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                             CHAPTER 5-H.F.No. 141 
                  An act relating to the operation and financing of 
                  government; providing for early childhood, adult, 
                  family, and kindergarten through grade 12 education 
                  including general education, education excellence, 
                  special programs, facilities and technology, nutrition 
                  and accounting, libraries, early childhood education, 
                  prevention, self-sufficiency and lifelong learning, 
                  state agencies, and technical and conforming 
                  amendments; reestablishing statutory authority for the 
                  Humanities Commission; authorizing certain nonprofit 
                  contracts; reimbursing local governments; authorizing 
                  certain state agencies and constitutional officers to 
                  carry forward unencumbered balances for fiscal year 
                  2005; appropriating money for lets go fishing to 
                  promote opportunities for fishing in the state; 
                  authorizing rulemaking; providing for reports; 
                  appropriating money; amending Minnesota Statutes 2004, 
                  sections 13.32, subdivision 8; 13.321, by adding a 
                  subdivision; 119A.46, subdivisions 1, 2, 3, 8; 
                  120A.05, by adding a subdivision; 120A.22, subdivision 
                  12; 120B.02; 120B.021, by adding a subdivision; 
                  120B.11, subdivisions 1, 2, 3, 4, 5, 8; 120B.13, 
                  subdivisions 1, 3, by adding a subdivision; 120B.22, 
                  subdivision 1; 120B.30, subdivisions 1, 1a, by adding 
                  a subdivision; 120B.31, subdivision 4; 121A.03, 
                  subdivision 1; 121A.06, subdivisions 2, 3; 121A.15, 
                  subdivision 3; 121A.17, subdivisions 1, 5; 121A.19; 
                  121A.41, subdivision 10; 121A.47, subdivision 14; 
                  121A.53; 121A.66, subdivision 5, by adding 
                  subdivisions; 121A.67; 122A.06, subdivision 4; 
                  122A.12, subdivision 2; 122A.18, subdivision 2a; 
                  122A.33; 122A.40, subdivision 5, as amended; 122A.41, 
                  subdivisions 2, as amended, 5a, 14; 122A.413; 
                  122A.414; 122A.415, subdivisions 1, 3; 122A.60, 
                  subdivision 1, by adding subdivisions; 123A.05, 
                  subdivision 2; 123B.02, by adding subdivisions; 
                  123B.04, subdivisions 1, 2; 123B.42, by adding a 
                  subdivision; 123B.49, subdivision 4; 123B.492; 
                  123B.53, subdivision 1; 123B.54; 123B.59, subdivisions 
                  3, 3a; 123B.63, subdivision 2; 123B.71, subdivisions 
                  8, 9, 12; 123B.75, subdivision 5, by adding a 
                  subdivision; 123B.76, subdivision 3; 123B.79, 
                  subdivision 6; 123B.81, subdivision 1; 123B.82; 
                  123B.83, subdivision 2; 123B.88, by adding a 
                  subdivision; 123B.92, subdivisions 1, 5; 124D.09, 
                  subdivision 12; 124D.095, subdivisions 2, 4, 8, by 
                  adding a subdivision; 124D.10, subdivisions 4, 6, 15, 
                  23; 124D.11, subdivisions 1, 2, 5, 6; 124D.111, 
                  subdivisions 1, 2; 124D.118, subdivision 4; 124D.135, 
                  subdivisions 1, 5; 124D.15, subdivisions 1, 3, 5, 10, 
                  12, by adding subdivisions; 124D.16, subdivisions 2, 
                  3; 124D.20, subdivisions 3, 5; 124D.40; 124D.454, 
                  subdivision 5; 124D.52, subdivision 3; 124D.531, 
                  subdivisions 1, 4; 124D.66, subdivision 3; 124D.68, 
                  subdivision 9; 124D.69, subdivision 1; 124D.74, 
                  subdivision 1; 124D.81, subdivision 1; 124D.84, 
                  subdivision 1; 125A.11, subdivision 1; 125A.24; 
                  125A.28; 125A.51; 125A.76, subdivision 4; 125A.79, 
                  subdivisions 1, 6; 126C.01, subdivision 11; 126C.05, 
                  by adding a subdivision; 126C.10, subdivisions 1, 2, 
                  13, 13a, 24, 31, by adding subdivisions; 126C.13, 
                  subdivision 4; 126C.15, subdivisions 2, 3; 126C.17, 
                  subdivisions 2, 5, 7, 9, 13; 126C.21, subdivision 4; 
                  126C.40, subdivision 1; 126C.43, subdivisions 2, 3; 
                  126C.457; 126C.48, subdivisions 2, 8; 126C.63, 
                  subdivisions 5, 8; 127A.41, subdivision 8; 127A.45, 
                  subdivisions 2, 10, 11, 12, 13, 14, 16; 127A.47, 
                  subdivisions 7, 8; 127A.49, subdivisions 2, 3; 
                  128C.05, by adding a subdivision; 128C.12, 
                  subdivisions 1, 3; 128D.11, subdivision 9; 134.31, by 
                  adding a subdivision; 179A.03, subdivision 14, as 
                  amended; 260C.201, subdivision 1, as amended; 275.14; 
                  275.16; 469.177, subdivision 9; 475.61, subdivision 4; 
                  Laws 1996, chapter 412, article 5, section 24; Laws 
                  2003, First Special Session chapter 9, article 3, 
                  section 20, subdivision 6, as amended; Laws 2003, 
                  First Special Session chapter 9, article 4, section 
                  29, as amended; proposing coding for new law in 
                  Minnesota Statutes, chapters 120B; 121A; 122A; 123A; 
                  123B; 124D; 125B; 127A; 129C; 138; 171; repealing 
                  Minnesota Statutes 2004, sections 122A.415, 
                  subdivision 2; 123B.83, subdivision 1; 124D.095, 
                  subdivision 9; 124D.15, subdivisions 2, 4, 6, 7, 8, 9, 
                  11, 13; 124D.16, subdivisions 1, 4; 125A.75, 
                  subdivision 8; 126C.42, subdivisions 1, 4; 128C.12, 
                  subdivision 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                               GENERAL EDUCATION 
           Section 1.  Minnesota Statutes 2004, section 120A.05, is 
        amended by adding a subdivision to read: 
           Subd. 10a.  [KINDERGARTEN.] "Kindergarten" means a program 
        designed for pupils five years of age on September 1 of the 
        calendar year in which the school year commences that prepares 
        pupils to enter first grade the following school year.  A 
        program designed for pupils younger than five years of age on 
        September 1 of the calendar year in which the school year 
        commences that prepares pupils to enter kindergarten the 
        following school year is a prekindergarten program. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 123A.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RESERVE REVENUE.] Each district that is a member 
        of an area learning center must reserve revenue in an amount 
        equal to the sum of (1) 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, and 
        the transportation portion of the transition revenue adjustment, 
        times the number of pupil units attending an area learning 
        center program under this section, plus (2) the amount of basic 
        skills revenue generated by pupils attending the area learning 
        center.  The amount of reserved revenue under this subdivision 
        may only be spent on program costs associated with the area 
        learning center.  Compensatory revenue must be allocated 
        according to section 126C.15, subdivision 2.  
           Sec. 3.  Minnesota Statutes 2004, section 123B.75, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [TACONITE REVENUE.] Taconite revenue received in 
        a calendar year by a school district under section 298.28, 
        subdivisions 4, paragraphs (b) and (c), and 11, paragraph (d), 
        is fully recognized in the fiscal year in which the February 
        payment falls. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 4.  Minnesota Statutes 2004, section 123B.76, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXPENDITURES BY BUILDING.] (a) For the purposes 
        of this section, "building" means education site as defined in 
        section 123B.04, subdivision 1.  
           (b) Each district shall maintain separate accounts to 
        identify general fund expenditures, excluding capital 
        expenditures and pupil transportation, for each building.  All 
        expenditures for regular instruction, secondary vocational 
        instruction, and school administration must be reported to the 
        department separately for each building.  All expenditures for 
        special education instruction, instructional support services, 
        and pupil support services provided within a specific building 
        must be reported to the department separately for each 
        building.  Salary expenditures reported by building must reflect 
        actual salaries for staff at the building and must not be based 
        on districtwide averages.  All other general fund expenditures 
        may be reported by building or on a districtwide basis. 
           (c) The department must annually report information showing 
        school district general fund expenditures per pupil by program 
        category for each building and estimated school district general 
        fund revenue generated by pupils attending each building on its 
        Web site.  For purposes of this report: 
           (1) expenditures not required to be reported by building 
        shall be allocated among buildings on a uniform per pupil basis; 
           (2) basic skills revenue shall be allocated according to 
        section 126C.10, subdivision 4; 
           (3) secondary sparsity revenue and elementary sparsity 
        revenue shall be allocated according to section 126C.10, 
        subdivisions 7 and 8; 
           (4) other general education revenue shall be allocated on a 
        uniform per pupil unit basis; 
           (5) first grade preparedness aid shall be allocated 
        according to section 124D.081; 
           (6) state and federal special education aid and Title I aid 
        shall be allocated in proportion to district expenditures for 
        these programs by building; and 
           (7) other general fund revenues shall be allocated on a 
        uniform per pupil basis, except that the department may allocate 
        other revenues attributable to specific buildings directly to 
        those buildings. 
           Sec. 5.  Minnesota Statutes 2004, section 123B.79, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ACCOUNT TRANSFER FOR STATUTORY OPERATING DEBT.] 
        On June 30 of each year, a district may make a permanent 
        transfer from the general fund account entitled "undesignated 
        net unreserved general fund balance since statutory operating 
        debt" to the account entitled "reserved fund balance reserve 
        account for purposes of statutory operating debt reduction."  
        The amount of the transfer is limited to the lesser of (a) the 
        net undesignated operating unreserved general fund balance, or 
        (b) the sum of the remaining statutory operating debt levies 
        authorized for all future years according to section 126C.42, 
        subdivision 1.  If the net undesignated operating unreserved 
        general fund balance is less than zero, the district may not 
        make a transfer.  
           Sec. 6.  Minnesota Statutes 2004, section 123B.81, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OPERATING DEBT.] The "operating debt" of a 
        school district means the net negative undesignated unreserved 
        general fund balance in all school district funds, other than 
        capital expenditure, building construction, debt service, and 
        trust and agency, calculated as of June 30 of each year in 
        accordance with the uniform financial accounting and reporting 
        standards for Minnesota school districts. 
           Sec. 7.  Minnesota Statutes 2004, section 123B.82, is 
        amended to read: 
           123B.82 [REORGANIZATION OPERATING DEBT.] 
           The "reorganization operating debt" of a school district 
        means the net negative undesignated unreserved fund balance 
        balances in all school district funds, other than building 
        construction, debt redemption, and trust and agency, calculated 
        in accordance with the uniform financial accounting and 
        reporting standards for Minnesota school districts as of: 
           (1) June 30 of the fiscal year before the first year that a 
        district receives revenue according to section 123A.39, 
        subdivision 3; or 
           (2) June 30 of the fiscal year before the effective date of 
        reorganization according to section 123A.46 or 123A.48. 
           Sec. 8.  Minnesota Statutes 2004, section 123B.83, 
        subdivision 2, is amended to read: 
           Subd. 2.  [UNDESIGNATED NET UNRESERVED GENERAL FUND 
        BALANCES.] Beginning in fiscal year 1978 and each year 
        thereafter, any A school district not subject to the provisions 
        of subdivision 1 must limit its expenditures so that 
        its undesignated net unreserved general fund balances do balance 
        does not constitute statutory operating debt as defined in 
        section 126C.42. 
           Sec. 9.  Minnesota Statutes 2004, 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; 
           (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 or if 
        resident pupils are not transported, the costs of necessary 
        travel between public and private schools or neutral 
        instructional sites by essential personnel employed by the 
        district's program for children with a disability; 
           (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. 
           For purposes of computing special education base revenue 
        under section 125A.76, subdivision 2, the cost of providing 
        transportation for children with disabilities includes (A) the 
        additional cost of transporting a homeless student from a 
        temporary nonshelter home in another district to the school of 
        origin, or a formerly homeless student from a permanent home in 
        another district to the school of origin but only through the 
        end of the academic year; and (B) depreciation on district-owned 
        school buses purchased after July 1, 2005, and used primarily 
        for transportation of pupils with disabilities, calculated 
        according to paragraph (a), clauses (ii) and (iii).  
        Depreciation costs included in the disabled transportation 
        category must be excluded in calculating the actual expenditure 
        per pupil transported in the regular and excess transportation 
        categories according to paragraph (a). 
           (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 2004, section 123B.92, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISTRICT REPORTS.] (a) Each district must report 
        data to the department as required by the department to account 
        for transportation expenditures.  
           (b) Salaries and fringe benefits of district employees 
        whose primary duties are other than transportation, including 
        central office administrators and staff, building administrators 
        and staff, teachers, social workers, school nurses, and 
        instructional aides, must not be included in a district's 
        transportation expenditures, except that a district may include 
        salaries and benefits according to paragraph (c) for (1) an 
        employee designated as the district transportation director, (2) 
        an employee providing direct support to the transportation 
        director, or (3) an employee providing direct transportation 
        services such as a bus driver or bus aide. 
           (c) Salaries and fringe benefits of other district 
        employees who work part time in transportation and part time in 
        other areas must not be included in a district's transportation 
        expenditures unless the district maintains documentation of the 
        employee's time spent on pupil transportation matters in the 
        form and manner prescribed by the department. 
           (d) Pupil transportation expenditures, excluding 
        expenditures for capital outlay, leased buses, student board and 
        lodging, crossing guards, and aides on buses, must be allocated 
        among transportation categories based on cost-per-mile, 
        cost-per-student, cost-per-hour, or cost-per-route, regardless 
        of whether the transportation services are provided on 
        district-owned or contractor-owned school buses.  Expenditures 
        for school bus driver salaries and fringe benefits may either be 
        directly charged to the appropriate transportation category or 
        may be allocated among transportation categories based on 
        cost-per-mile, cost-per-student, cost-per-hour, or 
        cost-per-route.  Expenditures by private contractors or 
        individuals who provide transportation exclusively in one 
        transportation category must be charged directly to the 
        appropriate transportation category.  Transportation services 
        provided by contractor-owned school bus companies incorporated 
        under different names but owned by the same individual or group 
        of individuals must be treated as the same company for cost 
        allocation purposes. 
           [EFFECTIVE DATE.] This section is effective for expenditure 
        reporting for fiscal year 2006. 
           Sec. 11.  Minnesota Statutes 2004, section 124D.68, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ENROLLMENT VERIFICATION.] (a) For a pupil 
        attending an eligible program full time under subdivision 3, 
        paragraph (d), the department must pay 90 percent of the 
        district's average general education revenue less basic skills 
        revenue to the eligible program and ten percent of the 
        district's average general education revenue less basic skills 
        revenue to the contracting district within 30 days after the 
        eligible program verifies enrollment using the form provided by 
        the department.  For a pupil attending an eligible program part 
        time, revenue, excluding compensatory revenue, shall be reduced 
        proportionately, according to the amount of time the pupil 
        attends the program, and the payments to the eligible program 
        and the contracting district shall be reduced accordingly.  A 
        pupil for whom payment is made according to this section may not 
        be counted by any district for any purpose other than 
        computation of general education revenue.  If payment is made 
        for a pupil under this subdivision, a district shall not 
        reimburse a program under section 124D.69 for the same 
        pupil.  The basic skills revenue shall be paid generated by 
        pupils attending the eligible program according to section 
        126C.10, subdivision 4, shall be paid to the eligible program. 
           (b) The department must pay up to 100 percent of the 
        revenue to the eligible program if there is an agreement to that 
        effect between the school district and the eligible program. 
           (c) Notwithstanding paragraphs (a) and (b), for an eligible 
        program that provides chemical treatment services to students, 
        the department must pay 100 percent of the revenue to the 
        eligible program. 
           Sec. 12.  Minnesota Statutes 2004, section 124D.69, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AID.] If a pupil enrolls in an alternative 
        program, eligible under section 124D.68, subdivision 3, 
        paragraph (d), or subdivision 4, operated by a private 
        organization that has contracted with a school district to 
        provide educational services for eligible pupils under section 
        124D.68, subdivision 2, the district contracting with the 
        private organization must reimburse the provider an amount equal 
        to the sum of (1) at least 95 percent of the district's average 
        general education less basic skills revenue per pupil unit times 
        the number of pupil units for pupils attending the program., and 
        (2) the amount of basic skills revenue shall be paid generated 
        by pupils attending the program according to section 126C.10, 
        subdivision 4.  Compensatory revenue must be allocated according 
        to section 126C.15, subdivision 2.  For a pupil attending the 
        program part time, the revenue paid to the program, excluding 
        compensatory revenue, must be reduced proportionately, according 
        to the amount of time the pupil attends the program, and revenue 
        paid to the district shall be reduced accordingly.  Pupils for 
        whom a district provides reimbursement may not be counted by the 
        district for any purpose other than computation of general 
        education revenue.  If payment is made to a district or program 
        for a pupil under this section, the department must not make a 
        payment for the same pupil under section 124D.68, subdivision 9. 
        Notwithstanding sections 125A.15, 125A.51, and 125A.515, general 
        education revenue for a student who receives educational 
        services under this section shall be paid according to this 
        section. 
           Sec. 13.  Minnesota Statutes 2004, section 125A.51, is 
        amended to read: 
           125A.51 [PLACEMENT OF CHILDREN WITHOUT DISABILITIES; 
        EDUCATION AND TRANSPORTATION.] 
           The responsibility for providing instruction and 
        transportation for a pupil without a disability who has a 
        short-term or temporary physical or emotional illness or 
        disability, as determined by the standards of the commissioner, 
        and who is temporarily placed for care and treatment for that 
        illness or disability, must be determined as provided in this 
        section.  
           (a) The school district of residence of the pupil is the 
        district in which the pupil's parent or guardian resides. 
           (b) When parental rights have been terminated by court 
        order, the legal residence of a child placed in a residential or 
        foster facility for care and treatment is the district in which 
        the child resides. 
           (c) Before the placement of a pupil for care and treatment, 
        the district of residence must be notified and provided an 
        opportunity to participate in the placement decision.  When an 
        immediate emergency placement is necessary and time does not 
        permit resident district participation in the placement 
        decision, the district in which the pupil is temporarily placed, 
        if different from the district of residence, must notify the 
        district of residence of the emergency placement within 15 days 
        of the placement.  
           (d) When a pupil without a disability is temporarily placed 
        for care and treatment in a day program and the pupil continues 
        to live within the district of residence during the care and 
        treatment, the district of residence must provide instruction 
        and necessary transportation to and from the treatment facility 
        for the pupil.  Transportation shall only be provided by the 
        district during regular operating hours of the district.  The 
        district may provide the instruction at a school within the 
        district of residence, at the pupil's residence, or in the case 
        of a placement outside of the resident district, in the district 
        in which the day treatment program is located by paying tuition 
        to that district.  The district of placement may contract with a 
        facility to provide instruction by teachers licensed by the 
        state Board of Teaching.  
           (e) When a pupil without a disability is temporarily placed 
        in a residential program for care and treatment, the district in 
        which the pupil is placed must provide instruction for the pupil 
        and necessary transportation while the pupil is receiving 
        instruction, and in the case of a placement outside of the 
        district of residence, the nonresident district must bill the 
        district of residence for the actual cost of providing the 
        instruction for the regular school year and for summer school, 
        excluding transportation costs. 
           (f) Notwithstanding paragraph (e), if the pupil is homeless 
        and placed in a public or private homeless shelter, then the 
        district that enrolls the pupil under section 127A.47, 
        subdivision 2, shall provide the transportation, unless the 
        district that enrolls the pupil and the district in which the 
        pupil is temporarily placed agree that the district in which the 
        pupil is temporarily placed shall provide transportation.  When 
        a pupil without a disability is temporarily placed in a 
        residential program outside the district of residence, the 
        administrator of the court placing the pupil must send timely 
        written notice of the placement to the district of residence.  
        The district of placement may contract with a residential 
        facility to provide instruction by teachers licensed by the 
        state Board of Teaching. For purposes of this section, the state 
        correctional facilities operated on a fee-for-service basis are 
        considered to be residential programs for care and treatment. 
           (f) (g) The district of residence must include the pupil in 
        its residence count of pupil units and pay tuition as provided 
        in section 123A.488 to the district providing the instruction.  
        Transportation costs must be paid by the district providing the 
        transportation and the state must pay transportation aid to that 
        district.  For purposes of computing state transportation aid, 
        pupils governed by this subdivision must be included in the 
        disabled transportation category if the pupils cannot be 
        transported on a regular school bus route without special 
        accommodations.  
           Sec. 14.  Minnesota Statutes 2004, section 126C.01, 
        subdivision 11, is amended to read: 
           Subd. 11.  [NET UNAPPROPRIATED OPERATING UNRESERVED GENERAL 
        FUND BALANCE.] "Net unappropriated operating unreserved general 
        fund balance" means the sum of the unreserved general fund 
        balances in the general, food service, and community service 
        funds minus the balances reserved for statutory operating debt 
        reduction, bus purchase, severance pay, taconite, unemployment 
        benefits, maintenance levy reduction, operating capital, 
        disabled access, health and safety, balance and encumbrances, 
        computed as of June 30 each year. 
           Sec. 15.  Minnesota Statutes 2004, section 126C.05, is 
        amended by adding a subdivision to read: 
           Subd. 20.  [PROJECT-BASED AVERAGE DAILY MEMBERSHIP.] (a) To 
        receive general education revenue for a pupil enrolled in a 
        public school with a project-based program, a school must meet 
        the requirements in this paragraph.  The school must: 
           (1) register with the commissioner as a project-based 
        program by May 30 of the preceding fiscal year; 
           (2) provide a minimum teacher contact of no less than one 
        hour per week per project-based credit for each pupil; 
           (3) maintain a record system that shows when each credit or 
        portion thereof was reported for membership for each pupil; and 
           (4) report pupil membership consistent with paragraph (b). 
           (b) The commissioner must develop a formula for reporting 
        pupil membership to compute average daily membership for each 
        registered project-based school.  Average daily membership for a 
        pupil in a registered project-based program is the lesser of: 
           (1) 1.0; or 
           (2) the ratio of (i) the number of membership hours 
        generated by project-based credits completed during the school 
        year plus membership hours generated by credits completed in a 
        seat-based setting to (ii) the annual required instructional 
        hours at that grade level.  Membership hours for a partially 
        completed project-based credit must be prorated. 
           Sec. 16.  Minnesota Statutes 2004, section 126C.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
        year 2003, 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 2006 and later, the general 
        education revenue for each district equals the sum of the 
        district's basic revenue, extended time revenue, gifted and 
        talented revenue, basic skills revenue, training and experience 
        revenue, secondary sparsity revenue, elementary sparsity 
        revenue, transportation sparsity revenue, total operating 
        capital revenue, equity revenue, alternative teacher 
        compensation revenue, and transition revenue. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 17.  Minnesota Statutes 2004, section 126C.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
        district equals the formula allowance times the adjusted 
        marginal cost pupil units for the school year.  The formula 
        allowance for fiscal year 2001 2005 is $3,964 $4,601.  The 
        formula allowance for fiscal year 2002 2006 is $4,068 $4,783. 
        The formula allowance for fiscal year 2003 2007 and subsequent 
        years is $4,601 $4,974. 
           Sec. 18.  Minnesota Statutes 2004, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [GIFTED AND TALENTED REVENUE.] Gifted and 
        talented revenue for each district equals $4 times the 
        district's adjusted marginal cost pupil units for fiscal year 
        2006 and $9 for fiscal year 2007 and later.  A school district 
        must reserve gifted and talented revenue and, consistent with 
        section 120B.15, must spend the revenue only to: 
           (1) identify gifted and talented students; 
           (2) provide education programs for gifted and talented 
        students; or 
           (3) provide staff development to prepare teachers to best 
        meet the unique needs of gifted and talented students. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006 and later. 
           Sec. 19.  Minnesota Statutes 2004, section 126C.10, 
        subdivision 13, is amended to read: 
           Subd. 13.  [TOTAL OPERATING CAPITAL REVENUE.] (a) For 
        fiscal year 2000 and thereafter, Total operating capital revenue 
        for a district equals the amount determined under paragraph (b) 
        or (c), plus $73 times the adjusted marginal cost pupil units 
        for the school year.  The revenue must be placed in a reserved 
        account in the general fund and may only be used according 
        to paragraph (d) or subdivision 14. 
           (b) For fiscal years 2000 and later, Capital revenue for a 
        district equals $100 times the district's maintenance cost index 
        times its adjusted marginal cost pupil units for the school year.
           (c) For fiscal years 2000 and later, The revenue for a 
        district that operates a program under section 124D.128, is 
        increased by an amount equal to $30 times the number of marginal 
        cost pupil units served at the site where the program is 
        implemented.  
           (d) For fiscal years 2001, 2002, and 2003, the district 
        must reserve an amount equal to $5 per adjusted marginal cost 
        pupil unit for telecommunication access costs.  Reserve revenue 
        under this paragraph must first be used to pay for ongoing or 
        recurring telecommunication access costs, including access to 
        data and video connections, including Internet access.  Any 
        revenue remaining after covering all ongoing or recurring access 
        costs may be used for computer hardware or equipment. 
           Sec. 20.  Minnesota Statutes 2004, section 126C.10, 
        subdivision 13a, is amended to read: 
           Subd. 13a.  [OPERATING CAPITAL LEVY.] To obtain operating 
        capital revenue for fiscal year 2005 2007 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 
        cost pupil unit to $22,222 the operating capital equalizing 
        factor.  The operating capital equalizing factor equals $22,222 
        for fiscal year 2006, and $10,700 for fiscal year 2007 and later.
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2007. 
           Sec. 21.  Minnesota Statutes 2004, 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) $13, plus (ii) 
        $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 $13. 
           (d) A school district's equity revenue is increased by the 
        greater of zero or an amount equal to the district's resident 
        marginal pupil units times the difference between ten percent of 
        the statewide average amount of referendum revenue per resident 
        marginal cost pupil unit for that year and the district's 
        referendum revenue per resident marginal cost pupil unit.  A 
        school district's revenue under this paragraph must not exceed 
        $100,000 for that year. 
           (e) A school district's equity revenue for a school 
        district located in the metro equity region equals the amount 
        computed in paragraphs (b), (c), and (d) multiplied by 1.25.  
           (f) For fiscal year 2007 and later, notwithstanding 
        paragraph (a), clause (2), a school district that has per pupil 
        referendum revenue below the 95th percentile qualifies for 
        additional equity revenue equal to $46 times its adjusted 
        marginal cost pupil unit. 
           (g) A district that does not qualify for revenue under 
        paragraph (f) qualifies for equity revenue equal to one-half of 
        the per pupil allowance in paragraph (f) times its adjusted 
        marginal cost pupil units. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 22.  Minnesota Statutes 2004, section 126C.10, 
        subdivision 31, is amended 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 2006 and later equals the sum of (1) the product of 
        the district's transition allowance times the district's 
        adjusted marginal cost pupil units. plus (2) the amount of 
        referendum revenue under section 126C.17 and general education 
        revenue, excluding transition revenue, for fiscal year 2004 
        attributable to pupils four or five years of age on September 1, 
        2003, enrolled in a prekindergarten program implemented by the 
        district before July 1, 2003, and reported as kindergarten 
        pupils under section 126C.05, subdivision 1, for fiscal year 
        2004, plus (3) the amount of compensatory education revenue 
        under subdivision 3 for fiscal year 2005 attributable to pupils 
        four years of age on September 1, 2003, enrolled in a 
        prekindergarten program implemented by the district before July 
        1, 2003, and reported as kindergarten pupils under section 
        126C.05, subdivision 1, for fiscal year 2004 multiplied by .04. 
           Sec. 23.  Minnesota Statutes 2004, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 34.  [BASIC ALTERNATIVE TEACHER COMPENSATION AID.] (a)
        For fiscal year 2006, the basic alternative teacher compensation 
        aid for a school district or an intermediate school district 
        with a plan approved under section 122A.414, subdivision 2b, 
        equals the alternative teacher compensation revenue under 
        section 122A.415, subdivision 1.  The basic alternative teacher 
        compensation aid for a charter school with an approved plan 
        under section 122A.414, subdivision 2b, equals $260 times the 
        number of pupils enrolled in the school on October 1 of the 
        previous school year, or on October 1 of the current fiscal year 
        for a charter school in the first year of operation.  
           (b) For fiscal year 2007 and later, the basic alternative 
        teacher compensation aid for a school district with a plan 
        approved under section 122A.414, subdivision 2b, equals 73.1 
        percent of the alternative teacher compensation revenue under 
        section 122A.415, subdivision 1.  The basic alternative teacher 
        compensation aid for an intermediate school district or charter 
        school with a plan approved under section 122A.414, subdivision 
        2b, and subdivision 2a, if the recipient is a charter school, 
        equals $260 times the number of pupils enrolled in the school on 
        October 1 of the previous fiscal year, or on October 1 of the 
        current fiscal year for a charter school in the first year of 
        operation, times the ratio of the sum of the alternative teacher 
        compensation aid and alternative teacher compensation levy for 
        all participating school districts to the maximum alternative 
        teacher compensation revenue for those districts under section 
        122A.415, subdivision 1. 
           (c) Notwithstanding paragraphs (a) and (b) and section 
        122A.415, subdivision 1, the state total basic alternative 
        teacher compensation aid entitlement must not exceed $19,329,000 
        for fiscal year 2006 and $75,636,000 for fiscal year 2007 and 
        later.  The commissioner must limit the amount of alternative 
        teacher compensation aid approved under section 122A.415 so as 
        not to exceed these limits. 
           Sec. 24.  Minnesota Statutes 2004, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 35.  [ALTERNATIVE TEACHER COMPENSATION LEVY.] For 
        fiscal year 2007 and later, the alternative teacher compensation 
        levy for a district receiving basic alternative teacher 
        compensation aid equals the product of (1) the difference 
        between the district's alternative teacher compensation revenue 
        and the district's basic alternative teacher compensation aid 
        times (2) the lesser of one or the ratio of the district's 
        adjusted net tax capacity per adjusted pupil unit to $5,913. 
           Sec. 25.  Minnesota Statutes 2004, section 126C.10, is 
        amended by adding a subdivision to read: 
           Subd. 36.  [ALTERNATIVE TEACHER COMPENSATION AID.] (a) For 
        fiscal year 2007 and later, a district's alternative teacher 
        compensation equalization aid equals the district's alternative 
        teacher compensation revenue minus the district's basic 
        alternative teacher compensation aid minus the district's 
        alternative teacher compensation levy.  If a district does not 
        levy the entire amount permitted, the alternative teacher 
        compensation equalization aid must be reduced in proportion to 
        the actual amount levied. 
           (b) A district's alternative teacher compensation aid 
        equals the sum of the district's basic alternative teacher 
        compensation aid and the district's alternative teacher 
        compensation equalization aid. 
           Sec. 26.  Minnesota Statutes 2004, 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; 
           (3) referendum aid according to section 126C.17; and 
           (4) online learning aid according to section 126C.24. 
           (b) For fiscal year 2005 and later 2006, a district's 
        general education aid is the sum of the following amounts: 
           (1) general education revenue, excluding equity revenue, 
        total operating capital, and transition revenue; 
           (2) operating capital aid according to section 126C.10, 
        subdivision 13b; 
           (3) equity aid according to section 126C.10, subdivision 
        30; 
           (4) transition aid according to section 126C.10, 
        subdivision 33; 
           (5) shared time aid according to section 126C.01, 
        subdivision 7; 
           (6) referendum aid according to section 126C.17; and 
           (7) online learning aid according to section 126C.24 
        124D.096. 
           (b) For fiscal year 2007 and later, a district's general 
        education aid is the sum of the following amounts: 
           (1) general education revenue, excluding equity revenue, 
        total operating capital revenue, alternative teacher 
        compensation revenue, and transition revenue; 
           (2) operating capital aid under section 126C.10, 
        subdivision 13b; 
           (3) equity aid under section 126C.10, subdivision 30; 
           (4) alternative teacher compensation aid under section 
        126C.10, subdivision 36; 
           (5) transition aid under section 126C.10, subdivision 33; 
           (6) shared time aid under section 126C.01, subdivision 7; 
           (7) referendum aid under section 126C.17; and 
           (8) online learning aid according to section 124D.096. 
           Sec. 27.  Minnesota Statutes 2004, section 126C.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BUILDING ALLOCATION.] (a) A district must 
        allocate its compensatory revenue to each school building in the 
        district where the children who have generated the revenue are 
        served unless the school district has received permission under 
        section 50 to allocate compensatory revenue according to student 
        performance measures developed by the school board. 
           (b) Notwithstanding paragraph (a), a district may allocate 
        up to five percent of the amount of compensatory revenue that 
        the district received during the previous fiscal year receives 
        to school sites according to a plan adopted by the school board. 
           (c) For the purposes of this section and section 126C.05, 
        subdivision 3, "building" means education site as defined in 
        section 123B.04, subdivision 1. 
           (d) If the pupil is served at a site other than one owned 
        and operated by the district, the revenue shall be paid to the 
        district and used for services for pupils who generate the 
        revenue.  
           [EFFECTIVE DATE.] This section is retroactively effective 
        from July 1, 2005, for revenue for fiscal year 2006. 
           Sec. 28.  Minnesota Statutes 2004, section 126C.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RECOMMENDATION.] A school site decision-making 
        team, as defined in section 123B.04, subdivision 2, paragraph 
        (a), or the instruction and curriculum advisory committee under 
        section 120B.11, if the school has no school site decision team, 
        shall recommend how the compensatory education revenue will be 
        used to carry out the purpose of this section.  A school 
        district that has received permission under section 50 to 
        allocate compensatory revenue according to school performance 
        measures shall share its plan for the distribution of 
        compensatory revenue with the school site decision team.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005, for revenue for fiscal year 2006. 
           Sec. 29.  Minnesota Statutes 2004, section 126C.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
        subdivision 1, for fiscal year 2003, 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 
        2007 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) (b) plus (ii) its 
        referendum conversion allowance for fiscal year 2003, minus 
        (iii) $415 $215; 
           (2) the greater of (i) 18.6 26 percent of the formula 
        allowance or (ii) $855.79 $1,294 times the annual inflationary 
        increase as calculated under paragraph (c) (b); or 
           (3) for a newly reorganized district created after July 1, 
        2002 2006, 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) (b) 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) (a), 
        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 revenue for 
        fiscal year 2007. 
           Sec. 30.  Minnesota Statutes 2004, 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.  For fiscal 
        year 2007, a district's first tier referendum equalization 
        allowance equals the lesser of the district's referendum 
        allowance under subdivision 1 or $600. 
           For fiscal year 2008 and later, a district's first tier 
        referendum equalization allowance equals the lesser of the 
        district's referendum allowance under subdivision 1 or $700.  
           (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) For fiscal year 2006, a district's second tier 
        referendum equalization allowance equals the lesser of the 
        district's referendum allowance under subdivision 1 or 18.6 
        percent of the formula allowance, minus the district's first 
        tier referendum equalization allowance.  For fiscal year 2007 
        and later, a district's second tier referendum equalization 
        allowance equals the lesser of the district's referendum 
        allowance under subdivision 1 or 26 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. 31.  Minnesota Statutes 2004, 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 18.6 26 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. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2007. 
           Sec. 32.  Minnesota Statutes 2004, 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 ballot, including a ballot on the 
        question to revoke or reduce the increased revenue amount under 
        paragraph (c), must abbreviate the term "per resident marginal 
        cost pupil unit" as "per pupil."  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 revenue amount must state 
        the amount per resident marginal cost pupil unit by which the 
        authority is to be reduced.  Revenue authority approved by the 
        voters of the district pursuant to paragraph (a) must be 
        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. 33.  Minnesota Statutes 2004, 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. 34.  Minnesota Statutes 2004, section 126C.21, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TACONITE DEDUCTIONS.] (1) Notwithstanding any 
        provisions of any other law to the contrary, the adjusted net 
        tax capacity used in calculating general education aid may 
        include only that property that is currently taxable in the 
        district.  
           (2) For districts that received payments have revenue under 
        sections 298.018; 298.225; 298.24 to 298.28, excluding 298.26 
        and 298.28, subdivision 4, paragraph (d); 298.34 to 298.39; 
        298.391 to 298.396; and 298.405; and 477A.15, or any law 
        imposing a tax upon severed mineral values; or recognized 
        revenue under section 477A.15;, the general education aid must 
        be reduced in the final adjustment payment by (1) the difference 
        between the dollar amount of the payments received revenue 
        recognized pursuant to those sections, or revenue recognized 
        under section 477A.15 in for the fiscal year to which the final 
        adjustment is attributable and, less (2) the amount that was 
        calculated, pursuant to section 126C.48, subdivision 8, as a 
        reduction of the levy attributable to the fiscal year to which 
        the final adjustment is attributable.  If the final adjustment 
        of a district's general education aid for a fiscal year is a 
        negative amount because of this clause subdivision, the next 
        fiscal year's general education aid to that district must be 
        reduced by this negative amount in the following manner:  there 
        must be withheld from each scheduled general education aid 
        payment due the district in such fiscal year, 15 percent of the 
        total negative amount, until the total negative amount has been 
        withheld.  The amount reduced from general education aid 
        pursuant to this clause subdivision must be recognized as reduce 
        revenue in the fiscal year to which the final adjustment payment 
        is attributable. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 35.  Minnesota Statutes 2004, 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 $90 $100 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 Education after April 1, 1998, 
        the term "instructional purpose" as used in this subdivision 
        excludes expenditures on stadiums. 
           (g) The commissioner of 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 $22.50 $25 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). 
           Sec. 36.  Minnesota Statutes 2004, 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 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 (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 2006.  
           Sec. 37.  Minnesota Statutes 2004, section 126C.43, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
        percent of the 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 2006.  
           Sec. 38.  Minnesota Statutes 2004, section 126C.48, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE TO COMMISSIONER; FORMS.] By October 7 of 
        each year each district must notify the commissioner of the 
        proposed levies in compliance with the levy limitations of this 
        chapter and chapters 120B, 122A, 123A, 123B, 124D, 125A, 127A, 
        and 136D.  By January 15 7 of each year each district must 
        notify the commissioner of the final levies certified.  The 
        commissioner shall prescribe the form of these notifications and 
        may request any additional information necessary to compute 
        certified levy amounts. 
           Sec. 39.  Minnesota Statutes 2004, section 126C.48, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
        Reductions in levies pursuant to subdivision 1 must be made 
        prior to the reductions in clause (2). 
           (2) Notwithstanding any other law to the contrary, 
        districts which received payments that have revenue pursuant to 
        sections 298.018; 298.225; 298.24 to 298.28, except an amount 
        distributed under section sections 298.26; 298.28, subdivision 
        4, paragraph paragraphs (c), clause (ii), and (d); 298.34 to 
        298.39; 298.391 to 298.396; 298.405; 477A.15; and any law 
        imposing a tax upon severed mineral values; or recognized 
        revenue under section 477A.15 must not include a portion of 
        these aids in their permissible levies pursuant to those 
        sections, but instead must reduce the permissible levies 
        authorized by this chapter and chapters 120B, 122A, 123A, 123B, 
        124A, 124D, 125A, and 127A by the greater of the following: 95 
        percent of the previous year's revenue specified under this 
        clause. 
           (a) an amount equal to 50 percent of the total dollar 
        amount of the payments received pursuant to those sections or 
        revenue recognized under section 477A.15 in the previous fiscal 
        year; or 
           (b) an amount equal to the total dollar amount of the 
        payments received pursuant to those sections or revenue 
        recognized under section 477A.15 in the previous fiscal year 
        less the product of the same dollar amount of payments or 
        revenue times five percent. 
           For levy year 2002 only, 77 percent of the amounts 
        distributed under section 298.225 and 298.28, and 100 percent of 
        the amounts distributed under sections 298.018; 298.34 to 
        298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
        upon severed mineral values, or recognized revenue under section 
        477A.15, shall be used for purposes of the calculations under 
        this paragraph.  For levy year 2003 only, the levy reductions 
        under this subdivision must be calculated as if section 298.28, 
        subdivision 4, paragraph (f), did not apply for the 2003 
        distribution. 
           (3) The amount of any voter approved referendum, facilities 
        down payment, and debt levies shall not be reduced by more than 
        50 percent under this subdivision.  In administering this 
        paragraph, the commissioner shall first reduce the nonvoter 
        approved levies of a district; then, if any payments, severed 
        mineral value tax revenue or recognized revenue under paragraph 
        (2) remains, the commissioner shall reduce any voter approved 
        referendum levies authorized under section 126C.17; then, if any 
        payments, severed mineral value tax revenue or recognized 
        revenue under paragraph (2) remains, the commissioner shall 
        reduce any voter approved facilities down payment levies 
        authorized under section 123B.63 and then, if any payments, 
        severed mineral value tax revenue or recognized revenue under 
        paragraph (2) remains, the commissioner shall reduce any voter 
        approved debt levies.  
           (4) Before computing the reduction pursuant to this 
        subdivision of the health and safety levy authorized by sections 
        123B.57 and 126C.40, subdivision 5, the commissioner shall 
        ascertain from each affected school district the amount it 
        proposes to levy under each section or subdivision.  The 
        reduction shall be computed on the basis of the amount so 
        ascertained. 
           (5) To the extent the levy reduction calculated under 
        paragraph (2) exceeds the limitation in paragraph (3), an amount 
        equal to the excess must be distributed from the school 
        district's distribution under sections 298.225, 298.28, and 
        477A.15 in the following year to the cities and townships within 
        the school district in the proportion that their taxable net tax 
        capacity within the school district bears to the taxable net tax 
        capacity of the school district for property taxes payable in 
        the year prior to distribution.  No city or township shall 
        receive a distribution greater than its levy for taxes payable 
        in the year prior to distribution.  The commissioner of revenue 
        shall certify the distributions of cities and towns under this 
        paragraph to the county auditor by September 30 of the year 
        preceding distribution.  The county auditor shall reduce the 
        proposed and final levies of cities and towns receiving 
        distributions by the amount of their distribution.  
        Distributions to the cities and towns shall be made at the times 
        provided under section 298.27. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 40.  Minnesota Statutes 2004, section 127A.45, 
        subdivision 11, is amended to read: 
           Subd. 11.  [PAYMENT PERCENTAGE FOR REIMBURSEMENT AIDS.] One 
        hundred percent of the aid for the previous fiscal year must be 
        paid in the current year for the following aids:  
        telecommunications/Internet access equity and according to 
        section 125B.26, special education special pupil aid according 
        to section 125A.75, subdivision 3, aid for litigation costs 
        according to section 125A.75, subdivision 8, aid for 
        court-placed special education expenses according to section 
        125A.79, subdivision 4, and aid for special education 
        out-of-state tuition according to section 125A.79, subdivision 
        8, and shared time aid according to section 126C.01, subdivision 
        7. 
           Sec. 41.  Minnesota Statutes 2004, 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 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 third preceding year according to the following:  
           (A) section 123B.57, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (B) section 124D.20, if the district received aid for 
        community education programs according to that section for the 
        second preceding year; 
           (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 
           (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 third preceding December, plus or minus auditor's 
        adjustments. 
           Sec. 42.  Minnesota Statutes 2004, 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 sections 
        469.176, subdivision 2, and 469.177, subdivision 9, 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 123B.57, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (B) section 124D.20, if the district received aid for 
        community education programs according to that section for the 
        second preceding year; 
           (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 
           (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. 43.  Minnesota Statutes 2004, section 275.14, is 
        amended to read: 
           275.14 [CENSUS.] 
           For the purposes of sections 275.124 to 275.16, the 
        population of a city shall be that established by the last 
        federal census, by a special census taken by the United States 
        Bureau of the Census, by an estimate made by the Metropolitan 
        Council, or by the state demographer made according to section 
        4A.02, whichever has the latest stated date of count or 
        estimate, before July 2 of the current levy year.  The 
        population of a school district must be as certified by the 
        Department of Education from the most recent federal census.  In 
        any year in which no federal census is taken pursuant to law in 
        any school district affected by sections 275.124 to 
        275.16 124D.20 and 124D.531 a population estimate may be made 
        and submitted to the state demographer for approval as 
        hereinafter provided.  The school board of a school district, in 
        case it desires a population estimate, shall pass a resolution 
        by July 1 containing a current estimate of the population of the 
        school district and shall submit the resolution to the state 
        demographer.  The resolution shall describe the criteria on 
        which the estimate is based and shall be in a form and 
        accompanied by the data prescribed by the state demographer.  
        The state demographer shall determine whether or not the 
        criteria and process described in the resolution provide a 
        reasonable basis for the population estimate and shall inform 
        the school district of that determination within 30 days of 
        receipt of the resolution.  If the state demographer determines 
        that the criteria and process described in the resolution do not 
        provide a reasonable basis for the population estimate, the 
        resolution shall be of no effect.  If the state demographer 
        determines that the criteria and process do provide a reasonable 
        basis for the population estimate, the estimate shall be treated 
        as the population of the school district for the purposes of 
        sections 275.124 to 275.16 124D.20 and 124D.531 until the 
        population of the school district has been established by the 
        next federal census or until a more current population estimate 
        is prepared and approved as provided herein, whichever occurs 
        first.  The state demographer shall establish guidelines for 
        acceptable population estimation criteria and processes.  The 
        state demographer shall issue advisory opinions upon request in 
        writing to cities or school districts as to proposed criteria 
        and processes prior to their implementation in an estimation.  
        The advisory opinion shall be final and binding upon the 
        demographer unless the demographer can show cause why it should 
        not be final and binding.  
           In the event that a census tract employed in taking a 
        federal or local census overlaps two or more school districts, 
        the county auditor shall, on the basis of the best information 
        available, allocate the population of said census tract to the 
        school districts involved.  
           The term "council," as used in sections 275.124 to 275.16, 
        means any board or body, whether composed of one or more 
        branches, authorized to make ordinances for the government of a 
        city within this state.  
           Sec. 44.  Minnesota Statutes 2004, section 275.16, is 
        amended to read: 
           275.16 [COUNTY AUDITOR TO FIX AMOUNT OF LEVY.] 
           If any such municipality shall return to the county auditor 
        a levy greater than permitted by chapters 123A, 123B, 124D, 
        126C, and 136C, and 136D, sections 275.124 to 275.16, and 275.70 
        to 275.74, such county auditor shall extend only such amount of 
        taxes as the limitations herein prescribed will permit; 
        provided, if such levy shall include any levy for the payment of 
        bonded indebtedness or judgments, such levies for bonded 
        indebtedness or judgments shall be extended in full, and the 
        remainder of the levies shall be reduced so that the total 
        thereof, including levies for bonds and judgments, shall not 
        exceed such amount as the limitations herein prescribed will 
        permit. 
           Sec. 45.  Minnesota Statutes 2004, section 469.177, 
        subdivision 9, is amended to read: 
           Subd. 9.  [DISTRIBUTIONS OF EXCESS TAXES ON CAPTURED NET 
        TAX CAPACITY.] (a) If the amount of tax paid on captured net tax 
        capacity exceeds the amount of tax increment, the county auditor 
        shall distribute the excess to the municipality, county, and 
        school district as follows:  each governmental unit's share of 
        the excess equals 
           (1) the total amount of the excess for the tax increment 
        financing district, multiplied by 
           (2) a fraction, the numerator of which is the current local 
        tax rate of the governmental unit less the governmental unit's 
        local tax rate for the year the original local tax rate for the 
        district was certified (in no case may this amount be less than 
        zero) and the denominator of which is the sum of the numerators 
        for the municipality, county, and school district. 
        If the entire increase in the local tax rate is attributable to 
        a taxing district, other than the municipality, county, or 
        school district, then the excess must be distributed to the 
        municipality, county, and school district in proportion to their 
        respective local tax rates. 
           (b) The amounts distributed shall be deducted in computing 
        the levy limits of the taxing district for the succeeding 
        taxable year.  In the case of a school district, only the 
        proportion of the excess taxes attributable to unequalized 
        levies that are subject to a fixed dollar amount levy limit 
        shall be deducted from the levy limit. 
           (c) In the case of distributions to a school district that 
        are attributable to state equalized levies, the county auditor 
        shall report amounts distributed to the commissioner of 
        education in the same manner as provided for excess increments 
        under section 469.176, subdivision 2, and the distribution shall 
        be deducted from the school district's state aid payments and 
        levy limitation according to section 127A.49, subdivision 3. 
           Sec. 46.  [KINDERGARTEN REPORTING.] 
           Notwithstanding Minnesota Statutes, sections 120A.05, 
        subdivision 10a; 120A.20, subdivision 1; and 124D.02, subdivision 
        1, pupils four or five years of age on September 1 of the 
        calendar year in which the school year commences and enrolled in 
        a prekindergarten program implemented by the district before 
        July 1, 2003, may be reported as kindergarten pupils under 
        Minnesota Statutes, section 126C.05, subdivision 1, for fiscal 
        years 2004 and earlier. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to fiscal years 2004 and 
        earlier. 
           Sec. 47.  [ALTERNATIVE TEACHER COMPENSATION REVENUE 
        GUARANTEE.] 
           Notwithstanding Minnesota Statutes, sections 122A.415, 
        subdivision 1, and 126C.10, subdivision 34, paragraphs (a) and 
        (b), a school district that received alternative teacher 
        compensation aid for fiscal year 2005, but does not qualify for 
        alternative teacher compensation revenue for all sites in the 
        district for fiscal year 2006 or 2007, shall receive additional 
        basic alternative teacher compensation aid for that fiscal year 
        equal to the lesser of the amount of alternative teacher 
        compensation aid it received for fiscal year 2005 or the amount 
        it would have received for that fiscal year under Minnesota 
        Statutes 2004, section 122A.415, subdivision 1, for teachers at 
        sites not qualifying for alternative teacher compensation 
        revenue for that fiscal year, if the district submits a timely 
        application and the commissioner determines that the district 
        continues to implement an alternative teacher compensation 
        system, consistent with its application under Minnesota Statutes 
        2004, section 122A.415, for fiscal year 2005.  The additional 
        basic alternative teacher compensation aid under this section 
        must not be used in calculating the alternative teacher 
        compensation levy under Minnesota Statutes, section 126C.10, 
        subdivision 35.  This section applies only to fiscal years 2006 
        and 2007 and does not apply to later fiscal years.  
           Sec. 48.  [INITIAL APPROVAL PROCESS.] 
           Notwithstanding Minnesota Statutes, sections 122A.414, 
        subdivision 2b, and 122A.415, subdivision 3, paragraph (b), or 
        other law to the contrary, until July 1, 2006, only, the 
        commissioner of education may accept, and subsequently approve 
        an application to participate in the alternative teacher 
        compensation system under Minnesota Statutes, section 122A.414, 
        based on the proportionate distribution of the student 
        population in the seven-county metropolitan area and in rural 
        Minnesota.  The commissioner must provide timely public notice 
        of the applicants the commissioner approves under this section. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2007. 
           Sec. 49.  [SCHOOL BUS LEVY; CARPENTER SCHOOL BUSES.] 
           For taxes payable in 2006 through 2010, a school district 
        may levy an amount, not to exceed in the aggregate, $30,000 
        times the number of Carpenter school buses in its fleet as of 
        January 1, 2003, that have been determined to have potentially 
        defective welds and are subject to limitations imposed by the 
        Department of Public Safety. 
           Sec. 50.  [COMPENSATORY REVENUE ALLOCATION; TEST SCORE 
        PILOT PROGRAM.] 
           Subdivision 1.  [PILOT PROGRAM CREATED.] A pilot program is 
        created to allow a school district to allocate compensatory 
        revenue received under Minnesota Statutes, section 126C.10, 
        subdivision 3, among its school buildings according to each 
        building's school performance measures. 
           Subd. 2.  [APPLICATION PROCESS.] Independent School 
        Districts Nos. 11, Anoka-Hennepin; 279, Osseo; 281, Robbinsdale; 
        535, Rochester; and 833, South Washington may submit an 
        application to the commissioner of education by August 15, 2005, 
        for a plan to allocate compensatory revenue to school sites 
        based on student performance.  The application must include a 
        written resolution approved by the school board that:  (1) 
        identifies the test results that will be used to assess student 
        performance; (2) describes the method for distribution of 
        compensatory revenue to the school sites; and (3) summarizes the 
        evaluation procedure the district will use to determine if the 
        redistribution of compensatory revenue improves overall student 
        performance.  The application must be submitted in the form and 
        manner specified by the commissioner.  The commissioner must 
        notify the selected school districts by September 1, 2005. 
           Subd. 3.  [REPORT.] The commissioner of education must 
        submit a report by February 15, 2008, to the education 
        committees of the legislature evaluating the effectiveness of 
        the pilot program. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 51.  [INCREASE IN EQUITY REVENUE; FISCAL YEAR 2006 
        ONLY.] 
           For fiscal year 2006 only, the increase in equity revenue 
        under section 21 is payable entirely in state aid. 
           Sec. 52.  [RED LAKE FISCAL YEAR 2005 PUPIL UNITS.] 
           Notwithstanding Minnesota Statutes, section 126C.05, the 
        fiscal year 2005 average daily membership for Independent School 
        District No. 38, Red Lake, shall be the greater of the amount 
        that would have been computed if the district's school buildings 
        had not reopened after March 21, 2005, or the amount computed 
        using actual data for the entire school year.  Notwithstanding 
        Minnesota Statutes, section 126C.05, subdivision 15, for fiscal 
        year 2005, learning year pupil units for Independent School 
        District No. 38, Red Lake, must be calculated using the hours in 
        excess of the actual number of instructional hours in the 
        calendar year for the school attended by the student, instead of 
        the number of hours in excess of 1,020 for a secondary school 
        pupil. 
           Sec. 53.  [FISCAL YEARS 2006 AND 2007 DECLINING PUPIL UNIT 
        AID, RED LAKE.] 
           For fiscal years 2006 and 2007 only, Independent School 
        District No. 38, Red Lake, is eligible for declining pupil unit 
        aid equal to the greater of zero or the product of the general 
        education formula allowance times the difference between the 
        district's adjusted marginal cost pupil units for fiscal year 
        2005 and the district's adjusted marginal cost pupil units for 
        that fiscal year.  Notwithstanding Minnesota Statutes, section 
        126C.13, the declining pupil unit aid must be included in 
        calculating the district's general education aid. 
           Sec. 54.  [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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of the 
        Ramsey County District Court in Case No. C9-05-5928.  
           Subd. 2.  [GENERAL EDUCATION AID.] For general education 
        aid under Minnesota Statutes, section 126C.13, subdivision 4: 
             $5,136,578,000  .....    2006
             $5,390,196,000  .....    2007
           The 2006 appropriation includes $784,978,000 for 2005 and 
        $4,351,600,000 for 2006. 
           The 2007 appropriation includes $817,588,000 for 2006 and 
        $4,572,608,000 for 2007.  
           Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
        referendum tax base replacement aid under Minnesota Statutes, 
        section 126C.17, subdivision 7a: 
             $8,704,000     .....     2006 
             $8,704,000     .....     2007 
           The 2006 appropriation includes $1,366,000 for 2005 and 
        $7,338,000 for 2006.  
           The 2007 appropriation includes $1,366,000 for 2006 and 
        $7,338,000 for 2007. 
           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: 
             $55,000        .....     2006
             $55,000        .....     2007
           Subd. 5.  [ABATEMENT REVENUE.] For abatement aid under 
        Minnesota Statutes, section 127A.49:  
             $903,000       .....     2006 
             $955,000       .....     2007 
           The 2006 appropriation includes $187,000 for 2005 and 
        $716,000 for 2006.  
           The 2007 appropriation includes $133,000 for 2006 and 
        $822,000 for 2007.  
           Subd. 6.  [CONSOLIDATION TRANSITION.] For districts 
        consolidating under Minnesota Statutes, section 123A.485: 
             $253,000        .....     2007 
           The 2007 appropriation includes $0 for 2006 and $253,000 
        for 2007. 
           Subd. 7.  [NONPUBLIC PUPIL EDUCATION AID.] For nonpublic 
        pupil education aid under Minnesota Statutes, sections 123B.87 
        and 123B.40 to 123B.43: 
             $15,370,000    .....     2006 
             $16,434,000    .....     2007 
           The 2006 appropriation includes $2,305,000 for 2005 and 
        $13,065,000 for 2006. 
           The 2007 appropriation includes $2,433,000 for 2006 and 
        $14,001,000 for 2007. 
           Subd. 8.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
        pupil transportation aid under Minnesota Statutes, section 
        123B.92, subdivision 9: 
             $21,451,000     .....     2006 
             $23,043,000     .....     2007 
           The 2006 appropriation includes $3,274,000 for 2005 and 
        $18,177,000 for 2006. 
           The 2007 appropriation includes $3,385,000 for 2006 and 
        $19,658,000 for 2007. 
           Subd. 9.  [ONE ROOM SCHOOLHOUSE.] For a grant to 
        Independent School District No. 690, Warroad, to operate the 
        Angle Inlet School: 
             $50,000        .....     2006 
             $50,000        .....     2007 
           Subd. 10.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
        pupil aid to Independent School District No. 241, Albert Lea: 
             $75,000         .....     2006
           Subd. 11.  [DECLINING PUPIL AID; MESABI EAST.] For 
        declining pupil aid to Independent School District No. 2711, 
        Mesabi East: 
             $50,000         .....     2006
           Subd. 12.  [DECLINING PUPIL AID; ROSEAU.] For declining 
        pupil aid to Independent School District No. 682, Roseau: 
             $10,000         .....     2006
           Subd. 13.  [COMPENSATORY REVENUE PILOT PROJECT.] For grants 
        for participation in the compensatory revenue pilot program 
        under section 50: 
             $2,100,000     .....     2006 
             $2,100,000     .....     2007 
           Of this amount, $1,500,000 in each year is for a grant to 
        Independent School District No. 11, Anoka-Hennepin, $210,000 in 
        each year is for a grant to Independent School District No. 279, 
        Osseo, $160,000 in each year is for a grant to Independent 
        School District No. 281, Robbinsdale, $165,000 each year is for 
        a grant to Independent School District No. 535, Rochester, and 
        $65,000 in each year is for Independent School District No. 833, 
        South Washington. 
           If a grant to a specific school district is not awarded, 
        the commissioner may increase the aid amounts to any of the 
        remaining participating school districts. 
           This appropriation is part of the base budget for 
        subsequent fiscal years. 
           Sec. 55.  [REPEALER.] 
           Minnesota Statutes 2004, sections 122A.415, subdivision 2; 
        123B.83, subdivision 1; and 126C.42, subdivisions 1 and 4, are 
        repealed. 
           Sec. 56.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 2 
                              EDUCATION EXCELLENCE 
           Section 1.  Minnesota Statutes 2004, section 13.32, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ACCESS BY JUVENILE JUSTICE SYSTEM.] (a) Upon 
        request, the following education data shall be disclosed under 
        subdivision 3, clause (i), to the juvenile justice system:  a 
        student's full name, home address, telephone number, date of 
        birth; a student's school schedule, daily attendance record, and 
        photographs, if any; and parents' names, home addresses, and 
        telephone numbers.  
           (b) In addition, the existence of the following data about 
        a student may be disclosed under subdivision 3, clause (i): 
           (1) use of a controlled substance, alcohol, or tobacco; 
           (2) assaultive or threatening conduct that could result in 
        dismissal from school under section 121A.45, subdivision 2, 
        clause (b) or (c); 
           (3) possession or use of weapons or look-alike weapons; 
           (4) theft; or 
           (5) vandalism or other damage to property. 
           Any request for access to data under this paragraph must 
        contain an explanation of why access to the data is necessary to 
        serve the student. 
           (c) A principal or chief administrative officer of a school 
        who receives a request to disclose information about a student 
        to the juvenile justice system under paragraph (b) shall, to the 
        extent permitted by federal law, notify the student's parent or 
        guardian by certified mail of the request to disclose 
        information before disclosing the information.  If the student's 
        parent or guardian notifies the principal or chief 
        administrative officer within ten days of receiving the 
        certified notice that the parent or guardian objects to the 
        disclosure, the principal or chief administrative officer must 
        not disclose the information.  The principal or chief 
        administrative officer must inform the requesting member of the 
        juvenile justice system of the objection.  
           (d) A principal or chief administrative officer is not 
        required to create data under this subdivision.  Information 
        provided in response to a data request under paragraph (b) shall 
        indicate only whether the data described in paragraph (b) 
        exist.  The principal or chief administrative officer is not 
        authorized under paragraph (b) to disclose the actual data or 
        other information contained in the student's education record.  
        A principal or chief administrative officer is not required to 
        provide data that are protected by court order.  A principal or 
        chief administrative officer must respond to a data request 
        within 14 days if no objection is received from the parent or 
        guardian. 
           (e) Nothing in this subdivision shall limit the disclosure 
        of educational data pursuant to court order. 
           (f) A school district, its agents, and employees who 
        provide data in good faith under this subdivision are not liable 
        for compensatory or exemplary damages or an award of attorney 
        fees in an action under section 13.08, or other law, or for a 
        penalty under section 13.09. 
           (g) Section 13.03, subdivision 4, applies to data that are 
        shared under this subdivision with a government entity.  If data 
        are shared with a member of the juvenile justice system who is 
        not a government entity, the person receiving the shared data 
        must treat the data consistent with the requirements of this 
        chapter applicable to a government entity.  
           (h) A member of the juvenile justice system who falsely 
        certifies a request for data under this section is subject to 
        the penalties under section 13.09.  
           Sec. 2.  Minnesota Statutes 2004, section 13.321, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [TEACHER DATA FROM VALUE-ADDED ASSESSMENT 
        MODEL.] Data on individual teachers generated from a value-added 
        assessment model are governed under section 120B.362. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 3.  Minnesota Statutes 2004, section 120A.22, 
        subdivision 12, is amended to read: 
           Subd. 12.  [LEGITIMATE EXEMPTIONS.] A parent, guardian, or 
        other person having control of a child may apply to a school 
        district to have the child excused from attendance for the whole 
        or any part of the time school is in session during any school 
        year.  Application may be made to any member of the board, a 
        truant officer, a principal, or the superintendent.  The school 
        district may state in its school attendance policy that it may 
        ask the student's parent or legal guardian to verify in writing 
        the reason for the child's absence from school.  The board of 
        the district in which the child resides may approve the 
        application upon the following being demonstrated to the 
        satisfaction of that board: 
           (1) that the child's bodily or mental condition is such as 
        to prevent attendance at school or application to study for the 
        period required; or, which includes: 
           (i) child illness, medical, dental, orthodontic, or 
        counseling appointments; 
           (ii) family emergencies; 
           (iii) the death or serious illness or funeral of an 
        immediate family member; 
           (iv) active duty in any military branch of the United 
        States; or 
           (v) other exemptions included in the district's school 
        attendance policy; 
           (2) that for the school years 1988-1989 through 1999-2000 
        the child has already completed the studies ordinarily required 
        in the 10th grade and that for the school years beginning with 
        the 2000-2001 school year the child has already completed the 
        studies ordinarily required to graduate the child has already 
        completed state and district standards required for graduation 
        from high school; or 
           (3) that it is the wish of the parent, guardian, or other 
        person having control of the child, that the child attend for a 
        period or periods not exceeding in the aggregate three hours in 
        any week, a school for religious instruction conducted and 
        maintained by some church, or association of churches, or any 
        Sunday school association incorporated under the laws of this 
        state, or any auxiliary thereof.  This school for religious 
        instruction must be conducted and maintained in a place other 
        than a public school building, and it must not, in whole or in 
        part, be conducted and maintained at public expense.  However, a 
        child may be absent from school on such days as the child 
        attends upon instruction according to the ordinances of some 
        church. 
           Sec. 4.  Minnesota Statutes 2004, section 120B.02, is 
        amended to read: 
           120B.02 [EDUCATIONAL EXPECTATIONS FOR MINNESOTA'S 
        STUDENTS.] 
           (a) The legislature is committed to establishing rigorous 
        academic standards for Minnesota's public school students.  To 
        that end, the commissioner shall adopt in rule statewide 
        academic standards.  The commissioner shall not prescribe in 
        rule or otherwise the delivery system, classroom assessments, or 
        form of instruction that school sites must use.  For purposes of 
        this chapter, a school site is a separate facility, or a 
        separate program within a facility that a local school board 
        recognizes as a school site for funding purposes.  
           (b) All commissioner actions regarding the rule must be 
        premised on the following:  
           (1) the rule is intended to raise academic expectations for 
        students, teachers, and schools; 
           (2) any state action regarding the rule must evidence 
        consideration of school district autonomy; and 
           (3) the Department of Education, with the assistance of 
        school districts, must make available information about all 
        state initiatives related to the rule to students and parents, 
        teachers, and the general public in a timely format that is 
        appropriate, comprehensive, and readily understandable. 
           (c) When fully implemented, the requirements for high 
        school graduation in Minnesota must require students to pass the 
        basic skills test requirements and satisfactorily complete, as 
        determined by the school district, the course credit 
        requirements under section 120B.024 and: 
           (1) for students enrolled in grade 8 before the 2005-2006 
        school year, to pass the basic skills test requirements; and 
           (2) for students enrolled in grade 8 in the 2005-2006 
        school year and later, to pass the Minnesota Comprehensive 
        Assessments Second Edition (MCA-IIs). 
           (d) The commissioner shall periodically review and report 
        on the state's assessment process. 
           (e) School districts are not required to adopt specific 
        provisions of the Goals 2000 and the federal School-to-Work 
        programs. 
           Sec. 5.  Minnesota Statutes 2004, section 120B.021, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [RIGOROUS COURSE OF STUDY; WAIVER.] (a) Upon 
        receiving a student's application signed by the student's parent 
        or guardian, a school district, area learning center, or charter 
        school must declare that a student meets or exceeds a specific 
        academic standard required for graduation under this section if 
        the local school board, the school board of the school district 
        in which the area learning center is located, or the charter 
        school board of directors determines that the student: 
           (1) is participating in a course of study, including an 
        advanced placement or international baccalaureate course or 
        program; a learning opportunity outside the curriculum of the 
        district, area learning center, or charter school; or an 
        approved preparatory program for employment or postsecondary 
        education that is equally or more rigorous than the 
        corresponding state or local academic standard required by the 
        district, area learning center, or charter school; 
           (2) would be precluded from participating in the rigorous 
        course of study, learning opportunity, or preparatory employment 
        or postsecondary education program if the student were required 
        to achieve the academic standard to be waived; and 
           (3) satisfactorily completes the requirements for the 
        rigorous course of study, learning opportunity, or preparatory 
        employment or postsecondary education program. 
        Consistent with the requirements of this section, the local 
        school board, the school board of the school district in which 
        the area learning center is located, or the charter school board 
        of directors also may formally determine other circumstances in 
        which to declare that a student meets or exceeds a specific 
        academic standard that the site requires for graduation under 
        this section. 
           (b) A student who satisfactorily completes a postsecondary 
        enrollment options course or program under section 124D.09 is 
        not required to complete other requirements of the academic 
        standards corresponding to that specific rigorous course of 
        study. 
           Sec. 6.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section and section 120B.10, the following terms have the 
        meanings given them. 
           (a) "Instruction" means methods of providing learning 
        experiences that enables enable a student to meet state and 
        district academic standards and graduation 
        standards requirements. 
           (b) "Curriculum" means district or school adopted programs 
        and written plans for providing students with learning 
        experiences that lead to expected knowledge, and skills, and 
        positive attitudes. 
           Sec. 7.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADOPTING POLICIES.] (a) A school board shall 
        adopt annually a have in place an adopted written policy that 
        includes the following: 
           (1) district goals for instruction and including the use of 
        best practices, district and school curriculum, and achievement 
        for all student subgroups; 
           (2) a process for evaluating each student's progress toward 
        meeting graduation academic standards and identifying the 
        strengths and weaknesses of instruction and curriculum affecting 
        students' progress; 
           (3) a system for periodically reviewing and evaluating all 
        instruction and curriculum; 
           (4) a plan for improving instruction and, curriculum, and 
        student achievement; and 
           (5) an instruction plan that includes education 
        effectiveness processes developed under plan aligned with 
        section 122A.625 and that integrates instruction, curriculum, 
        and technology. 
           Sec. 8.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INSTRUCTION AND CURRICULUM DISTRICT ADVISORY 
        COMMITTEE.] Each school board shall establish an Instruction and 
        Curriculum advisory committee to ensure active community 
        participation in all phases of planning and improving the 
        instruction and curriculum affecting state graduation and 
        district academic standards.  A district advisory committee, to 
        the extent possible, shall reflect the diversity of the district 
        and its learning sites, and shall include teachers, parents, 
        support staff, pupils students, and other community residents.  
        The district may establish building teams as subcommittees of 
        the district advisory committee under subdivision 4.  The 
        district advisory committee shall recommend to the school 
        board districtwide education standards rigorous academic 
        standards, student achievement goals and measures, assessments, 
        and program evaluations.  Learning sites may expand upon 
        district evaluations of instruction, curriculum, assessments, or 
        programs.  Whenever possible, parents and other community 
        residents shall comprise at least two-thirds of advisory 
        committee members. 
           Sec. 9.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BUILDING TEAM.] A school may establish a 
        building team to develop and implement an education 
        effectiveness plan to improve instruction and, curriculum, and 
        student achievement.  The team shall advise the board and the 
        advisory committee about developing an instruction and 
        curriculum improvement plan that aligns curriculum, assessment 
        of student progress in meeting state graduation and district 
        academic standards, and instruction. 
           Sec. 10.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPORT.] (a) By October 1 of each year, the 
        school board shall use standard statewide reporting procedures 
        the commissioner develops and adopt a report that includes the 
        following: 
           (1) student performance achievement goals for meeting state 
        graduation academic standards adopted for that year; 
           (2) results of local assessment data, and any additional 
        test data; 
           (3) the annual school district improvement plans including 
        staff development goals under section 122A.60; 
           (4) information about district and learning site progress 
        in realizing previously adopted improvement plans; and 
           (5) the amount and type of revenue attributed to each 
        education site as defined in section 123B.04. 
           (b) The school board shall publish the report in the local 
        newspaper with the largest circulation in the district or, by 
        mail, or by electronic means such as the district Web site.  If 
        electronic means are used, school districts must publish notice 
        of the report in a periodical of general circulation in the 
        district.  School districts must make copies of the report 
        available to the public on request.  The board shall make a copy 
        of the report available to the public for inspection.  The board 
        shall send a copy of the report to the commissioner of education 
        by October 15 of each year. 
           (c) The title of the report shall contain the name and 
        number of the school district and read "Annual Report on 
        Curriculum, Instruction, and Student Performance Achievement."  
        The report must include at least the following information about 
        advisory committee membership: 
           (1) the name of each committee member and the date when 
        that member's term expires; 
           (2) the method and criteria the school board uses to select 
        committee members; and 
           (3) the date by which a community resident must apply to 
        next serve on the committee. 
           Sec. 11.  Minnesota Statutes 2004, section 120B.11, 
        subdivision 8, is amended to read: 
           Subd. 8.  [BIENNIAL EVALUATION; ASSESSMENT PROGRAM.] At 
        least once every two years, the district report shall include an 
        evaluation of the district testing programs, according to the 
        following: 
           (1) written objectives of the assessment program; 
           (2) names of tests and grade levels tested; 
           (3) use of test results; and 
           (4) implementation of an assurance of mastery program 
        student achievement results compared to previous years. 
           Sec. 12.  [120B.128] [EDUCATIONAL PLANNING AND ASSESSMENT 
        SYSTEM (EPAS) PROGRAM.] 
           (a) School districts and charter schools may elect to 
        participate in the Educational Planning and Assessment System 
        (EPAS) program offered by ACT, Inc. to provide a longitudinal, 
        systematic approach to student educational and career planning, 
        assessment, instructional support, and evaluation.  The EPAS 
        achievement tests include English, reading, mathematics, 
        science, and components on planning for high school and 
        postsecondary education, interest inventory, needs assessments, 
        and student education plans.  These tests are linked to the ACT 
        assessment for college admission and allow students, parents, 
        teachers, and schools to determine the student's college 
        readiness before grades 11 and 12. 
           (b) The commissioner of education shall provide ACT Explore 
        tests for students in grade 8 and the ACT Plan test for students 
        in grade 10 to assess individual student academic strengths and 
        weaknesses, academic achievement and progress, higher order 
        thinking skills, and college readiness.  The state shall pay the 
        test costs for school districts and charter schools that choose 
        to participate in the EPAS program.  The commissioner shall 
        establish an application procedure and a process for state 
        payment of costs. 
           Sec. 13.  Minnesota Statutes 2004, section 120B.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM STRUCTURE; TRAINING PROGRAMS FOR 
        TEACHERS.] (a) The advanced placement and international 
        baccalaureate programs are well-established academic programs 
        for mature, academically directed high school students.  These 
        programs, in addition to providing academic rigor, offer sound 
        curricular design, accountability, comprehensive external 
        assessment, feedback to students and teachers, and the 
        opportunity for high school students to compete academically on 
        a global level.  Advanced placement and international 
        baccalaureate programs allow students to leave high school with 
        the academic skills and self-confidence to succeed in college 
        and beyond.  The advanced placement and international 
        baccalaureate programs help provide Minnesota students with 
        world-class educational opportunity. 
           (b) Critical to schools' educational success is ongoing 
        advanced placement/international baccalaureate-approved teacher 
        training.  A secondary teacher assigned by a district to teach 
        an advanced placement or international baccalaureate course or 
        other interested educator may participate in a training program 
        offered by The College Board or International Baccalaureate 
        North America, Inc.  The state may pay a portion of the tuition, 
        room, and board, and out-of-state travel costs a teacher or 
        other interested educator incurs in participating in a training 
        program.  The commissioner shall determine application 
        procedures and deadlines, and select teachers and other 
        interested educators to participate in the training program, and 
        determine the payment process and amount of the subsidy.  The 
        procedures determined by the commissioner shall, to the extent 
        possible, ensure that advanced placement and international 
        baccalaureate courses become available in all parts of the state 
        and that a variety of course offerings are available in school 
        districts.  This subdivision does not prevent teacher or other 
        interested educator participation in training programs offered 
        by The College Board or International Baccalaureate North 
        America, Inc., when tuition is paid by a source other than the 
        state. 
           Sec. 14.  Minnesota Statutes 2004, section 120B.13, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SUBSIDY FOR EXAMINATION FEES.] The state may pay 
        all or part of the fee for advanced placement or international 
        baccalaureate examinations for pupils of low-income families in 
        public and nonpublic schools.  The commissioner shall adopt a 
        schedule for fee subsidies that may allow payment of the entire 
        fee for pay all examination fees for all public and nonpublic 
        students of low-income families, as defined by the commissioner, 
        and to the limit of the available appropriation, shall also pay 
        a portion or all of the examination fees for other public and 
        nonpublic students sitting for an advanced placement 
        examination, international baccalaureate examination, or both.  
        The commissioner shall determine procedures for state payments 
        of fees. 
           Sec. 15.  Minnesota Statutes 2004, section 120B.13, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [COLLEGE CREDIT.] The colleges and universities 
        of the Minnesota State Colleges and Universities system must 
        award, and the University of Minnesota and private postsecondary 
        institutions are encouraged to award, college credit to high 
        school students who receive a score of three or higher on an 
        advanced placement or four or higher on the international 
        baccalaureate program examination. 
           Sec. 16.  [120B.131] [COLLEGE-LEVEL EXAMINATION PROGRAM 
        (CLEP).] 
           Subdivision 1.  [PROGRAM STRUCTURE.] The College-Level 
        Examination Program (CLEP) offered by the College Board provides 
        students with the opportunity to demonstrate college-level 
        achievement and receive college credit or advanced standing 
        through a program of examinations in undergraduate college 
        courses.  Schools must provide information about CLEP and the 
        opportunity to receive college credit from a Minnesota 
        postsecondary institution to students successfully completing a 
        college-level course. 
           Subd. 2.  [REIMBURSEMENT FOR EXAMINATION FEES.] The state 
        may reimburse college level examination program (CLEP) fees for 
        a Minnesota public high school student who has successfully 
        completed one or more college-level courses in high school and 
        earned a satisfactory score on one or more CLEP examinations in 
        the following subjects:  composition and literature, mathematics 
        and science, social sciences and history, foreign languages, and 
        business and humanities.  The state may reimburse each 
        successful student for up to six examination fees.  The 
        commissioner shall establish application procedures and a 
        process and schedule for fee reimbursements.  The commissioner 
        must give priority to reimburse the CLEP examination fees of 
        students of low-income families. 
           Subd. 3.  [COLLEGE CREDIT.] The colleges and universities 
        of the Minnesota State Colleges and Universities system must 
        award, and the University of Minnesota and private postsecondary 
        institutions are encouraged to award, college credit to high 
        school students who receive a satisfactory score on a CLEP 
        examination under this section.  The commissioner, in 
        consultation with the Minnesota State Colleges and Universities, 
        shall set a passing score for college credits. 
           Sec. 17.  [120B.15] [GIFTED AND TALENTED STUDENTS 
        PROGRAMS.] 
           School districts may identify students, locally develop 
        programs, provide staff development, and evaluate programs to 
        provide gifted and talented students with challenging 
        educational programs. 
           School districts may adopt guidelines for assessing and 
        identifying students for participation in gifted and talented 
        programs.  The guidelines should include the use of: 
           (1) multiple and objective criteria; and 
           (2) assessments and procedures that are valid and reliable, 
        fair, and based on current theory and research. 
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year. 
           Sec. 18.  Minnesota Statutes 2004, section 120B.22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [VIOLENCE PREVENTION CURRICULUM.] (a) The 
        commissioner of education, in consultation with the 
        commissioners of health and human services, state minority 
        councils, battered women's and domestic abuse programs, battered 
        women's shelters, sexual assault centers, representatives of 
        religious communities, and the assistant commissioner of the 
        Office of Drug Policy and Violence Prevention, shall assist 
        districts on request in developing or implementing a violence 
        prevention program for students in kindergarten to grade 12 that 
        can be integrated into existing curriculum.  The purpose of the 
        program is to help students learn how to resolve conflicts 
        within their families and communities in nonviolent, effective 
        ways.  
           (b) Each district is encouraged to integrate into its 
        existing curriculum a program for violence prevention that 
        includes at least: 
           (1) a comprehensive, accurate, and age appropriate 
        curriculum on violence prevention, nonviolent conflict 
        resolution, sexual, racial, and cultural 
        harassment, self-protection, and student hazing that promotes 
        equality, respect, understanding, effective communication, 
        individual responsibility, thoughtful decision making, positive 
        conflict resolution, useful coping skills, critical thinking, 
        listening and watching skills, and personal safety; 
           (2) planning materials, guidelines, and other accurate 
        information on preventing physical and emotional violence, 
        identifying and reducing the incidence of sexual, racial, and 
        cultural harassment, and reducing child abuse and neglect; 
           (3) a special parent education component of early childhood 
        family education programs to prevent child abuse and neglect and 
        to promote positive parenting skills, giving priority to 
        services and outreach programs for at-risk families; 
           (4) involvement of parents and other community members, 
        including the clergy, business representatives, civic leaders, 
        local elected officials, law enforcement officials, and the 
        county attorney; 
           (5) collaboration with local community services, agencies, 
        and organizations that assist in violence intervention or 
        prevention, including family-based services, crisis services, 
        life management skills services, case coordination services, 
        mental health services, and early intervention services; 
           (6) collaboration among districts and service cooperatives; 
           (7) targeting early adolescents for prevention efforts, 
        especially early adolescents whose personal circumstances may 
        lead to violent or harassing behavior; 
           (8) opportunities for teachers to receive in-service 
        training or attend other programs on strategies or curriculum 
        designed to assist students in intervening in or preventing 
        violence in school and at home; and 
           (9) administrative policies that reflect, and a staff that 
        models, nonviolent behaviors that do not display or condone 
        sexual, racial, or cultural harassment or student hazing. 
           (c) The department may provide assistance at a neutral site 
        to a nonpublic school participating in a district's program. 
           Sec. 19.  [120B.232] [CHARACTER DEVELOPMENT EDUCATION.] 
           Subdivision 1.  [CHARACTER DEVELOPMENT EDUCATION.] The 
        legislature encourages districts to integrate or offer 
        instruction on character education including, but not limited 
        to, character qualities such as attentiveness, truthfulness, 
        respect for authority, diligence, gratefulness, self-discipline, 
        patience, forgiveness, respect for others, peacemaking, and 
        resourcefulness.  Instruction should be integrated into a 
        district's existing programs, curriculum, or the general school 
        environment.  The commissioner shall provide assistance at the 
        request of a district to develop character education curriculum 
        and programs. 
           Subd. 2.  [FUNDING SOURCES.] The commissioner must first 
        use federal funds for character development education programs 
        to the extent available under United States Code, title 20, 
        section 7247.  Districts may accept funds from private and other 
        public sources for character development education programs 
        developed and implemented under this section. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 20.  [120B.235] [AMERICAN HERITAGE EDUCATION.] 
           (a) School districts shall permit grade-level instruction 
        for students to read and study America's founding documents, 
        including documents that contributed to the foundation or 
        maintenance of America's representative form of limited 
        government, the Bill of Rights, our free-market economic system, 
        and patriotism.  
           (b) Districts may not censor or restrain instruction in 
        American or Minnesota state history or heritage based on 
        religious references in original source documents, writings, 
        speeches, proclamations, or records. 
           Sec. 21.  Minnesota Statutes 2004, section 120B.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATEWIDE TESTING.] (a) The commissioner, 
        with advice from experts with appropriate technical 
        qualifications and experience and stakeholders, consistent with 
        subdivision 1a, shall include in the comprehensive assessment 
        system, for each grade level to be tested, state-constructed 
        tests developed from and aligned with the state's required 
        academic standards under section 120B.021 and administered 
        annually to all students in grades 3 through 8 and at the high 
        school level.  A state-developed test in a subject other than 
        writing, developed after the 2002-2003 school year, must include 
        both multiple choice machine-scoreable and constructed response 
        questions.  The commissioner shall establish one or more months 
        during which schools shall administer the tests to students each 
        school year.  For students enrolled in grade 8 before the 
        2005-2006 school year, only Minnesota basic skills tests in 
        reading, mathematics, and writing shall fulfill students' basic 
        skills testing requirements for a passing state notation.  The 
        passing scores of the state tests in reading and mathematics are 
        the equivalent of:  
           (1) 70 percent correct for students entering grade 9 in 
        1996; and 
           (2) 75 percent correct for students entering grade 9 in 
        1997 and thereafter, as based on the first uniform test 
        administration of February 1998.  
           For students enrolled in grade 8 in the 2005-2006 school 
        year and later, only the Minnesota Comprehensive Assessments 
        Second Edition (MCA-IIs) in reading, mathematics, and writing 
        shall fulfill students' academic standard requirements. 
           (b) The third through 8th grade and high school level test 
        results shall be available to districts for diagnostic purposes 
        affecting student learning and district instruction and 
        curriculum, and for establishing educational accountability.  
        The commissioner must disseminate to the public the test results 
        upon receiving those results. 
           (c) State tests must be constructed and aligned with state 
        academic standards.  The testing process and the order of 
        administration shall be determined by the commissioner.  The 
        statewide results shall be aggregated at the site and district 
        level, consistent with subdivision 1a.  
           (d) In addition to the testing and reporting requirements 
        under this section, the commissioner shall include the following 
        components in the statewide public reporting system: 
           (1) uniform statewide testing of all students in grades 3 
        through 8 and at the high school level that provides exemptions, 
        only with parent or guardian approval, for those very few 
        students for whom the student's individual education plan team 
        under sections 125A.05 and 125A.06, determines that the student 
        is incapable of taking a statewide test, or for a limited 
        English proficiency student under section 124D.59, subdivision 
        2, if the student has been in the United States for fewer than 
        three years; 
           (2) educational indicators that can be aggregated and 
        compared across school districts and across time on a statewide 
        basis, including average daily attendance, high school 
        graduation rates, and high school drop-out rates by age and 
        grade level; 
           (3) students' scores on the American College Test; and 
           (4) state results from participation in the National 
        Assessment of Educational Progress so that the state can 
        benchmark its performance against the nation and other states, 
        and, where possible, against other countries, and contribute to 
        the national effort to monitor achievement. 
           (e) Districts must report exemptions under paragraph (d), 
        clause (1), to the commissioner consistent with a format 
        provided by the commissioner. 
           Sec. 22.  Minnesota Statutes 2004, section 120B.30, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [STATEWIDE AND LOCAL ASSESSMENTS; RESULTS.] (a) 
        The commissioner must develop language arts reading, 
        mathematics, and science assessments aligned with state academic 
        standards that districts and sites must use to monitor student 
        growth toward achieving those standards.  The commissioner must 
        not develop statewide assessments for academic standards in 
        social studies, health and physical education, and the arts.  
        The commissioner must require: 
           (1) annual language arts reading and mathematics 
        assessments in grades 3 through 8 and at the high school level 
        for the 2005-2006 school year and later; and 
           (2) annual science assessments in one grade in the grades 3 
        through 5 span, the grades 6 through 9 span, and a life sciences 
        assessment in the grades 10 through 12 span for the 2007-2008 
        school year and later. 
           (b) The commissioner must ensure that all statewide tests 
        administered to elementary and secondary students measure 
        students' academic knowledge and skills and not students' 
        values, attitudes, and beliefs. 
           (c) Reporting of assessment results must: 
           (1) provide timely, useful, and understandable information 
        on the performance of individual students, schools, school 
        districts, and the state; 
           (2) include, by the 2006-2007 school year, a value-added 
        component to measure student achievement growth over time; and 
           (3)(i) for students enrolled in grade 8 before the 
        2005-2006 school year, determine whether students have met the 
        state's basic skills requirements; and 
           (ii) for students enrolled in grade 8 in the 2005-2006 
        school year and later, determine whether students have met the 
        state's academic standards. 
           (d) Consistent with applicable federal law and subdivision 
        1, paragraph (d), clause (1), the commissioner must include 
        alternative assessments for the very few students with 
        disabilities for whom statewide assessments are inappropriate 
        and for students with limited English proficiency. 
           (e) A school, school district, and charter school must 
        administer statewide assessments under this section, as the 
        assessments become available, to evaluate student progress in 
        achieving the academic standards.  If a state assessment is not 
        available, a school, school district, and charter school must 
        determine locally if a student has met the required academic 
        standards.  A school, school district, or charter school may use 
        a student's performance on a statewide assessment as one of 
        multiple criteria to determine grade promotion or retention.  A 
        school, school district, or charter school may use a high school 
        student's performance on a statewide assessment as a percentage 
        of the student's final grade in a course, or place a student's 
        assessment score on the student's transcript.  
           Sec. 23.  Minnesota Statutes 2004, section 120B.30, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [ACCESS TO TESTS.] The commissioner must adopt 
        and publish a policy to provide public and parental access for 
        review of basic skills tests, Minnesota Comprehensive 
        Assessments, or any other such statewide test and assessment.  
        Upon receiving a written request, the commissioner must make 
        available to parents or guardians a copy of their student's 
        actual answer sheet to the test questions to be reviewed by the 
        parent.  
           Sec. 24.  [120B.362] [VALUE-ADDED ASSESSMENT PROGRAM.] 
           (a) The commissioner of education must implement a 
        value-added assessment program to assist school districts, 
        public schools, and charter schools in assessing and reporting 
        individual students' growth in academic achievement under 
        section 120B.30, subdivision 1a.  The program must use 
        assessments of individual students' academic achievement to make 
        longitudinal comparisons of each student's academic growth over 
        time.  School districts, public schools, and charter schools may 
        apply to the commissioner to participate in the initial trial 
        program using a form and in the manner the commissioner 
        prescribes.  The commissioner must select program participants 
        from urban, suburban, and rural areas throughout the state.  
           (b) The commissioner may issue a request for proposals to 
        contract with an organization that provides a value-added 
        assessment model that reliably estimates school and school 
        district effects on students' academic achievement over time.  
        The model the commissioner selects must accommodate diverse data 
        and must use each student's test data across grades.  Data on 
        individual teachers generated under the model are personnel data 
        under section 13.43.  
           (c) The contract under paragraph (b) must be consistent 
        with the definition of "best value" under section 16C.02, 
        subdivision 4. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 25.  Minnesota Statutes 2004, section 121A.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MODEL POLICY.] The commissioner shall 
        maintain and make available to school boards a model sexual, 
        religious, and racial harassment and violence policy.  The model 
        policy shall address the requirements of subdivision 2, and may 
        encourage violence prevention and character development 
        education programs, consistent with section 120B.232, 
        subdivision 1, to prevent and reduce policy violations.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 26.  Minnesota Statutes 2004, section 121A.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REPORTS; CONTENT.] By January 1, 1994, the 
        commissioner, in consultation with the criminal and juvenile 
        information policy group, shall develop a standardized form to 
        be used by schools to report incidents involving the use or 
        possession of a dangerous weapon in school zones.  School 
        districts must electronically report to the commissioner of 
        education incidents involving the use or possession of a 
        dangerous weapon in school zones.  The form shall must include 
        the following information: 
           (1) a description of each incident, including a description 
        of the dangerous weapon involved in the incident; 
           (2) where, at what time, and under what circumstances the 
        incident occurred; 
           (3) information about the offender, other than the 
        offender's name, including the offender's age; whether the 
        offender was a student and, if so, where the offender attended 
        school; and whether the offender was under school expulsion or 
        suspension at the time of the incident; 
           (4) information about the victim other than the victim's 
        name, if any, including the victim's age; whether the victim was 
        a student and, if so, where the victim attended school; and if 
        the victim was not a student, whether the victim was employed at 
        the school; 
           (5) the cost of the incident to the school and to the 
        victim; and 
           (6) the action taken by the school administration to 
        respond to the incident. 
           The commissioner also shall develop provide an alternative 
        electronic reporting format that allows school districts to 
        provide aggregate data, with an option to use computer 
        technology to report the data. 
           Sec. 27.  Minnesota Statutes 2004, section 121A.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REPORTS; FILING REQUIREMENTS.] By February 1 and 
        July 1 31 of each year, each public school shall report 
        incidents involving the use or possession of a dangerous weapon 
        in school zones to the commissioner.  The reports must be made 
        on the standardized forms or using the alternative 
        format submitted using the electronic reporting system developed 
        by the commissioner under subdivision 2.  The commissioner shall 
        compile the information it receives from the schools and report 
        it annually to the commissioner of public safety, the criminal 
        and juvenile information policy group, and the legislature. 
           Sec. 28.  [121A.0695] [SCHOOL BOARD POLICY; PROHIBITING 
        INTIMIDATION AND BULLYING.] 
           Each school board shall adopt a written policy prohibiting 
        intimidation and bullying of any student. 
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year and later. 
           Sec. 29.  Minnesota Statutes 2004, section 121A.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXEMPTIONS FROM IMMUNIZATIONS.] (a) If a person 
        is at least seven years old and has not been immunized against 
        pertussis, the person must not be required to be immunized 
        against pertussis. 
           (b) If a person is at least 18 years old and has not 
        completed a series of immunizations against poliomyelitis, the 
        person must not be required to be immunized against 
        poliomyelitis.  
           (c) If a statement, signed by a physician, is submitted to 
        the administrator or other person having general control and 
        supervision of the school or child care facility stating that an 
        immunization is contraindicated for medical reasons or that 
        laboratory confirmation of the presence of adequate immunity 
        exists, the immunization specified in the statement need not be 
        required.  
           (d) If a notarized statement signed by the minor child's 
        parent or guardian or by the emancipated person is submitted to 
        the administrator or other person having general control and 
        supervision of the school or child care facility stating that 
        the person has not been immunized as prescribed in subdivision 1 
        because of the conscientiously held beliefs of the parent or 
        guardian of the minor child or of the emancipated person, the 
        immunizations specified in the statement shall not be required.  
        This statement must also be forwarded to the commissioner of the 
        Department of Health.  
           (e) If the person is under 15 months, the person is not 
        required to be immunized against measles, rubella, or mumps. 
           (f) If a person is at least five years old and has not been 
        immunized against haemophilus influenza type b, the person is 
        not required to be immunized against haemophilus influenza type 
        b. 
           (g) If a person who is not a Minnesota resident enrolls in 
        a Minnesota school online learning course or program that 
        delivers instruction to the person only by computer and does not 
        provide any teacher or instructor contact time or require 
        classroom attendance, the person is not subject to the 
        immunization, statement, and other requirements of this section. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 30.  Minnesota Statutes 2004, section 121A.47, 
        subdivision 14, is amended to read: 
           Subd. 14.  [ADMISSION OR READMISSION PLAN.] (a) A school 
        administrator shall prepare and enforce an admission or 
        readmission plan for any pupil who is excluded or expelled from 
        school.  The plan may include measures to improve the pupil's 
        behavior, including completing a character education program, 
        consistent with section 120B.232, subdivision 1, and require 
        parental involvement in the admission or readmission process, 
        and may indicate the consequences to the pupil of not improving 
        the pupil's behavior. 
           (b) The definition of suspension under section 121A.41, 
        subdivision 10, does not apply to a student's dismissal from 
        school for one school day or less, except as provided under 
        federal law for a student with a disability.  Each suspension 
        action may include a readmission plan.  A readmission plan must 
        provide, where appropriate, alternative education services, 
        which must not be used to extend the student's current 
        suspension period.  Consistent with section 125A.091, 
        subdivision 5, a readmission plan must not obligate a parent or 
        guardian to provide psychotropic drugs to their student as a 
        condition of readmission.  School officials must not use the 
        refusal of a parent or guardian to consent to the administration 
        of psychotropic drugs to their student or to consent to a 
        psychiatric evaluation, screening or examination of the student 
        as a ground, by itself, to prohibit the student from attending 
        class or participating in a school-related activity, or as a 
        basis of a charge of child abuse, child neglect or medical or 
        educational neglect. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 31.  Minnesota Statutes 2004, section 121A.53, is 
        amended to read: 
           121A.53 [REPORT TO COMMISSIONER OF EDUCATION.] 
           Subdivision 1.  [EXCLUSIONS AND EXPULSIONS.] The school 
        board shall must report through the department electronic 
        reporting system each exclusion or expulsion within 30 days of 
        the effective date of the action to the commissioner of 
        education.  This report shall must include a statement of 
        alternative educational services given the pupil and the reason 
        for, the effective date, and the duration of the exclusion or 
        expulsion.  The report must also include the student's age, 
        grade, gender, race, and special education status. 
           Subd. 2.  [REPORT.] The school board must include state 
        student identification numbers of affected pupils on all 
        dismissal reports required by the department.  The department 
        must report annually to the commissioner summary data on the 
        number of dismissals by age, grade, gender, race, and special 
        education status of the affected pupils.  All dismissal reports 
        must be submitted through the department electronic reporting 
        system. 
           Sec. 32.  [121A.575] [ALTERNATIVES TO PUPIL SUSPENSION.] 
           Notwithstanding any law to the contrary and in accordance 
        with sections 121A.40 to 121A.56, after a school administration 
        notifies a pupil of the grounds for suspension, the school 
        administration may, instead of imposing the suspension, do one 
        or more of the following: 
           (1) strongly encourage a parent or guardian of the pupil to 
        attend school with the pupil for one day; 
           (2) assign the pupil to attend school on Saturday as 
        supervised by the principal or the principal's designee; and 
           (3) petition the juvenile court that the student is in need 
        of services under chapter 260C.  
           Sec. 33.  Minnesota Statutes 2004, section 122A.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COMPREHENSIVE, SCIENTIFICALLY BASED READING 
        INSTRUCTION.] "Comprehensive, scientifically based reading 
        instruction" includes instruction and practice in phonemic 
        awareness, phonics and other word-recognition skills, and guided 
        oral reading for beginning readers, as well as extensive silent 
        reading, vocabulary instruction, instruction in comprehension, 
        and instruction that fosters understanding and higher-order 
        thinking for readers of all ages and proficiency 
        levels.  "Comprehensive, scientifically based reading 
        instruction" includes a program or collection of instructional 
        practices that is based on reliable, valid evidence showing that 
        when these programs or practices are used, students can be 
        expected to achieve, at a minimum, satisfactory reading 
        progress.  The program or collection of practices must include, 
        at a minimum, instruction in five areas of reading:  phonemic 
        awareness, phonics, fluency, vocabulary, and text comprehension. 
           Comprehensive, scientifically based reading instruction 
        also includes and integrates instructional strategies for 
        continuously assessing, evaluating, and communicating the 
        student's reading progress and needs in order to design and 
        implement ongoing interventions so that students of all ages and 
        proficiency levels can read and comprehend text and apply higher 
        level thinking skills. 
           Sec. 34.  Minnesota Statutes 2004, section 122A.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TERMS; COMPENSATION; REMOVAL; ADMINISTRATION; 
        REIMBURSEMENT.] (a) 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) 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. 
           (b) The board may reimburse local school districts for the 
        cost of a substitute teacher employed when a regular teacher is 
        providing professional assistance to the state by serving on the 
        board or on a committee or task force appointed by the board. 
           Sec. 35.  Minnesota Statutes 2004, section 122A.18, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [READING STRATEGIES.] (a) All colleges and 
        universities approved by the Board of Teaching to prepare 
        persons for classroom teacher licensure must include in their 
        teacher preparation programs reading best practices that enable 
        classroom teacher licensure candidates to know how to teach 
        reading, such as phonics or other research-based best practices 
        in reading, consistent with section 122A.06, subdivision 4, that 
        enable the licensure candidate to know how to teach reading in 
        the candidate's content areas. 
           (b) Board-approved teacher preparation programs for 
        teachers of elementary education must require instruction in the 
        application of comprehensive, scientifically based, and balanced 
        reading instruction programs. that: 
           (1) teach students to read using foundational knowledge, 
        practices, and strategies consistent with section 122A.06, 
        subdivision 4, so that all students will achieve continuous 
        progress in reading; and 
           (2) teach specialized instruction in reading strategies, 
        interventions, and remediations that enable students of all ages 
        and proficiency levels to become proficient readers. 
           Sec. 36.  Minnesota Statutes 2004, section 122A.33, is 
        amended to read: 
           122A.33 [LICENSE AND DEGREE EXEMPTION FOR HEAD COACH.] 
           Subdivision 1.  [EMPLOYMENT.] Notwithstanding section 
        122A.15, subdivision 1, a school district may employ as a head 
        varsity coach of an interscholastic sport at its secondary 
        school a person who does not have a license as head varsity 
        coach of interscholastic sports and who does not have a 
        bachelor's degree if: 
           (1) in the judgment of the school board, the person has the 
        knowledge and experience necessary to coach the sport; 
           (2) can verify completion of six quarter credits, or the 
        equivalent, or 60 clock hours of instruction in first aid and 
        the care and prevention of athletic injuries; and 
           (3) can verify completion of a coaching methods or theory 
        course. 
           Subd. 2.  [ANNUAL CONTRACT.] Notwithstanding section 
        122A.58, a person employed as a head varsity coach under this 
        section has an annual contract as a coach that the school board 
        may or may not renew as the board sees fit. 
           Subd. 3.  [NOTICE OF NONRENEWAL; OPPORTUNITY TO RESPOND.] A 
        school board that declines to renew the coaching contract of a 
        licensed or nonlicensed head varsity coach must notify the coach 
        within 14 days of that decision.  If the coach requests reasons 
        for not renewing the coaching contract, the board must give the 
        coach its reasons in writing within ten days of receiving the 
        request.  Upon request, the board must provide the coach with a 
        reasonable opportunity to respond to the reasons at a board 
        meeting.  The hearing may be opened or closed at the election of 
        the coach unless the board closes the meeting under section 
        13D.05, subdivision 2, to discuss nonpublic data. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 37.  Minnesota Statutes 2004, section 122A.41, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [PROBATIONARY PERIOD FOR PRINCIPALS HIRED 
        INTERNALLY.] A board and the exclusive representative of the 
        school principals in the district may negotiate a plan for a 
        probationary period of up to two school years for licensed 
        teachers employed by the board who are subsequently employed by 
        the board as a licensed school principal or assistant principal 
        and an additional probationary period of up to two years for 
        licensed assistant principals employed by the board who are 
        subsequently employed by the board as a licensed school 
        principal. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 38.  Minnesota Statutes 2004, section 122A.41, 
        subdivision 14, is amended to read: 
           Subd. 14.  [SERVICES TERMINATED BY DISCONTINUANCE OR LACK 
        OF PUPILS; PREFERENCE GIVEN.] (a) A teacher whose services are 
        terminated on account of discontinuance of position or lack of 
        pupils must receive first consideration for other positions in 
        the district for which that teacher is qualified.  In the event 
        it becomes necessary to discontinue one or more positions, in 
        making such discontinuance, teachers must be discontinued in any 
        department in the inverse order in which they were employed, 
        unless a board and the exclusive representative of teachers in 
        the district negotiate a plan providing otherwise. 
           (b) Notwithstanding the provisions of clause (a), a teacher 
        is not entitled to exercise any seniority when that exercise 
        results in that teacher being retained by the district in a 
        field for which the teacher holds only a provisional license, as 
        defined by the Board of Teaching, unless that exercise of 
        seniority results in the termination of services, on account of 
        discontinuance of position or lack of pupils, of another teacher 
        who also holds a provisional license in the same field.  The 
        provisions of this clause do not apply to vocational education 
        licenses.  
           (c) Notwithstanding the provisions of clause (a), a teacher 
        must not be reinstated to a position in a field in which the 
        teacher holds only a provisional license, other than a 
        vocational education license, while another teacher who holds a 
        nonprovisional license in the same field is available for 
        reinstatement. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 39.  Minnesota Statutes 2004, section 122A.413, is 
        amended to read: 
           122A.413 [EDUCATIONAL IMPROVEMENT PLAN.] 
           Subdivision 1.  [QUALIFYING PLAN.] A district or 
        intermediate school district may develop an educational 
        improvement plan for the purpose of qualifying for alternative 
        teacher compensation aid the alternative teacher professional 
        pay system under sections 122A.414 and 122A.415 section 
        122A.414.  The plan must include measures for improving school 
        district, intermediate school district, school site, teacher, 
        and individual student performance.  
           Subd. 2.  [PLAN COMPONENTS.] The educational improvement 
        plan must be approved by the school board and have at least 
        these elements: 
           (1) assessment and evaluation tools to measure student 
        performance and progress; 
           (2) performance goals and benchmarks for improvement; 
           (3) measures of student attendance and completion rates; 
           (4) a rigorous professional development system, consistent 
        with section 122A.60, that is aligned with educational 
        improvement, designed to achieve teaching quality improvement, 
        and consistent with clearly defined research-based standards; 
           (5) measures of student, family, and community involvement 
        and satisfaction; 
           (6) a data system about students and their academic 
        progress that provides parents and the public with 
        understandable information; and 
           (7) a teacher induction and mentoring program for 
        probationary teachers that provides continuous learning and 
        sustained teacher support.  The process for developing the plan 
        must involve district teachers; and 
           (8) substantial participation by the exclusive 
        representative of the teachers in developing the plan. 
           Subd. 3.  [SCHOOL SITE ACCOUNTABILITY.] A district or 
        intermediate school district that develops a plan under 
        subdivisions 1 and 2 must ensure that each school site develops 
        a board-approved educational improvement plan that is aligned 
        with the district educational improvement plan under subdivision 
        2 and developed with the exclusive representative of the 
        teachers.  While a site plan must be consistent with the 
        district educational improvement plan, it may establish 
        performance goals and benchmarks that meet or exceed those of 
        the district.  The process for developing the plan must involve 
        site teachers.  
           Sec. 40.  Minnesota Statutes 2004, section 122A.414, is 
        amended to read: 
           122A.414 [ALTERNATIVE TEACHER COMPENSATION PAY.] 
           Subdivision 1.  [RESTRUCTURED PAY SYSTEM.] A restructured 
        alternative teacher compensation professional pay system is 
        established under subdivision 2 to provide incentives for to 
        encourage teachers to improve their knowledge and instructional 
        skills in order to improve student learning and for school 
        districts, intermediate school districts, and charter schools to 
        recruit and retain highly qualified teachers, encourage highly 
        qualified teachers to undertake challenging assignments, and to 
        support teachers' roles in improving students' educational 
        achievement.  
           Subd. 1a.  [TRANSITIONAL PLANNING YEAR.] (a) To be eligible 
        to participate in an alternative teacher professional pay 
        system, a school district, intermediate school district, or 
        site, at least one school year before it expects to fully 
        implement an alternative pay system, must: 
           (1) submit to the department a letter of intent executed by 
        the school district or intermediate school district and the 
        exclusive representative of the teachers to complete a plan 
        preparing for full implementation, consistent with subdivision 
        2, that may include, among other activities, training to 
        evaluate teacher performance, a restructured school day to 
        develop integrated ongoing site-based professional development 
        activities, release time to develop an alternative pay system 
        agreement, and teacher and staff training on using multiple data 
        sources; and 
           (2) agree to use up to two percent of basic revenue for 
        staff development purposes, consistent with sections 122A.60 and 
        122A.61, to develop the alternative teacher professional pay 
        system agreement under this section.  
           (b) To be eligible to participate in an alternative teacher 
        professional pay system, a charter school, at least one school 
        year before it expects to fully implement an alternative pay 
        system, must: 
           (1) submit to the department a letter of intent executed by 
        the charter school and the charter school board of directors; 
           (2) submit the record of a formal vote by the teachers 
        employed at the charter school indicating at least 70 percent of 
        all teachers agree to implement the alternative pay system; and 
           (3) agree to use up to two percent of basic revenue for 
        staff development purposes, consistent with sections 122A.60 and 
        122A.61, to develop the alternative teacher professional pay 
        system.  
           (c) The commissioner may waive the planning year if the 
        commissioner determines, based on the criteria under subdivision 
        2, that the school district, intermediate school district, site 
        or charter school is ready to fully implement an alternative pay 
        system.  
           Subd. 2.  [ALTERNATIVE TEACHER PROFESSIONAL PAY SYSTEM.] 
        (a) To participate in this program, a school district, 
        intermediate school district, school site, or charter school 
        must have an educational improvement plan as described in under 
        section 122A.413 and an alternative teacher professional pay 
        system as described in agreement under paragraph (b).  A charter 
        school participant also must comply with subdivision 2a. 
           (b) The alternative teacher professional pay 
        system agreement must: 
           (1) describe the conditions necessary for how teachers can 
        achieve career advancement and additional compensation; 
           (2) describe how the school district, intermediate school 
        district, school site, or charter school will provide teachers 
        with career advancement options for teachers retaining that 
        allow teachers to retain primary roles in student 
        instruction and facilitate site-focused professional development 
        that helps other teachers improve their skills; 
           (3) use a professional pay system that replaces the step 
        and lane salary schedule and is not based on years of service; 
           (4) encourage teachers' continuous improvement in content 
        knowledge, pedagogy, and use of best practices; and 
           (5) implement an objective evaluation system, including 
        classroom observation, that is aligned with the district's or 
        the site's educational improvement plan as described in section 
        122A.413. reform the "steps and lanes" salary schedule, prevent 
        any teacher's compensation paid before implementing the pay 
        system from being reduced as a result of participating in this 
        system, and base at least 60 percent of any compensation 
        increase on teacher performance using: 
           (i) schoolwide student achievement gains under section 
        120B.35 or locally selected standardized assessment outcomes, or 
        both; 
           (ii) measures of student achievement; and 
           (iii) an objective evaluation program that includes:  
           (A) individual teacher evaluations aligned with the 
        educational improvement plan under section 122A.413 and the 
        staff development plan under section 122A.60; and 
           (B) objective evaluations using multiple criteria conducted 
        by a locally selected and periodically trained evaluation team 
        that understands teaching and learning; 
           (4) provide integrated ongoing site-based professional 
        development activities to improve instructional skills and 
        learning that are aligned with student needs under section 
        122A.413, consistent with the staff development plan under 
        section 122A.60 and led during the school day by trained teacher 
        leaders such as master or mentor teachers; 
           (5) allow any teacher in a participating school district, 
        intermediate school district, school site, or charter school 
        that implements an alternative pay system to participate in that 
        system without any quota or other limit; and 
           (6) encourage collaboration rather than competition among 
        teachers.  
           Subd. 2a.  [CHARTER SCHOOL APPLICATIONS.] For charter 
        school applications, the board of directors of a charter school 
        that satisfies the conditions under subdivisions 2 and 2b must 
        submit to the commissioner an application that contains: 
           (1) an agreement to implement an alternative teacher 
        professional pay system under this section; 
           (2) a resolution by the charter school board of directors 
        adopting the agreement; and 
           (3) the record of a formal vote by the teachers employed at 
        the charter school indicating that at least 70 percent of all 
        teachers agree to implement the alternative teacher professional 
        pay system, unless the charter school submits an alternative 
        teacher professional pay system agreement under this section 
        before the first year of operation. 
           Alternative compensation revenue for a qualifying charter 
        school must be calculated under section 126C.10, subdivision 34, 
        paragraphs (a) and (b). 
           Subd. 2b.  [APPROVAL PROCESS.] (a) Consistent with the 
        requirements of this section and sections 122A.413 and 122A.415, 
        the department must prepare and transmit to interested school 
        districts, intermediate school districts, school sites, and 
        charter schools a standard form for applying to participate in 
        the alternative teacher professional pay system.  An interested 
        school district, intermediate school district, school site, or 
        charter school must submit to the commissioner a completed 
        application executed by the district superintendent and the 
        exclusive bargaining representative of the teachers if the 
        applicant is a school district, intermediate school district, or 
        school site, or executed by the charter school board of 
        directors if the applicant is a charter school.  The application 
        must include the proposed alternative teacher professional pay 
        system agreement under subdivision 2.  The department must 
        convene a review committee that at least includes teachers and 
        administrators within 30 days of receiving a completed 
        application to recommend to the commissioner whether to approve 
        or disapprove the application.  The commissioner must approve 
        applications on a first-come, first-served basis.  The 
        applicant's alternative teacher professional pay system 
        agreement must be legally binding on the applicant and the 
        collective bargaining representative before the applicant 
        receives alternative compensation revenue.  The commissioner 
        must approve or disapprove an application based on the 
        requirements under subdivisions 2 and 2a.  
           (b) If the commissioner disapproves an application, the 
        commissioner must give the applicant timely notice of the 
        specific reasons in detail for disapproving the application.  
        The applicant may revise and resubmit its application and 
        related documents to the commissioner within 30 days of 
        receiving notice of the commissioner's disapproval and the 
        commissioner must approve or disapprove the revised application, 
        consistent with this subdivision.  Applications that are revised 
        and then approved are considered submitted on the date the 
        applicant initially submitted the application. 
           Subd. 3.  [REPORT; CONTINUED FUNDING.] (a) Participating 
        districts and, intermediate school districts, school sites, and 
        charter schools must report on the implementation and 
        effectiveness of the alternative teacher compensation plan 
        professional pay system, particularly addressing each 
        requirement under subdivision 2 and make biennial annual 
        recommendations by January 1 June 15 to their school boards.  
        The school boards board or board of directors shall transmit a 
        copy of the report with a summary of the findings and 
        recommendations of their the district, intermediate school 
        district, school site, or charter school to the commissioner. 
           (b) If the commissioner determines that a school district, 
        intermediate school district, school site, or charter school 
        that receives alternative teacher compensation revenue is not 
        complying with the requirements of this section, the 
        commissioner may withhold funding from that participant.  Before 
        making the determination, the commissioner must notify the 
        participant of any deficiencies and provide the participant an 
        opportunity to comply. 
           Subd. 4.  [PLANNING AND STAFF DEVELOPMENT.] A school 
        district that qualifies to participate in the alternative 
        teacher professional pay system transitional planning year under 
        subdivision 1a may use up to two percent of basic revenue that 
        would otherwise be reserved under section 122A.61 for complying 
        with the planning and staff development activities under this 
        section. 
           Sec. 41.  [122A.4144] [SUPPLEMENTAL AGREEMENTS; ALTERNATIVE 
        TEACHER PAY.] 
           Notwithstanding section 179A.20 or other law to the 
        contrary, a school board and the exclusive representative of the 
        teachers may agree to reopen a collective bargaining agreement 
        for the purpose of entering into an alternative teacher 
        professional pay system agreement under sections 122A.413, 
        122A.414, and 122A.415.  Negotiations for a contract reopened 
        under this section must be limited to issues related to the 
        alternative teacher professional pay system. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 42.  Minnesota Statutes 2004, section 122A.415, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AID REVENUE AMOUNT.] (a) A school district, 
        intermediate school district, school site, or charter school 
        that meets the conditions of section 122A.414 and submits an 
        application approved by the commissioner is eligible for 
        alternative teacher compensation aid revenue.  
           (b) For school district and intermediate school district 
        applications, the commissioner must consider only those 
        applications to participate that are 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 an 
        alternative teacher professional pay system agreement that: 
           (1) 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 or to 
        applications that align measures of teacher performance with 
        student academic achievement and progress under section 120B.35, 
        subdivision 1 
           (2) is negotiated and adopted according to the Public 
        Employment Labor Relations Act under chapter 179A, except that 
        notwithstanding section 179A.20, subdivision 3, a district may 
        enter into a contract for a term of two or four years. 
           (b) Alternative teacher compensation aid revenue for a 
        qualifying school district, or 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 
        teacher professional pay system equals $150 $260 times the 
        district's or the site's number of pupils enrolled at the 
        district or site 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.  Alternative teacher compensation revenue 
        for a qualifying intermediate school district must be calculated 
        under section 126C.10, subdivision 34, paragraphs (a) and (b). 
           (c) For a newly combined or consolidated district, the 
        revenue shall be computed using the sum of pupils enrolled on 
        October 1 of the previous year in the districts entering into 
        the combination or consolidation.  The commissioner may adjust 
        the revenue computed for a site using prior year data to reflect 
        changes attributable to school closings, school openings, or 
        grade level reconfigurations between the prior year and the 
        current year. 
           (d) The revenue is available only to school districts, 
        intermediate school districts, school sites, and charter schools 
        that fully implement an alternative teacher professional pay 
        system by October 1 of the current school year.  
           Sec. 43.  Minnesota Statutes 2004, section 122A.415, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AID REVENUE TIMING.] (a) Districts or, 
        intermediate school districts, school sites, or charter schools 
        with approved applications must receive alternative compensation 
        aid revenue for each school year that the district or, 
        intermediate school district, school site participates in the 
        program as described in, or charter school implements an 
        alternative teacher professional pay system under this 
        subdivision and section 122A.414.  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.  For fiscal year 2007 and later, a qualifying district 
        or, intermediate school district, school site, or charter school 
        that received alternative teacher compensation aid for the 
        previous fiscal year must receive at least an amount of 
        alternative teacher compensation revenue equal to the lesser of 
        the amount it received for the previous fiscal year or its 
        proportionate share of the previous year's appropriation the 
        amount it qualifies for under subdivision 1 for the current 
        fiscal year if the district or, intermediate school district, 
        school site, or charter school submits a timely application and 
        the commissioner determines that the district or, intermediate 
        school district, school site, or charter school 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 approve applications that comply 
        with sections 122A.414, subdivisions 2, paragraph (b), and 2a, 
        if the applicant is a charter school, and 122A.415, subdivision 
        1, in the order in which they are received, select applicants 
        that qualify for this program, notify school districts and, 
        intermediate school districts, school sites, and charter schools 
        about the program, develop and disseminate application 
        materials, and carry out other activities needed to implement 
        this section.  
           (c) For applications approved under section 122A.415 before 
        August 1 of the fiscal year for which the aid is paid, the 
        portion of the state total basic alternative teacher 
        compensation aid entitlement allocated to charter schools must 
        not exceed $522,000 for fiscal year 2006 and $3,374,000 for 
        fiscal year 2007.  For fiscal year 2008 and later, the portion 
        of the state total basic alternative teacher compensation aid 
        entitlement allocated to charter schools must not exceed the 
        product of $3,374,000 times the ratio of the state total charter 
        school enrollment for the previous fiscal year to the state 
        total charter school enrollment for the second previous year.  
        Additional basic alternative teacher compensation aid may be 
        approved for charter schools after August 1, not to exceed the 
        charter school limit for the following fiscal year, if the basic 
        alternative teacher compensation aid entitlement for school 
        districts based on applications approved by August 1 does not 
        expend the remaining amount under the limit. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 44.  Minnesota Statutes 2004, section 122A.60, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STAFF DEVELOPMENT COMMITTEE.] A school 
        board must use the revenue authorized in section 122A.61 for 
        in-service education for programs under section 120B.22, 
        subdivision 2, or for staff development plans under this 
        section.  The board must establish an advisory staff development 
        committee to develop the plan, assist site professional 
        development teams in developing a site plan consistent with the 
        goals of the plan, and evaluate staff development efforts at the 
        site level.  A majority of the advisory committee and the site 
        professional development team must be teachers representing 
        various grade levels, subject areas, and special education.  The 
        advisory committee must also include nonteaching staff, parents, 
        and administrators.  Districts must report staff development 
        results and expenditures to the commissioner in the form and 
        manner determined by the commissioner.  The expenditure report 
        must include expenditures by the board for district level 
        activities and expenditures made by the staff.  The report must 
        provide a breakdown of expenditures for (1) curriculum 
        development and programs, (2) in-service education, workshops, 
        and conferences, and (3) the cost of teachers or substitute 
        teachers for staff development purposes.  Within each of these 
        categories, the report must also indicate whether the 
        expenditures were incurred at the district level or the school 
        site level, and whether the school site expenditures were made 
        possible by the grants to school sites that demonstrate 
        exemplary use of allocated staff development revenue.  These 
        expenditures are to be reported using the UFARS system.  The 
        commissioner shall report the staff development expenditure data 
        to the education committees of the legislature by February 15 
        each year.  
           Sec. 45.  Minnesota Statutes 2004, section 122A.60, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [EFFECTIVE STAFF DEVELOPMENT ACTIVITIES.] (a) 
        Staff development activities must: 
           (1) focus on the school classroom and research-based 
        strategies that improve student learning; 
           (2) provide opportunities for teachers to practice and 
        improve their instructional skills over time; 
           (3) provide opportunities for teachers to use student data 
        as part of their daily work to increase student achievement; 
           (4) enhance teacher content knowledge and instructional 
        skills; 
           (5) align with state and local academic standards; 
           (6) provide opportunities to build professional 
        relationships, foster collaboration among principals and staff 
        who provide instruction, and provide opportunities for 
        teacher-to-teacher mentoring; and 
           (7) align with the plan of the district or site for an 
        alternative teacher professional pay system. 
        Staff development activities may include curriculum development 
        and curriculum training programs, and activities that provide 
        teachers and other members of site-based teams training to 
        enhance team performance.  The school district also may 
        implement other staff development activities required by law and 
        activities associated with professional teacher compensation 
        models.  
           (b) Release time provided for teachers to supervise 
        students on field trips and school activities, or independent 
        tasks not associated with enhancing the teacher's knowledge and 
        instructional skills, such as preparing report cards, 
        calculating grades, or organizing classroom materials, may not 
        be counted as staff development time that is financed with staff 
        development reserved revenue under section 122A.61. 
           Sec. 46.  Minnesota Statutes 2004, section 122A.60, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [STAFF DEVELOPMENT REPORT.] (a) By October 15 of 
        each year, the district and site staff development committees 
        shall write and submit a report of staff development activities 
        and expenditures for the previous year, in the form and manner 
        determined by the commissioner.  The report, signed by the 
        district superintendent and staff development chair, must 
        include assessment and evaluation data indicating progress 
        toward district and site staff development goals based on 
        teaching and learning outcomes, including the percentage of 
        teachers and other staff involved in instruction who participate 
        in effective staff development activities under subdivision 3. 
           (b) The report must break down expenditures for: 
           (1) curriculum development and curriculum training 
        programs; and 
           (2) staff development training models, workshops, and 
        conferences, and the cost of releasing teachers or providing 
        substitute teachers for staff development purposes. 
           The report also must indicate whether the expenditures were 
        incurred at the district level or the school site level, and 
        whether the school site expenditures were made possible by 
        grants to school sites that demonstrate exemplary use of 
        allocated staff development revenue.  These expenditures must be 
        reported using the uniform financial and accounting and 
        reporting standards.  
           (c) The commissioner shall report the staff development 
        progress and expenditure data to the house of representatives 
        and senate committees having jurisdiction over education by 
        February 15 each year. 
           Sec. 47.  [122A.628] [SCHOOLS MENTORING SCHOOLS REGIONAL 
        SITES.] 
           Subdivision 1.  [PROGRAM.] The commissioner of education 
        shall select up to four school districts, or partnerships of 
        school districts, for the purpose of assisting other school 
        districts in the region with the development of thorough and 
        effective teacher mentoring programs.  The commissioner shall 
        use geographic balance and proven teacher induction programs as 
        criteria when selecting the sites.  One site must include the 
        Brainerd teacher support system, which has been cited by the 
        Minnesota Board of Teaching as a model program and was one of 
        only six programs in the nation to be recognized for the 2004 
        NEA-Saturn/UAW partnership award.  The sites shall be known as 
        schools mentoring schools regional sites. 
           The sites shall provide high quality mentoring assistance 
        programs and services to other nearby school districts for the 
        development of effective systems of support for new teachers.  
        The sites shall offer coaching/mentor training, in-class 
        observation training, and train-the-teacher opportunities for 
        teams of participating teachers.  The sites shall use their 
        recognized experience and methods to equip schools to work with 
        their own new and beginning teachers.  The commissioner shall 
        review and report annually to the legislature on the operation 
        of each training center. 
           Subd. 2.  [REVENUE.] A school district that is selected to 
        participate in the schools mentoring schools program under this 
        section may utilize its professional compensation revenue under 
        section 122A.4142, subdivision 4, to pay regional training sites 
        for staff development and training services. 
           Sec. 48.  [122A.74] [PRINCIPALS' LEADERSHIP INSTITUTE.] 
           Subdivision 1.  [ESTABLISHMENT.] (a) The commissioner of 
        education may contract with the regents of the University of 
        Minnesota to establish a Principals' Leadership Institute to 
        provide professional development to school principals by: 
           (1) creating a network of leaders in the educational and 
        business communities to communicate current and future trends in 
        leadership techniques; 
           (2) helping to create a vision for the school that is 
        aligned with the community and district priorities; and 
           (3) developing strategies to retain highly qualified 
        teachers. 
           (b) The University of Minnesota must cooperate with 
        participating members of the business community to provide 
        funding and content for the institute. 
           (c) Participants must agree to attend the Principals' 
        Leadership Institute for four weeks during the academic summer. 
           (d) The Principals' Leadership Institute must incorporate 
        program elements offered by leadership programs at the 
        University of Minnesota and program elements used by the 
        participating members of the business community to enhance 
        leadership within their businesses. 
           Subd. 2.  [METHOD OF SELECTION AND REQUIREMENTS.] (a) The 
        board of each school district in the state may select a 
        principal, upon the recommendation of the district's 
        superintendent and based on the principal's leadership 
        potential, to attend the institute. 
           (b) The school board shall forward its list of recommended 
        participants to the commissioner of education by February 1 each 
        year.  In addition, a principal may submit an application 
        directly to the commissioner by February 1.  The commissioner of 
        education shall notify the school board, the principal 
        candidates, and the University of Minnesota of the principals 
        selected to participate in the Principals' Leadership Institute 
        each year. 
           Sec. 49.  [123A.12] [AGREEMENT REGARDING ADMINISTRATIVE 
        SERVICES.] 
           Subdivision 1.  [AGREEMENT.] (a) Two or more school 
        districts may enter into an agreement pursuant to section 471.59 
        to increase efficiency in the delivery of administrative 
        services and to reduce costs by the provision of an 
        administrative service by a district or an entity created by or 
        specified in the agreement and the purchase of that service by 
        one or more other districts that are a party to that agreement. 
           (b) Administrative services include, but are not limited to:
           (1) a superintendent, deputy superintendent, or assistant 
        superintendent; 
           (2) a principal, assistant principal, or vice principal; or 
           (3) a director, manager, coordinator, supervisor, dean, or 
        other administrative position regardless of title. 
           (c) A person providing administrative services to another 
        district pursuant to the agreement shall remain an employee of 
        the employing district or the entity created by or specified in 
        the agreement for all purposes. 
           Subd. 2.  [LEVY.] If an administrative position is 
        discontinued in a district as a result of the purchase of 
        administrative services under the agreement in subdivision 1, 
        the district may levy over a period of up to three years for 
        costs approved by the commissioner for retirement incentives or 
        severance pay or other costs related to the discontinuance of 
        that position. 
           Sec. 50.  Minnesota Statutes 2004, section 123B.02, is 
        amended by adding a subdivision to read: 
           Subd. 14a.  [EMPLOYEE RECOGNITION.] A school board may 
        establish and operate an employee recognition program for 
        district employees, including teachers, and may expend funds as 
        necessary to achieve the objectives of the program.  The 
        employee recognition program shall not include monetary awards.  
           Sec. 51.  Minnesota Statutes 2004, section 123B.02, is 
        amended by adding a subdivision to read: 
           Subd. 22.  [REWARD.] A school board, after formally 
        adopting a policy consistent with this subdivision, may offer a 
        reward to a person who provides accurate and reliable 
        information leading to the conviction of a person who has 
        committed or conspired to commit a crime against students or 
        school employees, volunteers or board members as a result of 
        their affiliation with the school district, or against school 
        district property. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 52.  Minnesota Statutes 2004, section 123B.02, is 
        amended by adding a subdivision to read: 
           Subd. 23.  [CREDIT CARDS.] A board may authorize the use of 
        a credit card by any officer or employee otherwise authorized to 
        make a purchase on behalf of the district.  If a district 
        officer or employee makes or directs a purchase by credit card 
        that is not approved by the school board, the officer or 
        employee is personally liable for the amount of the purchase.  A 
        purchase by credit card must otherwise comply with all statutes, 
        rules, or district policy applicable to school district 
        purchases. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies for fiscal year 2005 and 
        later. 
           Sec. 53.  Minnesota Statutes 2004, section 123B.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] "Education site" means a 
        separate facility.  A program within a facility or within a 
        district is an education site if the school board recognizes it 
        as a site.  
           Sec. 54.  Minnesota Statutes 2004, section 123B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGREEMENT.] (a) Either the school board or the 
        school site decision-making team may request that the school 
        board enter into an agreement with a school site decision-making 
        team concerning Upon the request of 60 percent of the licensed 
        employees of a site or a school site decision-making team, the 
        school board shall enter into discussions to reach an agreement 
        concerning the governance, management, or control of the 
        school.  A school site decision-making team may include the 
        school principal, teachers in the school or their designee, 
        other employees in the school, parents of pupils in the school, 
        representatives of pupils in the school, or other members in the 
        community.  A school site decision-making team must include at 
        least one parent of a pupil in the school.  For purposes of 
        formation of a new site, a school site decision-making team may 
        be a team of teachers that is recognized by the board as a 
        site.  The school site decision-making team shall include the 
        school principal or other person having general control and 
        supervision of the school.  The site decision-making team must 
        reflect the diversity of the education site.  No more than At 
        least one-half of the members shall be employees of the 
        district, unless an employee is the parent of a student enrolled 
        in the school site, in which case the employee may elect to 
        serve as a parent member of the site team. 
           (b) School site decision-making agreements must delegate 
        powers, duties, and broad management responsibilities to site 
        teams and involve staff members, students as appropriate, and 
        parents in decision making. 
           (c) An agreement shall include a statement of powers, 
        duties, responsibilities, and authority to be delegated to and 
        within the site. 
           (d) An agreement may include: 
           (1) an achievement contract according to subdivision 4; 
           (2) a mechanism to allow principals, a site leadership 
        team, or other persons having general control and supervision of 
        the school, to make decisions regarding how financial and 
        personnel resources are best allocated at the site and from whom 
        goods or services are purchased; 
           (3) a mechanism to implement parental involvement programs 
        under section 124D.895 and to provide for effective parental 
        communication and feedback on this involvement at the site 
        level; 
           (4) a provision that would allow the team to determine who 
        is hired into licensed and nonlicensed positions; 
           (5) a provision that would allow teachers to choose the 
        principal or other person having general control; 
           (6) an amount of revenue allocated to the site under 
        subdivision 3; and 
           (7) any other powers and duties determined appropriate by 
        the board. 
           The school board of the district remains the legal employer 
        under clauses (4) and (5). 
           (e) Any powers or duties not delegated to the school site 
        management team in the school site management agreement shall 
        remain with the school board. 
           (f) Approved agreements shall be filed with the 
        commissioner.  If a school board denies a request or the school 
        site and school board fail to reach an agreement to enter into a 
        school site management agreement, it the school board shall 
        provide a copy of the request and the reasons for its denial to 
        the commissioner. 
           (g) A site decision-making grant program is established, 
        consistent with this subdivision, to allow sites to implement an 
        agreement that at least: 
           (1) notwithstanding subdivision 3, allocates to the site 
        all revenue that is attributable to the students at that site; 
           (2) a provision, consistent with current law and the 
        collective bargaining agreement in effect, allows the site team 
        to decide who is selected from within the district for licensed 
        and nonlicensed positions at the site and to make staff 
        assignments in the site; and 
           (3) includes a completed performance agreement under 
        subdivision 4. 
           The commissioner shall establish the form and manner of the 
        application for a grant and annually, at the end of each fiscal 
        year, report to the house of representative and senate 
        committees having jurisdiction over education on the progress of 
        the program. 
           Sec. 55.  Minnesota Statutes 2004, section 123B.49, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BOARD CONTROL OF EXTRACURRICULAR ACTIVITIES.] 
        (a) The board may take charge of and control all extracurricular 
        activities of the teachers and children of the public schools in 
        the district.  Extracurricular activities means all direct and 
        personal services for pupils for their enjoyment that are 
        managed and operated under the guidance of an adult or staff 
        member.  The board shall allow all resident pupils receiving 
        instruction in a home school as defined in section 123B.36, 
        subdivision 1, paragraph (a), to be eligible to fully 
        participate in extracurricular activities on the same basis as 
        public school students. 
           (b) Extracurricular activities have all of the following 
        characteristics: 
           (1) they are not offered for school credit nor required for 
        graduation; 
           (2) they are generally conducted outside school hours, or 
        if partly during school hours, at times agreed by the 
        participants, and approved by school authorities; 
           (3) the content of the activities is determined primarily 
        by the pupil participants under the guidance of a staff member 
        or other adult. 
           (c) If the board does not take charge of and control 
        extracurricular activities, these activities shall be 
        self-sustaining with all expenses, except direct salary costs 
        and indirect costs of the use of school facilities, met by dues, 
        admissions, or other student fund-raising events.  The general 
        fund must reflect only those salaries directly related to and 
        readily identified with the activity and paid by public funds.  
        Other revenues and expenditures for extra curricular activities 
        must be recorded according to the "Manual of Instruction for 
        Uniform Student Activities Accounting for Minnesota School 
        Districts and Area Vocational-Technical Colleges." Manual for 
        Activity Fund Accounting.  Extracurricular activities not under 
        board control must have an annual financial audit and must also 
        be audited annually for compliance with this section. 
           (d) If the board takes charge of and controls 
        extracurricular activities, any or all costs of these activities 
        may be provided from school revenues and all revenues and 
        expenditures for these activities shall be recorded in the same 
        manner as other revenues and expenditures of the district.  
           (e) If the board takes charge of and controls 
        extracurricular activities, the teachers or pupils in the 
        district must not participate in such activity, nor shall the 
        school name or any allied name be used in connection therewith, 
        except by consent and direction of the board. 
           Sec. 56.  Minnesota Statutes 2004, section 123B.88, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [PUPIL TRANSPORTATION SAFETY COMMITTEE.] (a) A 
        school board may establish a pupil transportation safety 
        committee.  The chair of the pupil transportation safety 
        committee is the district's school transportation safety 
        director.  The school board shall appoint the other members of 
        the pupil transportation safety committee.  Membership may 
        include parents, school bus drivers, representatives of school 
        bus companies, local law enforcement officials, other school 
        district staff, and representatives from other units of local 
        government. 
           (b) The duties of the pupil transportation safety committee 
        include:  (1) reviewing and recommending changes to the 
        district's pupil transportation safety policy required under 
        subdivision 1; and (2) developing a comprehensive plan for the 
        safe transportation of students who face hazardous 
        transportation conditions.  The comprehensive hazardous 
        transportation plan shall consider safety factors including the 
        types of roads that students must cross, the speed of traffic on 
        those roads, the age of the students, and any other factors as 
        determined by the committee. 
           (c) The pupil transportation safety committee must hold at 
        least one public meeting before adopting its comprehensive plan 
        for transporting students who face hazardous transportation 
        conditions. 
           (d) Any recommended changes to the district's pupil 
        transportation safety policy and the comprehensive plan for 
        hazardous transportation must be submitted to the school board. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 57.  Minnesota Statutes 2004, section 124D.09, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CREDITS.] A pupil may enroll in a course under 
        this section for either secondary credit or postsecondary 
        credit.  At the time a pupil enrolls in a course, the pupil 
        shall designate whether the course is for secondary or 
        postsecondary credit.  A pupil taking several courses may 
        designate some for secondary credit and some for postsecondary 
        credit.  A pupil must not audit a course under this section. 
           A district shall grant academic credit to a pupil enrolled 
        in a course for secondary credit if the pupil successfully 
        completes the course.  Seven quarter or four semester college 
        credits equal at least one full year of high school credit.  
        Fewer college credits may be prorated.  A district must also 
        grant academic credit to a pupil enrolled in a course for 
        postsecondary credit if secondary credit is requested by a 
        pupil.  If no comparable course is offered by the district, the 
        district must, as soon as possible, notify the commissioner, who 
        shall determine the number of credits that shall be granted to a 
        pupil who successfully completes a course.  If a comparable 
        course is offered by the district, the school board shall grant 
        a comparable number of credits to the pupil.  If there is a 
        dispute between the district and the pupil regarding the number 
        of credits granted for a particular course, the pupil may appeal 
        the board's decision to the commissioner.  The commissioner's 
        decision regarding the number of credits shall be final.  
           The secondary credits granted to a pupil must be counted 
        toward the graduation requirements and subject area requirements 
        of the district.  Evidence of successful completion of each 
        course and secondary credits granted must be included in the 
        pupil's secondary school record.  A pupil shall provide the 
        school with a copy of the pupil's grade in each course taken for 
        secondary credit under this section.  Upon the request of a 
        pupil, the pupil's secondary school record must also include 
        evidence of successful completion and credits granted for a 
        course taken for postsecondary credit.  In either case, the 
        record must indicate that the credits were earned at a 
        postsecondary institution. 
           If a pupil enrolls in a postsecondary institution after 
        leaving secondary school, the postsecondary institution must 
        award postsecondary credit for any course successfully completed 
        for secondary credit at that institution.  Other postsecondary 
        institutions may award, after a pupil leaves secondary school, 
        postsecondary credit for any courses successfully completed 
        under this section.  An institution may not charge a pupil for 
        the award of credit. 
           The Board of Trustees of the Minnesota State Colleges and 
        Universities and the Board of Regents of the University of 
        Minnesota must, and private nonprofit and proprietary 
        postsecondary institutions, should award postsecondary credit 
        for any successfully completed courses in a program certified by 
        the National Alliance of Concurrent Enrollment Partnerships 
        offered according to an agreement under subdivision 10. 
           Sec. 58.  Minnesota Statutes 2004, section 124D.095, 
        subdivision 8, is amended to read: 
           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:  (1) the student does not complete the on-line 
        learning course, or (2) 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 124D.096. 
           (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. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 59.  Minnesota Statutes 2004, 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 who 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 and how the sponsor intends to oversee the 
        fiscal and student performance of the charter school and to 
        comply with the terms of the written contract between the 
        sponsor and the charter school board of directors under 
        subdivision 6.  The commissioner must approve or disapprove the 
        sponsor's proposed authorization within 60 90 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.  
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year and later. 
           Sec. 60.  Minnesota Statutes 2004, section 124D.10, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CONTRACT.] The sponsor's authorization for a 
        charter school must be in the form of a written contract signed 
        by the sponsor and the board of directors of the charter 
        school.  The contract must be completed within 90 days of the 
        commissioner's approval of the sponsor's proposed authorization. 
        The contract for a charter school must be in writing and contain 
        at least the following: 
           (1) a description of a program that carries out one or more 
        of the purposes in subdivision 1; 
           (2) specific outcomes pupils are to achieve under 
        subdivision 10; 
           (3) admission policies and procedures; 
           (4) management and administration of the school; 
           (5) requirements and procedures for program and financial 
        audits; 
           (6) how the school will comply with subdivisions 8, 13, 16, 
        and 23; 
           (7) assumption of liability by the charter school; 
           (8) types and amounts of insurance coverage to be obtained 
        by the charter school; 
           (9) the term of the contract, which may be up to three 
        years; and 
           (10) if the board of directors or the operators of the 
        charter school provide special instruction and services for 
        children with a disability under sections 125A.03 to 125A.24, 
        and 125A.65, a description of the financial parameters within 
        which the charter school will operate to provide the special 
        instruction and services to children with a disability; and 
           (11) the process and criteria the sponsor intends to use to 
        monitor and evaluate the fiscal and student performance of the 
        charter school, consistent with subdivision 15. 
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year and later. 
           Sec. 61.  Minnesota Statutes 2004, section 124D.10, 
        subdivision 15, is amended to read: 
           Subd. 15.  [REVIEW AND COMMENT.] (a) The department must 
        review and comment on the evaluation, by the sponsor, of the 
        performance of a charter school before the charter school's 
        contract is renewed for another contract term.  The sponsor must 
        submit to the commissioner timely information for the review and 
        comment.  
           (b) A sponsor shall monitor and evaluate the fiscal and 
        student performance of the school, and may for this purpose 
        annually assess a charter school:  (1) in its first, second, or 
        third year of operation up to $30 per student up to a maximum of 
        $10,000; and (2) in its fourth or a subsequent year of operation 
        up to $10 per student up to a maximum of $3,500.  The 
        information for the review and comment shall be reported by the 
        sponsor to the commissioner of education in a timely manner. 
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year and later. 
           Sec. 62.  Minnesota Statutes 2004, section 124D.10, 
        subdivision 23, is amended to read: 
           Subd. 23.  [CAUSES FOR NONRENEWAL OR TERMINATION OF CHARTER 
        SCHOOL CONTRACT.] (a) The duration of the contract with a 
        sponsor must be for the term contained in the contract according 
        to subdivision 6.  The sponsor may or may not renew a contract 
        at the end of the term for any ground listed in paragraph (b).  
        A sponsor may unilaterally terminate a contract during the term 
        of the contract for any ground listed in paragraph (b).  At 
        least 60 days before not renewing or terminating a contract, the 
        sponsor shall notify the board of directors of the charter 
        school of the proposed action in writing.  The notice shall 
        state the grounds for the proposed action in reasonable detail 
        and that the charter school's board of directors may request in 
        writing an informal hearing before the sponsor within 14 days of 
        receiving notice of nonrenewal or termination of the contract.  
        Failure by the board of directors to make a written request for 
        a hearing within the 14-day period shall be treated as 
        acquiescence to the proposed action.  Upon receiving a timely 
        written request for a hearing, the sponsor shall give reasonable 
        notice to the charter school's board of directors of the hearing 
        date.  The sponsor shall conduct an informal hearing before 
        taking final action.  The sponsor shall take final action to 
        renew or not renew a contract by the last day of classes in the 
        school year.  If the sponsor is a local board, the school's 
        board of directors may appeal the sponsor's decision to the 
        commissioner. 
           (b) A contract may be terminated or not renewed upon any of 
        the following grounds: 
           (1) failure to meet the requirements for pupil performance 
        contained in the contract; 
           (2) failure to meet generally accepted standards of fiscal 
        management; 
           (3) violations of law; or 
           (4) other good cause shown. 
           If a contract is terminated or not renewed under this 
        paragraph, the school must be dissolved according to the 
        applicable provisions of chapter 308A or 317A, except when the 
        commissioner approves the decision of a different eligible 
        sponsor to authorize the charter school.  
           (c) If at the end of a contract term, either the sponsor or 
        the charter school board of directors wants to voluntarily 
        terminate the contract, a change in sponsors is allowed if the 
        commissioner approves the decision of a different eligible 
        sponsor to authorize the charter school.  The party intending to 
        terminate the contract must notify the other party and the 
        commissioner of its intent at least 90 days before the date on 
        which the contract ends.  The sponsor that is a party to the 
        existing contract at least must inform the approved different 
        eligible sponsor about the fiscal and student performance of the 
        school.  If no different eligible sponsor is approved, the 
        school must be dissolved according to applicable law and the 
        terms of the contract.  
           (d) The commissioner, after providing reasonable notice to 
        the board of directors of a charter school and the existing 
        sponsor, and after providing an opportunity for a public 
        hearing, may terminate the existing sponsorial relationship if 
        the charter school has a history of: 
           (1) financial mismanagement; or 
           (2) repeated violations of the law. 
           [EFFECTIVE DATE.] This section is effective for the 
        2005-2006 school year and later. 
           Sec. 63.  Minnesota Statutes 2004, 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, extended time revenue, 
        alternative teacher compensation revenue, transition revenue, 
        and transportation sparsity revenue, plus basic skills revenue, 
        extended time revenue, basic alternative teacher compensation 
        aid according to section 126C.10, subdivision 34, and transition 
        revenue as though the school were a school district.  The 
        general education revenue for each extended time marginal cost 
        pupil unit equals $4,378.  
           (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. 64.  Minnesota Statutes 2004, 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 the 
        product of (i) 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 times (ii) the 
        adjusted marginal cost pupil units, plus the product of $223 
        times the extended time marginal cost pupil units.  
           Sec. 65.  Minnesota Statutes 2004, 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, or if the aid, grant, or revenue replaces levy 
        revenue that is not general education revenue, 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 education, the charter school shall report the 
        total amount of funds received from grants and other outside 
        sources. 
           Sec. 66.  [124D.4531] [CAREER AND TECHNICAL LEVY.] 
           Subdivision 1.  [CAREER AND TECHNICAL LEVY.] (a) A district 
        with a career and technical program approved under this section 
        for the fiscal year in which the levy is certified may levy an 
        amount equal to the lesser of: 
           (1) $80 times the district's average daily membership in 
        grades 10 through 12 for the fiscal year in which the levy is 
        certified; or 
           (2) 25 percent of approved expenditures in the fiscal year 
        in which the levy is certified for the following: 
           (i) salaries paid to essential, licensed personnel 
        providing direct instructional services to students in that 
        fiscal year for services rendered in the district's approved 
        career and technical education programs; 
           (ii) contracted services provided by a public or private 
        agency other than a Minnesota school district or cooperative 
        center under subdivision 7; 
           (iii) necessary travel between instructional sites by 
        licensed career and technical education personnel; 
           (iv) necessary travel by licensed career and technical 
        education personnel for vocational student organization 
        activities held within the state for instructional purposes; 
           (v) curriculum development activities that are part of a 
        five-year plan for improvement based on program assessment; 
           (vi) necessary travel by licensed career and technical 
        education personnel for noncollegiate credit-bearing 
        professional development; and 
           (vii) specialized vocational instructional supplies. 
           (b) Up to ten percent of a district's career and technical 
        levy may be spent on equipment purchases.  Districts using the 
        career and technical levy for equipment purchases must report to 
        the department on the improved learning opportunities for 
        students that result from the investment in equipment. 
           (c) The district must recognize the full amount of this 
        levy as revenue for the fiscal year in which it is certified. 
           Subd. 2.  [ALLOCATION FROM COOPERATIVE CENTERS AND 
        INTERMEDIATE DISTRICTS.] For purposes of this section, a 
        cooperative center or an intermediate district must allocate its 
        approved expenditures for career and technical education 
        programs among participating districts. 
           Subd. 3.  [LEVY GUARANTEE.] Notwithstanding subdivision 1, 
        the career and technical education levy for a district is not 
        less than the lesser of: 
           (1) the district's career and technical education levy 
        authority for the previous fiscal year; or 
           (2) 100 percent of the approved expenditures for career and 
        technical programs included in subdivision 1, paragraph (b), for 
        the fiscal year in which the levy is certified. 
           Subd. 4.  [DISTRICT REPORTS.] Each district or cooperative 
        center must report data to the department for all career and 
        technical education programs as required by the department to 
        implement the career and technical levy formula. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2008. 
           Sec. 67.  Minnesota Statutes 2004, section 124D.66, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBLE SERVICES.] (a) Assurance of mastery 
        programs may provide direct instructional services to an 
        eligible pupil, or a group of eligible pupils, under the 
        following conditions in paragraphs (b) to (d). 
           (b) Instruction may be provided at one or more grade levels 
        from kindergarten to grade 8 and for students in grades 9 
        through 12 who were enrolled in grade 8 before the 2005-2006 
        school year and have failed the basic skills tests, or were 
        enrolled in grade 8 in the 2005-2006 school year and later and 
        who have failed the Minnesota Comprehensive Assessments 
        (MCA-IIs) in reading, mathematics, or writing as required for 
        high school graduation under section 120B.02.  If an assessment 
        of pupils' needs within a district demonstrates that the 
        eligible pupils in grades kindergarten to grade 8 are being 
        appropriately served, a district may serve eligible pupils in 
        grades 9 to 12. 
           (c) Instruction must be provided under the supervision of 
        the eligible pupil's regular classroom teacher.  Instruction may 
        be provided by the eligible pupil's classroom teacher, by 
        another teacher, by a team of teachers, or by an education 
        assistant or aide.  A special education teacher may provide 
        instruction, but instruction that is provided under this section 
        is not eligible for aid under section 125A.76. 
           (d) The instruction that is provided must differ from the 
        initial instruction the pupil received in the regular classroom 
        setting.  The instruction may differ by presenting different 
        curriculum than was initially presented in the regular classroom 
        or by presenting the same curriculum: 
           (1) at a different rate or in a different sequence than it 
        was initially presented; 
           (2) using different teaching methods or techniques than 
        were used initially; or 
           (3) using different instructional materials than were used 
        initially. 
           Sec. 68.  Minnesota Statutes 2004, section 124D.74, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM DESCRIBED.] American Indian 
        education programs are programs in public elementary and 
        secondary schools, nonsectarian nonpublic, community, 
        tribal, charter, or alternative schools enrolling American 
        Indian children designed to: 
           (1) support postsecondary preparation for pupils; 
           (2) support the academic achievement of American Indian 
        students with identified focus to improve reading and mathematic 
        skills; 
           (3) make the curriculum more relevant to the needs, 
        interests, and cultural heritage of American Indian pupils; 
           (4) provide positive reinforcement of the self-image of 
        American Indian pupils; 
           (5) develop intercultural awareness among pupils, parents, 
        and staff; and 
           (6) supplement, not supplant, state and federal educational 
        and cocurricular programs.  
        Program components may include:  development of support 
        components for students in the areas of academic achievement, 
        retention, and attendance; development of support components for 
        staff, including in-service training and technical assistance in 
        methods of teaching American Indian pupils; research projects, 
        including experimentation with and evaluation of methods of 
        relating to American Indian pupils; provision of personal and 
        vocational counseling to American Indian pupils; modification of 
        curriculum, instructional methods, and administrative procedures 
        to meet the needs of American Indian pupils; and supplemental 
        instruction in American Indian language, literature, history, 
        and culture.  Districts offering programs may make contracts for 
        the provision of program components by establishing cooperative 
        liaisons with tribal programs and American Indian social service 
        agencies.  These programs may also be provided as components of 
        early childhood and family education programs. 
           Sec. 69.  Minnesota Statutes 2004, section 124D.81, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GRANTS; PROCEDURES.] Each fiscal year the 
        commissioner of education must make grants to no fewer than six 
        American Indian education programs.  At least three programs 
        must be in urban areas and at least three must be on or near 
        reservations.  The board of a local district, a participating 
        school or a group of boards may develop a proposal for grants in 
        support of American Indian education programs.  Proposals may 
        provide for contracts for the provision of program components by 
        nonsectarian nonpublic, community, tribal, charter, or 
        alternative schools.  The commissioner shall prescribe the form 
        and manner of application for grants, and no grant shall be made 
        for a proposal not complying with the requirements of sections 
        124D.71 to 124D.82.  The commissioner must submit all proposals 
        to the state Advisory Committee on American Indian Education 
        Programs for its recommendations concerning approval, 
        modification, or disapproval and the amounts of grants to 
        approved programs. 
           Sec. 70.  Minnesota Statutes 2004, section 124D.84, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AWARDS.] The commissioner, with the advice 
        and counsel of the Minnesota Indian Education Committee, may 
        award scholarships to any Minnesota resident student who is of 
        one-fourth or more Indian ancestry, who has applied for other 
        existing state and federal scholarship and grant programs, and 
        who, in the opinion of the commissioner, has the capabilities to 
        benefit from further education.  Scholarships must be for 
        accredited degree programs in accredited Minnesota colleges or 
        universities or for courses in accredited Minnesota business, 
        technical, or vocational schools.  Scholarships may also be 
        given to students attending Minnesota colleges that are in 
        candidacy status for obtaining full accreditation, and are 
        eligible for and receiving federal financial aid programs.  
        Students are also eligible for scholarships when enrolled as 
        students in Minnesota higher education institutions that have 
        joint programs with other accredited higher education 
        institutions.  Scholarships shall be used to defray the total 
        cost of education including tuition, incidental fees, books, 
        supplies, transportation, other related school costs and the 
        cost of board and room and shall be paid directly to the college 
        or school concerned where the student receives federal financial 
        aid.  The total cost of education includes all tuition and fees 
        for each student enrolling in a public institution and the 
        portion of tuition and fees for each student enrolling in a 
        private institution that does not exceed the tuition and fees at 
        a comparable public institution.  Each student shall be awarded 
        a scholarship based on the total cost of the student's education 
        and a federal standardized need analysis.  Applicants are 
        encouraged to apply for all other sources of financial aid.  The 
        amount and type of each scholarship shall be determined through 
        the advice and counsel of the Minnesota Indian education 
        committee. 
           When an Indian student satisfactorily completes the work 
        required by a certain college or school in a school year the 
        student is eligible for additional scholarships, if additional 
        training is necessary to reach the student's educational and 
        vocational objective.  Scholarships may not be given to any 
        Indian student for more than five years of study without special 
        recommendation of the Minnesota Indian Education Committee.  
           Sec. 71.  Minnesota Statutes 2004, section 126C.457, is 
        amended to read: 
           126C.457 [CAREER AND TECHNICAL LEVY.] 
           For taxes payable in 2006 and 2007, 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 Minnesota Statutes 2000, 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. 
           Sec. 72.  [127A.095] [IMPLEMENTATION OF NO CHILD LEFT 
        BEHIND ACT.] 
           Subdivision 1.  [CONTINUED IMPLEMENTATION.] The Department 
        of Education shall continue to implement the federal No Child 
        Left Behind Act, Public Law 107-110, without interruption. 
           Subd. 2.  [NO CHILD LEFT BEHIND REVIEW.] (a) The 
        legislature intends to require the Department of Education to 
        conduct a comprehensive review of the consolidated state plan 
        the state submitted to the federal Department of Education to 
        implement the No Child Left Behind Act.  The Minnesota 
        Department of Education shall seek waivers under paragraph (b).  
        If the Department of Education is unable to obtain waivers under 
        paragraph (b), it should recommend in its report under paragraph 
        (b) whether the state should opt out of the No Child Left Behind 
        Act. 
           (b) The commissioner, by January 15, 2007, shall report to 
        the house of representatives and senate committees having 
        jurisdiction over kindergarten through grade 12 education policy 
        and finance whether the department has received approval from 
        the federal Department of Education to: 
           (1) allow the state to develop a plan for determining 
        adequate yearly progress that uses multiple measures of student 
        achievement that include value-added measurement of student 
        achievement in addition to standardized test results to evaluate 
        school and student performance; 
           (2) exclude from sanctions a school that is classified as 
        not having made adequate yearly progress due solely to different 
        subgroups testing below proficient levels for at least two 
        consecutive years; 
           (3) allow the state to average three years of data for the 
        purposes of identifying a school for improvement; 
           (4) allow the state to use No Child Left Behind Act money 
        to provide supplemental education services only in the academic 
        subject area that causes a school to miss adequate yearly 
        progress; 
           (5) exclude from sanctions schools that have not made 
        adequate yearly progress due solely to a subgroup of students 
        with disabilities not testing at a proficient level; 
           (6) identify a school as not making adequate yearly 
        progress only after the school has missed the adequate yearly 
        progress targets in the same subject and subgroup for two 
        consecutive years; 
           (7) limit the score of a student within multiple subgroups 
        to the smallest subgroup in which that student is included when 
        calculating adequate yearly progress; 
           (8) determine when to hold schools accountable for 
        including a student with limited English proficiency in adequate 
        yearly progress calculations; and 
           (9) use a fully computer-adaptive test for purposes of 
        compliance with the No Child Left Behind Act.  
           Subd. 3.  [DEPARTMENT OF FINANCE CERTIFICATION.] If the 
        federal Department of Education does not transmit to the 
        commissioner of education its approval of the conditions in 
        subdivision 2, paragraph (b), the commissioner of finance shall 
        certify and report to the legislature annually beginning January 
        1, 2008, the amount of federal revenue, if any, that the federal 
        government may withhold as a result of a potential state 
        decision to discontinue implementation of the No Child Left 
        Behind Act.  The report shall also specify the intended purpose 
        of the federal revenue and the amount of revenue that the 
        federal government may withhold from the state, each school 
        district, and each charter school in each fiscal year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 73.  Minnesota Statutes 2004, 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 sum of: 
           (1) the product of:  (1) (i) 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; times (2) (ii) the adjusted 
        marginal cost pupil units attributable to the pupil; plus 
           (2) the product of $223 and the extended time marginal cost 
        pupil units attributable to the pupil.  
           Sec. 74.  Minnesota Statutes 2004, section 128C.05, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [EXEMPTION.] The appropriate regional committee 
        must hear a request for a waiver to allow a nonresident student 
        to participate in another district when that participation 
        affects a school's classification for interscholastic athletic 
        activities.  The regional committee must review requests for 
        waivers and make timely recommendations to the Minnesota State 
        High School League Board of Directors. 
           Sec. 75.  Minnesota Statutes 2004, section 128C.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DUES AND EVENTS REVENUE.] (a) The state 
        auditor annually must examine the accounts of, and audit all 
        money paid to, the State High School League by its members.  The 
        audit must include financial and compliance issues.  The state 
        auditor audit must also audit include all money derived from any 
        event sponsored by the league.  League audits must include 
        audits of administrative regions of the league.  The league and 
        its administrative regions may not contract with private 
        auditors.  The scope of the state auditor's examinations of the 
        league must be agreed upon by the board and the state auditor, 
        provided that all requirements of this section must be met. 
           (b) The administrative regions of the league may contract 
        with the state auditor or with a private certified public 
        accountant for the audit required by this section.  If a private 
        certified public accountant performs the audit, the state 
        auditor may require additional information from the private 
        certified public accountant as the state auditor deems in the 
        public interest.  The state auditor may accept the audit or make 
        additional examinations as the state auditor deems to be in the 
        public interest. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 76.  Minnesota Statutes 2004, section 128C.12, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COPIES.] The state auditor board must file 
        copies of the financial and compliance audit report with the 
        commissioner of education and the director of the Legislative 
        Reference Library. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 77.  [129C.105] [BOARD MEETINGS BY TELEPHONE OR OTHER 
        ELECTRONIC MEANS.] 
           (a) Notwithstanding section 13D.01 and if complying with 
        section 13D.02 is impractical, the Board of the Perpich Center 
        for Arts Education may conduct a meeting of its members by 
        telephone or other electronic means when: 
           (1) all members of the board participating in the meeting, 
        wherever the members' physical locations, can hear one another 
        and all discussion and testimony; 
           (2) members of the public present at the regular meeting 
        location of the board can hear all discussion and testimony and 
        all votes of members of the board; 
           (3) at least one member of the board is physically present 
        at the regular meeting location; and 
           (4) all votes are conducted by roll call, so each member's 
        vote on each issue can be identified and recorded. 
           (b) Each member of the board participating in a meeting by 
        telephone or other electronic means is considered present at the 
        meeting for purposes of determining a quorum and participating 
        in all proceedings. 
           (c) If telephone or other electronic means is used to 
        conduct a meeting, the board, to the extent practical, shall 
        allow a person to monitor the meeting electronically from a 
        remote location.  The board may require the person making such a 
        connection to pay for documented marginal costs that the board 
        incurs as a result of the additional connection. 
           (d) If telephone or other electronic means is used to 
        conduct a regular, special, or emergency meeting, the board 
        shall provide notice of the regular meeting location, of the 
        fact that some members may participate by telephone or other 
        electronic means, and of the provisions of paragraph (c).  The 
        timing and method of providing notice is governed by section 
        13D.04. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 78.  [138.911] [MINNESOTA HUMANITIES COMMISSION.] 
           Subdivision 1.  [ESTABLISHMENT.] The Minnesota Humanities 
        Commission, a nonprofit organization, is established to advance 
        the study of the humanities and enhance the work of schools, 
        colleges, and cultural organizations throughout the state.  
           Subd. 2.  [REPORTS.] The Minnesota Humanities Commission 
        shall report to the legislature by September 1 of each year on 
        the use of state funds appropriated to the commission.  The 
        report shall include an itemized account of the programs and 
        projects supported and the source of money for each.  The report 
        shall show actual expenditures for the fiscal year ending the 
        preceding June 30 and proposed expenditures for the fiscal year 
        beginning the preceding July 1. 
           Subd. 3.  [HUMANITIES CENTER.] (a) The Minnesota Humanities 
        Commission may establish a humanities center to ensure balance 
        in public education and in the cultural life of the state, and 
        to improve humanities education through the establishment of two 
        institutes:  the Minnesota Institute for Lifelong Learning and 
        the Minnesota Institute for the Advancement of Teaching. 
           (b) The humanities center may transport people and 
        resources to small towns, rural communities, and urban settings 
        to provide grants, technical assistance, and high-quality 
        educational and cultural programs to schools and community 
        organizations throughout Minnesota. 
           (c) The Minnesota Institute for the Advancement of Teaching 
        may conduct seminars and other activities for the recognition of 
        the teaching profession and the advancement of teaching in 
        Minnesota. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 79.  [171.176] [REVOCATION OR SUSPENSION; SCHOOL 
        ATTENDANCE.] 
           The commissioner of public safety may not link or condition 
        issuing, suspending, or revoking a person's license to operate a 
        motor vehicle to attendance at a secondary school. 
           Sec. 80.  Minnesota Statutes 2004, section 260C.201, 
        subdivision 1, as amended by Laws 2005, chapter 159, article 2, 
        section 16, is amended to read: 
           Subdivision 1.  [DISPOSITIONS.] (a) If the court finds that 
        the child is in need of protection or services or neglected and 
        in foster care, it shall enter an order making any of the 
        following dispositions of the case: 
           (1) place the child under the protective supervision of the 
        responsible social services agency or child-placing agency in 
        the home of a parent of the child under conditions prescribed by 
        the court directed to the correction of the child's need for 
        protection or services: 
           (i) the court may order the child into the home of a parent 
        who does not otherwise have legal custody of the child, however, 
        an order under this section does not confer legal custody on 
        that parent; 
           (ii) if the court orders the child into the home of a 
        father who is not adjudicated, he must cooperate with paternity 
        establishment proceedings regarding the child in the appropriate 
        jurisdiction as one of the conditions prescribed by the court 
        for the child to continue in his home; and 
           (iii) the court may order the child into the home of a 
        noncustodial parent with conditions and may also order both the 
        noncustodial and the custodial parent to comply with the 
        requirements of a case plan under subdivision 2; or 
           (2) transfer legal custody to one of the following: 
           (i) a child-placing agency; or 
           (ii) the responsible social services agency.  In making a 
        foster care placement for a child whose custody has been 
        transferred under this subdivision, the agency shall make an 
        individualized determination of how the placement is in the 
        child's best interests using the consideration for relatives and 
        the best interest factors in section 260C.212, subdivision 2, 
        paragraph (b); or 
           (3) order a trial home visit without modifying the transfer 
        of legal custody to the responsible social services agency under 
        clause (2).  Trial home visit means the child is returned to the 
        care of the parent or guardian from whom the child was removed 
        for a period not to exceed six months.  During the period of the 
        trial home visit, the responsible social services agency: 
           (i) shall continue to have legal custody of the child, 
        which means the agency may see the child in the parent's home, 
        at school, in a child care facility, or other setting as the 
        agency deems necessary and appropriate; 
           (ii) shall continue to have the ability to access 
        information under section 260C.208; 
           (iii) shall continue to provide appropriate services to 
        both the parent and the child during the period of the trial 
        home visit; 
           (iv) without previous court order or authorization, may 
        terminate the trial home visit in order to protect the child's 
        health, safety, or welfare and may remove the child to foster 
        care; 
           (v) shall advise the court and parties within three days of 
        the termination of the trial home visit when a visit is 
        terminated by the responsible social services agency without a 
        court order; and 
           (vi) shall prepare a report for the court when the trial 
        home visit is terminated whether by the agency or court order 
        which describes the child's circumstances during the trial home 
        visit and recommends appropriate orders, if any, for the court 
        to enter to provide for the child's safety and stability.  In 
        the event a trial home visit is terminated by the agency by 
        removing the child to foster care without prior court order or 
        authorization, the court shall conduct a hearing within ten days 
        of receiving notice of the termination of the trial home visit 
        by the agency and shall order disposition under this subdivision 
        or conduct a permanency hearing under subdivision 11 or 11a.  
        The time period for the hearing may be extended by the court for 
        good cause shown and if it is in the best interests of the child 
        as long as the total time the child spends in foster care 
        without a permanency hearing does not exceed 12 months.; 
           (4) if the child has been adjudicated as a child in need of 
        protection or services because the child is in need of special 
        services or care to treat or ameliorate a physical or mental 
        disability, the court may order the child's parent, guardian, or 
        custodian to provide it.  The court may order the child's health 
        plan company to provide mental health services to the child.  
        Section 62Q.535 applies to an order for mental health services 
        directed to the child's health plan company.  If the health 
        plan, parent, guardian, or custodian fails or is unable to 
        provide this treatment or care, the court may order it 
        provided.  Absent specific written findings by the court that 
        the child's disability is the result of abuse or neglect by the 
        child's parent or guardian, the court shall not transfer legal 
        custody of the child for the purpose of obtaining special 
        treatment or care solely because the parent is unable to provide 
        the treatment or care.  If the court's order for mental health 
        treatment is based on a diagnosis made by a treatment 
        professional, the court may order that the diagnosing 
        professional not provide the treatment to the child if it finds 
        that such an order is in the child's best interests; or 
           (5) if the court believes that the child has sufficient 
        maturity and judgment and that it is in the best interests of 
        the child, the court may order a child 16 years old or older to 
        be allowed to live independently, either alone or with others as 
        approved by the court under supervision the court considers 
        appropriate, if the county board, after consultation with the 
        court, has specifically authorized this dispositional 
        alternative for a child. 
           (b) If the child was adjudicated in need of protection or 
        services because the child is a runaway or habitual truant, the 
        court may order any of the following dispositions in addition to 
        or as alternatives to the dispositions authorized under 
        paragraph (a): 
           (1) counsel the child or the child's parents, guardian, or 
        custodian; 
           (2) place the child under the supervision of a probation 
        officer or other suitable person in the child's own home under 
        conditions prescribed by the court, including reasonable rules 
        for the child's conduct and the conduct of the parents, 
        guardian, or custodian, designed for the physical, mental, and 
        moral well-being and behavior of the child; or with the consent 
        of the commissioner of corrections, place the child in a group 
        foster care facility which is under the commissioner's 
        management and supervision; 
           (3) subject to the court's supervision, transfer legal 
        custody of the child to one of the following: 
           (i) a reputable person of good moral character.  No person 
        may receive custody of two or more unrelated children unless 
        licensed to operate a residential program under sections 245A.01 
        to 245A.16; or 
           (ii) a county probation officer for placement in a group 
        foster home established under the direction of the juvenile 
        court and licensed pursuant to section 241.021; 
           (4) require the child to pay a fine of up to $100.  The 
        court shall order payment of the fine in a manner that will not 
        impose undue financial hardship upon the child; 
           (5) require the child to participate in a community service 
        project; 
           (6) order the child to undergo a chemical dependency 
        evaluation and, if warranted by the evaluation, order 
        participation by the child in a drug awareness program or an 
        inpatient or outpatient chemical dependency treatment program; 
           (7) if the court believes that it is in the best interests 
        of the child and or of public safety that the child's driver's 
        license or instruction permit be canceled, the court may order 
        the commissioner of public safety to cancel the child's license 
        or permit for any period up to the child's 18th birthday.  If 
        the child does not have a driver's license or permit, the court 
        may order a denial of driving privileges for any period up to 
        the child's 18th birthday.  The court shall forward an order 
        issued under this clause to the commissioner, who shall cancel 
        the license or permit or deny driving privileges without a 
        hearing for the period specified by the court.  At any time 
        before the expiration of the period of cancellation or denial, 
        the court may, for good cause, order the commissioner of public 
        safety to allow the child to apply for a license or permit, and 
        the commissioner shall so authorize; 
           (8) order that the child's parent or legal guardian deliver 
        the child to school at the beginning of each school day for a 
        period of time specified by the court; or 
           (9) require the child to perform any other activities or 
        participate in any other treatment programs deemed appropriate 
        by the court.  
           To the extent practicable, the court shall enter a 
        disposition order the same day it makes a finding that a child 
        is in need of protection or services or neglected and in foster 
        care, but in no event more than 15 days after the finding unless 
        the court finds that the best interests of the child will be 
        served by granting a delay.  If the child was under eight years 
        of age at the time the petition was filed, the disposition order 
        must be entered within ten days of the finding and the court may 
        not grant a delay unless good cause is shown and the court finds 
        the best interests of the child will be served by the delay. 
           (c) If a child who is 14 years of age or older is 
        adjudicated in need of protection or services because the child 
        is a habitual truant and truancy procedures involving the child 
        were previously dealt with by a school attendance review board 
        or county attorney mediation program under section 260A.06 or 
        260A.07, the court shall order a cancellation or denial of 
        driving privileges under paragraph (b), clause (7), for any 
        period up to the child's 18th birthday. 
           (d) In the case of a child adjudicated in need of 
        protection or services because the child has committed domestic 
        abuse and been ordered excluded from the child's parent's home, 
        the court shall dismiss jurisdiction if the court, at any time, 
        finds the parent is able or willing to provide an alternative 
        safe living arrangement for the child, as defined in Laws 1997, 
        chapter 239, article 10, section 2.  
           (e) When a parent has complied with a case plan ordered 
        under subdivision 6 and the child is in the care of the parent, 
        the court may order the responsible social services agency to 
        monitor the parent's continued ability to maintain the child 
        safely in the home under such terms and conditions as the court 
        determines appropriate under the circumstances. 
           Sec. 81.  [BOARD OF SCHOOL ADMINISTRATORS; RULEMAKING 
        AUTHORITY.] 
           On or before June 30, 2007, the Board of School 
        Administrators may adopt expedited rules under Minnesota 
        Statutes, section 14.389, to make technical revisions and 
        clarifications to Minnesota Rules, chapter 3512.  
           Sec. 82.  [COLLEGE PREPARATION STANDARDS.] 
           (a) The Higher Education Advisory Council must convene a 
        working group to develop standards describing the skills and 
        knowledge a high school graduate must have at entry into 
        postsecondary education in order to successfully graduate from 
        college.  The standards must, to the extent possible, be 
        applicable for all postsecondary education but may describe 
        differences in the skills and knowledge necessary for success in 
        different higher education institutions and programs.  The 
        standards need not be comprehensive but must, at a minimum, be 
        the essential skills and knowledge that will enable a student to 
        succeed in college.  The Higher Education Services Office must 
        provide staff for the working group. 
           (b) The Higher Education Advisory Council must submit the 
        standards to the commissioner of education no later than January 
        15, 2006.  No later than March 15, 2006, the commissioner of 
        education must report, to the chairs of the legislative 
        committees with jurisdiction over kindergarten through grade 12 
        education policy and finance and higher education policy and 
        finance, its recommendations regarding the changes, if any, that 
        must be made in Minnesota's academic standards in order to 
        ensure that Minnesota high school graduates meet the college 
        readiness standards established by the Higher Education Advisory 
        Council. 
           (c) The Higher Education Advisory Council must invite the 
        University of Minnesota, Minnesota State Colleges and 
        Universities, representatives of private colleges, and other 
        private postsecondary institutions, to participate in the 
        working group and may invite other individuals or entities to 
        participate.  The Higher Education Advisory Council and its 
        working group may collaborate with the Minnesota P-16 Education 
        Partnership in developing the college readiness standards.  
           Sec. 83.  [MINNESOTA COMPREHENSIVE ASSESSMENTS; RULES.] 
           The commissioner of education shall adopt rules on or 
        before January 1, 2006, to implement the Minnesota Comprehensive 
        Assessments Second Edition (MCA-IIs) in reading, mathematics, 
        and writing.  For purposes of state and local high school 
        graduation requirements, the rules must include criteria 
        enabling school districts to: 
           (1) appropriately accommodate a student who fails but seeks 
        to pass the Minnesota Comprehensive Assessments Second Edition; 
        and 
           (2) exempt a disabled student, consistent with the 
        student's individualized education plan, or an English language 
        learner from the Minnesota Comprehensive Assessments Second 
        Edition or administer an alternative assessment either to a 
        disabled student, consistent with the student's individualized 
        education plan, or to an English language learner. 
           Sec. 84.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT.] The sums indicated in this 
        section are appropriated from the general fund to the Department 
        of Education for the fiscal years designated and include and 
        supersede any amounts appropriated in Laws 2005, First Special 
        Session chapter 2, or authorized by order of the Ramsey County 
        District Court in Case No. C9-05-5928. 
           Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
        lease aid under Minnesota Statutes, section 124D.11, subdivision 
        4: 
             $25,465,000    .....     2006 
             $30,929,000    .....     2007 
           The 2006 appropriation includes $3,324,000 for 2005 and 
        $22,141,000 for 2006. 
           The 2007 appropriation includes $4,123,000 for 2006 and 
        $26,806,000 for 2007.  
           Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
        startup cost aid under Minnesota Statutes, section 124D.11: 
             $1,393,000     .....     2006 
             $3,185,000     .....     2007 
           The 2006 appropriation includes $0 for 2005 and $1,393,000 
        for 2006.  
           The 2007 appropriation includes $259,000 for 2006 and 
        $2,926,000 for 2007. 
           Subd. 4.  [INTEGRATION AID.] For integration aid under 
        Minnesota Statutes, section 124D.86, subdivision 5: 
             $57,801,000    .....     2006 
             $57,536,000    .....     2007 
           The 2006 appropriation includes $8,545,000 for 2005 and 
        $49,256,000 for 2006. 
           The 2007 appropriation includes $9,173,000 for 2006 and 
        $48,363,000 for 2007.  
           Subd. 5.  [MAGNET SCHOOL GRANTS.] For magnet school and 
        program grants: 
             $  750,000     .....     2006 
             $  750,000     .....     2007 
           These amounts may be used for magnet school programs under 
        Minnesota Statutes, section 124D.88. 
           Subd. 6.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
        TRANSPORTATION GRANTS.] For interdistrict desegregation or 
        integration transportation grants under Minnesota Statutes, 
        section 124D.87: 
             $7,768,000     .....     2006 
             $9,908,000     .....     2007
           Subd. 7.  [SUCCESS FOR THE FUTURE.] For American Indian 
        success for the future grants under Minnesota Statutes, section 
        124D.81: 
             $2,137,000     .....     2006
             $2,137,000     .....     2007
           The 2006 appropriation includes $335,000 for 2005 and 
        $1,802,000 for 2006. 
           The 2007 appropriation includes $335,000 for 2006 and 
        $1,802,000 for 2007. 
           Subd. 8.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
        Indian scholarships under Minnesota Statutes, section 124D.84: 
             $1,875,000     .....     2006 
             $1,875,000     .....     2007 
           Subd. 9.  [AMERICAN INDIAN TEACHER PREPARATION GRANTS.] For 
        joint grants to assist American Indian people to become teachers 
        under Minnesota Statutes, section 122A.63: 
             $  190,000     .....     2006 
             $  190,000     .....     2007 
           Subd. 10.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
        school aid under Minnesota Statutes, section 124D.83: 
             $2,389,000     .....     2006
             $2,603,000     .....     2007
           The 2006 appropriation includes $348,000 for 2005 and 
        $2,041,000 for 2006. 
           The 2007 appropriation includes $380,000 for 2006 and 
        $2,223,000 for 2007. 
           Subd. 11.  [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     .....     2006 
             $   68,000     .....     2007 
           Subd. 12.  [STATEWIDE TESTING.] For statewide testing 
        support under Minnesota Statutes, section 120B.30: 
             $10,200,000    .....     2006
             $10,200,000    .....     2007
           Of this appropriation, $1,200,000 each year is for 
        development of interactive science assessments. 
           Subd. 13.  [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: 
             $4,500,000     .....     2006 
             $4,500,000     .....     2007 
           (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, at least $500,000 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. 14.  [FIRST GRADE PREPAREDNESS.] For first grade 
        preparedness grants under Minnesota Statutes, section 124D.081: 
             $7,250,000     .....     2006 
             $7,250,000     .....     2007
           Subd. 15.  [COLLABORATIVE URBAN EDUCATOR.] For the 
        collaborative urban educator program: 
             $  528,000     .....     2006 
             $  528,000     .....     2007 
           $210,000 each year is for the Southeast Asian teacher 
        program at Concordia University, St. Paul; $159,000 each year is 
        for the collaborative urban educator program at the University 
        of St. Thomas; and $159,000 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. 
           Subd. 16.  [YOUTH WORKS PROGRAM.] For funding youth works 
        programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
             $  900,000     .....     2006 
             $  900,000     .....     2007 
           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. 17.  [STUDENT ORGANIZATIONS.] For student 
        organizations: 
             $725,000     .....     2006 
             $725,000     .....     2007
           $40,000 each year is for student organizations serving 
        health occupations. 
           $38,000 each year is for student organizations serving 
        service occupations. 
           $88,000 each year is for student organizations serving 
        trade and industry occupations. 
           $84,000 each year is for student organizations serving 
        business occupations. 
           $131,000 each year is for student organizations serving 
        agriculture occupations. 
           $125,000 each year is for student organizations serving 
        family and consumer science occupations. 
           $95,000 each year is for student organizations serving 
        marketing occupations. 
           Subd. 18.  [EDUCATION PLANNING AND ASSESSMENT PROGRAM.] For 
        the Educational Planning and Assessment (EPAS) program under 
        Minnesota Statutes, section 120B.128: 
             $  829,000     .....     2006 
             $  829,000     .....     2007 
           Subd. 19.  [COLLEGE LEVEL EXAMINATION PROGRAM (CLEP).] For 
        the College Level Examination program (CLEP) under Minnesota 
        Statutes, section 120B.131: 
             $  825,000     .....     2006 
             $1,650,000     .....     2007 
           Subd. 20.  [SITE DECISION-MAKING PROGRAM GRANTS.] For 
        planning and implementation grants to five school sites and 
        school boards that have reached preliminary board approval or 
        entered into school site decision-making agreements under 
        Minnesota Statutes, section 123B.04: 
             $  250,000     .....     2006 
           Any balance in the first year does not cancel but is 
        available in the second year.  This is a onetime appropriation. 
           Subd. 21.  [BEST PRACTICES.] (a) For best practices grants: 
             $1,260,000     .....     2006 
             $1,210,000     .....     2007 
           (b) $400,000 each year is for a grant to the Minnesota 
        Humanities Commission under Minnesota Statutes, section 138.911. 
           (c) $150,000 each year is for a grant to the Minnesota 
        Historical Society. 
           (d) $160,000 each 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 
        mathematic skills. 
           (e) $50,000 in fiscal year 2006 is for schools mentoring 
        schools under Minnesota Statutes, section 122A.628.  Any balance 
        in the first year does not cancel but is available in the second 
        year. 
           (f) $400,000 each year is for the Principals' Leadership 
        Institute under Minnesota Statutes, section 122A.74. 
           (g) $100,000 each year is for the quantum opportunities 
        program. 
           Sec. 85.  [REPEALER.] 
           (a) Minnesota Statutes 2004, section 124D.095, subdivision 
        9, is repealed. 
           (b) Minnesota Statutes 2004, section 128C.12, subdivision 
        4, is repealed. 
           [EFFECTIVE DATE.] This section, paragraph (a), is effective 
        for revenue for fiscal year 2006.  This section, paragraph (b), 
        is effective the day following final enactment.  
           Sec. 86.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 3 
                                SPECIAL PROGRAMS 
           Section 1.  Minnesota Statutes 2004, section 121A.66, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EMERGENCY.] "Emergency" means a situation in 
        which immediate intervention is necessary to protect a pupil or 
        other individual from physical injury or to prevent serious 
        property damage.  
           Sec. 2.  Minnesota Statutes 2004, section 121A.66, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [POSITIVE BEHAVIORAL INTERVENTIONS AND 
        SUPPORTS.] "Positive behavioral interventions and supports" 
        means those strategies used to improve the school environment 
        and teach pupils skills likely to increase pupil ability to 
        exhibit appropriate behaviors. 
           Sec. 3.  Minnesota Statutes 2004, section 121A.66, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [TIME-OUT.] "Time-out" means: 
           (1) a contingent observation, which is not a regulated 
        intervention, and involves instructing the pupil to leave the 
        school activity during the school day and not participate for a 
        period of time, but to observe the activity and listen to the 
        discussion from a time-out area within the same setting; 
           (2) an exclusionary time-out, which is not a regulated 
        intervention, and involves instructing the pupil to leave the 
        school activity during the school day and not participate in or 
        observe the classroom activity, but to go to another area from 
        which the pupil may leave; or 
           (3) a locked time-out, which is a regulated intervention, 
        and involves involuntarily removing the pupil from the school 
        activity during the school day and placing the pupil in a 
        specially designed and continuously supervised isolation room 
        that the pupil is prevented from leaving. 
           Sec. 4.  Minnesota Statutes 2004, section 121A.67, is 
        amended to read: 
           121A.67 [AVERSIVE AND DEPRIVATION PROCEDURES.] 
           Subdivision 1.  [RULES.] The commissioner, after 
        consultation with interested parent organizations and advocacy 
        groups, the Minnesota Administrators for Special Education, the 
        Minnesota Association of School Administrators, Education 
        Minnesota, the Minnesota School Boards Association, the 
        Minnesota Police Officers Association, a representative of a 
        bargaining unit that represents paraprofessionals, the 
        Elementary School Principals Association, and the Secondary 
        School Principals Association, must adopt amend rules governing 
        the use of aversive and deprivation procedures by school 
        district employees or persons under contract with a school 
        district.  The rules must: 
           (1) promote the use of positive approaches behavioral 
        interventions and supports and must not encourage or require the 
        use of aversive or deprivation procedures; 
           (2) require that planned application of aversive and 
        deprivation procedures only be a part of an instituted after 
        completing a functional behavior assessment and developing a 
        behavior intervention plan that is included in or maintained 
        with the individual education plan; 
           (3) require parents or guardians to be notified after the 
        use of educational personnel to notify a parent or guardian of a 
        pupil with an individual education plan on the same day aversive 
        or deprivation procedures are used in an emergency or in writing 
        within two school days if district personnel are unable to 
        provide same-day notice; 
           (4) establish health and safety standards for the use of 
        locked time-out procedures that require a safe environment, 
        continuous monitoring of the child, ventilation, and adequate 
        space, a locking mechanism that disengages automatically when 
        not continuously engaged by school personnel, and full 
        compliance with state and local fire and building codes, 
        including state rules on time-out rooms; and 
           (5) contain a list of prohibited procedures; 
           (6) consolidate and clarify provisions related to behavior 
        intervention plans; 
           (7) require school districts to register with the 
        commissioner any room used for locked time-out, which the 
        commissioner must monitor by making announced and unannounced 
        on-site visits; 
           (8) place a student in locked time-out only if the 
        intervention is: 
           (i) part of the comprehensive behavior intervention plan 
        that is included in or maintained with the student's individual 
        education plan, and the plan uses positive behavioral 
        interventions and supports, and data support its continued use; 
        or 
           (ii) used in an emergency for the duration of the emergency 
        only; and 
           (9) require a providing school district or cooperative to 
        establish an oversight committee composed of at least one member 
        with training in behavioral analysis and other appropriate 
        education personnel to annually review aggregate data regarding 
        the use of aversive and deprivation procedures. 
           Subd. 2.  [REMOVAL BY PEACE OFFICER.] If a pupil who has an 
        individual education plan is restrained or removed from a 
        classroom, school building, or school grounds by a peace officer 
        at the request of a school administrator or a school staff 
        person during the school day twice in a 30-day period, the 
        pupil's individual education program team must meet to determine 
        if the pupil's individual education plan is adequate or if 
        additional evaluation is needed. 
           [EFFECTIVE DATE.] Subdivision 1 of this section is 
        effective the day following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 124D.11, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL EDUCATION AID.] (a) Except as provided 
        in subdivision 2, special education aid must be paid to a 
        charter school according to section 125A.76, as though it were a 
        school district.  
           (b) For fiscal year 2006, the charter school may charge 
        tuition to the district of residence as follows: 
           (1) if the charter school does not receive general 
        education revenue on behalf of the student according to 
        subdivision 1, tuition shall be charged as provided in section 
        125A.11; or 
           (2) if the charter school receives general education 
        revenue on behalf of the student according to subdivision 1, 
        tuition shall be charged as provided in section 127A.47, 
        subdivision 7, paragraph (d). 
           (c) For fiscal year 2007 and later, the special education 
        aid paid to the charter school shall be adjusted as follows: 
           (1) if the charter school does not receive general 
        education revenue on behalf of the student according to 
        subdivision 1, the aid shall be adjusted as provided in section 
        125A.11; or 
           (2) if the charter school receives general education 
        revenue on behalf of the student according to subdivision 1, the 
        aid shall be adjusted as provided in section 127A.47, 
        subdivision 7, paragraph (d). 
           Sec. 6.  Minnesota Statutes 2004, section 124D.454, 
        subdivision 5, is amended to read: 
           Subd. 5.  [STATE TOTAL TRANSITION PROGRAM-DISABLED 
        REVENUE.] The state total transition program-disabled revenue 
        for fiscal year 2000 equals $8,982,000.  The state total 
        transition program-disabled revenue for fiscal year 2001 equals 
        $8,966,000.  The state total transition program-disabled revenue 
        for later fiscal years equals:  
           (1) the state total transition program-disabled revenue for 
        the preceding fiscal year; times 
           (2) the program growth factor; times 
           (3) the greater of one, or 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. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2008. 
           Sec. 7.  Minnesota Statutes 2004, section 125A.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NONRESIDENT TUITION RATE; OTHER COSTS.] 
        (a) For fiscal year 2006, when a school district provides 
        instruction and services outside the district of residence, 
        board and lodging, and any tuition to be paid, shall be paid by 
        the district of residence.  The tuition rate to be charged for 
        any child with a disability, excluding a pupil for whom tuition 
        is calculated according to section 127A.47, subdivision 7, 
        paragraph (d), must be the sum of (1) the actual cost of 
        providing special instruction and services to the child 
        including a proportionate amount for capital outlay and debt 
        service but not including any amount for special transportation 
        and unreimbursed building lease and debt service costs for 
        facilities used primarily for special education, plus (2) the 
        amount of general education revenue and referendum aid 
        attributable to the pupil, minus (3) the amount of special 
        education aid for children with a disability received on behalf 
        of that child, minus (4) if the pupil receives special 
        instruction and services outside the regular classroom for more 
        than 60 percent of the school day, the amount of general 
        education revenue and referendum aid, excluding portions 
        attributable to district and school administration, district 
        support services, operations and maintenance, capital 
        expenditures, and pupil transportation, attributable to that 
        pupil for the portion of time the pupil receives instruction in 
        the regular classroom.  If the boards involved do not agree upon 
        the tuition rate, either board may apply to the commissioner to 
        fix the rate.  Notwithstanding chapter 14, the commissioner must 
        then set a date for a hearing or request a written statement 
        from each board, giving each board at least ten days' notice, 
        and after the hearing or review of the written statements the 
        commissioner must make an order fixing the tuition rate, which 
        is binding on both school districts.  General education revenue 
        and referendum aid attributable to a pupil must be calculated 
        using the resident district's average general education and 
        referendum revenue per adjusted pupil unit. 
           (b) For fiscal year 2007 and later, when a school district 
        provides special instruction and services for a pupil with a 
        disability as defined in section 125A.02 outside the district of 
        residence, excluding a pupil for whom an adjustment to special 
        education aid is calculated according to section 127A.47, 
        subdivision 7, paragraph (e), special education aid paid to the 
        resident district must be reduced by an amount equal to (1) the 
        actual cost of providing special instruction and services to the 
        pupil, including a proportionate amount for special 
        transportation and unreimbursed building lease and debt service 
        costs for facilities used primarily for special education, plus 
        (2) the amount of general education revenue and referendum aid 
        attributable to that pupil, minus (3) the amount of special 
        education aid for children with a disability received on behalf 
        of that child, minus (4) if the pupil receives special 
        instruction and services outside the regular classroom for more 
        than 60 percent of the school day, the amount of general 
        education revenue and referendum aid, excluding portions 
        attributable to district and school administration, district 
        support services, operations and maintenance, capital 
        expenditures, and pupil transportation, attributable to that 
        pupil for the portion of time the pupil receives instruction in 
        the regular classroom.  General education revenue and referendum 
        aid attributable to a pupil must be calculated using the 
        resident district's average general education revenue and 
        referendum aid per adjusted pupil unit.  Special education aid 
        paid to the district or cooperative providing special 
        instruction and services for the pupil must be increased by the 
        amount of the reduction in the aid paid to the resident 
        district.  Amounts paid to cooperatives under this subdivision 
        and section 127A.47, subdivision 7, shall be recognized and 
        reported as revenues and expenditures on the resident school 
        district's books of account under sections 123B.75 and 123B.76.  
        If the resident district's special education aid is insufficient 
        to make the full adjustment, the remaining adjustment shall be 
        made to other state aid due to the district. 
           (c) Notwithstanding paragraphs (a) and (b) and section 
        127A.47, subdivision 7, paragraphs (d) and (e), a charter school 
        where more than 30 percent of enrolled students receive special 
        education and related services, an intermediate district, or a 
        special education cooperative may apply to the commissioner for 
        authority to charge the resident district an additional amount 
        to recover any remaining unreimbursed costs of serving pupils 
        with a disability.  The application must include a description 
        of the costs and the calculations used to determine the 
        unreimbursed portion to be charged to the resident district.  
        Amounts approved by the commissioner under this paragraph must 
        be included in the tuition billings or aid adjustments under 
        paragraph (a) or (b), or section 127A.47, subdivision 7, 
        paragraph (d) or (e), as applicable. 
           [EFFECTIVE DATE.] This section is effective retroactively 
        from July 1, 2005, for revenue for fiscal year 2006. 
           Sec. 8.  Minnesota Statutes 2004, section 125A.24, is 
        amended to read: 
           125A.24 [PARENT ADVISORY COUNCILS.] 
           In order to increase the involvement of parents of children 
        with disabilities in district policy making and decision making, 
        school districts must have a special education advisory council 
        that is incorporated into the district's special education 
        system plan. 
           (1) This advisory council may be established either for 
        individual districts or in cooperation with other districts who 
        are members of the same special education cooperative. 
           (2) A district may set up this council as a subgroup of an 
        existing board, council, or committee. 
           (3) At least half of the designated council members must be 
        parents of students with a disability.  When a nonpublic school 
        is located in the district, the council must include at least 
        one member who is a parent of a nonpublic school student with a 
        disability, or an employee of a nonpublic school if no parent of 
        a nonpublic school student with a disability is available to 
        serve.  Each local council must meet no less than once each 
        year.  The number of members, frequency of meetings, and 
        operational procedures are to be locally determined.  
           Sec. 9.  Minnesota Statutes 2004, 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 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, 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 On the date that Minnesota Part C Annual 
        Performance Report is submitted to the federal Office of Special 
        Education, the council must recommend to the governor and the 
        commissioners of education, health, human services, commerce, 
        and employment and economic development policies for a 
        comprehensive and coordinated system. 
           Notwithstanding any other law to the contrary, the State 
        Interagency Coordinating Council expires on June 30, 2005 2009.  
           Sec. 10.  Minnesota Statutes 2004, 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 2004 equals 
        $530,642,000.  The state total special education aid for fiscal 
        year 2005 equals $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 greater of one, or 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. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2008. 
           Sec. 11.  Minnesota Statutes 2004, 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 qualifying referendum revenue specified in paragraph (e) 
        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 1.02 for fiscal year 
        2003, and 1.0 for fiscal year 2004 and later. 
           (e) "Total qualifying referendum revenue" means two-thirds 
        of the district's total referendum revenue for fiscal year 2006, 
        one-third of the district's total referendum revenue for fiscal 
        year 2007, and none of the district's total referendum revenue 
        for fiscal year 2008 and later. 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 12.  Minnesota Statutes 2004, 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 
        excess cost aid for fiscal year 2005 equals $91,811,000.  The 
        state total special education excess cost aid equals 
        $103,600,000 for fiscal year 2006 and $104,700,000 for fiscal 
        year 2007.  The state total special education excess cost aid 
        for fiscal year 2006 2008 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 greater of one, or 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.  
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 13.  Minnesota Statutes 2004, 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 80 percent the current year 
        aid payment percentage of the estimated entitlement during the 
        fiscal year of the entitlement.  For the purposes of this 
        subdivision, a district's estimated entitlement for special 
        education excess cost aid under section 125A.79 for fiscal year 
        2005 equals 70 percent of the district's entitlement for the 
        second prior fiscal year.  For the purposes of this subdivision, 
        a district's estimated entitlement for special education excess 
        cost aid under section 125A.79 for fiscal year 2006 and later 
        equals 74.0 percent of the district's entitlement for the 
        current 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. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to aid payments for fiscal 
        year 2005 and later. 
           Sec. 14.  Minnesota Statutes 2004, section 127A.47, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
        education aid and special education aid for districts must be 
        adjusted for each pupil attending a nonresident district under 
        sections 123A.05 to 123A.08, 124D.03, 124D.06, 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) For fiscal year 2006, the district of residence must 
        pay tuition to a district or an area learning center, operated 
        according to paragraph (e) (f), 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 
        special transportation and unreimbursed building lease and debt 
        service costs for facilities used primarily for special 
        education, minus (2) if the pupil receives special instruction 
        and services outside the regular classroom for more than 60 
        percent of the school day, the amount of general education 
        revenue and referendum aid attributable to that pupil for the 
        portion of time the pupil receives special instruction and 
        services outside of the regular classroom, excluding portions 
        attributable to district and school administration, district 
        support services, operations and maintenance, capital 
        expenditures, and pupil transportation, minus (3) special 
        education aid but not including any amount for transportation, 
        attributable to that pupil, that is received by the district 
        providing special instruction and services.  For purposes of 
        this paragraph, general education revenue and referendum aid 
        attributable to a pupil must be calculated using the serving 
        district's average general education revenue and referendum aid 
        per adjusted pupil unit. 
           (e) For fiscal year 2007 and later, special education aid 
        paid to a resident district must be reduced by an amount equal 
        to (1) the actual cost of providing special instruction and 
        services, including special transportation and unreimbursed 
        building lease and debt service costs for facilities used 
        primarily for special education, for a pupil with a disability, 
        as defined in section 125A.02, or a pupil, as defined in section 
        125A.51, who is enrolled in a program listed in this 
        subdivision, minus (2) if the pupil receives special instruction 
        and services outside the regular classroom for more than 60 
        percent of the school day, the amount of general education 
        revenue and referendum aid attributable to that pupil for the 
        portion of time the pupil receives special instruction and 
        services outside of the regular classroom, excluding portions 
        attributable to district and school administration, district 
        support services, operations and maintenance, capital 
        expenditures, and pupil transportation, minus (3) special 
        education aid attributable to that pupil, that is received by 
        the district providing special instruction and services.  For 
        purposes of this paragraph, general education revenue and 
        referendum aid attributable to a pupil must be calculated using 
        the serving district's average general education revenue and 
        referendum aid per adjusted pupil unit.  Special education aid 
        paid to the district or cooperative providing special 
        instruction and services for the pupil, or to the fiscal agent 
        district for a cooperative, must be increased by the amount of 
        the reduction in the aid paid to the resident district.  If the 
        resident district's special education aid is insufficient to 
        make the full adjustment, the remaining adjustment shall be made 
        to other state aids due to the district. 
           (f) An area learning center operated by a service 
        cooperative, intermediate district, education district, or a 
        joint powers cooperative may elect through the action of the 
        constituent boards to charge the resident district tuition for 
        pupils rather than to have the general education revenue paid to 
        a fiscal agent school district.  Except as provided in paragraph 
        (d) or (e), 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. 15.  Minnesota Statutes 2004, section 134.31, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ADVISORY COMMITTEE.] The commissioner shall 
        appoint an advisory committee of five members to advise the 
        staff of the Minnesota Library for the Blind and Physically 
        Handicapped on long-range plans and library services.  Members 
        shall be people who use the library.  Section 15.059 governs 
        this committee except that the committee shall not expire. 
           Sec. 16.  Laws 2003, First Special Session chapter 9, 
        article 3, section 20, subdivision 6, as amended by Laws 2004, 
        chapter 272, article 1, section 16, is amended to read: 
           Subd. 6.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
        cost aid under Minnesota Statutes, section 125A.79, subdivision 
        7: 
            $92,605,000     .....     2004 
            $92,799,000 $95,572,000     .....     2005 
           The 2004 appropriation includes $41,754,000 for 2003 and 
        $50,851,000 for 2004. 
           The 2005 appropriation includes $41,216,000 for 2004 and 
        $51,583,000 $54,356,000 for 2005.  
           Of the state total excess cost aid for fiscal year 2005, 
        $150,000 shall be paid to Independent School District No. 2580, 
        East Central, for unfunded special education costs that would 
        otherwise be cross-subsidized with general education aid.  For 
        purposes of Minnesota Statutes, section 125A.79, subdivision 7, 
        the state total excess cost aid used in calculating district 
        special education excess cost aid must be reduced by the amount 
        paid to Independent School District No. 2580, East Central.  
           [EFFECTIVE DATE.] This section is effective retroactively 
        from June 30, 2005. 
           Sec. 17.  [TASK FORCE ON DELIVERY OF SPECIAL EDUCATION TO 
        NONPUBLIC SCHOOL STUDENTS BY PUBLIC SCHOOL DISTRICTS.] 
           Subdivision 1.  [PURPOSE; ESTABLISHMENT.] A task force on 
        the delivery of special education services to nonpublic school 
        students by public school districts shall be established to 
        compare and evaluate how the individual needs of each child are 
        being met, if services are provided in the least restrictive 
        environment, and whether best practices and program efficiencies 
        are being used in the specific areas of transportation, location 
        of services, and shared time aid. 
           Subd. 2.  [MEMBERS.] The governor shall appoint the members 
        of the task force from each of the following: 
           (1) two members from the Department of Education, one 
        representing special education programs and policy and one 
        representing district finances; 
           (2) two special education teachers with one member from a 
        public school and one member from a nonpublic school; 
           (3) two special education administrators with one member 
        from a public school and one member from a nonpublic school; 
           (4) two members with one from each of two special education 
        advocacy organizations; 
           (5) two parents of children receiving special education 
        services with one member from a public school and one member 
        from a nonpublic school; 
           (6) two elementary school principals with one member from a 
        public school and one member from a nonpublic school; 
           (7) two superintendents with one member from a public 
        school district and one member from a nonpublic school district; 
           (8) two school business officials with one from a public 
        school and one from a nonpublic school; and 
           (9) two school board officials with one from a public 
        school and one from a nonpublic school. 
           The task force may select additional members to work on the 
        task force.  The commissioner of education shall provide 
        necessary materials and assistance. 
           Subd. 3.  [REPORT.] The task force shall submit a report by 
        January 15, 2006, to the house of representatives and senate 
        committees having jurisdiction over education on the delivery of 
        special education services to nonpublic school students by 
        public school districts, to compare and evaluate how the 
        individual needs of each child are being met in the least 
        restrictive environment, and whether best practices and program 
        efficiencies are being used. 
           Subd. 4.  [EXPIRATION.] This section expires January 31, 
        2006. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 18.  [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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2 or authorized by order of the 
        Ramsey County District Court in Case No. C9-05-5928. 
           Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
        education aid under Minnesota Statutes, section 125A.75: 
             $528,846,000   .....     2006 
             $527,446,000   .....     2007 
           The 2006 appropriation includes $83,078,000 for 2005 and 
        $445,768,000 for 2006. 
           The 2007 appropriation includes $83,019,000 for 2006 and 
        $444,427,000 for 2007. 
           Subd. 3.  [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: 
             $2,212,000     .....     2006 
             $2,615,000     .....     2007 
           If the appropriation for either year is insufficient, the 
        appropriation for the other year is available.  
           Subd. 4.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
        teacher travel for home-based services under Minnesota Statutes, 
        section 125A.75, subdivision 1: 
             $  187,000     .....     2006 
             $  195,000     .....     2007 
           The 2006 appropriation includes $28,000 for 2005 and 
        $159,000 for 2006. 
           The 2007 appropriation includes $29,000 for 2006 and 
        $166,000 for 2007. 
           Subd. 5.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
        cost aid under Minnesota Statutes, section 125A.79, subdivision 
        7: 
             $102,083,000    .....     2006 
             $104,286,000    .....     2007 
           The 2006 appropriation includes $37,455,000 for 2005 and 
        $64,628,000 for 2006. 
           The 2007 appropriation includes $38,972,000 for 2006 and 
        $65,314,000 for 2007.  
           Subd. 6.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
        transition programs for children with disabilities under 
        Minnesota Statutes, section 124D.454: 
             $8,788,000     .....     2006 
             $8,765,000     .....     2007 
           The 2006 appropriation includes $1,380,000 for 2005 and 
        $7,408,000 for 2006.  
           The 2007 appropriation includes $1,379,000 for 2006 and 
        $7,386,000 for 2007.  
           Subd. 7.  [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: 
             $   65,000     .....     2006 
             $   70,000     .....     2007 
           Subd. 8.  [SPECIAL EDUCATION OUT-OF-STATE TUITION.] For 
        special education out-of-state tuition according to Minnesota 
        Statutes, section 125A.79, subdivision 8: 
             $  250,000     .....     2006 
             $  250,000     .....     2007 
           Sec. 19.  [REPEALER.] 
           Minnesota Statutes 2004, section 125A.75, subdivision 8, is 
        repealed. 
           Sec. 20.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 4 
                           FACILITIES AND TECHNOLOGY 
           Section 1.  Minnesota Statutes 2004, section 123B.42, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [CURRICULUM; ELECTRONIC COMPONENTS.] A school 
        district that provides curriculum to resident students that has 
        both physical and electronic components must make the electronic 
        component accessible to a resident student in a home school in 
        compliance with sections 120A.22 and 120A.24 at the request of 
        the student or the student's parent or guardian, provided that 
        the district does not incur more than an incidental cost as a 
        result of providing access electronically. 
           Sec. 2.  Minnesota Statutes 2004, section 123B.492, is 
        amended to read: 
           123B.492 [SUPERVISED COMPETITIVE HIGH SCHOOL DIVING.] 
           Notwithstanding Minnesota Rules, part 4717.3750, any pool 
        built before January 1, 1987, that was used for a one-meter 
        board high school diving program during the 2000-2001 school 
        year may be used for supervised competitive one-meter board high 
        school diving.  Schools and school districts are strongly 
        encouraged to use a pool for supervised competitive high school 
        diving that meets the requirements of Minnesota Rules, part 
        4717.3750.  A school or district using a pool for 
        supervised training practice for competitive high school 
        diving for either training practice or competition that does not 
        meet the requirements of Minnesota Rules, part 4717.3750, must 
        provide appropriate notice to parents and participants as to the 
        type of variance from Minnesota Rules and risk it may present. 
           Sec. 3.  Minnesota Statutes 2004, section 123B.53, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the eligible debt service revenue of a district is 
        defined as follows: 
           (1) the amount needed to produce between five and six 
        percent in excess of the amount needed to meet when due the 
        principal and interest payments on the obligations of the 
        district for eligible projects according to subdivision 2, 
        including the amounts necessary for repayment of energy loans 
        according to section 216C.37 or sections 298.292 to 298.298, 
        debt service loans and capital loans, lease purchase payments 
        under section 126C.40, subdivision 2, alternative facilities 
        levies under section 123B.59, subdivision 5, minus 
           (2) the amount of debt service excess levy reduction for 
        that school year calculated according to the procedure 
        established by the commissioner. 
           (b) The obligations in this paragraph are excluded from 
        eligible debt service revenue: 
           (1) obligations under section 123B.61; 
           (2) the part of debt service principal and interest paid 
        from the taconite environmental protection fund or northeast 
        Minnesota economic protection trust; 
           (3) obligations issued under Laws 1991, chapter 265, 
        article 5, section 18, as amended by Laws 1992, chapter 499, 
        article 5, section 24; and 
           (4) obligations under section 123B.62. 
           (c) For purposes of this section, if a preexisting school 
        district reorganized under sections 123A.35 to 123A.43, 123A.46, 
        and 123A.48 is solely responsible for retirement of the 
        preexisting district's bonded indebtedness, capital loans or 
        debt service loans, debt service equalization aid must be 
        computed separately for each of the preexisting districts. 
           (d) For purposes of this section, the adjusted net tax 
        capacity determined according to section 127A.48 shall be 
        adjusted to include a portion of the tax capacity of property 
        generally exempted from ad valorem taxes under section 272.02, 
        subdivisions 64 and 65, equal to the product of that tax 
        capacity times the ratio of the eligible debt service revenue 
        attributed to general obligation bonds to the total eligible 
        debt service revenue of the district.  
           Sec. 4.  Minnesota Statutes 2004, section 123B.54, is 
        amended to read: 
           123B.54 [DEBT SERVICE APPROPRIATION.] 
           (a) $28,367,000 $21,624,000 in fiscal year 2006 2008 and 
        $25,560,000 $20,403,000 in fiscal year 2007 2009 and later are 
        appropriated from the general fund to the commissioner of 
        education for payment of debt service equalization aid under 
        section 123B.53.  
           (b) The appropriations in paragraph (a) must be reduced by 
        the amount of any money specifically appropriated for the same 
        purpose in any year from any state fund. 
           Sec. 5.  Minnesota Statutes 2004, section 123B.59, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOND AUTHORIZATION.] (a) A school district may 
        issue general obligation bonds under this section to finance 
        facilities plans approved by its board and the commissioner.  
        Chapter 475, except sections 475.58 and 475.59, must be complied 
        with.  The 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) At least 20 days before a district issues bonds the 
        earliest of solicitation of bids, the issuance of bonds, or the 
        final certification of levies under this subdivision 5, it the 
        district must publish notice of the intended projects, the 
        amount of the bond issue, and the total amount of district 
        indebtedness, and the commissioner's review and comment, if 
        applicable. 
           Sec. 6.  Minnesota Statutes 2004, section 123B.59, 
        subdivision 3a, is amended 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) At least 20 days before a final district certification 
        of levies under this subdivision 5, it the district must 
        publish notice of the intended projects, including the total 
        estimated project cost, and the commissioner's review and 
        comment, if applicable. 
           Sec. 7.  [123B.591] [DEFERRED MAINTENANCE REVENUE.] 
           Subdivision 1.  [ELIGIBILITY.] An independent or special 
        school district that does not qualify to participate in the 
        alternative facilities bonding and levy under section 123B.59, 
        subdivision 1, paragraph (a), is eligible to receive deferred 
        maintenance revenue. 
           Subd. 2.  [DEFERRED MAINTENANCE REVENUE.] The deferred 
        maintenance revenue for an eligible school district equals the 
        product of $60 times the adjusted marginal cost pupil units for 
        the school year times the lesser of one or the ratio of the 
        district's average age of building space to 35 years. 
           Subd. 3.  [DEFERRED MAINTENANCE LEVY.] To obtain deferred 
        maintenance revenue for fiscal year 2008 and later, a district 
        may levy an amount not more than the product of its deferred 
        maintenance revenue for the fiscal year times the lesser of one 
        or the ratio of its adjusted net tax capacity per adjusted 
        marginal cost pupil unit to $5,900. 
           Subd. 4.  [DEFERRED MAINTENANCE AID.] For fiscal year 2008 
        and later, a district's deferred maintenance aid equals its 
        deferred maintenance revenue minus its deferred maintenance levy 
        times the ratio of the actual amount levied to the permitted 
        levy. 
           Subd. 5.  [RESERVE ACCOUNT.] Deferred maintenance revenue 
        must be maintained in a reserve account within the general fund. 
        Deferred maintenance revenue may be used only for expenditures 
        that would be eligible for alternative facilities bonding and 
        levy revenue under section 123B.59, subdivision 2, paragraph 
        (a), if the district qualified for that revenue under section 
        123B.59, subdivision 1, paragraph (a). 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2008. 
           Sec. 8.  Minnesota Statutes 2004, section 123B.63, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USES OF THE ACCOUNT.] Money in the capital 
        project referendum account must be used only for the purposes 
        specified in section 126C.10, subdivision 14, for operating 
        capital revenue, including the 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. 9.  Minnesota Statutes 2004, section 123B.71, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REVIEW AND COMMENT.] A school district, a 
        special education cooperative, or a cooperative unit of 
        government, as defined in section 123A.24, subdivision 2, must 
        not initiate an installment contract for purchase or a lease 
        agreement, hold a referendum for bonds, nor solicit bids for new 
        construction, expansion, or remodeling of an educational 
        facility that requires an expenditure in excess of $500,000 per 
        school site prior to review and comment by the commissioner.  
        The commissioner may exempt a facility maintenance project 
        funded with general education aid and levy, alternative 
        facilities bonding and levy program, or health and safety 
        revenue from this provision after reviewing a written request 
        from a school district describing the scope of work.  A school 
        board shall not separate portions of a single project into 
        components to avoid the requirements of this subdivision. 
           Sec. 10.  Minnesota Statutes 2004, section 123B.71, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INFORMATION REQUIRED.] A school board proposing 
        to construct a facility described in subdivision 8 shall submit 
        to the commissioner a proposal containing information including 
        at least the following: 
           (1) the geographic area and population to be served, 
        preschool through grade 12 student enrollments for the past five 
        years, and student enrollment projections for the next five 
        years; 
           (2) a list of existing facilities by year constructed, 
        their uses, and an assessment of the extent to which alternate 
        facilities are available within the school district boundaries 
        and in adjacent school districts; 
           (3) a list of the specific deficiencies of the facility 
        that demonstrate the need for a new or renovated facility to be 
        provided, and a list of the specific benefits that the new or 
        renovated facility will provide to the students, teachers, and 
        community users served by the facility; 
           (4) the relationship of the project to any priorities 
        established by the school district, educational cooperatives 
        that provide support services, or other public bodies in the 
        service area; 
           (5) a specification of how the project will increase 
        community use of the facility and whether and how the project 
        will increase collaboration with other governmental or nonprofit 
        entities; 
           (6) a description of the project, including the 
        specification of site and outdoor space acreage and square 
        footage allocations for classrooms, laboratories, and support 
        spaces; estimated expenditures for the major portions of the 
        project; and the dates the project will begin and be completed; 
           (7) a specification of the source of financing the project; 
        the scheduled date for a bond issue or school board action; a 
        schedule of payments, including debt service equalization aid; 
        and the effect of a bond issue on local property taxes by the 
        property class and valuation; 
           (8) an analysis of how the proposed new or remodeled 
        facility will affect school district operational or 
        administrative staffing costs, and how the district's operating 
        budget will cover any increased operational or administrative 
        staffing costs; 
           (9) a description of the consultation with local or state 
        road and transportation officials on school site access and 
        safety issues, and the ways that the project will address those 
        issues; 
           (10) a description of how indoor air quality issues have 
        been considered and a certification that the architects and 
        engineers designing the facility will have professional 
        liability insurance; 
           (11) as required under section 123B.72, for buildings 
        coming into service after July 1, 2002, a certification that the 
        plans and designs for the extensively renovated or new 
        facility's heating, ventilation, and air conditioning systems 
        will meet or exceed code standards; will provide for the 
        monitoring of outdoor airflow and total airflow of ventilation 
        systems; and will provide an indoor air quality filtration 
        system that meets ASHRAE standard 52.1; 
           (12) a specification of any desegregation requirements that 
        cannot be met by any other reasonable means; and 
           (13) a specification, if applicable, of how the facility 
        will utilize environmentally sustainable school facility design 
        concepts; and 
           (14) a description of how the architects and engineers have 
        considered the American National Standards Institute Acoustical 
        Performance Criteria, Design Requirements and Guidelines for 
        Schools of the maximum background noise level and reverberation 
        times. 
           [EFFECTIVE DATE.] This section is effective July 1, 2006. 
           Sec. 11.  Minnesota Statutes 2004, section 123B.71, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PUBLICATION.] (a) At least 20 days but not more 
        than 60 days before a referendum for bonds or solicitation of 
        bids for a project that has received a positive or unfavorable 
        review and comment under section 123B.70, the school board shall 
        publish the commissioner's review and comment of that project in 
        the legal newspaper of the district.  Supplementary information 
        shall be available to the public.  
           (b) The publication requirement in paragraph (a) does not 
        apply to alternative facilities projects approved under section 
        123B.59.  Publication for alternative facilities projects shall 
        be as specified in section 123B.59, subdivisions 3 and 3a. 
           Sec. 12.  Minnesota Statutes 2004, section 124D.095, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them. 
           (a) "Online learning" is an interactive course or program 
        that delivers instruction from a teacher 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) "Online learning provider" is a school district, an 
        intermediate 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 online 
        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) "Online learning student" is a student enrolled in an 
        online learning course or program delivered by an online 
        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. 
           Sec. 13.  Minnesota Statutes 2004, section 124D.095, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ONLINE LEARNING PARAMETERS.] (a) An online 
        learning student must receive academic credit for completing the 
        requirements of an online learning course or program.  Secondary 
        credits granted to an online 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 online learning 
        students, and must continue to provide nonacademic services to 
        online learning students.  If a student completes an online 
        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 online 
        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 online learning student in proportion to the number of 
        online learning courses the student takes from an online 
        learning provider that is not the enrolling district.  
           (b) An online learning student may: 
           (1) enroll during a single school year in a maximum of 12 
        semester-long courses or their equivalent delivered by an online 
        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 online 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 online 
        learning course or program if the student's IEP team determines 
        that online learning is appropriate education for the student. 
           (d) An online 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 online 
        learning provider must assist an online learning student whose 
        family qualifies for the education tax credit under section 
        290.0674 to acquire computer hardware and educational software 
        for online learning purposes. 
           (e) An enrolling district may offer online learning to its 
        enrolled students.  Such online learning does not generate 
        online learning funds under this section.  An enrolling district 
        that offers online 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 online 
        learning from an enrolling district.  The delivery of 
        instruction occurs when the student interacts with the computer 
        or the teacher and receives ongoing assistance and assessment of 
        learning.  The instruction may include curriculum developed by 
        persons other than a teacher with a Minnesota license. 
           (f) An online 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 online learning 
        students.  The delivery of instruction occurs when the student 
        interacts with the computer or the teacher and receives ongoing 
        assistance and assessment of learning.  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 online learning instruction must not 
        instruct more than 40 students in any one online learning course 
        or program. 
           Sec. 14.  Minnesota Statutes 2004, section 124D.095, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [ONLINE LEARNING ADVISORY COUNCIL.] (a) An 
        online learning 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 12 members 
        from throughout the state who have demonstrated experience with 
        or interest in online learning.  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 online learning and provide input to the department 
        in matters related, but not restricted, to: 
           (1) quality assurance; 
           (2) teacher qualifications; 
           (3) program approval; 
           (4) special education; 
           (5) attendance; 
           (6) program design and requirements; and 
           (7) fair and equal access to programs. 
           (b) The online learning advisory council under this 
        subdivision expires June 30, 2008. 
           Sec. 15.  [125B.26] [TELECOMMUNICATIONS/INTERNET ACCESS 
        EQUITY AID.] 
           Subdivision 1.  [COSTS TO BE SUBMITTED.] (a) A district or 
        charter school shall submit its actual 
        telecommunications/Internet access costs for the previous fiscal 
        year, adjusted for any e-rate revenue received, to the 
        department by August 15 of each year as prescribed by the 
        commissioner.  Costs eligible for reimbursement under this 
        program are limited to the following: 
           (1) ongoing or recurring telecommunications/Internet access 
        costs associated with Internet access, data lines, and video 
        links providing: 
           (i) the equivalent of one data line, video link, or 
        integrated data/video link that relies on a transport medium 
        that operates at a minimum speed of 1.544 megabytes per second 
        (T1) for each elementary school, middle school, or high school 
        under section 120A.05, subdivisions 9, 11, and 13, including the 
        recurring telecommunications line lease costs and ongoing 
        Internet access service fees; or 
           (ii) the equivalent of one data line or video circuit, or 
        integrated data/video link that relies on a transport medium 
        that operates at a minimum speed of 1.544 megabytes per second 
        (T1) for each district, including recurring telecommunications 
        line lease costs and ongoing Internet access service fees; 
           (2) recurring costs of contractual or vendor-provided 
        maintenance on the school district's wide area network to the 
        point of presence at the school building up to the router, 
        codec, or other service delivery equipment located at the point 
        of presence termination at the school or school district; 
           (3) recurring costs of cooperative, shared arrangements for 
        regional delivery of telecommunications/Internet access between 
        school districts, postsecondary institutions, and public 
        libraries including network gateways, peering points, regional 
        network infrastructure, Internet2 access, and network support, 
        maintenance, and coordination; and 
           (4) service provider installation fees for installation of 
        new telecommunications lines or increased bandwidth. 
           (b) Costs not eligible for reimbursement under this program 
        include: 
           (1) recurring costs of school district staff providing 
        network infrastructure support; 
           (2) recurring costs associated with voice and standard 
        telephone service; 
           (3) costs associated with purchase of network hardware, 
        telephones, computers, or other peripheral equipment needed to 
        deliver telecommunications access to the school or school 
        district; 
           (4) costs associated with laying fiber for 
        telecommunications access; 
           (5) costs associated with wiring school or school district 
        buildings; 
           (6) costs associated with purchase, installation, or 
        purchase and installation of Internet filtering; and 
           (7) costs associated with digital content, including online 
        learning or distance learning programming, and information 
        databases. 
           Subd. 2.  [E-RATES.] To be eligible for aid under this 
        section, a district or charter school is required to file an 
        e-rate application either separately or through its 
        telecommunications access cluster and have a current technology 
        plan on file with the department.  Discounts received on 
        telecommunications expenditures shall be reflected in the costs 
        submitted to the department for aid under this section. 
           Subd. 3.  [REIMBURSEMENT CRITERIA.] The commissioner shall 
        develop criteria for approving costs submitted by organized 
        school districts and charter schools under subdivision 1. 
           Subd. 4.  [DISTRICT AID.] For fiscal year 2006 and later, a 
        district or charter school's Internet access equity aid equals 
        the district or charter school's approved cost for the previous 
        fiscal year according to subdivision 1 exceeding $15 times the 
        district's adjusted marginal cost pupil units for the previous 
        fiscal year or no reduction if the district is part of an 
        organized telecommunications access cluster.  Equity aid must be 
        distributed to the telecommunications access cluster for 
        districts that are members of the cluster or to individual 
        districts and charter schools not part of a telecommunications 
        access cluster.  
           Subd. 5.  [TELECOMMUNICATIONS/INTERNET ACCESS SERVICES FOR 
        NONPUBLIC SCHOOLS.] (a) Districts shall provide each year upon 
        formal request by or on behalf of a nonpublic school, not 
        including home schools, located in that district or area, 
        ongoing or recurring telecommunications access services to the 
        nonpublic school either through existing district providers or 
        through separate providers. 
           (b) The amount of district aid for telecommunications 
        access services for each nonpublic school under this subdivision 
        equals the lesser of: 
           (1) 90 percent of the nonpublic school's approved cost for 
        the previous fiscal year according to subdivision 1 exceeding 
        $10 for fiscal year 2006 and later times the number of weighted 
        pupils enrolled at the nonpublic school as of October 1 of the 
        previous school year; or 
           (2) the product of the district's aid per pupil unit 
        according to subdivision 4 times the number of weighted pupils 
        enrolled at the nonpublic school as of October 1 of the previous 
        school year. 
           (c) For purposes of this subdivision, nonpublic school 
        pupils shall be weighted by grade level using the weighting 
        factors defined in section 126C.05, subdivision 1. 
           (d) Each year, a district providing services under 
        paragraph (a) may claim up to five percent of the aid determined 
        in paragraph (b) for costs of administering this subdivision.  
        No district may expend an amount for these telecommunications 
        access services which exceeds the amount allocated under this 
        subdivision.  The nonpublic school is responsible for the 
        Internet access costs not covered by this section. 
           (e) At the request of a nonpublic school, districts may 
        allocate the amount determined in paragraph (b) directly to the 
        nonpublic school to pay for or offset the nonpublic school's 
        costs for telecommunications access services; however, the 
        amount allocated directly to the nonpublic school may not exceed 
        the actual amount of the school's ongoing or recurring 
        telecommunications access costs. 
           Subd. 6.  [SEVERABILITY.] If any portion of this section is 
        found by a court to be unconstitutional, the remaining portions 
        of the section shall remain in effect. 
           Sec. 16.  Minnesota Statutes 2004, 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 
        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 payment 
        from the general fund in the state treasury according to section 
        16A.641, as would be required under section 126C.72, subdivision 
        3.  A district's levy that is adjusted under this section must 
        not be reduced below 30.1 25 percent of the district's adjusted 
        net tax capacity. 
           Sec. 17.  Minnesota Statutes 2004, 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: 
           (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, 2002, a levy in total dollar 
        amount computed at a rate of 40 32 percent of adjusted net tax 
        capacity for taxes payable in 2002 and thereafter; 
           (ii) in any district receiving a debt service loan for a 
        debt service levy payable in 2001 or earlier, or granted a 
        capital loan before January 2, 2001 2002, a levy in a total 
        dollar amount computed at a rate of 32 28 percent of adjusted 
        net tax capacity for taxes payable in 2002 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. 18.  Minnesota Statutes 2004, section 128D.11, 
        subdivision 9, is amended to read: 
           Subd. 9.  [NET DEBT DEFINED.] The net debt of the school 
        district for the purposes of this limitation is the amount of 
        bonds less the amount of all money and the face value of all 
        securities then held as a sinking fund for the payment of such 
        bonds, and shall not include school aid and tax anticipation 
        certificates of indebtedness not in default or bonds issued to 
        pay pension fund liabilities under section 475.52, subdivision 6.
           Sec. 19.  Minnesota Statutes 2004, 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, for obligations authorized before July 1, 2005, 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 fund levy levies 
        authorized pursuant to chapters 122A, 123A, 123B, 124D, and 126C 
        and the state aids authorized pursuant to chapters 122A, 123A, 
        123B, 124D, 125A, 126C, and 127A.  For obligations authorized on 
        July 1, 2005, or thereafter, the amount of any surplus remaining 
        in the debt service fund of a school district when the 
        obligations and interest thereon are paid in full may be 
        appropriated to any other general purpose by the school district 
        without any reduction in state aid or levies or may be used to 
        reduce the general fund levies authorized under chapters 122A, 
        123A, 123B, 124D, and 126C, and the state aids authorized under 
        chapters 122A, 123A, 123B, 124D, 125A, 126C, and 127A. 
           (b) If the district qualified for second tier debt service 
        equalization aid in the last year that it qualified for debt 
        service equalization aid, the reduction to state aids equals the 
        lesser of (1) the amount of the surplus times the ratio of the 
        district's second tier debt service equalization aid to the 
        district's second tier 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) If the district did not qualify for second tier debt 
        service equalization aid in the last year that it qualified for 
        debt service equalization aid, 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.  
           (d) The reduction to the general fund levy levies equals 
        the total amount of the surplus minus the reduction to state 
        aids. 
           Sec. 20.  Laws 1996, chapter 412, article 5, section 24, is 
        amended to read: 
           Sec. 24.  [BONDS PAID FROM TACONITE PRODUCTION TAX 
        REVENUES.] 
           Subdivision 1.  [REFUNDING BONDS.] The appropriation of 
        funds from the distribution of taconite production tax revenues 
        to the taconite environmental protection tax fund and the 
        northeast Minnesota economic protection fund made by Laws 1988, 
        chapter 718, article 7, sections 62 and 63, Laws 1989, chapter 
        329, article 5, section 20, Laws 1990, chapter 604, article 8, 
        section 13, Laws 1992, chapter 499, article 5, section 29, and 
        by sections 18 to 20 Laws 1996, chapter 412, article 5, sections 
        20 to 22, and Laws 2000, chapter 489, article 5, sections 24 to 
        26, shall continue to apply to bonds issued under Minnesota 
        Statutes, chapter 475, to refund bonds originally issued 
        pursuant to those chapters. 
           Subd. 2.  [LOCAL PAYMENTS.] School districts that are 
        required in Laws 1988, chapter 718, article 7, sections 62 and 
        63, Laws 1989, chapter 329, article 5, section 20, Laws 1990, 
        chapter 604, article 8, section 13, Laws 1992, chapter 499, 
        article 5, section 29, and by sections 18 to 20 Laws 1996, 
        chapter 412, article 5, sections 20 to 22, and Laws 2000, 
        chapter 489, article 5, sections 24 to 26, to impose levies to 
        pay debt service on the bonds issued under those provisions to 
        the extent the principal and interest on the bonds is not paid 
        by distributions from the taconite environmental protection fund 
        and the northeast Minnesota economic protection trust, may pay 
        their portion of the principal and interest from any funds 
        available to them.  To the extent a school district uses funds 
        other than the proceeds of a property tax levy to pay its share 
        of the principal and interest on the bonds, the requirement to 
        impose a property tax to pay the local share does not apply to 
        the school district. 
           Sec. 21.  Laws 2003, First Special Session chapter 9, 
        article 4, section 29, as amended by Laws 2003, First Special 
        Session chapter 23, section 18, is amended to read: 
           Sec. 29.  [GARAGE LEASE LEVY; SARTELL.] 
           For taxes payable in 2004, 2005, and 2006, and 2007, 
        independent school district No. 740 748, Sartell, may levy up to 
        $107,000 each year and for taxes payable in 2008 may levy up to 
        $67,000 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 $90 $100 per resident 
        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. 22.  [LEVY; GLENCOE-SILVER LAKE.] 
           For taxes payable in 2006 only, Independent School District 
        No. 2859, Glencoe-Silver Lake, may levy an amount up to $81,000. 
        Of that amount, $64,000 is for recovering the cost of replacing 
        a gymnasium floor at Lakeside Elementary School resulting from 
        storm damage and $17,000 is for recovering the cost of the 
        Lincoln Junior High School water service line and associated 
        work. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2006. 
           Sec. 23.  [LEASE LEVY; ADMINISTRATIVE SPACE, WACONIA.] 
           Independent School District No. 110, Waconia, may lease 
        administrative space under Minnesota Statutes, section 126C.40, 
        subdivision 1, if the district can demonstrate to the 
        commissioner's satisfaction that the administrative space is 
        less expensive than instructional space that the district would 
        otherwise lease.  The commissioner must deny this levy authority 
        unless the district passes a resolution stating its intent to 
        lease instructional space under Minnesota Statutes, section 
        126C.40, subdivision 1, if the commissioner does not grant 
        authority under this section.  The resolution must also certify 
        that a lease of administrative space under this section is less 
        expensive than the district's proposed instructional lease.  
        Levy authority under this section shall not exceed the total 
        levy authority under Minnesota Statutes, section 126C.40, 
        subdivision 1, paragraph (e). 
           [EFFECTIVE DATE.] This section is effective for revenue for 
        taxes payable in 2006 through 2011. 
           Sec. 24.  [RESIDENTIAL PROGRAM FACILITIES; WORTHINGTON.] 
           Subject to Minnesota Statutes, section 16A.695, Independent 
        School District No. 518, Worthington, may use the facilities 
        provided under Laws 1994, chapter 643, section 14, subdivision 
        8, as amended by Laws 1995, chapter 76, section 1, to provide 
        adult foster care or child foster care services licensed by the 
        commissioner of human services or for other special education 
        purposes.  
           Sec. 25.  [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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of the 
        Ramsey County District Court in case No. C9-05-5928.  
           Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
        safety aid according to Minnesota Statutes, section 123B.57, 
        subdivision 5: 
             $  802,000     .....     2006 
             $  578,000     .....     2007 
           The 2006 appropriation includes $211,000 for 2005 and 
        $591,000 for 2006. 
           The 2007 appropriation includes $109,000 for 2006 and 
        $469,000 for 2007. 
           Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
        according to Minnesota Statutes, section 123B.53, subdivision 6: 
             $25,654,000    .....     2006 
             $24,134,000    .....     2007 
           The 2006 appropriation includes $4,654,000 for 2005 and 
        $21,000,000 for 2006. 
           The 2007 appropriation includes $3,911,000 for 2006 and 
        $20,223,000 for 2007. 
           Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
        alternative facilities bonding aid, according to Minnesota 
        Statutes, section 123B.59, subdivision 1: 
             $19,287,000    .....     2006 
             $19,287,000    .....     2007 
           The 2006 appropriation includes $3,028,000 for 2005 and 
        $16,259,000 for 2006. 
           The 2007 appropriation includes $3,028,000 for 2006 and 
        $16,259,000 for 2007. 
           Subd. 5.  [EQUITY IN TELECOMMUNICATIONS ACCESS.] For equity 
        in telecommunications access: 
             $3,750,000       .....     2006 
             $3,750,000       .....     2007 
           If the appropriation amount is insufficient, the 
        commissioner shall reduce the reimbursement rate in Minnesota 
        Statutes, section 125B.26, subdivisions 4 and 5, and the revenue 
        for the fiscal years 2006 and 2007 shall be prorated.  The base 
        for this program in fiscal year 2008 and later is $3,750,000.  
        Any balance in the first year does not cancel but is available 
        in the second year. 
           Subd. 6.  [EMERGENCY AID, RED LAKE.] For Independent School 
        District No. 38, Red Lake, for onetime emergency aid to repair 
        infrastructure damage to the Red Lake High School as a result of 
        the March 21, 2005, school shooting:  
             $   50,000       .....     2006
           The school district must submit proposed expenditures for 
        these funds for review and comment approval under Minnesota 
        Statutes, section 123B.71, before the commissioner releases the 
        funds to the district.  The district must report the amount of 
        its unreimbursed costs to the commissioner. 
           Sec. 26.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 5 
                            NUTRITION AND ACCOUNTING 
           Section 1.  Minnesota Statutes 2004, 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 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 (b), (c), and (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 45 48.6 percent of the referendum levy 
        certified according to section 126C.17, in the prior calendar 
        year or 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 (b), (c), and (d); 126C.43, subdivision 
        2; 126C.457; and 126C.48, subdivision 6; plus 
           (iii) 45 48.6 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). 
           Sec. 2.  Minnesota Statutes 2004, section 124D.111, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCHOOL LUNCH AID COMPUTATION.] Each school 
        year, the state must pay districts participating participants in 
        the national school lunch program the amount of eight ten cents 
        for each full paid, reduced, and free student lunch served to 
        students in the district. 
           [EFFECTIVE DATE.] This section is effective for fiscal year 
        2006. 
           Sec. 3.  Minnesota Statutes 2004, section 124D.111, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] A school districts district, 
        charter school, nonpublic school, or other participant in the 
        national school lunch program shall apply to the department for 
        this payment on forms provided by the department. 
           [EFFECTIVE DATE.] This section is effective for fiscal year 
        2006. 
           Sec. 4.  Minnesota Statutes 2004, section 124D.118, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REIMBURSEMENT.] In accordance with program 
        guidelines, the commissioner shall reimburse each participating 
        public or nonpublic school nine 14 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. 
           [EFFECTIVE DATE.] This section is effective for fiscal year 
        2006. 
           Sec. 5.  Minnesota Statutes 2004, 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) 80 percent the current year aid payment percentage of 
        the estimated aid and credit entitlements paid according to 
        subdivision 13; plus 
           (ii) 100 percent of the entitlements paid according to 
        subdivisions 11 and 12; plus 
           (iii) the other district receipts.  
           (c) 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.  
           [EFFECTIVE DATE.] This section is effective for state aid 
        payments for fiscal year 2006. 
           Sec. 6.  Minnesota Statutes 2004, 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 80 percent the current year 
        aid payment percentage 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 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. 
           [EFFECTIVE DATE.] This section is effective for state aid 
        payments for fiscal year 2006. 
           Sec. 7.  Minnesota Statutes 2004, 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 80 percent 
        the current year aid payment percentage 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. 
           [EFFECTIVE DATE.] This section is effective for state aid 
        payments for fiscal year 2006. 
           Sec. 8.  Minnesota Statutes 2004, section 127A.45, 
        subdivision 16, is amended to read: 
           Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
        subdivision 3, 80 percent the current year aid payment 
        percentage 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 20 percent final adjustment payment on 
        October 30 of the next fiscal year of the remaining amount. 
           [EFFECTIVE DATE.] This section is effective for state aid 
        payments for fiscal year 2006. 
           Sec. 9.  [FUND TRANSFERS.] 
           Subdivision 1.  [LAKE CRYSTAL-WELLCOME MEMORIAL.] 
        Notwithstanding Minnesota Statutes, section 123B.79 or 123B.80, 
        as of June 30, 2005, upon approval of the commissioner of 
        education, Independent School District No. 2071, Lake 
        Crystal-Wellcome Memorial, may permanently transfer up to 
        $133,000 from its reserved account for handicapped access to its 
        undesignated general fund balance. 
           Subd. 2.  [ROCKFORD.] Notwithstanding Minnesota Statutes, 
        sections 123B.79, 123B.80, and 475.61, subdivision 4, 
        Independent School District No. 883, Rockford, as of June 30, 
        2005, may permanently transfer up to $660,000 from its debt 
        redemption fund to the undesignated balance of its general fund 
        without making a levy reduction. 
           Subd. 3.  [RUSSELL.] Notwithstanding Minnesota Statutes, 
        section 123B.79 or 123B.80, as of June 30, 2005, Independent 
        School District No. 418, Russell, may transfer up to $50,000 
        from its reserved capital accounts in its general fund to its 
        undesignated fund balance. 
           Subd. 4.  [RUTHTON.] Notwithstanding Minnesota Statutes, 
        section 123B.79 or 123B.80, as of June 30, 2005, Independent 
        School District No. 584, Ruthton, may permanently transfer up to 
        $140,000 from its reserved for operating capital account to the 
        undesignated general fund balance. 
           Subd. 5.  [WINDOM.] Notwithstanding Minnesota Statutes, 
        section 123B.79 or 123B.80, Independent School District No. 177, 
        Windom, as of June 30, 2005, may permanently transfer up to 
        $270,000 from its reserved for operating capital account to the 
        undesignated balance in its general fund.  
           Subd. 6.  [CHOKIO-ALBERTA.] Notwithstanding Minnesota 
        Statutes, section 123B.79 or 123B.80, as of June 30, 2005, 
        Independent School District No. 771, Chokio-Alberta, may 
        permanently transfer up to $150,000 from its reserved operating 
        capital account and up to $50,000 from its reserved account for 
        disabled accessibility to the undesignated general fund balance. 
           Subd. 7.  [BUTTERFIELD.] Notwithstanding Minnesota 
        Statutes, section 123B.79 or 123B.80, for calendar years 2005 
        through 2007, as of June 30 of each year, Independent School 
        District No. 836, Butterfield, may permanently transfer up to 
        $50,000 from its reserved operating capital account in its 
        general fund to its undesignated general fund balance and 
        $60,000 from its reserved bus purchase account in its general 
        fund to its undesignated general fund balance.  The total amount 
        transferred for the three-year period must not total more than 
        $50,000 from the reserved operating capital account and $60,000 
        from the reserved bus purchase account. 
           Subd. 8.  [CLINTON-GRACEVILLE-BEARDSLEY.] Notwithstanding 
        Minnesota Statutes, sections 123B.79, 123B.80, and 475.64, 
        subdivision 4, as of June 30, 2005, Independent School District 
        No. 2888, Clinton-Graceville-Beardsley may permanently transfer 
        up to $244,000 from its reserved for disabled accessibility 
        account to its unrestricted general fund account without making 
        a levy reduction. 
           Subd. 9.  [HASTINGS.] Notwithstanding Minnesota Statutes, 
        section 123A.27, as of June 30, 2005, Independent School 
        District No. 200, Hastings, may permanently transfer up to 
        $300,000 from its reserved account for instructional services 
        from entities formed for cooperative services for special 
        education and secondary vocational programs in its general fund 
        to its unrestricted general fund account. 
           Subd. 10.  [M.A.C.C.R.A.Y.] Notwithstanding Minnesota 
        Statutes, section 123B.79 or 123B.80, upon approval of the 
        commissioner of education, as of June 30, 2005, Independent 
        School District No. 2180, M.A.C.C.R.A.Y., may permanently 
        transfer up to $230,000 from its reserved account for 
        handicapped access to its undesignated general fund balance. 
           Subd. 11.  [MCLEOD WEST.] Notwithstanding Minnesota 
        Statutes, section 123B.79 or 123B.80, on or before June 30, 
        2007, Independent School District No. 2887, McLeod West, may 
        permanently transfer up to $200,000 from its reserved operating 
        capital account in its general fund to the undesignated fund 
        balance. 
           Subd. 12.  [WIN-E-MAC.] Notwithstanding Minnesota Statutes, 
        section 123B.79 or 123B.80, as of June 30, 2005, Independent 
        School District No. 2609, Win-E-Mac, may permanently transfer up 
        to $87,000 from its reserved account for disabled accessibility 
        to its reserved operating capital account in its general fund. 
           [EFFECTIVE DATE.] This section is retroactively effective 
        from June 30, 2005. 
           Sec. 10.  [DISABLED ACCESS LEVY AUTHORITY; EAST GRAND 
        FORKS.] 
           Notwithstanding the time limits established in Minnesota 
        Statutes, section 123B.58, subdivision 3, Independent School 
        District No. 595, East Grand Forks, may levy its remaining 
        disabled access levy authority over five or fewer years. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  [TAX BASE ADJUSTMENTS, FERTILE-BELTRAMI.] 
           (a) Notwithstanding Minnesota Statutes, section 123B.61, 
        the commissioner of education, when making offsetting levy 
        adjustments between levy categories to ensure that each levy 
        category is positive for Independent School District No. 599, 
        Fertile-Beltrami, shall make such adjustments first between levy 
        categories that are imposed on identical tax bases before making 
        such adjustments between levy categories that are imposed on 
        different tax bases.  The commissioner may make offsetting levy 
        adjustments between the general fund and the debt service fund, 
        if necessary. 
           (b) The commissioner of education must make the offsetting 
        levy adjustments according to the process in paragraph (a) until 
        Independent School District No. 599, Fertile-Beltrami's current 
        referendum authority, under Minnesota Statutes, section 126C.17, 
        expires. 
           Sec. 12.  [NONPROFIT GRANT AND CONTRACT DECISIONS.] 
           Subdivision 1.  [PAYMENT FOR CONTINUING SERVICES.] If a 
        nonprofit corporation has provided services based on an 
        appropriation to a state agency for the fiscal year ending June 
        30, 2005, that names the nonprofit corporation or based on a 
        grant award letter from a state agency to the nonprofit 
        corporation for fiscal year 2005, and the state agency has 
        delayed its final decision on whether to enter into a grant or 
        contract with the same nonprofit corporation to provide 
        essentially the same services for the fiscal year ending June 
        30, 2006, pending enactment of an appropriation to continue 
        paying for the services, then within 30 business days after the 
        effective date of this section, the state agency must: 
           (1) process the grant or contract with the nonprofit 
        corporation; and 
           (2) issue payment to the nonprofit corporation for services 
        already provided on and after July 1, 2005. 
           Subd. 2.  [CONTRACTS RETROACTIVE.] A contract encumbered or 
        a grant awarded by a state agency to a nonprofit corporation 
        before September 1, 2005, for services rendered in the fiscal 
        year ending June 30, 2006, is retroactive from the date that 
        services of the kind covered by the contract or grant were first 
        provided on or after July 1, 2005. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 13.  [REIMBURSEMENT TO LOCAL GOVERNMENTS.] 
           During the fiscal year beginning July 1, 2005, if a county 
        or other local unit of government advances money from its own 
        resources to carry out a program under state law for which it is 
        authorized to spend money received from a state agency, and the 
        advance of local money was made necessary because of a delay in 
        the appropriation of state or federal money, the state agency 
        administering the program must use the state or federal money, 
        when it becomes available, to reimburse the local government for 
        the advance of local money to pay obligations that would 
        otherwise have been paid from the state or federal money. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  [CONTRACT RETROACTIVITY.] 
           A contract encumbered or a grant awarded by the 
        commissioner of health, human services, or education before 
        September 1, 2005, and not mandated by section 12 to be made 
        retroactive, may be made retroactive from July 1, 2005. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  [CARRYFORWARD.] 
           Notwithstanding Minnesota Statutes, section 16A.28, or 
        other law to the contrary, the unexpended and unencumbered 
        balance of an appropriation from the general fund to a state 
        agency or constitutional officer for operations, but not for 
        grants, for the fiscal year ending June 30, 2005, does not lapse 
        on that date and is available for the fiscal year ending June 
        30, 2006. 
           [EFFECTIVE DATE.] This section is retroactively effective 
        from June 30, 2005. 
           Sec. 16.  [LET'S GO FISHING APPROPRIATION.] 
           Notwithstanding Minnesota Statutes, section 297A.94, 
        paragraph (e), clause (1), $325,000 is appropriated from the 
        revenue credited to the game and fish fund under Minnesota 
        Statutes, section 297A.94, paragraph (e), clause (1), to the 
        commissioner of natural resources for a grant to "Let's Go 
        Fishing" of Minnesota to promote opportunities for fishing.  The 
        grant recipient must report back to the commissioner by February 
        1, 2006, on the use and results of the appropriation.  This is a 
        onetime appropriation. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 17.  [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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of 
        Ramsey County District Court in Case No. C9-05-5928. 
           Subd. 2.  [SCHOOL LUNCH.] For school lunch aid according to 
        Minnesota Statutes, section 124D.111, and Code of Federal 
        Regulations, title 7, section 210.17:  
             $8,998,000     .....     2006 
             $9,076,000     .....     2007 
           Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST; KINDERGARTEN 
        MILK.] For traditional school breakfast aid and kindergarten 
        milk under Minnesota Statutes, sections 124D.1158 and 124D.118: 
             $4,878,000     .....     2006 
             $4,968,000     .....     2007 
           Subd. 4.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
        summer food service replacement aid under Minnesota Statutes, 
        section 124D.119: 
             $  150,000     .....     2006 
             $  150,000     .....     2007 
           Sec. 18.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 6 
                                   LIBRARIES 
           Section 1.  [DEPARTMENT OF EDUCATION; LIBRARY 
        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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of the 
        Ramsey County District Court in case No. C9-05-5928. 
           Subd. 2.  [BASIC SYSTEM SUPPORT.] For basic system support 
        grants under Minnesota Statutes, section 134.355: 
             $ 8,570,000     .....     2006 
             $ 8,570,000     .....     2007 
           The 2006 appropriation includes $1,345,000 for 2005 and 
        $7,225,000 for 2006. 
           The 2007 appropriation includes $1,345,000 for 2006 and 
        $7,225,000 for 2007.  
           Subd. 3.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
        grants under Minnesota Statutes, sections 134.353 and 134.354, 
        to multicounty, multitype library systems: 
             $  903,000     .....     2006 
             $  903,000     .....     2007 
           The 2006 appropriation includes $141,000 for 2005 and 
        $762,000 for 2006. 
           The 2007 appropriation includes $141,000 for 2006 and 
        $762,000 for 2007.  
           Subd. 4.  [ELECTRONIC LIBRARY FOR MINNESOTA.] For statewide 
        licenses to online 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: 
             $  900,000     .....     2006 
             $  900,000     .....     2007 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 5.  [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 
        regional library telecommunications aid under Minnesota 
        Statutes, section 134.355: 
             $1,200,000     .....     2006 
             $1,200,000     .....     2007 
           The 2006 appropriation includes $188,000 for 2005 and 
        $1,012,000 for 2006. 
           The 2007 appropriation includes $188,000 for 2006 and 
        $1,012,000 for 2007. 
           [EFFECTIVE DATE.] This section is retroactively effective 
        from July 1, 2005. 

                                   ARTICLE 7 
                           EARLY CHILDHOOD EDUCATION 
           Section 1.  Minnesota Statutes 2004, section 121A.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EARLY CHILDHOOD DEVELOPMENTAL SCREENING.] 
        Every school board must provide for a mandatory program of early 
        childhood developmental screening for children at least once 
        before school entrance, targeting children who are between 3-1/2 
        three and four years old.  This screening program must be 
        established either by one board, by two or more boards acting in 
        cooperation, by service cooperatives, by early childhood family 
        education programs, or by other existing programs.  This 
        screening examination is a mandatory requirement for a student 
        to continue attending kindergarten or first grade in a public 
        school.  A child need not submit to developmental screening 
        provided by a board if the child's health records indicate to 
        the board that the child has received comparable developmental 
        screening from a public or private health care organization or 
        individual health care provider.  A student identification 
        number, as defined by the commissioner of education, shall be 
        assigned at the time of early childhood developmental screening 
        or at the time of the provision of health records indicating a 
        comparable screening.  Each school district must provide the 
        essential data in accordance with section 125B.07, subdivision 
        6, to the Department of Education.  Districts are encouraged to 
        reduce the costs of preschool developmental screening programs 
        by utilizing volunteers and public or private health care 
        organizations or individual health care providers in 
        implementing the program. 
           Sec. 2.  Minnesota Statutes 2004, section 121A.17, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEVELOPMENTAL SCREENING PROGRAM INFORMATION.] 
        The board must inform each resident family with a child eligible 
        to participate in the developmental screening program about the 
        availability of the program and the state's requirement that a 
        child receive a developmental screening or provide health 
        records indicating that the child received a comparable 
        developmental screening from a public or private health care 
        organization or individual health care provider not later than 
        30 days after the first day of attending kindergarten in a 
        public school.  A school district must inform all resident 
        families with eligible children under age seven that their 
        children may receive a developmental screening conducted either 
        by the school district or by a public or private health care 
        organization or individual health care provider.  
           Sec. 3.  Minnesota Statutes 2004, section 121A.19, is 
        amended to read: 
           121A.19 [DEVELOPMENTAL SCREENING AID.] 
           Each school year, the state must pay a district $40 $50 for 
        each three-year-old child screened; $40 for each four-year-old 
        child screened; and $30 for each five-year-old child screened by 
        the district prior to kindergarten according to the requirements 
        of section 121A.17.  If this amount of aid is insufficient, the 
        district may permanently transfer from the general fund an 
        amount that, when added to the aid, is sufficient. 
           Sec. 4.  Minnesota Statutes 2004, 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 $120 for 
        fiscal years 2003 and 2004 and $96 for fiscal year 2005 and $104 
        for fiscal year 2006 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. 5.  Minnesota Statutes 2004, section 124D.135, 
        subdivision 5, is amended to read: 
           Subd. 5.  [USE OF REVENUE RESTRICTED.] Early childhood 
        family education revenue may be used only for early childhood 
        family education programs.  Not more than five percent of early 
        childhood family education revenue, as defined in subdivision 7, 
        may be used to administer early childhood family education 
        programs.  
           Sec. 6.  Minnesota Statutes 2004, section 124D.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A district or a 
        group of districts may establish a school readiness program 
        for eligible children age three to kindergarten entrance.  The 
        purpose of a school readiness program is to provide all eligible 
        children adequate opportunities to participate in child 
        development programs that enable the children to enter school 
        with the necessary skills and behavior and family stability and 
        support to progress and flourish prepare children to enter 
        kindergarten. 
           Sec. 7.  Minnesota Statutes 2004, section 124D.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROGRAM ELIGIBILITY REQUIREMENTS.] A school 
        readiness program provider must include the following: 
           (1) a comprehensive plan to anticipate and meet the needs 
        of participating families by coordinating existing social 
        services programs and by fostering collaboration among agencies 
        or other community-based organizations and programs that provide 
        a full range of flexible, family-focused services to families 
        with young children assess each child's cognitive skills when 
        the child enters and again before the child leaves the program 
        to inform program planning and promote kindergarten readiness; 
           (2) a development and learning component to help children 
        develop appropriate social, cognitive, and physical skills, and 
        emotional well-being; 
           (3) health referral services to address children's medical, 
        dental, mental health, and nutritional needs provide 
        comprehensive program content based on early childhood research 
        and professional practice that is focused on children's 
        cognitive skills and development and prepares children for the 
        transition to kindergarten; 
           (4) (3) a nutrition component to meet children's daily 
        nutritional needs arrange for early childhood screening and 
        appropriate referral; 
           (5) (4) parents' involvement in meeting children's 
        educational, health, social service, and other needs involve 
        parents in program planning and decision making; 
           (6) (5) community outreach to ensure participation by 
        families who represent the racial, cultural, and economic 
        diversity of the community; coordinate with relevant 
        community-based services; and 
           (7) (6) community-based staff and program resources, 
        including interpreters, that reflect the racial and ethnic 
        characteristics of the children participating in the program; 
        and 
           (8) a literacy component to ensure that the literacy needs 
        of parents are addressed through referral to and cooperation 
        cooperate with adult basic education programs and other adult 
        literacy programs. 
           Sec. 8.  Minnesota Statutes 2004, section 124D.15, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [APPLICATION AND REPORTING REQUIREMENTS.] (a) A 
        school readiness program provider must submit a biennial plan 
        for approval by the commissioner before receiving aid under 
        section 124D.16.  The plan must describe how the program meets 
        the program requirements under subdivision 3.  A school district 
        by April 1 must submit the plan for approval by the commissioner 
        in the form and manner prescribed by the commissioner.  One-half 
        the districts must first submit the plan by April 1, 2006, and 
        one-half the districts must first submit the plan by April 1, 
        2007, as determined by the commissioner. 
           (b) Programs receiving school readiness funds annually must 
        submit a report to the department. 
           Sec. 9.  Minnesota Statutes 2004, section 124D.15, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SERVICES WITH NEW OR EXISTING PROVIDERS.] A 
        district is encouraged to may contract with a public charter 
        school or nonprofit community-based organization to provide 
        eligible children developmentally appropriate services that meet 
        the program requirements in subdivision 3.  In the alternative, 
        a district may pay tuition or fees to place an eligible child in 
        an existing program.  A district may establish a new program 
        where no existing, reasonably accessible program meets the 
        program requirements in subdivision 3.  Districts must submit a 
        copy of each contract to the commissioner with the biennial plan.
        Services may be provided in a site-based program or in the home 
        of the child or a combination of both.  The district may not 
        restrict participation to district residents.  
           Sec. 10.  Minnesota Statutes 2004, section 124D.15, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SUPERVISION.] A program provided by a board 
        must be supervised by a licensed early childhood teacher, a 
        certified early childhood educator, or a licensed parent 
        educator.  A program provided according to a contract between a 
        district and a nonprofit organization or another private 
        organization must be supervised and staffed according to the 
        terms of the contract.  
           Sec. 11.  Minnesota Statutes 2004, section 124D.15, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PROGRAM FEES.] A district may must adopt a 
        sliding fee schedule based on a family's income but must waive a 
        fee for a participant unable to pay.  The fees charged must be 
        designed to enable eligible children of all socioeconomic levels 
        to participate in the program. 
           Sec. 12.  Minnesota Statutes 2004, section 124D.15, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [ASSISTANCE.] The department must assist 
        districts, upon request, with programs under this section. 
           Sec. 13.  Minnesota Statutes 2004, section 124D.16, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AMOUNT OF AID.] (a) A district is eligible to 
        receive school readiness aid for eligible prekindergarten pupils 
        enrolled in a school readiness program under section 124D.15 if 
        the program biennial plan required by subdivision 1 section 
        124D.15, subdivision 3a, has been approved by the commissioner. 
           (b) For fiscal year 2002 and thereafter, a district must 
        receive school readiness aid equal to: 
           (1) the number of eligible four-year-old children in the 
        district on October 1 for the previous school year times the 
        ratio of 50 percent of the total school readiness aid for that 
        year to the total number of eligible four-year-old children 
        reported to the commissioner for the previous school year; plus 
           (2) the number of pupils enrolled in the school district 
        from families eligible for the free or reduced school lunch 
        program for the second previous school year times the ratio of 
        50 percent of the total school readiness aid for that year to 
        the total number of pupils in the state from families eligible 
        for the free or reduced school lunch program for the second 
        previous school year. 
           Sec. 14.  Minnesota Statutes 2004, section 124D.16, 
        subdivision 3, is amended to read: 
           Subd. 3.  [USE OF AID.] School readiness aid shall be used 
        only to provide a school readiness program and may be used to 
        provide transportation.  Not more than five percent of the 
        aid program revenue, as defined in subdivision 5, may be used 
        for the cost of administering the program.  Aid must be used to 
        supplement and not supplant local, state, and federal funding.  
        Aid may not be used for instruction and services required under 
        sections 125A.03 to 125A.24 and 125A.65. Aid may not be used to 
        purchase land or construct buildings, but may be used to lease 
        or renovate existing buildings. 
           Sec. 15.  [124D.175] [MINNESOTA EARLY LEARNING FOUNDATION 
        PROPOSAL.] 
           (a) The commissioner must implement an early childhood 
        development grant program for low-income and other challenged 
        families that increases the effectiveness and expands the 
        capacity of public and nonpublic early childhood development 
        programs, which may include child care programs, and leads to 
        improved early childhood parent education and children's 
        kindergarten readiness.  The program must include: 
           (1) grant awards to existing early childhood development 
        program providers that also provide parent education programs 
        and to qualified providers proposing to implement pilot programs 
        for this same purpose; 
           (2) grant awards to enable low-income families to 
        participate in these programs; 
           (3) grant awards to improve overall programmatic quality; 
        and 
           (4) an evaluation of the programmatic and financial 
        efficacy of all these programs, which may be performed using 
        measures of services, staffing, and management systems that 
        provide consistent information about system performance, show 
        trends, confirm successes, and identify potential problems in 
        early childhood development programs.  
        This grant program must not supplant existing early childhood 
        development programs or child care funds. 
           (b) The commissioner must contract with a private 
        nonprofit, section 501(c)(3) organization to implement the 
        requirements of paragraph (a).  The private nonprofit 
        organization must be governed by a board of directors composed 
        of members from the public and nonpublic sectors, where the 
        nonpublic sector members compose a simple majority of board 
        members and where the public sector members are state and local 
        government officials, kindergarten through grade 12 or 
        postsecondary educators, and early childhood providers appointed 
        by the governor.  Membership on the board of directors by a 
        state agency official are work duties for the official and are 
        not a conflict of interest under section 43A.38.  The board of 
        directors must appoint an executive director and must seek 
        advice from geographically and ethnically diverse parents of 
        young children and representatives of early childhood 
        development providers, kindergarten through grade 12 and 
        postsecondary educators, public libraries, and the business 
        sector.  The board of directors is subject to the open meeting 
        law under chapter 13D.  All other terms and conditions under 
        which board members serve and operate must be described in the 
        articles and bylaws of the organization.  The private nonprofit 
        organization is not a state agency and is not subject to laws 
        governing public agencies except the provisions of chapter 13, 
        salary limits under section 15A.0815, subdivision 2, and audits 
        by the legislative auditor under chapter 3 apply.  
           (c) This section expires June 30, 2011.  If no state 
        appropriation is made for purposes of this section, the 
        commissioner must not implement paragraphs (a) and (b). 
           Sec. 16.  Minnesota Statutes 2004, section 179A.03, 
        subdivision 14, as amended by Laws 2005, chapter 125, article 2, 
        section 2, is amended to read: 
           Subd. 14.  [PUBLIC EMPLOYEE OR EMPLOYEE.] "Public employee" 
        or "employee" means any person appointed or employed by a public 
        employer except:  
           (a) elected public officials; 
           (b) election officers; 
           (c) commissioned or enlisted personnel of the Minnesota 
        National Guard; 
           (d) emergency employees who are employed for emergency work 
        caused by natural disaster; 
           (e) part-time employees whose service does not exceed the 
        lesser of 14 hours per week or 35 percent of the normal work 
        week in the employee's appropriate unit; 
           (f) employees whose positions are basically temporary or 
        seasonal in character and:  (1) are not for more than 67 working 
        days in any calendar year; or (2) are not for more than 100 
        working days in any calendar year and the employees are under 
        the age of 22, are full-time students enrolled in a nonprofit or 
        public educational institution prior to being hired by the 
        employer, and have indicated, either in an application for 
        employment or by being enrolled at an educational institution 
        for the next academic year or term, an intention to continue as 
        students during or after their temporary employment; 
           (g) employees providing services for not more than two 
        consecutive quarters to the Board of Trustees of the Minnesota 
        State Colleges and Universities under the terms of a 
        professional or technical services contract as defined in 
        section 16C.08, subdivision 1; 
           (h) employees of charitable hospitals as defined by section 
        179.35, subdivision 3; 
           (i) full-time undergraduate students employed by the school 
        which they attend under a work-study program or in connection 
        with the receipt of financial aid, irrespective of number of 
        hours of service per week; 
           (j) an individual who is employed for less than 300 hours 
        in a fiscal year as an instructor in an adult vocational 
        education program; 
           (k) an individual hired by the Board of Trustees of the 
        Minnesota State Colleges and Universities to teach one course 
        for three or fewer credits for one semester in a year; 
           (l) with respect to court employees: 
           (1) personal secretaries to judges; 
           (2) law clerks; 
           (3) managerial employees; 
           (4) confidential employees; and 
           (5) supervisory employees; 
           (m) with respect to employees of Hennepin Healthcare 
        System, Inc., managerial, supervisory, and confidential 
        employees. 
           The following individuals are public employees regardless 
        of the exclusions of clauses (e) and (f):  
           (i) An employee hired by a school district or the Board of 
        Trustees of the Minnesota State Colleges and Universities except 
        at the university established in section 136F.13 or for 
        community services or community education instruction offered on 
        a noncredit basis:  (A) to replace an absent teacher or faculty 
        member who is a public employee, where the replacement employee 
        is employed more than 30 working days as a replacement for that 
        teacher or faculty member; or (B) to take a teaching position 
        created due to increased enrollment, curriculum expansion, 
        courses which are a part of the curriculum whether offered 
        annually or not, or other appropriate reasons; and 
           (ii) An employee hired for a position under clause (f)(1) 
        if that same position has already been filled under clause 
        (f)(1) in the same calendar year and the cumulative number of 
        days worked in that same position by all employees exceeds 67 
        calendar days in that year.  For the purpose of this paragraph, 
        "same position" includes a substantially equivalent position if 
        it is not the same position solely due to a change in the 
        classification or title of the position; and 
           (iii) an early childhood family education teacher employed 
        by a school district. 
           Sec. 17.  [GRANTS TO PROMOTE KINDERGARTEN READINESS AND 
        SUPPORT FAMILIES.] 
           Subdivision 1.  [ADMINISTRATION.] The commissioner of 
        education shall award a planning grant for $50,000 to develop a 
        project in Northwest Hennepin County that will promote the 
        school readiness of children by coordinating and collaborating 
        with community-based and neighborhood-based services that help 
        stabilize at-risk families, and that support and assist parents 
        in meeting the health and developmental needs of their children 
        at the earliest possible age. 
           Subd. 2.  [PROGRAM COMPONENTS.] (a) Planning projects 
        eligible for grant funding under this section must propose to: 
           (1) collaborate and coordinate delivery of services with 
        community organizations and agencies serving children and their 
        families; 
           (2) target services to families with children with services 
        increasing based on financial needs; 
           (3) build on existing services and coordinate a continuum 
        of essential services, including, but not limited to, health 
        services, family economic assistance, parent education and 
        support, and preschool programs; 
           (4) provide strategic outreach efforts to families using 
        culturally specific social support, information, outreach, and 
        other programs to promote healthy development of children and to 
        help parents obtain the information, resources, and parenting 
        skills needed to nurture and care for their children; 
           (5) offer programs to expand public and private 
        collaboration to promote the development of a coordinated and 
        culturally specific system of services available to all 
        families; and 
           (6) offer other programs or services to improve the health, 
        development, and school readiness of children in target 
        neighborhoods and communities.  
           Subd. 3.  [ELIGIBLE GRANTEES.] An application for a grant 
        may be submitted by a nonprofit organization, or consortium of 
        nonprofit organizations, that demonstrates collaborative effort 
        with at least one unit of local government. 
           Subd. 4.  [DISTRIBUTION.] To the extent possible, the 
        commissioner shall award a grant to applicants with experience 
        or demonstrated ability in providing comprehensive, 
        multidisciplinary, community-based programs with objectives 
        similar to those listed in subdivision 2, or in providing other 
        human services or social services programs using a 
        multidisciplinary, community-based approach.  
           Subd. 5.  [APPLICATIONS.] The application must be submitted 
        on forms provided by the commissioner of education.  The grant 
        application must include: 
           (1) a description of the specific community that will be 
        served under the program and the name, address, and a 
        description of each community agency or agencies involved in the 
        planning process; 
           (2) a letter of intent from each community agency 
        identified in clause (1) that indicates the agency's willingness 
        to participate in the program planning; and 
           (3) a description of how public and private resources, 
        including schools, health care facilities, government agencies, 
        neighborhood organizations, and other resources, will be 
        coordinated in the planning process. 
           Subd. 6.  [MATCH.] Each dollar of state money must be 
        matched with 50 cents of nonstate money.  A program may match 
        state money with in-kind contributions, including volunteer 
        assistance. 
           Subd. 7.  [ADVISORY COMMITTEE.] Each grantee must establish 
        a program advisory board to advise the grantee on program 
        design.  The board must include representatives of local units 
        of government and representatives of the project area who 
        reflect the geographic, cultural, racial, and ethnic diversity 
        of that community.  
           [EFFECTIVE DATE.] This section is effective for revenue for 
        fiscal year 2006. 
           Sec. 18.  [COORDINATION OF EARLY CARE AND EDUCATION 
        PROGRAMS.] 
           (a) The commissioners of education, human services, and 
        health shall identify how they will coordinate activities and 
        resources, with input from local communities and tribal 
        governments, including setting priorities, aligning policies, 
        and leveraging existing resources to achieve the goal for 
        increased school readiness of all Minnesota children.  The 
        commissioners shall report on the progress made, which must 
        include information on: 
           (1) coordinating and disseminating resources and 
        information on school readiness and early care and education, 
        health and nutrition, including child mental health and family 
        support to: 
           (i) parents and families with children birth to age five 
        through key entry points, such as women, infants, and children 
        (WIC), family home visiting, child welfare, public and private 
        health care providers, and other public programs; and 
           (ii) early care and education providers, public and private 
        health care providers, foster care providers, temporary care 
        providers, shelters, crisis nurseries, and other facilities 
        providing long-term or temporary care for young children, birth 
        to age five; 
           (2) supporting families, schools, and communities in 
        facilitating the transition of young children into the 
        kindergarten environment; 
           (3) identifying, coordinating, and sharing resources and 
        strategies between state departments that address the cultural 
        and linguistic needs of families served; 
           (4) amending the state Medicaid plan to expand the use of 
        the child and teen checkup funding for allowable child 
        development services, such as outreach for early childhood 
        screening, and streamlining the process for voluntary 
        certification of school districts as child and teen checkup 
        providers; and 
           (5) referring children ages three to five in the child 
        welfare system to the Interagency Early Intervention System for 
        a developmental screening and referral to services if problems 
        are identified. 
           (b) The commissioners shall report to the senate and house 
        of representatives committees having jurisdiction over early 
        care and education by March 1, 2006. 
           Sec. 19.  [MELF PROGRESS REPORT.] 
           Consistent with Minnesota Statutes, section 124D.175, the 
        private nonprofit organization under contract with the 
        commissioner of education must submit to the education policy 
        and finance committees of the legislature by February 1, 2008, 
        an interim progress report evaluating the programmatic and 
        financial efficacy of the programs receiving grant awards. 
           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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2 or authorized by order of the 
        Ramsey County District Court in Case No. C9-05-5928.  
           Subd. 2.  [SCHOOL READINESS.] For revenue for school 
        readiness programs under Minnesota Statutes, sections 124D.15 
        and 124D.16: 
             $9,020,000     .....     2006
             $9,042,000     .....     2007
           The 2006 appropriation includes $1,417,000 for 2005 and 
        $7,603,000 for 2006. 
           The 2007 appropriation includes $1,415,000 for 2006 and 
        $7,627,000 for 2007.  
           Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
        childhood family education aid under Minnesota Statutes, section 
        124D.135: 
             $14,356,000    .....     2006 
             $15,137,000    .....     2007 
           The 2006 appropriation includes $1,861,000 for 2005 and 
        $12,495,000 for 2006.  
           The 2007 appropriation includes $2,327,000 for 2006 and 
        $12,810,000 for 2007.  
           Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
        health and developmental screening aid under Minnesota Statutes, 
        sections 121A.17 and 121A.19: 
             $3,076,000     .....     2006 
             $3,511,000     .....     2007 
           The 2006 appropriation includes $417,000 for 2005 and 
        $2,659,000 for 2006.  
           The 2007 appropriation includes $494,000 for 2006 and 
        $3,017,000 for 2007.  
           Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
        under Minnesota Statutes, section 119A.52: 
             $19,100,000    .....     2006
             $19,100,000    .....     2007
           Subd. 6.  [MINNESOTA EARLY LEARNING FOUNDATION.] For the 
        purposes of Minnesota Statutes, section 124D.175: 
             $ 1,000,000    .....     2006 
           This is a onetime appropriation.  Any balance in the first 
        year does not cancel but is available in the second year.  
           Subd. 7.  [KINDERGARTEN READINESS AND FAMILY SUPPORT.] For 
        grants to promote kindergarten readiness and support families 
        under section 26: 
             $    50,000    .....     2006 
           This appropriation is available until June 30, 2007. 
           Sec. 21.  [REPEALER.] 
           (a) Minnesota Statutes 2004, sections 124D.15, subdivisions 
        2, 4, 6, 7, 8, 9, 11, and 13; and 124D.16, subdivision 4, are 
        repealed retroactively effective from July 1, 2005. 
           (b) Minnesota Statutes 2004, section 124D.16, subdivision 
        1, is repealed effective July 1, 2006. 
           [EFFECTIVE DATE.] This section is retroactively effective 
        from July 1, 2005. 
           Sec. 22.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 8 
                                   PREVENTION 
           Section 1.  Minnesota Statutes 2004, section 119A.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in 
        section 144.9501 and in this subdivision apply to this section. 
           (b) "Eligible organization" means a lead contractor, city, 
        board of health, community health department, community action 
        agency as defined in section 119A.374, or community development 
        corporation. 
           (c) "Commissioner" means the commissioner of education 
        health, or the commissioner of the Minnesota Housing Finance 
        Agency as authorized by section 462A.05, subdivision 15c. 
           Sec. 2.  Minnesota Statutes 2004, section 119A.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANTS; ADMINISTRATION.] Within the limits of 
        the available appropriation, the commissioner must develop a 
        swab team services program which may make demonstration and 
        training grants to eligible organizations to train workers to 
        provide swab team services and swab team services for 
        residential property.  Grants may be awarded to nonprofit 
        organizations to provide technical assistance and training to 
        ensure quality and consistency within the statewide program.  
        Grants must be awarded to help ensure full-time employment to 
        workers providing swab team services and must be awarded for a 
        two-year period. 
           Grants awarded under this section must be made in 
        consultation with the commissioners of the Department of Health 
        and commissioner of the Housing Finance Agency, and 
        representatives of neighborhood groups from areas at high risk 
        for toxic lead exposure, a labor organization, the lead 
        coalition, community action agencies, and the legal aid 
        society.  The consulting team must review grant applications and 
        recommend awards to eligible organizations that meet 
        requirements for receiving a grant under this section. 
           Sec. 3.  Minnesota Statutes 2004, section 119A.46, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICANTS.] (a) Interested eligible 
        organizations may apply to the commissioner for grants under 
        this section.  Two or more eligible organizations may jointly 
        apply for a grant.  Priority shall be given to community action 
        agencies in greater Minnesota and to either community action 
        agencies or neighborhood based nonprofit organizations in cities 
        of the first class.  Of the total annual appropriation, 12.5 
        percent may be used for administrative purposes.  The 
        commissioner may deviate from this percentage if a grantee can 
        justify the need for a larger administrative allowance.  Of this 
        amount, up to five percent may be used by the commissioner for 
        state administrative purposes.  Applications must provide 
        information requested by the commissioner, including at least 
        the information required to assess the factors listed in 
        paragraph (d).  
           (b) The commissioner must coordinate with the commissioner 
        of health who must consult with boards of health to provide swab 
        team services for purposes of secondary prevention.  The 
        priority for swab teams created by grants to eligible 
        organizations under this section must be work assigned by the 
        commissioner of health, or by a board of health if so designated 
        by the commissioner of health, to provide secondary prevention 
        swab team services to fulfill the requirements of section 
        144.9504, subdivision 6, in response to a lead order.  Swab 
        teams assigned work under this section by the commissioner, that 
        are not engaged daily in fulfilling the requirements of section 
        144.9504, subdivision 6, must deliver swab team services in 
        response to elevated blood lead levels as defined in section 
        144.9501, subdivision 9, where lead orders were not issued, and 
        for purposes of primary prevention in census tracts known to be 
        in areas at high risk for toxic lead exposure as described in 
        section 144.9503, subdivision 2. 
           (c) Any additional money must be used for grants to 
        establish swab teams for primary prevention under section 
        144.9503, in census tracts in areas at high risk for toxic lead 
        exposure as determined under section 144.9503, subdivision 2.  
           (d) In evaluating grant applications, the commissioner must 
        consider the following criteria: 
           (1) the use of lead contractors and lead workers for 
        residential swab team services; 
           (2) the participation of neighborhood groups and 
        individuals, as swab team workers, in areas at high risk for 
        toxic lead exposure; 
           (3) plans for the provision of swab team services for 
        primary and secondary prevention as required under subdivision 
        4; 
           (4) plans for supervision, training, career development, 
        and postprogram placement of swab team members; 
           (5) plans for resident and property owner education on lead 
        safety; 
           (6) plans for distributing cleaning supplies to area 
        residents and educating residents and property owners on 
        cleaning techniques; 
           (7) sources of other funding and cost estimates for 
        training, lead inspections, swab team services, equipment, 
        monitoring, testing, and administration; 
           (8) measures of program effectiveness; 
           (9) coordination of program activities with other federal, 
        state, and local public health, job training, apprenticeship, 
        and housing renovation programs including programs under 
        sections 116L.86 to 116L.881; and 
           (10) prior experience in providing swab team services. 
           Sec. 4.  Minnesota Statutes 2004, section 119A.46, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TESTING AND EVALUATION.] (a) Testing of the 
        environment is not necessary by swab teams whose work is 
        assigned by the commissioner of health or a designated board of 
        health under section 144.9504.  The commissioner of health or 
        designated board of health must share the analytical testing 
        data collected on each residence for purposes of secondary 
        prevention under section 144.9504 with the swab team workers in 
        order to provide constructive feedback on their work and to the 
        commissioner for the purposes set forth in paragraph (c). 
           (b) For purposes of primary prevention evaluation, the 
        following samples must be collected:  pretesting and posttesting 
        of one noncarpeted floor dust lead sample and a notation of the 
        extent and location of bare soil and of deteriorated lead-based 
        paint.  The analytical testing data collected on each residence 
        for purposes of primary prevention under section 144.9503 must 
        be shared with the swab team workers in order to provide 
        constructive feedback on their work and to the commissioner for 
        the purposes set forth in paragraph (c). 
           (c) The commissioner of health must establish a program in 
        cooperation with the commissioner to collect appropriate data as 
        required under paragraphs (a) and (b), in order to conduct an 
        ongoing evaluation of swab team services for primary and 
        secondary prevention.  Within the limits of available 
        appropriations, the commissioner of health must conduct or 
        contract with the commissioner, on up to 1,000 residences which 
        have received primary or secondary prevention swab team 
        services, a postremediation evaluation, on at least a quarterly 
        basis for a period of at least two years for each residence.  
        The evaluation must note the condition of the paint within the 
        residence, the extent of bare soil on the grounds, and collect 
        and analyze one noncarpeted floor dust lead sample.  The data 
        collected must be evaluated to determine the efficacy of 
        providing swab team services as a method of reducing lead 
        exposure in young children.  In evaluating this data, the 
        commissioner of health must consider city size, community 
        location, historic traffic flow, soil lead level of the property 
        by area or census tract, distance to industrial point sources 
        that emit lead, season of the year, age of the housing, age and 
        number of children living at the residence, the presence of pets 
        that move in and out of the residence, and other relevant 
        factors as the commissioner of health may determine. 
           Sec. 5.  Minnesota Statutes 2004, 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 years 
        2005 and 2006 and $5.42 for fiscal year 2007 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 2007.  
           Sec. 6.  Minnesota Statutes 2004, section 124D.20, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
        community education revenue, a district may levy the amount 
        raised by a maximum tax rate of .985 .9 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 2007. 
           Sec. 7.  [REVISOR'S INSTRUCTION.] 
           In the next edition of Minnesota Statutes, the revisor of 
        statutes shall renumber Minnesota Statutes, section 119A.46, as 
        section 144.9512 and make necessary cross-reference changes. 
           Sec. 8.  [APPROPRIATION.] 
           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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of the 
        Ramsey County District Court in case number C9-05-5928. 
           Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
        education aid under Minnesota Statutes, section 124D.20: 
             $1,918,000     .....     2006 
             $1,837,000     .....     2007 
           The 2006 appropriation includes $390,000 for 2005 and 
        $1,528,000 for 2006.  
           The 2007 appropriation includes $284,000 for 2006 and 
        $1,553,000 for 2007. 
           Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
        adults with disabilities programs under Minnesota Statutes, 
        section 124D.56: 
             $  710,000     .....     2006 
             $  710,000     .....     2007 
           The 2006 appropriation includes $111,000 for 2005 and 
        $599,000 for 2006.  
           The 2007 appropriation includes $111,000 for 2006 and 
        $599,000 for 2007. 
           Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
        hearing-impaired adults under Minnesota Statutes, section 
        124D.57: 
             $   70,000     .....     2006
             $   70,000     .....     2007
           Subd. 5.  [SCHOOL-AGE CARE REVENUE.] For extended day aid 
        under Minnesota Statutes, section 124D.22: 
             $   17,000     .....     2006 
             $    7,000     .....     2007
           The 2006 appropriation includes $4,000 for 2005 and $13,000 
        for 2006. 
           The 2007 appropriation includes $2,000 for 2006 and $5,000 
        for 2007. 
           Sec. 9.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 9 
                     SELF-SUFFICIENCY AND LIFELONG LEARNING 
           Section 1.  Minnesota Statutes 2004, 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 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) For purposes of paragraph (a), an adult basic education 
        program may include as valid expenditures for the previous 
        fiscal year program spending that occurs from July 1 to 
        September 30 of the following year.  A program may carry over a 
        maximum of 20 percent of its adult basic education aid revenue 
        into the next fiscal year.  Program spending may only be counted 
        for one fiscal year.  
           (c) 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. 2.  Minnesota Statutes 2004, 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 
        2004 equals $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 fiscal year 2006 and later 
        is $36,509,000 plus any amount that is not paid for during the 
        previous fiscal year, as a result of adjustments under 
        subdivision 4, paragraph (a), or section 124D.52, subdivision 
        3.  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. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to revenue distributions 
        for fiscal year 2006. 
           Sec. 3.  Minnesota Statutes 2004, 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 $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 Laws 2003, First Special 
        Session chapter 9, article 9, section 8, paragraph (a), for the 
        preceding fiscal year by more than the greater of eight percent 
        or $10,000.  
           (d) For fiscal year 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 eight percent or $10,000. 
           (e) Adult basic education aid is payable to a program for 
        unreimbursed costs occurring in the program year as defined in 
        section 124D.52, subdivision 3. 
           (f) Any adult basic education aid that is not paid to a 
        program because of the program aid limitation under paragraph 
        (a) must be added to the state total adult basic education aid 
        for the next fiscal year under subdivision 1.  Any adult basic 
        education aid that is not paid to a program because of the 
        program aid limitations under paragraph (b), (c), or (d), must 
        be reallocated among programs by adjusting the rate per contact 
        hour under subdivision 3, clause (2). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to revenue distributions 
        for fiscal year 2006. 
           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 
        and include and supersede any amounts appropriated in Laws 2005, 
        First Special Session chapter 2, or authorized by order of the 
        Ramsey County District Court in Case No. C9-05-5928. 
           Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
        education aid under Minnesota Statutes:  
             $36,518,000   .....      2006
             $36,540,000   .....      2007
           The 2006 appropriation includes $5,707,000 for 2005 and 
        $30,811,000 for 2006.  
           The 2007 appropriation includes $5,737,000 for 2006 and 
        $30,803,000 for 2007.  
           Subd. 3.  [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     .....     2006
             $  125,000     .....     2007
           Subd. 4.  [LEAD HAZARD REDUCTION.] For lead hazard 
        reduction under Minnesota Statutes, section 119A.46: 
             $  100,000     .....     2006 
             $  100,000     .....     2007
           The commissioner of education may transfer this 
        appropriation to the commissioner of health. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Any section in this article without a specified effective 
        date is retroactively effective from July 1, 2005. 

                                   ARTICLE 10 
                                 STATE AGENCIES 
           Section 1.  Minnesota Statutes 2004, section 122A.40, 
        subdivision 5, as amended by Laws 2005, chapter 36, section 1, 
        is amended to read: 
           Subd. 5.  [PROBATIONARY PERIOD.] (a) The first three 
        consecutive years of a teacher's first teaching experience in 
        Minnesota in a single district is deemed to be a probationary 
        period of employment, and after completion thereof, the 
        probationary period in each district in which the teacher is 
        thereafter employed shall be one year.  The school board must 
        adopt a plan for written evaluation of teachers during the 
        probationary period.  Evaluation must 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 must not be 
        included in determining the number of school days on which a 
        teacher performs services.  Except as otherwise provided in 
        paragraph (b), during the probationary period any annual 
        contract with any teacher may or may not be renewed as the 
        school board shall see fit.  However, the board must give any 
        such teacher whose contract it declines to renew for the 
        following school year written notice to that effect before July 
        1.  If the teacher requests reasons for any nonrenewal of a 
        teaching contract, the board must give the teacher its reason in 
        writing, including a statement that appropriate supervision was 
        furnished describing the nature and the extent of such 
        supervision furnished the teacher during the employment by the 
        board, within ten days after receiving such request.  The school 
        board may, after a hearing held upon due notice, discharge a 
        teacher during the probationary period for cause, effective 
        immediately, under section 122A.44.  
           (b) A board must discharge a probationary teacher, 
        effective immediately, upon receipt of notice under section 
        122A.20, subdivision 1, paragraph (b), that the teacher's 
        license has been revoked due to a conviction for child abuse or 
        sexual abuse. 
           (c) A probationary teacher whose first three years of 
        consecutive employment are interrupted for active military 
        service and who promptly resumes teaching consistent with 
        federal reemployment timelines for uniformed service personnel 
        under United States Code, title 38, section 4312(e), is 
        considered to have a consecutive teaching experience for 
        purposes of paragraph (a). 
           (d) A probationary teacher must complete at least 60 days 
        of teaching service each year during the probationary period.  
        Days devoted to parent-teacher conferences, teachers' workshops, 
        and other staff development opportunities and days on which a 
        teacher is absent from school do not count as days of teaching 
        service under this paragraph. 
           Sec. 2.  Minnesota Statutes 2004, section 122A.41, 
        subdivision 2, as amended by Laws 2005, chapter 36, section 2, 
        is amended to read: 
           Subd. 2.  [PROBATIONARY PERIOD; DISCHARGE OR DEMOTION.] (a) 
        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 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 
        3.  Evaluation by the peer review committee charged with 
        evaluating probationary teachers under subdivision 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. 
           (b) A probationary teacher whose first three years of 
        consecutive employment are interrupted for active military 
        service and who promptly resumes teaching consistent with 
        federal reemployment timelines for uniformed service personnel 
        under United States Code, title 38, section 4312(e), is 
        considered to have a consecutive teaching experience for 
        purposes of paragraph (a). 
           (c) A probationary teacher must complete at least 60 days 
        of teaching service each year during the probationary period.  
        Days devoted to parent-teacher conferences, teachers' workshops, 
        and other staff development opportunities and days on which a 
        teacher is absent from school do not count as days of teaching 
        service under this paragraph. 
           Sec. 3.  [BOARD OF TEACHING REPORT.] 
           By January 16, 2006, the Board of Teaching, in consultation 
        with the Department of Education and other education 
        stakeholders, must prepare and submit to the house of 
        representatives and senate committees having jurisdiction over 
        kindergarten through grade 12 education policy and finance:  
           (1) proposed licensure requirements for teachers of 
        interdisciplinary curriculum to facilitate learning in 
        state-approved innovative schools and programs; and 
           (2) recommendations for accommodating the needs for 
        appropriately licensed teachers in charter, alternative, small, 
        and rural schools. 
           Sec. 4.  [LICENSED STUDENT SUPPORT SERVICES.] 
           Subdivision 1.  [ACCESS TO SERVICES.] School districts and 
        the Department of Education shall work to provide for students' 
        educational achievement, to provide for student safety, and to 
        enhance student physical, emotional, and social well-being by 
        providing access to licensed student support services, such as 
        licensed school nurses, licensed school counselors, licensed 
        school social workers, licensed alcohol and drug abuse 
        counselors, and licensed school psychologists. 
           Subd. 2.  [FUNDING.] School districts and the Department of 
        Education shall explore opportunities for obtaining additional 
        funds to improve students' access to needed licensed student 
        support services including, at least, medical assistance 
        reimbursements, local collaborative time study funds, federal 
        funds, public health funds, and specifically designated funds. 
           Subd. 3.  [IMPROVING ACCESS.] School districts and the 
        Department of Education must consider nationally recommended 
        licensed staff-to-student ratios, work loads, and best practices 
        when working to improve student access to needed licensed 
        student support services.  
           Sec. 5.  [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 and include and supersede any amounts 
        appropriated in Laws 2005, First Special Session chapter 2, or 
        authorized by order of the Ramsey County District Court in case 
        No. C9-05-5928. 
           Subd. 2.  [DEPARTMENT.] (a) For the Department of Education:
             $21,997,000    .....     2006 
             $22,847,000    .....     2007 
           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) $605,000 each year is for the Board of Teaching.  
           (e) $160,000 each year is for the Board of School 
        Administrators.  
           (f) $300,000 in fiscal year 2006 and $1,150,000 in fiscal 
        year 2007 are for the value-added index assessment model. 
           (g) 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. 6.  [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 and include and 
        supersede any amounts appropriated in Laws 2005, First Special 
        Session chapter 2, or authorized by order of the Ramsey County 
        District Court in case No. C9-05-5928:  
             $10,966,000    .....     2006 
             $10,966,000    .....     2007 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 7.  [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 and include and supersede any 
        amounts appropriated in Laws 2005, First Special Session chapter 
        2, or authorized by order of the Ramsey County District Court in 
        case No. C9-05-5928: 
             $6,623,000     .....     2006 
             $6,623,000     .....     2007 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 to 7 are retroactively effective from July 1, 
        2005. 

                                   ARTICLE 11 
                      TECHNICAL AND CONFORMING AMENDMENTS 
           Section 1.  Minnesota Statutes 2004, section 120B.31, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STATISTICAL ADJUSTMENTS.] In developing policies 
        and assessment processes to hold schools and districts 
        accountable for high levels of academic standards, including the 
        profile of learning under section 120B.021, the commissioner 
        shall aggregate student data over time to report student 
        performance levels measured at the school district, regional, or 
        statewide level.  When collecting and reporting the data, the 
        commissioner shall:  (1) acknowledge the impact of significant 
        demographic factors such as residential instability, the number 
        of single parent families, parents' level of education, and 
        parents' income level on school outcomes; and (2) organize and 
        report the data so that state and local policy makers can 
        understand the educational implications of changes in districts' 
        demographic profiles over time.  Any report the commissioner 
        disseminates containing summary data on student performance must 
        integrate student performance and the demographic factors that 
        strongly correlate with that performance.  
           Sec. 2.  Minnesota Statutes 2004, 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 125A.091, subdivision 3 5, 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. 3.  Minnesota Statutes 2004, section 124D.40, is 
        amended to read: 
           124D.40 [YOUTH WORKS GRANTS.] 
           Subdivision 1.  [APPLICATION.] An eligible organization 
        interested in receiving a grant under sections 124D.39 to 
        124D.44 may prepare and submit an application to the commission 
        an application that complies with section 124D.41. 
           Subd. 2.  [GRANT AUTHORITY.] The commission must use any 
        state appropriation and any available federal funds, including 
        any grant received under federal law, to award grants to 
        establish programs for youth works meeting the requirements of 
        section 124D.41.  At least one grant each must be available for 
        a metropolitan proposal, a rural proposal, and a statewide 
        proposal.  If a portion of the suburban metropolitan area is not 
        included in the metropolitan grant proposal, the statewide grant 
        proposal must incorporate at least one suburban metropolitan 
        area.  In awarding grants, the commission may select at least 
        one residential proposal and one nonresidential proposal, 
        provided the proposals meet or exceed the criteria in section 
        124D.41. 
           Sec. 4.  Minnesota Statutes 2004, section 127A.41, 
        subdivision 8, is amended to read: 
           Subd. 8.  [APPROPRIATION TRANSFERS.] (a) If a direct 
        appropriation from the general fund to the department for any 
        education aid or grant authorized in this chapter and chapters 
        122A, 123A, 123B, 124D, 125A, 126C, and 134, excluding 
        appropriations under sections 124D.135, 124D.16, 124D.20, 
        124D.21, 124D.22, 124D.52, 124D.531, 124D.54, 124D.55, and 
        124D.56, exceeds the amount required, the commissioner may 
        transfer the excess to any education aid or grant appropriation 
        that is insufficient.  However, section 126C.20 applies to a 
        deficiency in the direct appropriation for general education 
        aid.  Excess appropriations must be allocated proportionately 
        among aids or grants that have insufficient appropriations.  The 
        commissioner of finance shall make the necessary transfers among 
        appropriations according to the determinations of the 
        commissioner.  If the amount of the direct appropriation for the 
        aid or grant plus the amount transferred according to this 
        subdivision is insufficient, the commissioner shall prorate the 
        available amount among eligible districts.  The state is not 
        obligated for any additional amounts. 
           (b) Transfers for aids paid under section 127A.45, 
        subdivisions 12, paragraph (a), 12a, paragraph (a), and 13, 
        shall be made during the fiscal year after the fiscal year of 
        the entitlement.  Transfers for aids paid under section 127A.45, 
        subdivisions 11, 12, paragraph (b), and 12a, paragraph (b), 
        shall be made during the fiscal year of the appropriation. 
           Sec. 5.  Minnesota Statutes 2004, 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; and hearing impaired 
        support services aid, according to section 124D.57; and Indian 
        postsecondary preparation grants according to section 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. 6.  [EFFECTIVE DATE.] 
           Sections 1 through 5 are retroactively effective from July 
        1, 2005. 
           Presented to the governor July 13, 2005 
           Signed by the governor July 14, 2005, 11:45 a.m.

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