been legally excused.  However, a 
        pupil, regardless of age, who has been absent from school for 15 
        consecutive school days during the regular school year or for 
        five consecutive school days during summer school or 
        intersession classes of flexible school year programs without 
        receiving instruction in the home or hospital shall be dropped 
        from the roll and classified as withdrawn.  Nothing in this 
        section shall be construed as waiving the compulsory attendance 
        provisions cited in section 120.101.  Average daily membership 
        shall equal the sum for all pupils of the number of days of the 
        school year each pupil is enrolled in the district's schools 
        divided by the number of days the schools are in session.  Days 
        of summer school or intersession classes of flexible school year 
        programs shall only be included in the computation of membership 
        for pupils with a disability not appropriately served at level 
        4, 5, or 6 of the continuum of placement model described in 
        Minnesota Rules, part 3525.0200 primarily in the regular 
        classroom. 
           Sec. 25.  Minnesota Statutes 1997 Supplement, section 
        124.3111, subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBLE PUPILS.] A pupil is eligible to receive 
        services through an assurance of mastery program if the pupil 
        has not demonstrated progress toward mastering the required 
        graduation standards, after receiving instruction that was 
        designed to enable the pupil to make progress toward mastering 
        the required graduation standards in a regular classroom 
        setting.  A pupil also is eligible to receive services through 
        an assurance of mastery program if the pupil, based on the 
        professional judgment of a classroom teacher or a team of 
        licensed professionals, demonstrates a need for alternative 
        instructional strategies or interventions.  To determine pupil 
        eligibility, a district must use a process adopted by the school 
        board to review curriculum and instruction, for the subjects and 
        at the grade level at which the district uses the revenue. 
           Sec. 26.  Minnesota Statutes 1996, section 124.32, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [LITIGATION AND HEARING COSTS.] (a) For fiscal 
        year 1999 and thereafter, the commissioner of children, 
        families, and learning, or the commissioner's designee, shall 
        use state funds to pay school districts for the administrative 
        costs of a due process hearing incurred under section 120.17, 
        subdivision 3b, paragraphs (e), (h), and (i), including hearing 
        officer fees, court reporter fees, mileage costs, transcript 
        costs, independent evaluations ordered by the hearing officer, 
        and rental of hearing rooms, but not including district attorney 
        fees.  To receive state aid under this paragraph, a school 
        district shall submit to the commissioner at the end of the 
        school year an itemized list of unreimbursed actual costs for 
        fees and other expenses under this paragraph.  State funds used 
        for aid to school districts under this paragraph shall be based 
        on the unreimbursed actual costs and fees submitted by a 
        district from previous school years. 
           (b) For fiscal year 1999 and thereafter, a school district, 
        to the extent to which it prevails under United States Code, 
        title 20, section 1415(i)(3)(B)(D) and Rule 68 of the Federal 
        Rules of Civil Procedure, shall receive state aid equal to 50 
        percent of the total actual cost of attorney fees incurred after 
        a request for a due process hearing under section 120.17, 
        subdivision 3b, paragraphs (e), (h), and (i), is served upon the 
        parties.  A district is eligible for reimbursement for attorney 
        fees under this paragraph only if: 
           (1) a court of competent jurisdiction determines that the 
        parent is not the prevailing party under United States Code, 
        title 20, section 1415(i)(3)(B)(D), or the parties stipulate 
        that the parent is not the prevailing party; 
           (2) the district has made a good faith effort to resolve 
        the dispute through mediation, but the obligation to mediate 
        does not compel the district to agree to a proposal or make a 
        concession; and 
           (3) the district made an offer of settlement under Rule 68 
        of the Federal Rules of Civil Procedure.  
           To receive aid, a school district that meets the criteria 
        of this paragraph shall submit to the commissioner at the end of 
        the school year an itemized list of unreimbursed actual attorney 
        fees associated with a due process hearing under section 120.17, 
        subdivision 3b, paragraphs (e), (h), and (i).  Aid under this 
        paragraph for each school district is based on unreimbursed 
        actual attorney fees submitted by the district from previous 
        school years. 
           (c) For fiscal year 1999 and thereafter, a school district 
        is eligible to receive state aid for 50 percent of the total 
        actual cost of attorney fees it incurs in appealing to a court 
        of competent jurisdiction the findings, conclusions, and order 
        of a due process hearing under section 120.17, subdivision 3b, 
        paragraphs (e), (h) and (i).  The district is eligible for 
        reimbursement under this paragraph only if the commissioner 
        authorizes the reimbursement after evaluating the merits of the 
        case.  In a case where the commissioner is a named party in the 
        litigation, the commissioner of the bureau of mediation services 
        shall make the determination regarding reimbursement.  The 
        commissioner's decision is final.  
           (d) The commissioner shall provide districts with a form on 
        which to annually report litigation costs under this section and 
        shall base aid estimates on those reports. 
           Sec. 27.  Minnesota Statutes 1997 Supplement, section 
        124.3201, subdivision 2, is amended to read: 
           Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] (a) The special 
        education base revenue equals the sum of the following amounts 
        computed using base year data: 
           (1) 68 percent of the salary of each essential person 
        employed in the district's program for children with a 
        disability during the regular school fiscal year, whether the 
        person is employed by one or more districts or a Minnesota 
        correctional facility operating on a fee-for-service basis; 
           (2) for the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind, 68 percent of the salary 
        of each instructional aide assigned to a child attending the 
        academy, if that aide is required by the child's individual 
        education plan; 
           (3) for special instruction and services provided to any 
        pupil by contracting with public, private, or voluntary agencies 
        other than school districts, in place of special instruction and 
        services provided by the district, 52 percent of the difference 
        between the amount of the contract and the basic revenue of the 
        district for that pupil for the fraction of the school day the 
        pupil receives services under the contract; 
           (4) for special instruction and services provided to any 
        pupil by contracting for services with public, private, or 
        voluntary agencies other than school districts, that are 
        supplementary to a full educational program provided by the 
        school district, 52 percent of the amount of the contract for 
        that pupil; 
           (5) for supplies and equipment purchased or rented for use 
        in the instruction of children with a disability an amount equal 
        to 47 percent of the sum actually expended by the district, or a 
        Minnesota correctional facility operating on a fee-for-service 
        basis, but not to exceed an average of $47 in any one school 
        year for each child with a disability receiving instruction; 
           (6) for fiscal years 1997 and later, special education base 
        revenue shall include amounts under clauses (1) to (5) for 
        special education summer programs provided during the base year 
        for that fiscal year; and 
           (7) for fiscal years 1999 and later, the cost of providing 
        transportation services for children with disabilities under 
        section 124.225, subdivision 1, paragraph (b), clause (4).  
           (b) If requested by a school district operating a special 
        education program during the base year for less than the full 
        school fiscal year, or a school district in which is located a 
        Minnesota correctional facility operating on a fee-for-service 
        basis for less than the full fiscal year, the commissioner may 
        adjust the base revenue to reflect the expenditures that would 
        have occurred during the base year had the program been operated 
        for the full school fiscal year. 
           (c) Notwithstanding paragraphs (a) and (b), the portion of 
        a school district's base revenue attributable to a Minnesota 
        correctional facility operating on a fee-for-service basis 
        during the facilities first year of operating on a 
        fee-for-service basis shall be computed using current year data. 
           Sec. 28.  Minnesota Statutes 1996, section 124.323, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [TUITION.] Notwithstanding section 120.17, for 
        children who are nonresidents of Minnesota, receive services 
        under section 124.3201, subdivisions 1 and 2, and are placed in 
        the serving school district by court action, the serving school 
        district shall submit unreimbursed tuition bills for eligible 
        services to the department of children, families, and learning 
        instead of the resident school district.  To be eligible for 
        reimbursement, the serving school district, as part of its child 
        intake procedures, must demonstrate good faith effort to obtain 
        from the placing agency a financial commitment to pay tuition 
        costs. 
           Sec. 29.  Minnesota Statutes 1996, section 124A.034, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LOCATION OF SERVICES.] (a) Public school 
        programs that provide instruction in core curriculum may be 
        provided to shared time pupils only at a public school building; 
        provided, however, that special instruction and services for 
        children with a disability required pursuant to section 120.17 
        may also be provided at a neutral site as defined in section 
        123.932, public school programs, excluding programs that provide 
        instruction in core curriculum, may be provided to shared time 
        pupils at a public school building, a neutral site, the 
        nonpublic school, or any other suitable location.  Guidance and 
        counseling and diagnostic and health services required pursuant 
        to under section 120.17 may also be provided at a nonpublic 
        school building.  As used in this subdivision, "diagnostic 
        services" means speech, hearing, vision, psychological, medical 
        and dental diagnostic services and "health services" means 
        physician, nursing or optometric services provided to pupils in 
        the field of physical and mental health.  
           (b) For those children with a disability under section 
        120.17 who attend nonpublic school at their parent's choice, a 
        school district may provide special instruction and services at 
        the nonpublic school building, a public school, or at a neutral 
        site other than a nonpublic school as defined in section 
        123.932, subdivision 9.  The school district shall determine the 
        location at which to provide services on a student-by-student 
        basis, consistent with federal law. 
           Sec. 30.  Minnesota Statutes 1996, section 124A.036, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [REPORTING; REVENUE FOR HOMELESS.] For all 
        school purposes, unless otherwise specifically provided by law, 
        a homeless pupil must be considered is a resident of the school 
        district that enrolls the pupil in which the homeless shelter or 
        other program, center, or facility assisting the homeless pupil 
        or the pupil's family is located. 
           Sec. 31.  Minnesota Statutes 1996, section 124A.036, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [REVENUE FOR CHILDREN OF DIVORCED PARENTS.] (a) 
        In those instances when the divorced parents share joint 
        physical custody of the child and the divorced parents reside in 
        different school districts, for all school purposes, unless 
        otherwise specifically provided by law, the child must be 
        considered a resident of the school district, as indicated by 
        the child's parents.  
           (b) When the child of divorced parents under paragraph (a) 
        resides with each parent on alternate weeks, the parents shall 
        be responsible for the transportation of the child to the border 
        of the resident school district during those weeks when the 
        child resides in the nonresident school district. 
           Sec. 32.  Minnesota Statutes 1996, section 124A.036, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STATE AGENCY AND COURT PLACEMENTS.] If a state 
        agency or a court of the state desires to place a child in a 
        school district which is not the child's district of 
        residence or to place a pupil who is a parent under section 
        120.101, subdivision 3, in a school district which is not the 
        school district in which the pupil's biological or adoptive 
        parent or designated guardian resides, that agency or court 
        shall, prior to placement, allow the district of residence an 
        opportunity to participate in the placement decision and notify 
        the district of residence, the district of attendance and the 
        commissioner of children, families, and learning of the 
        placement decision.  When a state agency or court determines 
        that an immediate emergency placement is necessary and that time 
        does not permit district participation in the placement decision 
        or notice to the districts and the commissioner of children, 
        families, and learning of the placement decision prior to the 
        placement, the agency or court may make the decision and 
        placement without that participation or prior notice.  The 
        agency or court shall notify the district of residence, the 
        district of attendance and the commissioner of children, 
        families, and learning of an emergency placement within 15 days 
        of the placement.  
           Sec. 33.  Minnesota Statutes 1996, section 124C.45, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACCESS TO SERVICES.] A center shall have access 
        to the district's regular education programs, special education 
        programs, technology facilities, and staff.  It may contract 
        with individuals or post-secondary institutions.  It shall seek 
        the involvement of community education programs, post-secondary 
        institutions, interagency collaboratives, community resources, 
        businesses, and other federal, state, and local public agencies. 
           Sec. 34.  Minnesota Statutes 1997 Supplement, section 
        124C.46, subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM FOCUS.] (a) The programs and 
        services of a center must focus on academic and learning skills, 
        applied learning opportunities, trade and vocational skills, 
        work-based learning opportunities, work experience, youth 
        service to the community, and transition services.  Applied 
        learning, work-based learning, and service learning may best be 
        developed in collaboration with a local education and 
        transitions partnership.  In addition to offering programs, the 
        center shall coordinate the use of other available educational 
        services, special education services, social services, health 
        services, and post-secondary institutions in the community and 
        services area.  
           (b) Consistent with the requirements of section 127.26 to 
        127.39, a school district may provide an alternative education 
        program for a student who is within the compulsory attendance 
        age under section 120.06, and who is involved in severe or 
        repeated disciplinary action. 
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        124C.46, subdivision 2, is amended to read: 
           Subd. 2.  [PEOPLE TO BE SERVED.] A center shall provide 
        programs for secondary pupils and adults.  A center may also 
        provide programs and services for elementary and secondary 
        pupils who are not attending the center to assist them in being 
        successful in school.  An individual education plan team may 
        identify a center as an appropriate placement to the extent a 
        center can provide the student with the appropriate special 
        education services described in the student's plan.  Pupils 
        eligible to be served are those age five to adults 21 22 and 
        older who qualify under the graduation incentives program in 
        section 126.22, subdivision 2, or those pupils who are eligible 
        to receive special education services under section 120.17. 
           Sec. 36.  Minnesota Statutes 1996, section 124C.47, is 
        amended to read: 
           124C.47 [RESOURCE CENTER FOR OTHER PROGRAMS.] 
           An area learning center must serve as a resource for other 
        districts, educational, community, and business organizations.  
        The center may charge a fee for these services.  The following 
        services shall be provided for a region or the state:  
           (1) information and research for alternative programs; 
           (2) regional or state workshops on awareness, 
        identification, programs, and support for these pupils; and 
           (3) recommendations for staff qualifications to ensure the 
        most qualified staff can be selected for the programs; and 
           (4) recommendations for successful learning programs for 
        special education students placed in an alternative setting. 
           Sec. 37.  Minnesota Statutes 1996, section 124C.48, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [SPECIAL EDUCATION REVENUE.] Payment of special 
        education revenue for nonresident pupils enrolled in the center 
        must be made according to section 120.17, subdivision 6. 
           Sec. 38.  Minnesota Statutes 1996, section 126.237, is 
        amended to read: 
           126.237 [ALTERNATE INSTRUCTION REQUIRED.] 
           (a) Before a pupil is referred for a special education 
        assessment, the district must conduct and document at least two 
        instructional strategies, alternatives, or interventions while 
        the pupil is in the regular classroom.  The pupil's teacher must 
        provide the documentation.  A special education assessment team 
        may waive this requirement when they determine the pupil's need 
        for the assessment is urgent.  This section may not be used to 
        deny a pupil's right to a special education assessment. 
           (b) A school district shall use alternative intervention 
        services, including the assurance of mastery program under 
        section 124.3111 and the supplemental early education program 
        under section 124.2613, to serve at-risk students who 
        demonstrate a need for alternative instructional strategies or 
        interventions. 
           Sec. 39.  Minnesota Statutes 1996, section 127.27, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISMISSAL.] "Dismissal" means the denial of the 
        appropriate current educational program to any pupil, including 
        exclusion, expulsion, and suspension.  It does not include 
        removal from class.  
           Sec. 40.  Minnesota Statutes 1997 Supplement, section 
        127.27, subdivision 10, is amended to read: 
           Subd. 10.  [SUSPENSION.] "Suspension" means an action by 
        the school administration, under rules promulgated by the school 
        board, prohibiting a pupil from attending school for a period of 
        no more than ten school days.  If a suspension is longer than 
        five days, the suspending administrator must provide the 
        superintendent with a reason for the longer suspension.  This 
        definition does not apply to dismissal from school for one 
        school day or less, except as provided in federal law for a 
        student with a disability.  Each suspension action shall may 
        include a readmission plan.  The readmission plan shall include, 
        where appropriate, a provision for implementing alternative 
        educational services upon readmission and may not be used to 
        extend the current suspension.  The school administration may 
        not impose consecutive suspensions against the same pupil for 
        the same course of conduct, or incident of misconduct, except 
        where the pupil will create an immediate and substantial danger 
        to self or to surrounding persons or property, or where the 
        district is in the process of initiating an expulsion, in which 
        case the school administration may extend the suspension up to a 
        total of 15 days.  In the case of a pupil with a disability, a 
        suspension may not exceed ten school days school districts must 
        comply with applicable federal law.  The school administration 
        shall implement alternative educational services to the extent 
        that when the suspension exceeds five days.  A separate 
        administrative conference is required for each period of 
        suspension. 
           Sec. 41.  Minnesota Statutes 1997 Supplement, section 
        127.27, subdivision 11, is amended to read: 
           Subd. 11.  [ALTERNATIVE EDUCATIONAL SERVICES.] "Alternative 
        educational services" may include, but are not limited to, 
        special tutoring, modified curriculum, modified instruction, 
        other modifications or adaptations, instruction through 
        electronic media, special education services as indicated by 
        appropriate assessment, homebound instruction, supervised 
        homework, or enrollment in another district or in an alternative 
        learning center under section 124C.45 selected to allow the 
        pupil to progress toward meeting graduation standards under 
        section 121.11, subdivision 7c, although in a different setting. 
           Sec. 42.  Minnesota Statutes 1997 Supplement, section 
        127.31, subdivision 15, is amended to read: 
           Subd. 15.  [ADMISSION OR READMISSION PLAN.] A school 
        administrator shall prepare and enforce an admission or 
        readmission plan for any pupil who is suspended, excluded, or 
        expelled from school.  The plan may include measures to improve 
        the pupil's behavior and require parental involvement in the 
        admission or readmission process, and may indicate the 
        consequences to the pupil of not improving the pupil's behavior. 
           Sec. 43.  Minnesota Statutes 1997 Supplement, section 
        127.32, is amended to read: 
           127.32 [APPEAL.] 
           A party to an exclusion or expulsion decision made under 
        sections 127.26 to 127.39 may appeal the decision to the 
        commissioner of children, families, and learning within 21 
        calendar days of school board action.  Upon being served with a 
        notice of appeal, the district shall provide the commissioner 
        and the parent or guardian with a complete copy of the hearing 
        record within five days of its receipt of the notice of appeal.  
        All written submissions by the appellant must be submitted and 
        served on the respondent within ten days of its actual receipt 
        of the transcript.  All written submissions by the respondent 
        must be submitted and served on the appellant within ten days of 
        its actual receipt of the written submissions of the appellant.  
        The decision of the school board must be implemented during the 
        appeal to the commissioner. 
           In an appeal under this section, the commissioner may 
        affirm the decision of the agency, may remand the decision for 
        additional findings, or may reverse or modify the decision if 
        the substantial rights of the petitioners may have been 
        prejudiced because the administrative findings, inferences, 
        conclusions, or decisions are: 
           (1) in violation of constitutional provisions; 
           (2) in excess of the statutory authority or jurisdiction of 
        the school district; 
           (3) made upon unlawful procedure, except as provided in 
        section 127.311; 
           (4) affected by other error of law; 
           (5) unsupported by substantial evidence in view of the 
        entire record submitted; or 
           (6) arbitrary or capricious. 
        The commissioner or the commissioner's representative shall make 
        a final decision based upon the record of evidence presented at 
        the hearing.  The commissioner shall issue a decision within 30 
        calendar days of receiving the entire record and the parties' 
        written submission on appeal.  The commissioner's decision shall 
        be final and binding upon the parties after the time for appeal 
        expires under section 127.33. 
           Sec. 44.  Minnesota Statutes 1997 Supplement, section 
        127.36, subdivision 1, is amended to read: 
           Subdivision 1.  [EXCLUSIONS AND EXPULSIONS.] The school 
        board shall report each exclusion or expulsion within 30 days of 
        the effective date of the action to the commissioner of 
        children, families, and learning.  This report shall include a 
        statement of alternative educational services given the pupil 
        before beginning exclusion or expulsion proceedings, and the 
        reason for, the effective date, and the duration of the 
        exclusion or expulsion.  
           Sec. 45.  Minnesota Statutes 1997 Supplement, section 
        127.38, is amended to read: 
           127.38 [POLICIES TO BE ESTABLISHED.] 
           (a) The commissioner of children, families, and learning 
        shall promulgate guidelines to assist each school board.  Each 
        school board shall establish uniform criteria for dismissal and 
        adopt written policies and rules to effectuate the purposes of 
        sections 127.26 to 127.39.  The policies shall emphasize 
        preventing dismissals through early detection of problems and 
        shall be designed to address students' inappropriate behavior 
        from recurring.  The policies shall recognize the continuing 
        responsibility of the school for the education of the pupil 
        during the dismissal period.  The alternative educational 
        services, if the pupil wishes to take advantage of them, must be 
        adequate to allow the pupil to make progress towards meeting the 
        graduation standards adopted under section 121.11, subdivision 
        7c, and help prepare the pupil for readmission.  
           (b) An area learning center under section 124C.45 may not 
        prohibit an expelled or excluded pupil from enrolling solely 
        because a district expelled or excluded the pupil.  The board of 
        the area learning center may use the provisions of The Pupil 
        Fair Dismissal Act to exclude a pupil or to require an admission 
        plan. 
           (c) The commissioner shall actively encourage and assist 
        school districts to cooperatively establish alternative 
        educational services within school buildings or at alternative 
        program sites that offer instruction to pupils who are dismissed 
        from school for willfully engaging in dangerous, disruptive, or 
        violent behavior, including for possessing a firearm in a school 
        zone. 
           Sec. 46.  Minnesota Statutes 1996, section 256B.0625, 
        subdivision 26, is amended to read: 
           Subd. 26.  [SPECIAL EDUCATION SERVICES.] Medical assistance 
        covers medical services identified in a recipient's 
        individualized education plan and covered under the medical 
        assistance state plan.  The services may be provided by a 
        Minnesota school district that is enrolled as a medical 
        assistance provider or its subcontractor, and only if the 
        services meet all the requirements otherwise applicable if the 
        service had been provided by a provider other than a school 
        district, in the following areas:  medical necessity, 
        physician's orders, documentation, personnel qualifications, and 
        prior authorization requirements.  Services of a speech-language 
        pathologist provided under this section are covered 
        notwithstanding Minnesota Rules, part 9505.0390, subpart 1, item 
        L, if the person: 
           (1) holds a masters degree in speech-language pathology; 
           (2) is licensed by the Minnesota board of teaching as an 
        educational speech-language pathologist; and 
           (3) either has a certificate of clinical competence from 
        the American Speech and Hearing Association, has completed the 
        equivalent educational requirements and work experience 
        necessary for the certificate or has completed the academic 
        program and is acquiring supervised work experience to qualify 
        for the certificate.  Medical assistance coverage for medically 
        necessary services provided under other subdivisions in this 
        section may not be denied solely on the basis that the same or 
        similar services are covered under this subdivision. 
           Sec. 47.  Laws 1993, chapter 224, article 3, section 32, is 
        amended to read: 
           Sec. 32.  [ASL GUIDELINES.] 
           (a) In determining appropriate licensure requirements for 
        teachers of deaf and hard of hearing students under Minnesota 
        Statutes, section 125.189, the board of teaching shall develop 
        the requirements according to the guidelines described in this 
        section. 
           (b) Each teacher must complete the American sign language 
        sign communication proficiency interview or a comparable 
        American sign language evaluation that the board of teaching, 
        the Minnesota association of deaf citizens, and the Minnesota 
        council for the hearing impaired accept as a means for 
        establishing the teacher's baseline level of American sign 
        language skills.  A teacher shall not be charged for this 
        evaluation. 
           (c) Each teacher must complete 60 continuing education 
        credits in American sign language, American sign language 
        linguistics, or deaf culture for every 120 continuing education 
        credits the teacher is required to complete to renew a teaching 
        license. 
           (d) As a condition of obtaining In order to obtain an 
        initial license to teach deaf and hard of hearing students, or 
        to apply for a Minnesota teaching license, after being licensed 
        to teach in another state, a person must demonstrate in the sign 
        communication proficiency interview an intermediate plus level 
        of proficiency in American sign language. 
           (e) Each teacher applying to renew a teaching license and 
        each teacher holding a teaching license from another state who 
        wishes to apply for a Minnesota teaching license must take the 
        American sign language sign communication proficiency interview 
        or a comparable American sign language evaluation every five 
        years until the teacher demonstrates a minimum, or survival 
        plus, level of proficiency in American sign language. 
           (f) A teacher working directly with students whose primary 
        language is American sign language should demonstrate at least 
        an advanced level of proficiency in American sign language.  The 
        board should not consider a minimum, or survival plus, level of 
        proficiency adequate for providing direct instruction to 
        students whose primary language is American sign language. 
           (g) To renew a teaching license, a teacher must comply with 
        paragraphs (c) and (e) in addition to other applicable board 
        requirements.  A teacher's ability to demonstrate a minimum, or 
        survival plus, level of proficiency in American sign language is 
        not a condition for renewing the teacher's license. 
           (h) A teacher who demonstrates an increased proficiency in 
        American sign language skill in the American sign language sign 
        communication proficiency interview or a comparable American 
        sign language evaluation shall receive credit toward completing 
        the requirements of paragraph (c).  The number of continuing 
        education credits the teacher receives is based on the teacher's 
        increased level of proficiency from the teacher's baseline level:
           (1) 35 continuing education credits for demonstrating an 
        intermediate level of proficiency; 
           (2) 40 continuing education credits for demonstrating an 
        intermediate plus level of proficiency; 
           (3) 45 continuing education credits for demonstrating an 
        advanced level of proficiency; 
           (4) 50 continuing education credits for demonstrating an 
        advanced plus level of proficiency; 
           (5) 55 continuing education credits for demonstrating a 
        superior level of proficiency; and 
           (6) 60 continuing education credits for demonstrating a 
        superior plus level of proficiency. 
           Sec. 48.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 2, is amended to read: 
           Subd. 2.  [AMERICAN INDIAN LANGUAGE AND CULTURE PROGRAMS.] 
        For grants to American Indian language and culture education 
        programs according to Minnesota Statutes, section 126.54, 
        subdivision 1: 
             $591,000     .....     1998
             $591,000 $716,000    .....     1999
           The 1998 appropriation includes $59,000 for 1997 and 
        $532,000 for 1998.  
           The 1999 appropriation includes $59,000 for 1998 and 
        $532,000 $657,000 for 1999.  
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 49.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 4, is amended to read: 
           Subd. 4.  [AMERICAN INDIAN POST-SECONDARY PREPARATION 
        GRANTS.] For American Indian post-secondary preparation grants 
        according to Minnesota Statutes, section 124.481: 
             $857,000     .....     1998
             $857,000   $982,000    .....     1999
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 50.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 5, is amended to read: 
           Subd. 5.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
        Indian scholarships according to Minnesota Statutes, section 
        124.48: 
             $1,600,000     .....     1998 
             $1,600,000 $1,875,000    .....     1999 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 51.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 25, is amended to read: 
           Subd. 25.  [MATCHING GRANTS FOR EDUCATION PROGRAMS SERVING 
        HOMELESS CHILDREN.] For matching grants for education programs 
        for homeless children: 
             $400,000 $1,100,000     .....     1998
           This appropriation is available until June 30, 1999.  
           Sec. 52.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 29, is amended to read: 
           Subd. 29.  [FIRST GRADE PREPAREDNESS.] (a) For grants for 
        the first grade preparedness program under Minnesota Statutes, 
        section 124.2613, and for school sites that have provided a 
        full-day kindergarten option for kindergarten students enrolled 
        in fiscal years 1996 and 1997: 
             $5,000,000     .....     1998 
             $5,000,000 $6,500,000    .....     1999 
           (b) To be a qualified site, licensed teachers must have 
        taught the optional full-day kindergarten classes.  A district 
        that charged a fee for students participating in an optional 
        full-day program is eligible to receive the grant to provide 
        full-day kindergarten for all students as required by Minnesota 
        Statutes, section 124.2613, subdivision 4.  Districts with 
        eligible sites must apply to the commissioner of children, 
        families, and learning for a grant. 
           (c) This appropriation must first be used to fund programs 
        operating during the 1996-1997 school year under paragraph (b) 
        and Minnesota Statutes, section 124.2613.  Any remaining funds 
        may be used to expand the number of sites providing first grade 
        preparedness programs. 
           Sec. 53.  [RULES AFFECTING SPECIAL EDUCATION INSTRUCTION 
        AND SERVICES.] 
           (a) The state board of education must amend all rules 
        relating to providing special instruction and services to 
        children with a disability so that the rules do not impose 
        requirements that exceed federal law.  Consistent with the 
        report from the commissioner to compare federal and state 
        special education law, the state board may use the expedited 
        process under Minnesota Statutes 1997, section 14.389, to amend 
        these rules. 
           (b) As of July 1, 1999, any rules relating to providing 
        special instruction and services to children with a disability 
        are invalid to the extent they exceed the requirements in 
        federal law unless a law is enacted before July 1, 1999, 
        indicating the intent of the state to exceed one or more federal 
        requirements. 
           Sec. 54.  [REPORT TO COMPARE FEDERAL AND STATE SPECIAL 
        EDUCATION LAW.] 
           Subdivision 1.  [REPORT.] The commissioner of children, 
        families, and learning shall prepare a report comparing existing 
        and currently proposed federal laws and regulations and state 
        laws and rules governing special education, indicating those 
        state laws and rules governing special education that exceed or 
        expand upon minimum requirements under federal special education 
        law or regulations.  The commissioner shall make the report 
        available by September 30, 1998, to the public, the state board 
        of education, and the education committees of the legislature 
        for consideration of amending state rules.  
           Sec. 55.  [SPEECH-LANGUAGE PATHOLOGISTS.] 
           The board of teaching shall allow individuals who hold a 
        certificate of clinical competence from the American 
        Speech-Language-Hearing Association to be licensed as 
        speech-language pathologists. 
           Sec. 56.  [BOARD OF TEACHING; RULE CHANGES; SPEECH-LANGUAGE 
        SERVICES.] 
           The board of teaching, in order to comply with section 55, 
        shall by rule allow individuals who hold a certificate of 
        clinical competence from the American Speech-Language-Hearing 
        Association to be licensed as speech-language pathologists. 
           Sec. 57.  [IN-SCHOOL BEHAVIOR INTERVENTION GRANTS.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
        children, families, and learning shall award grants to develop, 
        adapt, implement, or evaluate discipline programs that prevent 
        behavior that leads to suspensions or expulsions and that 
        provide students with an alternative education setting within 
        the school or program site.  A grant recipient must be a school 
        site, school district, charter school, or provider of an 
        alternative education program. 
           Subd. 2.  [EVALUATION.] The commissioner shall evaluate the 
        grant sites to determine the impact of the discipline program on 
        measures of student performance and behavior, including, but not 
        limited to, achievement, attendance, suspensions, expulsions, 
        and the impact on the site, student body, classroom, and school 
        faculty.  The commissioner may make recommendations to the 
        education committees of the legislature based on the results of 
        the grant recipients and disseminate information about 
        successful programs to interested schools and school sites. 
           Sec. 58.  [SPECIAL EDUCATION BASE ADJUSTMENT; ROCHESTER.] 
           Special education revenue for independent school district 
        No. 535, Rochester, is increased by $150,000 for fiscal year 
        1999 to reflect the increased special education costs associated 
        with the opening of a new facility for juvenile offenders in 
        Olmsted county.  
           Sec. 59.  [DEPARTMENT OF HUMAN SERVICES.] 
           The department of human services shall report to the 
        legislature on January 15 for the years 1999, 2000, and 2001, 
        the medical assistance MinnesotaCare reimbursed costs of special 
        education services, which are covered services under Minnesota 
        Statutes, chapter 256B.  If the November 1998 forecast for the 
        state medical assistance expenditures for special education 
        services which are covered services under Minnesota Statutes, 
        chapter 256B, exceeds $8,000,000 per year, the department of 
        children, families, and learning must develop a plan to allocate 
        additional resources to cover the excess costs. 
           Sec. 60.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated. 
           Subd. 2.  [IN-SCHOOL BEHAVIOR INTERVENTION GRANTS.] For 
        grants to develop, implement, and evaluate school discipline 
        policies under section 57: 
               $300,000     .....     1999 
           Grant recipients may expend grant proceeds over a 
        three-year period.  Of this amount, $13,500 is for performing an 
        evaluation. 
           Subd. 3.  [STATEWIDE THIRD-PARTY BILLING SYSTEM; TECHNICAL 
        ASSISTANCE.] For developing and implementing an effective and 
        efficient statewide third-party billing system under section 2: 
               $200,000     .....     1999 
           Funds remain available until expended. 
           Subd. 4.  [LITIGATION COSTS.] For paying the litigation 
        costs a district actually incurs under section 26: 
               $500,000     .....     1999
           If the amount appropriated is insufficient to fully fund 
        the aid for hearing and litigation costs and attorney fees under 
        Minnesota Statutes, section 124.32, subdivision 13, paragraph 
        (b), the commissioner shall prorate the appropriation to school 
        districts based on the amount of aid calculated for each 
        district. 
           Subd. 5.  [PROVIDING TECHNICAL ASSISTANCE.] For department 
        staff to provide technical assistance and training to school 
        districts and cooperative units under section 2: 
                $50,000     .....     1999 
           Subd. 6.  [COURT-PLACED SPECIAL EDUCATION REVENUE.] For 
        reimbursing serving school districts for unreimbursed eligible 
        expenditures attributable to children placed in the serving 
        school district by court action under Minnesota Statutes, 
        section 124.323: 
               $350,000     .....     1999
           Subd. 7.  [SPECIAL EDUCATION ADJUSTMENT; ROCHESTER.] For a 
        special education revenue adjustment for independent school 
        district No. 535, Rochester, according to section 58: 
             $  135,000     .....     1999 
           Sec. 61.  [APPROPRIATION.] 
           Subdivision 1.  [DEPARTMENT OF HUMAN SERVICES.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of human services for the fiscal years 
        designated. 
           Subd. 2.  [PROVIDING TECHNICAL ASSISTANCE.] For technical 
        assistance and training under section 2: 
                $50,000     .....     1999 
           Subd. 3.  [MEDICAL ASSISTANCE COSTS.] For additional 
        medical assistance costs associated with state law changes 
        regarding speech-language pathologists in Minnesota Statutes, 
        section 256B.0625, subdivision 26: 
               $458,000     ....     1999 
           Subd. 4.  [MINNESOTACARE COSTS.] For transfer into the 
        health care access fund for the purposes of state law changes 
        regarding speech-language pathologists in Minnesota Statutes, 
        section 256B.0625, subdivision 26: 
                $93,000     ....     1999 
           Sec. 62.  [MEDICAL COST REIMBURSEMENT DESIGNATION.] 
           For fiscal years 2000 and 2001, the department of children, 
        families, and learning must reimburse the department of human 
        services for medical assistance and MinnesotaCare costs 
        associated with state law changes regarding the speech-language 
        pathologists in Minnesota Statutes, section 256B.0625, 
        subdivision 26. 
           Sec. 63.  [REPEALER.] 
           Minnesota Rules, part 3525.2750, subpart 1, item B, is 
        repealed. 
           Sec. 64.  [EFFECTIVE DATES.] 
           (a) Sections 2, 9, 25, 42, 43, 44, 45, 46, 48, 49, 50, 53, 
        55, and 56, are effective the day following final enactment.  
           (b) Section 14 is effective July 1, 1999. 
                                   ARTICLE 3 
               INTERAGENCY SERVICE; LIFELONG LEARNING; TECHNOLOGY 
           Section 1.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INTERAGENCY EARLY INTERVENTION COMMITTEES.] (a) 
        A school district, group of districts, or special education 
        cooperative, in cooperation with the health and human service 
        agencies located in the county or counties in which the district 
        or cooperative is located, shall establish an interagency early 
        intervention committee for children with disabilities under age 
        five and their families under this section, and for children 
        with disabilities ages three to 22 consistent with the 
        requirements under sections 120.1703 and 120.1705.  Committees 
        shall include representatives of local and regional health, 
        education, and county human service agencies; county boards; 
        school boards; early childhood family education programs; 
        parents of young children with disabilities under age 12; 
        current service providers; and may also include representatives 
        from other private or public agencies and school nurses.  The 
        committee shall elect a chair from among its members and shall 
        meet at least quarterly. 
           (b) The committee shall develop and implement interagency 
        policies and procedures concerning the following ongoing duties: 
           (1) develop public awareness systems designed to inform 
        potential recipient families of available programs and services; 
           (2) implement interagency child find systems designed to 
        actively seek out, identify, and refer infants and young 
        children with, or at risk of, disabilities and their families; 
           (3) establish and evaluate the identification, referral, 
        child and family assessment systems, procedural safeguard 
        process, and community learning systems to recommend, where 
        necessary, alterations and improvements; 
           (4) assure the development of individualized family service 
        plans for all eligible infants and toddlers with disabilities 
        from birth through age two, and their families, and individual 
        education plans and individual service plans when necessary to 
        appropriately serve children with disabilities, age three and 
        older, and their families and recommend assignment of financial 
        responsibilities to the appropriate agencies.  Agencies are 
        encouraged to develop individual family service plans for 
        children with disabilities, age three and older; 
           (5) implement a process for assuring that services involve 
        cooperating agencies at all steps leading to individualized 
        programs; 
           (6) facilitate the development of a transitional plan if a 
        service provider is not recommended to continue to provide 
        services; 
           (7) identify the current services and funding being 
        provided within the community for children with disabilities 
        under age five and their families; 
           (8) develop a plan for the allocation and expenditure of 
        additional state and federal early intervention funds under 
        United States Code, title 20, section 1471 et seq. (Part H, 
        Public Law Number 102-119) and United States Code, title 20, 
        section 631, et seq. (Chapter I, Public Law Number 89-313); and 
           (9) develop a policy that is consistent with section 13.05, 
        subdivision 9, and federal law to enable a member of an 
        interagency early intervention committee to allow another member 
        access to data classified as not public. 
           (c) The local committee shall also: 
           (1) participate in needs assessments and program planning 
        activities conducted by local social service, health and 
        education agencies for young children with disabilities and 
        their families; 
           (2) review and comment on the early intervention section of 
        the total special education system for the district, the county 
        social service plan, the section or sections of the community 
        health services plan that address needs of and service 
        activities targeted to children with special health care needs, 
        and the section of the maternal and child health special project 
        grants that address needs of and service activities targeted to 
        children with chronic illness and disabilities; and 
           (3) prepare a yearly summary on the progress of the 
        community in serving young children with disabilities, and their 
        families, including the expenditure of funds, the identification 
        of unmet service needs identified on the individual family 
        services plan and other individualized plans, and local, state, 
        and federal policies impeding the implementation of this section.
           (d) The summary must be organized following a format 
        prescribed by the commissioner of the state lead agency and must 
        be submitted to each of the local agencies and to the state 
        interagency coordinating council by October 1 of each year. 
           The departments of children, families, and learning, 
        health, and human services must provide assistance to the local 
        agencies in developing cooperative plans for providing services. 
           Sec. 2.  [120.1703] [COORDINATED INTERAGENCY SERVICES.] 
           Subdivision 1.  [CITATION.] Sections 120.1703 and 120.1705 
        shall be cited as the "Interagency Services for Children with 
        Disabilities Act." 
           Subd. 2.  [PURPOSE.] It is the policy of the state to 
        develop and implement a coordinated, multidisciplinary, 
        interagency intervention service system for children ages three 
        to 22 with disabilities. 
           Subd. 3.  [DEFINITIONS.] For purposes of sections 120.1703 
        and 120.1705, the following terms have the meanings given them: 
           (a) "Health plan" means: 
           (1) a health plan under section 62Q.01, subdivision 3; 
           (2) a county-based purchasing plan under section 256B.692; 
           (3) a self-insured health plan established by a local 
        government under section 471.617; or 
           (4) self-insured health coverage provided by the state to 
        its employees or retirees. 
           (b) For purposes of this section, "health plan company" 
        means an entity that issues a health plan as defined in 
        paragraph (a). 
           (c) "Individual interagency intervention plan" means a 
        standardized written plan describing those programs or services 
        and the accompanying funding sources available to eligible 
        children with disabilities. 
           (d) "Interagency intervention service system" means a 
        system that coordinates services and programs required in state 
        and federal law to meet the needs of eligible children with 
        disabilities ages three to 22, including: 
           (1) services provided under the following programs or 
        initiatives administered by state or local agencies: 
           (i) the maternal and child health program under title V of 
        the Social Security Act, United States Code, title 42, sections 
        701 to 709; 
           (ii) the Individuals with Disabilities Education Act under 
        United States Code, title 20, chapter 33, subchapter II, 
        sections 1411 to 1420; 
           (iii) medical assistance under the Social Security Act, 
        United States Code, title 42, chapter 7, subchapter XIX, section 
        1396, et seq.; 
           (iv) the Developmental Disabilities Assistance and Bill of 
        Rights Act, United States Code, title 42, chapter 75, subchapter 
        II, sections 6021 to 6030, Part B; 
           (v) the Head Start Act, United States Code, title 42, 
        chapter 105, subchapter II, sections 9831 to 9852; 
           (vi) rehabilitation services provided under chapter 268A; 
           (vii) juvenile court act services provided under sections 
        260.011 to 260.301; 
           (viii) the children's mental health collaboratives under 
        section 245.493; 
           (ix) the family service collaboratives under section 
        121.8355; 
           (x) the family community support plan under section 
        245.4881, subdivision 4; 
           (xi) the Minnesota care program under chapter 256L; 
           (xii) the community health services grants under chapter 
        145; 
           (xiii) the community social services act funding under the 
        Social Security Act, United States Code, title 42, sections 1397 
        to 1397f; and 
           (xiv) the community interagency transition committees under 
        section 120.17, subdivision 16; 
           (2) services provided under a health plan in conformity 
        with an individual family service plan or an individual 
        education plan; and 
           (3) additional appropriate services that local agencies and 
        counties provide on an individual need basis upon determining 
        eligibility and receiving a request from the interagency early 
        intervention committee and the child's parent. 
           (e) "Children with disabilities" has the meaning given in 
        section 120.03. 
           (f) A "standardized written plan" means those individual 
        services or programs available through the interagency 
        intervention service system to an eligible child other than the 
        services or programs described in the child's individual 
        education plan or the child's individual family service plan. 
           Subd. 4.  [STATE INTERAGENCY COMMITTEE.] (a) The governor 
        shall convene an 18-member interagency committee to develop and 
        implement a coordinated, multidisciplinary, interagency 
        intervention service system for children ages three to 22 with 
        disabilities.  The commissioners of commerce, children, 
        families, and learning, health, human rights, human services, 
        economic security, and corrections shall each appoint two 
        committee members from their departments; the association of 
        Minnesota counties shall appoint two county representatives, one 
        of whom must be an elected official, as committee members; and 
        the Minnesota school boards association and the school nurse 
        association of Minnesota shall each appoint one committee 
        member.  The committee shall select a chair from among its 
        members. 
           (b) The committee shall: 
           (1) identify and assist in removing state and federal 
        barriers to local coordination of services provided to children 
        with disabilities; 
           (2) identify adequate, equitable, and flexible funding 
        sources to streamline these services; 
           (3) develop guidelines for implementing policies that 
        ensure a comprehensive and coordinated system of all state and 
        local agency services, including multidisciplinary assessment 
        practices for children with disabilities ages three to 22; 
           (4) develop, consistent with federal law, a standardized 
        written plan for providing services to a child with 
        disabilities; 
           (5) identify how current systems for dispute resolution can 
        be coordinated and develop guidelines for that coordination; 
           (6) develop an evaluation process to measure the success of 
        state and local interagency efforts in improving the quality and 
        coordination of services to children with disabilities ages 
        three to 22; 
           (7) develop guidelines to assist the governing boards of 
        the interagency early intervention committees in carrying out 
        the duties assigned in section 120.1705, subdivision 1, 
        paragraph (b); and 
           (8) carry out other duties necessary to develop and 
        implement within communities a coordinated, multidisciplinary, 
        interagency intervention service system for children with 
        disabilities. 
           (c) The committee shall consult on an on-going basis with 
        the state education advisory committee for special education and 
        the governor's interagency coordinating council in carrying out 
        its duties under this section, including assisting the governing 
        boards of the interagency early intervention committees. 
           Subd. 5.  [INTERVENTION DEMONSTRATION PROJECTS.] (a) The 
        commissioner of children, families, and learning, based on 
        recommendations from the state interagency committee, shall 
        issue a request for proposals by January 1, 1999, for grants to 
        the governing boards of interagency intervention committees 
        under section 120.1705 or a combination of one or more counties 
        and school districts to establish five voluntary interagency 
        intervention demonstration projects.  One grant shall be used to 
        implement a coordinated service system for all eligible children 
        with disabilities up to age 5 who received services under 
        section 120.1701.  One grant shall be used to implement a 
        coordinated service system for a population of minority children 
        with disabilities from ages 12 to 22, who may have behavioral 
        problems and are in need of transitional services.  Each project 
        must be operational by July 1, 1999.  The governing boards of 
        the interagency early intervention committees and the counties 
        and school districts receiving project grants must develop 
        efficient ways to coordinate services and funding for children 
        with disabilities ages three to 22, consistent with the 
        requirements of sections 120.1703 and 120.1705 and the 
        guidelines developed by the state interagency committee under 
        this section. 
           (b) The state interagency committee shall evaluate the 
        demonstration projects and provide the evaluation results to 
        interagency early intervention committees. 
           Subd. 6.  [THIRD-PARTY LIABILITY.] Nothing in sections 
        120.1703 and 120.1705 relieves a health plan company, third 
        party administrator or other third-party payer of an obligation 
        to pay for, or changes the validity of an obligation to pay for, 
        services provided to children with disabilities ages three to 22 
        and their families. 
           Subd. 7.  [AGENCY OBLIGATION.] Nothing in sections 120.1703 
        and 120.1705 removes the obligation of the state, counties, 
        local school districts, a regional agency, or a local agency or 
        organization to comply with any federal or state law that 
        mandates responsibility for finding, assessing, delivering, 
        assuring, or paying for education or related services for 
        children with disabilities and their families. 
           Sec. 3.  [120.1705] [INTERAGENCY EARLY INTERVENTION 
        COMMITTEE RESPONSIBILITIES.] 
           Subdivision 1.  [ADDITIONAL DUTIES.] (a) The governing 
        boards of the interagency early intervention committees are 
        responsible for developing and implementing interagency policies 
        and procedures to coordinate services at the local level for 
        children with disabilities ages three to 22 under guidelines 
        established by the state interagency committee under section 
        120.1703, subdivision 4.  Consistent with the requirements in 
        sections 120.1703 and 120.1705, the governing boards of the 
        interagency early intervention committees shall organize as a 
        joint powers board under section 471.59 or enter into an 
        interagency agreement that establishes a governance structure. 
           (b) The governing board of each interagency early 
        intervention committee as defined in section 120.1701, 
        subdivision 5, paragraph (a), which may include a juvenile 
        justice professional, shall: 
           (1) identify and assist in removing state and federal 
        barriers to local coordination of services provided to children 
        with disabilities; 
           (2) identify adequate, equitable, and flexible use of 
        funding by local agencies for these services; 
           (3) implement policies that ensure a comprehensive and 
        coordinated system of all state and local agency services, 
        including multidisciplinary assessment practices, for children 
        with disabilities ages three to 22; 
           (4) use a standardized written plan for providing services 
        to a child with disabilities developed under section 120.1703; 
           (5) access the coordinated dispute resolution system and 
        incorporate the guidelines for coordinating services at the 
        local level, consistent with section 120.1703; 
           (6) use the evaluation process to measure the success of 
        the local interagency effort in improving the quality and 
        coordination of services to children with disabilities ages 
        three to 22 consistent with section 120.1703; 
           (7) develop a transitional plan for children moving from 
        the interagency early childhood intervention system under 
        section 120.1701 into the interagency intervention service 
        system under this section; 
           (8) coordinate services and facilitate payment for services 
        from public and private institutions, agencies, and health plan 
        companies; and 
           (9) share needed information consistent with state and 
        federal data practices requirements. 
           Subd. 2.  [SERVICES.] (a) Parents, physicians, other health 
        care professionals including school nurses, and education and 
        human services providers jointly must determine appropriate and 
        necessary services for eligible children with disabilities ages 
        three to 22.  The services provided to the child under this 
        section must conform with the child's standardized written 
        plan.  The governing board of an interagency early intervention 
        committee must provide those services contained in a child's 
        individual education plan and those services for which a legal 
        obligation exists. 
           (b) Nothing in section 120.1703 or 120.1705 increases or 
        decreases the obligation of the state, county, regional agency, 
        local school district, or local agency or organization to pay 
        for education, health care, or social services.  
           (c) A health plan may not exclude any medically necessary 
        covered service solely because the service is or could be 
        identified in a child's individual family service plan, 
        individual education plan, a plan established under section 504 
        of the federal Rehabilitation Act of 1973, or a student's 
        individual health plan.  This paragraph reaffirms the obligation 
        of a health plan company to provide or pay for certain medically 
        necessary covered services, and encourages a health plan company 
        to coordinate this care with any other providers of similar 
        services.  Also, a health plan company may not exclude from a 
        health plan any medically necessary covered service such as an 
        assessment or physical examination solely because the resulting 
        information may be used for an individual education plan or a 
        standardized written plan. 
           Subd. 3.  [IMPLEMENTATION TIMELINE.] By July 1, 2000, all 
        governing boards of interagency early intervention committees 
        statewide must implement a coordinated service system for 
        children up to age five with disabilities consistent with the 
        requirements of sections 120.1703 and 120.1705 and the 
        evaluation results from the demonstration projects under section 
        120.1703, subdivision 5.  Children with disabilities up to the 
        age of 22 shall be eligible for coordinated services and their 
        eligibility to receive such services under this section shall be 
        phased-in over a four-year period as follows: 
           (1) July 1, 2001, children up to age nine become eligible; 
           (2) July 1, 2002, children up to age 14 become eligible; 
        and 
           (3) July 1, 2003, children up to age 22 become eligible. 
           Sec. 4.  Minnesota Statutes 1997 Supplement, section 
        126.79, subdivision 3, is amended to read: 
           Subd. 3.  [LOCAL PROGRAMS; APPLICATION PROCEDURE; GRANT 
        AWARDS.] The commissioner shall make grants to eligible 
        applicants to establish local learn and earn programs.  Each 
        program shall operate for at least a four-year period.  A local 
        program shall select its participants from among eligible 
        students who are entering or are in the ninth grade at the 
        inception of the program.  A program may not refill a program 
        slot with another student if a student drops out of the program. 
        Students selected to participate in the program shall be 
        considered part of the program class and students who drop out 
        may return to the program at any time prior to graduation. 
           The commissioner shall establish the application procedure 
        for awarding grants under this section.  The commissioner shall 
        begin awarding grants by September 1, 1997 May 1, 1998. 
           Sec. 5.  Minnesota Statutes 1997 Supplement, section 
        126.79, subdivision 6, is amended to read: 
           Subd. 6.  [PROGRAM COMPONENTS.] Each learn and earn 
        graduation achievement program must provide the opportunity for 
        participating students to complete: 
           (1) 250 hours each year, not including regular required 
        classroom hours, in basic education competency skills; 
           (2) 250 hours each year of service to the community 
        service; and 
           (3) 250 hours each year of cultural enrichment and personal 
        development, including but not limited to adult mentoring; 
        participating in community cultural events; developing life 
        skills for use in the home, workplace, and community; and 
        learning to set goals, manage time, and make appropriate 
        behavior choices for varying social situations. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        126.79, subdivision 7, is amended to read: 
           Subd. 7.  [PROGRAM INCENTIVES.] (a) Each participating 
        student shall receive a monetary stipend for each hour spent in 
        a program component activity, plus a bonus upon completion of 
        each component during each year of the program. 
           (b) An additional amount equal to or greater than each 
        student's earned stipends and bonuses must be deposited for the 
        student in a post-secondary opportunities interest-bearing 
        account, established by the commissioner through the higher 
        education services office.  A student may, upon graduation from 
        high school, use the funds accumulated for the student toward 
        the costs, including tuition, books, and lab fees, of attending 
        a Minnesota post-secondary institution or participating in a 
        Minnesota post-secondary program in a career training program.  
        Funds accumulated for a student shall be available to the 
        student from the time the student graduates from high school 
        until ten years after the date the student entered the learn and 
        earn graduation achievement program.  After ten years, the 
        commissioner shall close the student's account and any remaining 
        money in the account shall revert to the general fund. 
           The commissioner shall establish a procedure for providing 
        the monetary stipends and bonuses to students.  The commissioner 
        may delegate this authority to grantees. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        126.79, subdivision 8, is amended to read: 
           Subd. 8.  [PROGRAM COORDINATOR.] The local learn and earn 
        program coordinator must maintain contact with all participating 
        students and their families; work with the school to link 
        students with the resources needed to improve their educational 
        skills; arrange for service to the community service and 
        cultural enrichment opportunities for students; maintain records 
        regarding student completion of program component hours; and 
        perform other administrative duties as necessary.  A program 
        coordinator must, to the extent possible, agree to remain with 
        the program for four years to provide continuity of adult 
        contact to the participating students. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        126.79, subdivision 9, is amended to read: 
           Subd. 9.  [EVALUATION AND REPORTS.] The commissioner shall 
        collect information about participating students and a 
        demographically similar control group and shall evaluate the 
        short-term and long-term benefits participating students receive 
        from the learn and earn graduation achievement program, based on 
        the outcome measures specified in subdivision 2, and any other 
        criteria established by the commissioner as part of the grant 
        application process.  The evaluation must include a statistical 
        comparison of students participating in the program and the 
        control group.  The commissioner shall track follow 
        participating students and the control group for a minimum of 
        six years from the start of the program.  The commissioner shall 
        submit a preliminary report to the governor and the chairs of 
        the senate and house committees having jurisdiction over 
        education and crime prevention by December 15, 2000 2001, 
        regarding continuation of the learn and earn graduation 
        achievement program for participating schools and expansion of 
        the program to additional schools.  The commissioner shall 
        submit a final report by December 15, 2002 2003. 
           Sec. 9.  Minnesota Statutes 1997 Supplement, section 
        268.665, subdivision 2, is amended to read: 
           Subd. 2.  [MEMBERSHIP.] The governor's workforce 
        development council is composed of 33 members appointed by the 
        governor.  The members may be removed pursuant to section 
        15.059.  In selecting the representatives of the council, the 
        governor shall ensure that 50 percent of the members come from 
        nominations provided by local workforce councils.  Local 
        education representatives shall come from nominations provided 
        by local education to employment partnerships.  The 32 33 
        members shall represent the following sectors:  
           (a) State agencies:  the following individuals shall serve 
        on the council:  
           (1) commissioner of the Minnesota department of economic 
        security; 
           (2) commissioner of the Minnesota department of children, 
        families, and learning; 
           (3) commissioner of the Minnesota department of human 
        services; and 
           (4) commissioner of the Minnesota department of trade and 
        economic development. 
           (b) Business and industry:  six individuals shall represent 
        the business and industry sectors of Minnesota. 
           (c) Organized labor:  six individuals shall represent labor 
        organizations of Minnesota. 
           (d) Community-based organizations:  four individuals shall 
        represent community-based organizations of Minnesota.  
        Community-based organizations are defined by the Job Training 
        Partnership Act as private nonprofit organizations that are 
        representative of communities or significant segments of 
        communities and that provide job training services, agencies 
        serving youth, agencies serving individuals with disabilities, 
        agencies serving displaced homemakers, union-related 
        organizations, and employer-related nonprofit organizations and 
        organizations serving nonreservation Indians and tribal 
        governments. 
           (e) Education:  six individuals shall represent the 
        education sector of Minnesota as follows:  
           (1) one individual shall represent local public secondary 
        education; 
           (2) one individual shall have expertise in design and 
        implementation of school-based service-learning; 
           (3) one individual shall represent post-secondary 
        education; 
           (4) one individual shall represent secondary/post-secondary 
        vocational institutions; 
           (5) the chancellor of the board of trustees of the 
        Minnesota state colleges and universities; and 
           (6) one individual shall have expertise in agricultural 
        education. 
           (f) Other:  two individuals shall represent other 
        constituencies including: 
           (1) units of local government; and 
           (2) applicable state or local programs. 
           The speaker and the minority leader of the house of 
        representatives shall each appoint a representative to serve as 
        an ex officio member of the council.  The majority and minority 
        leaders of the senate shall each appoint a senator to serve as 
        an ex officio member of the council.  After January 1, 1997, the 
        Minnesota director of the corporation for national service shall 
        also serve as an ex officio member.  
           (g) Appointment:  each member shall be appointed for a term 
        of three years from the first day of January or July immediately 
        following their appointment.  Elected officials shall forfeit 
        their appointment if they cease to serve in elected office.  
           (h) Members of the council are compensated as provided in 
        section 15.059, subdivision 3. 
           Sec. 10.  Minnesota Statutes 1996, section 268.665, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PURPOSE; DUTIES.] The governor's workforce 
        development council shall replace the governor's job training 
        council and assume all of its requirements, duties, and 
        responsibilities, under the Job Training Partnership Act, United 
        States Code, title 29, section 1501, et seq.  Additionally, the 
        workforce development council shall assume the following duties 
        and responsibilities:  
           (a) Coordinate the development, implementation, and 
        evaluation of the statewide education and employment transitions 
        system under section 126B.01.  Beginning January 1, 1997, the 
        council shall also coordinate the development, implementation, 
        and evaluation of the Minnesota youth services programs under 
        sections 121.704 to 121.709, and the National and Community 
        Services Act of 1993, United States Code, title 42, section 
        12501, et seq.  
           (b) Review the provision of services and the use of funds 
        and resources under applicable federal human resource programs 
        and advise the governor on methods of coordinating the provision 
        of services and the use of funds and resources consistent with 
        the laws and regulations governing the programs.  For purposes 
        of this section, applicable federal and state human resource 
        programs mean the: 
           (1) Job Training Partnership Act, United States Code, title 
        29, section 1501, et seq.; 
           (2) Carl D. Perkins Vocational and Applied Technology 
        Education Act, United States Code, title 20, section 2301, et 
        seq.; 
           (3) National and Community Service Act of 1993, United 
        States Code, title 42, section 12501, et seq.; 
           (4) Adult Education Act, United States Code, title 20, 
        section 1201, et seq.; 
           (5) Wagner-Peyser Act, United States Code, title 29, 
        section 49; 
           (6) Social Security Act, title IV, part F, (JOBS), United 
        States Code, title 42, section 681, et seq.; 
           (7) Food Stamp Act of 1977, United States Code, title 7, 
        section 6(d)(4), Food Stamp Employment and Training Program, 
        United States Code, title 7, section 2015(d)(4); 
           (8) programs defined in section 268.0111, subdivisions 4 
        and 5; and 
           (9) School to Work Opportunity Act of 1994, Public Law 
        Number 103-239.  
           Additional federal and state programs and resources can be 
        included within the scope of the council's duties if recommended 
        by the governor after consultation with the council. 
           (c) Review federal, state, and local education, 
        post-secondary, job skills training, and youth employment 
        programs, and make recommendations to the governor and the 
        legislature for establishing an integrated seamless system for 
        providing education, service-learning, and work skills 
        development services to learners and workers of all ages. 
           (d) Advise the governor on the development and 
        implementation of statewide and local performance standards and 
        measures relating to applicable federal human resource programs 
        and the coordination of performance standards and measures among 
        programs.  
           (e) Administer Develop program guidelines and recommend 
        grant approval procedures to the department of children, 
        families, and learning for grants to local education and 
        employment transition partnerships, including implementation 
        grants under section 126B.01, grants for youth apprenticeship 
        programs under section 126B.03, and youth employer grants.  
        Beginning January 1, 1997, administer youthworks grants under 
        sections 121.704 to 121.709; and 
           (1) coordinate implementation of the education and 
        employment transitions system under section 126B.01; 
           (2) promote education and employment transitions programs 
        and knowledge and skills of entrepreneurship among employers, 
        workers, youth, and educators, and encourage employers to 
        provide meaningful work-based learning opportunities; 
           (3) evaluate and identify exemplary education and 
        employment transitions programs and provide technical assistance 
        to local partnerships to replicate the programs throughout the 
        state; 
           (4) establish a performance-based quality assurance system 
        for consistent statewide evaluation of the performance of the 
        education and employment transitions system at both the state 
        and local level; 
           (5) conduct an annual review of each local education and 
        employment transitions partnership to ensure it adequately meets 
        the quality assurance standards established as part of the state 
        quality assurance system; 
           (6) develop the methods to assess local partnership 
        effectiveness; 
           (7) annually publish a report on the findings of the 
        evaluations of each local education transitions partnership; 
           (8) promote knowledge and skills of entrepreneurship among 
        students in kindergarten through grade 12 by sharing information 
        about the ways new business development contributes to a strong 
        economy. 
           (f) Advise the governor on methods to evaluate applicable 
        federal human resource programs.  
           (g) Sponsor appropriate studies to identify human 
        investment needs in Minnesota and recommend to the governor 
        goals and methods for meeting those needs.  
           (h) Recommend to the governor goals and methods for the 
        development and coordination of a human resource system in 
        Minnesota.  
           (i) Examine federal and state laws, rules, and regulations 
        to assess whether they present barriers to achieving the 
        development of a coordinated human resource system. 
           (j) Recommend to the governor and to the federal government 
        changes in state or federal laws, rules, or regulations 
        concerning employment and training programs that present 
        barriers to achieving the development of a coordinated human 
        resource system. 
           (k) Recommend to the governor and to the federal government 
        waivers of laws and regulations to promote coordinated service 
        delivery. 
           (l) Sponsor appropriate studies and prepare and recommend 
        to the governor a strategic plan which details methods for 
        meeting Minnesota's human investment needs and for developing 
        and coordinating a state human resource system.  
           Sec. 11.  Laws 1997, chapter 157, section 71, is amended to 
        read: 
           Sec. 71.  [SCHOOL BANK PILOT PROJECT.] 
           (a) A school bank sponsored by independent school district 
        No. 31, Bemidji, or by independent school district No. 508, St. 
        Peter, that meets all requirements of paragraph (b) is not 
        subject to Minnesota Statutes, section 47.03, subdivision 1, or 
        to any other statute or rule that regulates banks, other 
        financial institutions, or currency exchanges. 
           (b) To qualify under paragraph (a), the school bank must: 
           (1) be operated as part of a high school educational 
        program and under guidelines adopted by the school board; 
           (2) be advised on a regular basis by a one or more 
        state-chartered or federally-chartered financial institution 
        institutions, but not owned or operated by that any financial 
        institution; 
           (3) be located on school premises and have as customers 
        only students enrolled in, or employees of, the school in which 
        it is located; and 
           (4) have a written commitment from the school board, 
        guaranteeing reimbursement of any depositor's funds lost due to 
        insolvency of the school bank. 
           (c) Funds of a school bank that meets the requirements of 
        this section are not school district or other public funds for 
        purposes of any state law governing the use or investment of 
        school district or other public funds. 
           (d) The school district shall annually file with the 
        commissioner of commerce a report, prepared by the students and 
        teachers involved, summarizing the operation of the school bank. 
           (e) This section expires June 30, 2000.  The commissioner 
        of commerce shall, no later than December 15, 1999, provide a 
        written report to the legislature regarding this pilot project 
        and any recommended legislation regarding school banks. 
           Sec. 12.  Laws 1997, First Special Session chapter 4, 
        article 2, section 51, subdivision 33, is amended to read: 
           Subd. 33.  [LEARN AND EARN GRADUATION ACHIEVEMENT PROGRAM.] 
        For the learn and earn graduation achievement program according 
        to Minnesota Statutes, section 126.79: 
             $1,000,000     .....     1998
             $1,000,000     .....     1999
           Any balance in the first year does not cancel but is 
        available in the second year. 
           At least 95 percent of the appropriation must be used for 
        stipends, educational awards, and program coordination.  The 
        remaining five percent of the appropriation may be used for 
        administrative costs. 
           Sec. 13.  Laws 1997, First Special Session chapter 4, 
        article 3, section 23, is amended by adding a subdivision to 
        read: 
           Subd. 4a.  [DESIGN AND IMPLEMENTATION GRANT.] An eligible 
        lifework learning site applicant may apply for a one-time grant 
        to design and implement a lifework learning facility.  The 
        design and implementation grant shall not exceed $200,000 for a 
        site. 
           Sec. 14.  Laws 1997, First Special Session chapter 4, 
        article 3, section 25, subdivision 4, is amended to read: 
           Subd. 4.  [EDUCATION AND EMPLOYMENT TRANSITIONS PROGRAM 
        GRANTS.] For education and employment transitions program: 
             $4,750,000 $4,800,000    .....      1998
             $4,750,000 $4,800,000    .....      1999 
           $500,000 each year is for development of MnCEPs, an 
        Internet-based education and employment information system.  
        These are one-time funds. 
           $1,225,000 in fiscal year 1998 and $1,250,000 in fiscal 
        year 1999 is for a rebate program for qualifying employers who 
        employ less than 250 employees, who offer youth internships to 
        educators.  An employer may apply for a rebate of up to $500 for 
        each paid youth internship and each educator internship, and up 
        to $3,000 for each paid youth apprenticeship.  The commissioner 
        shall determine the application and payment process. 
           $450,000 each year is for youth apprenticeship program 
        grants. 
           $225,000 each year is for youth entrepreneurship grants 
        under Minnesota Statutes, section 121.72.  Of this amount, 
        $25,000 each year is for the high school student 
        entrepreneurship program in independent school district No. 175, 
        Westbrook.  This appropriation shall be used for expenses, 
        including, but not limited to, salaries, travel, seminars, 
        equipment purchases, contractual expenses, and other expenses 
        related to the student-run business. 
           $125,000 each year is for youth employer grants under Laws 
        1995, First Special Session chapter 3, article 4, section 28. 
           $150,000 each year is for parent and community awareness 
        training. 
           $825,000 each year is for the development of career 
        assessment benchmarks, lifework portfolios, industry skill 
        standards, curriculum development, career academies, and career 
        programs for elementary, middle school, and at-risk learners. 
           $400,000 each year is for state level activities, including 
        the governor's workforce council. 
           $275,000 each year is for development of occupational 
        information. 
           $300,000 each year is for a grant to be made available to a 
        county government that has established school-to-work projects 
        with schools located in a city of the first class.  These grants 
        must be used to expand the number of at-risk students 
        participating in these school-to-work projects.  Priority must 
        be given to projects that demonstrate collaboration between 
        among private and public employers, collective bargaining 
        representatives, school officials, and the county government and 
        which prepare at-risk students for long-term employment with 
        private sector employers paying a minimum of 150 percent of the 
        federal poverty level for a family of four and with the majority 
        of their employees in collective bargaining units. 
           $250,000 each year is for agricultural school-to-work 
        grants. 
           $25,000 is for a grant to the Minnesota Historical Society 
        for money canceled in fiscal year 1997. 
           $50,000 each year is awarded to the Minnesota valley action 
        council, the fiscal agent for the south central tri-county 
        school-to-work partnership, to serve as a model for the state in 
        demonstrating the capability of a multicounty partnership to 
        develop both a resource map for sustaining all learners and an 
        assessment process for employer, labor, and community 
        organizations involved in the school-to-work initiative.  The 
        partnership shall submit a report to the commissioner and to the 
        governor's workforce development council by September 1, 1999, 
        that includes the resource map, the results of the assessments, 
        and models for multicounty partnerships to replicate these 
        activities. 
           Any balance remaining in the first year does not cancel but 
        is available in the second year. 
           Sec. 15.  Laws 1997, First Special Session chapter 4, 
        article 9, section 11, is amended to read: 
           Sec. 11.  [ADDITIONAL TECHNOLOGY REVENUE.] 
           (a) For fiscal year 1998 only, the allowance in Minnesota 
        Statutes, section 124A.22, subdivision 10, paragraph (a), is 
        increased by: 
           (1) $24 per pupil unit; or 
           (2) the lesser of $25,000 or $80 per pupil unit. 
           Revenue received under this section must be used according 
        to Minnesota Statutes, section 124A.22, subdivision 11, clauses 
        (15), (18), (19), (23), and (24). 
           (b) For the purposes of paragraph (a), "pupil unit" means 
        fund balance pupil unit as defined in Minnesota Statutes, 
        section 124A.26, subdivision 1, excluding pupil units 
        attributable to shared time pupils. 
           Sec. 16.  [DEADLINE.] 
           The governor shall convene the interagency committee 
        required by Minnesota Statutes, section 120.1703, subdivision 4, 
        by July 1, 1998. 
           Sec. 17.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated.  
           Subd. 2.  [INTERVENTION DEMONSTRATION PROJECTS.] For 
        establishing five voluntary interagency intervention 
        demonstration projects under section 2, subdivision 5: 
             $  250,000     .....     1999 
           The commissioner shall allocate the grant awards according 
        to the implementation needs of the grant recipients. 
           Subd. 3.  [DESIGN AND IMPLEMENTATION GRANT.] For one-time 
        grants to design and implement a lifework learning facility 
        under section 13: 
             $  450,000     .....     1999 
           In awarding the grants, priority shall be given to 
        applicants who are ready to implement a lifework learning 
        facility. 
           Sec. 18.  [REPEALER.] 
           Laws 1993, chapter 146, article 5, section 20, as amended 
        by Laws 1997, First Special Session chapter 4, article 3, 
        section 20, is repealed. 
           Sec. 19.  [EFFECTIVE DATES.] 
           (a) Sections 2 to 4, 6, 11 to 14, and 16 are effective the 
        day following final enactment. 
           (b) Section 15 is effective for revenue for fiscal year 
        1998. 
                                   ARTICLE 4 
                          FACILITIES AND ORGANIZATION 
           Section 1.  Minnesota Statutes 1997 Supplement, section 
        121.15, subdivision 6, is amended to read: 
           Subd. 6.  [REVIEW AND COMMENT.] A school district, a 
        special education cooperative, or a cooperative unit of 
        government, as defined in section 123.35, subdivision 19b, 
        paragraph (d), must not initiate an installment contract for 
        purchase or a lease agreement, hold a referendum for bonds, nor 
        solicit bids for new construction, expansion, or remodeling of 
        an educational facility that requires an expenditure in excess 
        of $400,000 per school site prior to review and comment by the 
        commissioner.  The commissioner may exempt a facility 
        maintenance project funded with general education aid and levy 
        or health and safety revenue from this provision after reviewing 
        a written request from a school district describing the scope of 
        work.  A school board shall not separate portions of a single 
        project into components to avoid the requirements of this 
        subdivision. 
           Sec. 2.  Minnesota Statutes 1996, section 124.755, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the term "debt obligation" means either: 
           (1) a tax or aid anticipation certificate of indebtedness; 
           (2) a certificate of participation issued under section 
        124.91, subdivision 7; or 
           (3) a general obligation bond.  
           Sec. 3.  Minnesota Statutes 1996, section 124.83, 
        subdivision 8, is amended to read: 
           Subd. 8.  [HEALTH, SAFETY, AND ENVIRONMENTAL MANAGEMENT 
        COST.] (a) 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. 
           (b) Effective July 1, 1993, The department of children, 
        families, and learning 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. 
           (c) Notwithstanding paragraph (b), the department may 
        approve revenue, up to the limit defined in paragraph (a) for 
        districts having an approved health, safety, and environmental 
        management plan that uses district staff to accomplish 
        coordination and provided services. 
           Sec. 4.  Minnesota Statutes 1997 Supplement, section 
        124.91, subdivision 1, is amended to read: 
           Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When a 
        district 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 124A.22, 
        subdivision 10, 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) The total levy under this subdivision for a district 
        for any year must not exceed $100 times the actual pupil units 
        for the fiscal year to which the levy is attributable. 
           (e) For agreements for which a review and comment have been 
        submitted to the department of children, families, and learning 
        after April 1, 1998, the term "instructional purpose" as used in 
        this subdivision excludes expenditures on stadiums. 
           Sec. 5.  Minnesota Statutes 1997 Supplement, section 
        124.91, subdivision 5, is amended to read: 
           Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
        with its central administrative office located within economic 
        development region one, two, three, four, five, six, seven, 
        eight, nine, and ten may apply to the commissioner of children, 
        families, and learning for ITV revenue up to the greater of .5 
        percent of the adjusted net tax capacity of the district or 
        $25,000.  Eligible interactive television expenditures include 
        the construction, maintenance, and lease costs of an interactive 
        television system for instructional purposes.  An eligible 
        school district that has completed the construction of its 
        interactive television system may also purchase computer 
        hardware and software used primarily for instructional purposes 
        and access to the Internet provided that its total expenditures 
        for interactive television maintenance and lease costs and for 
        computer hardware and software under this subdivision do not 
        exceed its interactive television revenue for fiscal year 1998.  
        The approval by the commissioner of children, families, and 
        learning and the application procedures set forth in subdivision 
        1 shall apply to the revenue in this subdivision.  In granting 
        the approval, the commissioner must consider whether the 
        district is maximizing efficiency through peak use and off-peak 
        use pricing structures. 
           (b) To obtain ITV revenue, a district may levy an amount 
        not to exceed the district's ITV 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 actual pupil units in the district for the 
        year to which the levy is attributable; to 
           (2) 100 percent of the equalizing factor as defined in 
        section 124A.02, subdivision 8, for the year to which the levy 
        is attributable $10,000. 
           (c) A district's ITV aid is the difference between its ITV 
        revenue and the ITV levy. 
           (d) The revenue in the first year after reorganization for 
        a district that has reorganized under section 122.22, 122.23, or 
        122.241 to 122.247 shall be the greater of: 
           (1) the revenue computed for the reorganized district under 
        paragraph (a), or 
           (2)(i) for two districts that reorganized, 75 percent of 
        the revenue computed as if the districts involved in the 
        reorganization were separate, or 
           (ii) for three or more districts that reorganized, 50 
        percent of the revenue computed as if the districts involved in 
        the reorganization were separate. 
           (e) The revenue in paragraph (d) is increased by the 
        difference between the initial revenue and ITV lease costs for 
        leases that had been entered into by the preexisting districts 
        on the effective date of the consolidation or combination and 
        with a term not exceeding ten years.  This increased revenue is 
        only available for the remaining term of the lease.  However, in 
        no case shall the revenue exceed the amount available had the 
        preexisting districts received revenue separately. 
           (f) Effective for fiscal year 2000, the revenue under this 
        section shall be 75 percent of the amount determined in 
        paragraph (a); for fiscal year 2001, 50 percent of the amount in 
        paragraph (a); and for fiscal year 2002, 25 percent of the 
        amount in paragraph (a). 
           (g) This section expires effective for revenue for fiscal 
        year 2003, or when leases in existence on the effective date of 
        Laws 1997, First Special Session chapter 4, expire.  
           Sec. 6.  Minnesota Statutes 1996, section 124.91, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ENERGY CONSERVATION.] For loans approved before 
        March 1, 1998, the school district may annually levy include as 
        revenue under section 124.95, without the approval of a majority 
        of the voters in the district, an amount sufficient to repay the 
        annual principal and interest of the loan made pursuant to 
        sections 216C.37 and 298.292 to 298.298.  For energy loans 
        approved after March 1, 1998, school districts must annually 
        transfer from the general fund to the debt redemption fund the 
        amount sufficient to pay interest and principal on the loans.  
           Sec. 7.  Minnesota Statutes 1996, section 124.95, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DEBT SERVICE EQUALIZATION AID PAYMENT SCHEDULE.] 
        Debt service equalization aid must be paid as follows:  30 
        percent before September 15, 30 percent before December 15, 25 
        30 percent before March 15, and a final payment of 15 10 percent 
        by July 15 of the subsequent fiscal year. 
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        124A.22, subdivision 11, is amended to read: 
           Subd. 11.  [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total 
        operating capital revenue may be used only for the following 
        purposes: 
           (1) to acquire land for school purposes; 
           (2) to acquire or construct buildings for school purposes, 
        up to $400,000; 
           (3) to rent or lease buildings, including the costs of 
        building repair or improvement that are part of a lease 
        agreement; 
           (4) to improve and repair school sites and buildings, and 
        equip or reequip school buildings with permanent attached 
        fixtures; 
           (5) for a surplus school building that is used 
        substantially for a public nonschool purpose; 
           (6) to eliminate barriers or increase access to school 
        buildings by individuals with a disability; 
           (7) to bring school buildings into compliance with the 
        uniform fire code adopted according to chapter 299F; 
           (8) to remove asbestos from school buildings, encapsulate 
        asbestos, or make asbestos-related repairs; 
           (9) to clean up and dispose of polychlorinated biphenyls 
        found in school buildings; 
           (10) to clean up, remove, dispose of, and make repairs 
        related to storing heating fuel or transportation fuels such as 
        alcohol, gasoline, fuel oil, and special fuel, as defined in 
        section 296.01; 
           (11) for energy audits for school buildings and to modify 
        buildings if the audit indicates the cost of the modification 
        can be recovered within ten years; 
           (12) to improve buildings that are leased according to 
        section 123.36, subdivision 10; 
           (13) to pay special assessments levied against school 
        property but not to pay assessments for service charges; 
           (14) to pay principal and interest on state loans for 
        energy conservation according to section 216C.37 or loans made 
        under the Northeast Minnesota Economic Protection Trust Fund Act 
        according to sections 298.292 to 298.298; 
           (15) to purchase or lease interactive telecommunications 
        equipment; 
           (16) by school board resolution, to transfer money into the 
        debt redemption fund to:  (i) pay the amounts needed to meet, 
        when due, principal and interest payments on certain obligations 
        issued according to chapter 475; or (ii) pay principal and 
        interest on debt service loans or capital loans according to 
        section 124.44; 
           (17) to pay capital expenditure equipment-related 
        assessments of any entity formed under a cooperative agreement 
        between two or more districts; 
           (18) to purchase or lease computers and related materials, 
        copying machines, telecommunications equipment, and other 
        noninstructional equipment; 
           (19) to purchase or lease assistive technology or equipment 
        for instructional programs; 
           (20) to purchase textbooks; 
           (21) to purchase new and replacement library books; 
           (22) to purchase vehicles; 
           (23) to purchase or lease telecommunications equipment, 
        computers, and related equipment for integrated information 
        management systems for: 
           (i) managing and reporting learner outcome information for 
        all students under a results-oriented graduation rule; 
           (ii) managing student assessment, services, and achievement 
        information required for students with individual education 
        plans; and 
           (iii) other classroom information management needs; and 
           (24) to pay personnel costs directly related to the 
        acquisition, operation, and maintenance of telecommunications 
        systems, computers, related equipment, and network and 
        applications software. 
           Sec. 9.  Laws 1997, First Special Session chapter 4, 
        article 4, section 34, is amended to read: 
           Sec. 34.  [FISCAL YEAR YEARS 1998 AND 1999 DECLINING PUPIL 
        UNIT AID.] 
           For fiscal year years 1998 and 1999 only, a school district 
        with one or more school buildings closed during the 1996-1997 
        school year due to flooding is eligible for declining pupil unit 
        aid equal to the greater of zero or the product of the general 
        education formula allowance for fiscal year 1998 times the 
        difference between the district's actual pupil units for the 
        1996-1997 school year and the district's actual pupil units for 
        the 1997-1998 school year. 
           Sec. 10.  Laws 1997, First Special Session chapter 4, 
        article 4, section 35, subdivision 9, is amended to read: 
           Subd. 9.  [FLOOD LOSSES.] (a) For grants and loans to 
        independent school district Nos. 2854, Ada-Borup; 2176, 
        Warren-Alvarado-Oslo; 846, Breckenridge; 595, East Grand Forks; 
        and other districts affected by the 1997 floods for expenses 
        associated with the floods not covered by insurance or state or 
        federal disaster relief: 
             $4,700,000 $14,775,000    .....     1998
           (b) The commissioner shall award grants and loans to school 
        districts to cover expenses associated with the 1997 floods.  
        The grants or loans may be for capital losses or for 
        extraordinary operating expenses resulting from the floods.  
        School districts shall repay any loan or grant amounts to the 
        department if those amounts are otherwise funded from other 
        sources.  The commissioner shall establish the terms and 
        conditions of any loans and may request any necessary 
        information from school districts before awarding a grant or 
        loan.  This appropriation shall also be used to fund aid under 
        sections 33 and 34. 
           (c) Of the amount in paragraph (a), $1,400,000 is for 
        special school district No. 1, Minneapolis, for Edison high 
        school; $1,250,000 is for independent school district No. 2854, 
        Ada-Borup; and $7,425,000 is for independent school district No. 
        595, East Grand Forks. Part of the appropriation to independent 
        school district No. 595, East Grand Forks, may be used to 
        convert the Valley elementary school into a facility for 
        community, early childhood, and senior programs. 
           (d) The commissioner shall determine a schedule for 
        payments to the school districts. 
           (e) This appropriation is available until June 30, 1999. 
           Sec. 11.  [JOINT FACILITY.] 
           Notwithstanding Minnesota Statutes, section 471.19, 
        independent school district No. 277, Westonka, may expend bond 
        funds for building and remodeling a facility to be operated and 
        maintained under a joint-powers agreement with other 
        governmental entities for joint use by the school district and 
        local community agencies.  The school district is not eligible 
        for debt service equalization on the bonds associated with the 
        joint facility. 
           Sec. 12.  [ENHANCED PAIRING COOPERATION AND COMBINATION 
        AID.] 
           Subdivision 1.  [DISTRICT ELIGIBILITY.] A group of 
        districts participating in an enhanced pairing agreement under 
        Laws 1995, First Special Session chapter 3, article 6, section 
        17, is eligible for a grant for cooperation and combination. 
           Subd. 2.  [AID AMOUNT.] A district that is participating in 
        an enhanced pairing agreement is eligible for consolidation 
        transition revenue under Minnesota Statutes, section 124.2726 
        and is also eligible for additional state aid equal to $100 
        times the number of pupil units enrolled in an enhanced paired 
        district in the year prior to consolidation. 
           Subd. 3.  [AID USES.] A district receiving aid under this 
        section must use the aid consistent with the purposes listed 
        under Minnesota Statutes, section 124.2725, subdivision 11, or 
        other purposes related to combination of the individual 
        districts as determined by the school board.  If, after receipt 
        of state aid under this section the districts choose not to 
        combine and receive aid under Minnesota Statutes, section 
        124.2726, the commissioner of children, families, and learning 
        must recover aid equal to $25 times the number of pupil units in 
        the enhanced paired district. 
           Sec. 13.  [LEASE LEVY FOR ADMINISTRATIVE SPACE; SOUTH ST. 
        PAUL AND MANKATO.] 
           Each year, special school district No. 6, South St. Paul, 
        and independent school district No. 77, Mankato, may levy the 
        amounts necessary to rent or lease administrative space so that 
        space previously used for administrative purposes may be used 
        for instructional purposes. 
           Sec. 14.  [USE OF BOND PROCEEDS; ST. CLOUD.] 
        Notwithstanding Minnesota Statutes, section 475.58, subdivision 
        4, independent school district No. 742, St. Cloud, upon passage 
        of a written resolution specifying the amount and purpose of the 
        expenditure, may expend up to $800,000 from its building 
        construction fund to purchase a building and site to be used for 
        community education purposes. 
           Sec. 15.  [BONDING AUTHORIZATION.] 
           To provide funds for the acquisition or betterment of 
        school facilities, independent school district No. 625, St. 
        Paul, may by two-thirds majority vote of all the members of the 
        board of directors issue general obligation bonds in one or more 
        series in calendar years 1998 to 2002, both inclusive, as 
        provided in this section.  The aggregate principal amount of any 
        bonds issued under this section for each calendar year must not 
        exceed $15,000,000.  Issuance of the bonds is not subject to 
        Minnesota Statutes, section 475.58 or 475.59.  The bonds must 
        otherwise be issued as provided in Minnesota Statutes, chapter 
        475.  The authority to issue bonds under this section is in 
        addition to any bonding authority authorized by Minnesota 
        Statutes, chapter 124, or other law.  The amount of bonding 
        authority authorized under this section must be disregarded in 
        calculating the bonding limit of Minnesota Statutes, chapter 
        124, or any other law other than Minnesota Statutes, section 
        475.53, subdivision 4. 
           Sec. 16.  [TAX LEVY FOR DEBT SERVICE.] 
           To pay the principal of and interest on bonds issued under 
        section 13, independent school district No. 625, St. Paul, must 
        levy a tax annually in an amount sufficient under Minnesota 
        Statutes, section 475.61, subdivisions 1 and 3, to pay the 
        principal of and interest on the bonds.  The tax authorized 
        under this section is in addition to the taxes authorized to be 
        levied under Minnesota Statutes, chapter 124A or 275, or other 
        law. 
           Sec. 17.  [MOUNTAIN IRON-BUHL; BONDS.] 
           Subdivision 1.  [AUTHORIZATION.] Independent school 
        district No. 712, Mountain Iron-Buhl, may issue bonds in an 
        aggregate principal amount not exceeding $5,300,000 in addition 
        to any bonds already issued or authorized, to provide funds to 
        design, construct, equip, furnish, remodel, rehabilitate, and 
        acquire land for school facilities and buildings, or abate, 
        remove, and dispose of asbestos, polychlorinated biphenyls, or 
        petroleum as defined in Minnesota Statutes, section 115C.02, and 
        make repairs related to the abatement, removal, or disposal of 
        these substances.  Independent school district No. 712, Mountain 
        Iron-Buhl, may spend the proceeds of the bond sale for those 
        purposes and any architect, engineer, and legal fees incidental 
        to those purposes or the sale.  The bond shall be authorized, 
        issued, sold, executed, and delivered in the manner provided by 
        Minnesota Statutes, chapter 475, including submission of the 
        proposition to the electors under Minnesota Statutes, section 
        475.58.  After authorization by the electors under Minnesota 
        Statutes, section 475.58, a resolution of the board levying 
        taxes for the payment of bonds and interest on them and pledging 
        the proceeds of the levies for the payment of the bonds and 
        interest on them shall be deemed to be in compliance with the 
        provisions of Minnesota Statutes, chapter 475, with respect to 
        the levying of taxes for their payment. 
           Subd. 2.  [APPROPRIATION.] There is annually appropriated 
        from the distribution of taconite production tax revenues to the 
        taconite environmental protection fund pursuant to Minnesota 
        Statutes, section 298.28, subdivision 11, and to the northeast 
        Minnesota economic protection trust pursuant to Minnesota 
        Statutes, section 298.28, subdivisions 9 and 11, in equal 
        shares, an amount sufficient to pay when due 80 percent of the 
        principal and interest on the bonds issued pursuant to 
        subdivision 1.  If the annual distribution to the northeast 
        Minnesota economic protection trust is insufficient to pay its 
        share after fulfilling any obligations of the trust under 
        Minnesota Statutes, section 298.225 or 298.293, the deficiency 
        shall be appropriated from the taconite environmental protection 
        fund. 
           Subd. 3.  [DISTRICT OBLIGATIONS.] Bonds issued under 
        authority of this section shall be the general obligations of 
        the school district, for which its full faith and credit and 
        unlimited taxing powers shall be pledged.  If there are any 
        deficiencies in the amount received pursuant to subdivision 2, 
        they shall be made good by general levies, not subject to limit, 
        on all taxable properties in the district in accordance with 
        Minnesota Statutes, section 475.64.  If any deficiency levies 
        are necessary, the school board may effect a temporary loan or 
        loans on certificates of indebtedness issued in anticipation of 
        them to meet payments of principal or interest on the bonds due 
        or about to become due. 
           Subd. 4.  [DISTRICT LEVY.] The school board shall by 
        resolution levy on all property in the school district subject 
        to the general ad valorem school tax levies, and not subject to 
        taxation under Minnesota Statutes, sections 298.23 to 298.28, a 
        direct annual ad valorem tax for each year of the term of the 
        bonds in amounts that, if collected in full, will produce the 
        amounts needed to meet when due 20 percent of the principal and 
        interest payments on the bonds.  A copy of the resolution shall 
        be filed, and the necessary taxes shall be extended, assessed, 
        collected, and remitted in accordance with Minnesota Statutes, 
        section 475.61. 
           Subd. 5.  [LEVY LIMITATIONS.] Taxes levied pursuant to this 
        section shall be disregarded in the calculation of any other tax 
        levies or limits on tax levies provided by other law. 
           Subd. 6.  [BONDING LIMITATIONS.] Bonds may be issued under 
        authority of this section notwithstanding any limitations upon 
        the indebtedness of a district, and their amounts shall not be 
        included in computing the indebtedness of a district for any 
        purpose, including the issuance of subsequent bonds and the 
        incurring of subsequent indebtedness. 
           Subd. 7.  [TERMINATION OF APPROPRIATION.] The appropriation 
        authorized in subdivision 2 shall terminate upon payment or 
        maturity of the last of those bonds. 
           Subd. 8.  [BOND ISSUE REQUIREMENT.] No bonds may be issued 
        under this section after March 1, 2000, unless they are issued 
        under a contract in effect on or before March 1, 2000. 
           Subd. 9.  [LOCAL APPROVAL.] This section is effective for 
        independent school district No. 712, Mountain Iron-Buhl, the day 
        after its governing body complies with Minnesota Statutes, 
        section 645.021, subdivision 3. 
           Sec. 18.  [BONDS PAID FROM TACONITE PRODUCTION TAX 
        REVENUES.] 
           Subdivision 1.  [REFUNDING BONDS.] The appropriation of 
        funds from the distribution of taconite production tax revenues 
        to the taconite environmental protection tax fund and the 
        northeast Minnesota economic protection fund made by Laws 1988, 
        chapter 718, article 7, sections 62 and 63; Laws 1989, chapter 
        329, article 5, section 20; Laws 1990, chapter 604, article 8, 
        section 13; Laws 1992, chapter 499, article 5, section 29; and 
        Laws 1996, chapter 412, article 5, sections 18 to 20; and by 
        section 16, shall continue to apply to bonds issued under 
        Minnesota Statutes, chapter 475, to refund bonds originally 
        issued pursuant to those chapters. 
           Subd. 2.  [LOCAL PAYMENTS.] School districts that are 
        required in Laws 1988, chapter 718, article 7, sections 62 and 
        63; Laws 1989, chapter 329, article 5, section 20; Laws 1990, 
        chapter 604, article 8, section 13; Laws 1992, chapter 499, 
        article 5, section 29; and sections 18 to 20, to impose levies 
        to pay debt service on the bonds issued under those provisions 
        to the extent the principal and interest on the bonds is not 
        paid by distributions from the taconite environmental protection 
        fund and the northeast Minnesota economic protection trust, may 
        pay their portion of the principal and interest from any funds 
        available to them.  To the extent a school district uses funds 
        other than the proceeds of a property tax levy to pay its share 
        of the principal and interest on the bonds, the requirement to 
        impose a property tax to pay the local share does not apply to 
        the school district. 
           Sec. 19.  [HEALTH AND SAFETY REVENUE; MOUNDS VIEW.] 
           (a) Upon approval of the commissioner of children, 
        families, and learning, and notwithstanding Minnesota Statutes, 
        section 124.83, subdivision 6, independent school district No. 
        621, Mounds View, is authorized to use up to $300,000 of its 
        health and safety revenue to replace portable classrooms with 
        new construction of classrooms. 
           (b) The department of children, families, and learning 
        shall approve the revenue use under paragraph (a) only after the 
        district has demonstrated to the commissioner's satisfaction 
        that: 
           (1) mold has rendered the portable classrooms 
        uninhabitable; 
           (2) Island Lake elementary school could not receive an 
        occupancy permit from local building code officials; and 
           (3) the timing of the damage to Island Lake elementary 
        school portables presented a hardship to the school by leaving 
        it short by two classrooms. 
           Sec. 20.  [HEALTH AND SAFETY; EVELETH-GILBERT.] 
           Notwithstanding any law to the contrary, independent school 
        district No. 2154, Eveleth-Gilbert, may include in its health 
        and safety program the amounts necessary to make health and 
        safety improvements to an ice arena located within the district 
        boundaries.  The total amount of revenue approved for this 
        purpose shall not exceed $300,000. 
           Sec. 21.  [APPROPRIATION.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated.  
           Subd. 2.  [MONTICELLO.] For a grant to independent school 
        district No. 882, Monticello, for losses related to summer 
        storms in 1997: 
             $  100,000     .....     1998 
           This appropriation is available until June 30, 1999. 
           Subd. 3.  [CARLTON PLANNING GRANT.] For a grant to 
        independent school district No. 93, Carlton, to develop a plan 
        to coordinate district buildings and services: 
             $   10,000     .....     1999 
           The school district shall collaborate with the city of 
        Carlton and Carlton county in developing the plan. 
           Subd. 4.  [CALEDONIA PLANNING GRANT.] (a) For a grant to 
        perform a management assistance study for independent school 
        district No. 299, Caledonia: 
             $   40,000     .....     1999 
           (b) The study shall include an analysis of facility needs, 
        enrollment trends, and instructional opportunities available to 
        pupils of independent school district No. 299, Caledonia.  The 
        department may consult with neighboring school districts, as 
        appropriate.  The department shall complete the management 
        assistance study by December 31, 1998. 
           (c) This appropriation is available until June 30, 1999. 
           Subd. 5.  [COORDINATED FACILITIES PLANS.] For grants for 
        coordinated facilities plans: 
             $  550,000     .....     1999 
           Of this amount, $200,000 is for independent school district 
        No. 2135, Maple River, $150,000 is for independent school 
        district No. 2184, Luverne, $100,000 is for independent school 
        district No. 238, Mabel-Canton, and $100,000 is for independent 
        school district No. 534, Stewartville.  The grants shall be used 
        to examine and coordinate the districts' building needs.  Each 
        district must evaluate how the current use of its facilities is 
        affecting its educational services and examine cost efficiencies 
        that may result from a coordinated facilities plan.  The grants 
        may be used for operating purposes, transportation purposes, or 
        facilities purposes that lead to greater program efficiencies. 
           Subd. 6.  [ENHANCED PAIRING COMBINATION AID.] For a grant 
        to a group of school districts participating in the enhanced 
        pairing program that intend to combine into a single school 
        district: 
             $  135,000     .....     1999 
           Sec. 22.  [EFFECTIVE DATES.] 
           (a) Section 2 is effective retroactively for revenue for 
        fiscal year 1997. 
           (b) Section 4 is effective retroactively to April 1, 1998. 
           (c) Section 6 is effective retroactively to March 1, 1998. 
           (d) Sections 10 and 14 are effective the day following 
        final enactment. 
           (e) Sections 15 and 16 are effective the day after the 
        governing body of independent school district No. 625, St. Paul, 
        complies with Minnesota Statutes, section 645.021, subdivision 3.
           (f) Section 21, subdivision 2, is effective the day 
        following final enactment. 
                                   ARTICLE 5 
                     POLICIES PROMOTING ACADEMIC EXCELLENCE 
           Section 1.  Minnesota Statutes 1996, section 43A.17, 
        subdivision 9, is amended to read: 
           Subd. 9.  [POLITICAL SUBDIVISION COMPENSATION LIMIT.] The 
        salary and the value of all other forms of compensation of a 
        person employed by a statutory or home rule charter city, 
        county, town, school district, metropolitan or regional agency, 
        or other political subdivision of this state excluding a school 
        district, or employed under section 422A.03, may not exceed 95 
        percent of the salary of the governor as set under section 
        15A.082, except as provided in this subdivision.  Deferred 
        compensation and payroll allocations to purchase an individual 
        annuity contract for an employee are included in determining the 
        employee's salary.  Other forms of compensation which shall be 
        included to determine an employee's total compensation are all 
        other direct and indirect items of compensation which are not 
        specifically excluded by this subdivision.  Other forms of 
        compensation which shall not be included in a determination of 
        an employee's total compensation for the purposes of this 
        subdivision are: 
           (1) employee benefits that are also provided for the 
        majority of all other full-time employees of the political 
        subdivision, vacation and sick leave allowances, health and 
        dental insurance, disability insurance, term life insurance, and 
        pension benefits or like benefits the cost of which is borne by 
        the employee or which is not subject to tax as income under the 
        Internal Revenue Code of 1986; 
           (2) dues paid to organizations that are of a civic, 
        professional, educational, or governmental nature; and 
           (3) reimbursement for actual expenses incurred by the 
        employee which the governing body determines to be directly 
        related to the performance of job responsibilities, including 
        any relocation expenses paid during the initial year of 
        employment. 
           The value of other forms of compensation shall be the 
        annual cost to the political subdivision for the provision of 
        the compensation.  The salary of a medical doctor or doctor of 
        osteopathy occupying a position that the governing body of the 
        political subdivision has determined requires an M.D. or D.O. 
        degree is excluded from the limitation in this subdivision.  The 
        commissioner may increase the limitation in this subdivision for 
        a position that the commissioner has determined requires special 
        expertise necessitating a higher salary to attract or retain a 
        qualified person.  The commissioner shall review each proposed 
        increase giving due consideration to salary rates paid to other 
        persons with similar responsibilities in the state and nation.  
        The commissioner may not increase the limitation until the 
        commissioner has presented the proposed increase to the 
        legislative coordinating commission and received the 
        commission's recommendation on it.  The recommendation is 
        advisory only.  If the commission does not give its 
        recommendation on a proposed increase within 30 days from its 
        receipt of the proposal, the commission is deemed to have 
        recommended approval. 
           Sec. 2.  Minnesota Statutes 1996, section 43A.17, 
        subdivision 10, is amended to read: 
           Subd. 10.  [LOCAL ELECTED OFFICIALS; CERTAIN COMPENSATION 
        PROHIBITED.] The compensation plan for an elected official of a 
        statutory or home rule charter city, county, or town, or school 
        district may not include a provision for vacation or sick 
        leave.  The salary of an official covered by this subdivision 
        may not be diminished because of the official's absence from 
        official duties because of vacation or sickness. 
           Sec. 3.  Minnesota Statutes 1997 Supplement, section 
        120.064, subdivision 3, is amended to read: 
           Subd. 3.  [SPONSOR.] A school board, intermediate school 
        district school board, private college, community college, state 
        university, technical college, or the University of Minnesota 
        may sponsor one or more charter schools. 
           Sec. 4.  Minnesota Statutes 1997 Supplement, section 
        120.101, subdivision 5, is amended to read: 
           Subd. 5.  [AGES AND TERMS.] (a) Every child between seven 
        and 16 years of age shall receive instruction.  Every child 
        under the age of seven who is enrolled in a half-day 
        kindergarten, or a full-day kindergarten program on alternate 
        days, or other kindergarten programs shall receive instruction.  
        Except as provided in subdivision 5a, a parent may withdraw a 
        child under the age of seven from enrollment at any time. 
           (b) A school district by annual board action may require 
        children subject to this subdivision to receive instruction in 
        summer school.  A district that acts to require children to 
        receive instruction in summer school shall establish at the time 
        of its action the criteria for determining which children must 
        receive instruction. 
           Sec. 5.  Minnesota Statutes 1996, section 120.73, 
        subdivision 1, is amended to read: 
           Subdivision 1.  A school board is authorized to require 
        payment of fees in the following areas: 
           (a) (1) in any program where the resultant product, in 
        excess of minimum requirements and at the pupil's option, 
        becomes the personal property of the pupil; 
           (b) (2) admission fees or charges for extra curricular 
        activities, where attendance is optional and where the admission 
        fees or charges a student must pay to attend or participate in 
        an extracurricular activity is the same for all students, 
        regardless of whether the student is enrolled in a public or a 
        home school; 
           (c) (3) a security deposit for the return of materials, 
        supplies, or equipment; 
           (d) (4) personal physical education and athletic equipment 
        and apparel, although any pupil may personally provide it if it 
        meets reasonable requirements and standards relating to health 
        and safety established by the school board; 
           (e) (5) items of personal use or products which a student 
        has an option to purchase such as student publications, class 
        rings, annuals, and graduation announcements; 
           (f) (6) fees specifically permitted by any other statute, 
        including but not limited to section 171.04, subdivision 1, 
        clause (1); 
           (g) (7) field trips considered supplementary to a district 
        educational program; 
           (h) (8) any authorized voluntary student health and 
        accident benefit plan; 
           (i) (9) for the use of musical instruments owned or rented 
        by the district, a reasonable rental fee not to exceed either 
        the rental cost to the district or the annual depreciation plus 
        the actual annual maintenance cost for each instrument; 
           (j) (10) transportation of pupils to and from extra 
        curricular activities conducted at locations other than school, 
        where attendance is optional; 
           (k) (11) transportation of pupils to and from school for 
        which aid for fiscal year 1996 is not authorized under Minnesota 
        Statutes 1994, section 124.223, subdivision 1, and for which 
        levy for fiscal year 1996 is not authorized under Minnesota 
        Statutes 1994, section 124.226, subdivision 5, if a district 
        charging fees for transportation of pupils establishes 
        guidelines for that transportation to ensure that no pupil is 
        denied transportation solely because of inability to pay; 
           (l) (12) motorcycle classroom education courses conducted 
        outside of regular school hours; provided the charge shall not 
        exceed the actual cost of these courses to the school district; 
           (m) (13) transportation to and from post-secondary 
        institutions for pupils enrolled under the post-secondary 
        enrollment options program under section 123.39, subdivision 
        16.  Fees collected for this service must be reasonable and 
        shall be used to reduce the cost of operating the route.  
        Families who qualify for mileage reimbursement under section 
        123.3514, subdivision 8, may use their state mileage 
        reimbursement to pay this fee.  If no fee is charged, districts 
        shall allocate costs based on the number of pupils riding the 
        route. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        121.11, subdivision 7c, is amended to read: 
           Subd. 7c.  [RESULTS-ORIENTED GRADUATION RULE.] (a) The 
        legislature is committed to establishing a rigorous, 
        results-oriented graduation rule for Minnesota's public school 
        students.  To that end, the state board shall use its rulemaking 
        authority under subdivision 7b to adopt a statewide, 
        results-oriented graduation rule to be implemented starting with 
        students beginning ninth grade in the 1996-1997 school year.  
        The board shall not prescribe in rule or otherwise the delivery 
        system or form of instruction that local sites must use to meet 
        the requirements contained in this rule. 
           (b) To successfully accomplish paragraph (a), the state 
        board shall set in rule high academic standards for all 
        students.  The standards must contain the foundational skills in 
        the three core curricular areas of reading, writing, and 
        mathematics while meeting requirements for high school 
        graduation.  The standards must also provide an opportunity for 
        students to excel by meeting higher academic standards through a 
        profile of learning that uses curricular requirements to allow 
        students to expand their knowledge and skills beyond the 
        foundational skills.  All state board actions regarding the rule 
        must be premised on the following:  
           (1) the rule is intended to raise academic expectations for 
        students, teachers, and schools; 
           (2) any state action regarding the rule must evidence 
        consideration of school district autonomy; and 
           (3) the department of children, families, and learning, 
        with the assistance of school districts, must make available 
        information about all state initiatives related to the rule to 
        students and parents, teachers, and the general public in a 
        timely format that is appropriate, comprehensive, and readily 
        understandable. 
           (c) For purposes of adopting the rule, the state board, in 
        consultation with the department, recognized psychometric 
        experts in assessment, and other interested and knowledgeable 
        educators, using the most current version of professional 
        standards for educational testing, shall evaluate the 
        alternative approaches to assessment.  
           (d) The content of the graduation rule must differentiate 
        between minimum competencies reflected in the basic requirements 
        assessment and rigorous profile of learning standards.  When 
        fully implemented, the requirements for high school graduation 
        in Minnesota must include both basic requirements and the 
        required profile of learning.  The profile of learning must 
        measure student performance using performance-based assessments 
        compiled over time that integrate higher academic standards, 
        higher order thinking skills, and application of knowledge from 
        a variety of content areas.  The profile of learning shall 
        include a broad range of academic experience and accomplishment 
        necessary to achieve the goal of preparing students to function 
        effectively as purposeful thinkers, effective communicators, 
        self-directed learners, productive group participants, and 
        responsible citizens.  The commissioner shall develop and 
        disseminate to school districts a uniform method for reporting 
        student performance on the profile of learning. 
           (e) The state board shall periodically review and report on 
        the assessment process and student achievement with the 
        expectation of raising the standards and expanding high school 
        graduation requirements. 
           (f) The state board shall report in writing to the 
        legislature annually by January 15 on its progress in developing 
        and implementing the graduation requirements according to the 
        requirements of this subdivision and section 123.97 until such 
        time as all the graduation requirements are implemented. 
           Sec. 7.  Minnesota Statutes 1996, section 121.11, 
        subdivision 7d, is amended to read: 
           Subd. 7d.  [DESEGREGATION/INTEGRATION, INCLUSIVE EDUCATION, 
        AND LICENSURE RULES.] (a) The state board may By January 10, 
        1999, the commissioner shall make rules relating to 
        desegregation/integration, and inclusive education, and 
        licensure of school personnel not licensed by the board of 
        teaching. 
           (b) In adopting a rule related to school 
        desegregation/integration, the state board commissioner shall 
        address the need for equal educational opportunities for all 
        students and racial balance as defined by the state 
        board commissioner.  
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        121.1113, subdivision 1, is amended to read: 
           Subdivision 1.  [STATEWIDE TESTING.] (a) The commissioner, 
        with advice from experts with appropriate technical 
        qualifications and experience and stakeholders, shall include in 
        the comprehensive assessment system, for each grade level to be 
        tested, a single statewide norm-referenced or 
        criterion-referenced test, or a combination of a norm-referenced 
        and a criterion-referenced test, which shall be highly 
        correlated with the state's graduation standards and 
        administered annually to all students in the third, fifth, and 
        eighth grades.  The commissioner shall establish one or more 
        months during which schools shall administer the tests to 
        students each school year.  The Only Minnesota basic skills 
        tests in reading and, mathematics, and writing shall fulfill 
        students' eighth grade testing requirements for a passing state 
        notation.  
           (b) In addition, at the secondary level, districts shall 
        assess student performance in all required learning areas and 
        selected required standards within each area of the profiles of 
        learning.  The testing instruments and testing process shall be 
        determined by the commissioner.  The results shall be aggregated 
        at the site and district level.  The testing shall be 
        administered beginning in the 1999-2000 school year and 
        thereafter. 
           (c) The comprehensive assessment system shall include an 
        evaluation of school site and school district performance levels 
        during the 1997-1998 school year and thereafter using an 
        established performance baseline developed from students' test 
        scores under this section that records, at a minimum, students' 
        unweighted mean test scores in each tested subject, a second 
        performance baseline that reports, at a minimum, the same 
        unweighted mean test scores of only those students enrolled in 
        the school by January 1 of the previous school year, and a third 
        performance baseline that reports the same unweighted test 
        scores of all students except those students receiving limited 
        English proficiency instruction.  The evaluation also shall 
        record separately, in proximity to the performance baselines, 
        the percentages of students who are eligible to receive a free 
        or reduced price school meal, demonstrate limited English 
        proficiency, or are eligible to receive special education 
        services. 
           (d) In addition to the testing and reporting requirements 
        under paragraphs (a), (b), and (c), the commissioner, in 
        consultation with the state board of education, shall include 
        the following components in the statewide educational 
        accountability and public reporting system: 
           (1) uniform statewide testing of all third, fifth, eighth, 
        and post-eighth grade students with exemptions, only with parent 
        or guardian approval, from the testing requirement only for 
        those very few students for whom the student's individual 
        education plan team under section 120.17, subdivision 2, 
        determines that the student is incapable of taking a statewide 
        test, or a limited English proficiency student under section 
        126.262, subdivision 2, if the student has been in the United 
        States for fewer than 12 months and for whom special language 
        barriers exist, such as the student's native language does not 
        have a written form or the district does not have access to 
        appropriate interpreter services for the student's native 
        language; 
           (2) educational indicators that can be aggregated and 
        compared across school districts and across time on a statewide 
        basis; 
           (3) students' scores on the American College Test; 
           (4) participation in the National Assessment of Educational 
        Progress so that the state can benchmark its performance against 
        the nation and other states, and, where possible, against other 
        countries, and contribute to the national effort to monitor 
        achievement; and 
           (5) basic skills and advanced competencies connecting 
        teaching and learning to high academic standards, assessment, 
        and transitions to citizenship and employment. 
           (e) Districts must report exemptions under paragraph (d), 
        clause (1), to the commissioner consistent with a format 
        provided by the commissioner. 
           Sec. 9.  [121.1114] [GRADUATION RULE.] 
           Subdivision 1.  [IMPLEMENTATION OF THE PROFILE OF 
        LEARNING.] (a) A school district shall implement the profile of 
        learning of the graduation rule under paragraph (b), (c), or (d).
           A district may implement the profile of learning under 
        paragraph (c) or (d) only after the commissioner approves the 
        district's request for a waiver and approves the local plan for 
        full implementation. 
           (b) A school district shall implement the profile of 
        learning for the 1998-1999 school year and later.  
           (c) A school district shall implement the profile of 
        learning as follows: 
           (1) for the 1998-1999 school year and later, the district 
        shall implement all required standards in learning areas at the 
        preparatory level and implement for ninth grade students a 
        minimum of six learning areas under the profile of learning with 
        three from the areas of read, listen, and view; write and speak; 
        mathematical applications; scientific applications; and people 
        and cultures; and three from the areas of literature and the 
        arts; inquiry; decision making; resource management; and world 
        language; 
           (2) for the 1999-2000 school year and later, the district 
        shall implement for ninth and tenth grade students two learning 
        areas in addition to those implemented under clause (1).  The 
        district shall complete the four learning areas of read, listen, 
        and view; write and speak; mathematical applications; scientific 
        applications; and people and cultures if the four areas were not 
        completed in clause (1); and the remainder from the areas of 
        literature and the arts; inquiry; decision making; resource 
        management; and world language; and 
           (3) for the 2000-2001 school year and later, the district 
        shall implement for ninth, tenth, and eleventh grade students 
        the two learning areas in the profile of learning that were not 
        implemented under clauses (1) and (2). 
           (d) A district shall develop a local plan to implement the 
        profile of learning and have all ten learning areas fully 
        implemented by the 2001-2002 school year.  
           (e) A district shall notify the commissioner by July 1, 
        1998, as to whether the district will implement the profile of 
        learning under paragraph (b), (c), or (d). 
           (f) An advisory committee of 11 members is established to 
        advise the governor and commissioner on the implementation of 
        the graduation rule under this section.  The commissioner shall 
        appoint 11 members with representatives from education 
        organizations, business, higher education, parents, and 
        organizations representing communities of color. 
           The committee shall review the implementation of the basic 
        requirements and the profile of learning standards. 
           The commissioner shall provide technical and other 
        assistance to the advisory committee.  The committee expires on 
        December 1, 1998. 
           Subd. 2.  [PERFORMANCE PACKAGES.] Teachers are not required 
        to use a state model performance package.  Teachers are 
        encouraged to develop and use a performance package that equals 
        or exceeds the difficulty of the state model performance package.
           Subd. 3.  [WAIVER.] In order to receive a waiver, a 
        district must document why the waiver is necessary, how the 
        local plan improves student achievement, and how the profile of 
        learning will be fully implemented for the 2001-2002 school year.
           Sec. 10.  Minnesota Statutes 1996, section 121.1115, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [EDUCATIONAL ACCOUNTABILITY.] (a) The 
        independent office of educational accountability, as authorized 
        by Laws 1997, First Special Session chapter 4, article 5, 
        section 28, subdivision 2, is established.  The office shall 
        advise the education committees of the legislature and the 
        commissioner of children, families, and learning, at least on a 
        biennial basis, on the degree to which the statewide educational 
        accountability and reporting system includes a comprehensive 
        assessment framework that measures school accountability for 
        students achieving the goals described in the state's 
        results-oriented graduation rule.  The office shall consider 
        whether the statewide system of educational accountability 
        utilizes multiple indicators to provide valid and reliable 
        comparative and contextual data on students, schools, districts, 
        and the state, and if not, recommend ways to improve the 
        accountability reporting system. 
           (b) When the office reviews the statewide educational 
        accountability and reporting system, it shall also consider: 
           (1) the objectivity and neutrality of the state's 
        educational accountability system; and 
           (2) the impact of a testing program on school curriculum 
        and student learning. 
           Sec. 11.  Minnesota Statutes 1996, section 125.183, 
        subdivision 1, is amended to read: 
           Subdivision 1.  The board of teaching consists of 11 
        members appointed by the governor, with the advice and consent 
        of the senate.  Membership terms, compensation of members, 
        removal of members, the filling of membership vacancies, and 
        fiscal year and reporting requirements shall be as provided in 
        sections 214.07 to 214.09.  No member may be reappointed for 
        more than one additional term. 
           Sec. 12.  Minnesota Statutes 1996, section 125.183, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MEMBERSHIP.] Except for the representatives of 
        higher education and the public, to be eligible for appointment 
        to the board of teaching a person must be a teacher currently 
        teaching in a Minnesota school and fully licensed for the 
        position held and have at least five years teaching experience 
        in Minnesota, including the two years immediately preceding 
        nomination and appointment.  Each nominee, other than a public 
        nominee, must be selected on the basis of professional 
        experience and knowledge of teacher education, accreditation, 
        and licensure.  The board must be composed of: 
           (1) six classroom teachers who are currently teaching in a 
        Minnesota school, at least four of whom must be teaching in a 
        public school; 
           (2) one higher education representative, who must be a 
        faculty member preparing teachers; 
           (3) one school administrator; and 
           (4) three members of the public, two of whom must be 
        present or former members of school boards. 
           Sec. 13.  Minnesota Statutes 1996, section 126.70, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [STAFF DEVELOPMENT OUTCOMES.] The staff 
        development committee shall adopt a staff development plan for 
        improving student achievement of education outcomes.  The plan 
        must be consistent with education outcomes that the school board 
        determines.  The plan shall include ongoing staff development 
        activities that contribute toward continuous improvement in 
        achievement of the following goals: 
           (1) improve student achievement of state and local 
        education standards in all areas of the curriculum by using best 
        practices methods; 
           (2) effectively meet the needs of a diverse student 
        population, including at-risk children, children with 
        disabilities, and gifted children, within the regular classroom 
        and other settings; 
           (3) provide an inclusive curriculum for a racially, 
        ethnically, and culturally diverse student population that is 
        consistent with the state education diversity rule and the 
        district's education diversity plan; 
           (4) improve staff ability to collaborate and consult with 
        one another and to resolve conflicts; 
           (5) effectively teach and model violence prevention policy 
        and curriculum that address issues of harassment and teach 
        nonviolent alternatives for conflict resolution; and 
           (6) provide teachers and other members of site-based 
        management teams with appropriate management and financial 
        management skills. 
           Sec. 14.  Minnesota Statutes 1996, section 128A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TO GOVERN GOVERNANCE.] The state board of 
        education the Faribault academy shall govern the state academy 
        for the deaf and the state academy for the blind.  The board 
        must promote academic standards based on high expectation and an 
        assessment system to measure academic performance toward the 
        achievement of those standards.  The board must focus on the 
        academies' needs as a whole and not prefer one school over the 
        other.  The board of the Faribault academies shall consist of 
        seven persons.  The members of the board shall be appointed by 
        the governor with the advice and consent of the senate.  Three 
        members must be from the seven-county metropolitan area, three 
        members must be from greater Minnesota, and one member may be 
        appointed at-large.  The board must be composed of: 
           (1) one superintendent of an independent school district; 
           (2) one special education director; 
           (3) the commissioner of children, families, and learning or 
        the commissioner's designee; 
           (4) one member of the blind community; 
           (5) one member of the deaf community; and 
           (6) two members of the general public with business or 
        financial expertise. 
           Sec. 15.  Minnesota Statutes 1996, section 128A.02, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [TERMS; COMPENSATION; AND OTHER.] The membership 
        terms, compensation, removal of members, and filling of 
        vacancies shall be as provided for in section 15.0575.  A member 
        may serve not more than two consecutive terms. 
           Sec. 16.  Minnesota Statutes 1996, section 128A.02, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [MEETINGS.] All meetings of the board shall be 
        as provided in section 471.705 and must be held in Faribault. 
           Sec. 17.  Minnesota Statutes 1996, section 128A.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MOST BENEFICIAL, LEAST RESTRICTIVE.] The state 
        board must do what is necessary to provide the most beneficial 
        and least restrictive program of education for each pupil at the 
        academies who is handicapped by visual disability or deafness.  
           Sec. 18.  Minnesota Statutes 1996, section 128A.02, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [PLANNING, EVALUATION, AND REPORTING.] To the 
        extent required in school districts, the state board must 
        establish a process for the academies to include parent and 
        community input in the planning, evaluation, and reporting of 
        curriculum and pupil achievement. 
           Sec. 19.  Minnesota Statutes 1996, section 128A.02, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SITE COUNCILS.] The state board may establish, 
        and appoint members to, a site council at each academy.  The 
        site councils shall exercise power and authority granted by 
        the state board.  The state board must appoint to each site 
        council the exclusive representative's employee designee from 
        each exclusive representative at the academies. 
           Sec. 20.  Minnesota Statutes 1996, section 128A.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TRUSTEE OF ACADEMIES' PROPERTY.] The state board 
        is the trustee of the academies' property.  Securities and 
        money, including income from the property, must be deposited in 
        the state treasury according to section 16A.275.  The deposits 
        are subject to the order of the state board.  
           Sec. 21.  Minnesota Statutes 1997 Supplement, section 
        128A.02, subdivision 7, is amended to read: 
           Subd. 7.  [GRANTS.] The state board, through the chief 
        administrators of the academies, may apply for all competitive 
        grants administered by agencies of the state and other 
        government or nongovernment sources.  Application may not be 
        made for grants over which the board has discretion. 
           Sec. 22.  Minnesota Statutes 1996, section 128A.022, is 
        amended to read: 
           128A.022 [POWERS OF STATE BOARD OF EDUCATION THE FARIBAULT 
        ACADEMIES.] 
           Subdivision 1.  [PERSONNEL.] The state board of education 
        of the Faribault academies may employ central administrative 
        staff members and other personnel necessary to provide and 
        support programs and services at each academy.  
           Subd. 2.  [GET HELP FROM DEPARTMENT.] The state board of 
        the Faribault academies may require the department of children, 
        families, and learning to provide program leadership, program 
        monitoring, and technical assistance at the academies.  
           Subd. 3.  [UNCLASSIFIED POSITIONS.] The state board of the 
        Faribault academies may place any position other than 
        residential academies administrator in the unclassified 
        service.  The position must meet the criteria in section 43A.08, 
        subdivision 1a.  
           Subd. 4.  [RESIDENTIAL AND BUILDING MAINTENANCE SERVICES.] 
        The state board of the Faribault academies may enter into 
        agreements with public or private agencies or institutions to 
        provide residential and building maintenance services.  
        The state board of the Faribault academies must first decide 
        that contracting for the services is more efficient and less 
        expensive than not contracting for them.  
           Subd. 6.  [STUDENT TEACHERS AND PROFESSIONAL TRAINEES.] (a) 
        The state board of the Faribault academies may enter into 
        agreements with teacher preparation institutions for student 
        teachers to get practical experience at the academies.  A 
        licensed teacher must provide appropriate supervision of each 
        student teacher.  
           (b) The state board of the Faribault academies may enter 
        into agreements with accredited higher education institutions 
        for certain student trainees to get practical experience at the 
        academies.  The students must be preparing themselves in a 
        professional field that provides special services to children 
        with a disability in school programs.  To be a student trainee 
        in a field, a person must have completed at least two years of 
        an approved program in the field.  A person who is licensed or 
        registered in the field must provide appropriate supervision of 
        each student trainee.  
           Sec. 23.  Minnesota Statutes 1996, section 128A.023, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The department of children, families, and learning 
        must assist the state board of education the Faribault academies 
        in preparing reports on the academies.  
           Sec. 24.  Minnesota Statutes 1996, section 128A.023, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEPARTMENT OF EMPLOYEE RELATIONS.] The 
        department of employee relations, in cooperation with the state 
        board of education the Faribault academies, must develop a 
        statement of necessary qualifications and skills for all staff 
        members of the academies. 
           Sec. 25.  Minnesota Statutes 1996, section 128A.026, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SUBJECTS.] The state board of education 
        the Faribault academies must establish procedures for:  
           (1) admission, including short-term admission, to the 
        academies; 
           (2) discharge from the academies; 
           (3) decisions on a pupil's program at the academies; and 
           (4) evaluation of a pupil's progress at the academies.  
           Sec. 26.  Minnesota Statutes 1996, section 128A.026, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NOT CONTESTED CASE.] A proceeding about 
        admission to or discharge from the academies or about a pupil's 
        program or progress at the academies is not a contested case 
        under section 14.02.  The proceeding is governed instead by the 
        rules of the state board governing special education.  
           Sec. 27.  Minnesota Statutes 1996, section 128A.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LOCAL SOCIAL SERVICES AGENCY.] If the person 
        liable for support of a pupil cannot support the pupil, the 
        local social services agency of the county of the pupil's 
        residence must do so.  The commissioner of children, families, 
        and learning must decide how much the local social services 
        agency must pay.  The state board of education the Faribault 
        academies must adopt rules that tell how the commissioner is to 
        fix the amount.  The local social services agency must make the 
        payment to the superintendent of the school district of 
        residence.  
           Sec. 28.  Minnesota Statutes 1996, section 260.015, 
        subdivision 19, is amended to read: 
           Subd. 19.  [HABITUAL TRUANT.] "Habitual truant" means a 
        child under the age of 16 years who is absent from attendance at 
        school without lawful excuse for seven school days if the child 
        is in elementary school or for one or more class periods on 
        seven school days if the child is in middle school, junior high 
        school, or high school, or a child who is 16 or 17 years of age 
        who is absent from attendance at school without lawful excuse 
        for one or more class periods on seven school days and who has 
        not lawfully withdrawn from school under section 120.101, 
        subdivision 5d.  
           Sec. 29.  Minnesota Statutes 1996, section 260.131, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [CHILD IN NEED OF PROTECTION OR SERVICES; 
        HABITUAL TRUANT.] If there is a school attendance review board 
        or county attorney mediation program operating in the child's 
        school district, a petition alleging that a child is in need of 
        protection or services as a habitual truant under section 
        260.015, subdivision 2a, clause (12), may not be filed until the 
        applicable procedures under section 260A.06 or 260A.07 have been 
        exhausted followed. 
           Sec. 30.  Minnesota Statutes 1996, section 260.132, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTICE.] When a peace officer, or 
        attendance officer in the case of a habitual truant, has 
        probable cause to believe that a child: 
           (1) is in need of protection or services under section 
        260.015, subdivision 2a, clause (11) or (12); 
           (2) is a juvenile petty offender; or 
           (3) has committed a delinquent act that would be a petty 
        misdemeanor or misdemeanor if committed by an adult; 
        the officer may issue a notice to the child to appear in 
        juvenile court in the county in which the child is found or in 
        the county of the child's residence or, in the case of a 
        juvenile petty offense, or a petty misdemeanor or misdemeanor 
        delinquent act, the county in which the offense was committed.  
        If there is a school attendance review board or county attorney 
        mediation program operating in the child's school district, a 
        notice to appear in juvenile court for a habitual truant may not 
        be issued until the applicable procedures under section 260A.06 
        or 260A.07 have been exhausted followed.  The officer shall file 
        a copy of the notice to appear with the juvenile court of the 
        appropriate county.  If a child fails to appear in response to 
        the notice, the court may issue a summons notifying the child of 
        the nature of the offense alleged and the time and place set for 
        the hearing.  If the peace officer finds it necessary to take 
        the child into custody, sections 260.165 and 260.171 shall apply.
           Sec. 31.  Minnesota Statutes 1996, section 260A.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL POWERS AND DUTIES.] A school attendance 
        review board shall prepare an annual plan to promote interagency 
        and community cooperation and to reduce duplication of services 
        for students with school attendance problems.  The plan shall 
        include a description of truancy procedures and services 
        currently in operation within the board's jurisdiction, 
        including the programs and services under section 260A.04.  A 
        board may provide consultant services to, and coordinate 
        activities of, truancy programs and services.  If a board 
        determines that it will be unable to provide services for all 
        truant students who are referred to it, the board shall 
        establish procedures and criteria for determining whether to 
        accept referrals of students or refer them for other appropriate 
        action. 
           Sec. 32.  Minnesota Statutes 1996, section 260A.06, is 
        amended to read: 
           260A.06 [REFERRAL OF TRUANT STUDENTS TO SCHOOL ATTENDANCE 
        REVIEW BOARD.] 
           Subdivision 1.  [REFERRAL; NOTICE.] An attendance officer 
        or other school official may refer a student who is a continuing 
        truant to the school attendance review board.  The person making 
        the referral shall provide a written notice by first class mail 
        or other reasonable means to the student and the student's 
        parent or legal guardian.  The notice must: 
           (1) include the name and address of the board to which the 
        student has been referred and the reason for the referral; and 
           (2) indicate that the student, the parent or legal 
        guardian, and the referring person will meet with the board to 
        determine a proper disposition of the referral, unless the board 
        refers the student directly to the county attorney or for other 
        appropriate legal action. 
           Subd. 2.  [MEETING; COMMUNITY SERVICES.] (a) Except as 
        provided in paragraph (b), the school attendance review board 
        shall schedule the meeting described in subdivision 1 and 
        provide notice of the meeting by first class mail or other 
        reasonable means to the student, parent or guardian, and 
        referring person.  If the board determines that available 
        community services may resolve the attendance problems of the 
        truant student, the board shall refer the student or the 
        student's parent or guardian to participate in the community 
        services.  The board may develop an agreement with the student 
        and parent or guardian that specifies the actions to be taken.  
        The board shall inform the student and parent or guardian that 
        failure to comply with any agreement or to participate in 
        appropriate community services will result in a referral to the 
        county attorney under subdivision 3.  The board may require the 
        student or parent or guardian to provide evidence of 
        participation in available community services or compliance with 
        any agreement. 
           (b) A school attendance review board may refer a student 
        directly to the county attorney or for other appropriate legal 
        action under subdivision 3 if it has established procedures and 
        criteria for these referrals. 
           Subd. 3.  [REFERRAL TO COUNTY ATTORNEY; OTHER APPROPRIATE 
        ACTION.] If the school attendance review board determines that 
        available community services cannot resolve the attendance 
        problems of the truant student or, if the student or the parent 
        or guardian has failed to comply with any referrals or 
        agreements under subdivision 2 or to otherwise cooperate with 
        the board, or if the board determines that a student should be 
        referred directly under this subdivision, the board may: 
           (1) refer the matter to the county attorney under section 
        260A.07, if the county attorney has elected to participate in 
        the truancy mediation program; or 
           (2) if the county attorney has not elected to participate 
        in the truancy mediation program, refer the matter for 
        appropriate legal action against the child or the child's parent 
        or guardian under chapter 260 or section 127.20. 
           Sec. 33.  Laws 1997, First Special Session chapter 4, 
        article 5, section 24, subdivision 4, is amended to read: 
           Subd. 4.  [GRANT AWARDS.] A school district or any group of 
        districts may receive a grant in the amount of $25 per pupil per 
        year.  The A grant recipient with 6,000 or more pupils in 
        average daily membership must match one local dollar for every 
        state dollar received.  The local match may include in kind 
        contributions.  In awarding grants, the commissioner shall 
        consider which students will benefit most from these programs. 
        No grant recipient shall use the grant award to supplant 
        existing funding for gifted and talented programs. 
           Sec. 34.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 4, is amended to read: 
           Subd. 4.  [ADVANCED PLACEMENT AND INTERNATIONAL 
        BACCALAUREATE PROGRAMS.] For the state advanced placement and 
        international baccalaureate programs: 
             $1,875,000     .....     1998 
             $1,875,000     .....     1999 
           Notwithstanding Minnesota Statutes, section 126.239, 
        subdivisions 1 and 2, $200,000 each year is for teachers to 
        attend subject matter summer training programs and follow-up 
        support workshops approved by the advanced placement or 
        international baccalaureate programs.  The amount of the subsidy 
        for each teacher attending an advanced placement or 
        international baccalaureate summer training program or workshop 
        shall be the same.  The commissioner shall determine the payment 
        process and the amount of the subsidy. 
           Notwithstanding Minnesota Statutes, section 126.239, 
        subdivision 3, in each year to the extent of available 
        appropriations, the commissioner shall pay all examination fees 
        for all students sitting for an advanced placement examination, 
        international baccalaureate examination, or both.  If this 
        amount is not adequate, the commissioner may pay less than the 
        full examination fee. 
           $300,000 each year is for student scholarships.  A student 
        scholarship shall be awarded to a student scoring three or 
        better on one or more advanced placement examinations or a four 
        or better on one or more international baccalaureate 
        examinations.  The amount of each scholarship shall range from 
        $150 $75 to $500 based on the student's score on the exams.  The 
        scholarships shall be awarded only to students who are enrolled 
        in a Minnesota public or private college or university.  The 
        total amount of each scholarship shall be paid directly to the 
        student's designated college or university and must be used by 
        the student only for tuition, required fees, and books in 
        nonsectarian courses or programs.  The higher education services 
        office, in consultation with the commissioner, shall determine 
        the payment process, the amount of the scholarships, and 
        provisions for unused scholarships.  
           In order to be eligible to receive advanced placement or 
        international baccalaureate scholarships on behalf of the 
        qualifying students, the college or university must have an 
        advanced placement, international baccalaureate, or both, credit 
        and placement policy for the scholarship recipients.  In 
        addition, each college or university must certify these policies 
        to the department each year.  The department must provide each 
        secondary school in the state with a copy of the post-secondary 
        advanced placement and international baccalaureate policies each 
        year. 
           $375,000 each year is for teacher stipends.  A teacher who 
        teaches an advanced placement or international baccalaureate 
        course shall receive a stipend for each student in that 
        teacher's course who receives a three or better on the advanced 
        placement or a four or better on the international baccalaureate 
        examination that covers the subject matter of the course.  The 
        commissioner shall determine the payment process and the amount 
        of the teacher stipend ranging from $25 to $50 for each student 
        receiving a qualifying score. 
           A stipend awarded to a teacher under this subdivision shall 
        not be a mandatory subject of bargaining under Minnesota 
        Statutes, chapter 179A, or any other law and shall not be a term 
        or condition of employment.  The amount of any award shall be 
        final and shall not be subject to review by an arbitrator 
        through any grievance or other process or by a court through any 
        appeal process.  
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 35.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 9, is amended to read: 
           Subd. 9.  [COLLABORATIVE URBAN EDUCATOR PROGRAMS.] For 
        grants to collaborative urban educator programs that prepare and 
        license people of color to teach: 
             $895,000     .....     1998
             $500,000     .....     1999 
           This appropriation is available until June 30, 1999. 
           Sec. 36.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 10, is amended to read: 
           Subd. 10.  [CHARTER SCHOOL BUILDING LEASE AID.] For 
        building lease aid according to section 124.248, subdivision 2a: 
             $1,078,000 $1,294,000    .....     1998 
             $1,577,000 $1,889,000    .....     1999 
           The 1999 appropriation includes $120,000 $143,000 for 1998 
        and $1,457,000 $1,746,000 for 1999. 
           Sec. 37.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 11, is amended to read: 
           Subd. 11.  [CHARTER SCHOOL START-UP GRANTS.] For charter 
        school start-up cost aid under Minnesota Statutes, section 
        124.248: 
             $500,000 $900,000      .....     1998 
             $1,000,000     .....     1999 
           The 1999 appropriation includes $100,000 for 1998 and 
        $900,000 for 1999.  
           Any balance in the first year does not cancel but is 
        available in the second year.  This appropriation may also be 
        used for grants to convert existing schools into charter schools.
           Sec. 38.  Laws 1997, First Special Session chapter 4, 
        article 5, section 28, subdivision 17, is amended to read: 
           Subd. 17.  [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY GRANTS.] 
        For year-round school/extended week or day grants under Laws 
        1995, First Special Session chapter 3, article 7, section 4: 
             $1,800,000     .....     1998 
               $455,000     .....     1999
           The department of children, families, and learning must 
        award grants to school districts with priority given to programs 
        that have not previously received year-round school/extended 
        week or day pilot grants.  Of this amount, $500,000 is for a 
        grant to independent school district No. 624, White Bear Lake.  
        Of this amount, $225,000 is for a year-round school extended day 
        project in independent school district No. 911, Cambridge.  Of 
        this amount, $200,000 is for the four-period day program at 
        independent school district No. 833, south Washington 
        county.  Of the fiscal year 1999 appropriation, $250,000 is for 
        a grant to independent school district No. 241, Albert Lea, 
        $105,000 is for a grant to independent school district No. 200, 
        Hastings, and $100,000 is for a grant to independent school 
        district No. 270, Hopkins.  The maximum grant amount for other 
        recipients is $300,000.  Grant recipients are required to make 
        reports on progress made, planning, and implementing projects in 
        the form and manner specified by the department of children, 
        families, and learning. 
           The senior high site councils in the independent school 
        district No. 833, south Washington county, shall develop and 
        implement a model four-period day curriculum during the 
        1997-1998 and 1998-1999 school years.  The site councils shall 
        seek input from parents, teachers, and students in the design 
        and implementation of the four-period day model.  If one or more 
        site councils determine a four-period day model is not 
        desirable, the site council shall report its recommendations 
        back to the board and need not proceed with the development and 
        implementation of the model. 
           The south Washington county school board shall develop a 
        system for monitoring and evaluating the development and 
        implementation of the four-period day models at its high 
        schools.  The board shall monitor and evaluate:  (1) the process 
        used by the site council to discuss, develop, and implement a 
        four-period day; and (2) the academic outcomes of students after 
        the four-period day has been fully implemented.  To evaluate the 
        academic outcomes of students, the district shall compare the 
        academic achievement of its high school students with the 
        achievement of students in similar school districts using a 
        six-period day model.  The board shall report the results of its 
        evaluation to the commissioner of children, families, and 
        learning on August 30, 1998, and August 30, 1999.  The reports 
        shall include a detailed description of the site-based, 
        decision-making model that was used to develop and implement the 
        four-period day and the steps that were taken to successfully 
        implement and evaluate the model. 
           Independent school district No. 833, south Washington 
        County, shall complete a class size mitigation pilot project to 
        explore options for improving learning outcomes in elementary 
        and junior high classrooms with 30 or more students.  The 
        options for mitigating the adverse impacts of large class sizes 
        shall be developed and implemented using a site-based management 
        decision-making process.  The district shall report the results 
        of its pilot project to the commissioner of children, families, 
        and learning by August 30, 1998. 
           Sec. 39.  Laws 1997, First Special Session chapter 4, 
        article 6, section 20, subdivision 4, is amended to read: 
           Subd. 4.  [SCHOOL LUNCH AND FOOD STORAGE AID.] (a) For 
        school lunch aid according to Minnesota Statutes, section 
        124.646, and Code of Federal Regulations, title 7, section 
        210.17, and for food storage and transportation costs for United 
        States Department of Agriculture donated commodities; and for a 
        temporary transfer to the commodity processing revolving fund to 
        provide cash flow to permit schools and other recipients of 
        donated commodities to take advantage of volume processing rates 
        and for school milk aid according to Minnesota Statutes, section 
        124.648:  
             $7,254,000     .....     1998 
             $7,254,000 $7,770,000    .....     1999 
           (b) Any unexpended balance remaining from the 
        appropriations in this subdivision shall be prorated among 
        participating schools based on the number of free, reduced, and 
        fully paid federally reimbursable student lunches served during 
        that school year.  
           (c) If the appropriation amount attributable to either year 
        is insufficient, the rate of payment for each fully paid student 
        lunch shall be reduced and the aid for that year shall be 
        prorated among participating schools so as not to exceed the 
        total authorized appropriation for that year.  
           (d) Any temporary transfer processed in accordance with 
        this subdivision to the commodity processing fund will be 
        returned by June 30 in each year so that school lunch aid and 
        food storage costs can be fully paid as scheduled.  
           (e) Not more than $800,000 of the amount appropriated each 
        year may be used for school milk aid. 
           (f) The commissioner may reduce other future aid and grant 
        payments due to school districts and other organizations for the 
        costs of processing and storage of commodities used by the 
        district or organization. 
           Sec. 40.  [GRADUATION RULE RESOURCE GRANTS.] 
           The commissioner of children, families, and learning shall 
        award grants to develop learning resources for the state's 
        results-oriented graduation rule.  The grants are available to: 
           (1) provide staff development for implementation of the 
        graduation standards, including training in economics, the arts, 
        and training in technology by community members; 
           (2) establish and equip learning resource centers; 
           (3) develop and sustain historical educational programming; 
           (4) make historical collections available via the Internet; 
           (5) develop a system of graduation rule implementation for 
        alternative programs; 
           (6) develop systemic site decision-making models and 
        implementing site decision making in schools; 
           (7) expand attention and reading readiness programs; and 
           (8) provide for reporting systems. 
           The commissioner may require a match of private funds as 
        part of the application process.  
           Sec. 41.  [REPORT.] 
           The commissioner of children, families, and learning, in 
        consultation with the Minnesota state colleges and universities, 
        the University of Minnesota, and the private college council, 
        shall examine the training of teachers entering the workforce in 
        Minnesota.  The commissioner shall also consult with the 
        Minnesota federation of teachers and the Minnesota education 
        association for this report.  The report shall make 
        recommendations for proposed legislative action to promote a 
        more direct connection between teacher training and student 
        learning needs under the state's results-oriented graduation 
        rule.  The commissioner shall seek assistance from the state 
        public policy unit within the Humphrey Institute of Minnesota 
        for existing research in this area for this report.  The 
        commissioner shall report its findings to education committees 
        of the legislature by December 1, 1998.  The report shall 
        examine at least the following areas: 
           (1) whether teachers entering the workforce are prepared to 
        meet the basic skills needs and higher learning needs of 
        students under the state's results-oriented graduation rule; 
           (2) identify teacher skills which are considered crucial to 
        the success of students in a knowledge-based economy and 
        determine if Minnesota colleges and universities are teaching 
        those skills adequately to teachers; 
           (3) examine the ability of Minnesota colleges and 
        universities to provide training to existing teachers who are 
        seeking further staff development experiences in order to meet 
        the students' needs under the graduation rule; and 
           (4) identify resources and organizations outside of the 
        colleges and universities that can provide training and teaching 
        experiences necessary to meet the needs of students under the 
        graduation rule. 
           Sec. 42.  [CLEARINGHOUSE OF BEST EDUCATIONAL PRACTICES.] 
           (a) The department of children, families, and learning 
        shall establish a clearinghouse of best educational practices 
        and shared decision-making for improving student performance, 
        particularly for at-risk students.  The clearinghouse must:  
           (1) align with all current activities for best educational 
        practice, shared decision-making, and the results-oriented 
        graduation rule; 
           (2) conduct research and collect information on the best 
        educational practices affecting a school's management, 
        operation, financing, personnel and instruction; 
           (3) train quality intervention teams composed of highly 
        qualified educators to assist a school's staff in working to 
        improve student performance, particularly for at-risk students, 
        by addressing a school's management, operation, financing, 
        personnel and instruction practices; 
           (4) develop and make available to interested school 
        districts a model for an independent educational audit that 
        evaluates a school's performance strengths and weaknesses and 
        makes specific recommendations for reinforcing performance 
        strengths and improving performance weaknesses cited in the 
        audit; 
           (5) using the comprehensive assessment framework under 
        section 121.1115, subdivision 1b, paragraph (a), develop student 
        and school performance indicators schools may use to reliably 
        measure school improvement over time; and 
           (6) provide staff development opportunities to assist 
        teachers and other educators in integrating educational reform 
        measures into a school's best practices. 
           (b) The clearinghouse must assist school districts, at 
        district request, and recommend methods to engage parents and 
        communities in improving student performance, particularly for 
        at-risk students. 
           (c) The clearinghouse must collaborate with and may 
        contract with community stakeholders, including the Minneapolis 
        urban league, the St. Paul urban league, the urban coalition, 
        the council on Asian-Pacific Minnesotans, the Chicano/Latino 
        affairs council, the council on Black Minnesotans, the Indian 
        affairs council, or the communities of color institute and 
        Minneapolis Pathways at the University of Minnesota's Roy 
        Wilkins center. 
           Sec. 43.  [NOTIFICATION TO COMMISSIONER ON COOPERATIVE 
        SPONSORSHIP.] 
           A school district shall transmit to the commissioner of 
        children, families, and learning information about each decision 
        to deny a home school a cooperative sponsorship under state high 
        school league rules or to otherwise deny a home school student 
        an opportunity to participate in the district's extracurricular 
        activities.  The school district shall transmit the information 
        in the form and manner the commissioner requires.  
           Sec. 44.  [COUNSELOR ASSESSMENT.] 
           The department of children, families, and learning, in 
        consultation with affected groups, shall conduct an assessment 
        of the need for expanding the number of counselors in school 
        districts.  As part of the assessment, the department shall 
        consider recommended ratios and the costs of meeting these, 
        alternative strategies for collaboration to provide counseling 
        services to pupils especially in small districts, mechanisms to 
        strengthen collaboration between school districts and local 
        colleges and universities in providing information and 
        experience to pupils, and suggestions for meeting the needs of 
        pupils for counseling that is focused on academic and career 
        needs and planning.  The department shall report its findings 
        and recommendations to the education committees of the house and 
        senate as part of its 2000-2001 biennial budget request. 
           Sec. 45.  [YOUTH ATHLETIC DEMONSTRATION PROGRAM.] 
           (a) A demonstration athletic grant program through special 
        school district No. 1, Minneapolis, and the Minneapolis park and 
        recreation board is established for children ages seven to 14 at 
        Waite Park school.  The goal of the demonstration program is to 
        develop a neighborhood-based athletic program that teaches 
        sports fundamentals to students that will lead to their 
        participation in high school level athletics.  The program shall 
        be year-round and shall require both in-school and after-school 
        participation by students.  A student who satisfactorily 
        completes the program curriculum shall receive secondary course 
        credit and the credit shall count towards the student's 
        graduation requirements consistent with Minnesota Statutes, 
        section 126.83. 
           (b) The program shall be established at Waite Park school 
        in Minneapolis where the school facility and park and recreation 
        facility are jointly located and where the school district has 
        established a neighborhood-based school for enrollment 
        purposes.  The school district and the park and recreation board 
        shall recruit at-risk students and those students who have not 
        participated in current after-school park programs to 
        participate in the demonstration project. 
           (c) The program funds shall be used for recreational 
        professionals at the park board to coordinate the program and 
        licensed teachers employed in the district; internships for 
        students at the University of Minnesota, Augsburg College, or 
        other post-secondary institutions to work in the program; master 
        coaches to train coaches; transportation costs; facilities' 
        costs; and assistance to neighborhood park athletic councils.  
           (d) The school district and the park board shall report to 
        the commissioner of children, families, and learning on the 
        outcome of the program.  Up to $10,000 of the appropriation in 
        section 38, subdivision 2, may be used for the planning of a 
        multipurpose community education and recreation center at a 
        northeast park adjacent to a northeast school.  The commissioner 
        shall report to the education committees of the legislature on 
        the program and the advisability of creating a statewide program 
        by March 15, 1999. 
           Sec. 46.  [RESIDENTIAL ACADEMIES PROGRAM.] 
           Subdivision 1.  [GRANT RECIPIENT.] The commissioner of 
        children, families, and learning may award grants to public 
        organizations or a collaborative of public and private 
        organizations for capital and start-up costs for residential 
        academies for students in grades 4 through 12 who desire to 
        attend a residential academy, demonstrate an interest in 
        learning and a potential for academic achievement, and who may: 
           (1) perform or are at risk of performing below the academic 
        performance level for students of the same age or ability; or 
           (2) have experienced homelessness or an unstable home 
        environment. 
           Subd. 2.  [ENROLLMENT.] Enrollment is voluntary.  A parent 
        or guardian, the student's county of residence, the student's 
        school, a health care provider, or the judicial system may 
        recommend a student for admission to an academy. 
           Subd. 3.  [EDUCATIONAL PROGRAMMING.] The education program 
        of a residential academy must be designed to: 
           (1) increase students' academic achievement; 
           (2) increase students' school attendance; 
           (3) enable secondary students to meet the requirements of 
        the state graduation rule; and 
           (4) improve secondary students' transition to 
        post-secondary education or the transition from school to work. 
           Subd. 4.  [FUNDING.] (a) Education and social services 
        funding shall follow each student from the student's school 
        district or county of residence to the academy as provided by 
        law. 
           (b) The cost of residential care for a student may be 
        covered under a sliding fee program based on student need. 
           (c) An academy may receive any gift, grant, bequest, or 
        devise. 
           Subd. 5.  [AWARDING GRANTS.] The commissioner of children, 
        families, and learning shall prescribe the form and manner of 
        applications.  In awarding grants, the commissioner shall 
        consider the quality of the education program, the academy's 
        location, the composition of the academy's governance structure 
        and board, the extent of the collaborative effort among various 
        organizations, the extent of family and community involvement, 
        and whether social services, after-school enrichment, and 
        instruction throughout the entire year are provided.  The 
        commissioner shall evaluate the components of the residential 
        academy program described in this section and report to the 
        education committees of the legislature by February 15, 2001. 
           Sec. 47.  [COMMISSIONER OF CHILDREN, FAMILIES, AND 
        LEARNING.] 
           The commissioner of children, families, and learning shall 
        designate a staff member as a resource person for gifted and 
        talented programs to provide assistance to parents and school 
        districts.  The commissioner shall pay all costs for that staff 
        member out of existing department appropriations. 
           Sec. 48.  [GOALS 2000.] 
           School boards shall not be required to adopt specific 
        provisions of the federal Goals 2000 program as state graduation 
        standards. 
           Sec. 49.  [RESIDENCY REQUIREMENT.] 
           The magnet schools that are part of the western 
        metropolitan education program must first enroll in the magnet 
        schools those otherwise qualified students who reside within one 
        of the nine participating school districts.  
           Sec. 50.  [TASK FORCE ON TRANSITIONAL ISSUES.] 
           Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A task force on 
        prekindergarten through grade 12 education governance structure 
        is established to examine the transitional issues related to the 
        repeal of the state board of education under section 39, 
        paragraph (b). 
           Subd. 2.  [TASK FORCE MEMBERS.] The task force is composed 
        of one person appointed by the governor, one person appointed by 
        the speaker of the house of representatives, and one person 
        appointed by the subcommittee on committees of the senate 
        committee on rules and administration.  The task force may 
        select additional members to serve on the task force. 
           Subd. 3.  [REPORT.] The task force shall submit a report on 
        appropriate statutory changes, if any, to accomplish an orderly 
        elimination of the state board to the chairs of the education 
        committees of the legislature by December 15, 1998. 
           Sec. 51.  [EXAMINATION OF PREKINDERGARTEN THROUGH GRADE 12 
        EDUCATION GOVERNANCE.] 
           Subdivision 1.  [MEMBERSHIP; EXPENSES.] The coalition for 
        education reform and accountability panel established according 
        to Laws 1993, chapter 224, article 1, section 35, subdivision 3, 
        must update the membership and fill vacancies on the coalition 
        according to the criteria established in Laws 1993, chapter 224, 
        article 1, section 35, subdivision 2.  The department of 
        children, families, and learning shall provide technical and 
        other assistance to the panel. 
           Subd. 2.  [STUDY.] The coalition for education reform and 
        accountability must examine alternatives for restructuring the 
        state's prekindergarten through grade 12 education system to 
        optimize student achievement for all children by considering at 
        least the following: 
           (1) the roles of the legislature, executive branch, and 
        local school boards in policymaking and administering the 
        prekindergarten through grade 12 education system; 
           (2) the best structure, excluding funding issues, to 
        anticipate and accommodate the changing demographics of students 
        and staff in the context of a dynamic education system; and 
           (3) the best structure, excluding funding issues, to 
        maintain a system adaptable to changing societal needs, that is 
        flexible and innovative, and that places the interest of 
        students first. 
           The coalition shall make recommendations regarding 
        appropriate parameters for the commissioner's rulemaking 
        authority and the extent of necessary legislative direction and 
        oversight of rulemaking activities. 
           Subd. 3.  [REPORT.] The coalition must submit a report of 
        its findings and recommendations to the education committees of 
        the house and senate by December 15, 1998. 
           Sec. 52.  [RECOMMENDATIONS ON A CENTRAL DEPOSITORY OF 
        EMPLOYMENT DATA.] 
           Subdivision 1.  [WORKING GROUP.] The board of teaching 
        shall convene a working group to consider data management 
        policies and appropriate organizing structures and operational 
        practices for a central depository of data containing licensing 
        and employment information about licensed education personnel 
        employed in Minnesota school districts.  The working group must 
        include one representative from each of the following 
        organizations:  the state board of education; the department of 
        children, families, and learning; the department of 
        administration; the Minnesota school boards association; the 
        Minnesota association of school administrators; the Minnesota 
        association of school personnel administrators; the Minnesota 
        education association; the Minnesota federation of teachers; the 
        Minnesota association of secondary school principals; the 
        Minnesota association of elementary school principals; and any 
        other groups the board determines are relevant.  Expenses 
        incurred by working group members must be reimbursed by the 
        agencies and organizations they represent.  By December 1, 1998, 
        the board shall submit to the education committees of the 
        legislature the group's recommendations concerning establishing 
        and operating a central depository of employment data on 
        licensed education personnel, including recommended statutory 
        changes.  The board shall convene the working group by June 15, 
        1998. 
           Subd. 2.  [ISSUES TO RESOLVE.] The working group must 
        address at least the following: 
           (1) to what extent a central database of employment history 
        of licensed education personnel would be useful and how it would 
        operate; 
           (2) what kinds of post-secondary education records and 
        employment-related data on licensed education personnel should 
        be gathered and stored, including whether to gather and store 
        complaints against licensed education personnel received by the 
        board of teaching or the board of education, or disciplinary 
        actions by the board of teaching or the board of education; 
           (3) what mechanisms and policies should be developed for 
        reporting state and school district data on licensed education 
        personnel to ensure that stored data are timely and accurate and 
        to ensure the integrity and privacy of the data; 
           (4) what policies should govern the access of individuals 
        and organizations to the data, including the release of 
        personnel data to prospective school or school district 
        employers; 
           (5) what should be the extent of liability and immunity 
        from liability for individuals and organizations that release 
        data; and 
           (6) whether guidelines consistent with this section for 
        hiring education personnel would be useful to school districts. 
           Sec. 53.  [RECOMMENDATIONS FOR ALTERNATIVE SCHOOL YEAR 
        CALENDARS.] 
           Subdivision 1.  [WORKING GROUP.] The commissioner of 
        children, families and learning shall convene a working group to 
        consider alternative school year calendars, including at least 
        45-15 plans, four-quarter plans, quinmester plans, extended 
        learning year plans, flexible all-year plans, and four-day week 
        plans, and recommend to the legislature those alternative school 
        year calendars that best allow school districts to meet the 
        educational needs of their students.  The working group must 
        include one representative from each of the following 
        organizations:  the Minnesota school boards association; the 
        Minnesota education association; the Minnesota federation of 
        teachers; the Minnesota association of school administrators; 
        the Minnesota association of secondary school principals; the 
        Minnesota elementary school principals' association; the 
        Minnesota association for pupil transportation; the Minnesota 
        association for supervision and curriculum; the Minnesota 
        congress of parents, teachers and students; the Minnesota state 
        high school league; the Minnesota business partnership; and the 
        Minnesota restaurant, hotel and resort associations.  By 
        February 1, 1999, the commissioner shall submit the group's 
        recommendations concerning the alternative school year calendars 
        that best allow school districts to meet the educational needs 
        of their students to the chairs of the education committees of 
        the legislature. 
           Subd. 2.  [ISSUE TO RESOLVE.] In recommending to the 
        legislature the alternative school year calendars that best 
        allow school districts to meet the educational needs of their 
        students, the working group must at least consider: 
           (1) how buildings and other facilities can be optimally 
        used during an entire year; 
           (2) what the optimal learning year schedule is of 
        elementary and secondary disabled students and staff in schools 
        and residential facilities; 
           (3) how a district divides its students among its 
        facilities to accommodate an alternative school year calendar; 
           (4) how a district accommodates an alternative school year 
        calendar in the context of the public employment labor relations 
        act; 
           (5) what parent involvement is required in establishing an 
        alternative school year calendar; 
           (6) how school staff is assigned in a district with fewer 
        than all facilities adopting an alternative school year 
        calendar; 
           (7) how teachers' contracting rights are affected by an 
        alternative school year calendar; 
           (8) what educational standards and requirements apply to a 
        district operating an alternative school year calendar; 
           (9) what adjustments of attendance and apportionments of 
        state aid are required; and addressed in an alternative school 
        year calendar. 
           Sec. 54.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated. 
           Subd. 2.  [GRADUATION RULE RESOURCE GRANTS.] For graduation 
        rule resource grants: 
             $3,500,000     .....     1999
           Of this amount, $200,000 is for a grant to the Council on 
        Economic Education; $300,000 is to the Lola and Rudy Perpich 
        Center for the Arts to develop arts-related performance packages 
        as part of the state high school graduation rule under Minnesota 
        Statutes, section 121.11, subdivision 7c; $90,000 is for a grant 
        to Murphy's Landing; $40,000 is for a grant to the metropolitan 
        multitype library consortium for copying and distributing 
        Minnesota authors videocassette series; and $300,000 is for a 
        grant to A Chance to Grow/New Visions to acquire the space and 
        technology needed to establish, equip, and operate the Minnesota 
        Learning Resource Center. 
           The department shall consider grant proposals from the 
        Minnesota Historical Society, the Richard Green Institute, 
        Ironworld, parent or community technology specialists working or 
        volunteering in schools, higher education institutions working 
        in conjunction with a school district or consortium of school 
        districts, and database access programs for public libraries and 
        school media centers.  
           This is a one-time appropriation. 
           Subd. 3.  [RESIDENTIAL ACADEMIES.] For grants for 
        residential academies: 
            $12,000,000     .....     1999
           Subd. 4.  [YOUTH ATHLETIC DEMONSTRATION PROGRAM.] For a 
        grant to special school district No. 1, Minneapolis, and the 
        Minneapolis park and recreation board to establish a youth 
        athletic demonstration program under section 26: 
             $  100,000     .....     1999 
           Subd. 5.  [UNLIMITED POSSIBILITIES PLAN.] For a grant to a 
        nonprofit agency representing the private alternative schools: 
             $  100,000     .....     1999 
           The purpose of the grant is to support the Unlimited 
        Possibilities Plan to assist student transition from secondary 
        school to college or gainful employment including mentoring 
        programs, post-secondary training, career exploration, and 
        placement services.  The grant recipient must match state funds 
        with an equal amount of funds raised from nonpublic sources.  
           This appropriation does not cancel but is available until 
        June 30, 2000. 
           Subd. 6.  [CLEARINGHOUSE OF BEST EDUCATIONAL 
        PRACTICES.] For a clearinghouse of best educational practices 
        according to section 19: 
            $2,000,000     .....     1999
           Of this amount, $500,000 is for a contract with an 
        institution of higher education for the purposes of Minnesota 
        Statutes, section 121.1115, subdivisions 1b and 1c.  
           Subd. 7.  [MODEL DISTANCE LEARNING GRANT; LAKE OF THE 
        WOODS.] For a grant to independent school district No. 390, Lake 
        of the Woods, for developing a model distance learning program: 
             $  250,000     .....     1999 
           The model program must address students' curriculum needs 
        for vocational programs, advanced collegiate level courses, 
        gifted and talented programming, programming for students with 
        disabilities, and other areas of programming made more difficult 
        because of the school district's geographic isolation. 
           Sec. 55.  [REVISOR'S INSTRUCTION.] 
           In the next and subsequent editions of Minnesota Statutes 
        and Minnesota Rules, all references to the state board of 
        education shall be changed to the commissioner of children, 
        families, and learning.  The changes made by the revisor shall 
        be effective December 31, 1999. 
           Sec. 56.  [REPEALER.] 
           Minnesota Statutes 1996, section 121.02, is repealed 
        effective December 31, 1999. 
           Sec. 57.  [EFFECTIVE DATES.] 
           (a) Sections 5, 28, and 33 are effective for the 1998-1999 
        school year and thereafter. 
           (b) Section 9 is effective for the profile of learning of 
        the graduation rule authorized under Minnesota Statutes, section 
        121.11, subdivision 7c, and adopted after January 1, 1998. 
           (c) Sections 7, 34, 43, 50, 51, and 52 are effective the 
        day following final enactment. 
           Sections 14 to 27 are effective December 31, 1999. 
                                   ARTICLE 6 
                            EDUCATION POLICY ISSUES 
           Section 1.  Minnesota Statutes 1996, section 120.17, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [ATTENDANCE AT SCHOOL FOR THE DISABLED.] 
        Responsibility for special instruction and services for a 
        visually disabled or hearing impaired child attending the 
        Minnesota state academy for the deaf or the Minnesota state 
        academy for the blind shall be determined in the following 
        manner: 
           (a) The legal residence of the child shall be the school 
        district in which the child's parent or guardian resides. 
           (b) When it is determined pursuant to section 128A.05, 
        subdivision 1 or 2, that the child is entitled to attend either 
        school, the state board of the Faribault academies shall provide 
        the appropriate educational program for the child.  The state 
        board of the Faribault academies shall make a tuition charge to 
        the child's district of residence for the cost of providing the 
        program.  The amount of tuition charged shall not exceed the 
        basic revenue of the district for that child, for the amount of 
        time the child is in the program.  For purposes of this 
        subdivision, "basic revenue" has the meaning given it in section 
        124A.22, subdivision 2.  The district of the child's residence 
        shall pay the tuition and may claim general education aid for 
        the child.  Tuition received by the state board of the Faribault 
        academies, except for tuition received under clause (c), shall 
        be deposited in the state treasury as provided in clause (g). 
           (c) In addition to the tuition charge allowed in clause 
        (b), the academies may charge the child's district of residence 
        for the academy's unreimbursed cost of providing an 
        instructional aide assigned to that child, if that aide is 
        required by the child's individual education plan.  Tuition 
        received under this clause must be used by the academies to 
        provide the required service. 
           (d) When it is determined that the child can benefit from 
        public school enrollment but that the child should also remain 
        in attendance at the applicable school, the school district 
        where the institution is located shall provide an appropriate 
        educational program for the child and shall make a tuition 
        charge to the state board of the Faribault academies for the 
        actual cost of providing the program, less any amount of aid 
        received pursuant to section 124.32.  The state board of the 
        Faribault academies shall pay the tuition and other program 
        costs including the unreimbursed transportation costs.  Aids for 
        children with a disability shall be paid to the district 
        providing the special instruction and services.  Special 
        transportation shall be provided by the district providing the 
        educational program and the state shall reimburse such district 
        within the limits provided by law.  
           (e) Notwithstanding the provisions of clauses (b) and (d), 
        the state board of the Faribault academies may agree to make a 
        tuition charge for less than the amount specified in clause (b) 
        for pupils attending the applicable school who are residents of 
        the district where the institution is located and who do not 
        board at the institution, if that district agrees to make a 
        tuition charge to the state board of the Faribault academies for 
        less than the amount specified in clause (d) for providing 
        appropriate educational programs to pupils attending the 
        applicable school. 
           (f) Notwithstanding the provisions of clauses (b) and (d), 
        the state board of the Faribault academies may agree to supply 
        staff from the Minnesota state academy for the deaf and the 
        Minnesota state academy for the blind to participate in the 
        programs provided by the district where the institutions are 
        located when the programs are provided to students in attendance 
        at the state schools.  
           (g) On May 1 of each year, the state board of the Faribault 
        academies shall count the actual number of Minnesota resident 
        kindergarten and elementary students and the actual number of 
        Minnesota resident secondary students enrolled and receiving 
        education services at the Minnesota state academy for the deaf 
        and the Minnesota state academy for the blind.  The state board 
        of the Faribault academies shall deposit in the state treasury 
        an amount equal to all tuition received less:  
           (1) the total number of students on May 1 less 175, times 
        the ratio of the number of kindergarten and elementary students 
        to the total number of students on May 1, times the general 
        education formula allowance; plus 
           (2) the total number of students on May 1 less 175, times 
        the ratio of the number of secondary students on May 1 to the 
        total number of students on May 1, times 1.3, times the general 
        education formula allowance.  
           (h) The sum provided by the calculation in clause (g), 
        subclauses (1) and (2), must be deposited in the state treasury 
        and credited to the general operation account of the academy for 
        the deaf and the academy for the blind.  
           (i) There is annually appropriated to the department of 
        children, families, and learning for the Faribault academies the 
        tuition amounts received and credited to the general operation 
        account of the academies under this section.  A balance in an 
        appropriation under this paragraph does not cancel but is 
        available in successive fiscal years. 
           Sec. 2.  Minnesota Statutes 1996, section 121.14, is 
        amended to read: 
           121.14 [RECOMMENDATIONS; BUDGET.] 
           The state board and the commissioner of children, families, 
        and learning shall recommend to the governor and legislature 
        such modification and unification of laws relating to the state 
        system of education as shall make those laws more readily 
        understood and more effective in execution.  The commissioner of 
        children, families, and learning shall prepare a biennial 
        education budget which shall be submitted to the governor and 
        legislature, such budget to contain a complete statement of 
        finances pertaining to the maintenance of the state department 
        and to the distribution of state aid.  
           Sec. 3.  Minnesota Statutes 1996, section 121.148, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NEGATIVE REVIEW AND COMMENT.] (a) If the 
        commissioner submits a negative review and comment for a 
        proposal according to section 121.15, the following steps must 
        be taken: 
           (1) the commissioner must notify the school board of the 
        proposed negative review and comment and schedule a public 
        meeting within 60 days of the notification within that school 
        district to discuss the proposed negative review and comment on 
        the school facility; and 
           (2) the school board shall appoint an advisory task force 
        of up to five members to advise the school board and the 
        commissioner on the advantages, disadvantages, and alternatives 
        to the proposed facility at the public meeting.  One member of 
        the advisory task force must also be a member of the county 
        facilities group. 
           (b) After attending the public meeting, the commissioner 
        shall reconsider the proposal.  If the commissioner submits a 
        negative review and comment, the school board may appeal that 
        decision to the state board of education under chapter 14.  The 
        state board of education may either uphold the commissioner's 
        negative review and comment or instruct the commissioner to 
        submit a positive or unfavorable review and comment on the 
        proposed facility. 
           (c) A school board may not proceed with construction if the 
        state board of education upholds the commissioner's negative 
        review and comment is upheld or if the commissioner's negative 
        review and comment is not appealed. 
           Sec. 4.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [UNIFORM SYSTEM OF RECORDS AND ACCOUNTING.] The 
        commissioner of children, families, and learning shall prepare a 
        uniform system of records for public schools and require reports 
        from superintendents and principals of schools, teachers, school 
        officers, and the chief officers of public and other educational 
        institutions to give such facts as it may deem of public value.  
        All reports required of school districts by the commissioner 
        shall be in conformance with the uniform financial accounting 
        and reporting system.  With the cooperation of the state 
        auditor, the commissioner shall establish and carry into effect 
        a uniform system of accounting by public school officers and 
        shall have authority to supervise and examine the accounts and 
        other records of all public schools. 
           Sec. 5.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [GENERAL SUPERVISION OVER EDUCATIONAL AGENCIES.] 
        The commissioner of children, families, and learning shall adopt 
        goals for and exercise general supervision over public schools 
        and public educational agencies in the state, classify and 
        standardize public elementary and secondary schools, and prepare 
        for them outlines and suggested courses of study.  The 
        commissioner shall develop a plan to attain the adopted goals.  
        The commissioner may recognize educational accrediting agencies 
        for the sole purposes of sections 120.101, 120.102, and 120.103. 
           Sec. 6.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ADMINISTRATIVE RULES.] The commissioner may 
        adopt new rules and amend them or amend any existing rules only 
        under specific authority.  The commissioner may repeal any 
        existing rules.  Notwithstanding the provisions of section 
        14.05, subdivision 4, the commissioner may grant a variance to 
        rules adopted by the commissioner upon application by a school 
        district for purposes of implementing experimental programs in 
        learning or school management.  This subdivision shall not 
        prohibit the commissioner from making technical changes or 
        corrections to adopted rules. 
           Sec. 7.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [LICENSURE RULES.] The commissioner may make 
        rules relating to licensure of school personnel not licensed by 
        the board of teaching. 
           Sec. 8.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [GENERAL EDUCATION DEVELOPMENT TESTS RULES.] The 
        commissioner may amend rules to reflect changes in the national 
        minimum standard score for passing the general education 
        development (GED) tests. 
           Sec. 9.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [UNIFORM FORMS FOR STATE EXAMINATIONS.] Upon the 
        request of any superintendent of any public or private school 
        teaching high school courses in the state, the commissioner 
        shall designate or prepare uniform forms for state examinations 
        in each high school subject during the month of May of each 
        year; the request shall be in writing and delivered to the 
        commissioner before January 1 of that year. 
           Sec. 10.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [EVENING SCHOOLS.] The commissioner shall 
        exercise general supervision over the public evening schools, 
        adult education programs, and summer programs. 
           Sec. 11.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [TEACHER RULE VARIANCES.] Notwithstanding any 
        law to the contrary, and only upon receiving the agreement of 
        the state board of teaching, the commissioner of children, 
        families, and learning may grant a variance to rules governing 
        licensure of teachers for those teachers licensed by the board 
        of teaching.  The commissioner may grant a variance, without the 
        agreement of the board of teaching, to rules adopted by the 
        commissioner governing licensure of teachers for those teachers 
        the commissioner licenses. 
           Sec. 12.  Minnesota Statutes 1996, section 121.16, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [SCHOOL LUNCH PROGRAM; REVOLVING FUND.] The 
        commissioner of finance shall establish for the commissioner of 
        children, families, and learning a revolving fund for deposit of 
        storage and handling charges paid by recipients of donated foods 
        shipped by the school lunch section of the department of 
        children, families, and learning.  These funds are to be used 
        only to pay storage and related charges as they are incurred for 
        United States Department of Agriculture foods. 
           The commissioner of finance shall also establish a 
        revolving fund for the department of children, families, and 
        learning to deposit charges paid by recipients of processed 
        commodities and for any authorized appropriation transfers for 
        the purpose of this subdivision.  These funds are to be used 
        only to pay for commodity processing and related charges as they 
        are incurred using United States Department of Agriculture 
        donated commodities. 
           Sec. 13.  Minnesota Statutes 1996, section 121.1601, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COORDINATION.] The commissioner shall coordinate 
        the office activities under subdivision 1 with new or existing 
        department and state board of education efforts to accomplish 
        school desegregation/integration.  The commissioner may request 
        information or assistance from, or contract with, any state or 
        local agency or officer, local unit of government, or recognized 
        expert to assist the commissioner in performing the activities 
        described in subdivision 1.  
           Sec. 14.  Minnesota Statutes 1996, section 122.23, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [ORDERLY REDUCTION PLAN.] As part of the 
        resolution required by subdivision 2, the school board must 
        prepare a plan for the orderly reduction of the membership of 
        the board to six or seven members and a plan for the 
        establishment or dissolution of election districts.  The plan 
        may shorten any or all terms of incumbent board members to 
        achieve the orderly reduction.  The plan must be submitted to 
        the secretary of state for review and comment. 
           Sec. 15.  Minnesota Statutes 1996, section 122.23, 
        subdivision 6, is amended to read: 
           Subd. 6.  The commissioner shall, upon receipt of a plat, 
        forthwith examine it and approve, modify or reject it.  The 
        commissioner shall also approve or reject any proposal contained 
        in the resolution or petition regarding the disposition of the 
        bonded debt of the component districts.  If the plat shows the 
        boundaries of proposed separate election districts and if the 
        commissioner modifies the plat, the commissioner shall also 
        modify the boundaries of the proposed separate election 
        districts.  The commissioner shall conduct a hearing public 
        meeting at the nearest county seat in the area upon reasonable 
        notice to the affected districts and county boards if requested 
        within 20 days after submission of the plat.  Such a hearing The 
        public meeting may be requested by the board of any affected 
        district, a county board of commissioners, or the petition of 20 
        resident voters living within the area proposed for 
        consolidation.  The commissioner shall endorse on the plat 
        action regarding any proposal for the disposition of the bonded 
        debt of component districts and the reasons for these actions 
        and within after a minimum of 20 days, but no more than 60 days 
        of the date of the receipt of the plat, the commissioner shall 
        return it to the county auditor who submitted it.  The 
        commissioner shall furnish a copy of that plat, and the 
        supporting statement and its endorsement to the auditor of each 
        county containing any land area of the proposed new district.  
        If land area of a particular county was included in the plat, as 
        submitted by the county auditor, and all of such land area is 
        excluded in the plat as modified and approved, the commissioner 
        shall also furnish a copy of the modified plat, supporting 
        statement, and any endorsement to the auditor of such county. 
           Sec. 16.  Minnesota Statutes 1996, section 123.34, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SUPERINTENDENT.] All districts maintaining a 
        classified secondary school shall employ a superintendent who 
        shall be an ex officio nonvoting member of the school board.  
        The authority for selection and employment of a superintendent 
        shall be vested in the school board in all cases.  An individual 
        employed by a school board as a superintendent shall have an 
        initial employment contract for a period of time no longer than 
        three years from the date of employment.  Any subsequent 
        employment contract must not exceed a period of three years.  A 
        school board, at its discretion, may or may not renew an 
        employment contract.  A school board shall not, by action or 
        inaction, extend the duration of an existing employment 
        contract.  Beginning 365 days prior to the expiration date of an 
        existing employment contract, a school board may negotiate and 
        enter into a subsequent employment contract to take effect upon 
        the expiration of the existing contract.  A subsequent contract 
        shall be contingent upon the employee completing the terms of an 
        existing contract.  If a contract between a school board and a 
        superintendent is terminated prior to the date specified in the 
        contract, the school board may not enter into another 
        superintendent contract with that same individual that has a 
        term that extends beyond the date specified in the terminated 
        contract.  A school board may terminate a superintendent during 
        the term of an employment contract for any of the grounds 
        specified in section 125.12, subdivision 6 or 8.  A 
        superintendent shall not rely upon an employment contract with a 
        school board to assert any other continuing contract rights in 
        the position of superintendent under section 125.12.  
        Notwithstanding the provisions of sections 122.532, 122.541, 
        125.12, subdivision 6a or 6b, or any other law to the contrary, 
        no individual shall have a right to employment as a 
        superintendent based on order of employment in any district.  If 
        two or more school districts enter into an agreement for the 
        purchase or sharing of the services of a superintendent, the 
        contracting districts have the absolute right to select one of 
        the individuals employed to serve as superintendent in one of 
        the contracting districts and no individual has a right to 
        employment as the superintendent to provide all or part of the 
        services based on order of employment in a contracting district. 
        The superintendent of a district shall perform the following:  
           (1) visit and supervise the schools in the district, report 
        and make recommendations about their condition when advisable or 
        on request by the board; 
           (2) recommend to the board employment and dismissal of 
        teachers; 
           (3) superintend school grading practices and examinations 
        for promotions; 
           (4) make reports required by the commissioner of children, 
        families, and learning; and 
           (5) by January 10, submit an annual report to the 
        commissioner in a manner prescribed by the commissioner, in 
        consultation with school districts, identifying the expenditures 
        that the district requires to ensure an 80 percent and a 90 
        percent student passage rate on the basic standards test taken 
        in the eighth grade, identifying the amount of expenditures that 
        the district requires to ensure a 99 percent student passage 
        rate on the basic standards test by 12th grade, and how much the 
        district is cross-subsidizing programs with special education, 
        compensatory, and general education revenue; and 
           (6) perform other duties prescribed by the board. 
           Sec. 17.  Minnesota Statutes 1996, section 123.35, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [LIMITATION ON PARTICIPATION AND FINANCIAL 
        SUPPORT.] (a) No school district shall be required by any type 
        of formal or informal agreement except an agreement to provide 
        building space according to paragraph (f), including a joint 
        powers agreement, or membership in any cooperative unit defined 
        in subdivision 19b, paragraph (d), to participate in or provide 
        financial support for the purposes of the agreement for a time 
        period in excess of one four fiscal year years, or the time 
        period set forth in this subdivision.  Any agreement, part of an 
        agreement, or other type of requirement to the contrary is void. 
           (b) This subdivision shall not affect the continued 
        liability of a school district for its share of bonded 
        indebtedness or other debt incurred as a result of any agreement 
        before July 1, 1993.  The school district is liable only until 
        the obligation or debt is discharged and only according to the 
        payment schedule in effect on July 1, 1993, except that the 
        payment schedule may be altered for the purpose of restructuring 
        debt or refunding bonds outstanding on July 1, 1993, if the 
        annual payments of the school district are not increased and if 
        the total obligation of the school district for its share of 
        outstanding bonds or other debt is not increased. 
           (c) To cease participating in or providing financial 
        support for any of the services or activities relating to the 
        agreement or to terminate participation in the agreement, the 
        school board shall adopt a resolution and notify other parties 
        to the agreement of its decision on or before February 1 of any 
        year.  The cessation or withdrawal shall be effective June 30 of 
        the same year except that for a member of an education district 
        organized under sections 122.91 to 122.95 or an intermediate 
        district organized under chapter 136D, cessation or withdrawal 
        shall be effective June 30 of the following fiscal year.  At the 
        option of the school board, cessation or withdrawal may be 
        effective June 30 of the following fiscal year for a district 
        participating in any type of agreement.  
           (d) Before issuing bonds or incurring other debt, the 
        governing body responsible for implementing the agreement shall 
        adopt a resolution proposing to issue bonds or incur other debt 
        and the proposed financial effect of the bonds or other debt 
        upon each participating district.  The resolution shall be 
        adopted within a time sufficient to allow the school board to 
        adopt a resolution within the time permitted by this paragraph 
        and to comply with the statutory deadlines set forth in sections 
        122.895, 125.12, and 125.17.  The governing body responsible for 
        implementing the agreement shall notify each participating 
        school board of the contents of the resolution.  Within 120 days 
        of receiving the resolution of the governing body, the school 
        board of the participating district shall adopt a resolution 
        stating: 
           (1) its concurrence with issuing bonds or incurring other 
        debt; 
           (2) its intention to cease participating in or providing 
        financial support for the service or activity related to the 
        bonds or other debt; or 
           (3) its intention to terminate participation in the 
        agreement. 
           A school board adopting a resolution according to clause 
        (1) is liable for its share of bonded indebtedness or other debt 
        as proposed by the governing body implementing the agreement.  A 
        school board adopting a resolution according to clause (2) is 
        not liable for the bonded indebtedness or other debt, as 
        proposed by the governing body, related to the services or 
        activities in which the district ceases participating or 
        providing financial support.  A school board adopting a 
        resolution according to clause (3) is not liable for the bonded 
        indebtedness or other debt proposed by the governing body 
        implementing the agreement. 
           (e) After July 1, 1993, a district is liable according to 
        paragraph (d) for its share of bonded indebtedness or other debt 
        incurred by the governing body implementing the agreement to the 
        extent that the bonds or other debt are directly related to the 
        services or activities in which the district participates or for 
        which the district provides financial support.  The district has 
        continued liability only until the obligation or debt is 
        discharged and only according to the payment schedule in effect 
        at the time the governing body implementing the agreement 
        provides notice to the school board, except that the payment 
        schedule may be altered for the purpose of refunding the 
        outstanding bonds or restructuring other debt if the annual 
        payments of the district are not increased and if the total 
        obligation of the district for the outstanding bonds or other 
        debt is not increased. 
           (f) A school district that is a member of a cooperative 
        unit as defined in subdivision 19b, paragraph (d), may obligate 
        itself to participate in and provide financial support for an 
        agreement with a cooperative unit to provide school building 
        space for a term not to exceed two years with an option on the 
        part of the district to renew for an additional two years. 
           (g) Notwithstanding any limitations imposed under this 
        subdivision, a school district may, according to section 123.36, 
        subdivision 10, enter into a lease of all or a portion of a 
        schoolhouse that is not needed for school purposes, including, 
        but not limited to, a lease with a term of more than one year. 
           Sec. 18.  Minnesota Statutes 1996, section 123.3514, is 
        amended by adding a subdivision to read: 
           Subd. 4f.  [PARTICIPATION IN HIGH SCHOOL 
        ACTIVITIES.] Enrolling in a course under this section shall not, 
        by itself, prohibit a pupil from participating in activities 
        sponsored by the pupil's high school. 
           Sec. 19.  Minnesota Statutes 1996, section 123.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  The board may provide for the 
        transportation of pupils to and from school and for any other 
        purpose.  The board may also provide for the transportation of 
        pupils to schools in other districts for grades and departments 
        not maintained in the district, including high school, at the 
        expense of the district, when funds are available therefor and 
        if agreeable to the district to which it is proposed to 
        transport the pupils, for the whole or a part of the school 
        year, as it may deem advisable, and subject to its rules.  In 
        any school district, the board shall arrange for the attendance 
        of all pupils living two miles or more from the school, except 
        pupils whose transportation privileges have been revoked under 
        section 123.805, subdivision 1, clause (6), or 123.7991, 
        paragraph (b), or whose privileges have been voluntarily 
        surrendered under subdivision 1a, through suitable provision for 
        transportation or through the boarding and rooming of the pupils 
        who may be more economically and conveniently provided for by 
        that means.  Arrangements for attendance may include a 
        requirement that parents or guardians request transportation 
        before it is provided.  The board shall provide transportation 
        to and from the home of a child with a disability not yet 
        enrolled in kindergarten when special instruction and services 
        under sections 120.17 and 120.1701 are provided in a location 
        other than in the child's home.  When transportation is 
        provided, scheduling of routes, establishment of the location of 
        bus stops, manner and method of transportation, control and 
        discipline of school children and any other matter relating 
        thereto shall be within the sole discretion, control, and 
        management of the school board.  The district may provide for 
        the transportation of pupils or expend a reasonable amount for 
        room and board of pupils whose attendance at school can more 
        economically and conveniently be provided for by that means or 
        who attend school in a building rented or leased by a district 
        within the confines of an adjacent district. 
           Sec. 20.  Minnesota Statutes 1996, section 123.39, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [VOLUNTARY SURRENDER OF TRANSPORTATION 
        PRIVILEGES.] The parent or guardian of a secondary student may 
        voluntarily surrender the secondary student's to and from school 
        transportation privileges granted under subdivision 1. 
           Sec. 21.  Minnesota Statutes 1996, section 123.805, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPREHENSIVE POLICY.] Each school 
        district shall develop and implement a comprehensive, written 
        policy governing pupil transportation safety, including 
        transportation of nonpublic school students, when applicable.  
        The policy shall, at minimum, contain: 
           (1) provisions for appropriate student bus safety training 
        under section 123.7991; 
           (2) rules governing student conduct on school buses and in 
        school bus loading and unloading areas; 
           (3) a statement of parent or guardian responsibilities 
        relating to school bus safety; 
           (4) provisions for notifying students and parents or 
        guardians of their responsibilities and the rules; 
           (5) an intradistrict system for reporting school bus 
        accidents or misconduct, and a system for dealing with local law 
        enforcement officials in cases of criminal conduct on a school 
        bus, and a system for reporting accidents, crimes, incidents of 
        misconduct, and bus driver dismissals to the department of 
        public safety under section 169.452; 
           (6) a discipline policy to address violations of school bus 
        safety rules, including procedures for revoking a student's bus 
        riding privileges in cases of serious or repeated misconduct; 
           (7) a system for integrating school bus misconduct records 
        with other discipline records; 
           (8) a statement of bus driver duties; 
           (9) planned expenditures for safety activities under 
        section 123.799 and, where applicable, provisions governing bus 
        monitor qualifications, training, and duties; 
           (10) rules governing the use and maintenance of type III 
        vehicles, drivers of type III vehicles, qualifications to drive 
        a type III vehicle, qualifications for a type III vehicle and 
        the circumstances under which a student may be transported in a 
        type III vehicle; 
           (11) operating rules and procedures; 
           (12) provisions for annual bus driver in-service training 
        and evaluation; 
           (13) emergency procedures; 
           (14) a system for maintaining and inspecting equipment; 
           (15) requirements of the school district, if any, that 
        exceed state law minimum requirements for school bus operations; 
        and 
           (16) requirements for basic first aid training, which shall 
        include the Heimlich maneuver and procedures for dealing with 
        obstructed airways, shock, bleeding, and seizures. 
           School districts are encouraged to use the model policy 
        developed by the Minnesota school boards association, the 
        department of public safety, and the department of children, 
        families, and learning, as well as the current edition of the 
        "National Standards for School Buses and Operations" published 
        by the National Safety Council, in developing safety policies.  
        Each district shall submit a copy of its policy under this 
        subdivision to the school bus safety advisory committee no later 
        than August 1, 1994.  Each district shall review its policy 
        annually and make appropriate amendments, which must be 
        submitted to the school bus safety advisory committee within one 
        month of approval by the school board. 
           Sec. 22.  Minnesota Statutes 1996, section 124.078, is 
        amended to read: 
           124.078 [PERMANENT SCHOOL FUND ADVISORY COMMITTEE.] 
           A state permanent school fund advisory committee is 
        established to advise the department of natural resources on the 
        management of permanent school fund land, which is held in trust 
        for the school districts of the state.  The advisory committee 
        shall consist of the following persons or their designees:  the 
        chairs of the education committees of the legislature, the 
        chairs of the senate committee on finance and house committee on 
        ways and means, the commissioner of children, families, and 
        learning, one superintendent from a nonmetropolitan district, 
        and one superintendent from a metropolitan area district.  The 
        school district superintendents shall be appointed by the 
        commissioner of children, families, and learning.  
           The advisory committee shall review the policies of the 
        department of natural resources and current statutes on 
        management of school trust fund lands at least semiannually and 
        shall recommend necessary changes in statutes, policy, and 
        implementation in order to ensure provident utilization of the 
        permanent school fund lands.  
           Sec. 23.  Minnesota Statutes 1996, section 124.225, 
        subdivision 7f, is amended to read: 
           Subd. 7f.  [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A 
        district shall reserve an amount equal to the greater of $500 or 
        $1.50 times the number of fund balance pupil units, for that 
        school year to provide student transportation safety programs 
        under section 123.799.  This revenue may only be used if the 
        district complies with the reporting requirements of section 
        123.7991, 123.805, 169.452, 169.4582, or 171.321, subdivision 5. 
           Sec. 24.  Minnesota Statutes 1996, section 124.225, 
        subdivision 8m, is amended to read: 
           Subd. 8m.  [TRANSPORTATION SAFETY AID.] A district's 
        transportation safety aid equals the district's reserved revenue 
        for transportation safety under subdivision 7f for that school 
        year.  Failure of a school district to comply with the reporting 
        requirements of section 123.7991, 123.805, 169.452, 169.4582, or 
        171.321, subdivision 5, may result in a withholding of that 
        district's transportation safety aid for that school year. 
           Sec. 25.  Minnesota Statutes 1996, section 124.646, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SCHOOL FOOD SERVICE FUND.] (a) The expenses 
        described in this subdivision must be recorded as provided in 
        this subdivision. 
           (b) In each school district, the expenses for a school food 
        service program for pupils must be attributed to a school food 
        service fund.  Under a food service program, the school food 
        service may prepare or serve milk, meals, or snacks in 
        connection with school or community service activities. 
           (c) Revenues and expenditures for food service activities 
        must be recorded in the food service fund.  The costs of 
        processing applications, accounting for meals, preparing and 
        serving food, providing kitchen custodial services, and other 
        expenses involving the preparing of meals or the kitchen section 
        of the lunchroom may be charged to the food service fund or to 
        the general fund of the district.  The costs of lunchroom 
        supervision, lunchroom custodial services, lunchroom utilities, 
        and other administrative costs of the food service program must 
        be charged to the general fund. 
           That portion of superintendent and fiscal manager costs 
        that can be documented as attributable to the food service 
        program may be charged to the food service fund provided that 
        the school district does not employ or contract with a food 
        service director or other individual who manages the food 
        service program, or food service management company.  If the 
        cost of the superintendent or fiscal manager is charged to the 
        food service fund, the charge must be at a wage rate not to 
        exceed the statewide average for food service directors as 
        determined by the department of children, families, and learning.
           (d) Capital expenditures for the purchase of food service 
        equipment must be made from the capital general fund and not the 
        food service fund, unless two conditions apply: 
           (1) the unreserved balance in the food service fund at the 
        end of the last fiscal year is greater than the cost of the 
        equipment to be purchased; and 
           (2) the department of children, families, and learning has 
        approved the purchase of the equipment. 
           (e) If the two conditions set out in paragraph (d) apply, 
        the equipment may be purchased from the food service fund. 
           (f) If a deficit in the food service fund exists at the end 
        of a fiscal year, and the deficit is not eliminated by revenues 
        from food service operations in the next fiscal year, then the 
        deficit must be eliminated by a permanent fund transfer from the 
        general fund at the end of that second fiscal year.  However, if 
        a district contracts with a food service management company 
        during the period in which the deficit has accrued, the deficit 
        must be eliminated by a payment from the food service management 
        company. 
           (g) Notwithstanding paragraph (f), a district may incur a 
        deficit in the food service fund for up to three years without 
        making the permanent transfer if the district submits to the 
        commissioner by January 1 of the second fiscal year a plan for 
        eliminating that deficit at the end of the third fiscal year. 
           (h) If a surplus in the food service fund exists at the end 
        of a fiscal year for three successive years, a district may 
        recode for that fiscal year the costs of lunchroom supervision, 
        lunchroom custodial services, lunchroom utilities, and other 
        administrative costs of the food service program charged to the 
        general fund according to paragraph (c) and charge those costs 
        to the food service fund in a total amount not to exceed the 
        amount of surplus in the food service fund. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, section 
        124.6475, is amended to read: 
           124.6475 [SUMMER FOOD SERVICE REPLACEMENT AID.] 
           States funds are available to compensate 
        department-approved summer food program sponsors for reduced 
        federal operating reimbursement rates under Public Law Number 
        104-193, the federal summer food service program.  A sponsor is 
        eligible for summer food service replacement aid equal to the 
        sum of the following amounts: 
           (1) for breakfast service, subtract the current year 
        maximum reimbursement rate from the 1996 maximum reimbursement 
        rate and multiply the result by the number of breakfasts the 
        district served up to four cents per breakfast served by the 
        sponsor during the current school program year; 
           (2) for lunch or supper service, subtract the current year 
        maximum reimbursement rate from the 1996 maximum reimbursement 
        rate and multiply the result by the number of lunches and 
        suppers the district served up to 14 cents per lunch or supper 
        served by the sponsor during the current school program year; 
        and 
           (3) for supplement service, subtract the current year 
        maximum reimbursement rate from the 1996 maximum reimbursement 
        rate and multiply the result by the number of up to ten cents 
        per supplement meals served by the district served sponsor 
        during the current school program year. 
           Sec. 27.  Minnesota Statutes 1997 Supplement, section 
        124.648, subdivision 3, is amended to read: 
           Subd. 3.  [PROGRAM GUIDELINES; DUTIES OF THE COMMISSIONER.] 
        (a) The commissioner shall: 
           (1) encourage all districts to participate in the school 
        milk program for kindergartners; 
           (2) prepare program guidelines, not subject to chapter 14 
        until July 1, 1998, which will effectively and efficiently 
        distribute appropriated and donated money to participating 
        districts; and 
           (3) seek donations and matching funds from appropriate 
        private and public sources. 
           (b) Program guidelines may provide for disbursement to 
        districts through a mechanism of prepayments or by reimbursement 
        for approved program expenses. 
           (c) It is suggested that the benefits of the school milk 
        program may reach the largest number of kindergarten students if 
        districts are allowed to submit annual bids stating the 
        per-serving level of support that would be acceptable to the 
        district for their participation in the program.  The 
        commissioner would review all bids received and approve bids in 
        sufficient number and value to maximize the provision of milk to 
        kindergarten students consistent with available funds. 
           Sec. 28.  Minnesota Statutes 1996, section 125.191, is 
        amended to read: 
           125.191 [LICENSE AND DEGREE EXEMPTION FOR HEAD COACH.] 
           Notwithstanding section 125.03, subdivision 1, a school 
        district may employ as a head varsity coach of an 
        interscholastic sport at its secondary school a person who does 
        not have a license as head varsity coach of interscholastic 
        sports and who does not have a bachelor's degree if: 
           (1) in the judgment of the school board, the person has the 
        knowledge and experience necessary to coach the sport; 
           (2) the position has been posted as a vacancy within the 
        present teaching staff for a period of 30 days and no licensed 
        coaches have applied for the position; 
           (3) the person can verify completion of six quarter 
        credits, or the equivalent, or 60 clock hours of instruction in 
        first aid and the care and prevention of athletic injuries; and 
           (4) the person (3) can verify completion of a coaching 
        methods or theory course. 
           Notwithstanding section 125.121, a person employed as a 
        head varsity coach under this section has an annual contract as 
        a coach that the school board may or may not renew as the board 
        sees fit, after annually posting the position as required in 
        clause (2) and no licensed coach has applied for the position. 
           Sec. 29.  Minnesota Statutes 1996, section 126.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Except for learning programs during summer, 
        flexible learning year programs authorized under sections 120.59 
        to 120.67, and learning year programs under section 121.585, a 
        school district shall not commence an elementary or secondary 
        school year prior to Labor Day September 1.  Days which are 
        devoted to teachers' workshops may be held before Labor Day 
        September 1.  Districts that enter into cooperative agreements 
        are encouraged to adopt similar school calendars. 
           Sec. 30.  Minnesota Statutes 1997 Supplement, section 
        169.01, subdivision 6, is amended to read: 
           Subd. 6.  [SCHOOL BUS.] "School bus" means a motor vehicle 
        used to transport pupils to or from a school defined in section 
        120.101, or to or from school-related activities, by the school 
        or a school district, or by someone under an agreement with the 
        school or a school district.  A school bus does not include a 
        motor vehicle transporting children to or from school for which 
        parents or guardians receive direct compensation from a school 
        district, a motor coach operating under charter carrier 
        authority, a transit bus providing services as defined in 
        section 174.22, subdivision 7, or a vehicle otherwise qualifying 
        as a type III vehicle under paragraph (5), when the vehicle is 
        properly registered and insured and being driven by an employee 
        or agent of a school district for nonscheduled transportation.  
        A school bus may be type A, type B, type C, or type D, or type 
        III as follows:  
           (1) A "type A school bus" is a conversion or body 
        constructed upon a van-type or cutaway front section vehicle 
        with a left-side driver's door, designed for carrying more than 
        ten persons.  This definition includes two classifications:  
        type A-I, with a gross vehicle weight rating (GVWR) over 10,000 
        pounds; and type A-II, with a GVWR of 10,000 pounds or less. 
           (2) A "type B school bus" is a conversion or body 
        constructed and installed upon a van or front-section vehicle 
        chassis, or stripped chassis, with a gross vehicle weight rating 
        of more than 10,000 pounds, designed for carrying more than ten 
        persons.  Part of the engine is beneath or behind the windshield 
        and beside the driver's seat.  The entrance door is behind the 
        front wheels. 
           (3) A "type C school bus" is a body installed upon a flat 
        back cowl chassis with a gross vehicle weight rating of more 
        than 10,000 pounds, designed for carrying more than ten 
        persons.  All of the engine is in front of the windshield and 
        the entrance door is behind the front wheels. 
           (4) A "type D school bus" is a body installed upon a 
        chassis, with the engine mounted in the front, midship or rear, 
        with a gross vehicle weight rating of more than 10,000 pounds, 
        designed for carrying more than ten persons.  The engine may be 
        behind the windshield and beside the driver's seat; it may be at 
        the rear of the bus, behind the rear wheels, or midship between 
        the front and rear axles.  The entrance door is ahead of the 
        front wheels. 
           (5) Type III school buses and type III Head Start buses are 
        restricted to passenger cars, station wagons, vans, and buses in 
        service after January 1, 1999, having a maximum an original 
        maximum manufacturer's rated seating capacity of ten or fewer 
        people, including the driver, and a gross vehicle weight rating 
        of 10,000 pounds or less.  In this subdivision, "gross vehicle 
        weight rating" means the value specified by the manufacturer as 
        the loaded weight of a single vehicle.  A "type III school bus" 
        and "type III Head Start bus" must not be outwardly equipped and 
        identified as a type A, B, C, or D school bus or type A, B, C, 
        or D Head Start bus. 
           Sec. 31.  Minnesota Statutes 1996, section 169.451, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RANDOM SPOT INSPECTIONS.] In addition to the 
        annual inspection, the Minnesota state patrol has authority to 
        conduct random, unannounced spot inspections of any school bus 
        or Head Start bus being operated within the state at the 
        location where the bus is kept when not in operation to 
        ascertain whether its construction, design, equipment, and color 
        comply it is in compliance with all provisions of law, including 
        the Minnesota school bus equipment standards in sections 
        169.4501 to 169.4504, subject to the procedures approved by the 
        commissioner. 
           Sec. 32.  Minnesota Statutes 1997 Supplement, section 
        290.0674, subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
        a credit against the tax imposed by this chapter in an amount 
        equal to the amount paid for education-related expenses for a 
        dependent in kindergarten through grade 12.  For purposes of 
        this section, "education-related expenses" means: 
           (1) fees or tuition for instruction by an instructor under 
        section 120.101, subdivision 7, clause (1), (2), (3), (4), or 
        (5), for instruction outside the regular school day or school 
        year, including tutoring, driver's education taken offered as 
        part of school curriculum, regardless of whether it is taken 
        from a public or private entity or summer camps, in grade or age 
        appropriate curricula that supplement curricula and instruction 
        available during the regular school year, that assists a 
        dependent to improve knowledge of core curriculum areas or to 
        expand knowledge and skills under the graduation rule under 
        section 121.11, subdivision 7c, and that do not include the 
        teaching of religious tenets, doctrines, or worship, the purpose 
        of which is to instill such tenets, doctrines, or worship; 
           (2) expenses for textbooks, including books and other 
        instructional materials and equipment used in elementary and 
        secondary schools in teaching only those subjects legally and 
        commonly taught in public elementary and secondary schools in 
        this state.  "Textbooks" does not include instructional books 
        and materials used in the teaching of religious tenets, 
        doctrines, or worship, the purpose of which is to instill such 
        tenets, doctrines, or worship, nor does it include books or 
        materials for extracurricular activities including sporting 
        events, musical or dramatic events, speech activities, driver's 
        education, or similar programs; 
           (3) a maximum expense of $200 per family for personal 
        computer hardware, excluding single purpose processors, and 
        educational software that assists a dependent to improve 
        knowledge of core curriculum areas or to expand knowledge and 
        skills under the graduation rule under section 121.11, 
        subdivision 7c, purchased for use in the taxpayer's home and not 
        used in a trade or business regardless of whether the computer 
        is required by the dependent's school; and 
           (4) the amount paid to others for transportation of a 
        dependent attending an elementary or secondary school situated 
        in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
        wherein a resident of this state may legally fulfill the state's 
        compulsory attendance laws, which is not operated for profit, 
        and which adheres to the provisions of the Civil Rights Act of 
        1964 and chapter 363. 
           Sec. 33.  [COMMISSIONER OF CHILDREN, FAMILIES, AND 
        LEARNING.] 
           The commissioner of children, families, and learning shall 
        apply directly to the Internal Revenue Service to obtain access 
        to federal income tax information for the purpose of determining 
        state school aids.  If the commissioner's request is approved, 
        then the commissioner shall report to the education committees 
        of the legislature on the changes needed in state statute. 
           Sec. 34.  [ACCELERATED TRANSITION PLAN.] 
           Notwithstanding Minnesota Statutes, section 122.23, 
        subdivision 2b, or other law to the contrary, independent school 
        district No. 2884, Red Rock Central, is authorized to terminate 
        all existing school board members' terms by the first Monday in 
        January 1999, and to hold elections for seven school board 
        members at the 1998 school district general election under 
        Minnesota Statutes, section 205A.04.  Of the seven board members 
        elected, three members shall be elected to serve four-year terms 
        and four members shall be elected to serve two-year terms.  Only 
        one board member from each election district shall be elected to 
        serve a four-year term.  Candidates must specify in their 
        affidavit the election district and the term of office to which 
        they are seeking election.  The school board members elected at 
        the 1998 school district general election shall assume office on 
        the first Monday in January 1999.  The school board of 
        independent school district No. 2884, Red Rock Central, then 
        shall consist of seven members until such time as the electors 
        in the school district vote on a proposition favoring a 
        six-member board under Minnesota Statutes, section 123.33, 
        subdivision 1. 
           Sec. 35.  [SCHOOL YEAR START DATE.] 
           Subdivision 1.  [BUFFALO.] Notwithstanding Minnesota 
        Statutes, section 126.12, subdivision 1, and Laws 1997, First 
        Special Session chapter 4, article 7, section 49, subdivision 1, 
        for the 1998-1999 and 1999-2000 school years only, independent 
        school district No. 877, Buffalo, may begin the school year any 
        day prior to Labor Day. 
           Subd. 2.  [SARTELL.] Notwithstanding Minnesota Statutes, 
        section 126.12, subdivision 1, and Laws 1997, First Special 
        Session chapter 4, article 7, section 49, subdivision 1, 
        independent school district No. 748, Sartell, may begin the 
        1998-1999 school year before Labor Day only by the number of 
        days necessary to accommodate the district building construction 
        project. 
           Subd. 3.  [HOLDINGFORD.] Notwithstanding Minnesota 
        Statutes, section 126.12, subdivision 1, and Laws 1997, First 
        Special Session chapter 4, article 7, section 49, subdivision 1, 
        independent school district No. 738, Holdingford, may begin the 
        1998-1999 school year on the Monday prior to Labor Day. 
           Subd. 4.  [BROWNS VALLEY.] Notwithstanding Minnesota 
        Statutes, section 126.12, subdivision 1, and Laws 1997 First 
        Special Session, chapter 4, article 7, section 49, subdivision 
        1, independent school district No. 801, Browns Valley, may begin 
        the 1998-99 school year on August 24, 1998, to accommodate its 
        shared school calendar with the Sisseton, South Dakota, school 
        district. 
           Subd. 5.  [FARIBAULT ACADEMIES.] Notwithstanding Minnesota 
        Statutes, section 126.12, subdivision 1, and Laws 1997, First 
        Special Session chapter 4, article 7, section 49, subdivision 1, 
        for the 1998-1999 and 1999-2000 school years only, Faribault 
        Academies may begin the school year any day prior to Labor Day. 
           Subd. 6.  [CROOKSTON.] Notwithstanding Minnesota Statutes, 
        section 126.12, subdivision 1, and Laws 1997, First Special 
        Session chapter 4, article 7, section 49, subdivision 1, for the 
        1998-1999 school year only, independent school district No. 593, 
        Crookston, may begin the school year any day prior to Labor Day. 
           Subd. 7.  [FERTILE-BELTRAMI.] Notwithstanding Minnesota 
        Statutes, section 126.12, subdivision 1, and Laws 1997, First 
        Special Session chapter 4, article 7, section 49, subdivision 1, 
        for the 1998-1999 school year only, independent school district 
        No. 599, Fertile-Bertrami, may begin the school year any day 
        prior to Labor Day. 
           Subd. 8.  [FISHER.] Notwithstanding Minnesota Statutes, 
        section 126.12, subdivision 1, and Laws 1997, First Special 
        Session chapter 4, article 7, section 49, subdivision 1, for the 
        1998-1999 school year only, independent school district No. 600, 
        Fisher, may begin the school year any day prior to Labor Day. 
           Sec. 36.  [FUND TRANSFERS.] 
           Subdivision 1.  [ADA-BORUP.] Notwithstanding Minnesota 
        Statutes, section 124.83, subdivision 6, independent school 
        district No. 2854, Ada-Borup, may use up to $90,000 of its 
        health and safety revenue for capital improvements, equipment, 
        or furnishings for new facilities. 
           Subd. 2.  [LYND.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1998, independent 
        school district No. 415, Lynd, may permanently transfer $100,000 
        from reserve accounts in the general fund to the unreserved 
        general fund.  The transfer may be made from the reemployment 
        account and the bus purchase account.  Transfers from the 
        reemployment and bus purchase accounts may be made without 
        making a levy reduction. 
           Subd. 3.  [RUSSELL.] Notwithstanding Minnesota Statutes, 
        section 121.912 or 121.9121, on June 30, 1998, independent 
        school district No. 418, Russell, may permanently transfer up to 
        $150,000 from its capital expenditure fund to the district's 
        general fund.  The transfer must not include health and safety 
        or handicapped access revenue. 
           Subd. 4.  [WIN-E-MAC.] Notwithstanding Minnesota Statutes, 
        section 121.912 or 121.9121, on June 30, 1998, independent 
        school district No. 2609, Win-E-Mac, may permanently transfer 
        the balance of its health and safety account to its building 
        construction fund.  This is an eligible expenditure of health 
        and safety revenue. 
           Sec. 37.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] The sums indicated in this section are appropriated 
        from the general fund to the department of children, families, 
        and learning for the fiscal years designated. 
           Subd. 2.  [MEDIA SPECIALIST.] For a media specialist for 
        independent school district No. 707, Nett Lake: 
             $   34,000     .....     1999
           Sec. 38.  [REPEALER.] 
           (a) Minnesota Statutes 1996, section 121.11, subdivisions 
        5, 7, 7b, 9, 11, 12, and 14; and Minnesota Statutes 1997 
        Supplement, section 121.11, subdivision 7e, are repealed 
        effective December 31, 1999. 
           (b) Minnesota Statutes 1996, section 121.11, subdivision 
        7d, is repealed effective January 10, 1999. 
           (c) Minnesota Statutes 1996, section 124.647; and Minnesota 
        Statutes 1997 Supplement, section 169.452, are repealed. 
           Sec. 39.  [EFFECTIVE DATES.] 
           (a) Sections 1 to 13 are effective December 31, 1999. 
           (b) Sections 14, 28, 34, and 35 are effective the day 
        following final enactment. 
           (c) Sections 17, 25, and 26 are effective July 1, 1998. 
           (d) Section 29 is effective for the 2000-2001 school year. 
           (e) Section 36 is effective June 30, 1998. 
                                   ARTICLE 7 
                                   LIBRARIES 
           Section 1.  Laws 1997, First Special Session chapter 4, 
        article 8, section 4, subdivision 3, is amended to read: 
           Subd. 3.  [BOARD; APPOINTMENTS.] The resolution in 
        subdivision 2 shall provide for a library board of five seven 
        members as follows:  two members appointed by the school board 
        of independent school district No. 319, one member appointed by 
        each town board located within independent school district No. 
        319 boundaries, one member appointed by the council of the city 
        of Nashwauk, and one member appointed by the Itasca county board 
        to represent the unorganized towns within the school district 
        territory. 
           Sec. 2.  [APPROPRIATION; DEPARTMENT OF CHILDREN, FAMILIES, 
        AND LEARNING.] 
           Subdivision 1.  [APPROPRIATIONS.] The sums indicated in 
        this section are appropriated from the general fund to the 
        department of children, families, and learning for the fiscal 
        years designated. 
           Subd. 2.  [REGIONAL LIBRARY SYSTEMS.] For regional library 
        systems: 
               $250,000     .....     1999 
        The money must be divided equally among the 12 regional public 
        library systems established under Minnesota Statutes, section 
        134.20, for use in providing library services. 
           Subd. 3.  [LIBRARY FOR THE BLIND; APPROPRIATION.] For the 
        purchase and installation of online catalog software for the 
        Minnesota library for the blind and physically handicapped: 
                $60,000     .....     1999 
                                   ARTICLE 8
                                 STATE AGENCIES
           Section 1.  Laws 1997, First Special Session chapter 4, 
        article 10, section 3, subdivision 2, is amended to read: 
           Subd. 2.  [DEPARTMENT.] For the department of children, 
        families, and learning: 
             $24,360,000 $24,810,000   .....      1998
             $23,978,000 $24,428,000   .....      1999
           (a) Any balance in the first year does not cancel but is 
        available in the second year. 
           (b) $21,000 each year is from the trunk highway fund. 
           (c) $622,000 in 1998 and $627,000 in 1999 is for the 
        academic excellence foundation. 
           Up to $50,000 each year is contingent upon the match of $1 
        in the previous year from private sources consisting of either 
        direct monetary contributions or in-kind contributions of 
        related goods or services, for each $1 of the appropriation.  
        The commissioner of children, families, and learning must 
        certify receipt of the money or documentation for the private 
        matching funds or in-kind contributions.  The unencumbered 
        balance from the amount actually appropriated from the 
        contingent amount in 1998 does not cancel but is available in 
        1999.  The amount carried forward must not be used to establish 
        a larger annual base appropriation for later fiscal years. 
           (d) $207,000 in 1998 and $210,000 in 1999 is for the state 
        board of education. 
           (e) $230,000 in 1998 and $234,000 in 1999 is for the board 
        of teaching. 
           (f) The expenditures of federal grants and aids as shown in 
        the biennial budget document and its supplements are approved 
        and appropriated and shall be spent as indicated. 
           (g) The department of children, families, and learning 
        shall develop a performance report on the quality of its 
        programs and services.  The report must be consistent with the 
        process specified in Minnesota Statutes, sections 15.90 to 
        15.92.  The goals, objectives, and measures of this report must 
        be developed in cooperation with the chairs of the finance 
        divisions of the education committees of the house of 
        representatives and senate, the department of finance, and the 
        office of legislative auditor.  The report must include data to 
        indicate the progress of the department in meeting its goals and 
        objectives. 
           (h) At least $50,000 is to ensure compliance with state and 
        federal laws prohibiting discrimination because of race, 
        religion, or sex.  The department shall use the appropriation to 
        provide state-level leadership on equal education opportunities 
        which promote elimination of discriminatory practices in the 
        areas of race, religion, and sex in public schools and public 
        educational agencies under its general supervision and on 
        activities including, at least, compliance monitoring and 
        voluntary compliance when local school district deficiencies are 
        found. 
           (i) Notwithstanding Minnesota Statutes, section 15.53, 
        subdivision 2, the commissioner of children, families, and 
        learning may contract with a school district for a period no 
        longer than five consecutive years to work in the development or 
        implementation of the graduation rule.  The commissioner may 
        contract for services and expertise as necessary.  The contracts 
        are not subject to Minnesota Statutes, sections 16B.06 to 16B.08.
           (j) In preparing the department budget for fiscal years 
        2000-2001, the department shall shift all administrative funding 
        from aids appropriations into the appropriation for the 
        department. 
           (k) Reallocations of excesses under Minnesota Statutes, 
        section 124.14, subdivision 7, from appropriations within this 
        act shall only be made to deficiencies in programs with 
        appropriations contained within this act. 
           (l) $850,000 $1,300,000 each year is for costs associated 
        with educational adequacy litigation costs and may only be used 
        for those purposes.  These appropriations are one-time 
        only.  Amounts appropriated for one year of the biennium may be 
        used for the other.  
           (m) Collaborative efforts between the department of 
        children, families, and learning and the office of technology, 
        as specified in Minnesota Statutes, section 237A.015, include: 
           (1) advising the commissioner of children, families, and 
        learning on new and emerging technologies, potential business 
        partnerships, and technical standards; 
           (2) assisting the commissioner of children, families, and 
        learning in the sharing of data between state agencies relative 
        to children's programs; and 
           (3) as requested by the commissioner of children, families, 
        and learning, assisting in collaborative efforts for joint 
        prekindergarten through grade 12 and higher education projects, 
        including the learning network. 
        The commissioner of children, families, and learning shall have 
        final approval for prekindergarten through grade 12 programs and 
        lifelong learning programs, grant awards, and funding decisions. 
           Sec. 2.  Laws 1997, First Special Session chapter 4, 
        article 10, section 4, is amended to read: 
           Sec. 4.  [APPROPRIATIONS; LOLA AND RUDY PERPICH MINNESOTA 
        CENTER FOR ARTS EDUCATION.] 
           The sums indicated in this section are appropriated from 
        the general fund to the center for arts education for the fiscal 
        years designated: 
            $5,541,000 $5,559,000     .....     1998
            $6,054,000 $6,120,000     .....     1999
           Of the fiscal year 1998 appropriation, $154,000 is to fund 
        artist and arts organization participation in the education 
        residency and education technology projects, $75,000 is for 
        school support for the residency project, and $121,000 is for 
        further development of the partners:  arts and school for 
        students (PASS) program, including pilots.  Of the fiscal year 
        1999 appropriation, $154,000 is to fund artist and arts 
        organizations participation in the education residency project, 
        $75,000 is for school support for the residency project, and 
        $121,000 is to fund the PASS program, including additional 
        pilots, and $30,000 is for staff development activities related 
        to implementation of the graduation rule.  The guidelines for 
        the education residency project and the pass program shall be 
        developed and defined by the center for arts education in 
        cooperation with the Minnesota arts board.  The Minnesota arts 
        board shall participate in the review and allocation process.  
        The center for arts education and the Minnesota arts board shall 
        cooperate to fund these projects. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 3.  Laws 1997, First Special Session chapter 4, 
        article 10, section 5, is amended to read: 
           Sec. 5.  [APPROPRIATIONS; FARIBAULT ACADEMIES.] 
           The sums indicated in this section are appropriated from 
        the general fund to the department of children, families, and 
        learning for the Faribault academies for the fiscal years 
        designated:  
             $8,910,000 $8,949,000     .....     1998
             $8,908,000 $8,986,000     .....     1999 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           In the next biennial budget, the academies must assess 
        their progress in meeting the established performance measures 
        for the Faribault academies and inform the legislature on the 
        content of that assessment.  The information must include an 
        assessment of its progress by consumers and employees. 
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective the day following final 
        enactment. 
                                   ARTICLE 9 
                                 MISCELLANEOUS 
           Section 1.  [123.3517] [STUDENT ACHIEVEMENT LEVELS.] 
           Subdivision 1.  [STATE EXPECTATIONS; PLAN.] (a) Each school 
        year, a school district must determine if the student 
        achievement levels at each school site meet state expectations.  
        If student achievement levels at a school site do not meet state 
        expectations for two out of three consecutive school years, 
        beginning with the 1999-2000 school year, the district must work 
        with the school site to adopt a plan to raise student 
        achievement levels to state expectations.  The legislature will 
        determine state expectations after receiving a recommendation 
        from the commissioner of children, families, and learning.  The 
        commissioner must submit its recommendations to the legislature 
        by December 15, 1998. 
           (b) The department must assist the district and the school 
        site in developing a plan to improve student achievement.  The 
        plan must include parental involvement components. 
           Sec. 2.  [145.9266] [FETAL ALCOHOL SYNDROME CAMPAIGN AND 
        EDUCATION.] 
           Subdivision 1.  [PUBLIC AWARENESS AND EDUCATION.] The 
        commissioner of health shall design and implement an ongoing 
        statewide campaign to raise awareness and educate the public 
        about fetal alcohol syndrome and other effects of prenatal 
        alcohol exposure.  The campaign shall include messages directed 
        to the general population as well as culturally specific and 
        community-based messages.  A toll-free resource and referral 
        telephone line shall be included in the messages.  The 
        commissioner of health shall conduct an evaluation to determine 
        the effectiveness of the campaign. 
           Subd. 2.  [STATEWIDE NETWORK OF FETAL ALCOHOL SYNDROME 
        DIAGNOSTIC CLINICS.] A statewide network of regional fetal 
        alcohol syndrome diagnostic clinics shall be developed between 
        the department of health and the University of Minnesota.  This 
        collaboration shall be based on a statewide needs assessment and 
        shall include involvement from consumers, providers, and 
        payors.  By the end of calendar year 1998, a plan shall be 
        developed for the clinic network, and shall include a 
        comprehensive evaluation component.  Sites shall be established 
        in calendar year 1999.  The commissioner shall not access or 
        collect individually identifiable data for the statewide network 
        of regional fetal alcohol syndrome diagnostic clinics.  Data 
        collected at the clinics shall be maintained according to 
        applicable data privacy laws, including section 144.335. 
           Subd. 3.  [PROFESSIONAL TRAINING AND EDUCATION ABOUT FETAL 
        ALCOHOL SYNDROME.] (a) The commissioner of health, in 
        collaboration with the board of medical practice, the board of 
        nursing, and other professional boards and state agencies, shall 
        develop curricula and materials about fetal alcohol syndrome for 
        professional training of health care providers, social service 
        providers, educators, and judicial and corrections systems 
        professionals.  The training and curricula shall increase 
        knowledge and develop practical skills of professionals to help 
        them address the needs of at-risk pregnant women and the needs 
        of individuals affected by fetal alcohol syndrome or fetal 
        alcohol effects and their families. 
           (b) Training for health care providers shall focus on skill 
        building for screening, counseling, referral, and follow-up for 
        women using or at risk of using alcohol while pregnant.  
        Training for health care professionals shall include methods for 
        diagnosis and evaluation of fetal alcohol syndrome and fetal 
        alcohol effects.  Training for education, judicial, and 
        corrections professionals shall involve effective education 
        strategies, methods to identify the behaviors and learning 
        styles of children with alcohol-related birth defects, and 
        methods to identify available referral and community resources. 
           (c) Training and education for social service providers 
        shall focus on resources for assessing, referring, and treating 
        at-risk pregnant women, changes in the mandatory reporting and 
        commitment laws, and resources for affected children and their 
        families.  
           Subd. 4.  [FETAL ALCOHOL SYNDROME COMMUNITY GRANT EDUCATION 
        PROGRAM.] The commissioner of health shall administer a grant 
        education program to provide money to community organizations 
        and coalitions to collaborate on fetal alcohol syndrome 
        prevention and intervention strategies and activities.  The 
        commissioner shall disburse grant money through a request for 
        proposal process or sole-source distribution where appropriate, 
        and shall include at least one grant award for transitional 
        skills and services for individuals with fetal alcohol syndrome 
        or fetal alcohol effects. 
           Subd. 5.  [SCHOOL PILOT PROGRAMS.] (a) The commissioner of 
        children, families, and learning shall award up to four grants 
        to schools for pilot programs to identify and implement 
        effective educational strategies for individuals with fetal 
        alcohol syndrome and other alcohol-related birth defects.  
           (b) One grant shall be awarded in each of the following age 
        categories:  
           (1) birth to three years; 
           (2) three to five years; 
           (3) six to 12 years; and 
           (4) 13 to 18 years.  
           (c) Grant proposals must include an evaluation plan, 
        demonstrate evidence of a collaborative or multisystem approach, 
        provide parent education and support, and show evidence of a 
        child- and family-focused approach consistent with 
        research-based best educational practices and other guidelines 
        developed by the department of children, families, and learning. 
           (d) Children participating in the pilot program sites may 
        be identified through child find activities or a diagnostic 
        clinic.  No identification activity may be undertaken without 
        the consent of a child's parent or guardian. 
           Subd. 6.  [FETAL ALCOHOL COORDINATING BOARD; DUTIES.] (a) 
        The fetal alcohol coordinating board consists of: 
           (1) the commissioners of health, human services, 
        corrections, public safety, economic security, and children, 
        families, and learning; 
           (2) the director of the office of strategic and long-range 
        planning; 
           (3) the chair of the maternal and child health advisory 
        task force established by section 145.881, or the chair's 
        designee; 
           (4) a representative of the University of Minnesota 
        academic health center, appointed by the provost; 
           (5) five members from the general public appointed by the 
        governor, one of whom must be a family member of an individual 
        with fetal alcohol syndrome or fetal alcohol effect; and 
           (6) one member from the judiciary appointed by the chief 
        justice of the supreme court. 
        Terms, compensation, removal, and filling of vacancies of 
        appointed members are governed by section 15.0575.  The board 
        shall elect a chair from its membership to serve a one-year 
        term.  The commissioner of health shall provide staff and 
        consultant support for the board.  Support must be provided 
        based on an annual budget and work plan developed by the board.  
        The board shall contract with the department of health for 
        necessary administrative services.  Administrative services 
        include personnel, budget, payroll, and contract 
        administration.  The board shall adopt an annual budget and work 
        program. 
           (b) Board duties include:  
           (1) reviewing programs of state agencies that involve fetal 
        alcohol syndrome and coordinating those that are 
        interdepartmental in nature; 
           (2) providing an integrated and comprehensive approach to 
        fetal alcohol syndrome prevention and intervention strategies 
        both at a local and statewide level; 
           (3) approving on an annual basis the statewide public 
        awareness campaign as designed and implemented by the 
        commissioner of health under subdivision 1; 
           (4) reviewing fetal alcohol syndrome community grants 
        administered by the commissioner of health under subdivision 4; 
        and 
           (5) submitting a report to the governor on January 15 of 
        each odd-numbered year summarizing board operations, activities, 
        findings, and recommendations, and fetal alcohol syndrome 
        activities throughout the state. 
           (c) The board expires on January 1, 2001. 
           Subd. 7.  [FEDERAL FUNDS; CONTRACTS; DONATIONS.] The fetal 
        alcohol coordinating board may apply for, receive, and disburse 
        federal funds made available to the state by federal law or 
        rules adopted for any purpose related to the powers and duties 
        of the board.  The board shall comply with any requirements of 
        federal law, rules, and regulations in order to apply for, 
        receive, and disburse funds.  The board may contract with or 
        provide grants to public and private nonprofit entities.  The 
        board may accept donations or grants from any public or private 
        entity.  Money received by the board must be deposited in a 
        separate account in the state treasury and invested by the state 
        board of investment.  The amount deposited, including investment 
        earnings, is appropriated to the board to carry out its duties.  
        Money deposited in the state treasury shall not cancel.  
           Sec. 3.  Minnesota Statutes 1996, section 254A.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MATERNAL AND CHILD SERVICE PROGRAMS.] (a) 
        The commissioner shall fund maternal and child health and social 
        service programs designed to improve the health and functioning 
        of children born to mothers using alcohol and controlled 
        substances.  Comprehensive programs shall include immediate and 
        ongoing intervention, treatment, and coordination of medical, 
        educational, and social services through a child's preschool 
        years.  Programs shall also include research and evaluation to 
        identify methods most effective in improving outcomes among this 
        high-risk population.  The commissioner shall ensure that the 
        programs are available on a statewide basis to the extent 
        possible with available funds.  
           (b) The commissioner of human services shall develop models 
        for the treatment of children ages 6 to 12 who are in need of 
        chemical dependency treatment.  The commissioner shall fund at 
        least two pilot projects with qualified providers to provide 
        nonresidential treatment for children in this age group.  Model 
        programs must include a component to monitor and evaluate 
        treatment outcomes. 
           Sec. 4.  Minnesota Statutes 1996, section 254A.17, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [INTERVENTION, EDUCATION, AND ADVOCACY PROGRAM.] 
        Within the limits of money available, the commissioner of human 
        services shall fund voluntary hospital-based outreach programs 
        targeted at women who deliver children affected by prenatal 
        alcohol or drug use.  The program shall help women obtain 
        treatment, stay in recovery, and plan any future pregnancies.  
        An advocate shall be assigned to each woman in the program to 
        provide education, guidance, and advice with respect to 
        treatment programs, child safety and parenting, housing, family 
        planning, and any other personal issues that are barriers to 
        remaining free of chemical dependence.  The commissioner shall 
        develop an evaluation component and provide centralized 
        coordination of the evaluation process. 
           Sec. 5.  Laws 1996, chapter 412, article 12, section 12, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPORT.] By January 1, 1999 2000, the selected 
        district shall submit a report to the commissioner on the 
        program with recommendations for expanding it or making changes. 
           Sec. 6.  Laws 1997, First Special Session chapter 4, 
        article 9, section 12, subdivision 6, is amended to read: 
           Subd. 6.  [ELECTRONIC CURRICULUM RESOURCE.] For support of 
        electronic curriculum development: 
             $4,000,000     .....     1998
           Of this amount, $2,700,000 is for the electronic curriculum 
        resource under section 5, $1,000,000 of which is for the 
        collaborative arts project in section 5, subdivision 1, 
        paragraph (c), clause (5). 
           Of this amount, $300,000 is for the purposes of the Gopher 
        Biology Shareware Project under section 5, subdivision 1, 
        paragraph (c), clause (1). 
           The department may use up to $100,000 for quality control 
        of the curriculum repository. 
           This appropriation is available until June 30, 1999.  
           Sec. 7.  [DATABASE ACCESS PROGRAM FOR PUBLIC LIBRARIES AND 
        SCHOOL MEDIA CENTERS.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
        children, families, and learning shall establish a program to 
        provide statewide licenses to commercial electronic databases of 
        periodicals, encyclopedias, and associated reference materials 
        for school media centers and public libraries.  The 
        commissioner, in consultation with Minitex and in cooperation 
        with the Library Planning Task Force, shall solicit proposals 
        for access licenses to commercial vendors of the databases.  
        Responses to those proposals shall be evaluated by staff of the 
        office of library development and services in the department of 
        children, families, and learning, Minitex staff, and a 
        representative panel of school media specialists and public 
        librarians. 
           Subd. 2.  [ELIGIBILITY.] Access to the selected databases 
        shall be made available to a school or school district that is a 
        member of a multicounty, multitype library system as defined in 
        Minnesota Statutes, section 134.001, subdivision 6, or a public 
        library as defined in Minnesota Statutes, section 134.001, 
        subdivision 2, that is a member of a multicounty, multitype 
        library system.  With appropriate authentication any user of an 
        eligible library may have access to the databases from a remote 
        site. 
           Subd. 3.  [RESOURCE GRANTS.] Graduation rule resource 
        grants are available for the purposes of this section. 
           Sec. 8.  [CITY OF EAST GRAND FORKS; APPROPRIATION.] 
           $650,000 is appropriated in fiscal year 1998 from the 
        general fund to the department of public safety for a grant to 
        the city of East Grand Forks to make a loan for the nonfederal 
        share of flood costs for educational facilities in East Grand 
        Forks. 
           Sec. 9.  [APPROPRIATIONS.] 
           (a) $5,000,000 is appropriated in 1999 from the general 
        fund to the commissioner of health for the fetal alcohol 
        syndrome initiative in section 2. 
           (b)(1) Of the appropriation in paragraph (a), $5,000,000 in 
        fiscal year 1999 is from the general fund to the commissioner 
        for the fetal alcohol syndrome/fetal alcohol effect (FAS/FAE) 
        initiatives specified in paragraphs (2) to (11). 
           (2) Of the amount in paragraph (a), $200,000 is transferred 
        to the commissioner of children, families, and learning for 
        school-based pilot programs to identify and implement effective 
        educational strategies for individuals with FAS/FAE. 
           (3) Of the amount in paragraph (a), $800,000 is for the 
        public awareness campaign under Minnesota Statutes, section 
        145.9266, subdivision 1. 
           (4) Of the amount in paragraph (a), $400,000 is to develop 
        a statewide network of regional FAS diagnostic clinics under 
        Minnesota Statutes, section 145.9266, subdivision 2. 
           (5) Of the amount in paragraph (a), $150,000 is for 
        professional training about FAS under Minnesota Statutes, 
        section 145.9266, subdivision 3. 
           (6) Of the amount in paragraph (a), $350,000 is for the 
        fetal alcohol coordinating board under Minnesota Statutes, 
        section 145.9266, subdivision 6. 
           (7) Of the amount in paragraph (a), $800,000 is transferred 
        to the commissioner of human services to expand the maternal and 
        child health social service programs under Minnesota Statutes, 
        section 254A.17, subdivision 1.  
           (8) Of the amount in paragraph (a), $200,000 is for the 
        commissioner to study the extent of fetal alcohol syndrome in 
        the state. 
           (9) Of the amount in paragraph (a), $400,000 is transferred 
        to the commissioner of human services for the intervention and 
        advocacy program under Minnesota Statutes, section 254A.17, 
        subdivision 1b. 
           (10) Of the amount in paragraph (a), $850,000 is for the 
        FAS community grant program under Minnesota Statutes, section 
        145.9266, subdivision 4. 
           (11) Of the amount in paragraph (a), $850,000 is 
        transferred to the commissioner of human services to expand 
        treatment services and halfway houses for pregnant women and 
        women with children who abuse alcohol during pregnancy. 
           (c) Notwithstanding chapter 645 or any other law to the 
        contrary, if the fetal alcohol syndrome initiative in this 
        article is enacted into law in the same or a substantially 
        similar form during the 1998 regular legislative session in S.F. 
        No. 3346 or other legislation, then the provisions in section 2 
        and this subdivision are not effective. 
           Sec. 10.  [EFFECTIVE DATES.] 
           Sections 1, 6, and 8 are effective the day following final 
        enactment. 
           Presented to the governor April 10, 1998 
           Signed by the governor April 21, 1998, 9:32 a.m.