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

                              CHAPTER 9-H.F.No. 51 
                  An act relating to education; providing for early 
                  childhood, family, and kindergarten through grade 12 
                  education including general education, education 
                  excellence, special programs, facilities and 
                  technology, nutrition, school accounting, other 
                  programs, libraries, early childhood family support, 
                  prevention, self-sufficiency and life long learning, 
                  state agencies, deficiencies, and technical 
                  amendments; providing for rulemaking; appropriating 
                  money; amending Minnesota Statutes 2002, sections 
                  12.21, subdivision 3; 84A.51, subdivision 4; 119A.52; 
                  119A.53; 119B.011, subdivision 20; 120A.05, 
                  subdivisions 9, 11; 120A.24, subdivision 4; 120A.41; 
                  121A.21; 121A.41, subdivision 10; 121A.55; 121A.61, 
                  subdivision 3; 121A.64; 122A.09, subdivisions 4, 10; 
                  122A.12, subdivisions 1, 2; 122A.18, subdivision 7a; 
                  122A.21; 122A.22; 122A.41, subdivision 2; 122A.414, by 
                  adding a subdivision; 122A.415, subdivisions 1, 3; 
                  122A.58; 122A.63, subdivision 3; 123A.06, subdivision 
                  3; 123A.18, subdivision 2; 123A.73, subdivisions 3, 4, 
                  5; 123B.02, subdivision 1; 123B.14, subdivision 1; 
                  123B.51, subdivisions 3, 4; 123B.52, by adding a 
                  subdivision; 123B.53, subdivision 4; 123B.57, 
                  subdivisions 1, 4, 6; 123B.59, subdivisions 1, 2, 3, 
                  5, by adding a subdivision; 123B.63, subdivisions 1, 
                  2, 3, 4; 123B.72, subdivision 3; 123B.75, subdivision 
                  5; 123B.88, subdivision 2; 123B.90, subdivisions 2, 3; 
                  123B.91, subdivision 1; 123B.92, subdivisions 1, 3, 9; 
                  123B.93; 124D.03, subdivision 12; 124D.081, by adding 
                  a subdivision; 124D.09, subdivisions 3, 9, 10, 13, 16, 
                  20; 124D.10, subdivisions 2a, 3, 4, 13, 16, 20, 23a; 
                  124D.11, subdivisions 1, 2, 4, 6, 9; 124D.118, 
                  subdivision 4; 124D.13, subdivisions 2, 4, 8; 
                  124D.135, subdivisions 1, 8; 124D.15, subdivision 7; 
                  124D.16, subdivisions 1, 6; 124D.19, subdivision 3; 
                  124D.20, subdivisions 3, 5, by adding subdivisions; 
                  124D.22, subdivision 3; 124D.42, subdivision 6; 
                  124D.454, subdivisions 1, 2, 3, 8, 10, by adding a 
                  subdivision; 124D.52, subdivisions 1, 3; 124D.531, 
                  subdivisions 1, 2, 4, 7; 124D.59, subdivision 2; 
                  124D.65, subdivision 5; 124D.86, subdivisions 1a, 3, 
                  4, 5, 6; 125A.05; 125A.12; 125A.21, subdivision 2; 
                  125A.28; 125A.30; 125A.76, subdivisions 1, 4; 125A.79, 
                  subdivisions 1, 6; 126C.05, subdivisions 8, 14, 15, 
                  16, 17, by adding a subdivision; 126C.10, subdivisions 
                  1, 3, 4, 17, 24, 28, by adding subdivisions; 126C.13, 
                  subdivision 4; 126C.15, subdivision 1; 126C.17, 
                  subdivisions 1, 2, 5, 7, 7a, 9, 13; 126C.21, 
                  subdivision 3; 126C.40, subdivision 1; 126C.42, 
                  subdivision 1; 126C.43, subdivisions 2, 3; 126C.44; 
                  126C.45; 126C.457; 126C.48, subdivision 3; 126C.63, 
                  subdivisions 5, 8; 126C.69, subdivisions 2, 9; 
                  127A.05, subdivision 4; 127A.45, subdivisions 2, 3, 
                  7a, 10, 12, 13, 14, 14a, 16; 127A.47, subdivisions 7, 
                  8; 127A.49, subdivisions 2, 3; 128C.02, subdivision 1; 
                  128C.05, by adding a subdivision; 128D.11, subdivision 
                  8; 134.34, subdivision 4; 134.47, subdivision 1; 
                  169.26, subdivision 3; 169.28, subdivision 1; 169.435; 
                  169.449, subdivision 1; 169.4501, subdivisions 3, 4; 
                  169.4503, subdivision 4; 169.454, subdivisions 2, 6; 
                  169.973, subdivision 1; 171.321, subdivision 5; 
                  178.02, subdivision 1; 200.02, subdivisions 7, 23; 
                  205A.03, subdivisions 1, 3, 4; 205A.06, subdivision 
                  1a; 205A.07, by adding a subdivision; 268.052, 
                  subdivisions 2, 4; 273.138, subdivision 6; 298.28, 
                  subdivision 4; 475.61, subdivisions 1, 3, 4; 611A.78, 
                  subdivision 1; Laws 1965, chapter 705, as amended; 
                  Laws 2001, First Special Session chapter 6, article 2, 
                  section 72; proposing coding for new law in Minnesota 
                  Statutes, chapters 123B; 124D; 125A; 126C; 127A; 134; 
                  repealing Minnesota Statutes 2002, sections 15.014, 
                  subdivision 3; 93.22, subdivision 2; 93.223, 
                  subdivision 1; 122A.62; 122A.64; 122A.65; 123A.73, 
                  subdivisions 7, 10, 11; 123B.81, subdivision 6; 
                  123B.90, subdivision 1; 124D.09, subdivision 15; 
                  124D.115; 124D.1156; 124D.17; 124D.21; 124D.221; 
                  124D.54; 124D.65, subdivision 4; 124D.84, subdivision 
                  2; 124D.89; 124D.93; 125A.023, subdivision 5; 125A.09; 
                  125A.47; 125A.79, subdivision 2; 125B.11; 126C.01, 
                  subdivision 4; 126C.05, subdivision 12; 126C.125; 
                  126C.14; 126C.55, subdivision 5; 127A.41, subdivision 
                  6; 128C.01, subdivision 5; 128C.02, subdivision 8; 
                  128C.13; 144.401, subdivision 5; 169.441, subdivision 
                  4; 239.004; Laws 1993, chapter 224, article 8, section 
                  20, subdivision 2, as amended; Laws 2000, chapter 489, 
                  article 2, section 36, as amended; Laws 2001, First 
                  Special Session chapter 3, article 4, sections 1, 2; 
                  Laws 2001, First Special Session chapter 6, article 2, 
                  section 52; Laws 2001, First Special Session chapter 
                  6, article 5, section 12, as amended; Minnesota Rules, 
                  parts 3500.0600; 3520.0400; 3520.1400; 3520.3300; 
                  3530.1500; 3530.2700; 3530.4400; 3530.4500; 3530.4700; 
                  3550.0100. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1
                               GENERAL EDUCATION
           Section 1.  Minnesota Statutes 2002, section 123A.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [HOURS OF INSTRUCTION EXEMPTION.] Notwithstanding 
        any law to the contrary, the center programs must be available 
        throughout the entire year.  Pupils in a center may receive 
        instruction for more than or less than the daily number of hours 
        required by the rules of the commissioner of children, families, 
        and learning.  However, a pupil must receive instruction each 
        year for at least the total number of instructional hours 
        required by statutes and rules.  A center may petition the state 
        board under Minnesota Rules, part 3500.1000, for exemption from 
        other rules.  
           Sec. 2.  Minnesota Statutes 2002, section 123A.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXTENDED YEAR INSTRUCTION.] The agreement may 
        provide opportunities for pupils to receive instruction 
        throughout the entire year and for teachers to coordinate 
        educational opportunities and provide instruction throughout the 
        entire year.  Pupils may receive instruction for more than or 
        less than the daily number of hours required by the rules of the 
        commissioner of children, families, and learning.  However, the 
        pupil must receive instruction each year for at least the total 
        number of instructional hours required by statutes and rules.  A 
        teacher who is employed for the extended year may develop, in 
        consultation with pupils and parents, individual educational 
        programs for not more than 125 pupils.  
           Sec. 3.  Minnesota Statutes 2002, section 123A.73, 
        subdivision 3, is amended to read: 
           Subd. 3.  [VOLUNTARY DISSOLUTION; REFERENDUM REVENUE.] As 
        of the effective date of the voluntary dissolution of a district 
        and its attachment to one or more existing districts pursuant to 
        section 123A.46, the authorization for all referendum revenues 
        previously approved by the voters of all affected districts for 
        those districts pursuant to section 126C.17, subdivision 9, or 
        its predecessor provision, is canceled.  However, if all of the 
        territory of any independent district is included in the 
        enlarged district, and if the adjusted net tax capacity of 
        taxable property in that territory comprises 90 percent or more 
        of the adjusted net tax capacity of all taxable property in an 
        enlarged district, the enlarged district's referendum revenue 
        shall be determined as follows: 
           If the referendum revenue previously approved in the 
        preexisting district is authorized as a tax rate, the referendum 
        revenue in the enlarged district is the tax rate times the net 
        tax capacity of the enlarged district.  If referendum revenue 
        previously approved in the preexisting district is authorized as 
        revenue per resident pupil unit, The referendum revenue shall be 
        the revenue per resident marginal cost pupil unit times the 
        number of resident marginal cost pupil units in the enlarged 
        district.  If referendum revenue in the preexisting district is 
        authorized both as a tax rate and as revenue per resident pupil 
        unit, the referendum revenue in the enlarged district shall be 
        the sum of both plus any referendum revenue in the preexisting 
        district authorized as a dollar amount.  Any new referendum 
        revenue shall be authorized only after approval is granted by 
        the voters of the entire enlarged district in an election 
        pursuant to section 126C.17, subdivision 9. 
           Sec. 4.  Minnesota Statutes 2002, section 123A.73, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONSOLIDATION; MAXIMUM AUTHORIZED REFERENDUM 
        REVENUES.] As of the effective date of a consolidation pursuant 
        to section 123A.48, if the plan for consolidation so provides, 
        or if the plan for consolidation makes no provision concerning 
        referendum revenues, the authorization for all referendum 
        revenues previously approved by the voters of all affected 
        districts for those districts pursuant to section 126C.17, 
        subdivision 9, or its predecessor provision shall be 
        recalculated as provided in this subdivision.  The referendum 
        revenue authorization for the newly created district shall be 
        the net tax capacity rate revenue per resident marginal cost 
        pupil unit that would raise an amount equal to the combined 
        dollar amount of the referendum revenues authorized by each of 
        the component districts for the year preceding the 
        consolidation, unless the referendum revenue authorization of 
        the newly created district is subsequently modified pursuant to 
        section 126C.17, subdivision 9.  If the referendum revenue 
        authorizations for each of the component districts were limited 
        to a specified number of years, The referendum revenue 
        authorization for the newly created district shall continue for 
        a period of time equal to the longest period authorized for any 
        component district.  If the referendum revenue authorization of 
        any component district is not limited to a specified number of 
        years, the referendum revenue authorization for the newly 
        created district shall not be limited to a specified number of 
        years.  
           Sec. 5.  Minnesota Statutes 2002, section 123A.73, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ALTERNATIVE METHOD.] As of the effective date of 
        a consolidation pursuant to section 123A.48, if the plan for 
        consolidation so provides, the authorization for all referendum 
        revenues previously approved by the voters of all affected 
        districts for those districts pursuant to section 126C.17, 
        subdivision 9, or its predecessor provision shall be combined as 
        provided in this subdivision.  The referendum revenue 
        authorization for the newly created district may be any 
        allowance per resident marginal cost pupil unit provided in the 
        plan for consolidation, but may not exceed the allowance per 
        resident marginal cost pupil unit that would raise an amount 
        equal to the combined dollar amount of the referendum revenues 
        authorized by each of the component districts for the year 
        preceding the consolidation.  If the referendum revenue 
        authorizations for each of the component districts were limited 
        to a specified number of years, The referendum revenue 
        authorization for the newly created district shall continue for 
        a period of time equal to the longest period authorized for any 
        component district.  If the referendum revenue authorization of 
        any component district is not limited to a specified number of 
        years, the referendum revenue authorization for the newly 
        created district shall not be limited to a specified number of 
        years.  The referendum revenue authorization for the newly 
        created district may be modified pursuant to section 126C.17, 
        subdivision 9. 
           Sec. 6.  Minnesota Statutes 2002, section 123B.90, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STUDENT TRAINING.] (a) Each district must 
        provide public school pupils enrolled in grades kindergarten 
        through grade 10 with age-appropriate school bus safety training.
        The training must be results-oriented and shall consist of both 
        classroom instruction and practical training using a school 
        bus.  Upon completing the training, a student shall be able to 
        demonstrate knowledge and understanding, as described in this 
        section, of at least the following competencies and concepts: 
           (1) transportation by school bus is a privilege and not a 
        right; 
           (2) district policies for student conduct and school bus 
        safety; 
           (3) appropriate conduct while on the school bus; 
           (4) the danger zones surrounding a school bus; 
           (5) procedures for safely boarding and leaving a school 
        bus; 
           (6) procedures for safe street or road crossing; and 
           (7) school bus evacuation and other emergency procedures; 
        and 
           (8) appropriate training on the use of lap belts or lap and 
        shoulder belts, if the district uses buses equipped with lap 
        belts or lap and shoulder belts. 
           (b) Each nonpublic school located within the district must 
        provide all nonpublic school pupils enrolled in grades 
        kindergarten through grade 10 who are transported by school bus 
        at public expense and attend school within the district's 
        boundaries with training as required in paragraph (a).  The 
        school district shall make a bus available for the practical 
        training if the district transports the nonpublic students.  
        Each nonpublic school shall provide the instruction. 
           (c) All Students enrolled in grades kindergarten through 3 
        grade 6 who are transported by school bus and are enrolled 
        during the first or second week of school must demonstrate 
        achievement of receive the school bus safety training 
        competencies by the end of the third week of school.  All 
        Students enrolled in grades 4 7 through 10 who are transported 
        by school bus and are enrolled during the first or second week 
        of school and have not received school bus safety training in 
        kindergarten through grade 6 must demonstrate achievement 
        of receive the competencies training by the end of the sixth 
        week of school.  Students in grades 9 and 10 must receive 
        training in the laws and proper procedures when operating a 
        motor vehicle in the vicinity of a school bus.  Students 
        enrolled in grades kindergarten through grade 10 who enroll in a 
        school after the second week of school and are transported by 
        school bus and have not received training in their previous 
        school district shall undergo school bus safety training and 
        demonstrate achievement of the school bus safety competencies or 
        receive bus safety instructional materials within four weeks of 
        the first day of attendance.  The school transportation safety 
        director in each district must certify to the commissioner 
        superintendent of schools annually that all students transported 
        by school bus within the district have satisfactorily 
        demonstrated knowledge and understanding of received the school 
        bus safety competencies training according to this section or 
        provide an explanation for a student's failure to demonstrate 
        the competencies.  The principal or other chief administrator of 
        each nonpublic school must certify annually to the school 
        transportation safety director of the district in which the 
        school is located that all of the school's students transported 
        by school bus at public expense have received training according 
        to this section.  A district may deny transportation to a 
        student who fails to demonstrate the competencies, unless the 
        student is unable to achieve the competencies due to a 
        disability, or to a student who attends a nonpublic school that 
        fails to provide training as required by this subdivision. 
           (d) A district and a nonpublic school with students 
        transported by school bus at public expense must, to the extent 
        possible, may provide kindergarten pupils with bus safety 
        training before the first day of school. 
           (e) A district and a nonpublic school with students 
        transported by school bus at public expense must may also 
        provide student safety education for bicycling and pedestrian 
        safety, for students enrolled in grades kindergarten through 
        grade 5. 
           (f) A district and a nonpublic school with students 
        transported by school bus at public expense must make reasonable 
        accommodations for the school bus, bicycle, and pedestrian 
        safety training of pupils known to speak English as a second 
        language and pupils with disabilities. 
           (g) The district must provide students enrolled in 
        kindergarten through grade 3 school bus safety training twice 
        during the school year.  
           Sec. 7.  Minnesota Statutes 2002, section 123B.90, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner shall 
        develop a comprehensive model school bus safety training program 
        for pupils who ride the bus that includes bus safety curriculum 
        for both classroom and practical instruction, methods for 
        assessing attainment of school bus safety competencies, and 
        age-appropriate instructional materials.  The model training 
        program for students riding buses with lap belts or lap and 
        shoulder belts must include information on the appropriate use 
        of lap belts or lap and shoulder belts.  The program must be 
        adaptable for use by students with disabilities. 
           Sec. 8.  Minnesota Statutes 2002, section 123B.91, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPREHENSIVE POLICY.] (a) Each district 
        shall develop and implement a comprehensive, written policy 
        governing pupil transportation safety, including transportation 
        of nonpublic school students, when applicable.  The policy, at 
        minimum, must contain: 
           (1) provisions for appropriate student bus safety training 
        under section 123B.90; 
           (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, including the 
        district's seat belt policy, if applicable; 
           (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; 
           (6) (5) 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) (6) a system for integrating school bus misconduct 
        records with other discipline records; 
           (8) a statement of bus driver duties; 
           (9) (7) where applicable, provisions governing bus monitor 
        qualifications, training, and duties; 
           (10) (8) 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) (9) operating rules and procedures; 
           (12) provisions for annual bus driver in-service training 
        and evaluation; 
           (13) (10) emergency procedures; 
           (14) (11) a system for maintaining and inspecting 
        equipment; and 
           (15) (12) any other 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 must 
        include the Heimlich maneuver and procedures for dealing with 
        obstructed airways, shock, bleeding, and seizures. 
           (b) 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 Transportation," in developing 
        safety policies.  Each district shall review its policy annually 
        to ensure that it conforms to law. 
           Sec. 9.  Minnesota Statutes 2002, section 123B.92, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this section 
        and section 125A.76, the terms defined in this subdivision have 
        the meanings given to them. 
           (a) "Actual expenditure per pupil transported in the 
        regular and excess transportation categories" means the quotient 
        obtained by dividing: 
           (1) the sum of: 
           (i) all expenditures for transportation in the regular 
        category, as defined in paragraph (b), clause (1), and the 
        excess category, as defined in paragraph (b), clause (2), plus 
           (ii) an amount equal to one year's depreciation on the 
        district's school bus fleet and mobile units computed on a 
        straight line basis at the rate of 15 percent per year for 
        districts operating a program under section 124D.128 for grades 
        1 to 12 for all students in the district and 12-1/2 percent per 
        year for other districts of the cost of the fleet, plus 
           (iii) an amount equal to one year's depreciation on the 
        district's type three school buses, as defined in section 
        169.01, subdivision 6, clause (5), which must be used a majority 
        of the time for pupil transportation purposes, computed on a 
        straight line basis at the rate of 20 percent per year of the 
        cost of the type three school buses by: 
           (2) the number of pupils eligible for transportation in the 
        regular category, as defined in paragraph (b), clause (1), and 
        the excess category, as defined in paragraph (b), clause (2).  
           (b) "Transportation category" means a category of 
        transportation service provided to pupils as follows:  
           (1) Regular transportation is:  
           (i) transportation to and from school during the regular 
        school year for resident elementary pupils residing one mile or 
        more from the public or nonpublic school they attend, and 
        resident secondary pupils residing two miles or more from the 
        public or nonpublic school they attend, excluding desegregation 
        transportation and noon kindergarten transportation; but with 
        respect to transportation of pupils to and from nonpublic 
        schools, only to the extent permitted by sections 123B.84 to 
        123B.87; 
           (ii) transportation of resident pupils to and from language 
        immersion programs; 
           (iii) transportation of a pupil who is a custodial parent 
        and that pupil's child between the pupil's home and the child 
        care provider and between the provider and the school, if the 
        home and provider are within the attendance area of the school; 
        and 
           (iv) transportation to and from or board and lodging in 
        another district, of resident pupils of a district without a 
        secondary school; and 
           (v) transportation to and from school during the regular 
        school year required under subdivision 3 for nonresident 
        elementary pupils when the distance from the attendance area 
        border to the public school is one mile or more, and for 
        nonresident secondary pupils when the distance from the 
        attendance area border to the public school is two miles or 
        more, excluding desegregation transportation and noon 
        kindergarten transportation. 
           For the purposes of this paragraph, a district may 
        designate a licensed day care facility, respite care facility, 
        the residence of a relative, or the residence of a person chosen 
        by the pupil's parent or guardian as the home of a pupil for 
        part or all of the day, if requested by the pupil's parent or 
        guardian, and if that facility or residence is within the 
        attendance area of the school the pupil attends. 
           (2) Excess transportation is: 
           (i) transportation to and from school during the regular 
        school year for resident secondary pupils residing at least one 
        mile but less than two miles from the public or nonpublic school 
        they attend, and transportation to and from school for resident 
        pupils residing less than one mile from school who are 
        transported because of extraordinary traffic, drug, or crime 
        hazards; and 
           (ii) transportation to and from school during the regular 
        school year required under subdivision 3 for nonresident 
        secondary pupils when the distance from the attendance area 
        border to the school is at least one mile but less than two 
        miles from the public school they attend, and for nonresident 
        pupils when the distance from the attendance area border to the 
        school is less than one mile from the school and who are 
        transported because of extraordinary traffic, drug, or crime 
        hazards. 
           (3) Desegregation transportation is transportation within 
        and outside of the district during the regular school year of 
        pupils to and from schools located outside their normal 
        attendance areas under a plan for desegregation mandated by the 
        commissioner or under court order.  
           (4) "Transportation services for pupils with disabilities" 
        is: 
           (i) transportation of pupils with disabilities who cannot 
        be transported on a regular school bus between home or a respite 
        care facility and school; 
           (ii) necessary transportation of pupils with disabilities 
        from home or from school to other buildings, including centers 
        such as developmental achievement centers, hospitals, and 
        treatment centers where special instruction or services required 
        by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65 
        are provided, within or outside the district where services are 
        provided; 
           (iii) necessary transportation for resident pupils with 
        disabilities required by sections 125A.12, and 125A.26 to 
        125A.48; 
           (iv) board and lodging for pupils with disabilities in a 
        district maintaining special classes; 
           (v) transportation from one educational facility to another 
        within the district for resident pupils enrolled on a 
        shared-time basis in educational programs, and necessary 
        transportation required by sections 125A.18, and 125A.26 to 
        125A.48, for resident pupils with disabilities who are provided 
        special instruction and services on a shared-time basis; 
           (vi) transportation for resident pupils with disabilities 
        to and from board and lodging facilities when the pupil is 
        boarded and lodged for educational purposes; and 
           (vii) services described in clauses (i) to (vi), when 
        provided for pupils with disabilities in conjunction with a 
        summer instructional program that relates to the pupil's 
        individual education plan or in conjunction with a learning year 
        program established under section 124D.128. 
           (5) "Nonpublic nonregular transportation" is: 
           (i) transportation from one educational facility to another 
        within the district for resident pupils enrolled on a 
        shared-time basis in educational programs, excluding 
        transportation for nonpublic pupils with disabilities under 
        clause (4); 
           (ii) transportation within district boundaries between a 
        nonpublic school and a public school or a neutral site for 
        nonpublic school pupils who are provided pupil support services 
        pursuant to section 123B.44; and 
           (iii) late transportation home from school or between 
        schools within a district for nonpublic school pupils involved 
        in after-school activities. 
           (c) "Mobile unit" means a vehicle or trailer designed to 
        provide facilities for educational programs and services, 
        including diagnostic testing, guidance and counseling services, 
        and health services.  A mobile unit located off nonpublic school 
        premises is a neutral site as defined in section 123B.41, 
        subdivision 13. 
           Sec. 10.  Minnesota Statutes 2002, section 123B.92, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
        that enrolls nonresident pupils in programs under sections 
        124D.03, 124D.06, 124D.07, 124D.08, 123A.05 to 123A.08, and 
        124D.68, must provide authorized transportation to the pupil 
        within the attendance area for the school that the pupil attends 
        at the same level of service that is provided to resident pupils 
        within the attendance area.  The resident district need not 
        provide or pay for transportation between the pupil's residence 
        and the district's border. 
           Sec. 11.  Minnesota Statutes 2002, section 123B.92, 
        subdivision 9, is amended to read: 
           Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
        district's nonpublic pupil transportation aid for the 1996-1997 
        and later school years for transportation services for nonpublic 
        school pupils according to sections 123B.88, 123B.84 to 123B.86, 
        and this section, equals the sum of the amounts computed in 
        paragraphs (b) and (c).  This aid does not limit the obligation 
        to transport pupils under sections 123B.84 to 123B.87. 
           (b) For regular and excess transportation according to 
        subdivision 1, paragraph (b), clauses (1) and (2), an amount 
        equal to the product of: 
           (1) the district's actual expenditure per pupil transported 
        in the regular and excess transportation categories during the 
        second preceding school year; times 
           (2) the number of nonpublic school pupils residing in the 
        district who receive regular or excess transportation service or 
        reimbursement for the current school year; times 
           (3) the ratio of the formula allowance pursuant to section 
        126C.10, subdivision 2, for the current school year to the 
        formula allowance pursuant to section 126C.10, subdivision 2, 
        for the second preceding school year. 
           (c) For nonpublic nonregular transportation according to 
        subdivision 1, paragraph (b), clause (5), an amount equal to the 
        product of: 
           (1) the district's actual expenditure for nonpublic 
        nonregular transportation during the second preceding school 
        year; times 
           (2) the ratio of the formula allowance pursuant to section 
        126C.10, subdivision 2, for the current school year to the 
        formula allowance pursuant to section 126C.10, subdivision 2, 
        for the second preceding school year. 
           (d) Notwithstanding the amount of the formula allowance for 
        fiscal years 2000, 2001, and 2002 year 2004 in section 126C.10, 
        subdivision 2, the commissioner shall use the amount of the 
        formula allowance for the current year plus $87 minus $415 in 
        determining the nonpublic pupil transportation revenue in 
        paragraphs (b) and (c) for fiscal year 2000, and the amount of 
        the formula allowance less $110 in determining the nonpublic 
        pupil transportation revenue in paragraphs (b) and (c) for 
        fiscal years 2001 and 2002 2004. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 12.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 13, is amended to read: 
           Subd. 13.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled 
        in a course under this section, the department must make 
        payments according to this subdivision for courses that were 
        taken for secondary credit.  
           The department must not make payments to a school district 
        or post-secondary institution for a course taken for 
        post-secondary credit only.  The department must not make 
        payments to a post-secondary institution for a course from which 
        a student officially withdraws during the first 14 days of the 
        quarter or semester or who has been absent from the 
        post-secondary institution for the first 15 consecutive school 
        days of the quarter or semester and is not receiving instruction 
        in the home or hospital. 
           A post-secondary institution shall receive the following: 
           (1) for an institution granting quarter credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the formula allowance minus $415, 
        multiplied by 1.3, and divided by 45; or 
           (2) for an institution granting semester credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the general revenue formula 
        allowance minus $415, multiplied by 1.3, and divided by 30. 
           The department must pay to each post-secondary institution 
        100 percent of the amount in clause (1) or (2) within 30 days of 
        receiving initial enrollment information each quarter or 
        semester.  If changes in enrollment occur during a quarter or 
        semester, the change shall be reported by the post-secondary 
        institution at the time the enrollment information for the 
        succeeding quarter or semester is submitted.  At any time the 
        department notifies a post-secondary institution that an 
        overpayment has been made, the institution shall promptly remit 
        the amount due.  
           Sec. 13.  Minnesota Statutes 2002, section 124D.59, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PUPIL OF LIMITED ENGLISH PROFICIENCY.] 
        (a) "Pupil of limited English proficiency" means a pupil in 
        kindergarten through grade 12 who meets the following 
        requirements: 
           (1) the pupil in kindergarten through grade 12, as declared 
        by a parent or guardian first learned a language other than 
        English, comes from a home where the language usually spoken is 
        other than English, or usually speaks a language other than 
        English; and 
           (2) for a pupil in kindergarten through grade 2, the pupil 
        is determined by developmentally appropriate measures, which 
        might include observations, teacher judgment, parent 
        recommendations, or developmentally appropriate assessment 
        instruments, to lack the necessary English skills to participate 
        fully in classes taught in English; or. 
           (3) the (b) Notwithstanding paragraph (a), a pupil in 
        grades 3 4 through 12 scores who was enrolled in a Minnesota 
        public school on the dates during the previous school year when 
        a commissioner provided assessment that measures the pupil's 
        emerging academic English was administered, shall not be counted 
        as a pupil of limited English proficiency in calculating limited 
        English proficiency pupil units under section 126C.05, 
        subdivision 17, and shall not generate state limited English 
        proficiency aid under section 124D.65, subdivision 5, unless the 
        pupil scored below the state cutoff score on an assessment 
        measuring emerging academic English provided by the commissioner 
        during the previous school year. 
           (c) Notwithstanding paragraphs (a) and (b), a pupil in 
        kindergarten through grade 12 shall not be counted as a pupil of 
        limited English proficiency in calculating limited English 
        proficiency pupil units under section 126C.05, subdivision 17, 
        and shall not generate state limited English proficiency aid 
        under section 124D.65, subdivision 5, if: 
           (i) the pupil is not enrolled during the current fiscal 
        year in an educational program for pupils of limited English 
        proficiency in accordance with sections 124D.58 to 124D.64; or 
           (ii) the pupil has generated five or more years of average 
        daily membership in Minnesota public schools since July 1, 1996. 
           Sec. 14.  Minnesota Statutes 2002, section 124D.65, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
        district's limited English proficiency programs revenue for 
        fiscal year 2000 equals the state total limited English 
        proficiency programs revenue, minus the amount determined under 
        paragraph (b), times the ratio of the district's adjusted 
        limited English proficiency programs base revenue to the state 
        total adjusted limited English proficiency programs base revenue.
           (b) Notwithstanding paragraph (a), if the limited English 
        proficiency programs base revenue for a district equals zero, 
        the limited English proficiency programs revenue equals the sum 
        of the following amounts, computed using current year data: 
           (1) 68 percent of the salary of one full-time equivalent 
        teacher for each 40 pupils of limited English proficiency 
        enrolled, or 68 percent of the salary of one-half of a full-time 
        teacher in a district with 20 or fewer pupils of limited English 
        proficiency enrolled; and 
           (2) for supplies and equipment purchased or rented for use 
        in the instruction of pupils of limited English proficiency an 
        amount equal to 47 percent of the sum actually spent by the 
        district but not to exceed an average of $47 in any one school 
        year for each pupil of limited English proficiency receiving 
        instruction. 
           (c) A district's limited English proficiency programs 
        revenue for fiscal year 2001 and later equals the product 
        of $584 (1) $700 in fiscal year 2004 and later times (2) the 
        greater of 20 or the number of adjusted marginal cost average 
        daily membership of eligible pupils of limited English 
        proficiency enrolled in the district during the current fiscal 
        year. 
           (d) (b) A pupil ceases to generate state limited English 
        proficiency aid in the school year following the school year in 
        which the pupil attains the state cutoff score on a 
        commissioner-provided assessment that measures the pupil's 
        emerging academic English. 
           Sec. 15.  Minnesota Statutes 2002, section 126C.05, 
        subdivision 8, is amended to read: 
           Subd. 8.  [AVERAGE DAILY MEMBERSHIP.] (a) 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 120A.22.  Average daily membership 
        equals 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 are only included in the computation of membership for 
        pupils with a disability not appropriately served primarily in 
        the regular classroom.  A student must not be counted as more 
        than 1.2 pupils in average daily membership under this section.  
        When the initial total average daily membership exceeds 1.2 for 
        a pupil enrolled in more than one school district during the 
        fiscal year, each district's average daily membership must be 
        reduced proportionately. 
           (b) A student must not be counted as more than one pupil in 
        average daily membership except for purposes of section 126C.10, 
        subdivision 2a.  
           Sec. 16.  Minnesota Statutes 2002, section 126C.05, 
        subdivision 14, is amended to read: 
           Subd. 14.  [COMPUTING PUPIL UNITS FOR A PRIOR YEAR.] In 
        computing pupil units for a prior year, the number of pupil 
        units shall be adjusted to reflect any change for the current 
        year in relative weightings by grade level or category of 
        special assistance, any change in measurement from average daily 
        attendance to average daily membership, any change in the limit 
        on average daily membership that can be generated by a pupil for 
        a fiscal year as provided in subdivisions 8 and 15, and any 
        change in school district boundaries, but not for the addition 
        for the first time in the current year of a specified category 
        of special assistance as provided in subdivision 1, clause (4). 
           Sec. 17.  Minnesota Statutes 2002, section 126C.05, 
        subdivision 15, is amended to read: 
           Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
        enrolled in a learning year program under section 124D.128, an 
        area learning center under sections 123A.05 and 123A.06, an 
        alternative program approved by the commissioner, or a contract 
        alternative program under section 124D.68, 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 for purposes of section 126C.10, subdivision 
        2a.  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.  A student in grades 1 through 12 must 
        not be counted as more than 1.5 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 district must meet the requirements in this paragraph.  The 
        district must develop, for the pupil, a continual learning plan 
        consistent with section 124D.128, subdivision 3.  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 126C.15, subdivision 2. 
           (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.  The district must develop a continual 
        learning plan for the pupil, consistent with section 124D.128, 
        subdivision 3.  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 126C.15, subdivision 2.  
           (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. 18.  Minnesota Statutes 2002, section 126C.05, 
        subdivision 16, is amended to read: 
           Subd. 16.  [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 December 15 of the following that school year shall 
        be counted as eligible on October 1 for purposes of subdivision 
        3.  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. 19.  Minnesota Statutes 2002, section 126C.05, 
        subdivision 17, is amended to read: 
           Subd. 17.  [LEP PUPIL UNITS.] (a) Limited English 
        proficiency pupil units for fiscal year 1998 2004 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 eligible pupils of limited English 
        proficiency in average daily membership 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 eligible pupil enrolled in a program for pupils of limited 
        English proficiency in accordance with sections 124D.58 to 
        124D.64 in average daily membership 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. 
           (f) For the purposes of this subdivision, the terms defined 
        in section 124D.59 have the same meaning. 
           Sec. 20.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
        year 2002, 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, equity revenue, 
        transition revenue, and supplemental revenue. 
           (b) For fiscal year 2003 and later, 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, and equity revenue. 
           (b) For fiscal year 2004 and later, the general education 
        revenue for each district equals the sum of the district's basic 
        revenue, extended time revenue, basic skills revenue, secondary 
        sparsity revenue, elementary sparsity revenue, transportation 
        sparsity revenue, total operating capital revenue, equity 
        revenue, and transition revenue. 
           Sec. 21.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [EXTENDED TIME REVENUE.] (a) A school district's 
        extended time revenue is equal to the product of $4,601 and the 
        sum of the adjusted marginal cost pupil units of the district 
        for each pupil in average daily membership in excess of 1.0 and 
        less than 1.2 according to section 126C.05, subdivision 8. 
           (b) A school district's extended time revenue may be used 
        for extended day programs, extended week programs, summer 
        school, and other programming authorized under the learning year 
        program.  
           Sec. 22.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] The 
        compensatory education revenue for each building in the district 
        equals the formula allowance minus $415 times the compensation 
        revenue pupil units computed according to section 126C.05, 
        subdivision 3.  Revenue shall be paid to the district and must 
        be allocated according to section 126C.15, subdivision 2. 
           Sec. 23.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BASIC SKILLS REVENUE.] (a) For fiscal year 2002, 
        a school district's basic skills revenue equals the sum of: 
           (1) compensatory revenue under subdivision 3; plus 
           (2) limited English proficiency revenue according to 
        section 124D.65, subdivision 5; plus 
           (3) $190 times the limited English proficiency pupil units 
        according to section 126C.05, subdivision 17; plus 
           (4) $22.50 times the number of adjusted marginal cost pupil 
        units in kindergarten to grade 8. 
           (b) For fiscal year 2003 and later, A school district's 
        basic skills revenue equals the sum of: 
           (1) compensatory revenue under subdivision 3; plus 
           (2) limited English proficiency revenue under section 
        124D.65, subdivision 5; plus 
           (3) $190 $250 times the limited English proficiency pupil 
        units under section 126C.05, subdivision 17. 
           Sec. 24.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [OPERATING CAPITAL LEVY.] To obtain operating 
        capital revenue for fiscal year 2005 and later, a district may 
        levy an amount not more than the product of its operating 
        capital revenue for the fiscal year times the lesser of one or 
        the ratio of its adjusted net tax capacity per adjusted marginal 
        pupil cost to $22,222. 
           Sec. 25.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 13b.  [OPERATING CAPITAL AID.] A district's operating 
        capital aid equals its operating capital revenue minus its 
        operating capital levy times the ratio of the actual amount 
        levied to the permitted levy. 
           Sec. 26.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 17, is amended to read: 
           Subd. 17.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
        definitions in this subdivision apply to subdivisions 18 and 19. 
           (a) "Sparsity index" for a district means the greater of .2 
        or the ratio of the square mile area of the district to the 
        resident pupil units of the district. 
           (b) "Density index" for a district means the ratio of the 
        square mile area of the district to the resident pupil units of 
        the district.  However, the density index for a district cannot 
        be greater than .2 or less than .005. 
           (c) "Fiscal year 1996 base allowance" for a district means 
        the result of the following computation: 
           (1) sum the following amounts: 
           (i) the fiscal year 1996 regular transportation revenue for 
        the district according to Minnesota Statutes 1996, section 
        124.225, subdivision 7d, paragraph (a), excluding the revenue 
        attributable nonpublic school pupils and to pupils with 
        disabilities receiving special transportation services; plus 
           (ii) the fiscal year 1996 nonregular transportation revenue 
        for the district according to Minnesota Statutes 1996, section 
        124.225, subdivision 7d, paragraph (b), excluding the revenue 
        for desegregation transportation according to Minnesota Statutes 
        1996, section 124.225, subdivision 1, paragraph (c), clause (4), 
        and the revenue attributable to nonpublic school pupils and to 
        pupils with disabilities receiving special transportation 
        services or board and lodging; plus 
           (iii) the fiscal year 1996 excess transportation levy for 
        the district according to Minnesota Statutes 1996, section 
        124.226, subdivision 5, excluding the levy attributable to 
        nonpublic school pupils; plus 
           (iv) the fiscal year 1996 late activity bus levy for the 
        district according to Minnesota Statutes 1996, section 124.226, 
        subdivision 9, excluding the levy attributable to nonpublic 
        school pupils; plus 
           (v) an amount equal to one-third of the fiscal year 1996 
        bus depreciation for the district according to Minnesota 
        Statutes 1996, section 124.225, subdivision 1, paragraph (b), 
        clauses (2), (3), and (4). 
           (2) divide the result in clause (1) by the district's 
        1995-1996 fund balance pupil units. 
           Sec. 27.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 24, is amended to read: 
           Subd. 24.  [EQUITY REVENUE.] (a) A school district 
        qualifies for equity revenue if: 
           (1) the school district's adjusted marginal cost pupil unit 
        amount of basic revenue, supplemental revenue, transition 
        revenue, and referendum revenue is less than the value of the 
        school district at or immediately above the 95th percentile of 
        school districts in its equity region for those revenue 
        categories; and 
           (2) the school district's administrative offices are not 
        located in a city of the first class on July 1, 1999. 
           (b) Equity revenue for a qualifying district that receives 
        referendum revenue under section 126C.17, subdivision 4, equals 
        the product of (1) the district's adjusted marginal cost pupil 
        units for that year; times (2) the sum of (i) $10 $13, plus (ii) 
        $55 $75, times the school district's equity index computed under 
        subdivision 27. 
           (c) Equity revenue for a qualifying district that does not 
        receive referendum revenue under section 126C.17, subdivision 4, 
        equals the product of the district's adjusted marginal cost 
        pupil units for that year times $10 $13. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005.  
           Sec. 28.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 29.  [EQUITY LEVY.] To obtain equity revenue for 
        fiscal year 2005 and later, a district may levy an amount not 
        more than the product of its equity revenue for the fiscal year 
        times the lesser of one or the ratio of its referendum market 
        value per resident marginal cost pupil unit to $476,000. 
           Sec. 29.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 30.  [EQUITY AID.] A district's equity aid equals its 
        equity revenue minus its equity levy times the ratio of the 
        actual amount levied to the permitted levy. 
           Sec. 30.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 31.  [TRANSITION REVENUE.] (a) A district's 
        transition allowance for fiscal years 2004 through 2008 equals 
        the greater of zero or the product of the ratio of the number of 
        adjusted marginal cost pupil units the district would have 
        counted for fiscal year 2004 under Minnesota Statutes 2002 to 
        the district's adjusted marginal cost pupil units for fiscal 
        year 2004, times the difference between:  (1) the lesser of the 
        district's general education revenue per adjusted marginal cost 
        pupil unit for fiscal year 2003 or the amount of general 
        education revenue the district would have received per adjusted 
        marginal cost pupil unit for fiscal year 2004 according to 
        Minnesota Statutes 2002, and (2) the district's general 
        education revenue for fiscal year 2004 excluding transition 
        revenue divided by the number of adjusted marginal cost pupil 
        units the district would have counted for fiscal year 2004 under 
        Minnesota Statutes 2002.  A district's transition allowance for 
        fiscal year 2009 and later is zero. 
           (b) A district's transition revenue for fiscal year 2004 
        and later equals the product of the district's transition 
        allowance times the district's adjusted marginal cost pupil 
        units. 
           Sec. 31.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 32.  [TRANSITION LEVY.] To obtain transition revenue 
        for fiscal year 2005 and later, a district may levy an amount 
        not more than the product of its transition revenue for the 
        fiscal year times the lesser of one or the ratio of its 
        referendum market value per resident marginal cost pupil unit to 
        $476,000. 
           Sec. 32.  Minnesota Statutes 2002, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 33.  [TRANSITION AID.] (a) For fiscal year 2004, a 
        district's transition aid equals its transition revenue. 
           (b) For fiscal year 2005 and later, a district's transition 
        aid equals its transition revenue minus its transition levy 
        times the ratio of the actual amount levied to the permitted 
        levy. 
           Sec. 33.  Minnesota Statutes 2002, section 126C.13, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL EDUCATION AID.] (a) For fiscal year 
        2004, a district's general education aid is the sum of the 
        following amounts:  
           (1) general education revenue; 
           (2) shared time aid according to section 126C.01, 
        subdivision 7; and 
           (3) referendum aid according to section 126C.17; and 
           (4) distance education aid according to section 126C.24. 
           (b) For fiscal year 2005 and later, a district's general 
        education aid is the sum of the following amounts: 
           (1) general education revenue, excluding equity revenue and 
        transition revenue; 
           (2) equity aid according to section 126C.10, subdivision 
        30; 
           (3) transition aid according to section 126C.10, 
        subdivision 33; 
           (4) shared time aid according to section 126C.01, 
        subdivision 7; 
           (5) referendum aid according to section 126C.17; and 
           (6) distance education aid according to section 126C.24. 
           Sec. 34.  Minnesota Statutes 2002, section 126C.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [USE OF THE REVENUE.] The basic skills 
        revenue under section 126C.10, subdivision 4, and the portion of 
        the transition revenue adjustment under section 126C.10, 
        subdivision 20, attributable to the compensatory transition 
        allowance under section 126C.10, subdivision 19, paragraph (b), 
        must be reserved and 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 124D.66; 
           (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 122A.60, 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; 
        and 
           (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. 
           Sec. 35.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REFERENDUM ALLOWANCE.] (a) For fiscal year 
        2002, a district's referendum revenue allowance equals the sum 
        of the allowance under section 126C.16, subdivision 2, plus any 
        additional allowance per resident marginal cost pupil unit 
        authorized under subdivision 9 for fiscal year 2002. 
           (b) For fiscal year 2003 and later, a district's initial 
        referendum revenue allowance equals the sum of the allowance 
        under section 126C.16, subdivision 2, plus any additional 
        allowance per resident marginal cost pupil unit authorized under 
        subdivision 9 before May 1, 2001, for fiscal year 2002 and 
        later, plus the referendum conversion allowance approved under 
        subdivision 13, minus $415.  For districts with more than one 
        referendum authority, the reduction must be computed separately 
        for each authority.  The reduction must be applied first to the 
        referendum conversion allowance and next to the authority with 
        the earliest expiration date.  A district's initial referendum 
        revenue allowance may not be less than zero. 
           (c) (b) For fiscal year 2003 and later, a district's 
        referendum revenue allowance equals the initial referendum 
        allowance plus any additional allowance per resident marginal 
        cost pupil unit authorized under subdivision 9 after between 
        April 30, 2001, and December 30, 2001, for fiscal year 2003 and 
        later. 
           (c) For fiscal year 2004 and later, a district's referendum 
        revenue allowance equals the sum of: 
           (1) the product of (i) the ratio of the resident marginal 
        cost pupil units the district would have counted for fiscal year 
        2004 under Minnesota Statutes 2002, section 126C.05, to the 
        district's resident marginal cost pupil units for fiscal year 
        2004, times (ii) the initial referendum allowance plus any 
        additional allowance per resident marginal cost pupil unit 
        authorized under subdivision 9 between April 30, 2001, and May 
        30, 2003, for fiscal year 2003 and later, plus 
           (2) any additional allowance per resident marginal cost 
        pupil unit authorized under subdivision 9 after May 30, 2003, 
        for fiscal year 2005 and later. 
           Sec. 36.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
        subdivision 1, for fiscal year 2002, a district's referendum 
        allowance must not exceed the greater of:  
           (1) the district's referendum allowance for fiscal year 
        1994; 
           (2) 25 percent of the formula allowance; or 
           (3) for a newly reorganized district created after July 1, 
        1994, the sum of the referendum revenue authority for the 
        reorganizing districts for the fiscal year preceding the 
        reorganization, divided by the sum of the resident marginal cost 
        pupil units of the reorganizing districts for the fiscal year 
        preceding the reorganization. 
           (b) Notwithstanding subdivision 1, for fiscal year 2003 and 
        later fiscal years, a district's referendum allowance must not 
        exceed the greater of: 
           (1) the sum of a district's referendum allowance for fiscal 
        year 1994 times 1.162 plus its referendum conversion allowance 
        for fiscal year 2003, minus $415; 
           (2) 18.2 percent of the formula allowance; 
           (3) for a newly reorganized district created on July 1, 
        2002, the referendum revenue authority for each reorganizing 
        district in the year preceding reorganization divided by its 
        resident marginal cost pupil units for the year preceding 
        reorganization, minus $415; or 
           (4) for a newly reorganized district created after July 1, 
        2002, the referendum revenue authority for each reorganizing 
        district in the year preceding reorganization divided by its 
        resident marginal cost pupil units for the year preceding 
        reorganization. 
           (b) Notwithstanding subdivision 1, for fiscal year 2004 and 
        later, a district's referendum allowance must not exceed the 
        greater of: 
           (1) the sum of:  (i) a district's referendum allowance for 
        fiscal year 1994 times 1.177 times the annual inflationary 
        increase as calculated under paragraph (c) plus (ii) its 
        referendum conversion allowance for fiscal year 2003, minus 
        (iii) $415; 
           (2) the greater of (i) 18.6 percent of the formula 
        allowance or (ii) the previous year's referendum allowance times 
        the annual inflationary increase as calculated under paragraph 
        (c); or 
           (3) for a newly reorganized district created after July 1, 
        2002, the referendum revenue authority for each reorganizing 
        district in the year preceding reorganization divided by its 
        resident marginal cost pupil units for the year preceding 
        reorganization. 
           (c) For purposes of this subdivision, for fiscal year 2005 
        and later, "inflationary increase" means one plus the percentage 
        change in the Consumer Price Index for urban consumers, as 
        prepared by the United States Bureau of Labor Standards, for the 
        current fiscal year to fiscal year 2004.  For fiscal years 2009 
        and later, for purposes of paragraph (b), clause (1), the 
        inflationary increase equals the inflationary increase for 
        fiscal year 2008 plus one-fourth of the percentage increase in 
        the formula allowance for that year compared with the formula 
        allowance for fiscal year 2008. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 37.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 
        year 2003 and later, a district's referendum equalization 
        revenue equals the sum of the first tier referendum equalization 
        revenue and the second tier referendum equalization revenue. 
           (b) A district's first tier referendum equalization revenue 
        equals the district's first tier referendum equalization 
        allowance times the district's resident marginal cost pupil 
        units for that year.  
           (c) For fiscal years 2003 and 2004, a district's first tier 
        referendum equalization allowance equals the lesser of the 
        district's referendum allowance under subdivision 1 or 
        $126.  For fiscal year 2005, a district's first tier referendum 
        equalization allowance equals the lesser of the district's 
        referendum allowance under subdivision 1 or $405.  For fiscal 
        year 2006 and later, a district's first tier referendum 
        equalization allowance equals the lesser of the district's 
        referendum allowance under subdivision 1 or $500. 
           (d) A district's second tier referendum equalization 
        revenue equals the district's second tier referendum 
        equalization allowance times the district's resident marginal 
        cost pupil units for that year. 
           (e) A district's second tier referendum equalization 
        allowance equals the lesser of the district's referendum 
        allowance under subdivision 1 or 18.2 18.6 percent of the 
        formula allowance, minus the district's first tier referendum 
        equalization allowance. 
           (f) Notwithstanding paragraph (e), the second tier 
        referendum allowance for a district qualifying for secondary 
        sparsity revenue under section 126C.10, subdivision 7, or 
        elementary sparsity revenue under section 126C.10, subdivision 
        8, equals the district's referendum allowance under subdivision 
        1 minus the district's first tier referendum equalization 
        allowance. 
           Sec. 38.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
        referendum equalization aid equals the difference between its 
        referendum equalization revenue and levy. 
           (b) If a district's actual levy for first or second tier 
        referendum equalization revenue is less than its maximum levy 
        limit for that tier, aid shall be proportionately reduced. 
           (c) Notwithstanding paragraph (a), the referendum 
        equalization aid for a district, where the referendum 
        equalization aid under paragraph (a) exceeds 90 percent of the 
        referendum revenue, must not exceed 18.2 18.6 percent of the 
        formula allowance times the district's resident marginal cost 
        pupil units.  A district's referendum levy is increased by the 
        amount of any reduction in referendum aid under this paragraph. 
           Sec. 39.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
        school district that had a referendum allowance for fiscal year 
        2002 exceeding $415, for each separately authorized referendum 
        levy, the commissioner of revenue, in consultation with the 
        commissioner of children, families, and learning education, 
        shall certify the amount of the referendum levy in taxes payable 
        year 2001 attributable to the portion of the referendum 
        allowance exceeding $415 levied against property classified as 
        class 2, noncommercial 4c(1), or 4c(4), under section 273.13, 
        excluding the portion of the tax paid by the portion of class 2a 
        property consisting of the house, garage, and surrounding one 
        acre of land.  The resulting amount must be used to reduce the 
        district's referendum levy amount otherwise determined, and must 
        be paid to the district each year that the referendum authority 
        remains in effect, is renewed, or new referendum authority is 
        approved.  The aid payable under this subdivision must be 
        subtracted from the district's referendum equalization aid under 
        subdivision 7.  The referendum equalization aid after the 
        subtraction must not be less than zero. 
           For the purposes of this subdivision, the referendum levy 
        with the latest year of expiration is assumed to be at the 
        highest level of equalization, and the referendum levy with the 
        earliest year of expiration is assumed to be at the lowest level 
        of equalization. 
           Sec. 40.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 9, is amended to read: 
           Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
        by section 126C.10, subdivision 1, may be increased in the 
        amount approved by the voters of the district at a referendum 
        called for the purpose.  The referendum may be called by the 
        board or shall be called by the board upon written petition of 
        qualified voters of the district.  The referendum must be 
        conducted one or two calendar years before the increased levy 
        authority, if approved, first becomes payable.  Only one 
        election to approve an increase may be held in a calendar year.  
        Unless the referendum is conducted by mail under paragraph (g), 
        the referendum must be held on the first Tuesday after the first 
        Monday in November.  The ballot must state the maximum amount of 
        the increased revenue per resident marginal cost pupil unit, the 
        estimated referendum tax rate as a percentage of referendum 
        market value in the first year it is to be levied, and that the 
        revenue must be used to finance school operations.  The ballot 
        may state a schedule, determined by the board, of increased 
        revenue per resident marginal cost pupil unit that differs from 
        year to year over the number of years for which the increased 
        revenue is authorized.  If the ballot contains a schedule 
        showing different amounts, it must also indicate the estimated 
        referendum tax rate as a percent of referendum market value for 
        the amount specified for the first year and for the maximum 
        amount specified in the schedule.  The ballot may state that 
        existing referendum levy authority is expiring.  In this case, 
        the ballot may also compare the proposed levy authority to the 
        existing expiring levy authority, and express the proposed 
        increase as the amount, if any, over the expiring referendum 
        levy authority.  The ballot must designate the specific number 
        of years, not to exceed ten, for which the referendum 
        authorization applies.  The notice required under section 275.60 
        may be modified to read, in cases of renewing existing levies: 
           "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
           FOR A PROPERTY TAX INCREASE." 
           The ballot may contain a textual portion with the 
        information required in this subdivision and a question stating 
        substantially the following:  
           "Shall the increase in the revenue proposed by (petition 
        to) the board of ........., School District No. .., be approved?"
           If approved, an amount equal to the approved revenue per 
        resident marginal cost pupil unit times the resident marginal 
        cost pupil units for the school year beginning in the year after 
        the levy is certified shall be authorized for certification for 
        the number of years approved, if applicable, or until revoked or 
        reduced by the voters of the district at a subsequent referendum.
           (b) The board must prepare and deliver by first class mail 
        at least 15 days but no more than 30 days before the day of the 
        referendum to each taxpayer a notice of the referendum and the 
        proposed revenue increase.  The board need not mail more than 
        one notice to any taxpayer.  For the purpose of giving mailed 
        notice under this subdivision, owners must be those shown to be 
        owners on the records of the county auditor or, in any county 
        where tax statements are mailed by the county treasurer, on the 
        records of the county treasurer.  Every property owner whose 
        name does not appear on the records of the county auditor or the 
        county treasurer is deemed to have waived this mailed notice 
        unless the owner has requested in writing that the county 
        auditor or county treasurer, as the case may be, include the 
        name on the records for this purpose.  The notice must project 
        the anticipated amount of tax increase in annual dollars and 
        annual percentage for typical residential homesteads, 
        agricultural homesteads, apartments, and commercial-industrial 
        property within the school district. 
           The notice for a referendum may state that an existing 
        referendum levy is expiring and project the anticipated amount 
        of increase over the existing referendum levy in the first year, 
        if any, in annual dollars and annual percentage for typical 
        residential homesteads, agricultural homesteads, apartments, and 
        commercial-industrial property within the district. 
           The notice must include the following statement:  "Passage 
        of this referendum will result in an increase in your property 
        taxes."  However, in cases of renewing existing levies, the 
        notice may include the following statement:  "Passage of this 
        referendum may result in an increase in your property taxes." 
           (c) A referendum on the question of revoking or reducing 
        the increased revenue amount authorized pursuant to paragraph 
        (a) may be called by the board and shall be called by the board 
        upon the written petition of qualified voters of the district.  
        A referendum to revoke or reduce the levy revenue amount must be 
        based upon the dollar amount, local tax rate, or state the 
        amount per resident marginal cost pupil unit, that was stated to 
        be the basis for the initial authorization by which the 
        authority is to be reduced.  Revenue authority approved by the 
        voters of the district pursuant to paragraph (a) must 
        be received available to the school district at least once 
        before it is subject to a referendum on its revocation or 
        reduction for subsequent years.  Only one revocation or 
        reduction referendum may be held to revoke or reduce referendum 
        revenue for any specific year and for years thereafter. 
           (d) A petition authorized by paragraph (a) or (c) is 
        effective if signed by a number of qualified voters in excess of 
        15 percent of the registered voters of the district on the day 
        the petition is filed with the board.  A referendum invoked by 
        petition must be held on the date specified in paragraph (a). 
           (e) The approval of 50 percent plus one of those voting on 
        the question is required to pass a referendum authorized by this 
        subdivision. 
           (f) At least 15 days before the day of the referendum, the 
        district must submit a copy of the notice required under 
        paragraph (b) to the commissioner and to the county auditor of 
        each county in which the district is located.  Within 15 days 
        after the results of the referendum have been certified by the 
        board, or in the case of a recount, the certification of the 
        results of the recount by the canvassing board, the district 
        must notify the commissioner of the results of the referendum. 
           Sec. 41.  Minnesota Statutes 2002, section 126C.17, 
        subdivision 13, is amended to read: 
           Subd. 13.  [REFERENDUM CONVERSION ALLOWANCE.] (a) A school 
        district that received supplemental or transition revenue in 
        fiscal year 2002 may convert its supplemental revenue conversion 
        allowance and transition revenue conversion allowance to 
        additional referendum allowance under subdivision 1 for fiscal 
        year 2003 and thereafter.  A majority of the school board must 
        approve the conversion at a public meeting before November 1, 
        2001.  For a district with other referendum authority, the 
        referendum conversion allowance approved by the board continues 
        until the portion of the district's other referendum authority 
        with the earliest expiration date after June 30, 2006, expires.  
        For a district with no other referendum authority, the 
        referendum conversion allowance approved by the board continues 
        until June 30, 2012. 
           (b) A school district that received transition revenue in 
        fiscal year 2004 may convert all or part of its transition 
        revenue to referendum revenue with voter approval in a 
        referendum called for the purpose.  The referendum must be held 
        in accordance with subdivision 9, except that the ballot may 
        state that existing transition revenue authority is being 
        canceled or is expiring.  In this case, the ballot shall compare 
        the proposed referendum allowance to the canceled or expiring 
        transition revenue allowance.  For purposes of this comparison, 
        the canceled or expiring transition revenue allowance per 
        adjusted marginal cost pupil unit shall be converted to an 
        allowance per resident marginal cost pupil unit based on the 
        district's ratio of adjusted marginal cost pupil units to 
        resident marginal cost pupil units for the preceding fiscal 
        year.  The referendum must be held on the first Tuesday after 
        the first Monday in November.  The notice required under section 
        275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT 
        QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."  
        Elections under this paragraph must be held in 2007 or earlier.  
           Sec. 42.  Minnesota Statutes 2002, section 126C.21, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
        amount of money apportioned to a district for that year pursuant 
        to section 127A.34, subdivision 2, excluding any district where 
        the general education levy is determined according to section 
        126C.13, subdivision 3, must be deducted from the general 
        education aid earned by that district for the same year or from 
        aid earned from other state sources.  
           Sec. 43.  Minnesota Statutes 2002, section 126C.457, is 
        amended to read: 
           126C.457 [CAREER AND TECHNICAL LEVY.] 
           For taxes payable in 2003 only, A school district may levy 
        an amount equal to the greater of (1) $10,000, or (2) the 
        district's fiscal year 2001 entitlement for career and technical 
        aid under section 124D.453.  The district must recognize the 
        full amount of this levy as revenue for the fiscal year in which 
        it is certified.  Revenue received under this section must be 
        reserved and used only for career and technical programs.  
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004.  
           Sec. 44.  Minnesota Statutes 2002, section 169.28, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STOP REQUIRED.] (a) The driver of any 
        motor vehicle carrying passengers for hire, or of any school bus 
        whether carrying passengers or not, or of any Head Start bus 
        whether carrying passengers or not, or of any vehicle that is 
        required to stop at railroad grade crossings under Code of 
        Federal Regulations, title 49, section 392.10, before crossing 
        at grade any track or tracks of a railroad, shall stop the 
        vehicle not less than 15 feet nor more than 50 feet from the 
        nearest rail of the railroad and while so stopped shall listen 
        and look in both directions along the track for any approaching 
        train, and for signals indicating the approach of a train, 
        except as hereinafter provided, and shall not proceed until safe 
        to do so.  The driver must not shift gears while crossing the 
        railroad tracks.  
           (b) A school bus or Head Start bus shall not be flagged 
        across railroad grade crossings except at those railroad grade 
        crossings that the local school administrative officer may 
        designate. 
           (c) A type III school bus, as defined in section 169.01, is 
        exempt from the requirement of school buses to stop at railroad 
        grade crossings. 
           Sec. 45.  Minnesota Statutes 2002, section 169.4503, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CERTIFICATION.] A body manufacturer, school bus 
        dealer, or certified Minnesota Commercial Vehicle Inspector who 
        is also an employee of an organization purchasing a school bus 
        shall certify provide preliminary certification to the 
        department of public safety that the product meets Minnesota 
        standards.  Final certification will be granted within 30 days 
        upon reinspection by the department of public safety. 
           Sec. 46.  Minnesota Statutes 2002, section 169.454, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGE OF VEHICLE.] Vehicles ten 12 years or older 
        must not be used as type III vehicles to transport school 
        children, except those vehicles that are manufactured to meet 
        the structural requirements of federal motor vehicle safety 
        standard 222, Code of Federal Regulations, title 49, part 571. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 47.  Minnesota Statutes 2002, section 169.454, 
        subdivision 6, is amended to read: 
           Subd. 6.  [IDENTIFICATION.] (a) The vehicle must not have 
        the words "school bus" in any location on the exterior of the 
        vehicle, or in any interior location visible to a motorist. 
           (b) The vehicle must display to the rear of the vehicle 
        this sign:  "VEHICLE STOPS AT RR CROSSINGS." 
           (c) The lettering (except for "AT," which may be one inch 
        smaller) must be a minimum two-inch "Series D" as specified in 
        standard alphabets for highway signs as specified by the Federal 
        Highway Administration.  The printing must be in a color giving 
        a marked contrast with that of the part of the vehicle on which 
        it is placed. 
           (d) The sign must have provisions for being covered, or be 
        of a removable or fold-down type. 
           Sec. 48.  Minnesota Statutes 2002, section 171.321, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL EVALUATION AND LICENSE VERIFICATION.] (a) 
        A school district's pupil transportation safety director, the 
        chief administrator of a nonpublic school, or a private 
        contractor shall certify annually to the school board or 
        governing board of a nonpublic school that, at minimum, each 
        school bus driver meets the school bus driver training 
        competencies under subdivision 4.  A school district, nonpublic 
        school, or private contractor also shall provide in-service 
        training annually to each school bus driver.  
           (b) A school district, nonpublic school, or private 
        contractor shall annually verify the validity of the driver's 
        license of each person who transports students for the district 
        with the National Drivers Register or with the department of 
        public safety. 
           Sec. 49.  Minnesota Statutes 2002, section 205A.07, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [NOTICE TO COMMISSIONER OF EDUCATION.] At least 
        49 days prior to every school district election, under section 
        123B.62, 123B.63, 126C.17, 126C.69, or 475.58, the school 
        district clerk shall provide a written notice to the 
        commissioner of education.  The notice must include the date of 
        the election and the title and language for each ballot question 
        to be voted on at the election.  The certified vote totals for 
        each ballot question shall be provided in a written notice to 
        the commissioner in a timely manner. 
           Sec. 50.  [NONPUBLIC PUPIL MATERIALS AND TESTS.] 
           Notwithstanding Minnesota Statutes, section 123B.42, 
        subdivision 3, paragraph (b), the inflation adjustment for 
        nonpublic pupil textbooks, individualized instructional or 
        cooperative learning materials, and standardized tests for 
        fiscal year 2004 must be computed using the fiscal year 2004 
        formula allowance minus $415. 
           Sec. 51.  [STAFF DEVELOPMENT RESERVED REVENUE; FISCAL YEARS 
        2004 AND 2005.] 
           Notwithstanding Minnesota Statutes, section 122A.61, 
        subdivision 1, for fiscal years 2004 and 2005 only, a school 
        district must reserve an amount equal to at least zero percent 
        of the basic revenue under Minnesota Statutes, section 126C.10, 
        subdivision 2.  A district may waive this requirement by a 
        majority vote of the licensed teachers in the district and a 
        majority vote of the school board.  A district in statutory 
        operating debt is exempt from this requirement. 
           Sec. 52.  [LEASE RATE; COOK COUNTY.] 
           (a) Notwithstanding Minnesota Statutes, section 92.46, and 
        Minnesota Rules, chapter 6122, in 2003, the lease rate for lands 
        leased under Minnesota Statutes, section 92.46, that are located 
        in Section 16, Township 62 North, Range 4 East, Cook county, 
        shall be two percent of the appraised value of the land as 
        determined by the commissioner of natural resources at the fifth 
        anniversary of the lease. 
           (b) In 2004 and every year thereafter, the amount payable 
        shall be adjusted for inflation and shall be increased to an 
        amount equal to:  (1) the amount before the inflation adjustment 
        multiplied by (2) one plus the percentage increase in the 
        implicit price deflator for government consumption expenditures 
        and gross investment for state and local governments prepared by 
        the Bureau of Economic Analysis of the United States Department 
        of Commerce for the last month of the third quarter of the 
        calendar year prior to the year for which the rent is paid. 
           Sec. 53.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated.  
           Subd. 2.  [GENERAL EDUCATION AID.] For general education 
        aid under Minnesota Statutes, section 126C.13, subdivision 4: 
          $4,764,384,000    .....     2004
          $5,090,303,000    .....     2005
           The 2004 appropriation includes $857,432,000 for 2003 and 
        $3,906,952,000 for 2004. 
           The 2005 appropriation includes $1,009,856,000 for 2004 and 
        $4,080,447,000 for 2005.  
           Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
        referendum tax base replacement aid under Minnesota Statutes, 
        section 126C.17, subdivision 7a: 
             $ 7,841,000    .....     2004 
             $ 8,543,000    .....     2005 
           The 2004 appropriation includes $1,419,000 for 2003 and 
        $6,422,000 for 2004.  
           The 2005 appropriation includes $1,605,000 for 2004 and 
        $6,938,000 for 2005. 
           Subd. 4.  [ENROLLMENT OPTIONS TRANSPORTATION.] For 
        transportation of pupils attending postsecondary institutions 
        under Minnesota Statutes, section 124D.09, or for transportation 
        of pupils attending nonresident districts under Minnesota 
        Statutes, section 124D.03: 
             $50,000        .....     2004
             $55,000        .....     2005
           Subd. 5.  [ABATEMENT REVENUE.] For abatement aid under 
        Minnesota Statutes, section 127A.49:  
             $2,680,000     .....     2004 
             $2,937,000     .....     2005 
           The 2004 appropriation includes $472,000 for 2003 and 
        $2,208,000 for 2004.  
           The 2005 appropriation includes $551,000 for 2004 and 
        $2,386,000 for 2005.  
           Subd. 6.  [CONSOLIDATION TRANSITION.] For districts 
        consolidating under Minnesota Statutes, section 123A.485: 
             $207,000        .....     2004 
             $607,000        .....     2005 
           The 2004 appropriation includes $35,000 for 2003 and 
        $172,000 for 2004. 
           The 2005 appropriation includes $42,000 for 2004 and 
        $565,000 for 2005. 
           Subd. 7.  [TORNADO IMPACT; YELLOW MEDICINE EAST.] For a 
        grant to independent school district No. 2190, Yellow Medicine 
        East, for tornado impact declining enrollment aid: 
             $78,000         .....     2004
             $39,000         .....     2005
           Subd. 8.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
        pupil aid to independent school district No. 241, Albert Lea: 
             $225,000        .....     2004
             $150,000        .....     2005
           Subd. 9.  [DECLINING PUPIL AID; MESABI EAST.] For declining 
        pupil aid to independent school district No. 2711, Mesabi East: 
             $150,000        .....     2004
             $100,000        .....     2005
           Subd. 10.  [DECLINING PUPIL AID; ROSEAU.] For declining 
        pupil aid to independent school district No. 682, Roseau: 
             $30,000         .....     2004
             $20,000         .....     2005
           Subd. 11.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
        education aid under Minnesota Statutes, sections 123B.40 to 
        123B.43 and 123B.87: 
             $14,626,000    .....     2004 
             $15,594,000    .....     2005 
           The 2004 appropriation includes $2,715,000 for 2003 and 
        $11,911,000 for 2004. 
           The 2005 appropriation includes $2,977,000 for 2004 and 
        $12,617,000 for 2005. 
           Subd. 12.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
        pupil transportation aid under Minnesota Statutes, section 
        123B.92, subdivision 9: 
             $21,477,000     .....     2004 
             $21,982,000     .....     2005 
           The 2004 appropriation includes $3,990,000 for 2003 and 
        $17,487,000 for 2004. 
           The 2005 appropriation includes $4,371,000 for 2004 and 
        $17,611,000 for 2005. 
           Subd. 13.  [ONE-ROOM SCHOOLHOUSE.] For a grant to 
        independent school district No. 690, Warroad, to operate the 
        Angle Inlet school: 
             $50,000     .....     2004
             $50,000     .....     2005
           The budget base for this item for fiscal year 2006 and each 
        year thereafter is $50,000. 
           Sec. 54.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 123A.73, subdivisions 
        7, 10, and 11; 123B.81, subdivision 6; 124D.65, subdivision 4; 
        126C.01, subdivision 4; and 126C.125, are repealed.  
           (b) Minnesota Statutes 2002, section 126C.14, is repealed 
        effective for revenue for fiscal year 2003. 
           (c) Minnesota Statutes 2002, section 122A.62, is repealed 
        effective for taxes payable in 2004. 
           (d) Laws 2001, First Special Session chapter 6, article 5, 
        section 12, as amended by Laws 2002, chapter 377, article 12, 
        section 15, is repealed. 
           (e) Laws 2000, chapter 489, article 2, section 36, as 
        amended by Laws 2001, First Special Session chapter 6, article 
        1, section 44, is repealed effective for revenue for fiscal year 
        2004. 

                                   ARTICLE 2 
                              EDUCATION EXCELLENCE 
           Section 1.  Minnesota Statutes 2002, section 120A.05, 
        subdivision 11, is amended to read: 
           Subd. 11.  [MIDDLE SCHOOL.] "Middle school" means any 
        school other than a secondary school giving an approved course 
        of study in a minimum of three two consecutive grades above 4th 
        but below 10th with building, equipment, courses of study, class 
        schedules, enrollment, and staff meeting the standards 
        established by the commissioner of children, families, and 
        learning education. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later. 
           Sec. 2.  Minnesota Statutes 2002, section 120A.24, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORTS TO THE STATE.] A superintendent must 
        make an annual report to the commissioner of children, families, 
        and learning education.  The report must include the following 
        information: 
           (1) the number of children residing in the district 
        attending nonpublic schools or receiving instruction from 
        persons or institutions other than a public school; 
           (2) the number of children in clause (1) who are in 
        compliance with section 120A.22 and this section; and 
           (3) the names, ages, and addresses number of children whom 
        in clause (1) who the superintendent has determined are not in 
        compliance with section 120A.22 and this section.  
           Sec. 3.  Minnesota Statutes 2002, section 120A.41, is 
        amended to read: 
           120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
           A school board's annual school calendar must include at 
        least three additional days of student instruction or staff 
        development training related to implementing section 120B.031, 
        subdivision 1, paragraph (f), beyond the number of days of 
        student instruction the board formally adopted as its school 
        calendar at the beginning of the 1996-1997 school year. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year. 
           Sec. 4.  Minnesota Statutes 2002, section 121A.55, is 
        amended to read: 
           121A.55 [POLICIES TO BE ESTABLISHED.] 
           (a) The commissioner of children, families, and 
        learning education 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 121A.40 to 121A.56.  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 120B.02 and help prepare the pupil for readmission.  
           (b) An area learning center under section 123A.05 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.  Each school district shall develop a policy and report it 
        to the commissioner on the appropriate use of peace officers and 
        crisis teams to remove students who have an individualized 
        education plan from school grounds. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 5.  Minnesota Statutes 2002, section 121A.61, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POLICY COMPONENTS.] The policy must include at 
        least the following components:  
           (a) rules governing student conduct and procedures for 
        informing students of the rules; 
           (b) the grounds for removal of a student from a class; 
           (c) the authority of the classroom teacher to remove 
        students from the classroom pursuant to procedures and rules 
        established in the district's policy; 
           (d) the procedures for removal of a student from a class by 
        a teacher, school administrator, or other school district 
        employee; 
           (e) the period of time for which a student may be removed 
        from a class, which may not exceed five class periods for a 
        violation of a rule of conduct; 
           (f) provisions relating to the responsibility for and 
        custody of a student removed from a class; 
           (g) the procedures for return of a student to the specified 
        class from which the student has been removed; 
           (h) the procedures for notifying a student and the 
        student's parents or guardian of violations of the rules of 
        conduct and of resulting disciplinary actions; 
           (i) any procedures determined appropriate for encouraging 
        early involvement of parents or guardians in attempts to improve 
        a student's behavior; 
           (j) any procedures determined appropriate for encouraging 
        early detection of behavioral problems; 
           (k) any procedures determined appropriate for referring a 
        student in need of special education services to those services; 
           (1) the procedures for consideration of whether there is a 
        need for a further assessment or of whether there is a need for 
        a review of the adequacy of a current individual education plan 
        of a student with a disability who is removed from class; 
           (m) procedures for detecting and addressing chemical abuse 
        problems of a student while on the school premises; 
           (n) the minimum consequences for violations of the code of 
        conduct; 
           (o) procedures for immediate and appropriate interventions 
        tied to violations of the code; and 
           (p) a provision that states that a teacher, school 
        employee, school bus driver, or other agent of a district may 
        use reasonable force in compliance with section 121A.582 and 
        other laws; and 
           (q) an agreement regarding procedures to coordinate crisis 
        services to the extent funds are available with the county board 
        responsible for implementing sections 245.487 to 245.4888 for 
        students with a serious emotional disturbance or other students 
        who have an individualized education plan whose behavior may be 
        addressed by crisis intervention. 
           Sec. 6.  Minnesota Statutes 2002, section 121A.64, is 
        amended to read: 
           121A.64 [NOTIFICATION; TEACHERS' LEGITIMATE EDUCATIONAL 
        INTEREST.] 
           (a) A classroom teacher has a legitimate educational 
        interest in knowing which students placed in the teacher's 
        classroom have a history of violent behavior and must be 
        notified before such students are placed in the teacher's 
        classroom.  
           (b) Representatives of the school board and the exclusive 
        representative of the teachers shall discuss issues related to 
        notification prior to placement the model policy on student 
        records adopted under Laws 1999, chapter 241, article 9, section 
        50, and any modifications adopted under this act for notifying 
        classroom teachers and other school district employees having a 
        legitimate educational interest in knowing about students with a 
        history of violent behavior placed in classrooms of students 
        with histories of violent behavior and any.  The representatives 
        of the school board and the exclusive representative of the 
        teachers also may discuss the need for intervention services or 
        conflict resolution or training for staff in these cases related 
        to placing students with a history of violent behavior in 
        teachers' classrooms. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later. 
           Sec. 7.  Minnesota Statutes 2002, section 122A.09, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LICENSE AND RULES.] (a) The board must adopt 
        rules to license public school teachers and interns subject to 
        chapter 14. 
           (b) The board must adopt rules requiring a person to 
        successfully complete a skills examination in reading, writing, 
        and mathematics as a requirement for initial teacher licensure.  
        Such rules must require college and universities offering a 
        board approved teacher preparation program to provide remedial 
        assistance to persons who did not achieve a qualifying score on 
        the skills examination, including those for whom English is a 
        second language. 
           (c) The board must adopt rules to approve teacher 
        preparation programs.  The board, upon the request of a 
        post-secondary student preparing for teacher licensure or a 
        licensed graduate of a teacher preparation program, shall assist 
        in resolving a dispute between the person and a post-secondary 
        institution providing a teacher preparation program when the 
        dispute involves an institution's recommendation for licensure 
        affecting the person or the person's credentials.  At the 
        board's discretion, assistance may include the application of 
        chapter 14. 
           (d) The board must provide the leadership and shall adopt 
        rules for the redesign of teacher education programs to 
        implement a research based, results-oriented curriculum that 
        focuses on the skills teachers need in order to be effective.  
        The board shall implement new systems of teacher preparation 
        program evaluation to assure program effectiveness based on 
        proficiency of graduates in demonstrating attainment of program 
        outcomes. 
           (e) The board must adopt rules requiring successful 
        completion of an examination of general pedagogical knowledge 
        and examinations of licensure-specific teaching skills.  The 
        rules shall be effective on the dates determined by the board 
        but not later than September 1, 2001.  
           (f) The board must adopt rules requiring teacher educators 
        to work directly with elementary or secondary school teachers in 
        elementary or secondary schools to obtain periodic exposure to 
        the elementary or secondary teaching environment. 
           (g) The board must grant licenses to interns and to 
        candidates for initial licenses. 
           (h) The board must design and implement an assessment 
        system which requires a candidate for an initial license and 
        first continuing license to demonstrate the abilities necessary 
        to perform selected, representative teaching tasks at 
        appropriate levels. 
           (i) The board must receive recommendations from local 
        committees as established by the board for the renewal of 
        teaching licenses. 
           (j) The board must grant life licenses to those who qualify 
        according to requirements established by the board, and suspend 
        or revoke licenses pursuant to sections 122A.20 and 214.10.  The 
        board must not establish any expiration date for application for 
        life licenses.  
           (k) The board must adopt rules that require all licensed 
        teachers who are renewing their continuing license to include in 
        their renewal requirements further preparation in the areas of 
        using positive behavior interventions and in accommodating, 
        modifying, and adapting curricula, materials, and strategies to 
        appropriately meet the needs of individual students and ensure 
        adequate progress toward the state's graduation rule.  
           (l) In adopting rules to license public school teachers who 
        provide health-related services for disabled children, the board 
        shall adopt rules consistent with license or registration 
        requirements of the commissioner of health and the 
        health-related boards who license personnel who perform similar 
        services outside of the school. 
           (m) The board must adopt rules that require all licensed 
        teachers who are renewing their continuing license to include in 
        their renewal requirements further reading preparation, 
        consistent with section 122A.06, subdivision 4.  The rules do 
        not take effect until they are approved by law.  
           (n) The board must adopt rules that require all licensed 
        teachers who are renewing their continuing license to include in 
        their renewal requirements further preparation in understanding 
        the key warning signs of early-onset mental illness in children 
        and adolescents. 
           Sec. 8.  Minnesota Statutes 2002, section 122A.414, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [REPORT.] Participating districts and school 
        sites must report on the implementation and effectiveness of the 
        alternative teacher compensation plan, particularly addressing 
        each requirement under subdivision 2 and make biennial 
        recommendations by January 1 to their school boards.  The school 
        boards shall transmit a summary of the findings and 
        recommendations of their district to the commissioner. 
           Sec. 9.  Minnesota Statutes 2002, section 122A.415, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AID AMOUNT.] (a) A school district that 
        meets the conditions of section 122A.414 and submits an 
        application approved by the commissioner is eligible for 
        alternative compensation aid.  The commissioner must consider 
        only applications submitted jointly by a school district and the 
        exclusive representative of the teachers for participation in 
        the program.  The application must contain a formally adopted 
        collective bargaining agreement, memorandum of understanding, or 
        other binding agreement that implements an alternative teacher 
        professional pay system consistent with section 122A.414 and 
        includes all teachers in a district, all teachers at a school 
        site, or at least 25 percent of the teachers in a district.  The 
        commissioner, in approving applications, may give preference to 
        applications involving entire districts or sites in approving 
        applications or to applications that align measures of teacher 
        performance with student academic achievement and progress under 
        section 120B.35, subdivision 1.  
           (b) Alternative compensation aid for a qualifying school 
        district, site, or portion of a district or school site is as 
        follows: 
           (1) for a school district in which the school board and the 
        exclusive representative of the teachers agree to place all 
        teachers in the district or at the site on the alternative 
        compensation schedule, alternative compensation aid equals $150 
        times the district's or the site's number of pupils enrolled on 
        October 1 of the previous fiscal year; or 
           (2) for a district in which the school board and the 
        exclusive representative of the teachers agree that at least 25 
        percent of the district's licensed teachers will be paid on the 
        alternative compensation schedule, alternative compensation aid 
        equals $150 times the percentage of participating teachers times 
        the district's number of pupils enrolled as of October 1 of the 
        previous fiscal year.  
           Sec. 10.  Minnesota Statutes 2002, section 122A.415, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AID TIMING.] (a) Districts or sites with 
        approved applications must receive alternative compensation aid 
        for each school year that the district or site participates in 
        the program as described in this subdivision.  Districts or 
        sites with applications received by the commissioner before June 
        1 of the first year of a two-year contract shall receive 
        alternative compensation aid for both years of the contract.  
        Districts or sites with applications received by the 
        commissioner after June 1 of the first year of a two-year 
        contract shall receive alternative compensation aid only for the 
        second year of the contract.  A qualifying district or site that 
        received alternative compensation aid for the previous fiscal 
        year must receive at least an amount equal to the lesser of the 
        amount it received for the previous fiscal year or its 
        proportionate share of the previous year's appropriation if the 
        district or site submits a timely application and the 
        commissioner determines that the district or site continues to 
        implement an alternative teacher professional pay system, 
        consistent with its application under this section.  The 
        commissioner must approve initial applications for school 
        districts qualifying under subdivision 1, paragraph (b), clause 
        (1), by January 15 of each year.  If any money remains, the 
        commissioner must approve aid amounts for school districts 
        qualifying under subdivision 1, paragraph (b), clause (2), by 
        February 15 of each year.  
           (b) The commissioner shall select applicants that qualify 
        for this program, notify school districts and school sites about 
        the program, develop and disseminate application materials, and 
        carry out other activities needed to implement this section.  
           Sec. 11.  Minnesota Statutes 2002, section 122A.63, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REVIEW AND COMMENT.] The commissioner must 
        submit the joint application to the Minnesota American Indian 
        scholarship education committee for review and comment. 
           Sec. 12.  [123B.025] [SCHOOL SPONSORSHIP AND ADVERTISING 
        REVENUE.] 
           Subdivision 1.  [BOARD AUTHORITY; CONTRACTS.] A school 
        board may enter into a contract with advertisers, sponsors, or 
        others regarding advertising and naming rights to school 
        facilities under the general charge of the district.  A contract 
        authorized under this section must be approved by the school 
        board.  The powers granted to a school board under this section 
        are in addition to any other authority the school district may 
        have. 
           Subd. 2.  [AUTHORIZED AGREEMENTS.] A school district may 
        enter into a contract to: 
           (1) lease the naming rights for school facilities, 
        including school buildings, ice arenas, and stadiums; 
           (2) sell advertising on or in the facilities listed in 
        clause (1); and 
           (3) otherwise enter into an agreement with a sponsoring 
        agent. 
           Subd. 3.  [REVENUE USES.] Revenue generated under this 
        section must be used according to a plan specified by the school 
        board. 
           Sec. 13.  Minnesota Statutes 2002, section 123B.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OFFICER SELECTION.] Within ten days after 
        the election of the first board in independent districts and 
        annually thereafter on July 1, On the first Monday of January of 
        each year, or as soon thereafter as practicable, the board must 
        meet and organize by selecting a chair, clerk, and a treasurer, 
        who shall hold their offices for one year and until their 
        successors are selected and qualify.  The persons who perform the 
        duties of the clerk and treasurer need not be members of the 
        board and the board by resolution may combine the duties of the 
        offices of clerk and treasurer in a single person in the office 
        of business affairs.  They may appoint a superintendent who 
        shall be ex officio a member of the board, but not entitled to 
        vote therein.  In districts in which board members are elected 
        at the general election in November, the annual meeting of the 
        board must be held on the first Monday of January or as soon 
        thereafter as practicable. 
           Sec. 14.  Minnesota Statutes 2002, section 123B.88, 
        subdivision 2, is amended to read: 
           Subd. 2.  [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. 15.  Minnesota Statutes 2002, section 124D.081, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [RESERVE ACCOUNT.] First grade preparedness 
        revenue must be placed in a reserve account within the general 
        fund and may only be used for first grade preparedness programs 
        at qualifying school sites. 
           Sec. 16.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ENROLLMENT PRIORITY.] A post-secondary 
        institution shall give priority to its post-secondary students 
        when enrolling 11th and 12th grade pupils in its courses.  A 
        post-secondary institution may provide information about its 
        programs to a secondary school or to a pupil or parent, but it 
        may not advertise or otherwise recruit or solicit the 
        participation on financial grounds, of secondary pupils to 
        enroll in its programs on financial grounds.  An institution 
        must not enroll secondary pupils, for post-secondary enrollment 
        options purposes, in remedial, developmental, or other courses 
        that are not college level.  Once a pupil has been enrolled in a 
        post-secondary course under this section, the pupil shall not be 
        displaced by another student.  
           Sec. 17.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 10, is amended to read: 
           Subd. 10.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
        pupil, according to subdivision 4 5, may enroll in a 
        nonsectarian course taught by a secondary teacher or a 
        post-secondary faculty member and offered at a secondary school, 
        or another location, according to an agreement between a public 
        school board and the governing body of an eligible public 
        post-secondary system or an eligible private post-secondary 
        institution, as defined in subdivision 3.  All provisions of 
        this section shall apply to a pupil, public school board, 
        district, and the governing body of a post-secondary 
        institution, except as otherwise provided.  
           Sec. 18.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 16, is amended to read: 
           Subd. 16.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
        ACCORDING TO AGREEMENTS.] (a) The agreement between a board and 
        the governing body of a public post-secondary system or private 
        post-secondary institution shall set forth the payment amounts 
        and arrangements, if any, from the board to the post-secondary 
        institution.  No payments shall be made by the department 
        according to subdivision 14 13 or 15.  For the purpose of 
        computing state aids for a district, a pupil enrolled according 
        to subdivision 10 shall be counted in the average daily 
        membership of the district as though the pupil were enrolled in 
        a secondary course that is not offered in connection with an 
        agreement.  Nothing in this subdivision shall be construed to 
        prohibit a public post-secondary system or private 
        post-secondary institution from receiving additional state 
        funding that may be available under any other law.  
           (b) If a course is provided under subdivision 10, offered 
        at a secondary school, and taught by a secondary teacher, the 
        post-secondary system or institution must not require a payment 
        from the school board that exceeds the cost to the 
        post-secondary institution that is directly attributable to 
        providing that course.  
           Sec. 19.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 20, is amended to read: 
           Subd. 20.  [TEXTBOOKS; MATERIALS.] All textbooks and 
        equipment provided to a pupil, and paid for under subdivision 
        13, are the property of the pupil's school district of residence 
        postsecondary institution.  Each pupil is required to return all 
        textbooks and equipment to the district postsecondary 
        institution after the course has ended. 
           Sec. 20.  [124D.095] [ON-LINE LEARNING OPTION.] 
           Subdivision 1.  [CITATION.] This section may be cited as 
        the "On-line Learning Option Act." 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them. 
           (a) "On-line learning" is an interactive course or program 
        that delivers instruction to a student by computer; is combined 
        with other traditional delivery methods that include frequent 
        student assessment and may include actual teacher contact time; 
        and meets or exceeds state academic standards. 
           (b) "On-line learning provider" is a school district, an 
        organization of two or more school districts operating under a 
        joint powers agreement, or a charter school located in Minnesota 
        that provides on-line learning to students. 
           (c) "Student" is a Minnesota resident enrolled in a school 
        under section 120A.22, subdivision 4, in kindergarten through 
        grade 12. 
           (d) "On-line learning student" is a student enrolled in an 
        on-line learning course or program delivered by an on-line 
        provider under paragraph (b). 
           (e) "Enrolling district" means the school district or 
        charter school in which a student is enrolled under section 
        120A.22, subdivision 4, for purposes of compulsory attendance.  
           Subd. 3.  [AUTHORIZATION; NOTICE; LIMITATIONS ON 
        ENROLLMENT.] (a) A student may apply to an on-line learning 
        provider to enroll in on-line learning.  A student age 17 or 
        younger must have the written consent of a parent or guardian to 
        apply.  No school district or charter school may prohibit a 
        student from applying to enroll in on-line learning.  An on-line 
        learning provider that accepts a student under this section 
        must, within ten days, notify the student and the enrolling 
        district if the enrolling district is not the on-line learning 
        provider.  The notice must report the student's course or 
        program and hours of instruction. 
           (b) An on-line learning student must notify the enrolling 
        district at least 30 days before taking an on-line learning 
        course or program if the enrolling district is not providing the 
        on-line learning.  An on-line learning provider must notify the 
        commissioner that it is delivering on-line learning and report 
        the number of on-line learning students it is accepting and the 
        on-line learning courses and programs it is delivering.  
           (c) An on-line learning provider may limit enrollment if 
        the provider's school board or board of directors adopts by 
        resolution specific standards for accepting and rejecting 
        students' applications. 
           (d) An enrolling district may reduce an on-line learning 
        student's regular classroom instructional membership in 
        proportion to the student's membership in on-line learning 
        courses. 
           Subd. 4.  [ON-LINE LEARNING PARAMETERS.] (a) An on-line 
        learning student must receive academic credit for completing the 
        requirements of an on-line learning course or program.  
        Secondary credits granted to an on-line learning student must be 
        counted toward the graduation and credit requirements of the 
        enrolling district.  The enrolling district must apply the same 
        graduation requirements to all students, including on-line 
        learning students, and must continue to provide nonacademic 
        services to on-line learning students.  If a student completes 
        an on-line learning course or program that meets or exceeds a 
        graduation standard or grade progression requirement at the 
        enrolling district, that standard or requirement is met.  The 
        enrolling district must use the same criteria for accepting 
        on-line learning credits or courses as it does for accepting 
        credits or courses for transfer students under section 124D.03, 
        subdivision 9.  The enrolling district may reduce the teacher 
        contact time of an on-line learning student in proportion to the 
        number of on-line learning courses the student takes from an 
        on-line learning provider that is not the enrolling district.  
           (b) An on-line learning student may: 
           (1) enroll during a single school year in a maximum of 12 
        semester-long courses or their equivalent delivered by an 
        on-line learning provider or the enrolling district; 
           (2) complete course work at a grade level that is different 
        from the student's current grade level; and 
           (3) enroll in additional courses with the on-line learning 
        provider under a separate agreement that includes terms for 
        payment of any tuition or course fees.  
           (c) A student with a disability may enroll in an on-line 
        learning course or program if the student's IEP team determines 
        that on-line learning is appropriate education for the student. 
           (d) An on-line learning student has the same access to the 
        computer hardware and education software available in a school 
        as all other students in the enrolling district.  An on-line 
        learning provider must assist an on-line learning student whose 
        family qualifies for the education tax credit under section 
        290.0674 to acquire computer hardware and educational software 
        for on-line learning purposes. 
           (e) An enrolling district may offer on-line learning to its 
        enrolled students.  Such on-line learning does not generate 
        on-line learning funds under this section.  An enrolling 
        district that offers on-line learning only to its enrolled 
        students is not subject to the reporting requirements or review 
        criteria under subdivision 7.  A teacher with a Minnesota 
        license must assemble and deliver instruction to enrolled 
        students receiving on-line learning from an enrolling district.  
        The instruction may include curriculum developed by persons 
        other than a teacher with a Minnesota license. 
           (f) An on-line learning provider that is not the enrolling 
        district is subject to the reporting requirements and review 
        criteria under subdivision 7.  A teacher with a Minnesota 
        license must assemble and deliver instruction to on-line 
        learning students.  The instruction may include curriculum 
        developed by persons other than a teacher with a Minnesota 
        license.  Unless the commissioner grants a waiver, a teacher 
        providing on-line learning instruction must not instruct more 
        than 40 students in any one on-line learning course or program.  
           Subd. 5.  [PARTICIPATION IN EXTRACURRICULAR ACTIVITIES.] An 
        on-line learning student may participate in the extracurricular 
        activities of the enrolling district on the same basis as other 
        enrolled students. 
           Subd. 6.  [INFORMATION.] School districts and charter 
        schools must make available information about on-line learning 
        to all interested people. 
           Subd. 7.  [DEPARTMENT OF EDUCATION.] (a) The department 
        must review and certify on-line learning providers.  The on-line 
        learning courses and programs must be rigorous, aligned with 
        state academic standards, and contribute to grade progression in 
        a single subject.  On-line learning providers must affirm to the 
        commissioner that on-line learning courses have equivalent 
        standards or instruction, curriculum, and assessment 
        requirements as other courses offered to enrolled students.  The 
        on-line learning provider must also demonstrate expectations for 
        actual teacher contact time or other student-to-teacher 
        communication.  Once an on-line learning provider is approved 
        under this paragraph, all of its on-line learning course 
        offerings are eligible for payment under this section unless a 
        course is successfully challenged by an enrolling district or 
        the department under paragraph (b). 
           (b) An enrolling district may challenge the validity of a 
        course offered by an on-line learning provider.  The department 
        must review such challenges based on the certification 
        procedures under paragraph (a).  The department may initiate its 
        own review of the validity of an on-line learning course offered 
        by an on-line learning provider.  
           (c) The department may collect a fee not to exceed $250 for 
        certifying on-line learning providers or $50 per course for 
        reviewing a challenge by an enrolling district. 
           (d) The department must develop, publish, and maintain a 
        list of approved on-line learning providers and on-line learning 
        courses and programs that it has reviewed and certified. 
           Subd. 8.  [FINANCIAL ARRANGEMENTS.] (a) For a student 
        enrolled in an on-line learning course, the department must 
        calculate average daily membership and make payments according 
        to this subdivision. 
           (b) The initial on-line learning average daily membership 
        equals 1/12 for each semester course or a proportionate amount 
        for courses of different lengths.  The adjusted on-line learning 
        average daily membership equals the initial on-line learning 
        average daily membership times .88. 
           (c) No on-line learning average daily membership shall be 
        generated if:  (i) the student does not complete the on-line 
        learning course, or (ii) the student is enrolled in on-line 
        learning provided by the enrolling district and the student was 
        enrolled in a Minnesota public school for the school year before 
        the school year in which the student first enrolled in on-line 
        learning. 
           (d) On-line learning average daily membership under this 
        subdivision for a student currently enrolled in a Minnesota 
        public school and who was enrolled in a Minnesota public school 
        for the school year before the school year in which the student 
        first enrolled in on-line learning shall be used only for 
        computing average daily membership according to section 126C.05, 
        subdivision 19, paragraph (a), clause (ii), and for computing 
        on-line learning aid according to section 126C.24. 
           (e) On-line learning average daily membership under this 
        subdivision for students not included in paragraph (c) or (d) 
        shall be used only for computing average daily membership 
        according to section 126C.05, subdivision 19, paragraph (a), 
        clause (ii), and for computing payments under paragraphs (f) and 
        (g). 
           (f) Subject to the limitations in this subdivision, the 
        department must pay an on-line learning provider an amount equal 
        to the product of the adjusted on-line learning average daily 
        membership for students under paragraph (e) times the student 
        grade level weighting under section 126C.05, subdivision 1, 
        times the formula allowance. 
           (g) The department must pay each on-line learning provider 
        100 percent of the amount in paragraph (f) within 45 days of 
        receiving final enrollment and course completion information 
        each quarter or semester. 
           Subd. 9.  [PAYMENT PRIORITY.] (a) To the extent funds are 
        available, the commissioner must pay an on-line learning 
        provider according to subdivision 8, in the order in which a 
        on-line learning provider notifies the commissioner under 
        subdivision 3, paragraph (b), that it is delivering on-line 
        learning.  The on-line learning provider must submit to the 
        commissioner any student information necessary to process 
        payments under this section. 
           (b) Before paying other on-line learning providers under 
        paragraph (a), the commissioner must pay providers that 
        delivered on-line learning in fiscal year 2003.  (i) First, the 
        commissioner must pay for students who were enrolled in a 
        Minnesota on-line learning program during fiscal year 2003 and 
        continue to be enrolled in that on-line learning program during 
        the current fiscal year.  (ii) Second, the commissioner must pay 
        for other students enrolled in that on-line learning program 
        during the current fiscal year.  A provider's qualifying number 
        of pupils under clauses (i) and (ii) shall not exceed 100 
        percent of the fiscal year 2003 pupils.  An on-line learning 
        provider that qualifies under this paragraph may also submit an 
        application for funding for additional pupils under paragraph 
        (a). 
           (c) Notwithstanding paragraph (a), the commissioner may 
        establish criteria to limit the increase in the number of 
        qualifying pupils for an on-line learning provider to enable 
        start-up or growth of other providers. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later. 
           Sec. 21.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [CHARTER SCHOOL ADVISORY COUNCIL.] (a) A charter 
        school advisory council is established under section 
        15.059 except that the term for each council member shall be 
        three years.  The advisory council is composed of seven members 
        from throughout the state who have demonstrated experience with 
        or interest in charter schools.  The members of the council 
        shall be appointed by the commissioner.  The advisory council 
        shall bring to the attention of the commissioner any matters 
        related to charter schools that the council deems necessary and 
        shall: 
           (1) encourage school boards to make full use of charter 
        school opportunities; 
           (2) encourage the creation of innovative schools; 
           (3) provide leadership and support for charter school 
        sponsors to increase the innovation in and the effectiveness, 
        accountability, and fiscal soundness of charter schools; 
           (4) serve an ombudsman function in facilitating the 
        operations of new and existing charter schools; 
           (5) promote timely financial management training for newly 
        elected members of a charter school board of directors and 
        ongoing training for other members of a charter school board of 
        directors; and 
           (6) review charter school applications and recommend 
        approving or disapproving the applications; and 
           (7) facilitate compliance with auditing and other reporting 
        requirements.  The advisory council shall refer all its 
        proposals to the commissioner who shall provide time for reports 
        from the council. 
           (b) The charter school advisory council under this 
        subdivision expires June 30, 2003 2007. 
           Sec. 22.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SPONSOR.] (a) A school board; intermediate 
        school district school board; education district organized under 
        sections 123A.15 to 123A.19; charitable organization under 
        section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
        member of the Minnesota council of nonprofits or the Minnesota 
        council on foundations, registered with the attorney general's 
        office, and reports an end-of-year fund balance of at least 
        $2,000,000; Minnesota private college that grants two- or 
        four-year degrees and is registered with the higher education 
        services office under chapter 136A; community college, state 
        university, or technical college, governed by the board of 
        trustees of the Minnesota state colleges and universities; or 
        the University of Minnesota may sponsor one or more charter 
        schools.  
           (b) A nonprofit corporation subject to chapter 317A, 
        described in section 317A.905, and exempt from federal income 
        tax under section 501(c)(6) of the Internal Revenue Code of 
        1986, may sponsor one or more charter schools if the charter 
        school has operated for at least three years under a different 
        sponsor and if the nonprofit corporation has existed for at 
        least 25 years.  
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later. 
           Sec. 23.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
        authorize one or more licensed teachers under section 122A.18, 
        subdivision 1, to operate a charter school subject to approval 
        by the commissioner.  A board must vote on charter school 
        application for sponsorship no later than 90 days after 
        receiving the application.  After 90 days, the applicant may 
        apply to the commissioner.  If a board elects not to sponsor a 
        charter school, the applicant may appeal the board's decision to 
        the commissioner.  The commissioner may elect to sponsor the 
        charter school or assist the applicant in finding an eligible 
        sponsor.  The school must be organized and operated as a 
        cooperative under chapter 308A or nonprofit corporation under 
        chapter 317A and the provisions under the applicable chapter 
        shall apply to the school except as provided in this section.  
        Notwithstanding sections 465.717 and 465.719, a school district 
        may create a corporation for the purpose of creating a charter 
        school.  
           (b) Before the operators may form and operate a school, the 
        sponsor must file an affidavit with the commissioner stating its 
        intent to authorize a charter school.  The affidavit must state 
        the terms and conditions under which the sponsor would authorize 
        a charter school.  The commissioner must approve or disapprove 
        the sponsor's proposed authorization within 60 days of receipt 
        of the affidavit.  Failure to obtain commissioner approval 
        precludes a sponsor from authorizing the charter school that was 
        the subject of the affidavit.  
           (c) The operators authorized to organize and operate a 
        school, before entering into a contract or other agreement for 
        professional or other services, goods, or facilities, must 
        incorporate as a cooperative under chapter 308A or as a 
        nonprofit corporation under chapter 317A and must establish a 
        board of directors composed of at least five members until a 
        timely election for members of the charter school board of 
        directors is held according to the school's articles and 
        bylaws.  A charter school board of directors must be composed of 
        at least five members.  Any staff members who are employed at 
        the school, including teachers providing instruction under a 
        contract with a cooperative, and all parents of children 
        enrolled in the school may participate in the election for 
        members of the school's board of directors.  Licensed teachers 
        employed at the school, including teachers providing instruction 
        under a contract with a cooperative, must be a majority of the 
        members of the board of directors before the school completes 
        its third year of operation, unless the commissioner waives the 
        requirement for a majority of licensed teachers on the board.  
        Board of director meetings must comply with chapter 13D. 
           (d) The granting or renewal of a charter by a sponsoring 
        entity must not be conditioned upon the bargaining unit status 
        of the employees of the school.  
           (e) A sponsor may authorize the operators of a charter 
        school to expand the operation of the charter school to 
        additional sites or to add additional grades at the school 
        beyond those described in the sponsor's application as approved 
        by the commissioner only after submitting a supplemental 
        application to the commissioner in a form and manner prescribed 
        by the commissioner.  The supplemental application must provide 
        evidence that: 
           (1) the expansion of the charter school is supported by 
        need and projected enrollment; 
           (2) the charter school is fiscally sound; 
           (3) the sponsor supports the expansion; and 
           (4) the building of the additional site meets all health 
        and safety requirements to be eligible for lease aid. 
           (f) The commissioner annually must provide timely financial 
        management training to newly elected members of a charter school 
        board of directors and ongoing training to other members of a 
        charter school board of directors.  Training must address ways 
        to: 
           (1) proactively assess opportunities for a charter school 
        to maximize all available revenue sources; 
           (2) establish and maintain complete, auditable records for 
        the charter school; 
           (3) establish proper filing techniques; 
           (4) document formal actions of the charter school, 
        including meetings of the charter school board of directors; 
           (5) properly manage and retain charter school and student 
        records; 
           (6) comply with state and federal payroll record-keeping 
        requirements; and 
           (7) address other similar factors that facilitate 
        establishing and maintaining complete records on the charter 
        school's operations.  
           Sec. 24.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 16, is amended to read: 
           Subd. 16.  [TRANSPORTATION.] (a) By July 1 of each year, a 
        charter school must notify the district in which the school is 
        located and the department of children, families, and 
        learning education if it will provide transportation for pupils 
        enrolled in the school for the fiscal year. 
           (b) If a charter school elects to provide transportation 
        for pupils, the transportation must be provided by the charter 
        school within the district in which the charter school is 
        located.  The state must pay transportation aid to the charter 
        school according to section 124D.11, subdivision 2. 
           For pupils who reside outside the district in which the 
        charter school is located, the charter school is not required to 
        provide or pay for transportation between the pupil's residence 
        and the border of the district in which the charter school is 
        located.  A parent may be reimbursed by the charter school for 
        costs of transportation from the pupil's residence to the border 
        of the district in which the charter school is located if the 
        pupil is from a family whose income is at or below the poverty 
        level, as determined by the federal government.  The 
        reimbursement may not exceed the pupil's actual cost of 
        transportation or 15 cents per mile traveled, whichever is 
        less.  Reimbursement may not be paid for more than 250 miles per 
        week.  
           At the time a pupil enrolls in a charter school, the 
        charter school must provide the parent or guardian with 
        information regarding the transportation.  
           (c) If a charter school does not elect to provide 
        transportation, transportation for pupils enrolled at the school 
        must be provided by the district in which the school is located, 
        according to sections 123B.88, subdivision 6, and 124D.03, 
        subdivision 8, for a pupil residing in the same district in 
        which the charter school is located.  Transportation may be 
        provided by the district in which the school is located, 
        according to sections 123B.88, subdivision 6, and 124D.03, 
        subdivision 8, for a pupil residing in a different district.  If 
        the district provides the transportation, the scheduling of 
        routes, manner and method of transportation, control and 
        discipline of the pupils, and any other matter relating to the 
        transportation of pupils under this paragraph shall be within 
        the sole discretion, control, and management of the district. 
           Sec. 25.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 20, is amended to read: 
           Subd. 20.  [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a 
        teacher employed by a district makes a written request for an 
        extended leave of absence to teach at a charter school, the 
        district must grant the leave.  The district must grant a leave 
        for any number of not to exceed a total of five years requested 
        by the teacher, and must.  Any request to extend the leave at 
        the teacher's request shall be granted only at the discretion of 
        the school board.  The district may require that the request for 
        a leave or extension of leave be made up to 90 days before the 
        teacher would otherwise have to report for duty.  Except as 
        otherwise provided in this subdivision and except for section 
        122A.46, subdivision 7, the leave is governed by section 
        122A.46, including, but not limited to, reinstatement, notice of 
        intention to return, seniority, salary, and insurance. 
           During a leave, the teacher may continue to aggregate 
        benefits and credits in the teachers' retirement association 
        account by paying both the employer and employee contributions 
        based upon the annual salary of the teacher for the last full 
        pay period before the leave began.  The retirement association 
        may impose reasonable requirements to efficiently administer 
        this subdivision.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to approvals of leaves or 
        approvals of extensions of leaves made after that date.  
        Notwithstanding Minnesota Statutes 2002, section 122A.46, 
        subdivision 2, a school district, upon request, must grant a 
        one-year extension for the 2003-2004 school year to a teacher on 
        a leave of absence to teach at a charter school under this 
        subdivision who has taught five or more years as of the 
        2003-2004 school year. 
           Sec. 26.  Minnesota Statutes 2002, section 124D.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
        education revenue must be paid to a charter school as though it 
        were a district.  The general education revenue for each 
        adjusted marginal cost pupil unit is the state average general 
        education revenue per pupil unit, plus the referendum 
        equalization aid allowance in the pupil's district of residence, 
        minus an amount equal to the product of the formula allowance 
        according to section 126C.10, subdivision 2, times .0485, 
        calculated without basic skills revenue, and transportation 
        sparsity revenue, and the transportation portion of the 
        transition revenue adjustment, plus basic skills revenue and 
        transition revenue as though the school were a school district. 
           (b) Notwithstanding paragraph (a), for charter schools in 
        the first year of operation, general education revenue shall be 
        computed using the number of adjusted pupil units in the current 
        fiscal year.  
           Sec. 27.  Minnesota Statutes 2002, section 124D.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRANSPORTATION REVENUE.] Transportation revenue 
        must be paid to a charter school that provides transportation 
        services according to section 124D.10, subdivision 16, according 
        to this subdivision.  Transportation aid shall equal 
        transportation revenue.  
           In addition to the revenue under subdivision 1, a charter 
        school providing transportation services must receive general 
        education aid for each pupil unit equal to the sum of an amount 
        equal to the product of the formula allowance according to 
        section 126C.10, 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 district in which the charter 
        school is located.  
           Sec. 28.  Minnesota Statutes 2002, section 124D.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [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 126C.10, subdivision 13, 
        is insufficient for this purpose, it may apply to the 
        commissioner for building lease aid for this purpose.  The 
        commissioner must review and either approve or deny a lease aid 
        application using the following criteria: 
           (1) the reasonableness of the price based on current market 
        values; 
           (2) the extent to which the lease conforms to applicable 
        state laws and rules; and 
           (3) the appropriateness of the proposed lease in the 
        context of the space needs and financial circumstances of the 
        charter school. 
        A charter school must not use the building lease aid it receives 
        for custodial, maintenance service, utility, or other operating 
        costs.  The amount of building lease aid per pupil unit served 
        for a charter school for any year shall not exceed the lesser of 
        (a) 90 percent of the approved cost or (b) the product of the 
        pupil units served for the current school year times $1,500 the 
        greater of the charter school's building lease aid per pupil 
        unit served for fiscal year 2003, excluding the adjustment under 
        Laws 2002, chapter 392, article 6, section 4, or $1,200. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 29.  Minnesota Statutes 2002, section 124D.11, 
        subdivision 6, is amended to read: 
           Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
        school is eligible to receive other aids, grants, and revenue 
        according to chapters 120A to 129C, as though it were a district.
           (b) Notwithstanding paragraph (a), a charter school may not 
        receive aid, a grant, or revenue if a levy is required to obtain 
        the money, except as otherwise provided in this section.  
           (c) Federal aid received by the state must be paid to the 
        school, if it qualifies for the aid as though it were a school 
        district. 
           (d) A charter school may receive money from any source for 
        capital facilities needs.  In the year-end report to the 
        commissioner of children, families, and learning education, the 
        charter school shall report the total amount of funds received 
        from grants and other outside sources. 
           (e) Notwithstanding paragraph (a) or (b), a charter school 
        may apply for a grant to receive the aid portion of integration 
        revenue under section 124D.86, subdivision 3, for enrolled 
        students who are residents of a district that is eligible for 
        integration revenue.  The commissioner shall determine grant 
        recipients and may adopt application guidelines.  The grants 
        must be competitively determined and must demonstrate that 
        enrolling pupils in the charter school contributes to 
        desegregation or integration purposes as determined by the 
        commissioner.  If the charter school has elected not to provide 
        transportation under section 124D.10, subdivision 16, the aid 
        shall be reduced by the amount per pupil unit specified for the 
        district where the charter school is located under section 
        123B.92, subdivision 8. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 30.  Minnesota Statutes 2002, section 124D.42, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROGRAM TRAINING.] (a) The commission must, 
        within available resources, ensure an opportunity for each 
        participant to have three weeks of training in a residential 
        setting.  If offered, each training session must: 
           (1) orient each participant in the nature, philosophy, and 
        purpose of the program; 
           (2) build an ethic of community service through general 
        community service training; and 
           (3) provide additional training as it determines necessary, 
        which may include training in evaluating early literacy skills 
        and teaching reading to preschool children through the St. Croix 
        River education district under Laws 2001, First Special Session 
        chapter 6, article 2, section 70, to assist local Head Start 
        organizations in establishing and evaluating Head Start programs 
        for developing children's early literacy skills.  
           (b) Each grantee organization shall also train participants 
        in skills relevant to the community service opportunity.  
           Sec. 31.  Minnesota Statutes 2002, section 124D.86, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [BUDGET APPROVAL PROCESS.] Each year before a 
        district receives any revenue under subdivision 3, clause (4), 
        (5), or (6), the district must submit to the department of 
        children, families, and learning education, for its review and 
        approval a budget detailing the costs of the 
        desegregation/integration plan filed under Minnesota Rules, 
        parts 3535.0100 to 3535.0180.  Notwithstanding chapter 14, the 
        department may develop criteria for budget approval.  The 
        department shall consult with the desegregation advisory board 
        in developing these criteria.  The criteria developed by the 
        department should address, at a minimum, the following: 
           (1) budget items cannot be approved unless they are part of 
        any overall desegregation plan approved by the district for 
        isolated sites or by the multidistrict collaboration council and 
        participation individual members; 
           (2) the budget must indicate how revenue expenditures will 
        be used specifically to support increased opportunities for 
        interracial contact; 
           (3) components of the budget to be considered by the 
        department, including staffing, curriculum, transportation, 
        facilities, materials, and equipment and reasonable planning 
        costs, as determined by the department; and 
           (4) if plans are proposed to enhance existing programs, the 
        total budget being appropriated to the program must be included, 
        indicating what part is to be funded using integration revenue 
        and what part is to be funded using other revenues.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        for revenue for fiscal year 2003. 
           Sec. 32.  Minnesota Statutes 2002, section 124D.86, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
        the following amounts: 
           (1) for independent school district No. 709, 
        Duluth, $207 $206 times the adjusted pupil units for the school 
        year; 
           (2) for independent school district No. 625, St. 
        Paul, $446 $445 times the adjusted pupil units for the school 
        year; 
           (3) for special school district No. 1, Minneapolis, the sum 
        of $446 $445 times the adjusted pupil units for the school year 
        and an additional $35 times the adjusted pupil units for the 
        school year that is provided entirely through a local levy; 
           (4) for a district not listed in clause (1), (2), or (3), 
        that must implement a plan under Minnesota Rules, parts 
        3535.0100 to 3535.0180, where the district's enrollment of 
        protected students, as defined under Minnesota Rules, part 
        3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
        of implementing the plan during the fiscal year minus the aid 
        received under subdivision 6, or (ii) $130 $129 times the 
        adjusted pupil units for the school year; 
           (5) for a district not listed in clause (1), (2), (3), or 
        (4), that is required to implement a plan according to the 
        requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
        the lesser of 
           (i) the actual cost of implementing the plan during the 
        fiscal year minus the aid received under subdivision 6, or 
           (ii) $93 $92 times the adjusted pupil units for the school 
        year. 
           Any money received by districts in clauses (1) to (4) (3) 
        which exceeds the amount received in fiscal year 2000 shall be 
        subject to the budget requirements in subdivision 1a; and 
           (6) for a member district of a multidistrict integration 
        collaborative that files a plan with the commissioner, but is 
        not contiguous to a racially isolated district, integration 
        revenue equals the amount defined in clause (5). 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 33.  Minnesota Statutes 2002, section 124D.86, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
        equal to 37 percent for fiscal year 2003, 22 23 percent for 
        fiscal year 2004, 29 and 30 percent for fiscal year 2005, and 22 
        percent for fiscal year 2006 and thereafter of the district's 
        integration revenue as defined in subdivision 3. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 34.  Minnesota Statutes 2002, section 124D.86, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INTEGRATION AID.] A district's integration aid 
        equals 63 percent for fiscal year 2003, 78 percent for fiscal 
        year 2004, 71 percent for fiscal year 2005, and 78 percent for 
        fiscal year 2006 and thereafter of the difference between the 
        district's integration revenue as defined in subdivision 3 and 
        its integration levy. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004.  
           Sec. 35.  Minnesota Statutes 2002, section 124D.86, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
        integration aid under subdivision 5 must be adjusted for each 
        pupil residing in a district eligible for integration revenue 
        under subdivision 3, clause (1), (2), or (3), and attending a 
        nonresident district under sections 123A.05 to 123A.08, 124D.03, 
        124D.06, 124D.07, and 124D.08, that is not eligible for 
        integration revenue under subdivision 3, clause (1), (2), or 
        (3), and has implemented a plan under Minnesota Rules, parts 
        3535.0100 to 3535.0180, if the enrollment of the pupil in the 
        nonresident district contributes to desegregation or integration 
        purposes.  The adjustments must be made according to this 
        subdivision.  
           (b) Aid paid to a district serving nonresidents must be 
        increased by an amount equal to the revenue per pupil unit of 
        the resident district under subdivision 3, clause (1), (2), or 
        (3), minus the revenue attributable to the pupil in the 
        nonresident district under subdivision 3, clause (4), (5), or 
        (6), for the time the pupil is enrolled in the nonresident 
        district.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        for fiscal year 2003. 
           Sec. 36.  Minnesota Statutes 2002, section 126C.05, is 
        amended by adding a subdivision to read: 
           Subd. 19.  [ON-LINE LEARNING STUDENTS.] (a) The average 
        daily membership for a public school pupil generating on-line 
        learning average daily membership according to section 124D.095, 
        subdivision 8, paragraph (b), equals the sum of:  (i) the ratio 
        of the sum of the number of instructional hours the pupil is 
        enrolled in a regular classroom setting at the enrolling school 
        to the actual number of instructional hours in the school year 
        at the enrolling school, plus (ii) .12 times the initial on-line 
        learning average daily membership according to section 124D.095, 
        subdivision 8, paragraph (b). 
           (b) When the sum of the average daily membership under 
        paragraph (a) and the adjusted on-line learning average daily 
        membership under section 124D.095, subdivision 8, paragraph (b), 
        exceeds the maximum allowed for the student under subdivision 8 
        or 15, as applicable, the average daily membership under 
        paragraph (a) shall be reduced by the excess over the maximum, 
        but shall not be reduced below .12.  The adjusted on-line 
        learning average daily membership according to section 124D.095, 
        subdivision 8, paragraph (b), shall be reduced by any remaining 
        excess over the maximum. 
           Sec. 37.  [124D.096] [ON-LINE LEARNING AID.] 
           (a) The on-line learning aid for an on-line learning 
        provider equals the product of the adjusted on-line learning 
        average daily membership for students under section 124D.095, 
        subdivision 8, paragraph (d), times the student grade level 
        weighting under section 126C.05, subdivision 1, times the 
        formula allowance. 
           (b) Notwithstanding section 127A.45, the department must 
        pay each on-line learning provider 77 percent of the amount in 
        paragraph (a) within 45 days of receiving final enrollment and 
        course completion information each quarter or semester.  A final 
        payment equal to 23 percent of the amount in paragraph (a) must 
        be made on September 30 of the next fiscal year. 
           Sec. 38.  Minnesota Statutes 2002, section 126C.44, is 
        amended to read: 
           126C.44 [SAFE SCHOOLS LEVY.] 
           Each district may make a levy on all taxable property 
        located within the district for the purposes specified in this 
        section.  The maximum amount which may be levied for all costs 
        under this section shall be equal to $30 $27 multiplied by the 
        district's adjusted marginal cost pupil units for the school 
        year.  The proceeds of the levy must be used for directly 
        funding the following purposes or for reimbursing the cities and 
        counties who contract with the district for the following 
        purposes:  (1) to pay the costs incurred for the salaries, 
        benefits, and transportation costs of peace officers and 
        sheriffs for liaison in services in the district's schools; (2) 
        to pay the costs for a drug abuse prevention program as defined 
        in section 609.101, subdivision 3, paragraph (e), in the 
        elementary schools; (3) to pay the costs for a gang resistance 
        education training curriculum in the district's schools; (4) to 
        pay the costs for security in the district's schools and on 
        school property; or (5) to pay the costs for other crime 
        prevention, drug abuse, student and staff safety, and violence 
        prevention measures taken by the school district.  The district 
        must initially attempt to contract for services to be provided 
        by peace officers or sheriffs with the police department of each 
        city or the sheriff's department of the county within the 
        district containing the school receiving the services.  If a 
        local police department or a county sheriff's department does 
        not wish to provide the necessary services, the district may 
        contract for these services with any other police or sheriff's 
        department located entirely or partially within the school 
        district's boundaries.  The levy authorized under this section 
        is not included in determining the school district's levy 
        limitations. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004.  
           Sec. 39.  Minnesota Statutes 2002, section 128C.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DECISIONS, POLICIES, ADVISORY COMMITTEES.] 
        The board shall establish and adopt policies, including a policy 
        on corporate sponsorships and similar agreements, make decisions 
        on behalf of the league, and establish advisory committees 
        necessary to carry out board functions. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 40.  Minnesota Statutes 2002, section 128C.05, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [SUPERVISED COMPETITIVE HIGH SCHOOL 
        DIVING.] Notwithstanding Minnesota Rules, part 4717.3750, any 
        pool built before January 1, 1987, that was used for a high 
        school diving program during the 2000-2001 school year may be 
        used for supervised competitive high school diving unless a pool 
        that meets the requirements of Minnesota Rules, part 4717.3750, 
        is located within the school district.  A school or district 
        using a pool for supervised competitive high school diving that 
        does not meet the requirements of the rule must provide 
        appropriate notice to parents and participants. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later. 
           Sec. 41.  Minnesota Statutes 2002, section 200.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MAJOR POLITICAL PARTY.] (a) "Major political 
        party" means a political party that maintains a party 
        organization in the state, political division or precinct in 
        question and that has presented at least one candidate for 
        election to the office of: 
           (1) governor and lieutenant governor, secretary of state, 
        state auditor, or attorney general, at the last preceding state 
        general election for those offices; or 
           (2) presidential elector, or U.S. senator at the last 
        preceding state general election for presidential electors; at 
        the last preceding general election, and whose candidate 
        received votes in each county in that election and received 
        votes from not less than five percent of the total number of 
        individuals who voted in that election. 
           (b) "Major political party" also means a political party 
        that maintains a party organization in the state, political 
        subdivision, or precinct in question and whose members present 
        to the secretary of state a petition for a place on the state 
        partisan primary ballot, which petition contains signatures of a 
        number of the party members equal to at least five percent of 
        the total number of individuals who voted in the preceding state 
        general election. 
           (c) A political party whose candidate receives a sufficient 
        number of votes at a state general election described in 
        paragraph (a) becomes a major political party as of January 1 
        following that election and retains its major party status 
        notwithstanding that the party fails to present a candidate who 
        receives the number and percentage of votes required under 
        paragraph (a) at the following state general election. 
           (d) A major political party whose candidates fail to 
        receive the number and percentage of votes required under 
        paragraph (a) at either the next state general election 
        described by paragraph (a) loses major party status as of 
        December 31 following the most recent that state general 
        election; except that in a year when presidential elector is the 
        only office of those listed in paragraph (a) to be voted on at 
        the state general election, a major political party retains its 
        major party status until the next state general election. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003. 
           Sec. 42.  Minnesota Statutes 2002, section 200.02, 
        subdivision 23, is amended to read: 
           Subd. 23.  [MINOR POLITICAL PARTY.] (a) "Minor political 
        party" means a political party that is not a major political 
        party as defined by subdivision 7 and that has adopted a state 
        constitution, designated a state party chair, held a state 
        convention in the last two years, filed with the secretary of 
        state no later than December 31 following the most recent state 
        general election a certification that the party has met the 
        foregoing requirements, and met the requirements of paragraph 
        (b) or (e), as applicable. 
           (b) To be considered a minor party in all elections 
        statewide,: 
           (1)  the political party must have presented at least one 
        candidate for election to the office of: 
           (1) governor and lieutenant governor, secretary of state, 
        state auditor, or attorney general, at the last preceding state 
        general election for those offices; or 
           (2) presidential elector, or U.S. senator at the preceding 
        state general election for presidential electors; and at the 
        last preceding general election, who received votes in each 
        county that in the aggregate equal at least one percent of the 
        total number of individuals who voted in the election, or 
           (2)  its members must have presented to the secretary of 
        state a nominating petition in a form prescribed by the 
        secretary of state containing the signatures of party members in 
        a number equal to at least one percent of the total number of 
        individuals who voted in the preceding state general election. 
           (c) A political party whose candidate receives a sufficient 
        number of votes at a state general election described in 
        paragraph (b) becomes a minor political party as of January 1 
        following that election and retains its minor party status 
        notwithstanding that the party fails to present a candidate who 
        receives the number and percentage of votes required under 
        paragraph (b) at the following state general election. 
           (d) A minor political party whose candidates fail to 
        receive the number and percentage of votes required under 
        paragraph (b) at either the next state general election 
        described by paragraph (b) loses minor party status as of 
        December 31 following the most recent that state general 
        election; except that in a year when presidential elector is the 
        only office of those listed in paragraph (b), clause (1), to be 
        voted on at the state general election, a minor political party 
        retains its minor party status until the next state general 
        election. 
           (e) To be considered a minor party in an election in a 
        legislative district, the political party must have presented at 
        least one candidate for a legislative office in that district 
        who received votes from at least ten percent of the total number 
        of individuals who voted for that office, or its members must 
        have presented to the secretary of state a nominating petition 
        in a form prescribed by the secretary of state containing the 
        signatures of party members in a number equal to at least ten 
        percent of the total number of individuals who voted in the 
        preceding state general election for that legislative office. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003. 
           Sec. 43.  Minnesota Statutes 2002, section 205A.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESOLUTION REQUIRED PRIMARY IN CERTAIN 
        CIRCUMSTANCES.] The school board of a school district may, by 
        resolution adopted by June 1 of any year, decide to choose 
        nominees for school district elective offices by a primary as 
        provided in subdivisions 1 to 6.  The resolution, when adopted, 
        is effective for all ensuing elections of board members in that 
        school district until it is revoked. In a school district 
        election, if there are more than two candidates for a specified 
        school board position or more than twice as many school board 
        candidates as there are at-large school board positions 
        available, a school district must hold a primary.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment for independent school district No. 
        742.  This section is effective January 1, 2004, for all other 
        school districts and applies to school board elections held in 
        2004 and thereafter. 
           Sec. 44.  Minnesota Statutes 2002, section 205A.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CANDIDATES, FILING.] The clerk shall place upon 
        the primary ballot without partisan designation the names of 
        individuals whose candidacies have been filed and for whom the 
        proper filing fee has been paid.  When not more than twice the 
        number of individuals to be elected to a school district 
        elective office as many school board candidates as there are 
        at-large school board positions available file for nomination 
        for the office or when not more than two candidates for a 
        specified school board position file for nomination for that 
        office, their names must not be placed upon the primary ballot 
        and must be placed on the school district general election 
        ballot as the nominees for that office.  
           Sec. 45.  Minnesota Statutes 2002, section 205A.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESULTS.] The school district primary must be 
        conducted and the returns made in the manner provided for the 
        state primary as far as practicable.  Within two days after the 
        primary, the school board of the school district shall canvass 
        the returns, and the two candidates for each office specified 
        school board position who receive the highest number of votes, 
        or a number of candidates equal to twice the number of 
        individuals to be elected to the office at-large school board 
        positions who receive the highest number of votes, are the 
        nominees for the office named.  Their names must be certified to 
        the school district clerk who shall place them on the school 
        district general election ballot without partisan designation 
        and without payment of an additional fee. 
           Sec. 46.  Minnesota Statutes 2002, section 205A.06, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [FILING PERIOD.] In school districts nominating 
        candidates at a school district primary, Affidavits of candidacy 
        may must be filed with the school district clerk no earlier than 
        the 70th day and no later than the 56th day before the first 
        Tuesday after the second Monday in September in the year when 
        the school district general election is held.  In all other 
        school districts, affidavits of candidacy must be filed not more 
        than 70 days and not less than 56 days before the school 
        district general election. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment for independent school district No. 
        742.  This section is effective January 1, 2004, for all other 
        school districts and applies to school board elections held in 
        2004 and thereafter. 
           Sec. 47.  Minnesota Statutes 2002, section 611A.78, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] A crime victim services 
        roundtable is created and shall be convened by the commissioner 
        of administration or a designee.  The roundtable membership 
        shall include representatives from the following:  the 
        departments of health; human services; children, families, and 
        learning; corrections; and public safety; the supreme court; the 
        Minnesota planning agency; the office of the attorney general; 
        the office of crime victim ombudsman; the county attorneys 
        association; and the office of dispute resolution.  The 
        roundtable membership shall also include one person representing 
        the four councils designated in sections 3.922, 3.9223, 3.9225, 
        and 3.9226. 
           Sec. 48.  Laws 2001, First Special Session chapter 6, 
        article 2, section 72, is amended to read: 
           Sec. 72.  [DEADLINE AND PENALTY WAIVED.] 
           The deadline and penalty under Minnesota Statutes, section 
        123B.05, subdivision 2, do not apply for aid payment for 
        the 2002-2003 2004-2005 biennium. 
           Sec. 49.  [CHARTER SCHOOL ADVISORY BOARD MEMBER TERMS.] 
           In order to establish staggered terms for charter school 
        advisory board members under Minnesota Statutes, section 
        124D.10, subdivision 2a, the commissioner of education shall, by 
        lot, determine the length of term for each member serving on the 
        board on the effective date of this section.  One-third of the 
        members shall serve a one-year term, one-third shall serve a 
        two-year term, and one-third shall serve a three-year term.  
        Thereafter, the term for each member must be three years. 
           Sec. 50.  [PILOT PROJECT TO EVALUATE PARENT INVOLVEMENT 
        POLICIES AND STRATEGIES.] 
           Subdivision 1.  [DISTRICT AND SCHOOL SITE POLICY 
        EVALUATION.] A school board may elect to participate in a 
        two-year pilot project to evaluate parent involvement policies 
        and strategies in the district and in school sites, with the 
        goal of improving the academic achievement of all students 
        within the district, including at-risk students.  
           Subd. 2.  [PARENT INVOLVEMENT REVIEW COMMITTEES.] A school 
        board electing to participate and interested school sites within 
        that district must establish a parent involvement review 
        committee or expand the purview of an existing committee 
        composed of a majority of parents.  The committees must evaluate 
        the effectiveness of district and school site programs and 
        strategies intended to provide all parents with meaningful 
        opportunities to participate in the process of educating 
        students.  The committees, among other things, may evaluate the 
        operation of the instruction and curriculum advisory committee 
        or building team under Minnesota Statutes, section 120B.11, or 
        parent involvement programs developed under Minnesota Statutes, 
        section 124D.895.  A majority of committee members must be 
        parents of students enrolled in the district or school site, if 
        applicable.  The committee also must include teachers employed 
        by the district and who teach at a school site, if applicable.  
        A district must assist participating school sites at the request 
        of the school site. 
           Subd. 3.  [NOTICE OF PARTICIPATION; NOTICE TO PARENTS.] (a) 
        A school board electing to participate under this section must 
        notify the commissioner of education of its participation and 
        the participation of interested school sites on a form supplied 
        by the commissioner.  The commissioner may assist participating 
        districts and school sites at the request of the district or 
        school site. 
           (b) Participating school districts must transmit timely 
        effective notice of this project to parent organizations 
        throughout the district and to parents of children enrolled in 
        district schools.  
           Subd. 4.  [REPORT.] Participating districts and school 
        sites must report the findings of the evaluation and related 
        recommendations annually by March 1 to the school board, which 
        shall transmit a summary of the findings and recommendations to 
        the commissioner.  Information the commissioner receives under 
        this subdivision may be used to modify guidelines and model 
        plans for parent involvement programs under Minnesota Statutes, 
        section 124D.895.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to the 2003-2004 and 
        2004-2005 school years. 
           Sec. 51.  [CHARTER SCHOOL START-UP AID.] 
           A charter school in its first year of operation during 
        fiscal year 2004 or 2005 is not eligible for charter school 
        start-up aid under Minnesota Statutes, section 124D.11, 
        subdivision 8. 
           Sec. 52.  [ALTERNATIVE ATTENDANCE ADJUSTMENTS FOR FISCAL 
        YEAR 2002.] 
           Notwithstanding Minnesota Statutes, section 124D.86, 
        subdivision 6, for fiscal year 2002 only, integration aid under 
        Minnesota Statutes, section 124D.86, subdivision 5, must be 
        adjusted for each pupil residing in special school district No. 
        1, Minneapolis; independent school district No. 625, St. Paul; 
        or independent school district No. 709, Duluth, and attending a 
        nonresident district under Minnesota Statutes, sections 123A.05 
        to 123A.08, 124D.03, 124D.06, and 124D.08, other than 
        Minneapolis, St. Paul or Duluth that has implemented a plan 
        under Minnesota Rules, parts 3535.0100 to 3535.0180, if the 
        enrollment of the pupil in the nonresident district contributes 
        to desegregation or integration purposes.  The adjustments must 
        be made according to this subdivision. 
           (b) Aid paid to a district serving nonresident pupils must 
        be increased by an amount equal to the revenue per pupil of the 
        resident district under Minnesota Statutes, section 124D.86, 
        subdivision 3, minus the revenue attributable to the pupil in 
        the nonresident district for the time the pupil is enrolled in 
        the nonresident district. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to fiscal year 2002. 
           Sec. 53.  [POLICY ON STUDENTS WITH A HISTORY OF VIOLENT 
        BEHAVIOR.] 
           (a) Representatives of the Minnesota school boards 
        association, Education Minnesota, and the information policy 
        analysis division in the Minnesota department of administration, 
        the parent of a child who has participated in the Title I 
        delinquent education program selected by the commissioner of 
        education, and the commissioner of education or the 
        commissioner's designee, shall develop a model policy by August 
        1, 2003, on notifying classroom teachers and other school 
        district employees having a legitimate educational interest when 
        a student with a history of violent behavior is placed in the 
        teacher's classroom.  The model policy at least must: 
           (1) define what constitutes a history of violent behavior, 
        consistent with Minnesota Statutes, section 121A.45, subdivision 
        2, clause (c); 
           (2) limit reports on violent behavior to a specified number 
        of school years; 
           (3) define "legitimate educational interest," consistent 
        with Minnesota Statutes, section 121A.64; 
           (4) indicate the persons at the school or district level 
        who determine which school district employees have a legitimate 
        educational interest; 
           (5) require school districts that transfer the student 
        records of a student with a history of violent behavior to 
        another school district, charter school, or alternative 
        education program to include all information about the student's 
        history of violent behavior in the student's educational records 
        it transmits to the enrolling school district, charter school, 
        or alternative education program, consistent with this policy; 
           (6) ensure that the parent of a student with a history of 
        violent behavior is able to review the student's educational 
        records and data and to effectively exercise rights under both 
        federal and state data practices laws to challenge records or 
        data on the basis that they are inaccurate, incomplete, 
        misleading, or otherwise violate the student's right to privacy 
        before the classroom teacher or other district employee is 
        notified; and 
           (7) require school districts to inform the parent or 
        guardian of a student with a history of violent behavior under 
        Minnesota Statutes, section 121A.64, that the district gives 
        notice about the student's history of violent behavior to the 
        classroom teacher and other district employees having a 
        legitimate educational interest before placing the student in 
        the teacher's classroom. 
           (b) The information policy analysis division in the 
        Minnesota department of administration by August 15, 2003, must 
        post on its division Web site the model policy developed under 
        paragraph (a). 
           (c) The task force in paragraph (a) expires on August 1, 
        2003. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 54.  [AT-LARGE SCHOOL BOARD MEMBERS; INDEPENDENT 
        SCHOOL DISTRICT NO. 709, DULUTH.] 
           (a) Notwithstanding Laws 1969, chapter 698, or other law to 
        the contrary, the school board for independent school district 
        No. 709, Duluth, may by resolution reduce from five to three the 
        number of at-large school board members. 
           (b) If the school board adopts the resolution under 
        paragraph (a), for the November 2003 election and each four 
        years thereafter, the three positions of those members elected 
        at large whose terms expire on December 31, 2003, shall be 
        reduced to one member elected at large. 
           (c) Nothing in this section prevents a member of the school 
        board on the effective date of this act who is otherwise 
        qualified from running for reelection upon the expiration of 
        that member's term. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 55.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
        lease aid under Minnesota Statutes, section 124D.11, subdivision 
        4: 
             $17,140,000    .....     2004 
             $21,018,000    .....     2005 
           The 2004 appropriation includes $2,524,000 for 2003 and 
        $14,616,000 for 2004. 
           The 2005 appropriation includes $3,654,000 for 2004 and 
        $17,364,000 for 2005.  
           Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
        startup cost aid under Minnesota Statutes, section 124D.11: 
             $824,000       .....     2004 
             $151,000       .....     2005 
           The 2004 appropriation includes $220,000 for 2003 and 
        $604,000 for 2004.  
           The 2005 appropriation includes $151,000 for 2004 and $0 
        for 2005. 
           Subd. 4.  [CHARTER SCHOOL INTEGRATION GRANTS.] For grants 
        to charter schools to promote integration and desegregation 
        under Minnesota Statutes, section 124D.11, subdivision 6, 
        paragraph (e): 
             $8,000         .....     2004 
           This appropriation includes $8,000 for 2003 and $0 for 2004.
           Subd. 5.  [INTEGRATION AID.] For integration aid under 
        Minnesota Statutes, section 124D.86, subdivision 5: 
             $56,869,000    .....     2004 
             $56,092,000    .....     2005 
           The 2004 appropriation includes $8,428,000 for 2003 and 
        $48,441,000 for 2004. 
           The 2005 appropriation includes $12,110,000 for 2004 and 
        $43,982,000 for 2005.  
           Subd. 6.  [MAGNET SCHOOL GRANTS.] For magnet school and 
        program grants: 
             $750,000       .....     2004 
             $750,000       .....     2005 
           $90,000 of the fiscal year 2004 appropriation is for 
        continuation of the magnet school program authorized under Laws 
        2000, chapter 489, article 7, section 15, subdivision 5, for 
        independent school district No. 696, Ely. 
           These amounts may be used for magnet school programs under 
        Minnesota Statutes, section 124D.88. 
           Subd. 7.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
        startup aid under Minnesota Statutes, section 124D.88: 
             $ 37,000       .....     2004 
             $454,000       .....     2005 
           The 2004 appropriation includes $37,000 for 2003 and $0 for 
        2004.  
           The 2005 appropriation includes $0 for 2004 and $437,000 
        for 2005. 
           Subd. 8.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
        TRANSPORTATION GRANTS.] For interdistrict desegregation or 
        integration transportation grants under Minnesota Statutes, 
        section 124D.87: 
             $5,796,000     .....     2004 
             $8,401,000     .....     2005
           Subd. 9.  [SUCCESS FOR THE FUTURE.] For American Indian 
        success for the future grants under Minnesota Statutes, section 
        124D.81: 
             $2,073,000     .....     2004
             $2,137,000     .....     2005
           The 2004 appropriation includes $363,000 for 2003 and 
        $1,710,000 for 2004. 
           The 2005 appropriation includes $427,000 for 2004 and 
        $1,710,000 for 2005. 
           Subd. 10.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
        Indian scholarships under Minnesota Statutes, section 124D.84: 
             $1,875,000     .....     2004 
             $1,875,000     .....     2005 
           Subd. 11.  [AMERICAN INDIAN TEACHER PREPARATION 
        GRANTS.] For joint grants to assist American Indian people to 
        become teachers under Minnesota Statutes, section 122A.63: 
             $190,000       .....     2004 
             $190,000       .....     2005 
           Subd. 12.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
        school aid under Minnesota Statutes, section 124D.83: 
             $2,135,000     .....     2004
             $2,336,000     .....     2005
           The 2004 appropriation includes $285,000 for 2003 and 
        $1,850,000 for 2004. 
           The 2005 appropriation includes $462,000 for 2004 and 
        $1,874,000 for 2005. 
           Subd. 13.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL 
        SCHOOLS.] For early childhood family education programs at 
        tribal contract schools under Minnesota Statutes, section 
        124D.83, subdivision 4: 
             $68,000        .....     2004 
             $68,000        .....     2005 
           Subd. 14.  [STATEWIDE TESTING SUPPORT.] For statewide 
        testing support under Minnesota Statutes, section 120B.30. 
             $9,000,000     .....     2004 
             $9,000,000     .....     2005 
           Subd. 15.  [BEST PRACTICES SEMINARS.] For best practices 
        seminars and other professional development capacity building 
        activities that assure proficiency in teaching and 
        implementation of graduation rule standards: 
             $1,000,000     .....     2004
             $1,000,000     .....     2005
           $250,000 per year is for a grant to A Chance to Grow/New 
        Visions for the Minnesota learning resource center's 
        comprehensive training program for education professionals 
        charged with helping children acquire basic reading and math 
        skills.  
           Subd. 16.  [ALTERNATIVE TEACHER COMPENSATION.] For 
        alternative teacher compensation established under Minnesota 
        Statutes, sections 122A.413 to 122A.415: 
             $3,700,000     .....     2004
             $3,700,000     .....     2005
           If the appropriations under this subdivision are 
        insufficient to fund all program participants, a participant may 
        receive less than the maximum per pupil amount available under 
        Minnesota Statutes, section 122A.415, subdivision 1.  A 
        qualifying district or site receiving alternative teacher 
        compensation funding under this subdivision may use the funding 
        it receives to leverage additional funds from a national program 
        for enhancing teacher professionalism. 
           Subd. 17.  [EXAMINATION FEES; TEACHER TRAINING AND SUPPORT 
        PROGRAMS.] (a) For students' advanced placement and 
        international baccalaureate examination fees under Minnesota 
        Statutes, section 120B.13, subdivision 3, and the training and 
        related costs for teachers and other interested educators under 
        Minnesota Statutes, section 120B.13, subdivision 1: 
             $  778,000     .....     2004 
             $  778,000     .....     2005   
           (b) The advanced placement program shall receive 75 percent 
        of the appropriation each year and the international 
        baccalaureate program shall receive 25 percent of the 
        appropriation each year.  The department, in consultation with 
        representatives of the advanced placement and international 
        baccalaureate programs selected by the advanced placement 
        advisory council and IBMN, respectively, shall determine the 
        amounts of the expenditures each year for examination fees and 
        training and support programs for each program. 
           (c) Notwithstanding Minnesota Statutes, section 120B.13, 
        subdivision 1, $375,000 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. 
           (d) The commissioner shall pay all examination fees for all 
        students of low-income families under Minnesota Statutes, 
        section 120B.13, subdivision 3, and to the extent of available 
        appropriations shall also pay examination fees for students 
        sitting for an advanced placement examination, international 
        baccalaureate examination, or both.  
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 18.  [FIRST GRADE PREPAREDNESS.] For first grade 
        preparedness grants under Minnesota Statutes, section 124D.081: 
             $7,250,000     .....     2004 
             $7,250,000     .....     2005
           Subd. 19.  [YOUTH WORKS PROGRAM.] For funding youth works 
        programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
             $900,000     .....     2004 
             $900,000     .....     2005 
           (a) $150,000 per year is for training in evaluating early 
        literacy skills and teaching reading to preschool children under 
        Minnesota Statutes, section 124D.42, subdivision 6, paragraph 
        (a), clause (3).  
           (b) A grantee organization may provide health and child 
        care coverage to the dependents of each participant enrolled in 
        a full-time youth works program to the extent such coverage is 
        not otherwise available. 
           Subd. 20.  [STUDENT ORGANIZATIONS.] For student 
        organizations: 
             $625,000       .....     2004
             $625,000       .....     2005
           The allocation for a student organization in fiscal year 
        2004 or fiscal year 2005 shall be no less than its fiscal year 
        2003 allocation. 
           Subd. 21.  [DISTANCE EDUCATION.] For distance education 
        under Minnesota Statutes, section 124D.095:  
           $1,000,000       .....     2004
           $1,250,000       .....     2005
           Subd. 22.  [COLLABORATIVE URBAN EDUCATOR RECRUITMENT AND 
        TRAINING PROGRAMS.] For grants to collaborative urban educator 
        recruitment and training programs: 
             $528,000       .....     2004
             $528,000       .....     2005
           $198,000 each year is for the Southeast Asian teacher 
        program at Concordia University, St. Paul; $165,000 each year is 
        for the collaborative urban educator program at the University 
        of St. Thomas; and $165,000 each year is for the center for 
        excellence in urban teaching at Hamline University.  Grant 
        recipients must collaborate with urban and nonurban school 
        districts. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 56.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 122A.64; 122A.65; 
        124D.84, subdivision 2; and 124D.89, are repealed. 
           (b) Minnesota Statutes 2002, sections 128C.01, subdivision 
        5; 128C.02, subdivision 8; and 128C.13, are repealed. 
           (c) Laws 1993, chapter 224, article 8, section 20, 
        subdivision 2, as amended by Laws 1994, chapter 647, article 8, 
        section 29, is repealed. 

                                   ARTICLE 3
                                SPECIAL PROGRAMS
           Section 1.  Minnesota Statutes 2002, section 121A.41, 
        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 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.  Consistent with section 125A.09, 
        subdivision 3, the readmission plan must not obligate a parent 
        to provide a sympathomimetic medication for the parent's child 
        as a condition of readmission.  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 to a 
        total of 15 days.  In the case of a student with a disability, 
        the student's individual education plan team must meet 
        immediately but not more than ten school days after the date on 
        which the decision to remove the student from the student's 
        current education placement is made.  The individual education 
        plan team and other qualified personnel shall at that meeting:  
        conduct a review of the relationship between the child's 
        disability and the behavior subject to disciplinary action; and 
        determine the appropriateness of the child's education plan. 
           The requirements of the individual education plan team 
        meeting apply when: 
           (1) the parent requests a meeting; 
           (2) the student is removed from the student's current 
        placement for five or more consecutive days; or 
           (3) the student's total days of removal from the student's 
        placement during the school year exceed ten cumulative days in a 
        school year.  The school administration shall implement 
        alternative educational services when the suspension exceeds 
        five days.  A separate administrative conference is required for 
        each period of suspension. 
           Sec. 2.  [124D.452] [DISTRICT REPORT; CAREER AND TECHNICAL 
        EDUCATION.] 
           Each district and cooperative center must report data to 
        the department of education for all career and technical 
        education programs as required by the department. 
           Sec. 3.  Minnesota Statutes 2002, section 124D.454, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE.] The purpose of this section is 
        to provide a method to fund transition career and technical 
        education programs for children with a disability that are 
        components of the student's transition plan.  As used in this 
        section, the term "children with a disability" shall have the 
        meaning ascribed to it in section 125A.02. 
           Sec. 4.  Minnesota Statutes 2002, section 124D.454, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        the definitions in this subdivision apply. 
           (a) "Base year" for fiscal year 1996 means fiscal year 1995.
        Base year for later fiscal years means the second fiscal year 
        preceding the fiscal year for which aid will be paid. 
           (b) "Basic revenue" has the meaning given it in section 
        126C.10, subdivision 2.  For the purposes of computing basic 
        revenue pursuant to this section, each child with a disability 
        shall be counted as prescribed in section 126C.05, subdivision 1.
           (c) "Average daily membership" has the meaning given it in 
        section 126C.05. 
           (d) "Program growth factor" means 1.00 for fiscal year 1998 
        and later. 
           (e) "Aid percentage factor" means 60 percent for fiscal 
        year 1996, 70 percent for fiscal year 1997, 80 percent for 
        fiscal year 1998, 90 percent for fiscal year 1999, and 100 
        percent for fiscal year 2000 and later. 
           (f) "Essential personnel" means a licensed teacher, 
        licensed support services staff person, paraprofessional 
        providing direct services to students, or licensed personnel 
        under subdivision 12, paragraph (c).  This definition is not 
        intended to change or modify the definition of essential 
        employee in chapter 179A. 
           Sec. 5.  Minnesota Statutes 2002, section 124D.454, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BASE REVENUE.] (a) The transition 
        program-disabled transition-disabled program base revenue equals 
        the sum of the following amounts computed using base year data: 
           (1) 68 percent of the salary of each essential licensed 
        person or approved paraprofessional who provides direct 
        instructional services to students employed during that fiscal 
        year for services rendered in that district's transition program 
        for children with a disability; 
           (2) 47 percent of the costs of necessary equipment for 
        transition programs for children with a disability; 
           (3) 47 percent of the costs of necessary travel between 
        instructional sites by transition program teachers of children 
        with a disability but not including travel to and from local, 
        regional, district, state, or national vocational career and 
        technical student organization meetings; 
           (4) 47 percent of the costs of necessary supplies for 
        transition programs for children with a disability but not to 
        exceed an average of $47 in any one school year for each child 
        with a disability receiving these services; 
           (5) for transition programs for children with disabilities 
        provided by a contract approved by the commissioner with public, 
        private, or voluntary agencies other than a Minnesota school 
        district or cooperative center, in place of programs 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; 
           (6) for transition programs for children with disabilities 
        provided by a contract approved by the commissioner with public, 
        private, or voluntary agencies other than a Minnesota school 
        district or cooperative center, that are supplementary to a full 
        educational program provided by the school district, 52 percent 
        of the amount of the contract; and 
           (7) for a contract approved by the commissioner with 
        another Minnesota school district or cooperative center for 
        vocational evaluation services for children with a disability 
        for children that are not yet enrolled in grade 12, 52 percent 
        of the amount of the contract. 
           (b) If requested by a school district for transition 
        programs during the base year for less than the full school 
        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 year. 
           Sec. 6.  Minnesota Statutes 2002, section 124D.454, 
        subdivision 8, is amended to read: 
           Subd. 8.  [USE OF AID.] The aid provided under this section 
        shall be paid only for services rendered or for the costs which 
        are incurred according to this section for transition programs 
        for children with a disability which are approved by the 
        commissioner of children, families, and learning education and 
        operated in accordance with rules promulgated by the 
        commissioner.  These rules shall be subject to the restrictions 
        provided in section 124D.453, subdivision 6 12.  The procedure 
        for application for approval of these programs shall be as 
        provided in section 125A.75, subdivisions 4 and 6, and the 
        application review process shall be conducted by the office 
        division of lifework development federal programs in the 
        department. 
           Sec. 7.  Minnesota Statutes 2002, section 124D.454, 
        subdivision 10, is amended to read: 
           Subd. 10.  [EXCLUSION.] A district shall not receive aid 
        pursuant to section 124D.453 or 125A.76 for salaries, supplies, 
        travel or equipment for which the district receives aid pursuant 
        to this section. 
           Sec. 8.  Minnesota Statutes 2002, section 124D.454, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [COMPLIANCE WITH RULES.] Aid must be paid under 
        this section only for services rendered or for costs incurred in 
        career and technical education programs approved by the 
        commissioner and operated in accordance with rules promulgated 
        by the commissioner.  This aid shall be paid only for services 
        rendered and for costs incurred by essential, licensed personnel 
        who meet the requirements for licensure pursuant to the rules of 
        the Minnesota board of teaching.  Licensed personnel means 
        persons holding a valid career and technical license issued by 
        the commissioner.  If an average of five or fewer secondary 
        full-time equivalent students are enrolled per teacher in an 
        approved postsecondary program at intermediate district No. 287, 
        916, or 917, licensed personnel means persons holding a valid 
        vocational license issued by the commissioner or the board of 
        trustees of the Minnesota state colleges and universities.  
        Notwithstanding section 127A.42, the commissioner may modify or 
        withdraw the program or aid approval and withhold aid under this 
        section without proceeding under section 127A.42 at any time.  
        To do so, the commissioner must determine that the program does 
        not comply with rules of the department of education or that any 
        facts concerning the program or its budget differ from the facts 
        in the district's approved application. 
           Sec. 9.  [125A.091] [ALTERNATIVE DISPUTE RESOLUTION AND DUE 
        PROCESS HEARINGS.] 
           Subdivision 1.  [DISTRICT OBLIGATION.] A school district 
        must use the procedures in federal law and state law and rule to 
        reach decisions about the identification, evaluation, 
        educational placement, manifestation determination, interim 
        alternative educational placement, or the provision of a free 
        appropriate public education to a child with a disability. 
           Subd. 2.  [PRIOR WRITTEN NOTICE.] A parent must receive 
        prior written notice a reasonable time before the district 
        proposes or refuses to initiate or change the identification, 
        evaluation, educational placement, or the provision of a free 
        appropriate public education to a child with a disability. 
           Subd. 3.  [CONTENT OF NOTICE.] The notice under subdivision 
        2 must: 
           (1) describe the action the district proposes or refuses; 
           (2) explain why the district proposes or refuses to take 
        the action; 
           (3) describe any other option the district considered and 
        the reason why it rejected the option; 
           (4) describe each evaluation procedure, test, record, or 
        report the district used as a basis for the proposed or refused 
        action; 
           (5) describe any other factor affecting the proposal or 
        refusal of the district to take the action; 
           (6) state that the parent of a child with a disability is 
        protected by procedural safeguards and, if this notice is not an 
        initial referral for evaluation, how a parent can get a 
        description of the procedural safeguards; and 
           (7) identify where a parent can get help in understanding 
        this law. 
           Subd. 4.  [UNDERSTANDABLE NOTICE.] (a) The written notice 
        under subdivision 2 must be understandable to the general public 
        and available in the parent's native language or by another 
        communication form, unless it is clearly not feasible to do so. 
           (b) If the parent's native language or other communication 
        form is not written, the district must take steps to ensure that:
           (1) the notice is translated orally or by other means to 
        the parent in the parent's native language or other 
        communication form; 
           (2) the parent understands the notice; and 
           (3) written evidence indicates the requirements in 
        subdivision 2 are met. 
           Subd. 5.  [INITIAL ACTION; PARENT CONSENT.] The district 
        must not proceed with the initial evaluation 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.  A 
        district may not override the written refusal of a parent to 
        consent to an initial evaluation or reevaluation. 
           Subd. 6.  [DISPUTE RESOLUTION PROCESSES; 
        GENERALLY.] Parties are encouraged to resolve disputes over the 
        identification, evaluation, educational placement, manifestation 
        determination, interim alternative educational placement, or the 
        provision of a free appropriate public education to a child with 
        a disability through conciliation, mediation, facilitated team 
        meetings, or other alternative process.  All dispute resolution 
        options are voluntary on the part of the parent and must not be 
        used to deny or delay the right to a due process hearing.  All 
        dispute resolution processes under this section are provided at 
        no cost to the parent. 
           Subd. 7.  [CONCILIATION CONFERENCE.] A parent must have an 
        opportunity to meet with appropriate district staff in at least 
        one conciliation conference if the parent objects to any 
        proposal of which the parent receives notice under subdivision 2.
        If the parent refuses district efforts to conciliate the 
        dispute, the conciliation requirement is satisfied.  Following a 
        conciliation conference, the district must prepare and provide 
        to the parent a conciliation conference memorandum that 
        describes the district's final proposed offer of service.  This 
        memorandum is admissible in evidence in any subsequent 
        proceeding. 
           Subd. 8.  [VOLUNTARY DISPUTE RESOLUTION OPTIONS.] In 
        addition to offering at least one conciliation conference, a 
        district must inform a parent of other dispute resolution 
        processes, including at least mediation and facilitated team 
        meetings.  The fact that an alternative dispute resolution 
        process was used is admissible in evidence at any subsequent 
        proceeding.  State-provided mediators and team meeting 
        facilitators shall not be subpoenaed to testify at a due process 
        hearing or civil action under federal special education law nor 
        are any records of mediators or state-provided team meeting 
        facilitators accessible to the parties. 
           Subd. 9.  [MEDIATION.] Mediation is a dispute resolution 
        process that involves a neutral party provided by the state to 
        assist a parent and a district in resolving disputes over the 
        identification, evaluation, educational placement, manifestation 
        determination, interim alternative educational placement, or the 
        provision of a free appropriate public education to a child with 
        a disability.  A mediation process is available as an informal 
        alternative to a due process hearing but must not be used to 
        deny or postpone the opportunity of a parent or district to 
        obtain a due process hearing.  Mediation is voluntary for all 
        parties.  All mediation discussions are confidential and 
        inadmissible in evidence in any subsequent proceeding, unless 
        the: 
           (1) parties expressly agree otherwise; 
           (2) evidence is otherwise available; or 
           (3) evidence is offered to prove bias or prejudice of a 
        witness. 
           Subd. 10.  [MEDIATED AGREEMENTS.] Mediated agreements are 
        not admissible unless the parties agree otherwise or a party to 
        the agreement believes the agreement is not being implemented, 
        in which case the aggrieved party may enter the agreement into 
        evidence at a due process hearing.  The parties may request 
        another mediation to resolve a dispute over implementing the 
        mediated agreement.  After a due process hearing is requested, a 
        party may request mediation and the commissioner must provide a 
        mediator who conducts a mediation session no later than the 
        third business day after the mediation request is made to the 
        commissioner. 
           Subd. 11.  [FACILITATED TEAM MEETING.] A facilitated team 
        meeting is an IEP, IFSP, or IIIP team meeting led by an 
        impartial state-provided facilitator to promote effective 
        communication and assist a team in developing an individualized 
        education plan. 
           Subd. 12.  [IMPARTIAL DUE PROCESS HEARING.] (a) A parent or 
        a district is entitled to an impartial due process hearing 
        conducted by the state when a dispute arises over the 
        identification, evaluation, educational placement, manifestation 
        determination, interim alternative educational placement, or the 
        provision of a free appropriate public education to a child with 
        a disability.  The hearing must be held in the district 
        responsible for ensuring that a free appropriate public 
        education is provided according to state and federal law.  The 
        proceedings must be recorded and preserved, at state expense, 
        pending ultimate disposition of the action. 
           (b) The due process hearing must be conducted according to 
        the rules of the commissioner and federal law. 
           Subd. 13.  [HEARING OFFICER QUALIFICATIONS.] The 
        commissioner must appoint an individual who is qualified under 
        this subdivision to serve as a hearing officer.  The hearing 
        officer must: 
           (1) be knowledgeable and impartial; 
           (2) have no personal interest in or specific involvement 
        with the student who is a party to the hearing; 
           (3) not have been employed as an administrator by the 
        district that is a party to the hearing; 
           (4) not have been involved in selecting the district 
        administrator who is a party to the hearing; 
           (5) have no personal, economic, or professional interest in 
        the outcome of the hearing other than properly administering 
        federal and state laws, rules, and policies; 
           (6) have no substantial involvement in developing state or 
        local policies or procedures challenged in the hearing; 
           (7) not be a current employee or board member of a 
        Minnesota public school district, education district, 
        intermediate unit or regional education agency, or the 
        department if the department is the service provider; and 
           (8) not be a current employee or board member of a 
        disability advocacy organization or group. 
           Subd. 14.  [REQUEST FOR HEARING.] A request for a due 
        process hearing must: 
           (1) be in writing; 
           (2) describe the nature of the dispute about providing 
        special education services to the student including facts 
        relating to the dispute; and 
           (3) state, to the extent known, the relief sought. 
           Any school district administrator receiving a request for a 
        due process hearing must immediately forward the request to the 
        commissioner.  Within two business days of receiving a request 
        for a due process hearing, the commissioner must appoint a 
        hearing officer.  The commissioner must not deny a request for 
        hearing because the request is incomplete.  A party may 
        disqualify a hearing officer only by affirmatively showing 
        prejudice or bias to the commissioner or to the chief 
        administrative law judge if the hearing officer is an 
        administrative law judge.  If a party affirmatively shows 
        prejudice against a hearing officer, the commissioner must 
        assign another hearing officer to hear the matter. 
           Subd. 15.  [PREHEARING CONFERENCE.] A prehearing conference 
        must be held within five business days of the date the 
        commissioner appoints the hearing officer.  The hearing officer 
        must initiate the prehearing conference which may be conducted 
        in person, at a location within the district, or by telephone. 
        The hearing officer must create a written verbatim record of the 
        prehearing conference which is available to either party upon 
        request.  At the prehearing conference, the hearing officer must:
           (1) identify the questions that must be answered to resolve 
        the dispute and eliminate claims and complaints that are without 
        merit; 
           (2) set a scheduling order for the hearing and additional 
        prehearing activities; 
           (3) determine if the hearing can be disposed of without an 
        evidentiary hearing and, if so, establish the schedule and 
        procedure for doing so; and 
           (4) establish the management, control, and location of the 
        hearing to ensure its fair, efficient, and effective disposition.
           Subd. 16.  [BURDEN OF PROOF.] The burden of proof at a due 
        process hearing is on the district to demonstrate, by a 
        preponderance of the evidence, that it is complying with the law 
        and offered or provided a free appropriate public education to 
        the child in the least restrictive environment.  If the district 
        has not offered or provided a free appropriate public education 
        in the least restrictive environment and the parent wants the 
        district to pay for a private placement, the burden of proof is 
        on the parent to demonstrate, by a preponderance of the 
        evidence, that the private placement is appropriate. 
           Subd. 17.  [ADMISSIBLE EVIDENCE.] The hearing officer may 
        admit all evidence that possesses probative value, including 
        hearsay, if it is the type of evidence on which reasonable, 
        prudent persons are accustomed to rely in conducting their 
        serious affairs.  The hearing officer must give effect to the 
        rules of privilege recognized by law and exclude evidence that 
        is incompetent, irrelevant, immaterial, or unduly repetitious. 
           Subd. 18.  [HEARING OFFICER AUTHORITY.] (a) A hearing 
        officer must limit an impartial due process hearing to the time 
        sufficient for each party to present its case.  
           (b) A hearing officer must establish and maintain control 
        and manage the hearing.  This authority includes, but is not 
        limited to: 
           (1) requiring attorneys representing parties at the 
        hearing, after notice and an opportunity to be heard, to pay 
        court reporting and hearing officer costs, or fines payable to 
        the state, for failing to:  (i) obey scheduling or prehearing 
        orders, (ii) appear, (iii) be prepared, or (iv) participate in 
        the hearing process in good faith; 
           (2) administering oaths and affirmations; 
           (3) issuing subpoenas; 
           (4) determining the responsible and providing districts and 
        joining those districts, if not already notified, in the 
        proceedings; 
           (5) making decisions involving identification, evaluation, 
        educational placement, manifestation determination, interim 
        alternative educational placement, or the provision of a free 
        appropriate public education to a child with a disability; and 
           (6) ordering an independent educational evaluation of a 
        child at district expense. 
           Subd. 19.  [EXPEDITED DUE PROCESS HEARINGS.] A parent has 
        the right to an expedited due process hearing when there is a 
        dispute over a manifestation determination or a proposed or 
        actual placement in an interim alternative educational setting.  
        A district has the right to an expedited due process hearing 
        when proposing or seeking to maintain placement in an interim 
        alternative educational setting.  A hearing officer must hold an 
        expedited due process hearing and must issue a decision within 
        ten calendar days of the request for a hearing.  A hearing 
        officer may extend by up to five additional calendar days the 
        time for issuing a decision in an expedited due process 
        hearing.  All policies in this section apply to expedited due 
        process hearings to the extent they do not conflict with federal 
        law. 
           Subd. 20.  [HEARING OFFICER'S DECISION; TIME PERIOD.] (a) 
        The hearing officer must issue a decision within 45 calendar 
        days of the date on which the commissioner receives the request 
        for a due process hearing.  A hearing officer is encouraged to 
        accelerate the time line to 30 days for a child under the age of 
        three whose needs change rapidly and who requires quick 
        resolution of a dispute.  A hearing officer may not extend the 
        time beyond the 45-day period unless requested by either party 
        for good cause shown on the record.  Extensions of time must not 
        exceed a total of 30 calendar days unless both parties and the 
        hearing officer agree or time is needed to complete an 
        independent educational evaluation.  Good cause includes, but is 
        not limited to, the time required for mediation or other 
        settlement discussions, independent educational evaluation, 
        complexity and volume of issues, or finding or changing counsel. 
           (b) The hearing officer's decision must: 
           (1) be in writing; 
           (2) state the controlling and material facts upon which the 
        decision is made in order to apprise the reader of the basis and 
        reason for the decision; and 
           (3) be based on local standards, state statute, the rules 
        of the commissioner, and federal law. 
           Subd. 21.  [COMPENSATORY EDUCATIONAL SERVICES.] The hearing 
        officer may require the resident or responsible district to 
        provide compensatory educational services to the child if the 
        hearing officer finds that the district has not offered or made 
        available to the child a free appropriate public education in 
        the least restrictive environment and the child suffered a loss 
        of educational benefit.  Such services 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 must be based on a present 
        determination of whether the child has suffered a loss of 
        educational benefit. 
           Subd. 22.  [CHILD'S EDUCATIONAL PLACEMENT DURING A DUE 
        PROCESS HEARING.] (a) Until a due process hearing under this 
        section is completed or the district and the parent agree 
        otherwise, the child must remain in the child's current 
        educational placement and must not be denied initial admission 
        to school. 
           (b) Until an expedited due process hearing challenging an 
        interim alternative educational placement is completed, the 
        child must remain in the interim alternative educational setting 
        until the decision of the hearing officer or the expiration of 
        the 45 days permitted for an interim alternative educational 
        setting, whichever occurs first, unless the parent and district 
        agree otherwise. 
           Subd. 23.  [IMPLEMENTATION OF HEARING OFFICER ORDER.] (a) 
        That portion of a hearing officer's decision granting relief 
        requested by the parent must be implemented upon issuance. 
           (b) Except as provided under paragraph (a) or the district 
        and parent agree otherwise, following a hearing officer's 
        decision granting relief requested by the district, the child 
        must remain in the current educational placement until the time 
        to request judicial review under subdivision 24 expires or, if 
        judicial review is requested, at the time the Minnesota court of 
        appeals or the federal district court issues its decision, 
        whichever is later.  
           Subd. 24.  [REVIEW OF HEARING OFFICER DECISIONS.] The 
        parent or district may seek review of the hearing officer's 
        decision in the Minnesota court of appeals or in the federal 
        district court, consistent with federal law.  A party must 
        appeal to the Minnesota court of appeals within 60 days of 
        receiving the hearing officer's decision. 
           Subd. 25.  [ENFORCEMENT OF ORDERS.] The commissioner must 
        monitor final hearing officer decisions and ensure enforcement 
        of hearing officer orders. 
           Subd. 26.  [HEARING OFFICER AND PERSON CONDUCTING 
        ALTERNATIVE DISPUTE RESOLUTION ARE STATE EMPLOYEES.] A hearing 
        officer or person conducting alternative dispute resolution 
        under this section is an employee of the state under section 
        3.732 for purposes of section 3.736 only. 
           Subd. 27.  [HEARING OFFICER TRAINING.] A hearing officer 
        must participate in training and follow procedures established 
        by the commissioner.  
           Subd. 28.  [DISTRICT LIABILITY.] A district is not liable 
        for harmless technical violations of this section or rules 
        implementing this section if the school district can demonstrate 
        on a case-by-case basis that the violations did not harm a 
        student's educational progress or the parent's right to notice, 
        participation, or due process. 
           Sec. 10.  Minnesota Statutes 2002, section 125A.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [THIRD PARTY REIMBURSEMENT.] (a) Beginning July 
        1, 2000, 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.  
           (b) For children enrolled in medical assistance under 
        chapter 256B or MinnesotaCare under chapter 256L who have no 
        other health coverage, a district shall provide an initial 
        written notice to the enrolled child's parent or legal 
        representative of its intent to seek reimbursement from medical 
        assistance or MinnesotaCare for the individual education plan 
        health-related services provided by the district. 
           (c) The district shall give the parent or legal 
        representative annual written notice of: 
           (1) the district's intent to seek reimbursement from 
        medical assistance or MinnesotaCare for individual education 
        plan health-related services provided by the district; 
           (2) the right of the parent or legal representative to 
        request a copy of all records concerning individual education 
        plan health-related services disclosed by the district to any 
        third party; and 
           (3) the right of the parent or legal representative to 
        withdraw consent for disclosure of a child's records at any time 
        without consequence. 
        The written notice shall be provided as part of the written 
        notice required by Code of Federal Regulations, title 34, 
        section 300.503 300.504. 
           (d) In order to access the private health care coverage of 
        a child who is covered by private health care coverage in whole 
        or in part, a district must: 
           (1) obtain annual written informed consent from the parent 
        or legal representative, in compliance with subdivision 5; and 
           (2) inform the parent or legal representative that a 
        refusal to permit the district or state Medicaid agency to 
        access their private health care coverage does not relieve the 
        district of its responsibility to provide all services necessary 
        to provide free and appropriate public education at no cost to 
        the parent or legal representative. 
           (e) If the commissioner of human services obtains federal 
        approval to exempt covered individual education plan 
        health-related services from the requirement that private health 
        care coverage refuse payment before medical assistance may be 
        billed, paragraphs (b), (c), and (d) shall also apply to 
        students with a combination of private health care coverage and 
        health care coverage through medical assistance or MinnesotaCare.
           (f) In the event that Congress or any federal agency or the 
        Minnesota legislature or any state agency establishes lifetime 
        limits, limits for any health care services, cost-sharing 
        provisions, or otherwise provides that individual education plan 
        health-related services impact benefits for persons enrolled in 
        medical assistance or MinnesotaCare, the amendments to this 
        subdivision adopted in 2002 are repealed on the effective date 
        of any federal or state law or regulation that imposes the 
        limits.  In that event, districts must obtain informed consent 
        consistent with this subdivision as it existed prior to the 2002 
        amendments and subdivision 5, before seeking reimbursement for 
        children enrolled in medical assistance under chapter 256B or 
        MinnesotaCare under chapter 256L who have no other health care 
        coverage. 
           Sec. 11.  Minnesota Statutes 2002, section 125A.28, is 
        amended to read: 
           125A.28 [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 must be appointed 
        by the governor.  Council members must elect the council chair.  
        The representative of the commissioner may not serve as the 
        chair.  The council must 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 education, health, human services, 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 must meet at least quarterly.  
           The council must 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.  
           By September 1, the council must recommend to the governor 
        and the commissioners of children, families, and learning 
        education, 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 expires on June 30, 2003 2005.  
           Sec. 12.  Minnesota Statutes 2002, section 125A.30, is 
        amended to read: 
           125A.30 [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, must 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 125A.023 and 
        125A.027.  Committees must include representatives of local and 
        regional health, education, and county human service agencies, 
        county boards, school boards, early childhood family education 
        programs, Head Start, parents of young children with 
        disabilities under age 12, child care resource and referral 
        agencies, school readiness programs, current service providers, 
        and may also include representatives from other private or 
        public agencies and school nurses.  The committee must elect a 
        chair from among its members and must meet at least quarterly. 
           (b) The committee must 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; 
           (5) encourage agencies to develop individual family service 
        plans for children with disabilities, age three and older; 
           (6) implement a process for assuring that services involve 
        cooperating agencies at all steps leading to individualized 
        programs; 
           (7) facilitate the development of a transitional plan if a 
        service provider is not recommended to continue to provide 
        services; 
           (8) identify the current services and funding being 
        provided within the community for children with disabilities 
        under age five and their families; 
           (9) 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 
           (10) 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; and 
           (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, the section on children with special needs in the county 
        child care fund plan, sections in Head Start plans on 
        coordinated planning and services for children with special 
        needs, any relevant portions of early childhood education plans, 
        such as early childhood family education or school readiness, or 
        other applicable coordinated school and community plans for 
        early childhood programs and services, 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. 
           Sec. 13.  Minnesota Statutes 2002, section 125A.76, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the definitions in this subdivision apply. 
           (a) "Base year" for fiscal year 1998 and later fiscal years 
        means the second fiscal year preceding the fiscal year for which 
        aid will be paid. 
           (b) "Basic revenue" has the meaning given it in section 
        126C.10, subdivision 2.  For the purposes of computing basic 
        revenue pursuant to this section, each child with a disability 
        shall be counted as prescribed in section 126C.05, subdivision 1.
           (c) "Essential personnel" means teachers, cultural 
        liaisons, related services, and support services staff providing 
        direct services to students.  Essential personnel may also 
        include special education paraprofessionals or clericals 
        providing support to teachers and students by preparing 
        paperwork and making arrangements related to special education 
        compliance requirements, including parent meetings and 
        individual education plans. 
           (d) "Average daily membership" has the meaning given it in 
        section 126C.05. 
           (e) "Program growth factor" means 1.08 for fiscal year 
        2002, and 1.046 for fiscal year 2003, and 1.0 for fiscal year 
        2004 and later. 
           Sec. 14.  Minnesota Statutes 2002, section 125A.76, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
        total special education aid for fiscal year 2000 2004 equals 
        $463,000,000 $530,642,000.  The state total special education 
        aid for fiscal year 2001 2005 equals $474,000,000 $529,164,000.  
        The state total special education aid for later fiscal years 
        equals:  
           (1) the state total special education aid for the preceding 
        fiscal year; times 
           (2) the program growth factor; times 
           (3) the ratio of the state total average daily membership 
        for the current fiscal year to the state total average daily 
        membership for the preceding fiscal year. 
           Sec. 15.  Minnesota Statutes 2002, section 125A.79, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the definitions in this subdivision apply. 
           (a) "Unreimbursed special education cost" means the sum of 
        the following: 
           (1) expenditures for teachers' salaries, contracted 
        services, supplies, equipment, and transportation services 
        eligible for revenue under section 125A.76; plus 
           (2) expenditures for tuition bills received under sections 
        125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
        under section 125A.76, subdivision 2; minus 
           (3) revenue for teachers' salaries, contracted services, 
        supplies, and equipment under section 125A.76; minus 
           (4) tuition receipts under sections 125A.03 to 125A.24 and 
        125A.65 for services eligible for revenue under section 125A.76, 
        subdivision 2. 
           (b) "General revenue" means for fiscal year 1996, the sum 
        of the general education revenue according to section 126C.10, 
        subdivision 1, as adjusted according to section 127A.47, 
        subdivision 7, plus the total referendum revenue according to 
        section 126C.17, subdivision 4.  For fiscal years 1997 and 
        later, "general revenue" means the sum of the general education 
        revenue according to section 126C.10, subdivision 1, as adjusted 
        according to section 127A.47, subdivisions 7 and 8, plus the 
        total referendum revenue minus transportation sparsity revenue 
        minus total operating capital revenue.  
           (c) "Average daily membership" has the meaning given it in 
        section 126C.05. 
           (d) "Program growth factor" means 1.044 for fiscal year 
        2002 and 1.02 for fiscal year 2003, and 1.0 for fiscal year 2004 
        and later. 
           Sec. 16.  Minnesota Statutes 2002, section 125A.79, 
        subdivision 6, is amended to read: 
           Subd. 6.  [STATE TOTAL SPECIAL EDUCATION EXCESS COST AID.] 
        The state total special education excess cost aid for fiscal 
        year 2004 equals $92,067,000.  The state total special education 
        aid for fiscal year 2005 equals $91,811,000.  The state total 
        special education excess cost aid for fiscal year 2002 2006 and 
        later fiscal years equals: 
           (1) the state total special education excess cost aid for 
        the preceding fiscal year; times 
           (2) the program growth factor; times 
           (3) the ratio of the state total average daily membership 
        for the current fiscal year to the state total average daily 
        membership for the preceding fiscal year.  
           Sec. 17.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION AID.] 
           (a) For fiscal year 2004, a district shall receive special 
        education cross-subsidy reduction aid equal to $5,000,000 times 
        the ratio of the district's special education excess cost aid 
        for the previous fiscal year according to Minnesota Statutes, 
        section 125A.79, subdivision 7, to the state total special 
        education excess cost aid for the previous fiscal year according 
        to Minnesota Statutes, section 125A.79, subdivision 6. 
           (b) For fiscal year 2005, a district shall receive special 
        education cross-subsidy reduction aid equal to $11,000,000 times 
        the ratio of the district's special education excess cost aid 
        for the previous fiscal year according to Minnesota Statutes, 
        section 125A.79, subdivision 7, to the state total special 
        education excess cost aid for the previous fiscal year according 
        to Minnesota Statutes, section 125A.79, subdivision 6. 
           (c) Special education cross-subsidy reduction aid must be 
        used to pay for a district's unfunded special education costs 
        that would otherwise be cross-subsidized by a district's general 
        education revenue. 
           Sec. 18.  [IMPACT OF WAIVING SPECIFIC SPECIAL EDUCATION 
        REQUIREMENTS THAT EXCEED FEDERAL LAW; THREE-YEAR PILOT PROJECT.] 
           Subdivision 1.  [ESTABLISHMENT; GOAL.] A three-year pilot 
        project is established to permit independent school district No. 
        535, Rochester, and up to three other geographically diverse 
        school districts or cooperative units under Minnesota Statutes, 
        section 125A.11, subdivision 3, selected by the commissioner of 
        education to determine the impact, if any, of waiving specific 
        special education requirements listed in subdivision 3 on the 
        quality and cost-effectiveness of the instructional services and 
        educational outcomes provided to eligible students by the 
        project participant. 
           Subd. 2.  [ELIGIBILITY; APPLICATIONS.] The commissioner 
        must transmit information about the pilot project and make 
        application forms available to interested school districts or 
        cooperative units.  Applications must be submitted to the 
        commissioner by July 1, 2003.  An applicant must identify the 
        specific special education requirements listed in subdivision 3 
        for which the applicant seeks a waiver and indicate how the 
        applicant proposes to modify the activities and procedures 
        affected by the waiver.  The commissioner must approve the 
        applications by August 1, 2003. 
           Subd. 3.  [WAIVERS.] The following state special education 
        requirements are waived for the 2003-2004, 2004-2005, and 
        2005-2006 school years for independent school district No. 535, 
        Rochester, and the other school districts or cooperative units 
        participating in this pilot project: 
           (1) Minnesota Statutes, section 125A.56, governing 
        prereferral interventions; 
           (2) Minnesota Statutes, section 125A.08, paragraph (a), 
        clause (1), governing transitional services for students when 
        reaching age 14 or grade 9, who transition from secondary 
        services to postsecondary education and training, employment, 
        community participation, recreation and leisure, and home 
        living; 
           (3) Minnesota Statutes, section 125A.22, governing 
        community transition interagency committees; and 
           (4) Minnesota Statutes, section 125A.023, governing 
        coordinated interagency services but only affecting eligible 
        children with disabilities age seven or older. 
           Subd. 4.  [STUDENTS' RIGHTS.] Eligible students enrolled in 
        a district or receiving special instruction and services through 
        a cooperative unit that is participating in this pilot project 
        remain entitled to the procedural protections provided under 
        federal law in any matter that affects the students' 
        identification, evaluation, and placement or change in 
        placement, or protections provided under state law in dismissal 
        proceedings that may result in students' suspension, exclusion, 
        or expulsion.  Project participants must ensure that students' 
        civil rights are protected, provide equal educational 
        opportunities, and prohibit discrimination.  Failure to comply 
        with this subdivision will at least cause a district or 
        cooperative unit to become ineligible to participate in the 
        pilot project. 
           Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner must 
        provide project participants, upon request, assistance in 
        developing and implementing a valid and uniform procedure under 
        subdivision 6 to evaluate the participants' experience. 
           Subd. 6.  [EVALUATION; REPORT.] All participating school 
        districts and cooperative units must evaluate the impact, if 
        any, of waiving specific special education requirements listed 
        in subdivision 3 on the quality and cost-effectiveness of the 
        instructional services and educational outcomes provided to 
        eligible students by the project participant.  Project 
        participants must focus the evaluation on the overall efficacy 
        of modifying the activities and procedures affected by the 
        waiver.  The evaluation must include a mechanism for documenting 
        parents' response to the pilot project.  Project participants 
        must submit to the commissioner a progress report by September 
        1, 2004, and a final report by November 1, 2005.  The 
        commissioner must compile and present the results of the reports 
        to the legislature by February 1, 2006, and recommend 
        appropriate amendments to the statutory requirements listed in 
        subdivision 3. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 19.  [DEPARTMENT RESPONSIBILITY.] 
           By January 1, 2004, the commissioner of education must 
        adopt rules that: 
           (1) establish criteria for selecting hearing officers, the 
        standards of conduct to which a hearing officer must adhere, and 
        a process to evaluate the hearing system; 
           (2) ensure that appropriately trained and knowledgeable 
        persons conduct due process hearings in compliance with federal 
        law; and 
           (3) create standards for expedited due process hearings 
        under federal law. 
           By March 1, 2004, the commissioner of education must 
        develop and make available a notice for participants in 
        state-provided dispute resolution processes that informs 
        participants of their rights concerning dispute resolution. 
           Sec. 20.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
        education aid under Minnesota Statutes, section 125A.75: 
             $515,091,000   .....     2004 
             $529,460,000   .....     2005 
           The 2004 appropriation includes $90,577,000 for 2003 and 
        $424,514,000 for 2004. 
           The 2005 appropriation includes $106,128,000 for 2004 and 
        $423,332,000 for 2005. 
           Subd. 3.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION 
        AID.] For special education cross-subsidy reduction aid under 
        section 17: 
             $ 5,000,000    .....     2004 
             $11,000,000    .....     2005 
           This is a onetime appropriation. 
           Subd. 4.  [AID FOR CHILDREN WITH DISABILITIES.] For aid 
        under Minnesota Statutes, section 125A.75, subdivision 3, for 
        children with disabilities placed in residential facilities 
        within the district boundaries for whom no district of residence 
        can be determined: 
             $2,177,000     .....     2004 
             $2,244,000     .....     2005 
           If the appropriation for either year is insufficient, the 
        appropriation for the other year is available.  
           Subd. 5.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
        teacher travel for home-based services under Minnesota Statutes, 
        section 125A.75, subdivision 1: 
             $220,000       .....     2004 
             $261,000       .....     2005 
           The 2004 appropriation includes $34,000 for 2003 and 
        $186,000 for 2004. 
           The 2005 appropriation includes $46,000 for 2004 and 
        $215,000 for 2005. 
           Subd. 6.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
        cost aid under Minnesota Statutes, section 125A.79, subdivision 
        7: 
             $92,606,000    .....     2004 
             $92,984,000    .....     2005 
           The 2004 appropriation includes $41,754,000 for 2003 and 
        $50,852,000 for 2004. 
           The 2005 appropriation includes $41,215,000 for 2004 and 
        $51,769,000 for 2005.  
           Subd. 7.  [LITIGATION COSTS FOR SPECIAL EDUCATION.] For 
        paying the costs a district incurs under Minnesota Statutes, 
        section 125A.75, subdivision 8: 
             $346,000       .....     2004 
             $ 17,000       .....     2005 
           Subd. 8.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
        transition programs for children with disabilities under 
        Minnesota Statutes, section 124D.454: 
             $8,625,000     .....     2004 
             $8,867,000     .....     2005 
           The 2004 appropriation includes $1,516,000 for 2003 and 
        $7,109,000 for 2004.  
           The 2005 appropriation includes $1,777,000 for 2004 and 
        $7,090,000 for 2005.  
           Subd. 9.  [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 125A.79, subdivision 4: 
             $152,000       .....     2004 
             $160,000       .....     2005 
           Subd. 10.  [OUT-OF-STATE TUITION SPECIAL EDUCATION.] For 
        special education out-of-state tuition according to Minnesota 
        Statutes, section 125A.79, subdivision 8: 
             $250,000       .....     2004 
             $250,000       .....     2005 
           Sec. 21.  [REPEALER.] 
           Minnesota Statutes 2002, sections 125A.023, subdivision 5; 
        125A.09; 125A.47; and 125A.79, subdivision 2, are repealed. 

                                   ARTICLE 4
                           FACILITIES AND TECHNOLOGY
           Section 1.  Minnesota Statutes 2002, section 123B.51, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEASE ROOMS OR BUILDINGS REAL PROPERTY.] When 
        necessary, the board may lease rooms or buildings real property 
        for school purposes. 
           Sec. 2.  Minnesota Statutes 2002, section 123B.51, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
        lease to any person, business, or organization a schoolhouse 
        real property that is not needed for school purposes, or part of 
        a schoolhouse the property that is not needed for school 
        purposes if the board determines that leasing part of a 
        schoolhouse the property does not interfere with the educational 
        programs taking place in the rest of the building on the 
        property.  The board may charge and collect reasonable 
        consideration for the lease and may determine the terms and 
        conditions of the lease. 
           (b) In districts with outstanding bonds, the net proceeds 
        of the lease must be first deposited in the debt retirement fund 
        of the district in an amount sufficient to meet when due that 
        percentage of the principal and interest payments for 
        outstanding bonds that is ascribable to the payment of expenses 
        necessary and incidental to the construction or purchase of the 
        particular building or property that is leased.  Any remaining 
        net proceeds in these districts may be deposited in either the 
        debt redemption fund or operating capital expenditure 
        fund account.  All net proceeds of the lease in districts 
        without outstanding bonds shall be deposited in the operating 
        capital expenditure fund account of the district. 
           (c) The board may make capital improvements, including 
        fixtures, to a schoolhouse or a portion thereof to the real 
        property, not exceeding in cost the replacement value of 
        the schoolhouse property, to facilitate its rental, and the 
        lease of an the improved schoolhouse property, or part of it, 
        shall provide for rentals which will recover the cost of the 
        improvements over the initial term of the lease.  
        Notwithstanding paragraph (b), the portion of the rentals 
        representing the cost of the improvements shall be deposited in 
        the operating capital expenditure fund account of the district 
        and the balance of the rentals shall be used as provided in 
        paragraph (b).  
           Sec. 3.  Minnesota Statutes 2002, section 123B.52, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [CONSTRUCTION CONTRACTS.] A project labor 
        agreement is a hiring agreement that establishes wages, uniform 
        work schedules, and rules for dispute resolution to manage 
        construction projects that generally require, among other 
        things, payment of union dues or fees to a labor organization or 
        membership in or affiliation with a labor organization.  A 
        school board must adopt at a public meeting a written resolution 
        authorizing a project labor agreement to construct or repair a 
        facility through a contract or bid.  The board must publish in 
        the official newspaper of the district notice of the meeting at 
        least 30 days in advance. 
           Sec. 4.  Minnesota Statutes 2002, section 123B.53, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
        service equalization revenue of a district equals the sum of the 
        first tier debt service equalization revenue and the second tier 
        debt service equalization revenue. 
           (b) The first tier debt service equalization revenue of a 
        district equals the greater of zero or the eligible debt service 
        revenue minus the amount raised by a levy of 15 percent times 
        the adjusted net tax capacity of the district minus the second 
        tier debt service equalization revenue of the district. 
           (c) The second tier debt service equalization revenue of a 
        district equals the greater of zero or the eligible debt service 
        revenue, excluding alternative facilities levies under section 
        123B.59, subdivision 5, minus the amount raised by a levy of 25 
        percent times the adjusted net tax capacity of the district. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005. 
           Sec. 5.  Minnesota Statutes 2002, section 123B.57, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] (a) To receive 
        health and safety revenue for any fiscal year a district must 
        submit to the commissioner an application for aid and levy by 
        the date determined by the commissioner.  The application may be 
        for hazardous substance removal, fire and life safety code 
        repairs, labor and industry regulated facility and equipment 
        violations, and health, safety, and environmental management, 
        including indoor air quality management.  The application must 
        include a health and safety program adopted by the school 
        district board.  The program must include the estimated cost, 
        per building, of the program by fiscal year.  Upon approval 
        through the adoption of a resolution by each of an intermediate 
        district's member school district boards and the approval of the 
        department of children, families, and learning education, a 
        school district may include its proportionate share of the costs 
        of health and safety projects for an intermediate district in 
        its application. 
           (b) Health and safety projects with an estimated cost of 
        $500,000 or more per site, approved after February 1, 2003, are 
        not eligible for health and safety revenue.  Health and safety 
        projects with an estimated cost of $500,000 or more per site, 
        approved after February 1, 2003, that meet all other 
        requirements for health and safety funding, are eligible for 
        alternative facilities bonding and levy revenue according to 
        section 123B.59.  A school board shall not separate portions of 
        a single project into components to qualify for health and 
        safety revenue, and shall not combine unrelated projects into a 
        single project to qualify for alternative facilities bonding and 
        levy revenue. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to projects approved after 
        February 1, 2003, for taxes payable in 2004 and later. 
           Sec. 6.  Minnesota Statutes 2002, section 123B.57, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
        safety revenue, a district may levy an amount equal to the 
        district's health and safety revenue as defined in subdivision 3 
        multiplied by the lesser of one, or the ratio of the quotient 
        derived by dividing the adjusted net tax capacity of the 
        district for the year preceding the year the levy is certified 
        by the adjusted marginal cost pupil units in the district for 
        the school year to which the levy is attributable, 
        to $3,956 $2,935. 
           Sec. 7.  Minnesota Statutes 2002, section 123B.57, 
        subdivision 6, is amended to read: 
           Subd. 6.  [USES OF HEALTH AND SAFETY REVENUE.] (a) Health 
        and safety revenue may be used only for approved expenditures 
        necessary to correct fire and life safety hazards, life safety 
        hazards, or for the removal or encapsulation of asbestos from 
        school buildings or property owned or being acquired by the 
        district, asbestos-related repairs, cleanup and disposal of 
        polychlorinated biphenyls found in school buildings or property 
        owned or being acquired by the district, or the cleanup, 
        removal, disposal, and repairs related to storing heating fuel 
        or transportation fuels such as alcohol, gasoline, fuel oil, and 
        special fuel, as defined in section 296A.01, labor and 
        industry Minnesota occupational safety and health administration 
        regulated facility and equipment hazards, indoor air quality 
        mold abatement, upgrades or replacement of mechanical 
        ventilation systems to meet American Society of Heating, 
        Refrigerating and Air Conditioning Engineers standards and state 
        mechanical code, department of health food code and swimming 
        pool hazards excluding depth correction, and health, safety, and 
        environmental management.  Health and safety revenue must not be 
        used to finance a lease purchase agreement, installment purchase 
        agreement, or other deferred payments agreement.  Health and 
        safety revenue must not be used for the construction of new 
        facilities or the purchase of portable classrooms, for interest 
        or other financing expenses, or for energy efficiency projects 
        under section 123B.65.  The revenue may not be used for a 
        building or property or part of a building or property used for 
        post-secondary instruction or administration or for a purpose 
        unrelated to elementary and secondary education. 
           (b) Notwithstanding paragraph (a), health and safety 
        revenue must not be used for replacement of building materials 
        or facilities including roof, walls, windows, internal fixtures 
        and flooring, nonhealth and safety costs associated with 
        demolition of facilities, structural repair or replacement of 
        facilities due to unsafe conditions, violence prevention and 
        facility security, ergonomics, building and heating, ventilating 
        and air conditioning supplies, maintenance, cleaning, testing, 
        and calibration activities.  All assessments, investigations, 
        inventories, and support equipment not leading to the 
        engineering or construction of a project shall be included in 
        the health, safety, and environmental management costs in 
        subdivision 8, paragraph (a). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to projects approved after 
        February 1, 2003, for taxes payable in 2004 and later. 
           Sec. 8.  Minnesota Statutes 2002, section 123B.59, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TO QUALIFY.] (a) An independent or special 
        school district qualifies to participate in the alternative 
        facilities bonding and levy program if the district has: 
           (1) more than 66 students per grade; 
           (2) over 1,850,000 square feet of space and the average age 
        of building space is 15 years or older or over 1,500,000 square 
        feet and the average age of building space is 35 years or older; 
           (3) insufficient funds from projected health and safety 
        revenue and capital facilities revenue to meet the requirements 
        for deferred maintenance, to make accessibility improvements, or 
        to make fire, safety, or health repairs; and 
           (4) a ten-year facility plan approved by the commissioner 
        according to subdivision 2. 
           (b) An independent or special school district not eligible 
        to participate in the alternative facilities bonding and levy 
        program under paragraph (a) qualifies for limited participation 
        in the program if the district has: 
           (1) one or more health and safety projects with an 
        estimated cost of $500,000 or more per site that would qualify 
        for health and safety revenue except for the project size 
        limitation in section 123B.57, subdivision 1, paragraph (b); and 
           (2) insufficient funds from capital facilities revenue to 
        fund those projects. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005. 
           Sec. 9.  Minnesota Statutes 2002, section 123B.59, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEN-YEAR FACILITY PLAN.] (a) A district 
        qualifying district under subdivision 1, paragraph (a), must 
        have a ten-year facility plan approved by the commissioner that 
        includes an inventory of projects and costs that would be 
        eligible for: 
           (1) health and safety revenue, without restriction as to 
        project size; 
           (2) disabled access levy; and 
           (3) deferred capital expenditures and maintenance projects 
        necessary to prevent further erosion of facilities. 
           (b) A district qualifying under subdivision 1, paragraph 
        (b), must have a five-year plan approved by the commissioner 
        that includes an inventory of projects and costs for health and 
        safety projects with an estimated cost of $500,000 or more per 
        site that would qualify for health and safety revenue except for 
        the project size limitation in section 123B.57, subdivision 1, 
        paragraph (b). 
           (c) The school district must: 
           (1) annually update the plan plans; 
           (2) biennially submit a facility maintenance plan; and 
           (3) indicate whether the district will issue bonds to 
        finance the plan or levy for the costs. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005. 
           Sec. 10.  Minnesota Statutes 2002, section 123B.59, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOND AUTHORIZATION.] (a) A school district, upon 
        approval of its board and the commissioner, may issue general 
        obligation bonds under this section to finance approved 
        facilities plans approved by its board and the commissioner.  
        Chapter 475, except sections 475.58 and 475.59, must be complied 
        with.  The district may levy under subdivision 5 for the debt 
        service revenue.  The authority to issue bonds under this 
        section is in addition to any bonding authority authorized by 
        this chapter, or other law.  The amount of bonding authority 
        authorized under this section must be disregarded in calculating 
        the bonding or net debt limits of this chapter, or any other law 
        other than section 475.53, subdivision 4. 
           (b) Before a district issues bonds under this subdivision, 
        it must publish notice of the intended projects, the amount of 
        the bond issue, and the total amount of district indebtedness. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to bonds issued after 
        April 15, 2003, for taxes payable in 2004 and later. 
           Sec. 11.  Minnesota Statutes 2002, section 123B.59, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [LEVY AUTHORIZATION.] (a) A school district may 
        levy under this section to finance the portion of facilities 
        plans approved by its board and the commissioner that are not 
        financed through bond issues according to subdivision 3. 
           (b) Before a district levies under this subdivision, it 
        must publish notice of the intended projects, including the 
        total estimated project cost. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to levies for taxes 
        payable in 2004 and later. 
           Sec. 12.  Minnesota Statutes 2002, section 123B.59, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
        approval, may levy for costs related to an approved facility 
        plan as follows:  
           (a) if the district has indicated to the commissioner that 
        bonds will be issued, the district may levy for the principal 
        and interest payments on outstanding bonds issued according to 
        subdivision 3 after reduction for any alternative facilities aid 
        receivable under subdivision 6; or 
           (b) if the district has indicated to the commissioner that 
        the plan will be funded through levy, the district may levy 
        according to the schedule approved in the plan after reduction 
        for any alternative facilities aid receivable under subdivision 
        6 3a. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 13.  Minnesota Statutes 2002, section 123B.63, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION OF A DOWN PAYMENT CAPITAL PROJECT 
        REFERENDUM ACCOUNT.] A district may create a down payment 
        capital project referendum account as a separate account in 
        its general fund or its building construction fund.  All 
        proceeds from the down payment capital project levy must be 
        deposited in the capital expenditure fund and transferred to 
        this account project referendum account in its general fund.  
        The portion of the proceeds to be used for building construction 
        must be transferred to the capital project referendum account in 
        its building construction fund.  Interest income attributable to 
        the down payment capital project referendum account must be 
        credited to the account. 
           Sec. 14.  Minnesota Statutes 2002, section 123B.63, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USES OF THE ACCOUNT.] Money in the down payment 
        capital project referendum account must be used as a down 
        payment for the future costs of acquisition and betterment for a 
        project that has been reviewed under section 123B.71 and has 
        been approved according to subdivision 3. 
           Sec. 15.  Minnesota Statutes 2002, section 123B.63, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FACILITIES DOWN PAYMENT CAPITAL PROJECT LEVY 
        REFERENDUM.] A district may levy the local tax rate approved by 
        a majority of the electors voting on the question to provide 
        funds for a down payment for an approved project.  The election 
        must take place no more than five years before the estimated 
        date of commencement of the project.  The referendum must be 
        held on a date set by the board.  A referendum for a project not 
        receiving a positive review and comment by the commissioner 
        under section 123B.71 must be approved by at least 60 percent of 
        the voters at the election.  The referendum may be called by the 
        school board and may be held: 
           (1) separately, before an election for the issuance of 
        obligations for the project under chapter 475; or 
           (2) in conjunction with an election for the issuance of 
        obligations for the project under chapter 475; or 
           (3) notwithstanding section 475.59, as a conjunctive 
        question authorizing both the down payment capital project levy 
        and the issuance of obligations for the project under chapter 
        475.  Any obligations authorized for a project may be issued 
        within five years of the date of the election. 
           The ballot must provide a general description of the 
        proposed project, state the estimated total cost of the project, 
        state whether the project has received a positive or negative 
        review and comment from the commissioner, state the maximum 
        amount of the down payment capital project levy as a percentage 
        of net tax capacity, state the amount that will be raised by 
        that local tax rate in the first year it is to be levied, and 
        state the maximum number of years that the levy authorization 
        will apply. 
           The ballot must contain a textual portion with the 
        information required in this section and a question stating 
        substantially the following: 
           "Shall the down payment capital project levy proposed by 
        the board of .......... School District No. .......... be 
        approved?" 
           If approved, the amount provided by the approved local tax 
        rate applied to the net tax capacity for the year preceding the 
        year the levy is certified may be certified for the number of 
        years approved. 
           In the event a conjunctive question proposes to authorize 
        both the down payment capital project levy and the issuance of 
        obligations for the project, appropriate language authorizing 
        the issuance of obligations must also be included in the 
        question.  
           The district must notify the commissioner of the results of 
        the referendum. 
           Sec. 16.  Minnesota Statutes 2002, section 123B.63, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXCESS BUILDING CONSTRUCTION FUND LEVY 
        PROCEEDS.] Any funds remaining in the down payment capital 
        project referendum account that are not applied to the payment 
        of the costs of the approved project before its final completion 
        must be transferred to the district's debt redemption fund.  
           Sec. 17.  Minnesota Statutes 2002, section 126C.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When an 
        independent or a special school district or a group of 
        independent or special school districts finds it economically 
        advantageous to rent or lease a building or land for any 
        instructional purposes or for school storage or furniture 
        repair, and it determines that the operating capital revenue 
        authorized under section 126C.10, subdivision 13, is 
        insufficient for this purpose, it may apply to the commissioner 
        for permission to make an additional capital expenditure levy 
        for this purpose.  An application for permission to levy under 
        this subdivision must contain financial justification for the 
        proposed levy, the terms and conditions of the proposed lease, 
        and a description of the space to be leased and its proposed use.
           (b) The criteria for approval of applications to levy under 
        this subdivision must include:  the reasonableness of the price, 
        the appropriateness of the space to the proposed activity, the 
        feasibility of transporting pupils to the leased building or 
        land, conformity of the lease to the laws and rules of the state 
        of Minnesota, and the appropriateness of the proposed lease to 
        the space needs and the financial condition of the district.  
        The commissioner must not authorize a levy under this 
        subdivision in an amount greater than 90 percent of the cost to 
        the district of renting or leasing a building or land for 
        approved purposes.  The proceeds of this levy must not be used 
        for custodial or other maintenance services.  A district may not 
        levy under this subdivision for the purpose of leasing or 
        renting a district-owned building or site to itself. 
           (c) For agreements finalized after July 1, 1997, a district 
        may not levy under this subdivision for the purpose of leasing:  
        (1) a newly constructed building used primarily for regular 
        kindergarten, elementary, or secondary instruction; or (2) a 
        newly constructed building addition or additions used primarily 
        for regular kindergarten, elementary, or secondary instruction 
        that contains more than 20 percent of the square footage of the 
        previously existing building. 
           (d) Notwithstanding paragraph (b), a district may levy 
        under this subdivision for the purpose of leasing or renting a 
        district-owned building or site to itself only if the amount is 
        needed by the district to make payments required by a lease 
        purchase agreement, installment purchase agreement, or other 
        deferred payments agreement authorized by law, and the levy 
        meets the requirements of paragraph (c).  A levy authorized for 
        a district by the commissioner under this paragraph may be in 
        the amount needed by the district to make payments required by a 
        lease purchase agreement, installment purchase agreement, or 
        other deferred payments agreement authorized by law, provided 
        that any agreement include a provision giving the school 
        districts the right to terminate the agreement annually without 
        penalty. 
           (e) The total levy under this subdivision for a district 
        for any year must not exceed $100 $90 times the resident pupil 
        units for the fiscal year to which the levy is attributable. 
           (f) For agreements for which a review and comment have been 
        submitted to the department of children, families, and 
        learning education after April 1, 1998, the term "instructional 
        purpose" as used in this subdivision excludes expenditures on 
        stadiums. 
           (g) The commissioner of children, families, and 
        learning education may authorize a school district to exceed the 
        limit in paragraph (e) if the school district petitions the 
        commissioner for approval.  The commissioner shall grant 
        approval to a school district to exceed the limit in paragraph 
        (e) for not more than five years if the district meets the 
        following criteria: 
           (1) the school district has been experiencing pupil 
        enrollment growth in the preceding five years; 
           (2) the purpose of the increased levy is in the long-term 
        public interest; 
           (3) the purpose of the increased levy promotes colocation 
        of government services; and 
           (4) the purpose of the increased levy is in the long-term 
        interest of the district by avoiding over construction of school 
        facilities. 
           (h) A school district that is a member of an intermediate 
        school district may include in its authority under this 
        section 90 percent of the costs associated with leases of 
        administrative and classroom space for intermediate school 
        district programs.  This authority must not exceed $25 $22.50 
        times the adjusted marginal cost pupil units of the member 
        districts.  This authority is in addition to any other authority 
        authorized under this section. 
           (i) In addition to the allowable capital levies in 
        paragraph (a), a district that is a member of the "Technology 
        and Information Education Systems" data processing joint board, 
        that finds it economically advantageous to enter into a lease 
        purchase agreement for a building for a group of school 
        districts or special school districts for staff development 
        purposes, may levy for its portion of lease costs attributed to 
        the district within the total levy limit in paragraph (e). 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 18.  Minnesota Statutes 2002, section 126C.63, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LEVY.] "Levy" means a district's net debt 
        service levy after the reduction of debt service equalization 
        aid under section 123B.53, subdivision 6.  For taxes payable in 
        1994 2003 and later, each district's maximum effort debt service 
        levy for purposes of subdivision 8, must be reduced by an equal 
        number of percentage points if the commissioner of finance 
        determines that the levy reduction will not result in 
        a statewide property tax payment from the general fund in the 
        state treasury according to section 16A.641, as would be 
        required under Minnesota Statutes 1992, section 124.46 126C.72, 
        subdivision 3.  A district's levy that is adjusted under this 
        section must not be reduced below 22.3 30.1 percent of the 
        district's adjusted net tax capacity. 
           Sec. 19.  Minnesota Statutes 2002, section 126C.63, 
        subdivision 8, is amended to read: 
           Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] (a) "Maximum 
        effort debt service levy" means the lesser of: 
           (1) a levy in whichever of the following amounts is 
        applicable: 
           (a) (i) in any district receiving a debt service loan for a 
        debt service levy payable in 2002 and thereafter, or granted a 
        capital loan after January 1, 2001 2002, a levy in total dollar 
        amount computed at a rate of 30 40 percent of adjusted net tax 
        capacity for taxes payable in 2002 and thereafter; 
           (b) (ii) in any district receiving a debt service loan for 
        a debt service levy payable in 1991 and thereafter 2001 or 
        earlier, or granted a capital loan after before January 1 
        2, 1990 2001, a levy in a total dollar amount computed at a rate 
        of 24 32 percent of adjusted net tax capacity for taxes payable 
        in 1991 2002 and thereafter; 
           (c) in any district granted a debt service loan after July 
        31, 1981, or granted a capital loan which is approved after July 
        31, 1981, a levy in a total dollar amount computed as a tax rate 
        of 21.92 percent on the adjusted net tax capacity for taxes 
        payable in 1991 and thereafter; or 
           (2) a levy in any district for which a capital loan was 
        approved prior to August 1, 1981, a levy in a total dollar 
        amount equal to the sum of the amount of the required debt 
        service levy and an amount which when levied annually will in 
        the opinion of the commissioner be sufficient to retire the 
        remaining interest and principal on any outstanding loans from 
        the state within 30 years of the original date when the capital 
        loan was granted.  
           (b) The board in any district affected by the provisions of 
        paragraph (a), clause (2), may elect instead to determine the 
        amount of its levy according to the provisions of paragraph (a), 
        clause (1).  If a district's capital loan is not paid within 30 
        years because it elects to determine the amount of its levy 
        according to the provisions of paragraph (a), clause (2), the 
        liability of the district for the amount of the difference 
        between the amount it levied under paragraph (a), clause (2), 
        and the amount it would have levied under paragraph (a), clause 
        (1), and for interest on the amount of that difference, must not 
        be satisfied and discharged pursuant to Minnesota Statutes 1988, 
        or an earlier edition of Minnesota Statutes if applicable, 
        section 124.43, subdivision 4. 
           Sec. 20.  Minnesota Statutes 2002, section 126C.69, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
        1999, a district is not eligible for a capital loan unless the 
        district's estimated net debt tax rate as computed by the 
        commissioner after debt service equalization aid would be more 
        than 30 40 percent of adjusted net tax capacity.  The estimate 
        must assume a 20-year maturity schedule for new debt. 
           Sec. 21.  Minnesota Statutes 2002, section 126C.69, 
        subdivision 9, is amended to read: 
           Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
        recommended for approval for a district exceeding an amount 
        computed as follows: 
           (1) the amount requested by the district under subdivision 
        6; 
           (2) plus the aggregate principal amount of general 
        obligation bonds of the district outstanding on June 30 of the 
        year following the year the application was received, not 
        exceeding the limitation on net debt of the district in section 
        475.53, subdivision 4, or 450 607 percent of its adjusted net 
        tax capacity as most recently determined, whichever is less; 
           (3) less the maximum net debt permissible for the district 
        on December 1 of the year the application is received, under the 
        limitation in section 475.53, subdivision 4, or 450 607 percent 
        of its adjusted net tax capacity as most recently determined, 
        whichever is less; 
           (4) less any amount by which the amount voted exceeds the 
        total cost of the facilities for which the loan is granted.  
           (b) The loan may be approved in an amount computed as 
        provided in paragraph (a), clauses (1) to (3), subject to later 
        reduction according to paragraph (a), clause (4). 
           Sec. 22.  Minnesota Statutes 2002, section 475.61, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEBT SERVICE RESOLUTION.] The governing 
        body of any municipality issuing general obligations shall, 
        prior to delivery of the obligations, levy by resolution a 
        direct general ad valorem tax upon all taxable property in the 
        municipality to be spread upon the tax rolls for each year of 
        the term of the obligations.  The tax levies for all years for 
        municipalities other than school districts shall be specified 
        and such that if collected in full they, together with estimated 
        collections of special assessments and other revenues pledged 
        for the payment of said obligations, will produce at least five 
        percent in excess of the amount needed to meet when due the 
        principal and interest payments on the obligations.  The tax 
        levies for school districts shall be specified and such that if 
        collected in full they, together with estimated collection of 
        other revenues pledged for the payment of the obligations, will 
        produce between five and six percent in excess of the amount 
        needed to meet when due the principal and interest payments on 
        the obligations, rounded up to the nearest dollar; except that, 
        with the permission of the commissioner of children, families, 
        and learning education, a school board may specify a tax levy in 
        a higher amount if necessary either to meet an anticipated tax 
        delinquency or for cash flow needs to meet the required payments 
        from the debt redemption fund.  Such resolution shall 
        irrevocably appropriate the taxes so levied and any special 
        assessments or other revenues so pledged to the municipality's 
        debt service fund or a special debt service fund or account 
        created for the payment of one or more issues of obligations.  
        The governing body may, in its discretion, at any time after the 
        obligations have been authorized, adopt a resolution levying 
        only a portion of such taxes, to be filed, assessed, extended, 
        collected, and remitted as hereinafter provided, and the amount 
        or amounts therein levied shall be credited against the tax 
        required to be levied prior to delivery of the obligations. 
           Sec. 23.  Minnesota Statutes 2002, section 475.61, 
        subdivision 3, is amended to read: 
           Subd. 3.  [IRREVOCABILITY.] (a) Tax levies so made and 
        filed shall be irrevocable, except as provided in this 
        subdivision. 
           (b) For purposes of this subdivision, "excess debt 
        redemption fund balance" means the greater of zero or the 
        balance in the district's debt redemption fund as of June 30 of 
        the fiscal year ending in the year before the year the levy is 
        certified, minus any debt redemption fund balance attributable 
        to refunding of existing bonds, minus the amount of the levy 
        reduction for the current year and the prior year under 
        paragraphs (e) and (f), minus five percent of the district's 
        required debt service levy for the next year. 
           (c) By July 15 each year, a district shall report to the 
        commissioner of children, families, and learning education the 
        amount of the districts' debt redemption fund balance as of June 
        30 of the prior year attributable to refunding of existing bonds.
           (d) By August 15 each year, the commissioner shall 
        determine the excess debt redemption fund balance for each 
        school district, and shall certify the amount of the excess 
        balance to the school district superintendent.  
           (e) In each year when a district has an excess debt 
        redemption fund balance, the commissioner shall report the 
        amount of the excess to the county auditor and the auditor shall 
        reduce the tax levy otherwise to be included in the rolls next 
        prepared by the amount certified.  
           (f) The school board may, with the approval of the 
        commissioner, retain all or part of the excess balance if it is 
        necessary to ensure the prompt and full payment of its 
        obligations and any call premium on its obligations, will be 
        used for redemption of its obligations in accordance with their 
        terms, or to level out the debt service tax rate, excluding the 
        debt excess adjustment, for its obligations over the next two 
        years.  A school district requesting authority to retain all or 
        part of the excess balance shall provide written documentation 
        to the commissioner describing the rationale for its request by 
        September 15 including the issuance of new obligations within 
        the next year or the refunding of existing obligations.  A 
        school district that retains an excess may request to transfer 
        the excess to its operating capital account in the general fund 
        under section 123B.80.  The school board may, with the approval 
        of the commissioner, specify a tax levy in a higher amount if 
        necessary because of anticipated tax delinquency or for cash 
        flow needs to meet the required payments from the debt 
        redemption fund.  
           (g) If the governing body, including the governing body of 
        a school district, in any year makes an irrevocable 
        appropriation to the debt service fund of money actually on hand 
        or if there is on hand any excess amount in the debt service 
        fund, the recording officer may certify to the county auditor 
        the fact and amount thereof and the auditor shall reduce by the 
        amount so certified the amount otherwise to be included in the 
        rolls next thereafter prepared. 
           Sec. 24.  [BONDS; MOUNDS VIEW.] 
           Notwithstanding Minnesota Statutes, section 123B.59, 
        subdivision 3, independent school district No. 621, Mounds View, 
        may issue bonds according to Minnesota Statutes 2002, section 
        123B.59, subdivision 3, for projects approved by the 
        commissioner before February 1, 2003. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 25.  [LEASE LEVY EXCEPTION.] 
           Notwithstanding Minnesota Statutes, section 126C.40, 
        subdivision 1, a school district that has entered into a 
        completed agreement under Laws 2000, chapter 492, article 1, 
        section 3, subdivision 4, may continue to levy for 100 percent 
        of the costs of any lease required by the agreement. 
           Sec. 26.  [PROPERTY SALE; ST. FRANCIS SCHOOL DISTRICT.] 
           Notwithstanding Minnesota Statutes, section 123B.51, 
        subdivision 6, or any other law to the contrary, independent 
        school district No. 15, St. Francis, may deposit the proceeds 
        from the sale of land that was purchased with funds obtained 
        according to Laws 1992, chapter 558, section 7, subdivision 7, 
        in the district's general fund reserved for operating capital 
        account.  The district may only use the proceeds of the sale for 
        projects designed to create or improve safe walking routes for 
        the students of independent school district No. 15, St. Francis. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 27.  [DISABLED ACCESS LEVY AUTHORITY; SOUTHLAND.] 
           Notwithstanding the time limits in Minnesota Statutes, 
        section 123B.58, subdivision 3, independent school district No. 
        500, Southland, may levy up to $66,000 of its remaining disabled 
        access levy authority over five or fewer years.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 28.  [LEVY; ELGIN-MILLVILLE.] 
           Subdivision 1.  [LEVY.] For taxes payable in 2004 only, 
        independent school district No. 806, Elgin-Millville, may levy 
        an amount up to $8,000 for handicapped access and fire safety 
        improvements to school buildings.  
           Subd. 2.  [LEVY LIMITATION.] The sum of the levy in 
        subdivision 1 and other levies under Minnesota Statutes, section 
        123B.58, must not exceed $300,000.  
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005 and thereafter. 
           Sec. 29.  [GARAGE LEASE LEVY; SARTELL.] 
           For taxes payable in 2004, 2005, and 2006, independent 
        school district No. 740, Sartell, may levy up to $107,000 each 
        year for the purpose of leasing a school bus storage facility.  
        The department of education shall include this levy in the 
        calculation of eligible building lease levy under Minnesota 
        Statutes, section 126C.40, subdivision 1.  This levy shall not 
        allow the district to exceed the $100 per resident marginal cost 
        pupil unit cap in that section.  The district is eligible to 
        make this levy only if it sells its current school bus storage 
        site to the city of Sartell and the district may not use this 
        levy as part of a lease purchase agreement to replace its 
        current school bus storage facility.  
           Sec. 30.  [HEALTH AND SAFETY EXCEPTION, ULEN-HITTERDAL.] 
           Notwithstanding Minnesota Statutes, section 123B.57, 
        independent school district No. 914, Ulen-Hitterdal, may submit 
        to the commissioner of education an application that the 
        demolition of a portion of the Ulen high school building be 
        included in its health and safety revenue for fiscal year 2005.  
        The department of education shall consider the district's 
        application for health and safety revenue based on the 
        eligibility criteria under Minnesota Statutes 2002, section 
        123B.57. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 31.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated.  
           Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
        safety aid according to Minnesota Statutes, section 123B.57, 
        subdivision 5: 
             $7,839,000     .....     2004 
             $6,068,000     .....     2005 
           The 2004 appropriation includes $1,516,000 for 2003 and 
        $6,323,000 for 2004. 
           The 2005 appropriation includes $1,580,000 for 2004 and 
        $4,488,000 for 2005. 
           Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
        according to Minnesota Statutes, section 123B.53, subdivision 6: 
             $34,500,000    .....     2004 
             $37,575,000    .....     2005 
           The 2004 appropriation includes $5,586,000 for 2003 and 
        $28,914,000 for 2004. 
           The 2005 appropriation includes $7,228,000 for 2004 and 
        $30,347,000 for 2005. 
           Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
        alternative facilities bonding aid, according to Minnesota 
        Statutes, section 123B.59, subdivision 1: 
             $18,708,000    .....     2004 
             $19,287,000    .....     2005 
           The 2004 appropriation includes $3,278,000 for 2003 and 
        $15,430,000 for 2004. 
           The 2005 appropriation includes $3,857,000 for 2004 and 
        $15,430,000 for 2005. 
           Sec. 32.  [REPEALER.] 
           Minnesota Statutes 2002, section 125B.11, is repealed. 

                                   ARTICLE 5 
                  NUTRITION, SCHOOL ACCOUNTING, OTHER PROGRAMS 
           Section 1.  Minnesota Statutes 2002, section 12.21, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SPECIFIC AUTHORITY.] In performing duties under 
        this chapter and to effect its policy and purpose, the governor 
        may: 
           (1) make, amend, and rescind the necessary orders and rules 
        to carry out the provisions of this chapter and section 216C.15 
        within the limits of the authority conferred by this section, 
        with due consideration of the plans of the federal government 
        and without complying with sections 14.001 to 14.69, but no 
        order or rule has the effect of law except as provided by 
        section 12.32; 
           (2) ensure that a comprehensive emergency operations plan 
        and emergency management program for this state are developed 
        and maintained, and are integrated into and coordinated with the 
        emergency plans of the federal government and of other states to 
        the fullest possible extent; 
           (3) in accordance with the emergency operations plan and 
        the emergency management program of this state, procure 
        supplies, equipment, and facilities; institute training programs 
        and public information programs; and take all other preparatory 
        steps, including the partial or full activation of emergency 
        management organizations in advance of actual disaster to ensure 
        the furnishing of adequately trained and equipped forces of 
        emergency management personnel in time of need; 
           (4) make studies and surveys of the industries, resources, 
        and facilities in this state as may be necessary to ascertain 
        the capabilities of the state for emergency management and to 
        plan for the most efficient emergency use of those industries, 
        resources, and facilities; 
           (5) on behalf of this state, enter into mutual aid 
        arrangements or cooperative agreements with other states, tribal 
        authorities, and Canadian provinces, and coordinate mutual aid 
        plans between political subdivisions of this state; 
           (6) delegate administrative authority vested in the 
        governor under this chapter, except the power to make rules, and 
        provide for the subdelegation of that authority; 
           (7) cooperate with the president and the heads of the armed 
        forces, the emergency management agency of the United States and 
        other appropriate federal officers and agencies, and with the 
        officers and agencies of other states in matters pertaining to 
        the emergency management of the state and nation, including the 
        direction or control of: 
           (i) emergency preparedness drills and exercises; 
           (ii) warnings and signals for drills or actual emergencies 
        and the mechanical devices to be used in connection with them; 
           (iii) shutting off water mains, gas mains, electric power 
        connections and the suspension of all other utility services; 
           (iv) the conduct of persons in the state, including 
        entrance or exit from any stricken or threatened public place, 
        occupancy of facilities, and the movement and cessation of 
        movement of pedestrians, vehicular traffic, and all forms of 
        private and public transportation during, prior, and subsequent 
        to drills or actual emergencies; 
           (v) public meetings or gatherings; and 
           (vi) the evacuation, reception, and sheltering of persons; 
           (8) contribute to a political subdivision, within the 
        limits of the appropriation for that purpose, not more than 25 
        percent of the cost of acquiring organizational equipment that 
        meets standards established by the governor; 
           (9) formulate and execute, with the approval of the 
        executive council, plans and rules for the control of traffic in 
        order to provide for the rapid and safe movement over public 
        highways and streets of troops, vehicles of a military nature, 
        and materials for national defense and war or for use in any war 
        industry, for the conservation of critical materials, or for 
        emergency management purposes; coordinate the activities of the 
        departments or agencies of the state and its political 
        subdivisions concerned directly or indirectly with public 
        highways and streets, in a manner that will best effectuate 
        those plans; 
           (10) alter or adjust by executive order, without complying 
        with sections 14.01 to 14.69, the working hours, work days and 
        work week of, and annual and sick leave provisions and payroll 
        laws regarding all state employees in the executive branch as 
        the governor deems necessary to minimize the impact of the 
        disaster or emergency, conforming the alterations or adjustments 
        to existing state laws, rules, and collective bargaining 
        agreements to the extent practicable; 
           (11) authorize the commissioner of children, families, and 
        learning education to alter school schedules, curtail school 
        activities, or order schools closed without affecting state aid 
        to schools, as defined in section 120A.05, subdivisions 9, 11, 
        13, and 17, and including charter schools under section 124D.10, 
        and elementary schools enrolling prekindergarten pupils in 
        district programs; and 
           (12) transfer the direction, personnel, or functions of 
        state agencies to perform or facilitate response and recovery 
        programs. 
           Sec. 2.  Minnesota Statutes 2002, section 84A.51, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COUNTY'S USE OF FUNDS.] The funds received by 
        each county must be apportioned by the county auditor as follows:
           (1) 30 percent to a county development fund, which is 
        created, to be spent under the direction of the county board for 
        the rehabilitation and development of the portion of the county 
        within the conservation area; 
           (2) 40 percent to the capital outlay general fund of the 
        school district from which derived; 
           (3) 20 percent to the county revenue fund; and 
           (4) ten percent to the township road and bridge fund of the 
        township from which derived. 
           If the proceeds are derived from an unorganized township 
        with no levy for road and bridge purposes, the township portion 
        must be credited to the county revenue fund. 
           Sec. 3.  Minnesota Statutes 2002, section 120A.05, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ELEMENTARY SCHOOL.] "Elementary school" means 
        any school with building, equipment, courses of study, class 
        schedules, enrollment of pupils ordinarily in prekindergarten 
        through grade 6 or any portion thereof, and staff meeting the 
        standards established by the commissioner. 
           The commissioner of children, families, and learning shall 
        not close a school or deny any state aids to a district for its 
        elementary schools because of enrollment limitations classified 
        in accordance with the provisions of this subdivision. 
           Sec. 4.  Minnesota Statutes 2002, section 123B.75, 
        subdivision 5, is amended to read: 
           Subd. 5.  [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. 
           (b) In June of 2001, the school district must recognize as 
        revenue, in the fund for which the levy was made, the lesser of: 
           (1) the sum of May, June, and July school district tax 
        settlement revenue received in that calendar year plus general 
        education aid according to section 126C.13, subdivision 4, 
        received in July and August of that calendar year; or 
           (2) the sum of: 
           (i) 31 percent of the referendum levy certified in the 
        prior calendar year according to section 126C.17, subdivision 9; 
        plus 
           (ii) the entire amount of the levy certified in the prior 
        calendar year according to sections 124D.86, subdivision 4, for 
        school districts receiving revenue under 124D.86, subdivision 3, 
        clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3, 
        paragraphs (4), (5), and (6); 126C.43, subdivision 2; and 
        126C.48, subdivision 6.  
           (c) For fiscal year 2002 and later years, In June of each 
        year 2003, the school district must recognize as revenue, in the 
        fund for which the levy was made, the lesser of: 
           (1) the sum of May, June, and July school district tax 
        settlement revenue received in that calendar year, plus general 
        education aid according to section 126C.13, subdivision 4, 
        received in July and August of that calendar year; or 
           (2) the sum of: 
           (i) 31 percent of the referendum levy certified according 
        to section 126C.17, in calendar year 2000; plus 
           (ii) the entire amount of the levy certified in the prior 
        calendar year according to section 124D.86, subdivision 4, for 
        school districts receiving revenue under sections 124D.86, 
        subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 
        1, 2, and 3, paragraphs (4) (b), (5) (c), and (6) (d); 
        126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 6. 
           (c) For fiscal year 2004 and later years, in June of each 
        year, the school district must recognize as revenue, in the fund 
        for which the levy was made, the lesser of: 
           (1) the sum of May, June, and July school district tax 
        settlement revenue received in that calendar year, plus general 
        education aid according to section 126C.13, subdivision 4, 
        received in July and August of that calendar year; or 
           (2) the sum of: 
           (i) the greater of the percent of the referendum levy 
        certified according to section 126C.17, in the prior calendar 
        year or 45 percent of the referendum levy certified according to 
        section 126C.17, in calendar year 2000; plus 
           (ii) the entire amount of the levy certified in the prior 
        calendar year according to section 124D.86, subdivision 4, for 
        school districts receiving revenue under sections 124D.86, 
        subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 
        1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 
        2; 126C.457; and 126C.48, subdivision 6; plus 
           (iii) 45 percent of the amount of the levy certified in the 
        prior calendar year for the school district's general and 
        community service funds, plus or minus auditor's adjustments, 
        not including levy portions that are assumed by the state, that 
        remains after subtracting the referendum levy certified 
        according to section 126C.17 and the amount recognized according 
        to clause (ii). 
           (3) For fiscal year 2005 and later, the percent of the 
        referendum levy that is shifted is the greater of 31 percent or 
        the percent computed under paragraph (c), clause (2), item (i), 
        for fiscal year 2004. 
           Sec. 5.  Minnesota Statutes 2002, section 124D.11, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
        Notwithstanding section 127A.45, subdivision 3, aid payments for 
        the current fiscal year to a charter school not in its first 
        year of operation shall be of an equal amount on each of the 23 
        payment dates.  A charter school in its first year of operation 
        shall receive, on its first payment date, ten percent of its 
        cumulative amount guaranteed for the year and 22 payments of an 
        equal amount thereafter the sum of which shall be 90 percent of 
        the cumulative amount guaranteed. 
           (b) Notwithstanding paragraph (a), for a charter school 
        ceasing operation prior to the end of a school year, 83 80 
        percent of the amount due for the school year may be paid to the 
        school after audit of prior fiscal year and current fiscal year 
        pupil counts. 
           (c) Notwithstanding section 127A.45, subdivision 3, and 
        paragraph (a), 83 80 percent of the start-up cost aid under 
        subdivision 8 shall be paid within 45 days after the first day 
        of student attendance for that school year. 
           (d) In order to receive state aid payments under this 
        subdivision, a charter school in its first three years of 
        operation must submit a quarterly report to the department of 
        children, families, and learning education.  The report must 
        list each student by grade, show the student's start and end 
        dates, if any, with the charter school, and for any student 
        participating in a learning year program, the report must list 
        the hours and times of learning year activities.  The report 
        must be submitted not more than two weeks after the end of the 
        calendar quarter to the department.  The department must develop 
        a Web-based reporting form for charter schools to use when 
        submitting enrollment reports.  A charter school in its fourth 
        and subsequent year of operation must submit enrollment 
        information to the department in the form and manner requested 
        by the department. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2004. 
           Sec. 6.  [124D.1158] [SCHOOL BREAKFAST PROGRAM.] 
           Subdivision 1.  [PURPOSE.] The purpose of the school 
        breakfast program is to provide affordable morning nutrition to 
        children so that they can effectively learn.  Public and 
        nonpublic schools that participate in the federal school 
        breakfast program may receive state breakfast aid.  Schools 
        shall encourage all children to eat a nutritious breakfast, 
        either at home or at school, and shall work to eliminate 
        barriers to breakfast participation at school such as inadequate 
        facilities and transportation. 
           Subd. 2.  [PROGRAM; ELIGIBILITY.] Each school year, public 
        and nonpublic schools that participate in the federal school 
        breakfast program are eligible for the state breakfast program.  
           Subd. 3.  [PROGRAM REIMBURSEMENT.] Each school year, the 
        state must reimburse each participating school 30 cents for each 
        reduced price breakfast and 55 cents for each fully paid 
        breakfast. 
           Subd. 4.  [NO FEES.] A school that receives school 
        breakfast aid under this section must make breakfast available 
        without charge to all participating students who qualify for 
        free or reduced price meals. 
           Sec. 7.  Minnesota Statutes 2002, section 124D.118, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REIMBURSEMENT.] In accordance with program 
        guidelines, the commissioner shall prepay or reimburse each 
        participating districts for the state share of the district's 
        cost for providing public or nonpublic school nine cents for 
        each half-pint of milk that is served to kindergarten students 
        and is not part of a school lunch or breakfast reimbursed under 
        section 124D.111 or 124D.1158. 
           Sec. 8.  Minnesota Statutes 2002, section 126C.42, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
        each year in which so required by this subdivision, a district 
        must make an additional levy to eliminate its statutory 
        operating debt, determined as of June 30, 1977, and certified 
        and adjusted by the commissioner.  This levy shall not be made 
        in more than 30 successive years and each year before it is 
        made, it must be approved by the commissioner and the approval 
        shall specify its amount.  This levy shall be an amount which is 
        equal to the amount raised by a levy of a net tax rate of 1.98 
        2.67 percent times the adjusted net tax capacity of the district 
        for the preceding year for taxes payable in 2000 2002 and 
        thereafter; provided that in the last year in which the district 
        is required to make this levy, it must levy an amount not to 
        exceed the amount raised by a levy of a net tax rate of 1.98 
        2.67 percent times the adjusted net tax capacity of the district 
        for the preceding year for taxes payable in 2000 2002 and 
        thereafter.  When the sum of the cumulative levies made pursuant 
        to this subdivision and transfers made according to section 
        123B.79, subdivision 6, equals an amount equal to the statutory 
        operating debt of the district, the levy shall be discontinued. 
           (b) The district must establish a special account in the 
        general fund which shall be designated "appropriated fund 
        balance reserve account for purposes of reducing statutory 
        operating debt" on its books and records.  This account shall 
        reflect the levy authorized pursuant to this subdivision.  The 
        proceeds of this levy must be used only for cash flow 
        requirements and must not be used to supplement district 
        revenues or income for the purposes of increasing the district's 
        expenditures or budgets. 
           (c) Any district which is required to levy pursuant to this 
        subdivision must certify the maximum levy allowable under 
        section 126C.13, subdivision 2, in that same year. 
           (d) Each district shall make permanent fund balance 
        transfers so that the total statutory operating debt of the 
        district is reflected in the general fund as of June 30, 1977. 
           Sec. 9.  Minnesota Statutes 2002, section 126C.43, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PAYMENT TO UNEMPLOYMENT INSURANCE PROGRAM TRUST 
        FUND BY STATE AND POLITICAL SUBDIVISIONS.] A district may 
        levy 90 percent of the amounts amount exceeding $10 times the 
        district's adjusted marginal cost pupil units for the fiscal 
        year ending in the year before the year the levy is certified 
        necessary (i) to pay the district's obligations under section 
        268.052, subdivision 1, and the amounts necessary (ii) to pay 
        for job placement services offered to employees who may become 
        eligible for benefits pursuant to section 268.085 for the fiscal 
        year the levy is certified. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 10.  Minnesota Statutes 2002, section 126C.43, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
        percent of the amounts amount exceeding $10 times the district's 
        adjusted marginal cost pupil units for the fiscal year ending in 
        the year before the year the levy is certified necessary to pay 
        judgments against the district under section 123B.25 that became 
        final after the date the district certified its proposed levy in 
        the previous year.  With the approval of the commissioner, a 
        district may spread this levy over a period not to exceed three 
        years.  Upon approval through the adoption of a resolution by 
        each of an intermediate district's member school district 
        boards, a member school district may include its proportionate 
        share of the costs of a judgment against an intermediate school 
        district that became final under section 123B.25 after the date 
        that the earliest member school district certified its proposed 
        levy in the previous year.  With the approval of the 
        commissioner, an intermediate school district member school 
        district may spread this levy over a period not to exceed three 
        years. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 11.  [127A.441] [AID REDUCTION; LEVY REVENUE 
        RECOGNITION CHANGE.] 
           Each year, the state aids payable to any school district 
        for that fiscal year that are recognized as revenue in the 
        school district's general and community service funds shall be 
        adjusted by an amount equal to (1) the amount the district 
        recognized as revenue for the prior fiscal year pursuant to 
        section 123B.75, subdivision 5, paragraph (b) or (c), minus (2) 
        the amount the district recognized as revenue for the current 
        fiscal year pursuant to section 123B.75, subdivision 5, 
        paragraph (c).  For purposes of making the aid adjustments under 
        this section, the amount the district recognizes as revenue for 
        either the prior fiscal year or the current fiscal year pursuant 
        to section 123B.75, subdivision 5, paragraph (b) or (c), shall 
        not include any amount levied pursuant to section 124D.86, 
        subdivision 4, for school districts receiving revenue under 
        sections 124D.86, subdivision 3, clauses (1), (2), and (3); 
        126C.41, subdivisions 1, 2, and 3, paragraphs (b), (c), and (d); 
        126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 6.  
        Payment from the permanent school fund shall not be adjusted 
        pursuant to this section.  The school district shall be notified 
        of the amount of the adjustment made to each payment pursuant to 
        this section. 
           Sec. 12.  Minnesota Statutes 2002, section 126C.45, is 
        amended to read: 
           126C.45 [ICE ARENA LEVY.] 
           (a) Each year, an independent school district operating and 
        maintaining an ice arena, may levy for the net operational costs 
        of the ice arena.  The levy may not exceed 90 percent of the net 
        actual costs of operation of the arena for the previous year.  
        Net actual costs are defined as operating costs less any 
        operating revenues. 
           (b) Any district operating and maintaining an ice arena 
        must demonstrate to the satisfaction of the office of monitoring 
        in the department that the district will offer equal sports 
        opportunities for male and female students to use its ice arena, 
        particularly in areas of access to prime practice time, team 
        support, and providing junior varsity and younger level teams 
        for girls' ice sports and ice sports offerings. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 13.  Minnesota Statutes 2002, section 126C.48, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADJUSTMENTS.] If any district levy is found to 
        be excessive as a result of a decision of the tax court or a 
        redetermination by the commissioner of revenue under section 
        127A.48, subdivisions 7 to 16, or for any other reason, the 
        amount of the excess shall be deducted from the levy certified 
        in the next year for the same purpose.  If no levy is certified 
        in the next year for the same purpose or if the amount certified 
        is less than the amount of the excess, the excess must be 
        deducted from that levy and the general fund levy certified 
        pursuant to section 126C.13, subdivision 2 chapters 122A, 123A, 
        123B, 124D, and 126C.  If the amount of any aid would have been 
        increased in a prior year as a result of a decision of the tax 
        court or a redetermination by the commissioner of revenue, the 
        amount of the increase shall be added to the amount of current 
        aid for the same purposes. 
           Sec. 14.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) The term "other district 
        receipts" means payments by county treasurers pursuant to 
        section 276.10, apportionments from the school endowment fund 
        pursuant to section 127A.33, apportionments by the county 
        auditor pursuant to section 127A.34, subdivision 2, and payments 
        to school districts by the commissioner of revenue pursuant to 
        chapter 298.  
           (b) The term "cumulative amount guaranteed" means the 
        product of 
           (1) the cumulative disbursement percentage shown in 
        subdivision 3; times 
           (2) the sum of 
           (i) 83 80 percent of the estimated aid and credit 
        entitlements paid according to subdivision 13; plus 
           (ii) 100 percent of the entitlements paid according to 
        subdivisions 11 and 12; plus 
           (iii) the other district receipts.  
           (c) The term "payment date" means the date on which state 
        payments to districts are made by the electronic funds transfer 
        method.  If a payment date falls on a Saturday, a Sunday, or a 
        weekday which is a legal holiday, the payment shall be made on 
        the immediately preceding business day.  The commissioner may 
        make payments on dates other than those listed in subdivision 3, 
        but only for portions of payments from any preceding payment 
        dates which could not be processed by the electronic funds 
        transfer method due to documented extenuating circumstances.  
           Sec. 15.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
        year 2003, the commissioner shall pay to a district on the dates 
        indicated an amount computed as follows:  the cumulative amount 
        guaranteed minus the sum of (a) the district's other district 
        receipts through the current payment, and (b) the aid and credit 
        payments through the immediately preceding payment.  For 
        purposes of this computation, the payment dates and the 
        cumulative disbursement percentages are as follows:  
                                 Payment date               Percentage 
        Payment 1    July 15:                                         5.1
        Payment 2    July 30:                                         7.7
        Payment 3    August 15:                                      16.9
        Payment 4    August 30:                                      19.3
        Payment 5    September 15:                                   21.8
        Payment 6    September 30:                                   24.3
        Payment 7    October 15:                                     26.3
        Payment 8    October 30:                                     28.3
        Payment 9    November 15:                                    32.8
        Payment 10   November 30:                                    39.1
        Payment 11   December 15:                                    42.4
        Payment 12   December 30:                                    45.6
        Payment 13   January 15:                                     50.5
        Payment 14   January 30:                                     55.0
        Payment 15   February 15:                                    60.2
        Payment 16   February 28:                                    65.0
        Payment 17   March 15:                                       69.7
        Payment 18   March 30:                                       74.3
        Payment 19   April 15:                                       78.3
        Payment 20   April 30:                                       84.2
        Payment 21   May 15:                                         88.7
        Payment 22   May 30:                                         93.3
        Payment 23   June 20:                                       100.0
           (b) In addition to the amounts paid under paragraph (a), 
        for fiscal year 2003, the commissioner shall pay to a district 
        on the dates indicated an amount computed as follows: 
        Payment 3    August 15:  the final adjustment for the
                     prior fiscal year for the state paid
                     property tax credits established in
                     section 273.1392
        Payment 7    October 15:  one-half of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits 
        Payment 8    October 30:  one-half of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits 
           (c) For fiscal year 2004 and later, the commissioner shall 
        pay to a district on the dates indicated an amount computed as 
        follows:  the cumulative amount guaranteed minus the sum of (a) 
        the district's other district receipts through the current 
        payment, and (b) the aid and credit payments through the 
        immediately preceding payment.  For purposes of this 
        computation, the payment dates and the cumulative disbursement 
        percentages are as follows: 
                   Payment date                      Percentage 
        Payment 1    July 15:                                     5.1 5.5
        Payment 2    July 30:                                     7.7 8.0
        Payment 3    August 15:                                 16.9 17.5
        Payment 4    August 30:                                 19.3 20.0
        Payment 5    September 15:                              21.8 22.5
        Payment 6    September 30:                              24.3 25.0
        Payment 7    October 15:                                26.3 27.0
        Payment 8    October 30:                                28.3 30.0
        Payment 9    November 15:                               30.3 32.5
        Payment 10   November 30:                               35.0 36.5
        Payment 11   December 15:                               40.0 42.0
        Payment 12   December 30:                               43.0 45.0
        Payment 13   January 15:                                48.0 50.0
        Payment 14   January 30:                                52.0 54.0
        Payment 15   February 15:                               56.0 58.0
        Payment 16   February 28:                               61.0 63.0
        Payment 17   March 15:                                  66.0 68.0
        Payment 18   March 30:                                  72.0 74.0
        Payment 19   April 15:                                  76.0 78.0
        Payment 20   April 30:                                  83.0 85.0
        Payment 21   May 15:                                    88.0 90.0
        Payment 22   May 30:                                    95.0
        Payment 23   June 20:                                  100.0
           (d) (b) In addition to the amounts paid under paragraph 
        (c) (a), for fiscal year 2004 and later, the commissioner shall 
        pay to a district on the dates indicated an amount computed as 
        follows: 
        Payment 3    August 15:  the final adjustment for the
                     prior fiscal year for the state paid
                     property tax credits established in 
                     section 273.1392 
        Payment 4    August 30:  one-third of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits 
        Payment 6    September 30:  one-third of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits
        Payment 8    October 30:  one-third of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits
           (c) In addition to the amounts paid under paragraph (a), 
        for fiscal year 2005 and later, the commissioner shall pay to a 
        district on the dates indicated an amount computed as follows: 
        Payment 3    August 15:  the final adjustment for the
                     prior fiscal year for the state paid
                     property tax credits established in
                     section 273.1392
        Payment 4    August 30:  30 percent of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits
        Payment 6    September 30:  40 percent of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits
        Payment 8    October 30:  30 percent of the final adjustment
                     for the prior fiscal year for all aid
                     entitlements except state paid property
                     tax credits
           Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 
        subdivisions 3 and 7, a school district or a charter school 
        exceeding its expenditure limitations under section 123B.83 as 
        of June 30 of the prior fiscal year may receive a portion of its 
        final payment for the current fiscal year on June 20, if 
        requested by the district.  The amount paid under this 
        subdivision must not exceed the lesser of: 
           (1) seven percent of the district or charter school's 
        general education aid for the current fiscal year; or 
           (2) the amount by which the district or charter school's 
        net negative unreserved general fund balance as of June 30 of 
        the prior fiscal year exceeds 2.5 percent of the district or 
        charter school's expenditures for that fiscal year. 
           (b) The state total advance final payment under this 
        subdivision for any year must not exceed $17,500,000 $12,000,000.  
        If the amount requested exceeds $17,500,000 $12,000,000, the 
        advance final payment for each eligible district must be reduced 
        proportionately. 
           Sec. 17.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 10, is amended to read: 
           Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
        fiscal year state general fund payments for a district 
        nonoperating fund must be made at 83 80 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 must 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. 18.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 13, is amended to read: 
           Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
        subdivisions 11, 12, 12a, and 14, each fiscal year, all 
        education aids and credits in this chapter and chapters 120A, 
        120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
        section 273.1392, shall be paid at 83 80 percent of the 
        estimated entitlement during the fiscal year of the 
        entitlement.  For the purposes of this subdivision, a district's 
        estimated entitlement for special education excess cost aid 
        under section 125A.79 equals 70 percent of the district's 
        entitlement for the second prior fiscal year.  The final 
        adjustment payment, according to subdivision 9, must be the 
        amount of the actual entitlement, after adjustment for actual 
        data, minus the payments made during the fiscal year of the 
        entitlement. 
           Sec. 19.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 14, is amended to read: 
           Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
        according to sections 123B.40 to 123B.48 for pupils attending 
        nonpublic schools as follows: 
           (1) an advance payment by November 30 equal to 83 80 
        percent of the estimated entitlement for the current fiscal 
        year; and 
           (2) a final payment by October 31 of the following fiscal 
        year, adjusted for actual data.  
           If a payment advance to meet cash flow needs is requested 
        by a district and approved by the commissioner, the state shall 
        pay nonpublic pupil transportation aid according to section 
        123B.92 by October 31. 
           Sec. 20.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 14a, is amended to read: 
           Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
        subdivision 3, the state shall pay 100 percent of the aid for 
        the current year according to sections 124D.111, 
        124D.115, 124D.1158, and 124D.118 and 83 percent of the aid for 
        the current year according to section 124D.1156 based on 
        submitted monthly vouchers showing meals and milk served.  The 
        remaining 17 percent according to section 124D.1156 shall be 
        paid by October 30 of the following fiscal year. 
           Sec. 21.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 16, is amended to read: 
           Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
        subdivision 3, 83 80 percent of the amounts under section 
        123A.26, subdivision 3, shall be paid in equal installments on 
        August 30, December 30, and March 30, with a 17 20 percent final 
        adjustment payment on October 30 of the next fiscal year. 
           Sec. 22.  Minnesota Statutes 2002, section 127A.47, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
        education aid for districts must be adjusted for each pupil 
        attending a nonresident district under sections 123A.05 to 
        123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  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 referendum equalization aid 
        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 must be increased 
        by an amount equal to the referendum equalization aid 
        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 must 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 125A.02, or a 
        pupil, as defined in section 125A.51, who is enrolled in a 
        program listed in this subdivision.  The tuition must 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 
        revenue and special education aid but not including any amount 
        for transportation, 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 the resident district 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 125A.02 or 
        125A.51 have the general education revenue paid to a fiscal 
        agent school district.  Except as provided in paragraph (d), the 
        district of residence must pay tuition equal to at least 90 
        percent of the district average general education revenue per 
        pupil unit minus an amount equal to the product of the formula 
        allowance according to section 126C.10, subdivision 2, times 
        .0485, calculated without basic skills revenue and 
        transportation sparsity revenue, times the number of pupil units 
        for pupils attending the area learning center, plus the amount 
        of compensatory revenue generated by pupils attending the area 
        learning center. 
           Sec. 23.  Minnesota Statutes 2002, section 127A.47, 
        subdivision 8, is amended to read: 
           Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
        for districts must be adjusted for each pupil attending a 
        charter school under section 124D.10.  The adjustments must be 
        made according to this subdivision. 
           (b) General education aid paid to a district in which a 
        charter school not providing transportation according to section 
        124D.10, subdivision 16, is located must be increased by an 
        amount equal to the product of:  (1) the sum of an amount equal 
        to the product of the formula allowance according to section 
        126C.10, 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.  
           Sec. 24.  Minnesota Statutes 2002, section 127A.49, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
        sections 270.07, 375.192, or otherwise, the net tax capacity of 
        any district for any taxable year is changed after the taxes for 
        that year have been spread by the county auditor and the local 
        tax rate as determined by the county auditor based upon the 
        original net tax capacity is applied upon the changed net tax 
        capacities, the county auditor shall, prior to February 1 of 
        each year, certify to the commissioner of children, families, 
        and learning education the amount of any resulting net revenue 
        loss that accrued to the district during the preceding year.  
        Each year, the commissioner shall pay an abatement adjustment to 
        the district in an amount calculated according to the provisions 
        of this subdivision.  This amount shall be deducted from the 
        amount of the levy authorized by section 126C.46.  The amount of 
        the abatement adjustment must be the product of:  
           (1) the net revenue loss as certified by the county 
        auditor, times 
           (2) the ratio of:  
           (i) the sum of the amounts of the district's certified levy 
        in the preceding year according to the following:  
           (A) section 126C.13 if the district received general 
        education aid according to that section for the second preceding 
        year; 
           (B) section 123B.57, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
        the district received aid for community education programs 
        according to any of those sections that section for the second 
        preceding year; 
           (D) (C) section 124D.135, subdivision 3, if the district 
        received early childhood family education aid according to 
        section 124D.135 for the second preceding year; and 
           (E) (D) section 126C.17, subdivision 6, if the district 
        received referendum equalization aid according to that section 
        for the second preceding year; to 
           (ii) the total amount of the district's certified levy in 
        the preceding December, plus or minus auditor's adjustments. 
           Sec. 25.  Minnesota Statutes 2002, section 127A.49, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
        tax increment is made to a district pursuant to section 469.176, 
        subdivision 2, or upon decertification of a tax increment 
        district, the school district's aid and levy limitations must be 
        adjusted for the fiscal year in which the excess tax increment 
        is paid under the provisions of this subdivision. 
           (b) An amount must be subtracted from the district's aid 
        for the current fiscal year equal to the product of: 
           (1) the amount of the payment of excess tax increment to 
        the district, times 
           (2) the ratio of: 
           (i) the sum of the amounts of the district's certified levy 
        for the fiscal year in which the excess tax increment is paid 
        according to the following: 
           (A) section 126C.13, if the district received general 
        education aid according to that section for the second preceding 
        year; 
           (B) section 123B.57, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
        the district received aid for community education programs 
        according to any of those sections that section for the second 
        preceding year; 
           (D) (C) section 124D.135, subdivision 3, if the district 
        received early childhood family education aid according to 
        section 124D.135 for the second preceding year; and 
           (E) (D) section 126C.17, subdivision 6, if the district 
        received referendum equalization aid according to that section 
        for the second preceding year; to 
           (ii) the total amount of the district's certified levy for 
        the fiscal year, plus or minus auditor's adjustments. 
           (c) An amount must be subtracted from the school district's 
        levy limitation for the next levy certified equal to the 
        difference between: 
           (1) the amount of the distribution of excess increment; and 
           (2) the amount subtracted from aid pursuant to clause (a). 
           If the aid and levy reductions required by this subdivision 
        cannot be made to the aid for the fiscal year specified or to 
        the levy specified, the reductions must be made from aid for 
        subsequent fiscal years, and from subsequent levies.  The school 
        district must use the payment of excess tax increment to replace 
        the aid and levy revenue reduced under this subdivision. 
           (d) This subdivision applies only to the total amount of 
        excess increments received by a district for a calendar year 
        that exceeds $25,000. 
           Sec. 26.  Minnesota Statutes 2002, section 128D.11, 
        subdivision 8, is amended to read: 
           Subd. 8.  [NET DEBT LIMIT.] The school district shall not 
        be subject to a net debt in excess of 102 144 percent of the net 
        tax capacity of all taxable property therein. 
           Sec. 27.  Minnesota Statutes 2002, section 268.052, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
        A TAXPAYING EMPLOYER.] (a) The state or political 
        subdivision excluding a school district may elect to be a 
        taxpaying employer for any calendar year if a notice of election 
        is filed within 30 calendar days following January 1 of that 
        calendar year.  Upon election, the state or political 
        subdivision shall be assigned the new employer tax rate under 
        section 268.051, subdivision 5, for the calendar year of the 
        election and until it qualifies for an experience rating under 
        section 268.051, subdivision 3. 
           (b) An election shall be for a minimum period of two 
        calendar years following the effective date of the election and 
        continue unless a notice terminating the election is filed not 
        later than 30 calendar days before the beginning of the calendar 
        year.  The termination shall be effective at the beginning of 
        the next calendar year.  Upon election, the commissioner shall 
        establish a reimbursable account for the state or political 
        subdivision.  A termination of election shall be allowed only if 
        the state or political subdivision has, since the beginning of 
        the experience rating period under section 268.051, subdivision 
        3, paid taxes and made voluntary payments under section 268.051, 
        subdivision 7, equal to or more than 125 percent of the 
        unemployment benefits used in computing the experience rating.  
        In addition, any unemployment benefits paid after the experience 
        rating period shall be transferred to the new reimbursable 
        account of the state or political subdivision.  If the amount of 
        taxes and voluntary payments paid since the beginning of the 
        experience rating period exceeds 125 percent of the amount of 
        unemployment benefits paid during the experience rating period, 
        that amount in excess shall be applied against any unemployment 
        benefits paid after the experience rating period. 
           (c) The method of payments to the fund under subdivisions 3 
        and 4 shall apply to all taxes paid by or due from the state or 
        political subdivision that elects to be taxpaying employers 
        under this subdivision. 
           (d) The commissioner may allow a notice of election or a 
        notice terminating election to be filed by mail or electronic 
        transmission.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 28.  Minnesota Statutes 2002, section 268.052, 
        subdivision 4, is amended to read: 
           Subd. 4.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION.] A 
        political subdivision or instrumentality thereof is authorized 
        and directed to pay its liabilities by money collected from 
        taxes or other revenues.  Every political subdivision authorized 
        to levy taxes except school districts may include in its tax 
        levy the amount necessary to pay its liabilities.  School 
        districts may levy according to section 126C.43, subdivision 2.  
        If the taxes authorized to be levied cause the total amount of 
        taxes levied to exceed any limitation upon the power of a 
        political subdivision to levy taxes, the political subdivision 
        may levy taxes in excess of the limitations in the amounts 
        necessary to meet its liability.  The expenditures authorized 
        shall not be included in computing the cost of government as 
        defined in any home rule charter.  The governing body of a 
        municipality, for the purpose of meeting its liabilities, in the 
        event of a deficit, may issue its obligations payable in not 
        more than two years, in an amount that may cause its 
        indebtedness to exceed any statutory or charter limitations, 
        without an election, and may levy taxes in the manner provided 
        in section 475.61. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 29.  Minnesota Statutes 2002, section 273.138, 
        subdivision 6, is amended to read: 
           Subd. 6.  The amount of aid calculated for a school 
        district pursuant to subdivision 3, clauses (2), (3), (4), and 
        (5) shall be deducted from the school district's general fund 
        levy limitation established pursuant to section 126C.13 chapters 
        122A, 123A, 123B, 124D, and 126C in determining the amount of 
        taxes the school district may levy for general and special 
        purposes. 
           Sec. 30.  Minnesota Statutes 2002, section 298.28, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
        ton plus the increase provided in paragraph (d) must be 
        allocated to qualifying school districts to be distributed, 
        based upon the certification of the commissioner of revenue, 
        under paragraphs (b) and (c), except as otherwise provided in 
        paragraph (f). 
           (b) 3.43 cents per taxable ton must be distributed to the 
        school districts in which the lands from which taconite was 
        mined or quarried were located or within which the concentrate 
        was produced.  The distribution must be based on the 
        apportionment formula prescribed in subdivision 2. 
           (c)(i) 13.72 cents per taxable ton, less any amount 
        distributed under paragraph (e), shall be distributed to a group 
        of school districts comprised of those school districts in which 
        the taconite was mined or quarried or the concentrate produced 
        or in which there is a qualifying municipality as defined by 
        section 273.134, paragraph (b), in direct proportion to school 
        district indexes as follows:  for each school district, its 
        pupil units determined under section 126C.05 for the prior 
        school year shall be multiplied by the ratio of the average 
        adjusted net tax capacity per pupil unit for school districts 
        receiving aid under this clause as calculated pursuant to 
        chapters 122A, 126C, and 127A for the school year ending prior 
        to distribution to the adjusted net tax capacity per pupil unit 
        of the district.  Each district shall receive that portion of 
        the distribution which its index bears to the sum of the indices 
        for all school districts that receive the distributions.  
           (ii) Notwithstanding clause (i), each school district that 
        receives a distribution under sections 298.018; 298.23 to 
        298.28, exclusive of any amount received under this clause; 
        298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
        imposing a tax on severed mineral values after reduction for any 
        portion distributed to cities and towns under section 126C.48, 
        subdivision 8, paragraph (5), that is less than the amount of 
        its levy reduction under section 126C.48, subdivision 8, for the 
        second year prior to the year of the distribution shall receive 
        a distribution equal to the difference; the amount necessary to 
        make this payment shall be derived from proportionate reductions 
        in the initial distribution to other school districts under 
        clause (i).  
           (d) Any school district described in paragraph (c) where a 
        levy increase pursuant to section 126C.17, subdivision 9, was 
        authorized by referendum for taxes payable in 2001, shall 
        receive a distribution from a fund that receives a distribution 
        in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
        year thereafter, the increase over the amount established for 
        the prior year shall be determined according to the increase in 
        the implicit price deflator as provided in section 298.24, 
        subdivision 1.  Each district shall receive $175 times the pupil 
        units identified in section 126C.05, subdivision 1, enrolled in 
        the second previous year or the 1983-1984 school year, whichever 
        is greater, less the product of 1.8 percent times the district's 
        taxable net tax capacity in the second previous year. 
           If the total amount provided by paragraph (d) is 
        insufficient to make the payments herein required then the 
        entitlement of $175 per pupil unit shall be reduced uniformly so 
        as not to exceed the funds available.  Any amounts received by a 
        qualifying school district in any fiscal year pursuant to 
        paragraph (d) shall not be applied to reduce general education 
        aid which the district receives pursuant to section 126C.13 or 
        the permissible levies of the district.  Any amount remaining 
        after the payments provided in this paragraph shall be paid to 
        the commissioner of iron range resources and rehabilitation who 
        shall deposit the same in the taconite environmental protection 
        fund and the northeast Minnesota economic protection trust fund 
        as provided in subdivision 11. 
           Each district receiving money according to this paragraph 
        shall reserve the lesser of the amount received under this 
        paragraph or $25 times the number of pupil units served in the 
        district.  It may use the money for early childhood programs or 
        for outcome-based learning programs that enhance the academic 
        quality of the district's curriculum.  The outcome-based 
        learning programs must be approved by the commissioner of 
        children, families, and learning education. 
           (e) There shall be distributed to any school district the 
        amount which the school district was entitled to receive under 
        section 298.32 in 1975. 
           (f) Effective for the distribution in 2003 only, five 
        percent of the distributions to school districts under 
        paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
        subdivision 11; and section 298.225, shall be distributed to the 
        general fund.  The remainder less any portion distributed to 
        cities and towns under section 126C.48, subdivision 8, paragraph 
        (5), shall be distributed to the northeast Minnesota economic 
        protection trust fund created in section 298.292.  Fifty percent 
        of the amount distributed to the northeast Minnesota economic 
        protection trust fund shall be made available for expenditure 
        under section 298.293 as governed by section 298.296.  Effective 
        in 2003 only, 100 percent of the distributions to school 
        districts under section 477A.15 less any portion distributed to 
        cities and towns under section 126C.48, subdivision 8, paragraph 
        (5), shall be distributed to the general fund. 
           Sec. 31.  Minnesota Statutes 2002, section 475.61, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SURPLUS FUNDS.] (a) All such taxes shall be 
        collected and remitted to the municipality by the county 
        treasurer as other taxes are collected and remitted, and shall 
        be used only for payment of the obligations on account of which 
        levied or to repay advances from other funds used for such 
        payments, except that any surplus remaining in the debt service 
        fund when the obligations and interest thereon are paid may be 
        appropriated to any other general purpose by the municipality.  
        However, the amount of any surplus remaining in the debt service 
        fund of a school district when the obligations and interest 
        thereon are paid shall be used to reduce the general education 
        fund levy authorized pursuant to section 126C.13 chapters 122A, 
        123A, 123B, 124D, and 126C and the state aids authorized 
        pursuant to chapters 122A, 123A, 123B, 124D, 125A, 126C, and 
        127A. 
           (b) The reduction to state aids equals the lesser of (1) 
        the amount of the surplus times the ratio of the district's debt 
        service equalization aid to the district's debt service 
        equalization revenue for the last year that the district 
        qualified for debt service equalization aid; or (2) the 
        district's cumulative amount of debt service equalization aid.  
           (c) The reduction to the general education fund levy equals 
        the total amount of the surplus minus the reduction to state 
        aids. 
           Sec. 32.  Laws 1965, chapter 705, as amended by Laws 1975, 
        chapter 261, section 4; Laws 1980, chapter 609, article 6, 
        section 37; and Laws 1989, chapter 329, article 13, section 18, 
        is amended to read: 
           Sec. 6.  [ST. PAUL SEVERANCE LEVY.] The school board of 
        independent school district No. 625, St. Paul, for the purpose 
        of providing moneys for the payment of its severance pay 
        obligations under a plan approved by resolution of the district, 
        in addition to all other powers possessed by the school district 
        and in addition to and in excess of any existing limitation upon 
        the amount it is otherwise authorized by law to levy as taxes, 
        is authorized to levy taxes annually not exceeding in any one 
        year an amount equal to a gross tax capacity rate of .17 percent 
        for taxes payable in 1990 or a net tax capacity rate of .21 .34 
        percent for taxes payable in 1991 2002 and thereafter upon all 
        taxable property within the school district which taxes as 
        levied shall be spread upon the tax rolls, and all corrections 
        thereof shall be held by the school district, and allocated 
        therefor to be disbursed and expended by the school district in 
        payment of any public school severance pay obligations and for 
        no other purpose.  Disbursements and expenditures previously 
        authorized on behalf of the school district for payment of 
        severance pay obligations shall not be deemed to constitute any 
        part of the cost of the operation and maintenance of the school 
        district within the meaning of any statutory limitation of any 
        school district expenditures.  
           The amount of such severance pay allowable or to become 
        payable in respect of any such employment or to any such 
        employee shall not exceed the amount permitted by Minnesota 
        Statutes, Section 465.72.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        for taxes payable in 2002 and thereafter. 
           Sec. 33.  [FUND TRANSFERS.] 
           Subdivision 1.  [CHISHOLM.] Notwithstanding Minnesota 
        Statutes, section 123B.79 or 123B.80, on June 30, 2003, 
        independent school district No. 695, Chisholm, may permanently 
        transfer up to $500,000 from its reserved operating capital 
        account in its general fund to the undesignated general fund 
        balance. 
           Subd. 2.  [SWANVILLE.] Notwithstanding Minnesota Statutes, 
        sections 123B.79, 123B.80, and 475.61, subdivision 4, 
        independent school district No. 486, Swanville, on June 30, 
        2003, may permanently transfer up to $61,000 from its debt 
        redemption fund to its capital account in its general fund 
        without making an aid or levy reduction. 
           Subd. 3.  [WESTONKA.] Notwithstanding Minnesota Statutes, 
        sections 123B.79, 123B.80, and 475.61, subdivision 4, 
        independent school district No. 277, Westonka, on June 30, 2003, 
        may permanently transfer the lesser of $170,000 or the actual 
        fund balance from its debt redemption fund to its general fund 
        without making a levy reduction. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 34.  [DIRECTION TO COMMISSIONER.] 
           Notwithstanding Minnesota Statutes, section 123B.75, 
        subdivision 5, the commissioner shall calculate the property tax 
        recognition shift percentage that raises $230,378,000 in fiscal 
        year 2004.  The commissioner shall apply this percentage to the 
        property tax recognition shift in fiscal year 2004 and later. 
           Sec. 35.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [SCHOOL LUNCH.] (a) For school lunch aid 
        according to Minnesota Statutes, section 124D.111, and Code of 
        Federal Regulations, title 7, section 210.17:  
             $7,800,000     .....     2004 
             $7,950,000     .....     2005 
           Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST; KINDERGARTEN 
        MILK.] For traditional school breakfast aid and kindergarten 
        milk under Minnesota Statutes, sections 124D.1158 and 124D.118: 
             $3,088,000     .....     2004 
             $3,217,000     .....     2005 
           Subd. 4.  [FAST BREAK TO LEARNING BREAKFAST.] For fast 
        break to learning breakfast under Minnesota Statutes, section 
        124D.1156: 
             $747,000     .....     2004 
           The 2004 appropriation includes $747,000 for 2003 and $0 
        for 2004. 
           Subd. 5.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
        summer food service replacement aid under Minnesota Statutes, 
        section 124D.119: 
             $150,000       .....     2004 
             $150,000       .....     2005 
           Sec. 36.  [REVISOR INSTRUCTION.] 
           In the next and subsequent editions of Minnesota Statutes, 
        the revisor shall codify section 32 as Minnesota Statutes, 
        section 126C.41, subdivision 5.  
           Sec. 37.  [REPEALER.] 
           Minnesota Statutes 2002, sections 93.22, subdivision 2; 
        93.223, subdivision 1; 124D.115; 124D.1156; and 127A.41, 
        subdivision 6, are repealed. 

                                   ARTICLE 6 
                                   LIBRARIES 
           Section 1.  Minnesota Statutes 2002, section 134.34, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATION.] A regional library basic system 
        support grant shall not be made to a regional public library 
        system for a participating city or county which decreases the 
        dollar amount provided for support for operating purposes of 
        public library service below 90 percent of the amount provided 
        by it for the second preceding year.  This subdivision shall not 
        apply to participating cities or counties where the adjusted net 
        tax capacity of that city or county has decreased, if the dollar 
        amount of the reduction in support is not greater than the 
        dollar amount by which support would be decreased if the 
        reduction in support were made in direct proportion to the 
        decrease in adjusted net tax capacity. 
           [EFFECTIVE DATE.] This section is effective for grants 
        distributed in 2004 and 2005 only. 
           Sec. 2.  [134.355] [BASIC REGIONAL LIBRARY SYSTEM; 
        SUPPORT.] 
           Subdivision 1.  [APPROPRIATIONS.] Basic system support 
        grants and regional library telecommunications aid provide the 
        appropriations for the basic regional library system. 
           Sec. 3.  Minnesota Statutes 2002, section 134.47, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) A regional public 
        library system may apply for regional library telecommunications 
        aid.  The aid must be used for data and video access costs and 
        other related costs to improve or maintain electronic access and 
        connect the library system with the state information 
        infrastructure administered by the department of administration 
        under section 16B.465.  Priority shall be given to public 
        libraries that have not received access., maintenance, 
        equipment, or installation of telecommunication lines.  To be 
        eligible, a regional public library system must be officially 
        designated by the commissioner of children, families, and 
        learning education as a regional public library system as 
        defined in section 134.34, subdivision 3, and each of its 
        participating cities and counties must meet local support levels 
        defined in section 134.34, subdivision 1.  A public library 
        building that receives aid under this section must be open a 
        minimum of 20 hours per week. 
           (b) Aid received under this section may not be used to 
        substitute for any existing local funds allocated to provide 
        electronic access, equipment for library staff or the public, or 
        local funds dedicated to other library operations. 
           (c) (b) An application for regional library 
        telecommunications aid must, at a minimum, contain information 
        to document the following: 
           (1) the connections are adequate and employ an open network 
        architecture that will ensure interconnectivity and 
        interoperability with school districts, post-secondary 
        education, or other governmental agencies; 
           (2) that the connection is established through the most 
        cost-effective means and that the regional library has explored 
        and coordinated connections through school districts, 
        post-secondary education, or other governmental agencies; 
           (3) that the regional library system has filed an e-rate 
        application; and 
           (4) other information, as determined by the commissioner of 
        children, families, and learning, to ensure that connections are 
        coordinated, efficient, and cost-effective, take advantage of 
        discounts, and meet applicable state standards. 
           The library system may include costs associated with 
        cooperative arrangements with post-secondary institutions, 
        school districts, and other governmental agencies. 
           Sec. 4.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated.  
           Subd. 2.  [BASIC SYSTEM SUPPORT.] For basic system support 
        grants under Minnesota Statutes, section 134.355: 
             $8,072,000     .....     2004 
             $8,570,000     .....     2005 
           The 2004 appropriation includes $1,456,000 for 2003 and 
        $6,616,000 for 2004. 
           The 2005 appropriation includes $1,654,000 for 2004 and 
        $6,916,000 for 2005. 
           Subd. 3.  [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 
        regional library telecommunications aid under Minnesota 
        Statutes, section 134.355: 
             $1,200,000     .....     2004
             $1,200,000     .....     2005
           Subd. 4.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
        grants according to Minnesota Statutes, sections 134.353 and 
        134.354, to multicounty, multitype library systems: 
             $876,000       .....     2004 
             $903,000       .....     2005 
           The 2004 appropriation includes $153,000 for 2003 and 
        $723,000 for 2004. 
           The 2005 appropriation includes $180,000 for 2004 and 
        $723,000 for 2005.  
           Subd. 5.  [ELECTRONIC LIBRARY FOR MINNESOTA.] For statewide 
        licenses to on-line databases selected in cooperation with the 
        higher education services office for school media centers, 
        public libraries, state government agency libraries, and public 
        or private college or university libraries: 
              $400,000     .....     2004 
              $400,000     .....     2005 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 5.  [REVISOR INSTRUCTION.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
                    Column A                Column B
                 134.35, subd. 1        134.355, subd. 2
                 134.35, subd. 2        134.355, subd. 3
                 134.35, subd. 3        134.355, subd. 4
                 134.35, subd. 4        134.355, subd. 5
                 134.35, subd. 5        134.355, subd. 6
                 134.35, subd. 6        134.355, subd. 7
                 134.47, subd. 1        
                   paragraph (a)        134.355, subd. 8
                 134.47, subd. 1       
                   paragraph (b)        134.355, subd. 9
                 134.47, subd. 2        134.355, subd. 10
           Sec. 6.  [REPEALER.] 
           The changes made to Minnesota Statutes, section 134.34, 
        subdivision 4, in section 1 are repealed effective July 1, 2005. 

                                   ARTICLE 7
                         EARLY CHILDHOOD FAMILY SUPPORT
           Section 1.  Minnesota Statutes 2002, section 119A.52, is 
        amended to read: 
           119A.52 [DISTRIBUTION OF APPROPRIATION AND PROGRAM 
        COORDINATION.] 
           (a) The commissioner of children, families, and learning 
        education must distribute money appropriated for that purpose to 
        Head Start program grantees to expand services and to serve 
        additional low-income children.  Money must be allocated to each 
        project Head Start grantee in existence on the effective date of 
        Laws 1989, chapter 282.  Migrant and Indian reservation grantees 
        must be initially allocated money based on the grantees' share 
        of federal funds.  The remaining money must be initially 
        allocated to the remaining local agencies based equally on the 
        agencies' share of federal funds and on the proportion of 
        eligible children in the agencies' service area who are not 
        currently being served.  A Head Start grantee must be funded at 
        a per child rate equal to its contracted, federally funded base 
        level for program accounts 20, 22, and 25 at the start of the 
        fiscal year.  In allocating funds under this paragraph, the 
        commissioner of children, families, and learning education must 
        assure that each Head Start grantee is allocated no less funding 
        in any fiscal year than was allocated to that grantee in fiscal 
        year 1993.  The commissioner may provide additional funding to 
        grantees for start-up costs incurred by grantees due to the 
        increased number of children to be served.  Before paying money 
        to the grantees, the commissioner must notify each grantee of 
        its initial allocation, how the money must be used, and the 
        number of low-income children that must be served with the 
        allocation.  Each grantee must notify present a work plan to the 
        commissioner of for approval.  The work plan must include the 
        estimated number of low-income children and families it will be 
        able to serve, a description of the program design and service 
        delivery area which meets the needs of and encourages access by 
        low-income working families, a program design that ensures fair 
        and equitable access to Head Start services for all populations 
        and parts of the service area, and a plan for coordinating 
        services to maximize assistance for child care costs available 
        to families under chapter 119B.  For any grantee that cannot 
        utilize its full allocation, the commissioner must reduce the 
        allocation proportionately.  Money available after the initial 
        allocations are reduced must be redistributed to eligible 
        grantees. 
           (b) Up to 11 percent of the funds appropriated annually may 
        be used to provide grants to local Head Start agencies to 
        provide funds for innovative programs designed either to target 
        Head Start resources to particular at-risk groups of children or 
        to provide services in addition to those currently allowable 
        under federal Head Start regulations.  The commissioner must 
        award funds for innovative programs under this paragraph on a 
        competitive basis. 
           Sec. 2.  Minnesota Statutes 2002, section 119A.53, is 
        amended to read: 
           119A.53 [FEDERAL REQUIREMENTS.] 
           Grantees and the commissioner of children, families, and 
        learning shall comply with federal regulations governing the 
        federal Head Start program, except for innovative programs 
        funded under section 119A.52, paragraph (b) funding for 
        innovative initiatives under section 119A.52, which may be used 
        to operate differently than federal Head Start regulations, and 
        except that when.  If a state statute or regulation rule 
        conflicts with a federal statute or regulation, the state 
        statute or regulation rule prevails. 
           Sec. 3.  Minnesota Statutes 2002, section 124D.13, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRAM CHARACTERISTICS.] Early childhood family 
        education programs are programs for children in the period of 
        life from birth to kindergarten, for the parents of such 
        children, and for expectant parents.  The To the extent that 
        funds are insufficient to provide programs for all children, 
        early childhood family education programs should emphasize 
        programming for a child from birth to age three and encourage 
        parents to involve four- and five-year-old children in school 
        readiness programs, and other public and nonpublic early 
        learning programs.  Early childhood family education programs 
        may include the following:  
           (1) programs to educate parents about the physical, mental, 
        and emotional development of children; 
           (2) programs to enhance the skills of parents in providing 
        for their children's learning and development; 
           (3) learning experiences for children and parents that 
        promote children's development; 
           (4) activities designed to detect children's physical, 
        mental, emotional, or behavioral problems that may cause 
        learning problems; 
           (5) activities and materials designed to encourage 
        self-esteem, skills, and behavior that prevent sexual and other 
        interpersonal violence; 
           (6) educational materials which may be borrowed for home 
        use; 
           (7) information on related community resources; 
           (8) programs to prevent child abuse and neglect; 
           (9) other programs or activities to improve the health, 
        development, and school readiness of children; or 
           (10) activities designed to maximize development during 
        infancy.  
           The programs must not include activities for children that 
        do not require substantial involvement of the children's 
        parents.  The programs must be reviewed periodically to assure 
        the instruction and materials are not racially, culturally, or 
        sexually biased.  The programs must encourage parents to be 
        aware of practices that may affect equitable development of 
        children. 
           Sec. 4.  Minnesota Statutes 2002, section 124D.13, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HOME VISITING PROGRAM.] (a) The commissioner A 
        district that levies for home visiting under section 124D.135, 
        subdivision 6, shall use this revenue to include as part of the 
        early childhood family education programs a parent education 
        component to prevent child abuse and neglect.  This parent 
        education component must include: 
           (1) expanding statewide the home visiting component of the 
        early childhood family education programs; 
           (2) training parent educators, child educators, community 
        outreach workers, and home visitors in the dynamics of child 
        abuse and neglect and positive parenting and discipline 
        practices; and 
           (3) developing and disseminating education and public 
        information materials that promote positive parenting skills and 
        prevent child abuse and neglect. 
           (b) The parent education component must: 
           (1) offer to isolated or at-risk families home visiting 
        parent education services that at least address parenting 
        skills, a child's development and stages of growth, 
        communication skills, managing stress, problem-solving skills, 
        positive child discipline practices, methods of improving 
        parent-child interactions and enhancing self-esteem, using 
        community support services and other resources, and encouraging 
        parents to have fun with and enjoy their children; 
           (2) develop a that is designed to reach isolated or at-risk 
        families. 
           The home visiting program must use: 
           (1) an established risk assessment tool to determine the 
        family's level of risk; 
           (3) (2) establish clear objectives and protocols for home 
        visits; 
           (4) determine the frequency and duration of home visits 
        based on a risk-need assessment of the client, with home visits 
        beginning in the second trimester of pregnancy and continuing, 
        based on client need, until a child is six years old; 
           (5) (3) encourage families to make a transition from home 
        visits to site-based parenting programs to build a family 
        support network and reduce the effects of isolation; 
           (6) develop and distribute education materials on 
        preventing child abuse and neglect that may be used in home 
        visiting programs and parent education classes and distributed 
        to the public; 
           (7) initially provide at least 40 hours of training and 
        thereafter ongoing training for parent educators, child 
        educators, community outreach workers, and home visitors that 
        covers the dynamics of child abuse and neglect, domestic 
        violence and victimization within family systems, signs of abuse 
        or other indications that a child may be at risk of being abused 
        or neglected, what child abuse and neglect are, how to properly 
        report cases of child abuse and neglect, respect for cultural 
        preferences in child rearing, what community resources, social 
        service agencies, and family support activities and programs are 
        available, child development and growth, parenting skills, 
        positive child discipline practices, identifying stress factors 
        and techniques for reducing stress, home visiting techniques, 
        and risk assessment measures; 
           (8) (4) provide program services that are community-based, 
        accessible, and culturally relevant; and 
           (9) (5) foster collaboration among existing agencies and 
        community-based organizations that serve young children and 
        their families. 
           (c) Home visitors should reflect the demographic 
        composition of the community the home visitor is serving to the 
        extent possible.  
           Sec. 5.  Minnesota Statutes 2002, section 124D.13, 
        subdivision 8, is amended to read: 
           Subd. 8.  [COORDINATION.] (a) A district is encouraged to 
        coordinate the program with its special education and vocational 
        education programs and with related services provided by other 
        governmental agencies and nonprofit agencies. must describe 
        strategies to coordinate and maximize public and private 
        community resources and reduce duplication of services. 
           (b) A district is encouraged to coordinate adult basic 
        education programs provided to parents and early childhood 
        family education programs provided to children to accomplish the 
        goals of section 124D.895. 
           Sec. 6.  Minnesota Statutes 2002, section 124D.135, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REVENUE.] The revenue for early childhood 
        family education programs for a school district equals $113.50 
        for fiscal years 2000 and 2001 and $120 for 2002 and later 
        fiscal years for fiscal years 2003 and 2004 and $96 for fiscal 
        year 2005 and later, times the greater of: 
           (1) 150; or 
           (2) the number of people under five years of age residing 
        in the district on October 1 of the previous school year. 
           Sec. 7.  Minnesota Statutes 2002, section 124D.135, 
        subdivision 8, is amended to read: 
           Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
        the average balance, during the most recent three-year period in 
        a district's early childhood family education reserve account on 
        June 30 of each year, adjusted for any prior reductions under 
        this subdivision, must not be greater than 25 percent of the sum 
        of the district's maximum early childhood family education 
        annual revenue under subdivision 1, excluding adjustments under 
        this subdivision, plus any fees, grants, or other revenue 
        received by the district for early childhood family education 
        programs for the prior year. 
           (b) If a district's adjusted average early childhood family 
        education reserve over the three-year period is in excess of 25 
        percent of the prior year annual revenue the limit under 
        paragraph (a), the district's early childhood family education 
        state aid and levy authority for the current school year must be 
        reduced by the lesser of the current year revenue under 
        subdivision 1 or the excess reserve amount.  The aid reduction 
        equals the product of the lesser of the excess reserve amount or 
        the current year revenue under subdivision 1 times the ratio of 
        the district's aid for the prior current year under subdivision 
        4 to the district's revenue for the prior current year under 
        subdivision 1.  The levy reduction equals the excess reserve 
        amount minus the aid reduction.  The commissioner must 
        reallocate aid and levy reduced under this subdivision to other 
        eligible early childhood family education programs in proportion 
        to each district's revenue for the prior year under subdivision 
        1.  For purposes of this paragraph, if a district does not levy 
        the entire amount permitted under subdivision 3, the revenue 
        under subdivision 1 must be reduced in proportion to the actual 
        amount levied.  
           (b) (c) Notwithstanding paragraph (a), for fiscal year 
        2003, the excess reserve amount shall be computed using the 
        balance in a district's early childhood family education reserve 
        account on June 30, 2002.  For fiscal year 2004, the excess 
        reserve amount shall be computed using the adjusted average 
        balance in a district's early childhood family education reserve 
        account on June 30, 2002, and June 30, 2003. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2003. 
           Sec. 8.  Minnesota Statutes 2002, section 124D.15, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ADVISORY COUNCIL.] Each school readiness program 
        must have an advisory council composed of members of existing 
        early education-related boards, parents of participating 
        children, child care providers, culturally specific service 
        organizations, local resource and referral agencies, local early 
        intervention committees, and representatives of early childhood 
        service providers.  The council must advise the board in 
        creating and administering the program and must monitor the 
        progress of the program.  The council must ensure that children 
        at greatest risk receive appropriate services.  If the board is 
        unable to appoint to the advisory council members of existing 
        early education-related boards, it must appoint parents of 
        children enrolled in the program who represent the racial, 
        cultural, and economic diversity of the district and 
        representatives of early childhood service providers as 
        representatives to an existing advisory council. 
           Sec. 9.  Minnesota Statutes 2002, section 124D.16, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM REVIEW AND APPROVAL.] A school 
        district shall biennially by May 1 submit to the commissioners 
        of children, families, and learning education and health the 
        program plan required under this subdivision.  As determined by 
        the commissioners, one-half of the districts shall first submit 
        the plan by May 1 of the 2000-2001 school year and one-half of 
        the districts shall first submit the plan by May 1 of the 
        2001-2002 school year.  The program plan must include: 
           (1) a description of the services to be provided; 
           (2) a plan to ensure children at greatest risk receive 
        appropriate services; 
           (3) a description of procedures and methods to be used 
        strategies to coordinate and maximize public and private 
        community resources to maximize use of existing community 
        resources, including school districts, health care facilities, 
        government agencies, neighborhood organizations, and other 
        resources knowledgeable in early childhood development and 
        reduce duplication of services; 
           (4) comments about the district's proposed program by the 
        advisory council required by section 124D.15, subdivision 7; and 
           (5) agreements with all participating service providers.  
           Each commissioner may review and comment on the program, 
        and make recommendations to the commissioner of children, 
        families, and learning education, within 30 90 days of receiving 
        the plan. 
           Sec. 10.  Minnesota Statutes 2002, section 124D.16, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
        the average balance, during the most recent three-year period, 
        in a district's school readiness reserve account on June 30 of 
        each year, adjusted for any prior reductions under this 
        subdivision, must not be greater than 25 percent of the 
        district's school readiness annual revenue for the prior year, 
        excluding adjustments under this subdivision.  
           (b) If a district's adjusted average school readiness 
        reserve over the three-year period is in excess of 25 percent of 
        the prior year annual revenue the limit under paragraph (a), the 
        district's current year school readiness state aid must be 
        reduced by the lesser of the excess reserve amount or the 
        current year aid.  The commissioner must reallocate aid reduced 
        under this subdivision to other eligible school readiness 
        programs in proportion to each district's aid for the prior year 
        under subdivision 2.  
           (b) (c) Notwithstanding paragraph (a), for fiscal year 
        2003, the excess reserve amount shall be computed using the 
        balance in a district's school readiness reserve account on June 
        30, 2002.  For fiscal year 2004, the excess reserve amount shall 
        be computed using the adjusted average balance in a district's 
        school readiness reserve account on June 30, 2002, and June 30, 
        2003. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2003. 
           Sec. 11.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated.  
           Subd. 2.  [SCHOOL READINESS.] For revenue for school 
        readiness programs under Minnesota Statutes, sections 124D.15 
        and 124D.16: 
             $ 9,536,000    .....     2004
             $ 9,258,000    .....     2005
           The 2004 appropriation includes $1,605,000 for 2003 and 
        $7,931,000 for 2004. 
           The 2005 appropriation includes $1,982,000 for 2004 and 
        $7,276,000 for 2005.  
           Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
        childhood family education aid under Minnesota Statutes, section 
        124D.135: 
             $19,675,000    .....     2004 
             $15,129,000    .....     2005 
           The 2004 appropriation includes $3,239,000 for 2003 and 
        $16,436,000 for 2004.  
           The 2005 appropriation includes $4,109,000 for 2004 and 
        $11,020,000 for 2005.  
           Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
        health and developmental screening aid under Minnesota Statutes, 
        sections 121A.17 and 121A.19: 
             $2,581,000     .....     2004 
             $2,661,000     .....     2005 
           The 2004 appropriation includes $452,000 for 2003 and 
        $2,129,000 for 2004.  
           The 2005 appropriation includes $532,000 for 2004 and 
        $2,129,000 for 2005.  
           Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
        under Minnesota Statutes, section 119A.52: 
             $16,475,000    .....     2004
             $17,100,000    .....     2005
           Sec. 12.  [REPEALER.] 
           Minnesota Statutes 2002, section 124D.17, is repealed. 

                                   ARTICLE 8 
                                   PREVENTION
           Section 1.  Minnesota Statutes 2002, section 124D.19, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMUNITY EDUCATION DIRECTOR.] (a) Except as 
        provided under paragraphs (b) and (c), each board shall employ a 
        licensed community education director.  The board shall submit 
        the name of the person who is serving as director of community 
        education under this section on the district's annual community 
        education report to the commissioner. 
           (b) A board may apply to the commissioner Minnesota board 
        of school administrators under Minnesota Rules, part 3512.3500, 
        subpart 9, for authority to use an individual who is not 
        licensed as a community education director. 
           (c) A board of a district with a total population of 2,000 
        or less may identify an employee who holds a valid Minnesota 
        principal or superintendent license under Minnesota Rules, 
        chapter 3512, to serve as director of community education.  To 
        be eligible for an exception under this paragraph, the board 
        shall certify in writing to the commissioner that the district 
        has not placed a licensed director of community education on 
        unrequested leave. 
           Sec. 2.  Minnesota Statutes 2002, section 124D.20, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL COMMUNITY EDUCATION REVENUE.] The 
        general community education revenue for a district equals 
        $5.95 for fiscal year 2003 and 2004 and $5.23 for fiscal year 
        2005 and later, times the greater of 1,335 or the population of 
        the district.  The population of the district is determined 
        according to section 275.14.  
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005. 
           Sec. 3.  Minnesota Statutes 2002, section 124D.20, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
        community education revenue, a district operating a youth 
        after-school enrichment program under section 124D.19, 
        subdivision 12, may levy the amount raised by a maximum tax rate 
        of .7431 .985 percent times the adjusted net tax capacity of the 
        district.  To obtain total community education revenue, a 
        district not operating a youth after-school enrichment program 
        may levy the amount raised by a maximum tax rate of .4795 
        percent times the adjusted net tax capacity of the district.  If 
        the amount of the total community education levy would exceed 
        the total community education revenue, the total community 
        education levy shall be determined according to subdivision 6. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2005. 
           Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
        the sum of the average balances during the most recent 
        three-year period in a district's community education reserve 
        account and unreserved/undesignated community service fund 
        account on June 30 of each year, adjusted for any prior 
        reductions under this subdivision, must not be greater than 25 
        percent of the sum of the district's maximum total community 
        education revenue under subdivision 1, excluding adjustments 
        under this subdivision, plus the district's additional community 
        education levy under section 124D.21, plus any fees, grants, or 
        other revenue received by the district for community education 
        programs for the prior year.  For purposes of this paragraph, 
        "community education programs" means programs according to 
        subdivisions 8, paragraph (a), and 9, and section 124D.19, 
        subdivision 12, excluding early childhood family education 
        programs under section 124D.13, school readiness programs under 
        sections 124D.15 and 124D.17, and adult basic education programs 
        under section 124D.52. 
           (b) If the sum of the average balances during the most 
        recent three-year period in a district's community education 
        reserve account and unreserved/undesignated community service 
        fund account on June 30 of each year, adjusted for any prior 
        reductions under this subdivision, is in excess of the limit 
        under paragraph (a), the district's community education state 
        aid and levy authority for the current school year must be 
        reduced by the lesser of the current year revenue under 
        subdivision 1 or the excess reserve amount.  The aid reduction 
        equals the product of the lesser of the excess reserve amount or 
        the current year revenue under subdivision 1 times the ratio of 
        the district's aid for the current year under subdivision 7 to 
        the district's revenue for the current year under subdivision 
        1.  The levy reduction equals the excess reserve amount minus 
        the aid reduction.  For purposes of this paragraph, if a 
        district does not levy the entire amount permitted under 
        subdivision 5 or 6, the revenue under subdivision 1 must be 
        reduced in proportion to the actual amount levied. 
           (c) Notwithstanding paragraph (a), for fiscal year 2003, 
        the excess reserve amount shall be computed using the balances 
        in a district's community education reserve account and 
        unreserved/undesignated community service fund account on June 
        30, 2002.  For fiscal year 2004, the excess reserve amount shall 
        be computed using the adjusted average balances in a district's 
        community education reserve account and unreserved/undesignated 
        community service fund account on June 30, 2002, and June 30, 
        2003. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2003. 
           Sec. 5.  Minnesota Statutes 2002, section 124D.20, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
        reserve account may exceed the 25 percent limit established 
        under subdivision 11 because of extenuating circumstances, prior 
        approval to exceed the limit must be obtained in writing from 
        the commissioner. 
           (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
        district may submit a waiver request within 30 days of the date 
        of final enactment. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment for revenue for fiscal year 2003. 
           Sec. 6.  Minnesota Statutes 2002, section 124D.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SCHOOL-AGE CARE LEVY.] To obtain school-age care 
        revenue, a school district may levy an amount equal to the 
        district's school-age care revenue as defined in subdivision 2 
        multiplied by the lesser of one, or the ratio of the quotient 
        derived by dividing the adjusted net tax capacity of the 
        district for the year before the year the levy is certified by 
        the resident pupil units in the district for the school year to 
        which the levy is attributable, to $3,280 $2,433. 
           Sec. 7.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
        education aid under Minnesota Statutes, section 124D.20: 
             $5,495,000     .....     2004 
             $3,406,000     .....     2005 
           The 2004 appropriation includes $956,000 for 2003 and 
        $4,539,000 for 2004.  
           The 2005 appropriation includes $1,134,000 for 2004 and 
        $2,272,000 for 2005.  
           Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
        adults with disabilities programs under Minnesota Statutes, 
        section 124D.56: 
             $688,000       .....     2004 
             $710,000       .....     2005 
           The 2004 appropriation includes $120,000 for 2003 and 
        $568,000 for 2004.  
           The 2005 appropriation includes $142,000 for 2004 and 
        $568,000 for 2005. 
           Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
        hearing-impaired adults under Minnesota Statutes, section 
        124D.57: 
             $70,000        .....     2004
             $70,000        .....     2005
           Subd. 5.  [SCHOOL-AGE CARE REVENUE.] For extended day care 
        aid under Minnesota Statutes, section 124D.22: 
             $41,000        .....     2004 
             $22,000        .....     2005
           The 2004 appropriation includes $14,000 for 2003 and 
        $27,000 for 2004. 
           The 2005 appropriation includes $6,000 for 2004 and $16,000 
        for 2005. 
           Sec. 8.  [REPEALER.] 
           Minnesota Statutes 2002, sections 124D.21; 124D.221; 
        124D.93; and 144.401, subdivision 5, are repealed. 

                                   ARTICLE 9
                    SELF-SUFFICIENCY AND LIFE LONG LEARNING
           Section 1.  Minnesota Statutes 2002, section 124D.52, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM REQUIREMENTS.] (a) An adult basic 
        education program is a day or evening program offered by a 
        district that is for people over 16 years of age who do not 
        attend an elementary or secondary school.  The program offers 
        academic instruction necessary to earn a high school diploma or 
        equivalency certificate.  Tuition and fees may not be charged to 
        a learner for instruction paid under this section, except for 
           (b) Notwithstanding any law to the contrary, a school board 
        or the governing body of a consortium offering an adult basic 
        education program may adopt a sliding fee schedule based on a 
        family's income, but must waive the fee for participants who are 
        under the age of 21 or unable to pay.  The fees charged must be 
        designed to enable individuals of all socioeconomic levels to 
        participate in the program.  A program may charge a security 
        deposit to assure return of materials, supplies, and equipment. 
           (c) Each approved adult basic education program must 
        develop a memorandum of understanding with the local workforce 
        development centers located in the approved program's service 
        delivery area.  The memorandum of understanding must describe 
        how the adult basic education program and the workforce 
        development centers will cooperate and coordinate services to 
        provide unduplicated, efficient, and effective services to 
        clients.  
           (d) Adult basic education aid must be spent for adult basic 
        education purposes as specified in sections 124D.518 to 124D.531.
           Sec. 2.  Minnesota Statutes 2002, section 124D.52, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ACCOUNTS; REVENUE; AID.] (a) Each district, 
        group of districts, or private nonprofit organization providing 
        adult basic education programs must establish and 
        maintain accounts separate from all other district accounts a 
        reserve account within the community service fund for the 
        receipt and disbursement of all funds related to these 
        programs.  All revenue received pursuant to this section must be 
        utilized solely for the purposes of adult basic education 
        programs.  State aid must not equal more than 100 percent of the 
        unreimbursed expenses of providing these programs, excluding 
        in-kind costs.  
           (b) Notwithstanding section 123A.26 or any other law to the 
        contrary, an adult basic education consortium providing an 
        approved adult basic education program may be its own fiscal 
        agent and is eligible to receive state-aid payments directly 
        from the commissioner. 
           Sec. 3.  Minnesota Statutes 2002, section 124D.531, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
        (a) The state total adult basic education aid for fiscal year 
        2001 2004 equals $30,157,000 $34,388,000.  The state total adult 
        basic education aid for fiscal year 2005 and later is 
        $36,509,000.  The state total adult basic education aid for 
        later years equals: 
           (1) the state total adult basic education aid for the 
        preceding fiscal year; times 
           (2) the lesser of: 
           (i) 1.08, or 
           (ii) the greater of 1.00 or the ratio of the state total 
        contact hours in the first prior program year to the state total 
        contact hours in the second prior program year.  Beginning in 
        fiscal year 2002, two percent of the state total adult basic 
        education aid must be set aside for adult basic education 
        supplemental service grants under section 124D.522.  
           (b) The state total adult basic education aid, excluding 
        basic population aid, equals the difference between the amount 
        computed in paragraph (a), and the state total basic population 
        aid under subdivision 2. 
           Sec. 4.  Minnesota Statutes 2002, section 124D.531, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BASIC POPULATION AID.] A district is eligible 
        for basic population aid if the district has a basic service 
        level approved by the commissioner under section 124D.52, 
        subdivision 5, or is a member of a consortium with an approved 
        basic service level.  Basic population aid is equal to the 
        greater of $4,000 $3,844 or $1.80 $1.73 times the population of 
        the district.  District population is determined according to 
        section 275.14. 
           Sec. 5.  Minnesota Statutes 2002, section 124D.531, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
        Notwithstanding subdivisions 2 and 3, the total adult basic 
        education aid for a program per prior year contact hour must not 
        exceed four times the rate $21 per prior year contact hour 
        computed under subdivision 3, clause (2). 
           (b) For fiscal year 2004, the aid for a program under 
        subdivision 3, clause (2), adjusted for changes in program 
        membership, must not exceed the aid for that program under 
        subdivision 3, clause (2), for fiscal year 2003 by more than the 
        greater of eight percent or $10,000. 
           (c) For fiscal year 2005, the aid for a program under 
        subdivision 3, clause (2), adjusted for changes in program 
        membership, must not exceed the sum of the aid for that program 
        under subdivision 3, clause (2), and section 8, paragraph (a), 
        for the preceding fiscal year by more than the greater of eight 
        percent or $10,000.  
           (d) For fiscal year 2002 2006 and later, the aid for a 
        program under subdivision 3, clause (2), adjusted for changes in 
        program membership, must not exceed the aid for that program 
        under subdivision 3, clause (2), for the first preceding fiscal 
        year by more than the greater of 17 eight percent or 
        $20,000 $10,000. 
           (c) (d) Adult basic education aid is payable to a program 
        for unreimbursed costs. 
           Sec. 6.  Minnesota Statutes 2002, section 124D.531, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PROGRAM AUDITS.] Programs that receive aid under 
        this section must maintain records that support the aid 
        payments.  The commissioner may audit these records upon 
        request.  The commissioner must establish procedures for 
        conducting fiscal audits of adult basic education programs 
        according to the schedule in this subdivision.  In calendar year 
        2003, the commissioner must audit one-half of approved adult 
        basic education programs that received aid for fiscal year 2002, 
        and in calendar year 2004, the commissioner must audit the 
        remaining unaudited programs for aid received in fiscal year 
        2003.  Beginning with fiscal year 2005, the commissioner must, 
        at a minimum, audit each adult basic education program once 
        every five years.  The commissioner must establish procedures to 
        reconcile any discrepancies between aid payments based on 
        information reported to the commissioner and aid estimates based 
        on a program audit. 
           Sec. 7.  [ADULT BASIC EDUCATION PROGRAM APPROVAL AND AID, 
        FISCAL YEAR 2004.] 
           (a) Notwithstanding Minnesota Statutes 2002, section 
        124D.54, subdivision 2, a district or consortium of districts 
        that provided a program funded under Minnesota Statutes 2002, 
        section 124D.54, in fiscal year 2003 may request an extension of 
        the application deadline for approval of an adult basic 
        education program for fiscal year 2004. 
           (b) For purposes of computing the fiscal year 2005 adult 
        basic education aid for a program under Minnesota Statutes, 
        section 124D.531, subdivision 3, clause (2), the contact hours 
        for students participating in the program during the first prior 
        program year must be increased by 17 percent of the adult 
        graduation aid average daily attendance for fiscal year 2002.  
           Sec. 8.  [ADULT BASIC EDUCATION TRANSITION AID.] 
           (a) For fiscal year 2004, adult basic education transition 
        aid for each qualifying district equals the district's adult 
        high school graduation aid for fiscal year 2002.  This aid 
        amount must be used to provide an adult basic education program 
        under Minnesota Statutes, section 124D.52.  To qualify for aid 
        under this section a district must establish or join an approved 
        adult basic education program according to Minnesota Statutes, 
        section 124D.52, subdivision 2.  
           (b) For fiscal year 2005, the adult high school graduation 
        aid program is eliminated.  
           Sec. 9.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
        education aid under Minnesota Statutes, section 124D.52, in 
        fiscal year 2004 and Minnesota Statutes, section 124D.531, in 
        fiscal year 2005:  
             $33,153,000    .....     2004 
             $35,823,000    .....     2005 
           The 2004 appropriation includes $5,905,000 for 2003 and 
        $27,248,000 for 2004.  
           The 2005 appropriation includes $6,811,000 for 2004 and 
        $29,012,000 for 2005.  
           Subd. 3.  [ADULT GRADUATION AID.] For adult graduation aid 
        under Minnesota Statutes, section 124D.54:  
             $2,094,000     .....     2004
             $  424,000     .....     2005
           The 2004 appropriation includes $396,000 for 2003 and 
        $1,698,000 for 2004.  
           The 2005 appropriation includes $424,000 for 2004 and $0 
        for 2005. 
           Subd. 4.  [GED TESTS.] For payment of 60 percent of the 
        costs of GED tests under Laws 1993, chapter 224, article 4, 
        section 44, subdivision 10: 
             $125,000       .....     2004
             $125,000       .....     2005
           Subd. 5.  [LEAD ABATEMENT.] For lead abatement according to 
        Minnesota Statutes, section 119A.46:  
             $  100,000     .....     2004 
             $  100,000     .....     2005 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 10.  [REPEALER.] 
           Minnesota Statutes 2002, sections 124D.09, subdivision 15; 
        124D.54; and 126C.05, subdivision 12, are repealed. 

                                   ARTICLE 10
                                 STATE AGENCIES
           Section 1.  Minnesota Statutes 2002, section 122A.09, 
        subdivision 10, is amended to read: 
           Subd. 10.  [VARIANCES.] (a) Notwithstanding subdivision 9 
        and section 14.05, subdivision 4, the board of teaching may 
        grant a variance to its rules upon application by a school 
        district for purposes of implementing experimental programs in 
        learning or management. 
           (b) To enable a school district to meet the needs of 
        students enrolled in an alternative education program and to 
        enable licensed teachers instructing those students to satisfy 
        content area licensure requirements, the board of teaching 
        annually may permit a licensed teacher teaching in an 
        alternative education program to instruct students in a content 
        area for which the teacher is not licensed, consistent with 
        paragraph (a). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 2.  Minnesota Statutes 2002, section 122A.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] A board of school 
        administrators is established and must consist of nine ten 
        members appointed by the governor with the advice and consent of 
        the senate, including at least: 
           (1) one elementary school principal; 
           (2) one secondary school principal; 
           (3) one higher education faculty member in an educational 
        administration program approved by the board; 
           (4) one higher education administrator for an educational 
        administration program approved by the board; 
           (5) one school superintendent; 
           (6) one classroom teacher; 
           (7) one community education director or a; 
           (8) one special education director; and 
           (8) (9) two members of the public, one of whom must be a 
        present or former school board member. 
           In making appointments, the governor shall solicit 
        recommendations from groups representing persons in clauses (1) 
        to (8) (9). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 3.  Minnesota Statutes 2002, section 122A.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TERMS; COMPENSATION; REMOVAL; ADMINISTRATION.] 
        Membership terms, removal of members, and the filling of 
        membership vacancies are as provided in section 214.09.  The 
        terms of the initial board members must be determined by lot as 
        follows: 
           (1) three members must be appointed for terms that expire 
        August 1, 2002; 
           (2) three members must be appointed for terms that expire 
        August 1, 2003; and 
           (3) three four members must be appointed for terms that 
        expire August 1, 2004. 
           Members shall not receive the daily payment under section 
        214.09, subdivision 3.  The public employer of a member shall 
        not reduce the member's compensation or benefits for the 
        member's absence from employment when engaging in the business 
        of the board.  The provision of staff, administrative services, 
        and office space; the review and processing of complaints; the 
        setting of fees; the selection and duties of an executive 
        secretary to serve the board; and other provisions relating to 
        board operations are as provided in chapter 214.  Fiscal year 
        and reporting requirements are as provided in sections 214.07 
        and 214.08. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 4.  Minnesota Statutes 2002, section 122A.18, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [PERMISSION TO SUBSTITUTE TEACH.] (a) The board 
        of teaching may allow a person who is enrolled in and making 
        satisfactory progress in a board-approved teacher program and 
        who has successfully completed student teaching to be employed 
        as a short-call substitute teacher.  
           (b) The board of teaching may issue a lifetime qualified 
        short-call substitute teaching license to a person who: 
           (1) was a qualified teacher under section 122A.16 while 
        holding a continuing five-year teaching license issued by the 
        board, and receives a retirement annuity from the teachers 
        retirement association, Minneapolis teachers retirement fund 
        association, St. Paul teachers retirement fund association, or 
        Duluth teachers retirement fund association; 
           (2) holds an out-of-state teaching license and receives a 
        retirement annuity as a result of the person's teaching 
        experience; or 
           (3) held a continuing five-year license issued by the 
        board, taught at least three school years in an accredited 
        nonpublic school in Minnesota, and receives a retirement annuity 
        as a result of the person's teaching experience. 
        A person holding a lifetime qualified short-call substitute 
        teaching license is not required to complete continuing 
        education clock hours.  A person holding this license may 
        reapply to the board for a continuing five-year license and must 
        again complete continuing education clock hours one school year 
        after receiving the continuing five-year license. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year. 
           Sec. 5.  Minnesota Statutes 2002, section 122A.21, is 
        amended to read: 
           122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 
           Each application for the issuance, renewal, or extension of 
        a license to teach must be accompanied by a processing fee in an 
        amount set by the board of teaching by rule of $57.  Each 
        application for issuing, renewing, or extending the license of a 
        school administrator or supervisor must be accompanied by a 
        processing fee in the amount set by the board of teaching.  The 
        processing fee for a teacher's license and for the licenses of 
        supervisory personnel must be paid to the executive secretary of 
        the appropriate board.  The executive secretary of the board 
        shall deposit the fees with the state treasurer, as provided by 
        law, and report each month to the commissioner of finance the 
        amount of fees collected.  The fees as set by the board are 
        nonrefundable for applicants not qualifying for a license.  
        However, a fee must be refunded by the state treasurer in any 
        case in which the applicant already holds a valid unexpired 
        license.  The board may waive or reduce fees for applicants who 
        apply at the same time for more than one license. 
           Sec. 6.  Minnesota Statutes 2002, section 122A.22, is 
        amended to read: 
           122A.22 [DISTRICT RECORDING VERIFICATION OF TEACHER 
        LICENSES.] 
           No person shall be accounted a qualified teacher until the 
        person has filed for record with the district superintendent 
        where the person intends to teach a license, or certified copy 
        of a license, authorizing the person to teach school in the 
        district school system school district or charter school 
        contracting with the person for teaching services verifies 
        through the Minnesota education licensing system available on 
        the department Web site that the person is a qualified teacher, 
        consistent with sections 122A.16 and 122A.44, subdivision 1. 
           [EFFECTIVE DATE.] This section is effective for the 
        2003-2004 school year and later.  
           Sec. 7.  Minnesota Statutes 2002, section 169.26, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DRIVER TRAINING.] All driver education courses 
        approved by the commissioner of children, families, and learning 
        and the commissioner of public safety must include instruction 
        on railroad-highway grade crossing safety.  The commissioner of 
        children, families, and learning and the commissioner of public 
        safety shall by rule establish minimum standards of course 
        content relating to operation of vehicles at railroad-highway 
        grade crossings.  
           Sec. 8.  Minnesota Statutes 2002, section 169.973, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER'S AUTHORITY; RULES; 
        CURRICULUM.] The commissioner of public safety shall supervise 
        the administration and conduct of driver improvement clinics and 
        youth-oriented driver improvement clinics.  The commissioner of 
        public safety shall promulgate rules setting forth standards for 
        the curriculum and mode of instruction of driver improvement 
        clinics and youth-oriented driver improvement clinics and such 
        other matters as the commissioner of public safety considers 
        necessary for the proper administration of such clinics.  In the 
        preparation of such standards the commissioner of public safety 
        shall consult with the commissioner of children, families, and 
        learning and state associations of judges.  A driver improvement 
        clinic established under sections 169.971 to 169.973 and 171.20, 
        subdivision 3, shall conform to the standards promulgated by the 
        commissioner of public safety.  The course of study at a driver 
        improvement clinic and youth-oriented driver improvement clinic 
        may not exceed a cumulative total of nine hours with no single 
        class session lasting more than three hours.  The course of 
        study at a driver improvement clinic and youth-oriented driver 
        improvement clinic shall include instruction in railroad 
        crossing safety. 
           Sec. 9.  Minnesota Statutes 2002, section 178.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERS.] The commissioner of labor and 
        industry, hereinafter called the commissioner, shall appoint an 
        apprenticeship advisory council, hereinafter referred to as the 
        council, composed of three representatives each from employer 
        and employee organizations, and two representatives of the 
        general public.  The assistant commissioner director of 
        children, families, and learning education responsible for 
        vocational career and technical education or designee shall be 
        an ex officio member of the council and shall serve in an 
        advisory capacity only.  
           Sec. 10.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] Unless otherwise 
        indicated, the sums indicated in this section are appropriated 
        from the general fund to the department of education for the 
        fiscal years designated. 
           Subd. 2.  [DEPARTMENT.] (a) For the department of education:
             $23,653,000    .....     2004 
             $23,653,000    .....     2005 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           (b) $260,000 each year is for the Minnesota children's 
        museum. 
           (c) $41,000 each year is for the Minnesota academy of 
        science. 
           (d) $237,000 of the balance in the state education 
        courseware development account in the state government special 
        revenue fund as of July 1, 2004, is canceled to the general fund.
           (e) $160,000 of the balance in the state item bank 
        revolving account in the state government special revenue fund 
        as of July 1, 2004, is canceled to the general fund. 
           (f) $621,000 each year is for the board of teaching. 
           (g) $165,000 each year is for the board of school 
        administrators.  
           (h) The commissioner is encouraged to give priority 
        consideration to the Minnesota humanities commission when 
        issuing grants for professional development of teachers or 
        content development from best practices, Federal Title II, Part 
        A, Federal Title V, Part A, or other appropriate grant resources 
        that have a stated objective of improvement of teacher 
        performance. 
           (i) An additional $96,000 in fiscal year 2004 and $96,000 
        in fiscal year 2005 are appropriated from the special revenue 
        fund under Minnesota Statutes, section 517.08, subdivision 1c, 
        for family visitation centers.  Any balance in the first year 
        does not cancel but is available for the second year. 
           Subd. 3.  [FEDERAL GRANTS AND AIDS.] 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. 
           Sec. 11.  [APPROPRIATIONS; MINNESOTA STATE ACADEMIES.] 
           The sums indicated in this section are appropriated from 
        the general fund to the Minnesota state academies for the deaf 
        and the blind for the fiscal years designated:  
             $10,466,000    .....     2004 
             $10,466,000    .....     2005 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 12.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
        EDUCATION.] 
           The sums indicated in this section are appropriated from 
        the general fund to the Perpich center for arts education for 
        the fiscal years designated: 
             $6,864,000     .....     2004 
             $6,423,000     .....     2005 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 13.  [REVISOR'S INSTRUCTION.] 
           In the next and subsequent editions of Minnesota Statutes, 
        the revisor shall change all references to the "commissioner of 
        children, families, and learning" to the "commissioner of public 
        safety" in Minnesota Statutes, sections 123B.88, subdivision 9; 
        168.102; 169.441, subdivision 5; and 171.321, subdivision 4c; 
        and "Part H" to "Part C" in Minnesota Statutes, sections 
        125A.27, subdivisions 7 and 8; 125A.32; 125A.35; 125A.37; 
        125A.39; 125A.44; and 125A.45. 
           Sec. 14.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 15.014, subdivision 
        3; 123B.90, subdivision 1; 169.441, subdivision 4; and 239.004, 
        are repealed. 
           (b) Minnesota Rules, parts 3500.0600; 3520.0400; 3520.1400; 
        3520.3300; 3530.1500; 3530.2700; 3530.4400; 3530.4500; 
        3530.4700; and 3550.0100, are repealed. 

                                   ARTICLE 11
                                  DEFICIENCIES
        Section 1.  [DEPARTMENT OF EDUCATION.] 
           The dollar amounts shown are added to or, if shown in 
        parentheses, are subtracted from the appropriations in Laws 
        2001, First Special Session chapter 6, as amended by Laws 2002, 
        chapter 220, and Laws 2002, chapter 374, or other law, and are 
        appropriated from the general fund to the department of 
        education for the purposes specified in this article, to be 
        available for the fiscal year indicated for each purpose.  The 
        figure "2003" used in this article means that the appropriation 
        or appropriations listed are available for the fiscal year 
        ending June 30, 2003. 
                                                               2003 
        APPROPRIATION ADJUSTMENTS                         $  10,869,000 
                                                   APPROPRIATION CHANGE
        Sec. 2.  APPROPRIATIONS; DEPARTMENT OF 
        EDUCATION 
        Subdivision 1.  Community Education Aid                 219,000 
        Subd. 2.  General and Supplemental 
        Education Aid                                         8,791,000 
        This change includes ($7,420,000) for 
        2002 and $16,211,000 for 2003. 
        Subd. 3.  Nonpublic Pupil Aid                           437,000 
        Subd. 4.  Consolidation Transition Aid                    5,000 
        Subd. 5.  Interdistrict Desegregation 
        or Integration Transportation Grants                    169,000 
        Subd. 6.  Travel for Home-Based 
        Services                                                 48,000  
        Subd. 7.  Debt Service Aid                               19,000 
        Subd. 8.  School Breakfast                              100,000 
        Subd. 9.  Fast Break to Learning                      1,081,000 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 

                                   ARTICLE 12
                              TECHNICAL AMENDMENTS
           Section 1.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 20, is amended to read: 
           Subd. 20.  [TRANSITION YEAR FAMILIES.] "Transition year 
        families" means families who have received MFIP assistance, or 
        who were eligible to receive MFIP assistance after choosing to 
        discontinue receipt of the cash portion of MFIP assistance under 
        section 256J.31, subdivision 12, for at least three of the last 
        six months before losing eligibility for MFIP or families 
        participating in work first under chapter 256K who meet the 
        requirements of section 256K.07.  Transition year child care may 
        be used to support employment or job search.  Transition year 
        child care is not available to families who have been 
        disqualified from MFIP due to fraud.  
           Sec. 2.  Minnesota Statutes 2002, section 121A.21, is 
        amended to read: 
           121A.21 [SCHOOL HEALTH SERVICES.] 
           (a) Every school board must provide services to promote the 
        health of its pupils. 
           (b) The board of a district with 1,000 pupils or more in 
        average daily membership in early childhood family education, 
        preschool handicapped, elementary, and secondary programs must 
        comply with the requirements of this paragraph.  It may use one 
        or a combination of the following methods: 
           (1) employ personnel, including at least one full-time 
        equivalent licensed school nurse or continue to employ a 
        registered nurse not yet certified as a public health nurse as 
        defined in section 145A.02, subdivision 18, who is enrolled in a 
        program that would lead to certification within four years of 
        August 1, 1988; 
           (2) contract with a public or private health organization 
        or another public agency for personnel during the regular school 
        year, determined appropriate by the board, who are currently 
        licensed under chapter 148 and who are certified public health 
        nurses; or 
           (3) enter into another arrangement approved by the 
        commissioner.  
           Sec. 3.  Minnesota Statutes 2002, section 122A.41, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROBATIONARY PERIOD; DISCHARGE OR DEMOTION.] All 
        teachers in the public schools in cities of the first class 
        during the first three years of consecutive employment shall be 
        deemed to be in a probationary period of employment during which 
        period any annual contract with any teacher may, or may not, be 
        renewed as the school board, after consulting with the peer 
        review committee charged with evaluating the probationary 
        teachers under subdivision 2a or 3, shall see fit.  The school 
        site management team or the school board if there is no school 
        site management team, shall adopt a plan for a written 
        evaluation of teachers during the probationary period according 
        to subdivision 2a 3.  Evaluation by the peer review committee 
        charged with evaluating probationary teachers under subdivision 
        2a 3 shall occur at least three times each year for a teacher 
        performing services on 120 or more school days, at least two 
        times each year for a teacher performing services on 60 to 119 
        school days, and at least one time each year for a teacher 
        performing services on fewer than 60 school days.  Days devoted 
        to parent-teacher conferences, teachers' workshops, and other 
        staff development opportunities and days on which a teacher is 
        absent from school shall not be included in determining the 
        number of school days on which a teacher performs services.  The 
        school board may, during such probationary period, discharge or 
        demote a teacher for any of the causes as specified in this 
        code.  A written statement of the cause of such discharge or 
        demotion shall be given to the teacher by the school board at 
        least 30 days before such removal or demotion shall become 
        effective, and the teacher so notified shall have no right of 
        appeal therefrom. 
           Sec. 4.  Minnesota Statutes 2002, section 122A.58, is 
        amended to read: 
           122A.58 [COACHES, TERMINATION OF DUTIES.] 
           Subdivision 1.  [TERMINATION; HEARING.] Before a district 
        terminates the coaching duties of an employee who is required to 
        hold a license as an athletic coach from the commissioner 
        of children, families, and learning education, the district must 
        notify the employee in writing and state its reason for the 
        proposed termination.  Within 14 days of receiving this 
        notification, the employee may request in writing a hearing on 
        the termination before the commissioner board.  If a hearing is 
        requested, the commissioner board must hold a hearing within 25 
        days according to the hearing procedures specified in section 
        122A.40, subdivision 14, and the termination is final upon the 
        order of the commissioner board after the hearing. 
           Subd. 2.  [FINAL DECISION.] Within ten days after the 
        hearing, the commissioner board must issue a written decision 
        regarding the termination.  If the commissioner board decides to 
        terminate the employee's coaching duties, the decision must 
        state the reason on which it is based and include findings of 
        fact based upon competent evidence in the record.  The 
        commissioner board may terminate the employee's duties or not, 
        as it sees fit, for any reason which is found to be true based 
        on substantial and competent evidence in the record. 
           Subd. 3.  [NONAPPLICATION OF SECTION.] This section shall 
        not apply to the termination of coaching duties pursuant to a 
        district transfer policy or as a result of the nonrenewal or 
        termination of the employee's contract or the employee's 
        discharge, demotion or suspension pursuant to section 122A.40 or 
        122A.41.  This section shall not apply to the termination of an 
        employee's coaching duties prior to completion of before 
        completing the probationary period of employment. 
           Sec. 5.  Minnesota Statutes 2002, section 123B.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BOARD AUTHORITY.] The board must have the 
        general charge of the business of the district, the school 
        houses, and of the interests of the schools thereof.  The 
        board's authority to govern, manage, and control the district; 
        to carry out its duties and responsibilities; and to conduct the 
        business of the district includes implied powers in addition to 
        any specific powers granted by the legislature.  
           Sec. 6.  Minnesota Statutes 2002, section 123B.72, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CERTIFICATION.] Prior to occupying or 
        reoccupying a school facility affected by this section, a school 
        board or its designee shall submit a document prepared by a 
        system inspector to the building official or to the 
        commissioner, verifying that the facility's heating, 
        ventilation, and air conditioning system has been installed and 
        operates according to design specifications and code, according 
        to section 123B.71, subdivision 10 9, clause (3) (11).  A 
        systems inspector shall also verify that the facility's design 
        will provide the ability for monitoring of outdoor airflow and 
        total airflow of ventilation systems in new school facilities 
        and that any heating, ventilation, or air conditioning system 
        that is installed or modified for a project subject to this 
        section must provide a filtration system with a current ASHRAE 
        standard. 
           Sec. 7.  Minnesota Statutes 2002, section 123B.93, is 
        amended to read: 
           123B.93 [ADVERTISING ON SCHOOL BUSES.] 
           (a) The commissioner, through a competitive process, and 
        with the approval of the school bus safety advisory committee 
        may contract with advertisers regarding advertising on school 
        buses.  At a minimum, the contract must prohibit advertising and 
        advertising images that: 
           (1) solicit the sale of, or promote the use of, alcoholic 
        beverages and tobacco products; 
           (2) are discriminatory in nature or content; 
           (3) imply or declare an endorsement of the product or 
        service by the school district; 
           (4) contain obscene material; 
           (5) are false, misleading, or deceptive; or 
           (6) relate to an illegal activity or antisocial behavior. 
           (b) Advertisement must meet the following conditions: 
           (1) the advertising attached to the school bus does not 
        interfere with bus identification under section 169.441; and 
           (2) the bus with attached advertising meets the school bus 
        equipment standards under sections 169.4501 to 169.4504. 
           (c) All buses operated by school districts may be attached 
        with advertisements under the state contract.  All school 
        district contracts shall include a provision for advertisement.  
        Each school district shall be reimbursed by the advertiser for 
        all costs incurred by the district and its contractors for 
        supporting the advertising program, including, but not limited 
        to, retrofitting buses, storing advertising, attaching 
        advertising to the bus, and related maintenance. 
           (d) The commissioner shall hold harmless and indemnify each 
        district for all liabilities arising from the advertising 
        program.  Each district must tender defense of all such claims 
        to the commissioner within five days of receipt. 
           (e) All revenue from the contract shall be deposited in the 
        general fund. 
           Sec. 8.  Minnesota Statutes 2002, section 124D.03, 
        subdivision 12, is amended to read: 
           Subd. 12.  [TERMINATION OF ENROLLMENT.] A district may 
        terminate the enrollment of a nonresident student enrolled under 
        this section or section 124D.07 or 124D.08 at the end of a 
        school year if the student meets the definition of a habitual 
        truant under section 260C.007, subdivision 19, the student has 
        been provided appropriate services under chapter 260A, and the 
        student's case has been referred to juvenile court.  A district 
        may also terminate the enrollment of a nonresident student over 
        the age of 16 enrolled under this section if the student is 
        absent without lawful excuse for one or more periods on 15 
        school days and has not lawfully withdrawn from school under 
        section 120A.22, subdivision 8. 
           Sec. 9.  Minnesota Statutes 2002, section 124D.09, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given to them. 
           (a) "Eligible institution" means a Minnesota public 
        post-secondary institution, a private, nonprofit two-year trade 
        and technical school granting associate degrees, an 
        opportunities industrialization center accredited by the North 
        Central Association of Colleges and Schools, or a private, 
        residential, two-year or four-year, liberal arts, 
        degree-granting college or university located in Minnesota.  
        "Course" means a course or program.  
           (b) "Course" means a course or program.  
           Sec. 10.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 13, is amended to read: 
           Subd. 13.  [LENGTH OF SCHOOL YEAR.] A charter school must 
        provide instruction each year for at least the number of days 
        required by section 120A.22, subdivision 5 120A.41.  It may 
        provide instruction throughout the year according to sections 
        124D.12 to 124D.127 or 124D.128.  
           Sec. 11.  Minnesota Statutes 2002, section 124D.10, 
        subdivision 23a, is amended to read: 
           Subd. 23a.  [RELATED PARTY LEASE COSTS.] (a) A charter 
        school is prohibited from entering a lease of real property with 
        a related party as defined in this subdivision, unless the 
        lessor is a nonprofit corporation under chapter 317A or a 
        cooperative under chapter 308A, and the lease cost is reasonable 
        under section 124D.11, subdivision 4, clause (1). 
           (b) For purposes of this subdivision: 
           (1) A "related party" is an affiliate or close relative of 
        the other party in question, an affiliate of a close relative, 
        or a close relative of an affiliate.  
           (2) "Affiliate" means a person that directly, or indirectly 
        through one or more intermediaries, controls, or is controlled 
        by, or is under common control with, another person. 
           (3) "Close relative" means an individual whose relationship 
        by blood, marriage, or adoption to another individual is no more 
        remote than first cousin. 
           (4) "Person" means an individual or entity of any kind. 
           (5) "Control" includes the terms "controlling," "controlled 
        by," and "under common control with" and means the possession, 
        direct or indirect, of the power to direct or cause the 
        direction of the management, operations, or policies of a 
        person, whether through the ownership of voting securities, by 
        contract, or otherwise. 
           (c) A lease of real property to be used for a charter 
        school, not excluded in paragraph (b), must contain the 
        following statement:  "This lease is subject to Minnesota 
        Statutes, section 124D.10, subdivision 23a." 
           (d) If a charter school enters into as lessee a lease with 
        a related party and the charter school subsequently closes, the 
        commissioner has the right to recover from the lessor any lease 
        payments in excess of those that are reasonable under section 
        124.11 124D.11, subdivision 4, clause (1). 
           Sec. 12.  Minnesota Statutes 2002, section 125A.05, is 
        amended to read: 
           125A.05 [METHOD OF SPECIAL INSTRUCTION.] 
           (a) As defined in this subdivision section, 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 must 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 must notify the child's district of 
        residence before the child's individual education plan is 
        developed and must 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. 
           Sec. 13.  Minnesota Statutes 2002, section 125A.12, is 
        amended to read: 
           125A.12 [ATTENDANCE IN ANOTHER DISTRICT.] 
           No resident of a district who is eligible for special 
        instruction and services pursuant to this section may be denied 
        provision of this instruction and service because of attending a 
        public school in another district pursuant to section 123B.88, 
        subdivision 5, if the attendance is not subject to section 
        124D.06, 124D.07, or 124D.08.  If the pupil attends a public 
        school located in a contiguous district and the district of 
        attendance does not provide special instruction and services, 
        the district of residence must provide necessary transportation 
        for the pupil between the boundary of the district of residence 
        and the educational facility where special instruction and 
        services are provided within the district of residence.  The 
        district of residence may provide necessary transportation for 
        the pupil between its boundary and the school attended in the 
        contiguous district, but must not pay the cost of transportation 
        provided outside the boundary of the district of residence.  
           Sec. 14.  Minnesota Statutes 2002, section 126C.10, 
        subdivision 28, is amended to read: 
           Subd. 28.  [EQUITY REGION.] For the purposes of computing 
        equity revenue under subdivision 23 24, a district whose 
        administrative offices on July 1, 1999, is located in Anoka, 
        Carver, Dakota, Hennepin, Ramsey, Scott, or Washington county is 
        part of the metro equity region.  Districts whose administrative 
        offices on July 1, 1999, are not located in Anoka, Carver, 
        Dakota, Hennepin, Ramsey, Scott, or Washington county are part 
        of the rural equity region. 
           Sec. 15.  Minnesota Statutes 2002, section 127A.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADMINISTRATIVE RULES.] The commissioner may 
        adopt new rules or amend any existing rules only under specific 
        authority and consistent with the requirements of chapter 14.  
        The commissioner may repeal any existing rules adopted by the 
        commissioner.  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 rules adopted by the commissioner. 
           Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] (a) One 
        hundred percent of the aid for the current fiscal year must be 
        paid for the following aids:  reimbursement for enrollment 
        options transportation, according to sections 124D.03, 
        subdivision 8, 124D.09, subdivision 22, and 124D.10; school 
        lunch aid, according to section 124D.111; hearing impaired 
        support services aid, according to section 124D.57; and Indian 
        post-secondary preparation grants according to section 124D.85 
        124D.80. 
           (b) One hundred percent of the aid for the current fiscal 
        year, based on enrollment in the previous year, must be paid for 
        the first grade preparedness program according to section 
        124D.081. 
           Sec. 17.  Minnesota Statutes 2002, section 169.435, is 
        amended to read: 
           169.435 [STATE SCHOOL BUS SAFETY ADMINISTRATION.] 
           Subdivision 1.  [RESPONSIBILITY; DEPARTMENT OF PUBLIC 
        SAFETY.] The department of public safety has the primary 
        responsibility for school transportation safety.  To oversee 
        school transportation safety, the commissioner of public safety 
        shall establish a school bus safety advisory committee according 
        to subdivision 2.  The commissioner or the commissioner's 
        designee shall serve as state director of pupil transportation 
        according to subdivision 3. 
           Subd. 3.  [PUPIL TRANSPORTATION SAFETY DIRECTOR.] (a) The 
        commissioner of public safety or the commissioner's designee 
        shall serve as pupil transportation safety director. 
           (b) The duties of the pupil transportation safety director 
        shall include: 
           (1) overseeing all department activities related to school 
        bus safety; 
           (2) assisting in the development, interpretation, and 
        implementation of laws and policies relating to school bus 
        safety; 
           (3) supervising preparation of the school bus inspection 
        manual; and 
           (4) in conjunction with the department of children, 
        families, and learning education, assisting school districts in 
        developing and implementing comprehensive transportation 
        policies; and 
           (5) providing information requested by the school bus 
        safety advisory committee. 
           Sec. 18.  Minnesota Statutes 2002, section 169.449, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RULES.] The commissioner of public safety, 
        in consultation with the school bus safety advisory committee, 
        shall adopt rules governing the operation of school buses used 
        for transportation of school children, when owned or operated by 
        a school or privately owned and operated under a contract with a 
        school, and these rules must be made a part of that contract by 
        reference.  Each school, its officers and employees, and each 
        person employed under the contract is subject to these rules. 
           Sec. 19.  Minnesota Statutes 2002, section 169.4501, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INSPECTION MANUAL.] The department of public 
        safety shall develop a school bus inspection manual based on the 
        national standards adopted in subdivision 1 and Minnesota 
        standards adopted in sections 169.4502 to 169.4504.  The 
        Minnesota state patrol shall use the manual as the basis for 
        inspecting buses as provided in section 169.451.  When 
        appropriate, the school bus safety advisory committee shall 
        recommend to the education committees of the legislature 
        modifications to the standards upon which the school bus 
        inspection manual is based.  The department of public safety has 
        no rulemaking authority to alter the standards upon which school 
        buses are inspected. 
           Sec. 20.  Minnesota Statutes 2002, section 169.4501, 
        subdivision 4, is amended to read: 
           Subd. 4.  [VARIANCE.] The commissioner of public safety may 
        grant a variance to any of the school bus standards to 
        accommodate testing of new equipment related to school buses.  A 
        variance from the standards must be for the sole purpose of 
        testing and evaluating new equipment for increased safety, 
        efficiency, and economy of pupil transportation.  The variance 
        expires 18 months from the date on which it is granted unless 
        the commissioner specifies an earlier expiration date.  The 
        school bus safety advisory committee shall annually review all 
        variances that are granted under this subdivision and consider 
        whether to recommend modifications to the Minnesota school bus 
        equipment standards based on the variances. 
           Sec. 21.  [REPEALER.] 
           (a) Minnesota Statutes 2002, section 126C.55, subdivision 
        5, is repealed. 
           (b) Laws 2001, First Special Session chapter 3, article 4, 
        sections 1 and 2; and Laws 2001, First Special Session chapter 
        6, article 2, section 52, are repealed. 
           Presented to the governor May 27, 2003 
           Signed by the governor May 30, 2003, 3:44 p.m.