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1995 Minnesota Session Laws

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                              CHAPTER 3-H.F.No. 4 
                  An act relating to government financing; providing for 
                  education general and uniform revenue; education 
                  transportation; education special programs; community 
                  programs; education facilities; education organization 
                  and cooperation; education excellence; other education 
                  programs; miscellaneous education provisions; 
                  libraries; state agencies; education technology; 
                  technical and conforming amendments; budget reserve 
                  and cost management; education targeted needs revenue; 
                  establishing the department of children, families, and 
                  learning; providing for penalties; appropriating 
                  money; amending Minnesota Statutes 1994, sections 
                  6.62, subdivision 1; 13.43, subdivision 2; 16A.152, 
                  subdivisions 2, 4, and by adding a subdivision; 
                  16B.465; 43A.316, subdivision 2; 62L.08, subdivision 
                  7a; 116J.655; 120.064; 120.101, subdivision 5c, and by 
                  adding a subdivision; 120.17, subdivisions 3a, 3b, and 
                  by adding a subdivision; 120.74, subdivision 1; 
                  120.75, subdivision 1; 121.11, subdivision 7c; 121.15, 
                  subdivision 6; 121.207, subdivisions 2 and 3; 121.702, 
                  by adding a subdivision; 121.705; 121.706; 121.707, 
                  subdivisions 2, 3, 4, 6, and 7; 121.708; 121.709; 
                  121.710; 121.8355, subdivision 2; 121.885, 
                  subdivisions 1 and 4; 121.904, subdivisions 4a and 4c; 
                  121.912, subdivisions 1, 1b, and 6; 121.931; 121.932; 
                  121.933, subdivision 1; 121.935; 122.21, subdivision 
                  4; 122.532, subdivision 3a; 122.895, subdivisions 1, 
                  8, and 9; 122.91, subdivisions 1, 2, and 2a; 122.92, 
                  subdivision 1; 122.93, subdivision 1; 122.94, 
                  subdivision 1; 123.34, by adding a subdivision; 
                  123.35, subdivision 19b; 123.351, subdivisions 1, 3, 
                  4, and 5; 123.3514, subdivisions 4d, 7, 8, and by 
                  adding a subdivision; 123.39, subdivision 1; 123.70, 
                  subdivision 8; 123.78, subdivision 1; 123.79, 
                  subdivision 1; 123.7991, subdivisions 2 and 3; 
                  123.805, subdivisions 1 and 2; 124.06; 124.14, by 
                  adding a subdivision; 124.155, subdivision 2; 124.17, 
                  subdivisions 1, 1d, 2f, and by adding a subdivision; 
                  124.193; 124.195, subdivision 10, and by adding 
                  subdivisions; 124.2139; 124.214, subdivisions 2 and 3; 
                  124.223; 124.225, subdivisions 1, 3a, 7b, 7d, 7f, 8a, 
                  8l, 8m, 9, and by adding subdivisions; 124.226, 
                  subdivisions 3, 4, 9, and by adding a subdivision; 
                  124.243, subdivision 2; 124.244, subdivisions 1 and 4; 
                  124.2445; 124.2455; 124.248; 124.261, subdivision 1; 
                  124.2711, subdivision 2a; 124.2713, subdivision 6; 
                  124.2725, subdivisions 1, 3, 4, and 15; 124.2726, 
                  subdivisions 1, 2, and 4; 124.2728, subdivision 1; 
                  124.273, by adding subdivisions; 124.32, subdivisions 
                  7, 10, and 12; 124.321, subdivisions 1 and 2; 124.322; 
                  124.323, subdivisions 1, 2, and by adding a 
                  subdivision; 124.431, subdivision 2; 124.574, 
                  subdivisions 7, 9, and by adding subdivisions; 124.83, 
                  subdivision 4; 124.84, subdivision 3; 124.91, 
                  subdivisions 3 and 5; 124.912, subdivision 1; 124.916, 
                  subdivision 2; 124.918, subdivisions 1 and 2; 124.95, 
                  subdivisions 2, 4, and 6; 124.961; 124A.02, 
                  subdivision 16; 124A.03, subdivisions 1c, 1g, 1h, and 
                  2; 124A.0311, subdivision 4; 124A.22, subdivisions 1, 
                  2, 3, 4, 4a, 4b, 6, 6a, 8a, 9, and by adding 
                  subdivisions; 124A.225, subdivisions 1 and 2; 124A.23, 
                  subdivisions 1 and 4; 124A.24; 124A.29, subdivision 1; 
                  124C.07; 124C.08, subdivision 2; 124C.45, subdivision 
                  1; 124C.46, subdivision 2; 124C.48, subdivision 1; 
                  124C.60, subdivision 1; 125.12, subdivision 3; 125.62, 
                  subdivisions 1 and 7; 125.623, subdivision 2; 126.031, 
                  subdivision 1; 126.15, subdivision 2; 126.22, 
                  subdivisions 2 and 3; 126.49, by adding a subdivision; 
                  126.666, subdivision 2; 126.70; 126.78, subdivision 2; 
                  126A.01; 126A.02, subdivision 2; 126B.01; 126B.03, 
                  subdivisions 2 and 3; 127.40; 127.41; 127.42; 128A.02, 
                  subdivisions 1, 3, 5, and by adding a subdivision; 
                  128A.021; 128A.022, subdivisions 1 and 6; 128A.024, 
                  subdivision 4; 128A.025, subdivisions 1 and 2; 
                  128A.026; 128A.05, subdivisions 1 and 2; 128B.08; 
                  128B.10, subdivision 1; 134.155; 134.34, subdivision 
                  4a; 134.351, subdivision 4; 169.01, subdivision 6; 
                  169.21, subdivision 2; 169.444, subdivision 2; 
                  169.4502, subdivision 4; 169.4503, by adding a 
                  subdivision; 169.451, by adding a subdivision; 
                  169.452; 169.454, subdivision 5, and by adding a 
                  subdivision; 171.01, subdivision 21; 171.18, 
                  subdivision 1; 171.321, subdivisions 3, 4, and 5; 
                  171.3215, subdivisions 1, 2, and 3; 237.065; 256F.13, 
                  subdivision 1; 275.065, subdivision 1; 275.60; 
                  469.1831, subdivision 4; 631.40, subdivision 1a; Laws 
                  1965, chapter 705, section 1, subdivisions 3 and 4; 
                  Laws 1992, chapter 499, article 11, section 9, as 
                  amended; Laws 1993, chapter 224, article 8, section 
                  21, subdivision 1; Laws 1993, chapter 224, article 12, 
                  section 32, as amended; Laws 1993, chapter 224, 
                  article 12, sections 39 and 41; Laws 1994, chapter 
                  587, article 3, section 19, subdivision 1; Laws 1994, 
                  chapter 647, article 1, section 36; Laws 1994, chapter 
                  647, article 3, section 25; and Laws 1994, chapter 
                  647, article 7, section 15; proposing coding for new 
                  law in Minnesota Statutes, chapters 120; 123; 124; 
                  124C; 126B; 127; 134; 136D; 145; 169; 604A; proposing 
                  coding for new law as Minnesota Statutes, chapter 
                  119A; repealing Minnesota Statutes 1994, sections 
                  3.198; 121.702, subdivision 9; 121.703; 121.912, 
                  subdivision 8; 121.93; 121.936; 123.58; 124.17, 
                  subdivision 1b; 124.243; 124.244; 124.273, 
                  subdivisions 1b and 2c; 124.32, subdivisions 1b, 1c, 
                  1d, 1f, 2, and 3a; 124.574, subdivisions 2b, 3, 4, and 
                  4a; 124.912, subdivision 8; 124.962; 124A.04, 
                  subdivision 1; 124A.26; 124A.27, subdivision 11; 
                  125.05, subdivision 7; 125.138, subdivisions 6, 7, 8, 
                  9, 10, and 11; 125.231, subdivision 2; 126.019; 
                  126B.02; 126B.03, subdivision 1; 126B.04; 126B.05; 
                  128A.02, subdivisions 2 and 4; 128A.03; Laws 1991, 
                  chapter 265, article 5, section 23, as amended; Laws 
                  1992, chapter 499, article 7, section 27; Laws 1993, 
                  First Special Session chapter 2, article 5, sections 
                  1; and 2, as amended; and Laws 1995, chapter 207, 
                  article 1, section 9, subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                          GENERAL AND UNIFORM REVENUE 
           Section 1.  Minnesota Statutes 1994, section 6.62, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LEVY OF TAX.] Counties, cities and towns 
        are authorized, if necessary, to levy an amount sufficient to 
        pay the expense of a postaudit by the state auditor. 
           A school district is authorized to levy an amount 
        sufficient to pay for the expense of a postaudit by the state 
        auditor if the audit is performed at the discretion of the state 
        auditor pursuant to section 6.51 or if the audit has been 
        requested through a petition by eligible voters pursuant to 
        section 6.54.  A school district is not authorized to levy these 
        amounts if the postaudit by the state auditor is requested by 
        the school board pursuant to section 6.55. 
           Sec. 2.  Minnesota Statutes 1994, section 121.15, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REVIEW AND COMMENT.] No referendum for bonds or 
        solicitation of bids A school district must not initiate an 
        installment contract for purchase, hold a referendum for bonds, 
        nor solicit bids for new construction, expansion, or remodeling 
        of an educational facility that requires an expenditure in 
        excess of $400,000 per school site shall be initiated prior to 
        review and comment by the commissioner.  A school board shall 
        not separate portions of a single project into components to 
        avoid the requirements of this subdivision.  
           Sec. 3.  Minnesota Statutes 1994, section 121.904, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
        settlement revenue" means the current, delinquent, and 
        manufactured home property tax receipts collected by the county 
        and distributed to the school district, including distributions 
        made pursuant to section 279.37, subdivision 7, and excluding 
        the amount levied pursuant to section 124.914, subdivision 1. 
           (b) In June of each year, the school district shall 
        recognize as revenue, in the fund for which the levy was made, 
        the lesser of:  
           (1) the May, June, and July school district tax settlement 
        revenue received in that calendar year; or 
           (2) the sum of the state aids and credits enumerated in 
        section 124.155, subdivision 2, which are for the fiscal year 
        payable in that fiscal year plus an amount equal to the levy 
        recognized as revenue in June of the prior year plus 37.4 48 
        percent for fiscal year 1994 1996 and thereafter of the amount 
        of the levy certified in the prior calendar year according to 
        section 124A.03, subdivision 2, plus or minus auditor's 
        adjustments, not including levy portions that are assumed by the 
        state; or 
           (3) 37.4 48 percent for fiscal year 1994 1996 and 
        thereafter of the amount of the levy certified in the prior 
        calendar year, plus or minus auditor's adjustments, not 
        including levy portions that are assumed by the state, which 
        remains after subtracting, by fund, the amounts levied for the 
        following purposes:  
           (i) reducing or eliminating projected deficits in the 
        reserved fund balance accounts for unemployment insurance and 
        bus purchases; 
           (ii) statutory operating debt pursuant to section 124.914, 
        subdivision 1; 
           (iii) retirement and severance pay pursuant to sections 
        122.531, subdivision 9, 124.2725, subdivision 15, 124.4945, 
        124.912, subdivision 1, and 124.916, subdivision 3, and Laws 
        1975, chapter 261, section 4; 
           (iv) amounts levied for bonds issued and interest thereon, 
        amounts levied for debt service loans and capital loans, amounts 
        levied for down payments under section 124.82, subdivision 3, 
        and amounts levied pursuant to section 136C.411; and 
           (v) amounts levied under section 124.755.  
           (c) In July of each year, the school district shall 
        recognize as revenue that portion of the school district tax 
        settlement revenue received in that calendar year and not 
        recognized as revenue for the previous fiscal year pursuant to 
        clause (b).  
           (d) All other school district tax settlement revenue shall 
        be recognized as revenue in the fiscal year of the settlement. 
        Portions of the school district levy assumed by the state, 
        including prior year adjustments and the amount to fund the 
        school portion of the reimbursement made pursuant to section 
        273.425, shall be recognized as revenue in the fiscal year 
        beginning in the calendar year for which the levy is payable. 
           Sec. 4.  Minnesota Statutes 1994, section 121.904, 
        subdivision 4c, is amended to read: 
           Subd. 4c.  [PROPERTY TAX SHIFT REDUCTION CHANGE IN LEVY 
        RECOGNITION PERCENT.] (a) Money appropriated under section 
        16A.152, subdivision 2, must be used to reduce the levy 
        recognition percent specified in subdivision 4a, clauses (b)(2) 
        and (b)(3), for taxes payable in the succeeding calendar year.  
           (b) The levy recognition percent shall equal the result of 
        the following computation:  the current levy recognition 
        percent, times the ratio of 
           (1) the statewide total amount of levy recognized in June 
        of the year in which the taxes are payable pursuant to 
        subdivision 4a, clause (b), excluding those levies that are 
        shifted for revenue recognition but are not included in the 
        computation of the adjustment to aids under section 124.155, 
        subdivision 1, reduced by the difference between the amount of 
        money appropriated under section 16A.152, subdivision 2, and the 
        amount required for the adjustment payment under clause (d), to 
           (2) the statewide total amount of the levy recognized in 
        June of the year in which the taxes are payable pursuant to 
        subdivision 4a, clause (b), excluding those levies that are 
        shifted for revenue recognition but are not included in the 
        computation of the adjustment to aids under section 124.155, 
        subdivision 1.  
           The result shall be rounded up to the nearest one-tenth of 
        a percent.  However, in no case shall the levy recognition 
        percent be reduced below zero or increased above the current 
        levy recognition percent.  
           (c) The commissioner of finance must certify to the 
        commissioner of education the levy recognition percent computed 
        under this subdivision by January 5 of each year.  The 
        commissioner of education must notify school districts of a 
        change in the levy recognition percent by January 15. 
           (d) For fiscal years 1994 and 1995, When the levy 
        recognition percent is increased or decreased as provided in 
        this subdivision, a special aid adjustment shall be made to each 
        school district with an operating referendum levy:  
           (i) When the levy recognition percent is increased from the 
        prior fiscal year, the commissioner of education shall calculate 
        the difference between (1) the amount of the levy under section 
        124A.03, that is recognized as revenue for the current fiscal 
        year according to subdivision 4a; and (2) the amount of the 
        levy, under section 124A.03, that would have been recognized as 
        revenue for the current fiscal year had the percentage according 
        to subdivision 4a, not been increased.  The commissioner shall 
        reduce other aids due the district by the amount of the 
        difference.  This aid reduction shall be in addition to the aid 
        reduction required because of the increase pursuant to this 
        subdivision of the levy recognition percent.  
           (ii) When the levy recognition percent is reduced as 
        provided in this subdivision from the prior fiscal year, a 
        special adjustment payment shall be made to each school district 
        with an operating referendum levy that received an aid reduction 
        under Laws 1991, chapter 265, article 1, section 31, or Laws 
        1992, chapter 499, article 1, section 22 when the levy 
        recognition percent was last increased.  The special adjustment 
        payment shall be in addition to the additional payments required 
        because of the reduction pursuant to this subdivision of the 
        levy recognition percent.  The amount of the special adjustment 
        payment shall be computed by the commissioner of education such 
        that any remaining portion of the aid reduction these districts 
        received that has not been repaid is repaid on a proportionate 
        basis as the levy recognition percent is reduced from 50 percent 
        to 31 percent.  The special adjustment payment must be included 
        in the state aid payments to school districts according to the 
        schedule specified in section 124.195, subdivision 3.  An 
        additional adjustment shall be made on June 30, 1995, for the 
        final payment otherwise due July 1, 1995, under Minnesota 
        Statutes 1992, section 136C.36. 
           (e) The commissioner of finance shall transfer from the 
        general fund to the education aids appropriations specified by 
        the commissioner of education, the amounts needed to finance the 
        additional payments required because of the reduction pursuant 
        to this subdivision of the levy recognition percent.  Payments 
        to a school district of additional state aids resulting from a 
        reduction in the levy recognition percent must be included in 
        the cash metering of payments made according to section 124.195 
        after January 15, and must be paid in a manner consistent with 
        the percent specified in that section. 
           Sec. 5.  Minnesota Statutes 1994, section 122.532, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [INTERIM CONTRACTUAL AGREEMENTS.] (a) Until a 
        successor contract is executed between the new school board and 
        the exclusive representative of the teachers of the new 
        district, the school boards of both districts and the exclusive 
        representatives of the teachers of both districts may agree: 
           (1) to comply with the contract of either district with 
        respect to all of the teachers assigned to the new district; or 
           (2) that each of the contracts shall apply to the teachers 
        previously subject to the respective contract.  
           (b) In the absence of an agreement according to paragraph 
        (a), the following shall apply: 
           (1) if the effective date is July 1 of an even-numbered 
        year, each of the contracts shall apply to the teachers 
        previously subject to the respective contract and shall be 
        binding on the new school board; or 
           (2) if the effective date is July 1 of an odd-numbered 
        year, the contract of the district that previously employed the 
        largest proportion of teachers assigned to the new district 
        applies to all of the teachers assigned to the new district and 
        shall be binding on the new school board.  The application of 
        this section shall not result in a reduction in a teacher's 
        basic salary, payments for cocurricular or extracurricular 
        assignments, district contributions toward insurance coverages 
        or tax-sheltered annuities, leaves of absence, or severance pay 
        until a successor contract is executed between the new school 
        board and the exclusive representative. 
           Sec. 6.  Minnesota Statutes 1994, section 124.06, is 
        amended to read: 
           124.06 [INSUFFICIENT FUNDS TO PAY ORDERS.] 
           (a) In the event that a district or a cooperative unit 
        defined in section 123.35, subdivision 19b, has insufficient 
        funds to pay its usual lawful current obligations, subject to 
        section 471.69, the board may enter into agreements with banks 
        or any person to take its orders at any rate of interest not to 
        exceed six percent per annum.  Any order drawn after having been 
        presented to the treasurer for payment and not paid for want of 
        funds shall be endorsed by the treasurer by putting on the back 
        thereof the words "not paid for want of funds," giving the date 
        of endorsement and signed by the treasurer.  A record of such 
        presentment, nonpayment and endorsement shall be made by the 
        treasurer.  Every such order shall bear interest at the rate of 
        not to exceed six percent per annum from the date of such 
        presentment.  The treasurer shall serve a written notice upon 
        the payee or the payee's assignee, personally, or by mail, when 
        the treasurer is prepared to pay such orders; such notice may be 
        directed to the payee or the payee's assignee at the address 
        given in writing by such payee or assignee to such treasurer, at 
        any time prior to the service of such notice.  No order shall 
        draw any interest if such address is not given when the same is 
        unknown to the treasurer, and no order shall draw any interest 
        after the service of such notice.  
           (b) A district may enter, subject to section 471.69, into a 
        line of credit agreement with a financial institution.  The 
        amount of credit available must not exceed 95 percent of average 
        expenditure per month of operating expenditures in the previous 
        fiscal year.  Any amount advanced must be repaid no later than 
        45 days after the day of advancement. 
           Sec. 7.  Minnesota Statutes 1994, section 124.155, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADJUSTMENT TO AIDS.] (a) The amount specified in 
        subdivision 1 shall be used to adjust the following state aids 
        and credits in the order listed: 
           (1) general education aid authorized in sections 124A.23 
        and 124B.20; 
           (2) secondary vocational aid authorized in section 124.573; 
           (3) special education aid authorized in section 124.32; 
           (4) secondary vocational aid for children with a disability 
        authorized in section 124.574; 
           (5) aid for pupils of limited English proficiency 
        authorized in section 124.273; 
           (6) transportation aid authorized in section 124.225; 
           (7) community education programs aid authorized in section 
        124.2713; 
           (8) adult education aid authorized in section 124.26; 
           (9) early childhood family education aid authorized in 
        section 124.2711; 
           (10) capital expenditure aid authorized in sections 
        124.243, 124.244, and 124.83; 
           (11) school district cooperation aid authorized in section 
        124.2727; 
           (12) assurance of mastery aid according to section 124.311; 
           (13) homestead and agricultural credit aid, disparity 
        credit and aid, and changes to credits for prior year 
        adjustments according to section 273.1398, subdivisions 2, 3, 4, 
        and 7; 
           (14) attached machinery aid authorized in section 273.138, 
        subdivision 3; and 
           (15) alternative delivery aid authorized in section 
        124.322; 
           (16) special education equalization aid authorized in 
        section 124.321; 
           (17) special education excess cost aid authorized in 
        section 124.323; 
           (18) learning readiness aid authorized in section 124.2615; 
           (19) cooperation-combination aid authorized in section 
        124.2725; and 
           (20) district cooperation revenue aid authorized in section 
        124.2727. 
           (b) The commissioner of education shall schedule the timing 
        of the adjustments to state aids and credits specified in 
        subdivision 1, as close to the end of the fiscal year as 
        possible. 
           Sec. 8.  Minnesota Statutes 1994, section 124.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
        pupil in average daily membership shall be counted according to 
        this subdivision.  
           (a) A prekindergarten pupil with a disability who is 
        enrolled for the entire fiscal year in a program approved by the 
        commissioner and has an individual education plan that requires 
        up to 437 hours of assessment and education services in the 
        fiscal year is counted as one-half of a pupil unit.  If the plan 
        requires more than 437 hours of assessment and education 
        services, the pupil is counted as the ratio of the number of 
        hours of assessment and education service to 875 825 with a 
        minimum of 0.28, but not more than one. 
           (b) A prekindergarten pupil with a disability who is 
        enrolled for less than the entire fiscal year in a program 
        approved by the commissioner is counted as the greater of: 
           (1) one-half times the ratio of the number of instructional 
        days from the date the pupil is enrolled to the date the pupil 
        withdraws to the number of instructional days in the school 
        year; or 
           (2) the ratio of the number of hours of assessment and 
        education service required in the fiscal year by the pupil's 
        individual education program plan to 875, but not more than one. 
           (c) A prekindergarten pupil who is assessed but determined 
        not to be handicapped is counted as the ratio of the number of 
        hours of assessment service to 875 825.  
           (d) (c) A kindergarten pupil with a disability who is 
        enrolled in a program approved by the commissioner is counted as 
        the ratio of the number of hours of assessment and education 
        services required in the fiscal year by the pupil's individual 
        education program plan to 875, but not more than one. 
           (e) (d) A kindergarten pupil who is not included in 
        paragraph (d) (c) is counted as .515 of a pupil unit for fiscal 
        year 1994 and .53 of a pupil unit for fiscal year 1995 and 
        thereafter. 
           (f) (e) A pupil who is in any of grades 1 to 6 is counted 
        as 1.03 pupil units for fiscal year 1994 and 1.06 pupil units 
        for fiscal year 1995 and thereafter. 
           (g) (f) A pupil who is in any of grades 7 to 12 is counted 
        as 1.3 pupil units.  
           (h) (g) A pupil who is in the post-secondary enrollment 
        options program is counted as 1.3 pupil units. 
           Sec. 9.  Minnesota Statutes 1994, section 124.17, 
        subdivision 1d, is amended to read: 
           Subd. 1d.  [AFDC PUPIL UNITS.] AFDC pupil units for fiscal 
        year 1993 and thereafter must be computed according to this 
        subdivision.  
           (a) The AFDC concentration percentage for a district equals 
        the product of 100 times the ratio of:  
           (1) the number of pupils enrolled in the district from 
        families receiving aid to families with dependent children 
        according to subdivision 1e; to 
           (2) the number of pupils in average daily membership 
        according to subdivision 1e enrolled in the district. 
           (b) The AFDC pupil weighting factor for a district equals 
        the lesser of one or the quotient obtained by dividing the 
        district's AFDC concentration percentage by 11.5.  
           (c) The AFDC pupil units for a district for fiscal year 
        1993 and thereafter equals the product of:  
           (1) the number of pupils enrolled in the district from 
        families receiving aid to families with dependent children 
        according to subdivision 1e; times 
           (2) the AFDC pupil weighting factor for the district; times 
           (3) .65 .67. 
           Sec. 10.  Minnesota Statutes 1994, section 124.17, is 
        amended by adding a subdivision to read: 
           Subd. 1g.  [FUND BALANCE PUPIL UNITS.] Fund balance pupil 
        units must be computed separately for kindergarten pupils, 
        elementary pupils in grades 1 to 6, and secondary pupils in 
        grades 7 to 12.  Total fund balance pupil units means the sum of 
        kindergarten, elementary, and secondary fund balance pupil 
        units.  Fund balance pupil units for each category means the 
        number of resident pupil units in average daily membership, 
        including shared time pupil units, according to section 124A.02, 
        subdivision 20, plus 
           (1) pupils attending the district for which general 
        education aid adjustments are made according to section 
        124A.036, subdivision 5; minus 
           (2) the sum of the resident pupils attending other 
        districts for which general education aid adjustments are made 
        according to section 124A.036, subdivision 5, plus pupils for 
        whom payment is made according to section 126.22, subdivision 8, 
        or 126.23. 
           Sec. 11.  Minnesota Statutes 1994, section 124.17, 
        subdivision 2f, is amended to read: 
           Subd. 2f.  [PSEO PUPILS.] The average daily membership for 
        a student pupil participating in the post-secondary enrollment 
        options program equals the lesser of 
           (1) (a) 1.00, or 
           (2) (b) the greater of 
           (i) (1) .12, or 
           (ii) (2) the ratio of (i) the sum of the number of 
        instructional hours the student pupil is enrolled in the 
        secondary school to the product of the number of days required 
        in section 120.101, subdivision 5b, times the minimum length of 
        day required in Minnesota Rules, part 3500.1500, subpart 
        1 during quarters, trimesters, or semesters during which the 
        pupil participates in PSEO, and hours enrolled in the secondary 
        school during the remainder of the school year, to (ii) the 
        actual number of instructional days in the school year times the 
        length of day in the school. 
           Sec. 12.  Minnesota Statutes 1994, section 124.195, is 
        amended by adding a subdivision to read: 
           Subd. 3c.  [CASH FLOW WAIVER.] For any district exceeding 
        its expenditure limitations under section 121.917, and if 
        requested by the district, the commissioner of education, in 
        consultation with the commissioner of finance, and a school 
        district may negotiate a cash flow payment schedule under 
        subdivision 3 corresponding to the district's cash flow needs so 
        as to minimize the district's short-term borrowing needs. 
           Sec. 13.  Minnesota Statutes 1994, section 124.195, 
        subdivision 10, is amended to read: 
           Subd. 10.  [AID PAYMENT PERCENTAGE.] Except as provided in 
        subdivisions 8, 9, and 11, each fiscal year, all education aids 
        and credits in this chapter and chapters 121, 123, 124A, 124B, 
        125, 126, 134, and section 273.1392, shall be paid at 90 percent 
        for districts operating a program under section 121.585 for 
        grades 1 to 12 for all students in the district and 85 percent 
        for other districts of the estimated entitlement during the 
        fiscal year of the entitlement, unless a higher rate has been 
        established according to section 121.904, subdivision 4d.  
        Districts operating a program under section 121.585 for grades 1 
        to 12 for all students in the district shall receive 85 percent 
        of the estimated entitlement plus an additional amount of 
        general education aid equal to five percent of the estimated 
        entitlement.  For all districts, the final adjustment payment, 
        according to subdivision 6, shall be the amount of the actual 
        entitlement, after adjustment for actual data, minus the 
        payments made during the fiscal year of the entitlement shall be 
        paid as the final adjustment payment according to subdivision 6. 
           Sec. 14.  Minnesota Statutes 1994, section 124.195, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [EDUCATION AIDS CASH FLOW ACCOUNT.] (a) An 
        education aids cash flow account is established in the state 
        treasury for the purpose of ensuring the timely payment of state 
        aids or credits to school districts as provided in this 
        section.  In the event the account balance in any appropriation 
        from the general fund to the department of education for 
        education aids or credits is insufficient to make the next 
        scheduled payment or payments, the commissioner of education is 
        authorized to transfer funds from the education aids cash flow 
        account to the accounts that are insufficient. 
           (b) For purposes of this subdivision, an account may have 
        an insufficient balance only as a result of some districts being 
        overpaid based on revised estimates for the relevant annual aid 
        or credit entitlements.  When the overpayment amounts are 
        recovered from the pertinent districts, the commissioner of 
        education shall transfer those amounts to the education aids 
        cash flow account.  The commissioner shall determine when it is 
        not feasible to recover the overpayments in a timely manner from 
        the district's future aid payments and notify the district of 
        the amount that is to be refunded to the state.  School 
        districts are encouraged to make such refunds promptly.  The 
        commissioner may approve a schedule for making a refund when a 
        district demonstrates that its cash flow is inadequate to 
        promptly make the refund in full. 
           (c) There is annually appropriated from the general fund to 
        the education aids cash flow account the additional amount 
        necessary to ensure the timely payment of state aids or credits 
        to school districts as provided in this section.  For any fiscal 
        year, the appropriation authorized in this subdivision shall not 
        exceed an amount equal to two-tenths of one percent of the total 
        general fund appropriations in that year for education aids and 
        credits.  At the close of each fiscal year, the amount of actual 
        transfers plus anticipated transfers required in paragraph (b) 
        shall equal the authorized amounts transferred in paragraph (a) 
        so that the net effect on total general fund spending for 
        education aids and credits is zero. 
           Sec. 15.  Minnesota Statutes 1994, section 124.2139, is 
        amended to read: 
           124.2139 [REDUCTION OF PAYMENTS TO SCHOOL DISTRICTS.] 
           The commissioner of revenue shall reduce the sum of the 
        additional transition credit, homestead and agricultural credit 
        aid, and disparity reduction aid payments under section 273.1398 
        made to school districts by the product of:  
           (1) the district's fiscal year 1984 payroll for coordinated 
        plan members of the public employees retirement association 
        other than technical college employees, times 
           (2) the difference between the employer contribution rate 
        in effect prior to July 1, 1984, and the total employer 
        contribution rate in effect after June 30, 1984.  
           Sec. 16.  Minnesota Statutes 1994, section 124.431, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISTRICT REQUEST FOR REVIEW AND COMMENT.] A 
        school district or a joint powers district that intends to apply 
        for a capital loan must submit a proposal to the commissioner 
        for review and comment according to section 121.15 on or before 
        July 1.  The commissioner must prepare a review and comment on 
        the proposed facility, regardless of the amount of the capital 
        expenditure required to construct the facility.  In addition to 
        the information provided under section 121.15, subdivision 7, 
        the commissioner shall consider the following criteria in 
        determining whether to make a positive review and comment.  
           (a) To grant a positive review and comment the commissioner 
        must determine that all of the following conditions are met: 
           (1) the facilities are needed for pupils for whom no 
        adequate facilities exist or will exist; 
           (2) the district will serve, on average, at least 80 pupils 
        per grade or is eligible for elementary or secondary sparsity 
        revenue; 
           (3) no form of cooperation with another district would 
        provide the necessary facilities; 
           (4) the facilities are comparable in size and quality to 
        facilities recently constructed in other districts that have 
        similar enrollments; 
           (5) the facilities are comparable in size and quality to 
        facilities recently constructed in other districts that are 
        financed without a capital loan; 
           (6) the district is projected to maintain or increase its 
        average daily membership over the next five years or is eligible 
        for elementary or secondary sparsity revenue; 
           (7) the current facility poses a threat to the life, 
        health, and safety of pupils, and cannot reasonably be brought 
        into compliance with fire, health, or life safety codes; 
           (8) the district has made a good faith effort, as evidenced 
        by its maintenance expenditures, to adequately maintain the 
        existing facility during the previous ten years and to comply 
        with fire, health, and life safety codes and state and federal 
        requirements for handicapped accessibility; 
           (9) the district has made a good faith effort to encourage 
        integration of social service programs within the new facility; 
        and 
           (10) evaluations by school boards of adjacent districts 
        have been received. 
           (b) The commissioner may grant a negative review and 
        comment if: 
           (1) the state demographer has examined the population of 
        the communities to be served by the facility and determined that 
        the communities have not grown during the previous five years; 
           (2) the state demographer determines that the economic and 
        population bases of the communities to be served by the facility 
        are not likely to grow or to remain at a level sufficient, 
        during the next ten years, to ensure use of the entire facility; 
           (3) the need for facilities could be met within the 
        district or adjacent districts at a comparable cost by leasing, 
        repairing, remodeling, or sharing existing facilities or by 
        using temporary facilities; 
           (4) the district plans do not include cooperation and 
        collaboration with health and human services agencies and other 
        political subdivisions; or 
           (5) if the application is for new construction, an existing 
        facility that would meet the district's needs could be purchased 
        at a comparable cost from any other source within the area. 
           Sec. 17.  Minnesota Statutes 1994, section 124.912, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
        district may levy the amounts necessary to pay the district's 
        obligations under section 6.62; the amount authorized for 
        liabilities of dissolved districts pursuant to section 122.45; 
        the amounts necessary to pay the district's obligations under 
        section 268.06, subdivision 25; the amounts necessary to pay for 
        job placement services offered to employees who may become 
        eligible for benefits pursuant to section 268.08; the amounts 
        necessary to pay the district's obligations under section 
        127.05; the amounts authorized by section 122.531; the amounts 
        necessary to pay the district's obligations under section 
        122.533; and for severance pay required by sections 120.08, 
        subdivision 3, and 122.535, subdivision 6. 
           (b) An education district that negotiates a collective 
        bargaining agreement for teachers under section 122.937 may 
        certify to the department of education the amount necessary to 
        pay all of the member districts' obligations and the education 
        district's obligations under section 268.06, subdivision 25. 
           The department of education must allocate the levy amount 
        proportionately among the member districts based on adjusted net 
        tax capacity.  The member districts must levy the amount 
        allocated. 
           (c) Each year, a member district of an education district 
        that levies under this subdivision must transfer the amount of 
        revenue certified under paragraph (b) to the education district 
        board according to this subdivision.  By June 20 and November 30 
        of each year, an amount must be transferred equal to: 
           (1) 50 percent times 
           (2) the amount certified in paragraph (b) minus homestead 
        and agricultural credit aid allocated for that levy according to 
        section 273.1398, subdivision 6. 
           Sec. 18.  Minnesota Statutes 1994, section 124.918, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CERTIFY LEVY LIMITS.] By September 1 8, 
        the commissioner shall notify the school districts of their levy 
        limits.  The commissioner shall certify to the county auditors 
        the levy limits for all school districts headquartered in the 
        respective counties together with adjustments for errors in 
        levies not penalized pursuant to section 124.918, subdivision 3, 
        as well as adjustments to final pupil unit counts. A school 
        district may require the commissioner to review the 
        certification and to present evidence in support of modification 
        of the certification. 
           The county auditor shall reduce levies for any excess of 
        levies over levy limitations pursuant to section 275.16.  Such 
        reduction in excess levies may, at the discretion of the school 
        district, be spread over two calendar years. 
           Sec. 19.  Minnesota Statutes 1994, section 124.918, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE TO COMMISSIONER; FORMS.] By September 
        15 30 of each year each district shall notify the commissioner 
        of education of the proposed levies in compliance with the levy 
        limitations of this chapter and chapters 124A, 124B, 136C, and 
        136D.  By January 15 of each year each district shall notify the 
        commissioner of education of the final levies certified.  The 
        commissioner of education shall prescribe the form of these 
        notifications and may request any additional information 
        necessary to compute certified levy amounts. 
           Sec. 20.  Minnesota Statutes 1994, section 124A.03, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 
        subdivision 1b, a district's referendum allowance must not 
        exceed the greater of:  
           (1) the district's referendum allowance for fiscal year 
        1994; or 
           (2) 25 percent of the formula allowance minus $300 for 
        fiscal year 1995 and later 1997 and later. 
           Sec. 21.  Minnesota Statutes 1994, section 124A.03, 
        subdivision 1g, is amended to read: 
           Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
        year 1996, a district's referendum equalization levy equals the 
        district's referendum equalization revenue times the lesser of 
        one or the ratio of the district's adjusted net tax capacity per 
        actual pupil unit to 100 percent of the equalizing factor as 
        defined in section 124A.02, subdivision 8. 
           (b) For fiscal year 1997 and thereafter, a district's 
        referendum equalization levy for a referendum levied against the 
        referendum market value of all taxable property as defined in 
        section 124A.02, subdivision 3b, equals the district's 
        referendum equalization revenue times the lesser of one or the 
        ratio of the district's referendum market value per actual pupil 
        unit to $476,000. 
           (c) For fiscal year 1997 and thereafter, a district's 
        referendum equalization levy for a referendum levied against the 
        net tax capacity of all taxable property equals the district's 
        referendum equalization revenue times the lesser of one or the 
        ratio of the district's adjusted net tax capacity per actual 
        pupil unit to 100 percent of the equalizing factor for that year.
           Sec. 22.  Minnesota Statutes 1994, section 124A.03, 
        subdivision 1h, is amended to read: 
           Subd. 1h.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
        referendum equalization aid equals the difference between its 
        referendum equalization revenue and levy. 
           (b) For fiscal year 1993, a district's referendum 
        equalization aid is equal to one-third of the amount calculated 
        in clause (a). 
           (c) For fiscal year 1994, a district's referendum 
        equalization aid is equal to two-thirds of the amount calculated 
        in clause (a). 
           (d) If a district's actual levy for referendum equalization 
        revenue is less than its maximum levy limit, aid shall be 
        proportionately reduced. 
           Sec. 23.  Minnesota Statutes 1994, section 124A.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REFERENDUM REVENUE.] (a) The revenue authorized 
        by section 124A.22, 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 
        school board or shall be called by the school board upon written 
        petition of qualified voters of the district.  The referendum 
        shall be conducted during the one or two calendar year 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 shall 
        state the maximum amount of the increased revenue per actual 
        pupil unit, the estimated referendum tax rate as a percentage of 
        market value in the first year it is to be levied, and that the 
        revenue shall be used to finance school operations.  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 shall designate the 
        specific number of years, not to exceed ten, for which the 
        referendum authorization shall apply.  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 
        actual pupil unit times the actual 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 school board shall prepare and deliver by first 
        class mail at least 15 days but no more than 30 days prior to 
        the day of the referendum to each taxpayer a notice of the 
        referendum and the proposed revenue increase.  The school board 
        need not mail more than one notice to any taxpayer.  For the 
        purpose of giving mailed notice under this subdivision, owners 
        shall 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 shall be 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, if any, in annual 
        dollars and annual percentage for typical residential 
        homesteads, agricultural homesteads, apartments, and 
        commercial-industrial property within the school 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 school board and shall be called by the 
        school board upon the written petition of qualified voters of 
        the district.  A referendum to revoke or reduce the levy amount 
        must be based upon the dollar amount, local tax rate, or amount 
        per actual pupil unit, that was stated to be the basis for the 
        initial authorization.  Revenue approved by the voters of the 
        district pursuant to paragraph (a) must be received 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) shall be 
        effective if signed by a number of qualified voters in excess of 
        15 percent of the registered voters of the school district on 
        the day the petition is filed with the school board.  A 
        referendum invoked by petition shall 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 prior to the day of the referendum, 
        the district shall submit a copy of the notice required under 
        paragraph (b) to the commissioner of education.  Within 15 days 
        after the results of the referendum have been certified by the 
        school board, or in the case of a recount, the certification of 
        the results of the recount by the canvassing board, the district 
        shall notify the commissioner of education of the results of the 
        referendum. 
           (g) Except for a referendum held under subdivision 2b, any 
        referendum under this section held on a day other than the first 
        Tuesday after the first Monday in November must be conducted by 
        mail in accordance with section 204B.46.  Notwithstanding 
        paragraph (b) to the contrary, in the case of a referendum 
        conducted by mail under this paragraph, the notice required by 
        paragraph (b) shall be prepared and delivered by first class 
        mail at least 20 days before the referendum. 
           Sec. 24.  Minnesota Statutes 1994, section 124A.0311, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REFERENDUM.] The school board must prepare and 
        publish in the official legal newspaper of the school district a 
        notice of the public meeting on the district's intent to convert 
        any portion of its referendum levy to market value not less than 
        30 days before the scheduled date of the meeting.  The 
        resolution converting a portion of the district's referendum 
        levy to referendum market value becomes final unless within 30 
        days after the meeting where the resolution was adopted a 
        petition requesting an election signed by a number of people 
        residing in the district equal to 15 percent of the number of 
        people who voted in the last general election in the school 
        district is filed with the recording officer qualified voters in 
        excess of 15 percent of the registered voters of the school 
        district on the day the petition is filed with the school 
        board.  If a petition is filed, then the school board resolution 
        has no effect and the amount of referendum revenue authority 
        specified in the resolution cancels for taxes payable in the 
        following year and thereafter.  The school board shall schedule 
        a referendum under section 124A.03, subdivision 2. 
           Sec. 25.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
        year 1996, the general education revenue for each district 
        equals the sum of the district's basic revenue, compensatory 
        education revenue, training and experience revenue, secondary 
        sparsity revenue, elementary sparsity revenue, and supplemental 
        revenue. 
           (b) For fiscal year 1997 and thereafter, the general 
        education revenue for each district equals the sum of the 
        district's basic revenue, compensatory education revenue, 
        secondary sparsity revenue, elementary sparsity revenue, 
        transportation sparsity, total operating capital revenue, 
        transition revenue, and supplemental revenue. 
           Sec. 26.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
        district equals the formula allowance times the actual pupil 
        units for the school year.  The formula allowance for fiscal 
        years 1993 and 1994 is $3,050.  The formula allowance for fiscal 
        year 1995 and subsequent fiscal years is $3,150.  The formula 
        allowance for fiscal year 1996 is $3,205.  The formula allowance 
        for fiscal year 1997 is $3,505 and for fiscal year 1998 and 
        subsequent fiscal years the formula allowance is $3,430. 
           Sec. 27.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] (a) For fiscal 
        year 1992, the compensatory education revenue for each district 
        equals the formula allowance times the AFDC pupil units counted 
        according to section 124.17, subdivision 1b. 
           (b) For fiscal year 1993 and thereafter, The maximum 
        compensatory education revenue for each district equals the 
        formula allowance less $300 times the AFDC pupil units computed 
        according to section 124.17, subdivision 1d. 
           (c) For fiscal year 1993 and thereafter, the previous 
        formula compensatory education revenue for each district equals 
        the formula allowance times the AFDC pupil units computed 
        according to section 124.17, subdivision 1b.  
           (d) For fiscal year 1993, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory revenue plus one-fourth of the difference between 
        the district's maximum compensatory education revenue and the 
        district's previous formula compensatory education revenue.  
           (e) For fiscal year 1994, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory education revenue plus one-half of the difference 
        between the district's maximum compensatory education revenue 
        and the district's previous formula compensatory education 
        revenue.  
           (f) For fiscal year 1995, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory education revenue plus three-fourths of the 
        difference between the district's maximum compensatory education 
        revenue and the district's previous formula compensatory 
        education revenue.  
           (g) For fiscal year 1996 and thereafter, the compensatory 
        education revenue for each district equals the district's 
        maximum compensatory education revenue.  
           Sec. 28.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TRAINING AND EXPERIENCE REVENUE.] (a) The 
        previous formula training and experience revenue for each 
        district equals the greater of zero or the result of the 
        following computation:  
           (1) subtract 1.6 from the training and experience index; 
           (2) multiply the result in clause (1) by the product of 
        $700 times the actual pupil units for the school year. 
           (b) The maximum training and experience revenue for each 
        district equals the greater of zero or the result of the 
        following computation:  
           (1) subtract .8 from the training and experience index; 
           (2) multiply the result in clause (1) by the product of 
        $660 times the actual pupil units for the school year.  
           (c) For fiscal year 1994, the training and experience 
        revenue for each district equals the district's previous formula 
        training and experience revenue plus one-half of the difference 
        between the district's maximum training and experience revenue 
        and the district's previous formula training and experience 
        revenue.  
           (d) For fiscal year 1995, the training and experience 
        revenue for each district equals the district's previous formula 
        training and experience revenue plus three-fourths of the 
        difference between the district's maximum training and 
        experience revenue and the district's previous formula training 
        and experience revenue. 
           (e) For fiscal year 1996 and thereafter, the training and 
        experience revenue for each district equals the district's 
        maximum training and experience revenue.  
           Sec. 29.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [FISCAL YEAR 1996 TRAINING AND EXPERIENCE LEVY.] 
        A district's training and experience levy for fiscal year 1996 
        equals its training and experience revenue times the lesser of 
        one or the ratio of the district's adjusted net tax capacity per 
        actual pupil unit for the year before the year the levy is 
        certified to the equalizing factor for the school year to which 
        the levy is attributable. 
           Sec. 30.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [FISCAL YEAR 1996 TRAINING AND EXPERIENCE AID.] 
        A district's training and experience aid for fiscal year 1996 
        equals its training and experience revenue minus its training 
        and experience levy times the ratio of the actual amount levied 
        to the permitted levy. 
           Sec. 31.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SECONDARY SPARSITY REVENUE.] (a) A district's 
        secondary sparsity revenue for a school year equals the sum of 
        the results of the following calculation for each qualifying 
        high school in the district: 
           (1) the formula allowance for the school year less $300, 
        multiplied by 
           (2) the secondary average daily membership of the high 
        school, multiplied by 
           (3) the quotient obtained by dividing 400 minus the 
        secondary average daily membership by 400 plus the secondary 
        daily membership, multiplied by 
           (4) the lesser of 1.5 or the quotient obtained by dividing 
        the isolation index minus 23 by ten. 
           (b) A newly formed school district that is the result of 
        districts combining under the cooperation and combination 
        program or consolidating under section 122.23 shall receive 
        secondary sparsity revenue equal to the greater of:  (1) the 
        amount calculated under paragraph (a) for the combined district; 
        or (2) the sum of the amounts of secondary sparsity revenue the 
        former school districts had in the year prior to consolidation, 
        increased for any subsequent changes in the secondary sparsity 
        formula. 
           Sec. 32.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [ELEMENTARY SPARSITY REVENUE.] A district's 
        elementary sparsity revenue equals the sum of the following 
        amounts for each qualifying elementary school in the district:  
           (1) the formula allowance for the year less $300, 
        multiplied by 
           (2) the elementary average daily membership of the school, 
        multiplied by 
           (3) the quotient obtained by dividing 140 minus the 
        elementary average daily membership by 140 plus the average 
        daily membership.  
           Sec. 33.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [SUPPLEMENTAL LEVY.] To obtain supplemental 
        revenue, a district may levy an amount not more than the product 
        of its supplemental revenue for the school year times the lesser 
        of one or the ratio of its general education levy to its general 
        education revenue, excluding training and experience transition 
        revenue and supplemental revenue, for the same year. 
           Sec. 34.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SUPPLEMENTAL REVENUE REDUCTION.] A district's 
        supplemental revenue allowance is reduced by the sum of: 
           (1) the sum of one-fourth of the difference of:  
           (i) the sum of the district's training and experience 
        revenue and compensatory revenue per actual pupil unit for that 
        fiscal year 1996, and 
           (ii) the sum of district's training and experience revenue 
        and compensatory revenue per actual pupil unit for fiscal year 
        1994; and 
           (2) the difference between the formula allowance for the 
        current fiscal year and $3,050 $100.  
           A district's supplemental revenue allowance may not be less 
        than zero. 
           Sec. 35.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [TOTAL OPERATING CAPITAL REVENUE.] (a) For 
        fiscal year 1997 and thereafter, total operating capital revenue 
        for a district equals the amount determined under paragraph (b), 
        (c), (d), (e), or (f), plus $68 times the actual 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 
        subdivision 11. 
           (b) For fiscal years 1996 and later, capital revenue for a 
        district equals $100 times the district's maintenance cost index 
        times its actual pupil units for the school year. 
           (c) For 1996 and later fiscal years, the previous formula 
        revenue for a district equals $128 times its actual pupil units 
        for fiscal year 1995. 
           (d) Notwithstanding paragraph (b), for fiscal year 1996, 
        the revenue for each district equals 25 percent of the amount 
        determined in paragraph (b) plus 75 percent of the previous 
        formula revenue. 
           (e) Notwithstanding paragraph (b), for fiscal year 1997, 
        the revenue for each district equals 50 percent of the amount 
        determined in paragraph (b) plus 50 percent of the previous 
        formula revenue. 
           (f) Notwithstanding paragraph (b), for fiscal year 1998, 
        the revenue for each district equals 75 percent of the amount 
        determined in paragraph (b) plus 25 percent of the previous 
        formula revenue. 
           (g) The revenue in paragraph (b) for a district that 
        operates a program under section 121.585, is increased by an 
        amount equal to $15 times the number of actual pupil units at 
        the site where the program is implemented. 
           Sec. 36.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total 
        operating capital revenue may be used only for the following 
        purposes: 
           (1) to acquire land for school purposes; 
           (2) to acquire or construct buildings for school purposes, 
        up to $400,000; 
           (3) to rent or lease buildings, including the costs of 
        building repair or improvement that are part of a lease 
        agreement; 
           (4) to improve and repair school sites and buildings, and 
        equip or reequip school buildings with permanent attached 
        fixtures; 
           (5) for a surplus school building that is used 
        substantially for a public nonschool purpose; 
           (6) to eliminate barriers or increase access to school 
        buildings by individuals with a disability; 
           (7) to bring school buildings into compliance with the 
        uniform fire code adopted according to chapter 299F; 
           (8) to remove asbestos from school buildings, encapsulate 
        asbestos, or make asbestos-related repairs; 
           (9) to clean up and dispose of polychlorinated biphenyls 
        found in school buildings; 
           (10) to clean up, remove, dispose of, and make repairs 
        related to storing heating fuel or transportation fuels such as 
        alcohol, gasoline, fuel oil, and special fuel, as defined in 
        section 296.01; 
           (11) for energy audits for school buildings and to modify 
        buildings if the audit indicates the cost of the modification 
        can be recovered within ten years; 
           (12) to improve buildings that are leased according to 
        section 123.36, subdivision 10; 
           (13) to pay special assessments levied against school 
        property but not to pay assessments for service charges; 
           (14) to pay principal and interest on state loans for 
        energy conservation according to section 216C.37 or loans made 
        under the northeast Minnesota economic protection trust fund act 
        according to sections 298.292 to 298.298; and 
           (15) to purchase or lease interactive telecommunications 
        equipment; 
           (16) by school board resolution, to transfer money into the 
        debt redemption fund to pay the amounts needed to meet, when 
        due, principal and interest payments on certain obligations 
        issued according to chapter 475; 
           (17) to pay capital expenditure equipment-related 
        assessments of any entity formed under a cooperative agreement 
        between two or more districts; 
           (18) to purchase or lease computers and related materials, 
        copying machines, telecommunications equipment, and other 
        noninstructional equipment; 
           (19) to purchase or lease assistive technology or equipment 
        for instructional programs; 
           (20) to purchase textbooks; 
           (21) to purchase new and replacement library books; 
           (22) to purchase vehicles; 
           (23) to purchase or lease telecommunications equipment, 
        computers, and related equipment for integrated information 
        management systems for: 
           (i) managing and reporting learner outcome information for 
        all students under a results-oriented graduation rule; 
           (ii) managing student assessment, services, and achievement 
        information required for students with individual education 
        plans; and 
           (iii) other classroom information management needs; and 
           (24) to pay personnel costs directly related to the 
        acquisition, operation, and maintenance of telecommunications 
        systems, computers, related equipment, and network and 
        applications software. 
           Sec. 37.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [MAINTENANCE COST INDEX.] (a) A district's 
        maintenance cost index is equal to the ratio of: 
           (1) the total weighted square footage for all eligible 
        district-owned facilities; and 
           (2) the total unweighted square footage of these facilities.
           (b) The department shall determine a district's maintenance 
        cost index annually.  Eligible district-owned facilities shall 
        include only instructional or administrative square footage 
        owned by the district.  The commissioner of education may adjust 
        the age of a building or addition for major renovation projects. 
           (c) The square footage weighting factor for each original 
        building or addition equals the lesser of: 
           (1) one plus the ratio of the age in years to 100; or 
           (2) 1.5. 
           (d) The weighted square footage for each original building 
        or addition equals the product of the unweighted square footage 
        times the square footage weighting factor. 
           Sec. 38.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
        definitions in this subdivision apply to subdivisions 13a and 
        13b. 
           (a) "Sparsity index" for a school district means the 
        greater of .2 or the ratio of the square mile area of the school 
        district to the actual pupil units of the school district. 
           (b) "Density index" for a school district means the ratio 
        of the square mile area of the school district to the actual 
        pupil units of the school district.  However, the density index 
        for a school district cannot be greater than .2 or less than 
        .005. 
           (c) "Fiscal year 1996 base allowance" for a school district 
        means the result of the following computation: 
           (1) sum the following amounts: 
           (i) the fiscal year 1996 regular transportation revenue for 
        the school district according to section 124.225, subdivision 
        7d, paragraph (a), excluding the revenue attributable nonpublic 
        school pupils and to pupils with disabilities receiving special 
        transportation services; plus 
           (ii) the fiscal year 1996 nonregular transportation revenue 
        for the school district according to section 124.225, 
        subdivision 7d, paragraph (b), excluding the revenue for 
        desegregation transportation according to section 124.225, 
        subdivision 1, paragraph (c), clause (4), and the revenue 
        attributable to nonpublic school pupils and to pupils with 
        disabilities receiving special transportation services or board 
        and lodging; plus 
           (iii) the fiscal year 1996 excess transportation levy for 
        the school district according to section 124.226, subdivision 5, 
        excluding the levy attributable to nonpublic school pupils; plus 
           (iv) the fiscal year 1996 late activity bus levy for the 
        school district according to section 124.226, subdivision 9, 
        excluding the levy attributable to nonpublic school pupils; plus 
           (v) an amount equal to one-third of the fiscal year 1996 
        bus depreciation for the school district according to section 
        124.225, subdivision 1, paragraph (b), clauses (2), (3), and (4).
           (2) divide the result in paragraph (c), clause (1), by the 
        school districts 1995-1996 actual pupil units. 
           Sec. 39.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [TRANSPORTATION SPARSITY REVENUE 
        ALLOWANCE.] (a) A district's transportation sparsity allowance 
        equals the greater of zero or the result of the following 
        computation: 
           (i) Multiply the formula allowance according to section 
        124A.22, subdivision 2, by .1469. 
           (ii) Multiply the result in clause (i) by the district's 
        sparsity index raised to the 26/100 power. 
           (iii) Multiply the result in clause (ii) by the district's 
        density index raised to the 13/100 power. 
           (iv) Multiply the formula allowance according to section 
        124A.22, subdivision 2, by .0485. 
           (v) Subtract the result in clause (iv) from the result in 
        clause (iii). 
           (b) Transportation sparsity revenue is equal to the 
        transportation sparsity allowance times the actual pupil units. 
           Sec. 40.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13b.  [TRANSITION ALLOWANCE.] (a) A district's 
        transportation transition allowance for fiscal year 1997 equals 
        the result of the following computation: 
           (1) if the result in subdivision 13a, paragraph (a), clause 
        (iii), for fiscal year 1997 is less than the fiscal year 1996 
        base allowance, the transportation transition allowance equals 
        the fiscal year 1996 base allowance minus the result in section 
        124A.22, subdivision 13a, paragraph (a), clause (iii). 
           (2) if the result in subdivision 13a, paragraph (b), for 
        fiscal year 1997 is greater than the fiscal year 1996 base 
        allowance and less than 110 percent of the fiscal year 1996 base 
        allowance, the transportation transition allowance equals zero. 
           (3) if the result in subdivision 13a, paragraph (b), for 
        fiscal year 1997 is greater than 110 percent of the fiscal year 
        1996 base allowance, the transportation transition allowance 
        equals 110 percent of the fiscal year 1996 base allowance minus 
        the result in subdivision 13a, paragraph (a), clause (iii). 
           (b) For fiscal years 1997 and 1998, a district's training 
        and experience transition allowance is equal to the training and 
        experience revenue the district would have received under 
        Minnesota Statutes 1994, section 124A.22, subdivision 4, divided 
        by the actual pupil units for fiscal year 1997 minus $130.  For 
        fiscal year 1999 and later, a district's training and experience 
        transition allowance equals zero.  
           If the training and experience transition allowance is less 
        than zero, the reduction shall be determined according to the 
        following schedule: 
           (i) for fiscal year 1997, the reduction is equal to .9 
        times the amount initially determined; 
           (ii) for fiscal year 1998, the reduction is equal to .75 
        times the amount initially determined; 
           (iii) for fiscal year 1999, the reduction is equal to .50 
        times the amount initially determined; 
           (iv) for fiscal year 2000, the reduction is equal to .25 
        times the amount initially determined; and 
           (v) for fiscal year 2001 and thereafter, the transition 
        allowance shall not be less than zero.  
           (c) A district's transition allowance for fiscal year 1997 
        and thereafter is equal to the sum of its transportation 
        transition allowance and its training and experience transition 
        allowance. 
           Sec. 41.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13c.  [TRANSITION REVENUE ADJUSTMENT.] A district's 
        transition revenue adjustment equals the district's transition 
        allowance times the actual pupil units for the school year. 
           Sec. 42.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13d.  [TRANSITION LEVY ADJUSTMENT.] A district's 
        general education levy shall be adjusted by an amount equal to 
        the district's transition revenue times the lesser of 1 or the 
        ratio of the district's general education levy to its general 
        education revenue, excluding transition revenue and supplemental 
        revenue. 
           Sec. 43.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13e.  [TRANSITION AID ADJUSTMENT.] A district's 
        transition aid adjustment is the difference between the 
        transition revenue and the transition levy. 
           Sec. 44.  Minnesota Statutes 1994, section 124A.22, is 
        amended by adding a subdivision to read: 
           Subd. 13f.  [TRAINING AND EXPERIENCE REVENUE.] Training and 
        experience revenue for each district equals the greater of zero 
        or the result of the following computation: 
           (1) subtract .8 from the training and experience index; 
           (2) multiply the result in clause (1) by the product of 
        $660 times the actual pupil units for that school year. 
           Sec. 45.  Minnesota Statutes 1994, section 124A.225, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REVENUE.] Of a district's general 
        education revenue an amount equal to the sum of the number of 
        elementary fund balance pupils in average daily membership 
        defined in section 124.17, subdivision 1, clause (f) 1h, and 
        one-half of the number of kindergarten fund balance pupils in 
        average daily membership as defined in section 124.17, 
        subdivision 1, clause (e) 1h, times .03 .06 for fiscal year 
        1994 1995 and .06 for fiscal year 1995 and thereafter times the 
        formula allowance must be reserved according to this section. 
           Sec. 46.  Minnesota Statutes 1994, section 124A.23, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
        commissioner shall establish the general education tax rate by 
        July 1 of each year for levies payable in the following year.  
        The general education tax capacity rate shall be a rate, rounded 
        up to the nearest tenth of a percent, that, when applied to the 
        adjusted net tax capacity for all districts, raises the amount 
        specified in this subdivision.  The general education tax rate 
        shall be the rate that raises $1,044,000,000 for fiscal year 
        1995 and $1,054,000,000 for fiscal year 1996 and $1,359,000,000 
        for fiscal year 1997 and later fiscal years.  The general 
        education tax rate may not be changed due to changes or 
        corrections made to a district's adjusted net tax capacity after 
        the tax rate has been established.  
           Sec. 47.  Minnesota Statutes 1994, section 124A.23, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL EDUCATION AID.] A district's general 
        education aid is the sum of the following amounts:  
           (1) the product of (i) the difference between the general 
        education revenue, excluding training and experience transition 
        revenue and supplemental revenue, and the general education 
        levy, times (ii) the ratio of the actual amount levied to the 
        permitted levy; 
           (2) training and experience transition aid according to 
        section 124A.22, subdivision 4b 13e; 
           (3) supplemental aid according to section 124.214, 
        subdivision 2; 
           (4) (3) shared time aid according to section 124A.02, 
        subdivision 21; and 
           (5) (4) referendum aid according to section 124A.03. 
           Sec. 48.  Minnesota Statutes 1994, section 124A.24, is 
        amended to read: 
           124A.24 [GENERAL EDUCATION LEVY EQUITY.] 
           If a district's general education levy is determined 
        according to section 124A.23, subdivision 3, an amount must be 
        deducted from state aid authorized in this chapter and chapters 
        124 and 124B, receivable for the same school year, and from 
        other state payments receivable for the same school year 
        authorized in chapter 273.  The aid in section 124.646 must not 
        be reduced. 
           The amount of the deduction equals the difference between: 
           (1) the general education tax rate, according to section 
        124A.23, times the district's adjusted net tax capacity used to 
        determine the general education aid for the same school year; 
        and 
           (2) the district's general education revenue, excluding 
        training and experience transition revenue and supplemental 
        revenue, for the same school year, according to section 124A.22. 
           Sec. 49.  Minnesota Statutes 1994, section 124A.29, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STAFF DEVELOPMENT AND PARENTAL INVOLVEMENT 
        REVENUE.] (a) Of a district's basic revenue under section 
        124A.22, subdivision 2, an amount equal to one percent in fiscal 
        year 1994, two percent in fiscal year 1995, and 2.5 percent in 
        fiscal year 1996 and thereafter times the formula allowance 
        times the number of actual pupil units shall be reserved and may 
        be used only A district is encouraged to reserve general 
        education revenue for in-service education for programs under 
        section 126.77, subdivision 2, or for staff development plans, 
        including plans for challenging instructional activities and 
        experiences under section 126.70, and for curriculum development 
        and programs, other in-service education, teachers' workshops, 
        teacher conferences, the cost of substitute teachers staff 
        development purposes, and other related costs for staff 
        development efforts.  Districts may expend an additional amount 
        of basic revenue for staff development based on their needs.  
        The school board shall initially allocate 50 percent of the 
        revenue to each school site in the district on a per teacher 
        basis, which shall be retained by the school site until used.  
        The board may retain 25 percent to be used for district wide 
        staff development efforts.  The remaining 25 percent of the 
        revenue shall be used to make grants to school sites that 
        demonstrate exemplary use of allocated staff development 
        revenue.  A grant may be used for any purpose authorized under 
        section 126.70 or, 126.77, subdivision 2, or for the costs of 
        curriculum development and programs, other in-service education, 
        teachers' workshops, teacher conferences, substitute teachers 
        for staff development purposes, and other staff development 
        efforts, and determined by the site decision-making team.  The 
        site decision-making team must demonstrate to the school board 
        the extent to which staff at the site have met the outcomes of 
        the program.  The board may withhold a portion of initial 
        allocation of revenue if the staff development outcomes are not 
        being met. 
           (b) Of a district's basic revenue under section 124A.22, 
        subdivision 2, an amount equal to $5 times the number of actual 
        pupil units must be reserved and may be used only to provide 
        parental involvement programs that implement section 126.69.  
        Parental involvement programs may include career teacher 
        programs, programs promoting parental involvement in the PER 
        process, coordination of volunteer services, participation in 
        developing, implementing, or evaluating school 
        desegregation/integration plans, and programs designed to 
        encourage community involvement. 
           Sec. 50.  Minnesota Statutes 1994, section 124C.60, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] Two or more districts that 
        have consolidated under section 122.23 or combined under 
        sections 122.241 to 122.248, are eligible for a capital 
        facilities grant of up to $100,000 $200,000 for fiscal year 1995 
        and $100,000 thereafter under this section.  To qualify the 
        following criteria must be met: 
           (1) the proposed facility changes are part of the plan 
        according to section 122.242, subdivision 10, or the plan 
        adopted by the reorganized district according to section 
        124.243, subdivision 1; 
           (2) the changes proposed to a facility must be needed to 
        accommodate changes in the educational program due to the 
        reorganization; 
           (3) the utilization of the facility for educational 
        programs is at least 85 percent of capacity; and 
           (4) the grant will be used only to remodel or improve 
        existing facilities. 
           Sec. 51.  Minnesota Statutes 1994, section 126.22, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBLE PUPILS.] The following pupils are 
        eligible to participate in the high school graduation incentives 
        program:  
           (a) any pupil who is between the ages of 12 and 21, or who 
        is an elementary pupil, and in either case, who:  
           (1) is at least two grade levels below the performance 
        level for pupils of the same age in a locally determined 
        achievement test; or 
           (2) is at least one year behind in satisfactorily 
        completing coursework or obtaining credits for graduation; or 
           (3) is pregnant or is a parent; or 
           (4) has been assessed as chemically dependent; or 
           (5) has been excluded or expelled according to sections 
        127.26 to 127.39; or 
           (6) has been referred by a school district for enrollment 
        in an eligible program or a program pursuant to section 126.23; 
        or 
           (7) is a victim of physical or sexual abuse; or 
           (8) has experienced mental health problems; or 
           (9) has experienced homelessness sometime within six months 
        before requesting a transfer to an eligible program; or 
           (10) speaks English as a second language or has limited 
        English proficiency; or 
           (b) any person who is at least 21 years of age and who:  
           (1) has received fewer than 14 years of public or nonpublic 
        education, beginning at age 5; 
           (2) has not completed the requirements for a high school 
        diploma; and 
           (3) at the time of application, (i) is eligible for 
        reemployment insurance benefits or has exhausted the benefits, 
        (ii) is eligible for, or is receiving income maintenance and 
        support services, as defined in section 268.0111, subdivision 5, 
        or (iii) is eligible for services under the displaced homemaker 
        program, state wage-subsidy program, or any programs under the 
        federal Jobs Training Partnership Act or its successor. 
           Sec. 52.  Minnesota Statutes 1994, section 275.065, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
        law or charter to the contrary, on or before September 15, each 
        taxing authority, other than a school district, shall adopt a 
        proposed budget and each taxing authority shall certify to the 
        county auditor the proposed or, in the case of a town, the final 
        property tax levy for taxes payable in the following year. 
           (b) On or before September 30, each school district shall 
        certify to the county auditor the proposed property tax levy for 
        taxes payable in the following year.  The school district may 
        certify the proposed levy as: 
           (1) a specific dollar amount; or 
           (2) an amount equal to the maximum levy limitation 
        certified by the commissioner of education to the county auditor 
        according to section 124.918, subdivision 1. 
           (c) If the board of estimate and taxation or any similar 
        board that establishes maximum tax levies for taxing 
        jurisdictions within a first class city certifies the maximum 
        property tax levies for funds under its jurisdiction by charter 
        to the county auditor by September 15, the city shall be deemed 
        to have certified its levies for those taxing jurisdictions. 
           (d) For purposes of this section, "taxing authority" 
        includes all home rule and statutory cities, towns, counties, 
        school districts, and special taxing districts as defined in 
        section 275.066.  Intermediate school districts that levy a tax 
        under chapter 124 or 136D, joint powers boards established under 
        sections 124.491 to 124.495, and common school districts No. 
        323, Franconia, and No. 815, Prinsburg, are also special taxing 
        districts for purposes of this section.  
           Sec. 53.  Minnesota Statutes 1994, section 275.60, is 
        amended to read: 
           275.60 [LEVY OR BOND REFERENDUM; BALLOT NOTICE.] 
           Notwithstanding any general or special law or any charter 
        provisions, but subject to section 124A.03, subdivision 2, any 
        question submitted to the voters by any local governmental 
        subdivision at a general or special election after the day of 
        final enactment, authorizing a property tax levy or tax rate 
        increase, including the issuance of debt obligations payable in 
        whole or in part from property taxes, must include on the ballot 
        the following notice in boldface type.  
           "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING 
           FOR A PROPERTY TAX INCREASE." 
           For purposes of this section and section 275.61, "local 
        governmental subdivision" includes counties, home rule and 
        statutory cities, towns, school districts, and all special 
        taxing districts.  This statement is in addition to any general 
        or special laws or any charter provisions that govern the 
        contents of a ballot question. 
           This section does not apply to a school district bond 
        election if the debt service payments are to be made entirely 
        from transfers of revenue from the capital fund to the debt 
        service fund. 
           Sec. 54.  Minnesota Statutes 1994, section 469.1831, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROGRAM MONEY; DISTRIBUTION AND RESTRICTIONS.] 
        (a) Neighborhood revitalization program money may only be 
        expended in accordance with the program for a purpose listed in 
        subdivision 3 or this subdivision.  Program money may not be 
        used in those project areas of the city where the city 
        determines that private investment will be sufficient to provide 
        for development and redevelopment of the project area without 
        public sector assistance, except in cases where program money is 
        being used to remove or rehabilitate structurally substandard or 
        obsolete buildings.  Revenues derived from tax increments may 
        only be expended for the purposes otherwise permitted by law, 
        except that notwithstanding any law to the contrary, the city 
        must pay at least the following amount of program money, 
        including revenues derived from tax increments:  (1) 15 percent 
        to the school district, (2) 7.5 percent to the county, and (3) 
        7.5 percent for social services.  Payment must be made to the 
        county and school district within 15 days after the city 
        receives the distribution of increment revenues, provided that 
        the payment for calendar year 1990 may be made at any time 
        during the year.  Payment to the county for social services 
        delivery shall be paid only after approval of program and 
        spending plans under paragraph (b).  Payment to the school 
        district for education programs and services shall be paid only 
        after approval of program and spending plans under paragraph (b).
           (b) The money distributed to the county in a calendar year 
        must be deducted from the county's levy limit for the following 
        calendar year.  In calculating the county's levy limit base for 
        later years, the amount deducted must be treated as a local 
        government aid payment. 
           The city must notify the commissioner of education of the 
        amount of the payment made to the school district for the year.  
        The commissioner shall deduct from the school district's state 
        education aid payments one-half of the amount received by the 
        school district. 
           The program money paid to the school district by the city 
        less any amount of state aid deducted by the commissioner must 
        be expended for additional education programs and services in 
        accordance with the program.  The amounts expended by the school 
        district may not replace existing services. 
           The money for social services must be paid to the county 
        for the cost of the provision of social services under the plan, 
        as approved by the policy board and the county board.  
           (c) The city must expend on housing programs and related 
        purposes as provided by the program at least 75 percent of the 
        program money, after deducting the payments to the school 
        district and county. 
           (d) Notwithstanding any other provisions of law to the 
        contrary, for a city of the first class qualifying under section 
        469.1781, paragraph (a), program money and money described in 
        Laws 1990, chapter 604, article 7, section 29, as amended, may 
        be expended anywhere within the city by the authority for a 
        purpose permitted by this section for any political subdivision 
        without compliance with section 469.175, subdivision 4, and such 
        money shall be deemed to be expended for a purpose that is a 
        permitted project under section 469.176 and for a purpose that 
        is permitted under section 469.176 for the district from which 
        the increment was received. 
           Sec. 55.  Laws 1994, chapter 647, article 1, section 36, is 
        amended to read: 
           Sec. 36.  [PEQUOT LAKES; DELAY IN FORGIVENESS OF AID 
        REPAYMENT.] 
           The department of education must allow independent school 
        district No. 186, Pequot Lakes, to repay over a five-year period 
        forgive state aid overpayments of $196,000 for fiscal years 1991 
        and 1992 due to the property tax revenue recognition 
        shift attributable to independent school district No. 186, 
        Pequot Lakes.  Notwithstanding Minnesota Statutes, section 
        124.155, subdivision 1, aids for independent school district No. 
        186, Pequot Lakes, shall not be adjusted for fiscal years 1991 
        and 1992 for pupils transferring into the district under 
        Minnesota Statutes, section 120.062. 
           Sec. 56.  [SUPPLEMENTAL REVENUE REDUCTION.] 
           For fiscal years 1996 and 1997, if a district's ratio of 
        1992 adjusted net tax capacity divided by 1994-1995 actual pupil 
        units to $9,025 is less than or equal to .25, then the 
        difference under Minnesota Statutes, section 124A.22, 
        subdivision 9, clause (2), is equal to $25 for purposes of 
        computing the district's supplemental revenue under Minnesota 
        Statutes, section 124A.22, subdivision 8.  For purposes of 
        computing the referendum allowance reduction under Minnesota 
        Statutes, section 124A.03, subdivision 3b, the supplemental 
        revenue reduction shall be computed according to Minnesota 
        Statutes, section 124A.22, subdivision 9. 
           Sec. 57.  [PERMANENT SCHOOL FUND EARNINGS.] 
           During either fiscal year 1996 or 1997, notwithstanding 
        section 124.09, the state board of investment may invest in 
        equities an amount of principal in excess of the principal 
        necessary to generate $32,500,000 with the goal of improving the 
        long-term income from the permanent school fund. 
           Sec. 58.  [LEVY ADJUSTMENT; LE SUEUR-HENDERSON.] 
           Independent school district No. 2397, Le Sueur-Henderson, 
        must not receive a negative levy adjustment for any referendum 
        levy made by independent school district No. 734, Henderson, 
        that was certified for taxes payable in 1992. 
           Sec. 59.  [NO AID REDUCTION.] 
           The commissioner of education shall not reduce aid to a 
        district under Minnesota Statutes, section 124.14, subdivision 
        3, for the 1992-1993 school year because the district did not 
        provide the number of instructional days provided for in 
        Minnesota Statutes 1992, section 120.101, as long as the 
        district provided at least the minimum instructional hours 
        required by the rules of the state board of education during the 
        1992-1993 school year. 
           Sec. 60.  [EQUALIZING FACTOR.] 
           For fiscal year 1996 only, levies calculated under chapters 
        124 and 124A shall not be recomputed because of an increase in 
        the formula allowance under Minnesota Statutes, section 124A.22, 
        subdivision 2. 
           Sec. 61.  [FORMULA ALLOWANCE.] 
           Notwithstanding the amount of the formula allowance for 
        fiscal year 1997, in Minnesota Statutes, section 124A.22, 
        subdivision 2, the commissioner shall use the amount of the 
        formula allowance minus $300 for fiscal year 1997 in determining 
        the payments under Minnesota Statutes, sections 123.3514, 
        subdivisions 6 and 8; 124A.02, subdivision 21; 126.22; and 
        126.23. 
           Sec. 62.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated.  
           Subd. 2.  [GENERAL AND SUPPLEMENTAL EDUCATION AID.] For 
        general and supplemental education aid:  
             $1,992,244,000     .....     1996
             $2,370,053,000     .....     1997
           The 1996 appropriation includes $301,965,000 for 1995 and 
        $1,690,280,000 for 1996.  
           The 1997 appropriation includes $325,496,000 for 1996 and 
        $2,044,557,000 for 1997.  
           Sec. 63.  [REPEALER.] 
           Subdivision 1.  [JULY 1, 1995.] Minnesota Statutes 1994, 
        sections 124.17, subdivision 1b; 124.962; 124A.04, subdivision 
        1; and 124A.27, subdivision 11, are repealed July 1, 1995. 
           Subd. 2.  [REVENUE FOR FISCAL YEAR 1997.] Minnesota 
        Statutes 1994, sections 121.912, subdivision 8; 124.243; 
        124.244; 124A.26; and 126.019, are repealed effective for 
        revenue for fiscal year 1997. 
           Sec. 64.  [EFFECTIVE DATE.] 
           Sections 14 and 50 are effective the day following final 
        enactment.  Sections 9, 20, 27, 31, 32, 33, 47, and 48 are 
        effective for revenue for fiscal year 1997.  Section 44 is 
        effective for revenue for fiscal year 1999 and thereafter. 
                                   ARTICLE 2 
                                 TRANSPORTATION
           Section 1.  Minnesota Statutes 1994, section 121.912, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LIMITATIONS.] Except as provided in this 
        subdivision, sections 121.9121, 123.36, 124.243, 475.61, and 
        475.65, a school district may not permanently transfer money 
        from (1) an operating fund to a nonoperating fund; (2) a 
        nonoperating fund to another nonoperating fund; or (3) a 
        nonoperating fund to an operating fund.  Permanent transfers may 
        be made from any fund to any other fund to correct for prior 
        fiscal years' errors discovered after the books have been closed 
        for that year.  Permanent transfers may be made from the general 
        fund to any other operating funds according to section 123.7045 
        or if the resources of the other fund are not adequate to 
        finance approved expenditures from that other fund.  Permanent 
        transfers may also be made from the general fund to eliminate 
        deficits in another fund when that other fund is being 
        discontinued.  When a district discontinues operation of a 
        district-owned bus fleet or a substantial portion of a fleet, 
        permanent transfers must be made, on June 30 of the fiscal year 
        that the operation is discontinued, from the fund balance 
        account entitled "pupil transportation fund reserved for bus 
        purchases" to the capital expenditure fund.  The sum of the 
        levies authorized pursuant to sections 124.243, 124.244, and 
        124.83 shall be reduced by an amount equal to the amount 
        transferred.  Any school district may transfer any amount from 
        the undesignated fund balance account in its transportation fund 
        to any other operating fund or to the reserved fund balance 
        account for bus purchases in its transportation fund the balance 
        shall cancel to the district's general fund. 
           Sec. 2.  Minnesota Statutes 1994, section 123.3514, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TRANSPORTATION.] A parent or guardian of a pupil 
        enrolled in a course for secondary credit may apply to the 
        pupil's district of residence for reimbursement for transporting 
        the pupil between the secondary school in which the pupil is 
        enrolled or the pupil's home and the post-secondary institution 
        that the pupil attends.  The commissioner shall establish 
        guidelines for providing state aid to districts to reimburse the 
        parent or guardian for the necessary transportation costs, which 
        shall be based on financial need.  The reimbursement may not 
        exceed the pupil's actual cost of transportation or 15 cents per 
        mile traveled, whichever is less.  Reimbursement may not be paid 
        for more than 250 miles per week.  However, if the nearest 
        post-secondary institution is more than 25 miles from the 
        pupil's resident secondary school, the weekly reimbursement may 
        not exceed the reimbursement rate per mile times the actual 
        distance between the secondary school or the pupil's home and 
        the nearest post-secondary institution times ten.  The state 
        shall pay aid to the district according to the guidelines 
        established under this subdivision.  Chapter 14 does not apply 
        to the guidelines. 
           Sec. 3.  Minnesota Statutes 1994, section 123.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  The board may provide for the 
        transportation of pupils to and from school and for any other 
        purpose for which aid is authorized under section 124.223 or for 
        which levies are authorized under sections 124.226, 124.2716, 
        124.91, 124.912, 124.914, 124.916, 124.918, and 136C.411.  The 
        board may also provide for the transportation of pupils to 
        schools in other districts for grades and departments not 
        maintained in the district, including high school, at the 
        expense of the district, when funds are available therefor and 
        if agreeable to the district to which it is proposed to 
        transport the pupils, for the whole or a part of the school 
        year, as it may deem advisable, and subject to its rules.  In 
        any school district, the board shall arrange for the attendance 
        of all pupils living two miles or more from the school, except 
        pupils whose transportation privileges have been revoked under 
        section 123.805, subdivision 1, clause (6), or 123.7991, 
        paragraph (b), through suitable provision for transportation or 
        through the boarding and rooming of the pupils who may be more 
        economically and conveniently provided for by that means.  The 
        board shall provide transportation to and from the home of a 
        child with a disability not yet enrolled in kindergarten when 
        special instruction and services under sections 120.17 and 
        120.1701 are provided in a location other than in the child's 
        home.  When transportation is provided, scheduling of routes, 
        establishment of the location of bus stops, manner and method of 
        transportation, control and discipline of school children and 
        any other matter relating thereto shall be within the sole 
        discretion, control, and management of the school board.  The 
        district may provide for the transportation of pupils or expend 
        a reasonable amount for room and board of pupils whose 
        attendance at school can more economically and conveniently be 
        provided for by that means or who attend school in a building 
        rented or leased by a district within the confines of an 
        adjacent district. 
           Sec. 4.  Minnesota Statutes 1994, section 123.78, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL PROVISIONS.] A district eligible 
        to receive state aid for transportation under chapter 124 shall 
        provide equal transportation within the district for all school 
        children to any school when transportation is deemed necessary 
        by the school board because of distance or traffic condition in 
        like manner and form as provided in sections 123.39 and 124.223, 
        when applicable. 
           Sec. 5.  Minnesota Statutes 1994, section 123.79, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Such state aids as may become are made 
        available or appropriated shall be governed by section 124.225, 
        be paid to the school district entitled thereto for the equal 
        benefit of all school children, and be disbursed in such manner 
        as determined by the board. 
           Sec. 6.  Minnesota Statutes 1994, section 123.7991, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STUDENT TRAINING.] (a) Each school district 
        shall provide public school pupils enrolled in grades 
        kindergarten through 12 10 with age-appropriate school bus 
        safety training.  The training shall be results-oriented and 
        shall consist of both classroom instruction and practical 
        training using a school bus.  Upon completing the training, a 
        student shall be able to demonstrate knowledge and understanding 
        of at least the following competencies and concepts: 
           (1) transportation by school bus is a privilege and not a 
        right; 
           (2) district policies for student conduct and school bus 
        safety; 
           (3) appropriate conduct while on the school bus; 
           (4) the danger zones surrounding a school bus; 
           (5) procedures for safely boarding and leaving a school 
        bus; 
           (6) procedures for safe vehicle lane street or road 
        crossing; and 
           (7) school bus evacuation and other emergency procedures. 
           (b) Each nonpublic school located within the district shall 
        provide all nonpublic school pupils enrolled in grades 
        kindergarten through 10 who are transported by school bus at 
        public expense and attend school within the district's 
        boundaries with training as required in paragraph (a).  The 
        school district shall make a bus available for the practical 
        training if the district transports the nonpublic students.  
        Each nonpublic school shall provide the instruction. 
           (c) Student school bus safety training shall commence 
        during school bus safety week.  All students enrolled in grades 
        kindergarten through 3 who are transported by school bus and are 
        enrolled during the first or second week of school must 
        demonstrate achievement of the school bus safety training 
        competencies by the end of the third week of school.  All 
        students enrolled in grades 4 through 10 who are transported by 
        school bus and are enrolled during the first or second week of 
        school must demonstrate achievement of the competencies by the 
        end of the sixth week of school.  Students enrolled in grades 
        kindergarten through 10 who enroll in a school after the first 
        second week of school and are transported by school bus shall 
        undergo school bus safety training and demonstrate achievement 
        of the school bus safety competencies within three four weeks of 
        the first day of attendance.  The pupil transportation safety 
        director in each district must certify to the commissioner of 
        education annually by October 15 that all students transported 
        by school bus within the district have satisfactorily 
        demonstrated knowledge and understanding of the school bus 
        safety competencies according to this section or provide an 
        explanation for a student's failure to demonstrate the 
        competencies.  The principal or other chief administrator of 
        each nonpublic school must certify annually to the public 
        transportation safety director of the district in which the 
        school is located that all of the school's students transported 
        by school bus at public expense have received training.  A 
        school district may deny transportation to a student who fails 
        to demonstrate the competencies, unless the student is unable to 
        achieve the competencies due to a disability, or to a student 
        who attends a nonpublic school that fails to provide training as 
        required by this subdivision. 
           (c) (d) A school district and a nonpublic school with 
        students transported by school bus at public expense must, to 
        the extent possible, provide kindergarten pupils with bus safety 
        training before the first day of school. 
           (d) (e) A school district and a nonpublic school with 
        students transported by school bus at public expense must also 
        provide student safety education for bicycling and pedestrian 
        safety. 
           (f) A school district and a nonpublic school with students 
        transported by school bus at public expense must make reasonable 
        accommodations for the school bus, bicycle, and pedestrian 
        safety training of pupils known to speak English as a second 
        language and pupils with disabilities. 
           Sec. 7.  Minnesota Statutes 1994, section 123.7991, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner of 
        education shall develop a comprehensive model school bus safety 
        training program for pupils who ride the bus that includes bus 
        safety curriculum for both classroom and practical instruction, 
        methods for assessing attainment of school bus safety 
        competencies, and age-appropriate instructional materials.  The 
        program must be adaptable for use by students with disabilities. 
           Sec. 8.  Minnesota Statutes 1994, section 123.805, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPREHENSIVE POLICY.] Each school 
        district shall develop and implement a comprehensive, written 
        policy governing pupil transportation safety, including 
        transportation of nonpublic school students, when applicable.  
        The policy shall, at minimum, contain: 
           (1) provisions for appropriate student bus safety training 
        under section 123.7991; 
           (2) rules governing student conduct on school buses and in 
        school bus loading and unloading areas; 
           (3) a statement of parent or guardian responsibilities 
        relating to school bus safety; 
           (4) provisions for notifying students and parents or 
        guardians of their responsibilities and the rules; 
           (5) an intradistrict system for reporting school bus 
        accidents or misconduct, a system for dealing with local law 
        enforcement officials in cases of criminal conduct on a school 
        bus, and a system for reporting accidents, crimes, incidents of 
        misconduct, and bus driver dismissals to the department of 
        public safety under section 169.452; 
           (6) a discipline policy to address violations of school bus 
        safety rules, including procedures for revoking a student's bus 
        riding privileges in cases of serious or repeated misconduct; 
           (7) a system for integrating school bus misconduct records 
        with other discipline records; 
           (8) a statement of bus driver duties; 
           (9) planned expenditures for safety activities under 
        section 123.799 and, where applicable, provisions governing bus 
        monitor qualifications, training, and duties; 
           (10) rules governing the use and maintenance of type III 
        vehicles, drivers of type III vehicles, qualifications to drive 
        a type III vehicle, qualifications for a type III vehicle and 
        the circumstances under which a student may be transported in a 
        type III vehicle; 
           (11) operating rules and procedures; 
           (12) provisions for annual bus driver in-service training 
        and evaluation; 
           (13) emergency procedures; and 
           (14) a system for maintaining and inspecting equipment; 
           (15) requirements of the school district, if any, that 
        exceed state law minimum requirements for school bus operations; 
        and 
           (16) requirements for basic first aid training, which shall 
        include the Heimlich maneuver and procedures for dealing with 
        obstructed airways, shock, bleeding, and seizures. 
           School districts are encouraged to use the model policy 
        developed by the Minnesota school boards association, the 
        department of public safety, and the department of education, as 
        well as the current edition of the "National Standards for 
        School Buses and Operations" published by the National Safety 
        Council, in developing safety policies.  Each district shall 
        submit a copy of its policy under this subdivision to the school 
        bus safety advisory committee no later than August 1, 1994, and 
        review and make appropriate amendments annually by August 
        1.  Each district shall review its policy annually and make 
        appropriate amendments, which must be submitted to the school 
        bus safety advisory committee within one month of approval by 
        the school board. 
           Sec. 9.  Minnesota Statutes 1994, section 123.805, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SCHOOL TRANSPORTATION SAFETY DIRECTOR.] Each 
        school board shall designate a school transportation safety 
        director to oversee and implement pupil transportation safety 
        policies.  The director shall have day-to-day responsibility for 
        pupil transportation safety within the district, including 
        transportation of nonpublic school children when provided by the 
        district. 
           Sec. 10.  Minnesota Statutes 1994, section 124.223, is 
        amended to read: 
           124.223 [TRANSPORTATION AID AUTHORIZATION.] 
           Subdivision 1.  [TO AND FROM SCHOOL; BETWEEN SCHOOLS.] 
        (a) State transportation aid is authorized for School districts 
        may provide transportation or board of resident elementary 
        pupils who reside one mile or more from the public schools which 
        they could attend; transportation or board of resident secondary 
        pupils who reside two miles or more from the public schools 
        which they could attend; transportation to and from schools the 
        resident pupils attend according to a program approved by the 
        commissioner of education, or between the schools the resident 
        pupils attend for instructional classes, or to and from service 
        learning programs; transportation of resident elementary pupils 
        who reside one mile or more from a nonpublic school actually 
        attended; transportation of resident secondary pupils who reside 
        two miles or more from a nonpublic school actually attended; but 
        with respect to transportation of pupils to nonpublic schools 
        actually attended, only to the extent permitted by sections 
        123.76 to 123.79; transportation of resident pupils to and from 
        language immersion programs; 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.  State transportation aid is not authorized for 
        Late transportation home from school for pupils involved in 
        after school activities.  State transportation aid is not 
        authorized for summer program transportation except as provided 
        in subdivision 8. 
           (b) For the purposes of this subdivision, 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. 
           (c) State transportation aid is authorized for School 
        districts may provide transportation to and from school of an 
        elementary pupil who moves during the school year within an area 
        designated by the district as a mobility zone, but only for the 
        remainder of the school year.  The attendance areas of schools 
        in a mobility zone must be contiguous.  To be in a mobility 
        zone, a school must meet both of the following requirements: 
           (1) more than 50 percent of the pupils enrolled in the 
        school are eligible for free or reduced school lunch; and 
           (2) the pupil withdrawal rate for the last year is more 
        than 12 percent. 
           (d) A pupil withdrawal rate is determined by dividing: 
           (1) the sum of the number of pupils who withdraw from the 
        school, during the school year, and the number of pupils 
        enrolled in the school as a result of transportation provided 
        under this paragraph, by 
           (2) the number of pupils enrolled in the school. 
           (e) The district may establish eligibility requirements for 
        individual pupils to receive transportation in the mobility zone.
           Subd. 2.  [OUTSIDE DISTRICT.] State transportation aid is 
        authorized for School districts may provide transportation to 
        and from or board and lodging in another district, of resident 
        pupils of a district without a secondary school.  The pupils may 
        attend a classified secondary school in another district 
        and shall may receive board and lodging in or transportation to 
        and from a district having a classified secondary school at the 
        expense of the district of the pupil's residence. 
           Subd. 3.  [SECONDARY VOCATIONAL CENTERS.] State 
        transportation aid is authorized for School districts may 
        provide transportation to and from a commissioner approved 
        secondary vocational center for secondary vocational classes for 
        resident pupils of any of the districts who are members of or 
        participating in programs at that center. 
           Subd. 4.  [PUPILS WITH DISABILITIES.] State transportation 
        aid is authorized for School districts may provide 
        transportation or board and lodging of a pupil with a disability 
        when that pupil cannot be transported on a regular school bus, 
        the conveying of pupils with a disability between home or a 
        respite care facility and school and within the school plant, 
        necessary transportation of pupils with a disability 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 120.17 and 120.1701 are provided, within or outside the 
        district where services are provided, and necessary 
        transportation for resident pupils with a disability required by 
        sections 120.17, subdivision 4a, and 120.1701.  Transportation 
        of pupils with a disability between home or a respite care 
        facility and school shall not be subject to any distance 
        requirement for children not yet enrolled in kindergarten or to 
        the requirement in subdivision 1 that elementary pupils reside 
        at least one mile from school and secondary pupils reside at 
        least two miles from school in order for the transportation to 
        qualify for aid. 
           Subd. 5.  [BOARD AND LODGING; NONRESIDENTS WITH 
        DISABILITIES.] State transportation aid is authorized for School 
        districts may provide, when necessary, board and lodging for 
        nonresident pupils with a disability in a district maintaining 
        special classes. 
           Subd. 6.  [SHARED TIME.] State transportation aid is 
        authorized for School districts may provide 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 
        120.17, subdivision 9, and 120.1701 for resident pupils with a 
        disability who are provided special instruction and services on 
        a shared time basis. 
           Subd. 7.  [FARIBAULT STATE ACADEMIES.] State transportation 
        aid is authorized for School districts may provide 
        transportation for residents resident pupils with disabilities 
        to and from the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind board and lodging 
        facilities when the pupil is boarded and lodged for educational 
        purposes. 
           Subd. 8.  [SUMMER INSTRUCTIONAL PROGRAMS.] State 
        transportation aid is authorized for School districts may 
        provide services described in subdivisions 1 to 7, 9, and 10 
        when provided for pupils with a disability in conjunction with a 
        summer program that meets the requirements of section 124A.27, 
        subdivision 9.  State transportation aid is authorized 
        for School districts may provide services described in 
        subdivision 1 when provided during the summer in conjunction 
        with a learning year program established under section 121.585. 
           Subd. 9.  [COOPERATIVE ACADEMIC AND VOCATIONAL.] State 
        transportation aid is authorized for School districts may 
        provide transportation to, from or between educational 
        facilities located in any of two or more school districts 
        jointly offering academic classes or secondary vocational 
        classes not provided at a secondary vocational center for 
        resident pupils of any of these districts. 
           Subd. 10.  [NONPUBLIC SUPPORT SERVICES.] State 
        transportation aid is authorized for School districts may 
        provide necessary 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 123.935. 
           Subd. 11.  [RULES.] The state board of education may amend 
        rules relating to transportation aid and data. 
           Sec. 11.  Minnesota Statutes 1994, section 124.225, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given to them. 
           (a) "FTE" means a full-time equivalent pupil whose 
        transportation is authorized for aid purposes by section 124.223.
           (b) "Authorized cost for regular transportation" means the 
        sum of: 
           (1) all expenditures for transportation in the regular 
        category, as defined in paragraph (c), clause (1), for which aid 
        is authorized in section 124.223, plus 
           (2) 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 121.585 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 
           (3) an amount equal to one year's depreciation on district 
        school buses reconditioned by the department of corrections 
        computed on a straight line basis at the rate of 33-1/3 percent 
        per year of the cost to the district of the reconditioning, plus 
           (4) 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 the purposes in sections 124.223 and 124.226, 
        subdivisions 5, 8, and 9, and were purchased after July 1, 1982, 
        for authorized transportation of pupils, with the prior approval 
        of the commissioner, computed on a straight line basis at the 
        rate of 20 percent per year of the cost of the type three school 
        buses.  
           (c) "Transportation category" means a category of 
        transportation service provided to pupils as follows:  
           (1) Regular transportation is transportation services 
        provided during the regular school year under section 124.223, 
        subdivisions 1 and 2, excluding the following transportation 
        services provided under section 124.223, subdivision 1:  
        transportation between schools; transportation to and from 
        service learning programs; noon transportation to and from 
        school for kindergarten pupils attending half-day sessions; 
        transportation of pupils to and from schools located outside 
        their normal attendance areas under the provisions of a plan for 
        desegregation mandated by the state board of education or under 
        court order; and transportation of elementary pupils to and from 
        school within a mobility zone. 
           (2) Nonregular transportation is transportation services 
        provided under section 124.223, subdivision 1, that are excluded 
        from the regular category and transportation services provided 
        under section 124.223, subdivisions 3, 4, 5, 6, 7, 8, 9, and 10. 
           (3) Excess transportation is transportation to and from 
        school during the regular school year for secondary pupils 
        residing at least one mile but less than two miles from the 
        public school they could attend or from the nonpublic school 
        actually attended, and transportation to and from school for 
        pupils residing less than one mile from school who are 
        transported because of extraordinary traffic, drug, or crime 
        hazards. 
           (4) 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 
        state board or under court order.  
           (5) Handicapped transportation is transportation provided 
        under section 124.223, subdivision 4, for pupils with a 
        disability between home or a respite care facility and school or 
        other buildings where special instruction required by sections 
        120.17 and 120.1701 is provided. 
           (d) "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 123.932, 
        subdivision 9. 
           (e) "Current year" means the school year for which aid will 
        be paid.  
           (f) "Base year" means the second school year preceding the 
        school year for which aid will be paid.  
           (g) "Base cost" means the ratio of: 
           (1) the sum of the authorized cost in the base year for 
        regular transportation as defined in paragraph (b) plus the 
        actual cost in the base year for excess transportation as 
        defined in paragraph (c); 
           (2) to the sum of the number of weighted FTE's in the 
        regular and excess categories in the base year. 
           (h) "Pupil weighting factor" for the excess transportation 
        category for a school district means the lesser of one, or the 
        result of the following computation: 
           (1) Divide the square mile area of the school district by 
        the number of FTE's in the regular and excess categories in the 
        base year. 
           (2) Raise the result in clause (1) to the one-fifth power. 
           (3) Divide four-tenths by the result in clause (2). 
           The pupil weighting factor for the regular transportation 
        category is one.  
           (i) "Weighted FTE's"  means the number of FTE's in each 
        transportation category multiplied by the pupil weighting factor 
        for that category. 
           (j) "Sparsity index" for a school district means the 
        greater of .005 or the ratio of the square mile area of the 
        school district to the sum of the number of weighted FTE's by 
        the district in the regular and excess categories in the base 
        year. 
           (k) "Density index" for a school district means the greater 
        of one or the result obtained by subtracting the product of the 
        district's sparsity index times 20 from two. 
           (l) "Contract transportation index" for a school district 
        means the greater of one or the result of the following 
        computation: 
           (1) Multiply the district's sparsity index by 20. 
           (2) Select the lesser of one or the result in clause (1). 
           (3) Multiply the district's percentage of regular FTE's in 
        the current year using vehicles that are not owned by the school 
        district by the result in clause (2). 
           (m) "Adjusted predicted base cost" means the predicted base 
        cost as computed in subdivision 3a as adjusted under subdivision 
        7a. 
           (n) "Regular transportation allowance" means the adjusted 
        predicted base cost, inflated and adjusted under subdivision 7b. 
           Sec. 12.  Minnesota Statutes 1994, section 124.225, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PREDICTED BASE COST.] A district's predicted 
        base cost equals the result of the following computation:  
           (a) Multiply the transportation formula allowance by the 
        district's sparsity index raised to the one-fourth power.  The 
        transportation formula allowance is $447 $477 for the 
        1991-1992 1993-1994 base year and $463 for the 1992-1993 base 
        year.  
           (b) Multiply the result in paragraph (a) by the district's 
        density index raised to the 35/100 1/2 power.  
           (c) Multiply the result in paragraph (b) by the district's 
        contract transportation index raised to the 1/20 power. 
           Sec. 13.  Minnesota Statutes 1994, section 124.225, 
        subdivision 7b, is amended to read: 
           Subd. 7b.  [INFLATION FACTORS.] (a) The adjusted predicted 
        base cost determined for a district under subdivision 7a for the 
        base year must be increased by 2.35 zero percent to determine 
        the district's regular transportation allowance for the 
        1993-1994 1995-1996 school year and by 3.425 percent to 
        determine the district's regular transportation allowance for 
        the 1994-1995 school year, but. 
           (b) Notwithstanding paragraph (a), the regular 
        transportation allowance for a district for the 1995-1996 school 
        year cannot be less than the district's minimum regular 
        transportation allowance according to Minnesota Statutes 1990, 
        section 124.225, subdivision 1, paragraph (t). 
           Sec. 14.  Minnesota Statutes 1994, section 124.225, 
        subdivision 7d, is amended to read: 
           Subd. 7d.  [TRANSPORTATION REVENUE.] Transportation revenue 
        for each district equals the sum of the district's regular 
        transportation revenue and the district's nonregular 
        transportation revenue. 
           (a) The regular transportation revenue for each district 
        equals the district's regular transportation allowance according 
        to subdivision 7b times the sum of the number of FTE's by the 
        district in the regular, desegregation, and handicapped 
        categories in the current school year. 
           (b) For the 1992-1993 and later school years 1995-1996 
        school year, the nonregular transportation revenue for each 
        district equals the lesser of the district's actual cost in the 
        current school year for nonregular transportation services or 
        the product of the district's actual cost in the base year for 
        nonregular transportation services as defined for the current 
        year in subdivision 1, paragraph (c), times the ratio of the 
        district's average daily membership for the current year to the 
        district's average daily membership for the base year according 
        to section 124.17, subdivision 2, times the nonregular 
        transportation inflation factor for the current year, minus the 
        amount of regular transportation revenue attributable to FTE's 
        in the desegregation and handicapped categories in the current 
        school year, plus the excess nonregular transportation revenue 
        for the current year according to subdivision 7e.  The 
        nonregular transportation inflation factor is 1.0435 1.0 for the 
        1993-1994 1995-1996 school year and 1.03425 for the 1994-1995 
        school year.  
           Sec. 15.  Minnesota Statutes 1994, section 124.225, 
        subdivision 7f, is amended to read: 
           Subd. 7f.  [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A 
        district shall reserve an amount equal to the greater of 
        $1,000 $500 or one percent of the sum of the district's regular 
        transportation revenue according to subdivision 7d, paragraph 
        (a), and nonregular transportation revenue according to 
        subdivision 7d, paragraph (b) $1.50 times the number of fund 
        balance pupil units, for that school year to provide student 
        transportation safety programs under section 123.799.  This 
        revenue may only be used if the district complies with the 
        reporting requirements of section 123.7991, 123.805, 169.452, 
        169.4582, or 171.321, subdivision 5. 
           Sec. 16.  Minnesota Statutes 1994, section 124.225, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [TRANSPORTATION AID.] (a) A district's 
        transportation aid equals the product of: 
           (1) the difference between the transportation revenue and 
        the sum of: 
           (i) the maximum basic transportation levy for that school 
        year under section 275.125 124.226, subdivision 5 1, plus 
           (ii) the maximum nonregular transportation levy for that 
        school year under section 124.226, subdivision 4, plus 
           (iii) the contracted services aid reduction under 
        subdivision 8k, 
           (2) times the ratio of the sum of the actual amounts levied 
        under section 124.226, subdivisions 1 and 4, to the sum of the 
        permitted maximum levies under section 124.226, subdivisions 1 
        and 4. 
           (b) If the total appropriation for transportation aid for 
        any fiscal year is insufficient to pay all districts the full 
        amount of aid earned, the department of education shall reduce 
        each district's aid in proportion to the number of resident 
        pupils in average daily membership in the district to the state 
        total average daily membership, and shall reduce the 
        transportation levy of off-formula districts in the same 
        proportion. 
           Sec. 17.  Minnesota Statutes 1994, section 124.225, 
        subdivision 8l, is amended to read: 
           Subd. 8l.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
        that enrolls nonresident pupils in programs under sections 
        120.062, 120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 
        126.22, shall may provide authorized transportation to the pupil 
        within the attendance area for the school that the pupil 
        attends.  The state shall pay transportation aid attributable to 
        the pupil to the nonresident district according to this 
        section.  The resident district need not provide or pay for 
        transportation between the pupil's residence and the district's 
        border.  
           Sec. 18.  Minnesota Statutes 1994, section 124.225, 
        subdivision 8m, is amended to read: 
           Subd. 8m.  [TRANSPORTATION SAFETY AID.] A district's 
        transportation safety aid equals the district's reserved revenue 
        for transportation safety under subdivision 7f for that school 
        year.  Failure of a school district to comply with the reporting 
        requirements of section 123.7991, 123.805, 169.452, 169.4582, or 
        171.321, subdivision 5, may result in a withholding of that 
        district's transportation safety aid for that school year. 
           Sec. 19.  Minnesota Statutes 1994, section 124.225, 
        subdivision 9, is amended to read: 
           Subd. 9.  [DISTRICT REPORTS.] Each district shall report 
        data to the department as required by the department to 
        implement the transportation aid formula account for 
        transportation expenditures.  If a district's final 
        transportation aid payment is adjusted after the final aid 
        payment has been made to all districts, the adjustment shall be 
        made by increasing or decreasing the district's aid for the next 
        fiscal year.  
           Sec. 20.  Minnesota Statutes 1994, section 124.225, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [TARGETED NEEDS TRANSPORTATION REVENUE.] A 
        district's targeted needs transportation revenue for the 
        1996-1997 and later school years equals the sum of the special 
        programs transportation revenue according to subdivision 14, the 
        integration transportation revenue according to subdivision 15, 
        and the nonpublic pupil transportation revenue according to 
        subdivision 16. 
           Sec. 21.  Minnesota Statutes 1994, section 124.225, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [SPECIAL PROGRAMS TRANSPORTATION REVENUE.] A 
        district's special programs transportation revenue for the 
        1996-1997 and later school years equals the sum of: 
           (a) the district's actual cost in the base year for 
        transportation services for children with disabilities under 
        section 124.223, subdivisions 4, 5, 7, and 8, times the ratio of 
        the district's average daily membership for the current school 
        year to the district's average daily membership for the base 
        year; plus 
           (b) 80 percent of the difference between: 
           (1) the district's actual cost in the current year for 
        transportation services for children with disabilities under 
        section 124.223, subdivisions 4, 5, 7, and 8; and 
           (2) the amount computed in paragraph (a). 
           Sec. 22.  Minnesota Statutes 1994, section 124.225, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [INTEGRATION TRANSPORTATION REVENUE.] A 
        district's integration transportation revenue for the 1996-1997 
        and later school years equals the following amounts: 
           (a) for independent school district No. 709, Duluth, $4 
        times the actual pupil units for the school year; 
           (b) for independent school district No. 625, St. Paul, $73 
        times the actual pupil units for the school year; and 
           (c) for special school district No. 1, Minneapolis, $158 
        times the actual pupil units for the school year. 
           Sec. 23.  Minnesota Statutes 1994, section 124.225, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [NONPUBLIC PUPIL TRANSPORTATION REVENUE.] (a) A 
        district's nonpublic pupil transportation revenue for the 
        1996-1997 and later school years for transportation services for 
        nonpublic school pupils according to sections 123.39, 123.76 to 
        123.78, 124.223, and 124.226, equals the sum of the amounts 
        computed in paragraphs (b) and (c).  This revenue does not limit 
        the obligation to transport pupils under sections 123.76 to 
        123.79. 
           (b) For regular and excess transportation according to 
        section 124.225, subdivision 1, paragraph (c), clauses (1) and 
        (3), an amount equal to the product of: 
           (1) the district's actual expenditure per pupil transported 
        in the regular and excess transportation categories during the 
        second preceding school year; times 
           (2) the number of nonpublic school pupils residing in the 
        district who receive regular or excess transportation service or 
        reimbursement for the current school year; times 
           (3) the ratio of the formula allowance pursuant to section 
        124A.22, subdivision 2, for the current school year to the 
        formula allowance pursuant to section 124A.22, subdivision 2, 
        for the second preceding school year. 
           (c) For nonregular transportation according to section 
        124.225, subdivision 1, paragraph (c), clause (2), and late 
        activity transportation according to section 124.226, 
        subdivision 9, an amount equal to the product of: 
           (1) the district's actual expenditure for nonregular and 
        late activity transportation for nonpublic school pupils during 
        the second preceding school year; times 
           (2) the ratio of the formula allowance pursuant to section 
        124A.22, subdivision 2, for the current school year to the 
        formula allowance pursuant to section 124A.22, subdivision 2, 
        for the second preceding school year. 
           Sec. 24.  Minnesota Statutes 1994, section 124.225, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [TARGETED NEEDS TRANSPORTATION AID.] (a) A 
        district's targeted needs transportation aid is the difference 
        between its targeted needs transportation revenue under 
        subdivision 13 and its targeted needs transportation revenue 
        under section 124.226, subdivision 10. 
           (b) If a district does not levy the entire amount 
        permitted, aid must be reduced in proportion to the actual 
        amount levied. 
           Sec. 25.  Minnesota Statutes 1994, section 124.226, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OFF-FORMULA ADJUSTMENT.] In a district if the 
        basic transportation levy under subdivision 1 attributable to 
        that fiscal year is more than the difference between (1) the 
        district's transportation revenue under section 124.225, 
        subdivision 7d, and (2) the sum of the district's maximum 
        nonregular levy under subdivision 4 and the district's 
        contracted services aid reduction under section 124.225, 
        subdivision 8k, and the amount of any reduction due to 
        insufficient appropriation under section 124.225, subdivision 
        8a, the district's transportation levy in the second year 
        following each fiscal year must be reduced by the difference 
        between the amount of the excess and the amount of the aid 
        reduction for the same fiscal year according to subdivision 3a. 
           Sec. 26.  Minnesota Statutes 1994, section 124.226, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NONREGULAR TRANSPORTATION.] A school district 
        may also make a levy for unreimbursed nonregular transportation 
        costs pursuant to this subdivision.  
           (a) For the 1995-1996 school year, the amount of the levy 
        shall be the result of the following computation: 
           (a) (1) multiply 
           (1) (i) the amount of the district's nonregular 
        transportation revenue under section 124.225, subdivision 7d, 
        that is more than the product of $60 $65 times the district's 
        average daily membership, by 
           (2) (ii) 50 percent; 
           (b) (2) subtract the result in clause (a) (1) from the 
        district's total nonregular transportation revenue; 
           (c) (3) multiply the result in clause (b) (2) by the lesser 
        of one or the ratio of 
           (i) the quotient derived by dividing the adjusted net tax 
        capacity of the district for the year before the year the levy 
        is certified by the average daily membership in the district for 
        the school year to which the levy is attributable, to 
           (ii) $8,000. 
           Sec. 27.  Minnesota Statutes 1994, section 124.226, 
        subdivision 9, is amended to read: 
           Subd. 9.  [LATE ACTIVITY BUSES.] (a) For taxes payable in 
        1996, a school district may levy an amount equal to the lesser 
        of: 
           (1) the actual cost of late transportation home from 
        school, between schools within a district, or between schools in 
        one or more districts that have an agreement under sections 
        122.241 to 122.248, 122.535, 122.541, or 124.494, for pupils 
        involved in after school activities for the school year 
        beginning in the year the levy is certified; or 
           (2) two percent of the sum of the district's regular 
        transportation revenue and the district's nonregular 
        transportation revenue for that school year according to section 
        124.225, subdivision 7d. 
           (b) A district that levies under this section must provide 
        late transportation from school for students participating in 
        any academic-related activities provided by the district if 
        transportation is provided for students participating in 
        athletic activities. 
           (c) Notwithstanding section 121.904, 50 percent of the levy 
        certified for taxes payable in 1994, and for each year 
        thereafter the entire amount of this levy, shall be recognized 
        as revenue for the fiscal year in which the levy is certified. 
           Sec. 28.  Minnesota Statutes 1994, section 124.226, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [TARGETED NEEDS TRANSPORTATION LEVY.] A school 
        district may make a levy for targeted needs transportation costs 
        according to this subdivision.  The amount of the levy shall be 
        the result of the following computation: 
           (1) For fiscal year 1997 and later, targeted needs 
        transportation levy equalization revenue equals 28 percent of 
        the sum of the district's special programs transportation 
        revenue under section 124.225, subdivision 14, and the 
        district's integration transportation revenue under section 
        124.225, subdivision 15. 
           (2) The targeted needs transportation levy equals the 
        result in clause (1) times the lesser of one or the ratio of (i) 
        the quotient derived by dividing the adjusted net tax capacity 
        of the district for the year before the year the levy is 
        certified by the actual pupil units in the district for the 
        school year to which the levy is attributable, to (ii) $3,540. 
           Sec. 29.  Minnesota Statutes 1994, section 126.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPOINTMENT OF MEMBERS.] Unless the parents or 
        guardian of a pupil object in writing to the school authorities 
        to the appointment of the pupil on a school safety patrol, it is 
        lawful for any pupil over nine years of age to be appointed and 
        designated as a member thereof, provided that in any school in 
        which there are no pupils who have attained such age any pupil 
        in the highest grade therein may be so appointed and 
        designated.  School authorities may also appoint and designate 
        nonpupil adults as members of a school safety patrol on a 
        voluntary or for-hire basis. 
           Sec. 30.  Minnesota Statutes 1994, section 169.01, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SCHOOL BUS.] "School bus" means a motor vehicle 
        used to transport pupils to or from a school defined in section 
        120.101, or to or from school-related activities, by the school 
        or a school district, or by someone under an agreement with the 
        school or a school district.  A school bus does not include a 
        motor vehicle transporting children to or from school for which 
        parents or guardians receive direct compensation from a school 
        district, a motor coach operating under charter carrier 
        authority, or a transit bus providing services as defined in 
        section 174.22, subdivision 7, or a vehicle otherwise qualifying 
        as a type III vehicle under paragraph (5), when the vehicle is 
        properly registered and insured and being driven by an employee 
        or agent of a school district for nonscheduled transportation.  
        A school bus may be type A, type B, type C, or type D, or type 
        III as follows:  
           (1) A "type A school bus" is a conversion or body 
        constructed upon a van-type compact truck or a front-section 
        vehicle, with a gross vehicle weight rating of 10,000 pounds or 
        less, designed for carrying more than ten persons. 
           (2) A "type B school bus" is a conversion or body 
        constructed and installed upon a van or front-section vehicle 
        chassis, or stripped chassis, with a gross vehicle weight rating 
        of more than 10,000 pounds, designed for carrying more than ten 
        persons.  Part of the engine is beneath or behind the windshield 
        and beside the driver's seat.  The entrance door is behind the 
        front wheels. 
           (3) A "type C school bus" is a body installed upon a flat 
        back cowl chassis with a gross vehicle weight rating of more 
        than 10,000 pounds, designated for carrying more than ten 
        persons.  All of the engine is in front of the windshield and 
        the entrance door is behind the front wheels. 
           (4) A "type D school bus" is a body installed upon a 
        chassis, with the engine mounted in the front, midship or rear, 
        with a gross vehicle weight rating of more than 10,000 pounds, 
        designed for carrying more than ten persons.  The engine may be 
        behind the windshield and beside the driver's seat; it may be at 
        the rear of the bus, behind the rear wheels, or midship between 
        the front and rear axles.  The entrance door is ahead of the 
        front wheels. 
           (5) Type III school buses and type III Head Start buses are 
        restricted to passenger cars, station wagons, vans, and buses 
        having a maximum manufacturer's rated seating capacity of ten 
        people, including the driver, and a gross vehicle weight rating 
        of 10,000 pounds or less.  In this subdivision, "gross vehicle 
        weight rating" means the value specified by the manufacturer as 
        the loaded weight of a single vehicle.  A "type III school bus" 
        and "type III Head Start bus" must not be outwardly equipped and 
        identified as a type A, B, C, or D school bus or type A, B, C, 
        or D Head Start bus. 
           Sec. 31.  Minnesota Statutes 1994, section 169.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RIGHTS IN ABSENCE OF SIGNALS.] (a) Where 
        traffic-control signals are not in place or in operation the 
        driver of a vehicle shall yield the right-of-way, slowing down 
        or stopping if need be to so yield, to a pedestrian crossing the 
        roadway within a crosswalk but no pedestrian shall suddenly 
        leave a curb or other place of safety and walk or run into the 
        path of a vehicle which is so close that it is impossible for 
        the driver to yield.  This provision shall not apply under the 
        conditions as otherwise provided in this subdivision. 
           (b) When any vehicle is stopped at a marked crosswalk or at 
        any unmarked crosswalk at an intersection to permit a pedestrian 
        to cross the roadway, the driver of any other vehicle 
        approaching from the rear shall not overtake and pass the 
        stopped vehicle. 
           (c) It is unlawful for any person to drive a motor vehicle 
        through a column of school children crossing a street or highway 
        or past a member of a school safety patrol or adult crossing 
        guard, while the member of the school safety patrol or adult 
        crossing guard is directing the movement of children across a 
        street or highway and while the school safety patrol member or 
        adult crossing guard is holding an official signal in the stop 
        position.  A person who violates this paragraph is guilty of a 
        misdemeanor.  A person who violates this paragraph a second or 
        subsequent time within one year of a previous conviction under 
        this paragraph is guilty of a gross misdemeanor. 
           Sec. 32.  Minnesota Statutes 1994, section 169.444, 
        subdivision 2, is amended to read: 
           Subd. 2.  [VIOLATIONS BY DRIVERS; PENALTIES.] (a) A person 
        who fails to stop a vehicle or to keep it stopped, as required 
        in subdivision 1, is guilty of a misdemeanor punishable by a 
        fine of not less than $300. 
           (b) A person is guilty of a gross misdemeanor if the person 
        fails to stop a motor vehicle or to keep it stopped, as required 
        in subdivision 1, and commits either or both of the following 
        acts: 
           (1) passes or attempts to pass the school bus in a motor 
        vehicle on the right-hand, passenger-door side of the bus; or 
           (2) passes or attempts to pass the school bus in a motor 
        vehicle when a school child is outside of and on the street or 
        highway used by the school bus or on the adjacent sidewalk. 
           Sec. 33.  Minnesota Statutes 1994, section 169.4502, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COLOR.] Fenders may be painted black.  The hood 
        may be painted nonreflective black or nonreflective yellow.  The 
        grill may be manufacturer's standard color or chrome. 
           Sec. 34.  Minnesota Statutes 1994, section 169.4503, is 
        amended by adding a subdivision to read: 
           Subd. 10a.  [EMERGENCY EQUIPMENT; FIRST AID KITS.] A first 
        aid kit, and a body fluids cleanup kit is required regardless of 
        the age of the vehicle.  They must be contained in removable, 
        moisture- and dust-proof containers mounted in an accessible 
        place within the driver's compartment of the school bus and must 
        be marked to indicate their identity and location. 
           Sec. 35.  Minnesota Statutes 1994, section 169.451, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [RANDOM SPOT INSPECTIONS.] In addition to the 
        annual inspection, the Minnesota state patrol has authority to 
        conduct random, unannounced spot inspections of any school bus 
        or Head Start bus being operated within the state at the 
        location where the bus is kept when not in operation to 
        ascertain whether its construction, design, equipment, and color 
        comply with all provisions of law, including the Minnesota 
        school bus equipment standards in sections 169.4501 to 169.4504. 
           Sec. 36.  [169.4511] [SCHOOL BUS ACCIDENTS; REINSPECTION.] 
           Subdivision 1.  [POSTCRASH INSPECTION.] A peace officer 
        responding to an accident involving a school bus or Head Start 
        bus must immediately notify the state patrol if the accident 
        results in death or serious personal injury on the school bus, 
        or property damage to the school bus of an apparent extent of 
        more than $4,400.  No person shall drive or knowingly permit or 
        cause to be driven, for the purpose of transporting students, 
        any school bus or Head Start bus after such an accident unless 
        the vehicle: 
           (1) has been inspected by the Minnesota state patrol and 
        the state patrol has determined that the vehicle may safely be 
        operated; or 
           (2) a waiver has been granted under subdivision 2. 
           A violation of this section is a misdemeanor. 
           Subd. 2.  [WAIVER.] A state trooper or designee of the 
        Minnesota state patrol called to the scene of an accident by a 
        responding peace officer under subdivision 1 may waive the 
        inspection requirement of subdivision 1 if the trooper or state 
        patrol designee determines that a postcrash inspection is not 
        needed or cannot be accomplished without unreasonable delay.  
        The trooper or state patrol designee granting a waiver must 
        provide to the driver of the school bus for which the waiver is 
        granted a written statement that the inspection has been 
        waived.  The written statement must include the incident report 
        number assigned to the accident by the state patrol. 
           Sec. 37.  Minnesota Statutes 1994, section 169.452, is 
        amended to read: 
           169.452 [ACCIDENT AND SERIOUS INCIDENT REPORTING.] 
           The department of public safety shall develop uniform 
        definitions of a school bus accident, an incident of serious 
        misconduct, and an incident that results in personal injury or 
        death.  The department shall determine what type of information 
        on school bus accidents and incidents, including criminal 
        conduct, and bus driver dismissals for cause should be collected 
        and develop a uniform accident and incident reporting form to 
        collect those data, including data relating to type III 
        vehicles, statewide.  In addition to the form, the department 
        shall have an alternative method of reporting that allows school 
        districts to use computer technology to provide the required 
        information.  School districts shall report the information 
        required by the department using either format.  A school 
        district must not be charged for reporting forms or reporting 
        procedures under this section.  Data collected with this 
        reporting form under this section shall be analyzed to help 
        develop accident, crime, and misconduct prevention 
        programs.  This section is not subject to chapter 14. 
           Sec. 38.  Minnesota Statutes 1994, section 169.454, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FIRST AID KIT.] A minimum of a ten-unit first 
        aid kit, and a body fluids cleanup kit is required.  The bus 
        They must have a be contained in removable, moisture- and 
        dust-proof first aid kit containers mounted in an accessible 
        place within the driver's compartment and must be marked to 
        indicate its their identity and location. 
           Sec. 39.  Minnesota Statutes 1994, section 169.454, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [EXEMPTION.] When a vehicle otherwise qualifying 
        as a type III vehicle under section 169.01, subdivision 6, 
        paragraph (5), whether owned and operated by a school district 
        or privately owned and operated, is used to transport school 
        children in a nonscheduled situation, it shall be exempt from 
        the vehicle requirements of this section and the licensing 
        requirements of section 171.321, if the vehicle is properly 
        registered and insured and operated by an employee or agent of a 
        school district with a valid driver's license. 
           Sec. 40.  Minnesota Statutes 1994, section 171.01, 
        subdivision 21, is amended to read: 
           Subd. 21.  [SCHOOL BUS.] "School bus" means a motor vehicle 
        used to transport pupils to or from a school defined in section 
        120.101, or to or from school-related activities, by the school 
        or a school district or by someone under an agreement with the 
        school or a school district.  A school bus does not include a 
        motor vehicle transporting children to or from school for which 
        parents or guardians receive direct compensation from a school 
        district, a motor coach operating under charter carrier 
        authority, or a transit bus providing services as defined in 
        section 174.22, subdivision 7, or a vehicle otherwise qualifying 
        as a type III vehicle under section 169.01, subdivision 6, 
        paragraph (5), when the vehicle is properly registered and 
        insured and being driven by an employee or agent of a school 
        district for nonscheduled transportation. 
           Sec. 41.  Minnesota Statutes 1994, section 171.18, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OFFENSES.] The commissioner may suspend 
        the license of a driver without preliminary hearing upon a 
        showing by department records or other sufficient evidence that 
        the licensee: 
           (1) has committed an offense for which mandatory revocation 
        of license is required upon conviction; 
           (2) has been convicted by a court for violating a provision 
        of chapter 169 or an ordinance regulating traffic and department 
        records show that the violation contributed in causing an 
        accident resulting in the death or personal injury of another, 
        or serious property damage; 
           (3) is an habitually reckless or negligent driver of a 
        motor vehicle; 
           (4) is an habitual violator of the traffic laws; 
           (5) is incompetent to drive a motor vehicle as determined 
        in a judicial proceeding; 
           (6) has permitted an unlawful or fraudulent use of the 
        license; 
           (7) has committed an offense in another state that, if 
        committed in this state, would be grounds for suspension; 
           (8) has committed a violation of section 169.444, 
        subdivision 2, paragraph (a), within five years of a prior 
        conviction under that section; 
           (9) has committed a violation of section 171.22, except 
        that the commissioner may not suspend a person's driver's 
        license based solely on the fact that the person possessed a 
        fictitious or fraudulently altered Minnesota identification 
        card; 
           (10) has failed to appear in court as provided in section 
        169.92, subdivision 4; or 
           (11) has failed to report a medical condition that, if 
        reported, would have resulted in cancellation of driving 
        privileges. 
           However, an action taken by the commissioner under clause 
        (2) or (5) must conform to the recommendation of the court when 
        made in connection with the prosecution of the licensee. 
           Sec. 42.  Minnesota Statutes 1994, section 171.321, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STUDY OF APPLICANT.] (a) Before issuing or 
        renewing a school bus endorsement, the commissioner shall 
        conduct a criminal and driver's license records check of the 
        applicant.  The commissioner may also conduct the check at any 
        time while a person is so licensed.  The check shall consist of 
        a criminal records check of the state criminal records 
        repository and a check of the driver's license records system.  
        If the applicant has resided in Minnesota for less than five 
        years, the check shall also include a criminal records check of 
        information from the state law enforcement agencies in the 
        states where the person resided during the five years before 
        moving to Minnesota, and of the national criminal records 
        repository including the criminal justice data communications 
        network.  The applicant's failure to cooperate with the 
        commissioner in conducting the records check is reasonable cause 
        to deny an application or cancel a school bus endorsement.  The 
        commissioner may not release the results of the records check to 
        any person except the applicant. 
           (b) The commissioner may issue to an otherwise qualified 
        applicant a temporary school bus endorsement, effective for no 
        more than 120 days, upon presentation of (1) an affidavit by the 
        applicant that the applicant has not been convicted of a 
        disqualifying offense and (2) a criminal history check from each 
        state of residence for the previous five years.  The criminal 
        history check may be conducted and prepared by any public or 
        private source acceptable to the commissioner. 
           Sec. 43.  Minnesota Statutes 1994, section 171.321, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TRAINING.] No person shall drive a class A, B, 
        C, or D school bus when transporting school children to or from 
        school or upon a school-related trip or activity without having 
        demonstrated sufficient skills and knowledge to transport 
        students in a safe and legal manner.  A bus driver must have 
        training or experience that allows the driver to meet at least 
        the following competencies: 
           (1) safely operate the type of school bus the driver will 
        be driving; 
           (2) understand student behavior, including issues relating 
        to students with disabilities; 
           (3) ensure encourage orderly conduct of students on the bus 
        and handle incidents of misconduct appropriately; 
           (4) know and understand relevant laws, rules of the road, 
        and local school bus safety policies; 
           (5) handle emergency situations; and 
           (6) safely load and unload students; and 
           (7)  demonstrate proficiency in first aid and 
        cardiopulmonary resuscitation procedures. 
           The commissioner of public safety, in conjunction with the 
        commissioner of education, shall develop a comprehensive model 
        school bus driver training program and model assessments for 
        school bus driver training competencies, which are not subject 
        to chapter 14.  A school district may use alternative 
        assessments for bus driver training competencies with the 
        approval of the commissioner of public safety. 
           Sec. 44.  Minnesota Statutes 1994, section 171.321, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ANNUAL EVALUATION.] A school district district's 
        pupil transportation safety director, the chief administrator of 
        a nonpublic school, or a private contractor shall evaluate each 
        bus driver certify annually to assure the commissioner of public 
        safety that, at minimum, each school bus driver continues to 
        meet meets the school bus driver training competencies under 
        subdivision 4 and shall report the number of hours of in-service 
        training completed by each driver.  A school district, nonpublic 
        school, or private contractor also shall provide at least eight 
        hours of in-service training annually to each school bus 
        driver.  As part of the annual evaluation, A district, nonpublic 
        school, or private contractor also shall check the license of 
        each person who transports students for the district with the 
        National Drivers Register or the department of public 
        safety annually.  A school district, nonpublic school, or 
        private contractor shall certify annually to the commissioner of 
        public safety that each driver has received eight hours of 
        in-service training and has met the training competencies The 
        school board must approve and forward the competency 
        certification and in-service report to the commissioner of 
        public safety. 
           Sec. 45.  Minnesota Statutes 1994, section 171.3215, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
        the following terms have the meanings given them. 
           (b) "School bus driver" means a person possessing a school 
        bus driver's endorsement on a valid Minnesota driver's license 
        or a person possessing a valid Minnesota driver's license who 
        drives a vehicle with a seating capacity of ten or less persons 
        used as a school bus. 
           (c) "Disqualifying offense" includes any felony offense, 
        any misdemeanor, gross misdemeanor, or felony violation of 
        chapter 152, or any violation under section 609.3451, 609.746, 
        subdivision 1, or 617.23, or while driving, operating, or being 
        in physical control of a school bus or a Head Start bus, a 
        fourth moving violation within a three-year period violation of 
        section 169.121, 169.129, or a similar statute or ordinance from 
        another state. 
           (d) "Head Start bus driver" means a person possessing a 
        valid Minnesota driver's license: 
           (1) with a passenger endorsement, who drives a Head Start 
        bus; 
           (2) with a school bus driver's endorsement, who drives a 
        Head Start bus; or 
           (3) who drives a vehicle with a seating capacity of ten or 
        fewer persons used as a Head Start bus. 
           Sec. 46.  Minnesota Statutes 1994, section 171.3215, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CANCELLATION FOR DISQUALIFYING OFFENSE AND OTHER 
        OFFENSES.] Within ten days of receiving notice under section 
        631.40, subdivision 1a, or otherwise receiving notice for a 
        nonresident driver, that a school bus driver has been convicted 
        of a disqualifying offense, the commissioner shall permanently 
        cancel the school bus driver's endorsement on the offender's 
        driver's license and in the case of a nonresident, the driver's 
        privilege to operate a school bus in Minnesota.  A school bus 
        driver whose endorsement or privilege to operate a school bus in 
        Minnesota has been permanently canceled may not apply for 
        reinstatement.  Within ten days of receiving notice under 
        section 631.40, subdivision 1a, or otherwise receiving notice 
        for a nonresident driver, that a school bus driver has been 
        convicted of a gross misdemeanor, or a violation of section 
        169.121 or, 169.129, or a similar statute or ordinance from 
        another state, and within ten days of revoking a school bus 
        driver's license under section 169.123, the commissioner shall 
        cancel the school bus driver's endorsement on the offender's 
        driver's license or the nonresident's privilege to operate a 
        school bus in Minnesota for five years.  After five years, a 
        school bus driver may apply to the commissioner for 
        reinstatement.  Even after five years, cancellation of a school 
        bus driver's endorsement or a nonresident's privilege to operate 
        a school bus in Minnesota for a conviction violation under 
        section 169.121, 169.123, or 169.129, or a similar statute or 
        ordinance from another state, shall remain in effect until the 
        driver provides proof of successful completion of an alcohol or 
        controlled substance treatment program.  For a first offense, 
        proof of completion is required only if treatment was ordered as 
        part of a chemical use assessment.  Within ten days of receiving 
        notice under section 631.40, subdivision 1a, or otherwise 
        receiving notice for a nonresident driver, that a school bus 
        driver has been convicted of a fourth moving violation in the 
        last three years, the commissioner shall cancel the school bus 
        driver's endorsement on the offender's driver's license or the 
        nonresident's privilege to operate a school bus in Minnesota 
        until one year has elapsed since the last conviction.  A school 
        bus driver who has no new convictions after one year may apply 
        for reinstatement.  Upon canceling the offender's school bus 
        driver's endorsement, the commissioner shall immediately notify 
        the licensed offender of the cancellation in writing, by 
        depositing in the United States post office a notice addressed 
        to the licensed offender at the licensed offender's last known 
        address, with postage prepaid thereon. 
           Sec. 47.  Minnesota Statutes 1994, section 171.3215, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BACKGROUND CHECK.] Before issuing or renewing a 
        driver's license with a school bus driver's endorsement, the 
        commissioner shall conduct an investigation to determine if the 
        applicant has been convicted of committing a disqualifying 
        offense, four moving violations in the previous three years, a 
        violation of section 169.121 or, 169.129, or a similar statute 
        or ordinance from another state, a gross misdemeanor, or if the 
        applicant's driver's license has been revoked under section 
        169.123.  The commissioner shall not issue a new bus driver's 
        endorsement and shall not renew an existing bus driver's 
        endorsement if the applicant has been convicted of committing a 
        disqualifying offense.  The commissioner shall not issue a new 
        bus driver's endorsement and shall not renew an existing bus 
        driver's endorsement if, within the previous five years, the 
        applicant has been convicted of committing a violation of 
        section 169.121 or, 169.129, or a similar statute or ordinance 
        from another state, a gross misdemeanor, or if the applicant's 
        driver's license has been revoked under section 169.123, or if, 
        within the previous three years, the applicant has been 
        convicted of four moving violations.  An applicant who has been 
        convicted of violating section 169.121 or, 169.129, or a similar 
        statute or ordinance from another state, or who has had a 
        license revocation under section 169.123 within the previous ten 
        years must show proof of successful completion of an alcohol or 
        controlled substance treatment program in order to receive a bus 
        driver's endorsement.  For a first offense, proof of completion 
        is required only if treatment was ordered as part of a chemical 
        use assessment.  A school district or contractor that employs a 
        nonresident school bus driver must conduct a background check of 
        the employee's driving record and criminal history in both 
        Minnesota and the driver's state of residence.  Convictions for 
        disqualifying offenses, gross misdemeanors, a fourth moving 
        violation within the previous three years, or violations of 
        section 169.121, 169.129, or a similar statute or ordinance in 
        another state, must be reported to the department of public 
        safety. 
           Sec. 48.  [604A.015] [SCHOOL BUS DRIVER IMMUNITY FROM 
        LIABILITY.] 
           A school bus driver who, while on duty, provides emergency 
        care, advice, or assistance at the scene of an emergency or 
        during transit to a location where professional medical care can 
        be rendered, is not liable in ordinary negligence, for any civil 
        damages as a result of acts or omissions to the person to whom 
        assistance is rendered by the school bus driver in rendering the 
        emergency care, advice, or assistance.  For the purposes of this 
        section, the scene of an emergency is an area outside the 
        confines of a hospital or other institution that has hospital 
        facilities, or an office of a person licensed to practice one or 
        more of the healing arts under chapter 147, 148, 150A, or 153. 
           Sec. 49.  Minnesota Statutes 1994, section 631.40, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CERTIFIED COPY OF DISQUALIFYING OFFENSE 
        CONVICTIONS SENT TO PUBLIC SAFETY AND SCHOOL DISTRICTS.] When a 
        person is convicted of committing a disqualifying offense, as 
        defined in section 171.3215, subdivision 1, a gross misdemeanor, 
        a fourth moving violation within a three-year period, or a 
        violation of section 169.121 or 169.129, the court shall 
        determine whether the offender is a school bus driver as defined 
        in section 171.3215, subdivision 1, whether the offender 
        possesses a school bus driver's endorsement on the offender's 
        driver's license and in what school districts the offender 
        drives a school bus.  If the offender is a school bus driver or 
        possesses a school bus driver's endorsement, the court 
        administrator shall send a certified copy of the conviction to 
        the department of public safety and to the school districts in 
        which the offender drives a school bus within ten days after the 
        conviction. 
           Sec. 50.  [INTERDISTRICT DESEGREGATION TRANSPORTATION 
        GRANTS.] 
           A district that provides transportation of pupils between 
        resident and nonresident districts for desegregation purposes 
        may apply to the commissioner of education for a grant to cover 
        the additional costs of transportation.  The commissioner must 
        develop the form and manner of applications, the criteria to be 
        used to determine when transportation is for desegregation 
        purposes, and the accounting procedure to be used to determine 
        excess costs.  In determining the grant amount, the commissioner 
        must consider other revenue received by the district for 
        transportation for desegregation purposes. 
           Sec. 51.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [TRANSPORTATION AID.] For transportation aid 
        according to Minnesota Statutes, section 124.225: 
             $145,715,000     .....     1996
             $ 22,001,000     .....     1997
           The 1996 appropriation includes $21,038,000 for 1995 and 
        $124,677,000 for 1996.  
           The 1997 appropriation includes $22,001,000 for 1996 and 
        $-0- for 1997.  
           Subd. 3.  [TRANSPORTATION SAFETY.] For student 
        transportation safety aid according to Minnesota Statutes, 
        section 124.225, subdivision 8m: 
             $1,445,000     .....     1996 
             $1,290,000     .....     1997
           The 1996 appropriation includes $368,000 for 1995 and 
        $1,077,000 for 1996.  
           The 1997 appropriation includes $190,000 for 1996 and 
        $1,110,000 for 1997. 
           Subd. 4.  [TRANSPORTATION AID FOR ENROLLMENT OPTIONS.] For 
        transportation of pupils attending post-secondary institutions 
        according to Minnesota Statutes, section 123.3514, or for 
        transportation of pupils attending nonresident districts 
        according to Minnesota Statutes, section 120.062: 
             $ 92,000     .....     1996
             $102,000     .....     1997
           Any balance remaining in the first year does not cancel but 
        is available in the second year. 
           Subd. 5.  [RURAL COMPUTERIZED TRANSPORTATION ROUTING PILOT 
        PROJECT.] For a grant to independent school district No. 2148, 
        Blue Earth Area, for equipment and software to develop a 
        computerized school bus routing and mapping system: 
              $25,000      .....      1996 
           The grantee district shall cooperate with at least two 
        other school districts in developing and implementing the system.
           Subd. 6.  [WIDE AREA TRANSPORTATION SERVICE PILOT PROJECT.] 
        For a wide area transportation service pilot project: 
              $250,000      .....      1996 
           The purpose of the project is to pilot the use of 
        computerized mapping and scheduling programs for school 
        districts to jointly provide transportation services for 
        low-incidence programs in the metropolitan area.  These services 
        include, but are not limited to, transportation for special 
        education, nonpublic pupils, results-oriented chartered schools, 
        enrollment options programs, area learning center programs and 
        desegregation programs.  The department shall work with 
        representatives of the affected programs, transportation 
        managers from both metropolitan and rural districts, and the 
        metropolitan council.  The department shall contract for 
        services as appropriate.  The project may consider the 
        relationship of education transportation with transportation 
        services provided by noneducation agencies.  This appropriation 
        is available until June 30, 1997. 
           Subd. 7.  [INTERDISTRICT DESEGREGATION TRANSPORTATION 
        GRANT.] For grants according to section 50: 
             $300,000       .....     1996
             $630,000       .....     1997
           Subd. 8.  [TARGETED NEEDS TRANSPORTATION AID.] For aid 
        payments for targeted needs transportation aid according to 
        section 24: 
             $60,760,000    .....     1997
           This appropriation is based on an entitlement of 
        $71,482,000. 
           Sec. 52.  [TRANSPORTATION AIDS AND LEVIES; SUSPENSION.] 
           Minnesota Statutes 1994, sections 124.225, subdivisions 1, 
        3a, 7a, 7b, 7d, 7e, 8a, 8k, 8m, and 10; and 124.226, 
        subdivisions 1, 2, 3a, 4, 5, 6, 7, and 8, do not apply to aids 
        payable in fiscal years 1997 and 1998 or to levies made in 1995 
        and 1996 for taxes payable in 1996 and 1997. 
           Sec. 53.  [EFFECTIVE DATE.] 
           Sections 6 to 9 and 29 to 49 are effective the day 
        following final enactment. 
           Section 12 is effective beginning with taxes payable in 
        1996 for fiscal year 1997. 
                                   ARTICLE 3
                                SPECIAL PROGRAMS 
           Section 1.  Minnesota Statutes 1994, section 120.17, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [SCHOOL DISTRICT OBLIGATIONS.] Every district 
        shall ensure that: 
           (1) all students with disabilities are provided the special 
        instruction and services which are appropriate to their needs.  
        Where the individual education plan team has determined 
        appropriate goals and objectives based on the student's needs, 
        including the extent to which the student can be included in the 
        least restrictive environment, and where there are essentially 
        equivalent and effective instruction, related services, or 
        assistive technology devices available to meet the student's 
        needs, cost to the school district may be among the factors 
        considered by the team in choosing how to provide the 
        appropriate services, instruction, or devices that are to be 
        made part of the student's individual education plan.  The 
        student's needs and the special education instruction and 
        services to be provided shall be agreed upon through the 
        development of an individual education plan.  The plan shall 
        address the student's need to develop skills to live and work as 
        independently as possible within the community.  By grade 9 or 
        age 14, the plan shall address the student's needs for 
        transition from secondary services to post-secondary education 
        and training, employment, community participation, recreation, 
        and leisure and home living.  The plan must include a statement 
        of the needed transition services, including a statement of the 
        interagency responsibilities or linkages or both before 
        secondary services are concluded; 
           (2) children with a disability under age five and their 
        families are provided special instruction and services 
        appropriate to the child's level of functioning and needs; 
           (3) children with a disability and their parents or 
        guardians are guaranteed procedural safeguards and the right to 
        participate in decisions involving identification, assessment 
        and educational placement of children with a disability; 
           (4) to the maximum extent appropriate, children with a 
        disability, including those in public or private institutions or 
        other care facilities, are educated with children who are not 
        disabled, and that special classes, separate schooling, or other 
        removal of children with a disability from the regular 
        educational environment occurs only when and to the extent that 
        the nature or severity of the disability is such that education 
        in regular classes with the use of supplementary services cannot 
        be achieved satisfactorily; 
           (5) in accordance with recognized professional standards, 
        testing and evaluation materials, and procedures utilized for 
        the purposes of classification and placement of children with a 
        disability are selected and administered so as not to be 
        racially or culturally discriminatory; and 
           (6) the rights of the child are protected when the parents 
        or guardians are not known or not available, or the child is a 
        ward of the state. 
           Sec. 2.  Minnesota Statutes 1994, section 120.17, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [PROCEDURES FOR DECISIONS.] Every district shall 
        utilize at least the following procedures for decisions 
        involving identification, assessment, and educational placement 
        of children with a disability: 
           (a) Parents and guardians shall receive prior written 
        notice of:  
           (1) any proposed formal educational assessment or proposed 
        denial of a formal educational assessment of their child; 
           (2) a proposed placement of their child in, transfer from 
        or to, or denial of placement in a special education program; or 
           (3) the proposed provision, addition, denial or removal of 
        special education services for their child; 
           (b) The district shall not proceed with the initial formal 
        assessment of a child, the initial placement of a child in a 
        special education program, or the initial provision of special 
        education services for a child without the prior written consent 
        of the child's parent or guardian.  The refusal of a parent or 
        guardian to consent may be overridden by the decision in a 
        hearing held pursuant to clause (e) at the district's 
        initiative; 
           (c) Parents and guardians shall have an opportunity to meet 
        with appropriate district staff in at least one conciliation 
        conference, mediation, or other method of alternative dispute 
        resolution that the parties agree to, if they object to any 
        proposal of which they are notified pursuant to clause (a).  The 
        conciliation process or other form of alternative dispute 
        resolution shall not be used to deny or delay a parent or 
        guardian's right to a due process hearing.  If the parent or 
        guardian refuses efforts by the district to conciliate the 
        dispute with the school district, the requirement of an 
        opportunity for conciliation or other alternative dispute 
        resolution shall be deemed to be satisfied;.  Notwithstanding 
        other law, in any proceeding following a conciliation 
        conference, the school district must not offer a conciliation 
        conference memorandum into evidence, except for any portions 
        that describe the district's final proposed offer of service.  
        Otherwise, with respect to forms of dispute resolution, 
        mediation, or conciliation, Minnesota Rule of Evidence 408 
        applies.  The department of education may reimburse the 
        districts or directly pay the costs of lay advocates, not to 
        exceed $150 per dispute, used in conjunction with alternative 
        dispute resolution. 
           (d) The commissioner shall establish a mediation process to 
        assist parents, school districts, or other parties to resolve 
        disputes arising out of the identification, assessment, or 
        educational placement of children with a disability.  The 
        mediation process must be offered as an informal alternative to 
        the due process hearing provided under clause (e), but must not 
        be used to deny or postpone the opportunity of a parent or 
        guardian to obtain a due process hearing. 
           (e) Parents, guardians, and the district shall have an 
        opportunity to obtain an impartial due process hearing initiated 
        and conducted by and in the school district responsible for 
        assuring that an appropriate program is provided in accordance 
        with state board rules, if the parent or guardian continues to 
        object to:  
           (1) a proposed formal educational assessment or proposed 
        denial of a formal educational assessment of their child; 
           (2) the proposed placement of their child in, or transfer 
        of their child to a special education program; 
           (3) the proposed denial of placement of their child in a 
        special education program or the transfer of their child from a 
        special education program; 
           (4) the proposed provision or addition of special education 
        services for their child; or 
           (5) the proposed denial or removal of special education 
        services for their child. 
           At least five calendar Within five business days before 
        after the request for a hearing, or as directed by the hearing 
        officer, the objecting party shall provide the other party with 
        a brief written statement of particulars of the objection and, 
        the reasons for the objection, and the specific remedies sought. 
        The other party shall provide the objecting party with a written 
        response to the statement of objections within five business 
        days of receipt of the statement.  
           The hearing shall take place before an impartial hearing 
        officer mutually agreed to by the school board and the parent or 
        guardian.  If the school board and the parent or guardian are 
        unable to agree on a hearing officer, the school board shall 
        request the commissioner to appoint a hearing officer.  The 
        hearing officer shall not be a school board member or employee 
        of the school district where the child resides or of the child's 
        school district of residence, an employee of any other public 
        agency involved in the education or care of the child, or any 
        person with a personal or professional interest which would 
        conflict with the person's objectivity at the hearing.  A person 
        who otherwise qualifies as a hearing officer is not an employee 
        of the district solely because the person is paid by the 
        district to serve as a hearing officer.  If the hearing officer 
        requests an independent educational assessment of a child, the 
        cost of the assessment shall be at district expense.  The 
        proceedings shall be recorded and preserved, at the expense of 
        the school district, pending ultimate disposition of the action. 
           (f) The decision of the hearing officer pursuant to clause 
        (e) shall be rendered not more than 45 calendar days from the 
        date of the receipt of the request for the hearing.  A hearing 
        officer may grant specific extensions of time beyond the 45-day 
        period at the request of either party.  The decision of the 
        hearing officer shall be binding on all parties unless appealed 
        to the hearing review officer by the parent, guardian, or the 
        school board of the district where the child resides pursuant to 
        clause (g). 
           The local decision shall: 
           (1) be in writing; 
           (2) state the controlling facts upon which the decision is 
        made in sufficient detail to apprise the parties and the hearing 
        review officer of the basis and reason for the decision; 
           (3) state whether the special education program or special 
        education services appropriate to the child's needs can be 
        reasonably provided within the resources available to the 
        responsible district or districts; 
           (4) state the amount and source of any additional district 
        expenditure necessary to implement the decision; and 
           (5) be based on the standards set forth in subdivision 3a 
        and the rules of the state board. 
           (g) Any local decision issued pursuant to clauses (e) and 
        (f) may be appealed to the hearing review officer within 30 
        calendar days of receipt of that written decision, by the 
        parent, guardian, or the school board of the district 
        responsible for assuring that an appropriate program is provided 
        in accordance with state board rules. 
           If the decision is appealed, a written transcript of the 
        hearing shall be made by the school district and shall be 
        accessible to the parties involved within five calendar days of 
        the filing of the appeal.  The hearing review officer shall 
        issue a final independent decision based on an impartial review 
        of the local decision and the entire record within 30 calendar 
        days after the filing of the appeal.  The hearing review officer 
        shall seek additional evidence if necessary and may afford the 
        parties an opportunity for written or oral argument; provided 
        any hearing held to seek additional evidence shall be an 
        impartial due process hearing but shall be deemed not to be a 
        contested case hearing for purposes of chapter 14.  The hearing 
        review officer may grant specific extensions of time beyond the 
        30-day period at the request of any party. 
           The final decision shall: 
           (1) be in writing; 
           (2) include findings and conclusions; and 
           (3) be based upon the standards set forth in subdivision 3a 
        and in the rules of the state board. 
           (h) The decision of the hearing review officer shall be 
        final unless appealed by the parent or guardian or school board 
        to the court of appeals.  The judicial review shall be in 
        accordance with chapter 14.  
           (i) The commissioner of education shall select an 
        individual who has the qualifications enumerated in this 
        paragraph to serve as the hearing review officer: 
           (1) the individual must be knowledgeable and impartial; 
           (2) the individual must not have a personal interest in or 
        specific involvement with the student who is a party to the 
        hearing; 
           (3) the individual must not have been employed as an 
        administrator by the district that is a party to the hearing; 
           (4) the individual must not have been involved in the 
        selection of the administrators of the district that is a party 
        to the hearing; 
           (5) the individual must not have a personal, economic, or 
        professional interest in the outcome of the hearing other than 
        the proper administration of the federal and state laws, rules, 
        and policies; 
           (6) the individual must not have substantial involvement in 
        the development of a state or local policy or procedures that 
        are challenged in the appeal; and 
           (7) the individual is not a current employee or board 
        member of a Minnesota public school district, education 
        district, intermediate unit or regional education agency, the 
        state department of education, the state board of education, or 
        a parent advocacy organization or group.  
           (j) In all appeals, the parent or guardian of the pupil 
        with a disability or the district that is a party to the hearing 
        may challenge the impartiality or competence of the proposed 
        hearing review officer by applying to the state board of 
        education hearing review officer.  
           (k) Pending the completion of proceedings pursuant to this 
        subdivision, unless the district and the parent or guardian of 
        the child agree otherwise, the child shall remain in the child's 
        current educational placement and shall not be denied initial 
        admission to school. 
           (l) The child's school district of residence, a resident 
        district, and providing district shall receive notice of and may 
        be a party to any hearings or appeals under this subdivision. 
           (m) A school district is not liable for harmless technical 
        violations of this subdivision or rules implementing this 
        subdivision if the school district can demonstrate on a 
        case-by-case basis that the violations did not harm the 
        student's educational progress or the parent or guardian's right 
        to notice, participation, or due process. 
           (n) Within ten calendar days after appointment, the hearing 
        officer shall schedule and hold a prehearing conference.  At 
        that conference, or later, the hearing officer may take any 
        appropriate action that a court might take under Rule 16 of 
        Minnesota Rules of Civil Procedure including, but not limited 
        to, scheduling, jurisdiction, and listing witnesses including 
        expert witnesses. 
           (o) A hearing officer or hearing review officer appointed 
        under this subdivision shall be deemed to be an employee of the 
        state under section 3.732 for the purposes of section 3.736 only.
           (p) In order to be eligible for selection, hearing officers 
        and hearing review officers shall participate in training and 
        follow procedures as designated by the commissioner. 
           Sec. 3.  Minnesota Statutes 1994, section 120.17, is 
        amended by adding a subdivision to read: 
           Subd. 3d.  [INTERAGENCY SERVICES.] If at the time of 
        initial referral for an educational assessment, or a 
        reassessment, the school district determines that a child with 
        disabilities who is age 3 through 21 may be eligible for 
        interagency services, the district may request that the county 
        of residence provide a representative to the initial assessment 
        or reassessment team meeting or the first individual education 
        plan team meeting following the assessment or reassessment.  The 
        district may request to have a county representative attend 
        other individual education plan team meetings when it is 
        necessary to facilitate coordination between district and county 
        provided services.  Upon request from a school district, the 
        resident county shall provide a representative to assist the 
        individual education plan team in determining the child's 
        eligibility for existing health, mental health, or other support 
        services administered or provided by the county.  The individual 
        education plan team and the county representative shall develop 
        an interagency plan of care for an eligible child and the 
        child's family to coordinate services required under the child's 
        individual education plan with county services.  The interagency 
        plan of care shall include appropriate family information with 
        the consent of the family, a description of how services will be 
        coordinated between the district and county, a description of 
        service coordinator responsibilities and services, and a 
        description of activities for obtaining third-party payment for 
        eligible services, including medical assistance payments. 
           Sec. 4.  Minnesota Statutes 1994, section 121.8355, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES.] (a) Each collaborative shall: 
           (1) establish, with assistance from families and service 
        providers, clear goals for addressing the health, developmental, 
        educational, and family-related needs of children and youth and 
        use outcome-based indicators to measure progress toward 
        achieving those goals; 
           (2) establish a comprehensive planning process that 
        involves all sectors of the community, identifies local needs, 
        and surveys existing local programs; 
           (3) integrate service funding sources so that children and 
        their families obtain services from providers best able to 
        anticipate and meet their needs; 
           (4) coordinate families' services to avoid duplicative and 
        overlapping assessment and intake procedures; 
           (5) focus primarily on family-centered services; 
           (6) encourage parents and volunteers to actively 
        participate by using flexible scheduling and actively recruiting 
        volunteers; 
           (7) provide services in locations that are readily 
        accessible to children and families; 
           (8) use new or reallocated funds to improve or enhance 
        services provided to children and their families; 
           (9) identify federal, state, and local institutional 
        barriers to coordinating services and suggest ways to remove 
        these barriers; and 
           (10) design and implement an integrated local service 
        delivery system for children and their families that coordinates 
        services across agencies and is client centered.  The delivery 
        system shall provide a continuum of services for children birth 
        to age 18, or birth through age 21 for individuals with 
        disabilities.  The collaborative shall describe the community 
        plan for serving pregnant women and children from birth to age 
        six. 
           (b) The outcome-based indicators developed in paragraph 
        (a), clause (1), may include the number of low birth weight 
        babies, the infant mortality rate, the number of children who 
        are adequately immunized and healthy, require out-of-home 
        placement or long-term special education services, and the 
        number of minor parents. 
           Sec. 5.  Minnesota Statutes 1994, section 123.3514, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FEES; TEXTBOOKS; MATERIALS.] A post-secondary 
        institution that receives reimbursement for a pupil under 
        subdivision 6 may not charge that pupil for fees, textbooks, 
        materials, support services as defined in section 135A.16, or 
        other necessary costs of the course or program in which the 
        pupil is enrolled if the charge would be prohibited under 
        section 120.74, except for equipment purchased by the pupil that 
        becomes the property of the pupil.  An institution may require 
        the pupil to pay for fees, textbooks, and materials for a course 
        taken for post-secondary credit. 
           Sec. 6.  Minnesota Statutes 1994, section 123.3514, is 
        amended by adding a subdivision to read: 
           Subd. 7b.  [SUPPORT SERVICES.] The postsecondary 
        institution shall inform the pupil of the support services 
        available at that institution.  If the student has an individual 
        education plan that provides general education support and 
        accommodations, the post-secondary institution shall provide the 
        support services as described in the student's IEP and the 
        post-secondary institution and the district shall negotiate an 
        agreement on the rate to be charged for the services.  Nothing 
        in this section shall prevent the student from enrolling while 
        the agreement is being developed.  If the parties cannot agree 
        on the services, on application of either party, the 
        commissioner shall resolve the dispute in the same manner the 
        commissioner fixes tuition rates under section 120.17, 
        subdivision 4.  The commissioner's decision is binding on both 
        parties. 
           Sec. 7.  Minnesota Statutes 1994, section 125.62, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] A grant program is 
        established to assist American Indian people to become teachers 
        and to provide additional education for American Indian 
        teachers.  The state board may award a joint grant to each of 
        the following:  
           (1) the Duluth campus of the University of Minnesota and 
        independent school district No. 709, Duluth; 
           (2) Bemidji state university and independent school 
        district No. 38, Red Lake; 
           (3) Moorhead state university and one of the school 
        districts located within the White Earth reservation; and 
           (4) Augsburg college, independent school district No. 625, 
        St. Paul, and special school district No. 1, Minneapolis. 
           Sec. 8.  Minnesota Statutes 1994, section 125.62, 
        subdivision 7, is amended to read: 
           Subd. 7.  [LOAN FORGIVENESS.] The loan may be forgiven if 
        the recipient is employed as a teacher, as defined in section 
        125.12 or 125.17, in an eligible school or program in 
        Minnesota.  One-fifth One-fourth of the principal of the 
        outstanding loan amount shall be forgiven for each year of 
        eligible employment, or a pro rata amount for eligible 
        employment during part of a school year, part-time employment as 
        a substitute teacher, or other eligible part-time 
        teaching.  Loans for $2,500 or less may be forgiven at the rate 
        of up to $1,250 per year.  The following schools and programs 
        are eligible for the purposes of loan forgiveness: 
           (1) a school or program operated by a school district; 
           (2) a tribal contract school eligible to receive aid 
        according to section 124.86; 
           (3) a head start program; 
           (4) an early childhood family education program; or 
           (5) a program providing educational services to children 
        who have not entered kindergarten; or 
           (6) a program providing educational enrichment services to 
        American Indian students in grades kindergarten through 12. 
           If a person has an outstanding loan obtained through this 
        program, the duty to make payments of principal and interest may 
        be deferred during any time period the person is enrolled at 
        least one-half time in an advanced degree program in a field 
        that leads to employment by a school district.  To defer loan 
        obligations, the person shall provide written notification to 
        the state board of education and the recipients of the joint 
        grant that originally authorized the loan.  Upon approval by the 
        state board and the joint grant recipients, payments shall be 
        deferred.  
           The loan forgiveness program, loan deferral, and procedures 
        to administer the program shall be approved by the higher 
        education coordinating board. 
           Sec. 9.  Minnesota Statutes 1994, section 126.49, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [RESOLUTION OR LETTER.] All persons applying for 
        a license under this section must submit to the board a 
        resolution or letter of support signed by an American Indian 
        tribal government or its designee.  All persons holding a 
        license under this section on the effective date of this section 
        must have on file or file with the board a resolution or letter 
        of support signed by a tribal government or its designee by 
        January 1, 1996, or the next renewal date of the license 
        thereafter. 
           Sec. 10.  Laws 1994, chapter 587, article 3, section 19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SPECIAL EDUCATION AID.] $17,500,000 is 
        appropriated in fiscal year 1994 from the general fund to the 
        department of education for special education aid to school 
        districts.  This appropriation is available until June 30, 
        1995.  This amount is added to the appropriations for aid for 
        special education programs contained in Laws 1993, chapter 224, 
        article 3, section 38, subdivisions 2, 4, 8, 11, and 14.  The 
        individual appropriations shall be increased by the commissioner 
        of finance in the amounts determined by the commissioner of 
        education.  This amount is appropriated to eliminate the fiscal 
        year 1993 deficiencies and eliminate or reduce the fiscal year 
        1995 deficiencies in the appropriations in those 
        subdivisions.  Any amount not needed for these purposes is 
        available to eliminate or reduce the fiscal year 1994 
        deficiencies in the appropriations in those subdivisions.  The 
        commissioner of finance shall transfer amounts among the 
        appropriations in those subdivisions as determined by the 
        department of education.  The department must reduce a school 
        district's payable 1995 levy limitations by the full amount of 
        the aid payments made to the school district according to this 
        subdivision.  This appropriation shall not be included in 
        determining the amount of a deficiency in the special education 
        programs for fiscal year years 1994 and 1995 for the purpose of 
        allocating any excess appropriations to aid or grant programs 
        with insufficient appropriations as provided in Minnesota 
        Statutes, section 124.14, subdivision 7.  Notwithstanding 
        Minnesota Statutes, section 124.195, subdivision 10, 100 percent 
        of this appropriation must be paid in fiscal years 1994 and 
        1995.  This appropriation is not to be included in a base budget 
        for future fiscal years. 
           Sec. 11.  [OPTIONS PLUS PILOT PROGRAM.] 
           Subdivision 1.  [PURPOSE.] A pilot program is established 
        to support general education classroom teachers who teach 
        children with specific learning disabilities.  The goals of the 
        pilot program are to: 
           (1) increase participation of these children in 
        noncategorical programming designed to encourage their maximum 
        potential and maintain their self-esteem; 
           (2) demonstrate results in measurable educational outcomes; 
           (3) provide alternatives to special education that focus on 
        children's educational progress and results, respond to the 
        individual child, are efficient and cost-effective, and ensure 
        the rights of eligible children and their families to due 
        process; 
           (4) increase general education's ability to educate in a 
        manner that decreases the need for pull-out programs for 
        students with specific learning disabilities; and 
           (5) implement alternative approaches to conflict resolution.
           Subd. 2.  [DEFINITIONS.] For the purposes of this section 
        the terms defined in this subdivision have the meanings given 
        them. 
           (a) "Accommodation" means any technique that alters the 
        educational setting to enable the child to reach the child's 
        maximum potential and to demonstrate more accurately the child's 
        knowledge and educational progress.  Accommodations may include, 
        but are not limited to:  preferential seating, paraphrasing of 
        information, instructions, practice activities and directions 
        provided in a manner consistent with the child's learning style, 
        opportunity for increased response time, more frequent 
        opportunity for review, extended time to complete assignments 
        and tests, larger print for assignments or tests, special study 
        sheets, extended or untimed tests, oral testing and answering, 
        and use of assistive technology within and outside the 
        educational environment. 
           (b) "Assistive technology" means any item, piece of 
        equipment, or product system, whether acquired commercially off 
        the shelf, modified, or customized, that is used to increase, 
        maintain, or improve functional capabilities. 
           (c) "Competency" means a documented and demonstrated 
        attitude, skill, or knowledge base resulting in an ability of 
        general education personnel to provide accommodations, 
        modifications, and personalized instruction, according to the 
        eligible child's individual learning styles, within general 
        education environments. 
           (d) "Consistently available" means that education personnel 
        who demonstrate competency are site-based and designated as a 
        resource for the development and use of accommodations, 
        modifications, and personalized instruction in general education.
           (e) "Eligible children" means those children who have 
        specific learning disabilities or conditions related to these 
        disabilities according to recognized professional standards and 
        documented by appropriately licensed personnel. 
           (f) "Learner plan" means a concise written plan that is 
        based on the eligible child's documented specific learning 
        disabilities and needs; includes the eligible child's strengths 
        that may compensate for those differences and needs; provides 
        the child, the child's parent, and all general education 
        personnel responsible for direct instruction with information 
        that results in clear understanding and subsequent use of 
        accommodations, modifications, and personalized instruction; and 
        includes methods of evaluating the child's progress that are 
        consistent with learning differences, needs, strengths, 
        modifications, and accommodations, and are at intervals 
        identical to the student population of the school in which the 
        child participating in Options Plus is enrolled. 
           (g) "Modification" means any technique that alters the 
        school work required, makes it different from the school work 
        required or other students in the same course, and encourages 
        the eligible child to reach the child's maximum potential and 
        facilitate educational success.  Modifications may include, but 
        are not limited to:  copies of teacher notes and lesson plans, 
        assisted note taking, reduced or altered assignments, increased 
        assignments in areas of strength, alternative test formats, 
        modified testing, peer assistance, cooperative learning, and 
        modified grading such as documentation of progress and results. 
           (h) "Parent" means a parent, guardian, or person acting as 
        a parent of a child. 
           (i) "Personalized instruction" means direct instruction 
        designed with knowledge of the child's learning style, 
        strengths, and differences, to assist the child to gain in skill 
        areas, so the child demonstrates progress toward and outcomes 
        necessary to become a successful citizen. 
           Subd. 3.  [APPLICATION.] (a) An Options Plus applicant must 
        be a school district or districts that cooperate for a 
        particular purpose.  To be eligible for an Options Plus pilot 
        program grant, a district or districts must submit an 
        application to the commissioner of education in the form and 
        manner prescribed by the commissioner.  The application must 
        describe: 
           (1) how the applicant will ensure that eligible children 
        receive accommodations, modifications, and personalized 
        instruction; 
           (2) the methods to be used to develop a learner plan for 
        each child participating in the program and to evaluate 
        individual progress, outcomes, and cumulative results including 
        parent satisfaction; 
           (3) the projected number of students participating in the 
        program; 
           (4) the current and projected level of educator competency 
        at each district site where an Options Plus program will be 
        established; 
           (5) procedures for assessing and determining eligibility of 
        students with specific learning disabilities in accordance with 
        Minnesota Rules, parts 3525.1325 to 3525.1347; 
           (6) procedures for informing the parent and child, as 
        appropriate, of all procedural safeguards and dispute resolution 
        alternatives available under the Individuals with Disabilities 
        Education Act (IDEA), United States Code, title 20, section 1400 
        et seq., American with Disabilities Act of 1990 (ADA), United 
        States Code, title 42, section 12101 et seq., Rehabilitation Act 
        of 1973, United States Code, title 29, section 794, and 
        applicable state law; 
           (7) alternative dispute resolution methods to be 
        implemented if agreed upon by the parent and are instituted in a 
        timely manner not to exceed 30 days or in accordance with 
        current laws; and 
           (8) any additional information required by the commissioner.
           (b) Districts shall continue accounting procedures for 
        documenting that federal special education funds are expended 
        for child find, identification, and evaluation consistent with 
        federal law.  A district shall not include children 
        participating in the Options Plus program in special education 
        child counts or funding formulas. 
           Subd. 4.  [RIGHTS OF PARENT AND CHILD.] Any child enrolled 
        in an Options Plus pilot program may withdraw at any time upon 
        written request of the parent or child and seek or reinstate 
        eligibility for services under Minnesota Statutes, section 
        120.17.  If a child who withdraws was previously served through 
        an individual education plan under Minnesota Statutes, section 
        120.17, the parent shall retain the right to immediately 
        reinstate the last agreed upon individual education plan. 
           Subd. 5.  [USE OF FUNDS.] Options Plus pilot program grants 
        shall be used to supplement staff development funding under 
        Minnesota Statutes, section 124A.29, to train general education 
        classroom teachers to meet the needs of children with specific 
        learning disabilities.  The training shall result in each 
        participating teacher achieving the following competencies: 
           (1) understanding and communicating to the parents of the 
        child the options available for instruction; 
           (2) the ability to assess the learning environment and 
        provide the necessary accommodations, modifications, and 
        personalized instruction necessary to meet the needs of the 
        child; and 
           (3) the ability to work collaboratively and in teams with 
        other teachers and support and related services staff. 
           Subd. 6.  [REPORT.] A school district receiving an Options 
        Plus pilot program grant shall report to the commissioner of 
        education on the educational impact and cost-effectiveness of 
        the Options Plus program by February 15, 1997.  The commissioner 
        shall evaluate the effectiveness of the Options Plus program and 
        recommend to the education committees of the legislature by 
        February 15, 1998, whether the program should be continued or 
        expanded statewide and whether to include other disability areas.
           Sec. 12.  [STATE VOCATIONAL SCHOOL PLANNING PROCESS.] 
           Subdivision 1.  [PLANNING COMMITTEE.] A planning committee 
        is established to develop a preliminary plan for a 
        state-of-the-art vocational high school in Minnesota to serve 
        the needs of students with special vocational interests and 
        talents, and to serve as a demonstration site for vocational 
        education.  The committee shall consist of 21 members.  The 
        governor, speaker of the house of representatives, and the 
        majority leader of the senate shall each appoint seven members.  
        The governor's appointments must include the commissioners of 
        education and human services or their designees.  Members also 
        must include potential students and their parents, imaginative 
        practicing teachers, high school administrators, representatives 
        of business and labor, and community representatives.  The 
        committee is subject to Minnesota Statutes, section 15.059. 
           Subd. 2.  [PURPOSES.] The purposes of the planning 
        committee are to: 
           (1) evaluate the need for a vocational high school, 
        including the needs of Minnesota students for vocational 
        training and the needs of private sector employers for skilled, 
        vocationally trained employees; 
           (2) determine the capacity of Minnesota's secondary schools 
        to meet this need; 
           (3) identify the challenges and opportunities for 
        vocational education; 
           (4) develop a preliminary plan for a vocational high school 
        to meet the identified needs; 
           (5) develop a learning signature for a vocational high 
        school based on its focus, including educational goals, learning 
        organization, anticipated learner results, and staffing and 
        staff development; 
           (6) describe the anticipated partnerships of the vocational 
        school with other secondary educational institutions, 
        post-secondary institutions, business and labor, community 
        organizations, and students' families; 
           (7) develop a technology and equipment plan for the 
        proposed school; and 
           (8) develop preliminary cost estimates for a vocational 
        school. 
           Subd. 3.  [APPOINTMENTS; MEETINGS.] The planning committee 
        must be appointed by July 1, 1995.  The committee must begin 
        meeting in July 1995.  At least some of the committee meetings 
        must be held outside the metropolitan area as defined in 
        Minnesota Statutes, section 473.121, subdivision 2. 
           Subd. 4.  [REPORT.] The planning committee shall make a 
        report of its work to the education committees of the 
        legislature in February 1996. 
           Subd. 5.  [STAFF; OFFICE SPACE.] The planning committee may 
        appoint staff as necessary to assist in its work.  The staff are 
        members of the unclassified service of the state.  The 
        commissioner of education shall provide office space for the 
        committee staff. 
           Sec. 13.  [MEXICAN ORIGIN EDUCATION PILOT GRANT PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT.] A Mexican origin education 
        pilot grant program is established to assist school districts 
        and communities in meeting the educational and culturally 
        related academic needs of students of Mexican origin. 
           Subd. 2.  [EXPECTED OUTCOMES.] Grant recipients shall use 
        the funds for programs designed to improve the school success of 
        students of Mexican origin.  Grant proceeds may be used for 
        curriculum and staff development, tutoring, mentoring, parent 
        involvement, and other programs that are designed to: 
           (1) improve student achievement and reduce dropout rates; 
           (2) increase student knowledge and understanding of Mexican 
        history; 
           (3) improve instruction by developing the cultural 
        competence skills of teachers and other staff; and 
           (4) increase parent involvement in education and the school 
        community. 
           Subd. 3.  [GRANT ELIGIBILITY, APPLICATIONS, AND AWARDS.] 
        The commissioner of education shall prescribe the form and 
        manner of applications and may award grants to the applicants 
        likely to meet the outcomes in subdivision 2.  The commissioner 
        shall give preference to grant proposals that provide 
        collaboration with community resources and a local match. 
           Sec. 14.  [COMMISSIONERS' DUTIES.] 
           The commissioners of education, human services, and health 
        shall review current state rules and statutes concerning the 
        disability definitions, eligibility criteria, assessment and 
        diagnostic practices, licensing of service providers, aversive 
        and deprivation procedures, and case management procedures for 
        programs and services for children with disabilities provided by 
        the education and human services systems.  The commissioners 
        shall report to the education and health and human services 
        committees of the legislature by February 15, 1996, on 
        recommendations for modifying state rules and statutes and 
        applying for necessary federal waivers to improve service 
        delivery and promote integration and collaboration between the 
        education and human services systems.  The commissioners shall 
        include state and local program administrators and service 
        providers in the process for reviewing the state statutes and 
        rules. 
           Sec. 15.  [LOCAL TRAINING PROGRAMS.] 
           The commissioners of education, human services, and health 
        shall jointly develop and implement a training program for local 
        staff in school districts and county human services and social 
        services agencies who work with children with disabilities and 
        their families.  Implementation of the training program shall 
        begin no later than January 15, 1996.  The training shall 
        familiarize staff with the disability definitions, eligibility 
        criteria, assessment and diagnostic practices, available 
        services, and case management procedures of each of the service 
        providing systems.  The goal of the training is to enable local 
        staff to determine if children with disabilities may be eligible 
        for interagency services, involve staff from appropriate 
        agencies in collaboratively developing a multiagency plan of 
        care, reduce duplication and promote service coordination, and 
        improve services to children with disabilities and their 
        families. 
           Sec. 16.  [OSSEO LEVY.] 
           For 1995 taxes payable in 1996 only, independent school 
        district No. 279, Osseo, may levy a tax in an amount not to 
        exceed $500,000.  The proceeds of this levy must be used to 
        provide instructional services for at-risk children. 
           Sec. 17.  [FEDERAL SPECIAL EDUCATION FUNDS.] 
           A school district shall not transfer a special education 
        expenditure from a federal revenue source to a state revenue 
        source for fiscal year 1995 after March 30, 1995. 
           Sec. 18.  [COMPREHENSIVE EARLY INTERVENTION PROGRAM FOR 
        STUDENTS WITH EMOTIONAL OR BEHAVIORAL DISORDERS.] 
           Subdivision 1.  [ESTABLISHMENT.] A pilot program is 
        established in independent school district No. 624, White Bear 
        Lake, to provide comprehensive early intervention services to 
        children with emotional or behavioral disorders.  The goals of 
        the pilot program are to: 
           (1) improve learner outcomes for children with emotional or 
        behavioral disorders; 
           (2) reduce the need for placement of children with 
        emotional or behavioral disorders in special education programs 
        under Minnesota Statutes, section 120.17; 
           (3) reduce the number of school exclusions, expulsions, and 
        suspensions; 
           (4) reduce the number of children entering the juvenile 
        justice system; and 
           (5) improve the cost-effectiveness of services for children 
        with emotional or behavioral disorders. 
           Subd. 2.  [APPLICATION; EVALUATION.] (a) To participate in 
        the pilot program, the district shall submit an application to 
        the commissioner of education in the form and manner prescribed 
        by the commissioner.  The application shall include a plan for 
        developing and implementing a comprehensive early intervention 
        program that provides for the following: 
           (1) early identification of children who are demonstrating 
        characteristics or behavior that may lead to placement in a 
        special education program under Minnesota Statutes, section 
        120.17, and Minnesota Rules, part 3525.1329; 
           (2) flexible early intervention strategies that are 
        performance based and may include the school, local mental 
        health agencies, the parent, and the community; 
           (3) mentoring programs that may include both adult 
        community mentors or student peer mentors; 
           (4) collaboration with local mental health, social 
        services, law enforcement, and nonprofit agencies; 
           (5) flexible instructional delivery alternatives that may 
        include an extended school year, flexible school days, or 
        work-based learning programs; 
           (6) extensive parent involvement in developing and 
        implementing early intervention strategies, including parent 
        training in appropriate intervention skills; and 
           (7) technology-based systems for individualized instruction 
        and student record management. 
           (b) The district shall contract with an independent agency 
        for an evaluation of the effectiveness of the pilot program and 
        report to the commissioner of education by January 15, 1997. 
           Sec. 19.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        or other named fund to the department of education for the 
        fiscal years designated. 
           Subd. 2.  [AMERICAN INDIAN LANGUAGE AND CULTURE PROGRAMS.] 
        For grants to American Indian language and culture education 
        programs according to Minnesota Statutes, section 126.54, 
        subdivision 1: 
             $591,000     .....     1996
             $591,000     .....     1997
           The 1996 appropriation includes $88,000 for 1995 and 
        $503,000 for 1996.  
           The 1997 appropriation includes $88,000 for 1996 and 
        $503,000 for 1997.  
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 3.  [AMERICAN INDIAN EDUCATION.] (a) For certain 
        American Indian education programs in school districts: 
             $175,000       .....     1996
             $175,000       .....     1997
           The 1996 appropriation includes $26,000 for 1995 and 
        $149,000 for 1996.  
           The 1997 appropriation includes $26,000 for 1996 and 
        $149,000 for 1997.  
           (b) These appropriations are available for expenditure with 
        the approval of the commissioner of the department of education. 
           (c) The commissioner must not approve the payment of any 
        amount to a school district or school under this subdivision 
        unless that school district or school is in compliance with all 
        applicable laws of this state. 
           (d) Up to the following amounts may be distributed to the 
        following schools and school districts for each fiscal year:  
        $54,800, Pine Point School; $9,800 to independent school 
        district No. 166, Cook county; $14,900 to independent school 
        district No. 432, Mahnomen; $14,200 to independent school 
        district No. 435, Waubun; $42,200 to independent school district 
        No. 707, Nett Lake; and $39,100 to independent school district 
        No. 38, Red Lake.  These amounts must be spent only for the 
        benefit of American Indian pupils and to meet established state 
        educational standards or statewide requirements. 
           (e) Before a district or school can receive money under 
        this subdivision, the district or school must submit, to the 
        commissioner, evidence that it has complied with the uniform 
        financial accounting and reporting standards act, Minnesota 
        Statutes, sections 121.904 to 121.917. 
           Subd. 4.  [AMERICAN INDIAN POST-SECONDARY PREPARATION 
        GRANTS.] For American Indian post-secondary preparation grants 
        according to Minnesota Statutes, section 124.481: 
             $857,000     .....     1996
             $857,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 5.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
        Indian scholarships according to Minnesota Statutes, section 
        124.48: 
             $1,600,000     .....     1996 
             $1,600,000     .....     1997 
           Any unexpended balance remaining in the first year does not 
        cancel but is available in the second year. 
           Subd. 6.  [INDIAN TEACHER PREPARATION GRANTS.] (a) For 
        joint grants to assist Indian people to become teachers: 
             $190,000     .....     1996 
             $190,000     .....     1997 
           (b) Up to $70,000 each year is for a joint grant to the 
        University of Minnesota at Duluth and the Duluth school district.
           (c) Up to $40,000 each year is for a joint grant to each of 
        the following: 
           (1) Bemidji state university and the Red Lake school 
        district; 
           (2) Moorhead state university and a school district located 
        within the White Earth reservation; and 
           (3) Augsburg college, independent school district No. 625, 
        St. Paul, and the Minneapolis school district. 
           (d) Money not used for students at one location may be 
        transferred for use at another location. 
           (e) Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 7.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
        school aid according to Minnesota Statutes, section 124.86: 
             $238,000     .....     1996
             $361,000     .....     1997
           The 1996 appropriation includes $19,000 for 1995 and 
        $219,000 for 1996. 
           The 1997 appropriation includes $38,000 for 1996 and 
        $323,000 for 1997. 
           Subd. 8.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL SCHOOLS.] For 
        early childhood family education programs at tribal contract 
        schools: 
             $68,000     .....     1996 
             $68,000     .....     1997 
           Subd. 9.  [PART H.] For the department of education's share 
        of the state's obligation under Part H: 
             $  -0-       .....     1996 
             $400,000     .....     1997 
           This appropriation assumes that the departments of health 
        and human services will contribute $1,635,000 for the state 
        share of Part H costs. 
           Subd. 10.  [AMERICAN SIGN LANGUAGE; TEACHER EDUCATION 
        HEARING.] To assist school districts in educating teachers in 
        American sign language: 
             $13,000     .....     1996
             $12,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 11.  [MEXICAN ORIGIN EDUCATION GRANTS.] For grants 
        for a Mexican origin education pilot grant program: 
             $50,000     .....     1996
             $25,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 12.  [LAY ADVOCATES.] To pay or reimburse lay 
        advocates for their time and expense as provided in Minnesota 
        Statutes, section 120.17: 
             $10,000     .....     1996
           This appropriation is available until June 30, 1997. 
           Subd. 13.  [OPTIONS PLUS PILOT GRANTS.] For grants to 
        school districts for options plus pilot programs: 
             $150,000    .....     1996 
           Each grant shall not exceed $50,000. 
           This appropriation is available until June 30, 1997.  
           Recipients are encouraged to use other staff development 
        resources if available. 
           Subd. 14.  [VOCATIONAL SCHOOL PLANNING.] For staff costs 
        and related expenses for the vocational school planning 
        committee: 
             $100,000     .....     1996
           This appropriation is available until June 30, 1997. 
           Subd. 15.  [SECONDARY VOCATIONAL EDUCATION AID.] For 
        secondary vocational education aid according to Minnesota 
        Statutes, section 124.573: 
             $11,874,000     .....     1996 
             $11,596,000     .....     1997 
           The 1996 appropriation includes $2,017,000 for 1995 and 
        $9,857,000 for 1996.  
           The 1997 appropriation includes $1,739,000 for 1996 and 
        $9,857,000 for 1997.  
           Subd. 16.  [SCHOOL INTERPRETERS.] For grants for school 
        interpreters to upgrade their interpreting/transliterating 
        skills and obtain certification: 
             $150,000    .....     1996
             $100,000    .....     1997
           Up to five percent of this amount may be used for 
        administration of this program. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 17.  [COMPREHENSIVE EARLY INTERVENTION PROGRAM 
        GRANTS.] For a grant to independent school district No. 624, 
        White Bear Lake, for a comprehensive early intervention pilot 
        program for students with emotional or behavioral disorders: 
             $390,000    .....     1996 
           This appropriation is available until June 30, 1997. 
           Sec. 20.  [EFFECTIVE DATE.] 
           Sections 10, 12, and 17 are effective the day following 
        final enactment. 
                                   ARTICLE 4
                               COMMUNITY PROGRAMS
           Section 1.  Minnesota Statutes 1994, section 116J.655, is 
        amended to read: 
           116J.655 [YOUTH ENTREPRENEURSHIP EDUCATION PROGRAM.] 
           The commissioner of trade and economic development shall 
        establish a youth entrepreneurship education program to improve 
        the academic and entrepreneurial skills of students and aid in 
        their transition from school to business creation.  The program 
        shall strengthen local economies by creating jobs that enable 
        citizens to remain in their communities and to foster 
        cooperation among educators, economic development professionals, 
        business leaders, and representatives of labor.  Assistance 
        under this section shall be available to new or existing 
        student-operated or school-operated businesses that have an 
        educational purpose, and provide service or products for 
        customers or clients who do not attend or work at the sponsoring 
        school.  The commissioner may require an equal local match for 
        assistance under this section up to the maximum grant amount of 
        $20,000. 
           Sec. 2.  Minnesota Statutes 1994, section 121.702, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [COUNCIL.] "Council" means the governor's 
        workforce development council. 
           Sec. 3.  Minnesota Statutes 1994, section 121.705, is 
        amended to read: 
           121.705 [YOUTH WORKS GRANTS.] 
           Subdivision 1.  [APPLICATION.] An eligible organization 
        interested in receiving a grant under sections 121.704 to 
        121.709 may prepare and submit to the commission, and beginning 
        January 1, 1997, the council, an application that complies with 
        section 121.706. 
           Subd. 2.  [GRANT AUTHORITY.] The commission and, beginning 
        January 1, 1997, the council shall 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 121.706.  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 and, beginning January 1, 1997, 
        the council may select at least one residential proposal and one 
        nonresidential proposal, provided the proposals meet or exceed 
        the criteria in section 121.706. 
           Sec. 4.  Minnesota Statutes 1994, section 121.706, is 
        amended to read: 
           121.706 [GRANT APPLICATIONS.] 
           Subdivision 1.  [APPLICATIONS REQUIRED.] An organization 
        seeking federal or state grant money under sections 121.704 to 
        121.709 shall prepare and submit to the commission and, 
        beginning January 1, 1997, the council an application that meets 
        the requirements of this section.  The commission and, beginning 
        January 1, 1997, the council shall develop, and the applying 
        organizations shall comply with, the form and manner of the 
        application. 
           Subd. 2.  [APPLICATION CONTENT.] An applicant on its 
        application shall: 
           (1) propose a program to provide participants the 
        opportunity to perform community service to meet specific unmet 
        community needs, and participate in classroom, work-based, and 
        service learning; 
           (2) assess the community's unmet educational, human, 
        environmental, and public safety needs, the resources and 
        programs available for meeting those needs, and how young people 
        participated in assessing community needs; 
           (3) describe the educational component of the program, 
        including classroom hours per week, classroom time for 
        participants to reflect on the program experience, and 
        anticipated academic outcomes related to the service experience; 
           (4) describe the work to be performed, the ratio of youth 
        participants to crew leaders and mentors, and the expectations 
        and qualifications for crew leaders and mentors; 
           (5) describe local funds or resources available to meet the 
        match requirements of section 121.709; 
           (6) describe any funds available for the program from 
        sources other than the requested grant; 
           (7) describe any agreements with local businesses to 
        provide participants with work-learning opportunities and 
        mentors; 
           (8) describe any agreement with local post-secondary 
        educational institutions to offer participants course credits 
        for their community service learning experience; 
           (9) describe any agreement with a local high school or an 
        alternative learning center to provide remedial education, 
        credit for community service work and work-based learning, or 
        graduate equivalency degrees; 
           (10) describe any pay for service or other program delivery 
        mechanism that will provide reimbursement for benefits conferred 
        or recover costs of services participants perform; 
           (11) describe how local resources will be used to provide 
        support and assistance for participants to encourage them to 
        continue with the program, fulfill the terms of the contract, 
        and remain eligible for any postservice benefit; 
           (12) describe the arbitration mechanism for dispute 
        resolution required under section 121.707, subdivision 2; 
           (13) describe involvement of community leaders in 
        developing broad-based support for the program; 
           (14) describe the consultation and sign-off process to be 
        used with any local labor organization representing employees in 
        the area engaged in work similar to that proposed for the 
        program to ensure that no current employees or available 
        employment positions will be displaced by program participants; 
           (15) certify to the commission and, beginning January 1, 
        1997, the council, and to any certified bargaining 
        representatives representing employees of the applying 
        organization that the project will not decrease employment 
        opportunities that would be available without the project; will 
        not displace current employees including any partial 
        displacement in the form of reduced hours of work other than 
        overtime, wages, employment benefits, or regular seasonal work; 
        will not impair existing labor agreements; and will not result 
        in the substitution of project funding for preexisting funds or 
        sources of funds for ongoing work; 
           (16) describe the length of the required service period, 
        which may not be less than six months or more than two years, a 
        method to incorporate a participant's readiness to advance or 
        need for postservice financial assistance into individual 
        service requirements, and any opportunity for participating part 
        time or in another program; 
           (17) describe a program evaluation plan that contains 
        cost-effectiveness measures, measures of participant success 
        including educational accomplishments, job placements, community 
        contributions, and ongoing volunteer activities, outcome 
        measures based on a preprogram and postprogram survey of 
        community rates of arrest, incarceration, teenage pregnancy, and 
        other indicators of youth in trouble, and a list of local 
        resources dedicated to reducing these rates; 
           (18) describe a three-year financial plan for maintaining 
        the program; 
           (19) describe the role of local youth in developing all 
        aspects of the grant proposal; and 
           (20) describe the process by which the local private 
        industry council participated in, and reviewed the grant 
        application. 
           Sec. 5.  Minnesota Statutes 1994, section 121.707, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TERMS OF SERVICE.] (a) A participant shall agree 
        to perform community service for the period required unless the 
        participant is unable to complete the terms of service for the 
        reason provided in paragraph (b). 
           An agreement to perform community service must be in the 
        form of a written contract between the participant and the 
        grantee organization.  Terms of the contract must include a 
        length of service between six months and two years, the amount 
        of the postservice benefit earned upon completion of the 
        contracted length of service, the participant's education goals 
        and commitment, the anticipated date of completion, dismissal 
        for cause, including failure to fully participate in the 
        education component, and the exclusive right to challenge a 
        dismissal for cause through binding arbitration.  The arbitrator 
        must be chosen jointly by the grantee organization and the 
        participant from the community or, if agreement cannot be 
        reached, an arbitrator must be determined from a list of 
        arbitrators provided by the American Arbitration Association.  
        The sole remedy available to the participant through arbitration 
        is reinstatement to the program and eligibility for postservice 
        benefits.  The parent or guardian of a minor shall consent in 
        writing to the contract between the participant and the grantee 
        organization. 
           (b) If the grantee organization releases a participant from 
        completing a term of service in a program receiving assistance 
        under sections 121.704 to 121.709 for compelling personal 
        circumstances as demonstrated by the participant, or if the 
        program in which the participant serves does not receive 
        continued funding for any reason, the grantee organization may 
        provide the participant with that portion of the financial 
        assistance described in subdivision 3 that corresponds to the 
        quantity of the service obligation completed by the individual. 
           If the grantee organization terminates a participant for 
        cause or a participant resigns without demonstrating compelling 
        personal circumstances under this section, no postservice 
        benefit under subdivision 3 may be paid. 
           (c) A participant performing part-time service under 
        sections 121.701 to 121.710 shall serve at least two weekends 
        each month and two weeks during the year.  A part-time 
        participant shall serve at least 900 hours during a period of 
        not more than two years, or three years if enrolled in an 
        institution of higher education.  A participant performing 
        full-time service under sections 121.701 to 121.710 shall serve 
        at least 1,700 hours during a period of not less than nine 
        months, or more than one year. 
           (d) Notwithstanding any other law to the contrary, for 
        purposes of tort liability under sections 3.732 and 3.736, while 
        participating in a program a participant is an employee of the 
        state. 
           (e) Participants performing community service in a program 
        are not public employees for purposes of chapter 43A, 179A, 197, 
        353, or any other law governing hiring or discharging of public 
        employees. 
           Sec. 6.  Minnesota Statutes 1994, section 121.707, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POSTSERVICE BENEFIT.] (a) Each eligible 
        organization shall agree to provide to every participant shall 
        who fulfills the terms of a contract under section 121.707, 
        subdivision 2, receive a nontransferable postservice benefit 
        upon successfully completing the program.  The benefit must be 
        not less than $4,725 per year of full-time service or prorated 
        for part-time service or for partial service of at least 900 
        hours.  Upon signing a contract under section 121.707, 
        subdivision 2, each eligible organization shall deposit funds to 
        cover the full amount of postservice benefits obligated, except 
        for national education awards that are deposited in the national 
        service trust fund.  Funds encumbered in fiscal years 1994 and 
        1995 for postservice benefits shall be available until the 
        participants for whom the funds were encumbered are no longer 
        eligible to draw benefits.  
           (b) Nothing in this subdivision prevents a grantee 
        organization from using funds from nonfederal or nonstate 
        sources to increase the value of postservice benefits above the 
        value described in paragraph (a). 
           (c) The higher education coordinating board shall establish 
        an account for depositing funds for postservice 
        benefits received from eligible organizations.  If a participant 
        does not complete the term of service or, upon successful 
        completion of the program, does not use a postservice benefit 
        according to subdivision 4 within seven years after completing 
        the program, the amount of the postservice benefit shall be used 
        to provide a postservice benefit refunded to the eligible 
        organization or, at the organization's discretion, dedicated to 
        another eligible participant.  Interest earned on funds 
        deposited in the postservice benefit account is appropriated to 
        the higher education coordinating board for the costs of 
        administering the postservice benefits accounts.  
           (d) The state shall provide an additional postservice 
        benefit to any participant who successfully completes the 
        program.  The benefit must be a credit of five points to be 
        added to the competitive open rating of a participant who 
        obtains a passing grade on a civil service examination under 
        chapter 43A.  The benefit is available for five years after 
        completing the community service. 
           Sec. 7.  Minnesota Statutes 1994, section 121.707, 
        subdivision 4, is amended to read: 
           Subd. 4.  [USES OF POSTSERVICE BENEFITS.] (a) A postservice 
        benefit for a participant provided under subdivision 3, 
        paragraph (a), (b), or (c), must be available for seven years 
        after completing the program and may only be used for: 
           (1) paying a student loan; 
           (2) costs of attending an institution of higher education; 
        or 
           (3) expenses incurred by a student in an approved youth 
        apprenticeship program under chapter 126B, or in a registered 
        apprenticeship program approved by the department of labor and 
        industry. 
        Financial assistance provided under this subdivision must be in 
        the form of vendor payments whenever possible.  Any postservice 
        benefits provided by federal funds or vouchers may be used as a 
        downpayment on, or closing costs for, purchasing a first home. 
           (b) Postservice benefits are to be used to develop skills 
        required in occupations where numbers of jobs are likely to 
        increase.  The commission, in consultation with the education 
        and employment transitions council, and beginning January 1, 
        1997, the workforce development council, shall determine how the 
        benefits may be used in order to best prepare participants with 
        skills that build on their service learning and equip them for 
        meaningful employment. 
           (c) The postservice benefit shall not be included in 
        determining financial need when establishing eligibility or 
        award amounts for financial assistance programs under chapter 
        136A. 
           Sec. 8.  Minnesota Statutes 1994, section 121.707, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROGRAM TRAINING.] (a) The commission and, 
        beginning January 1, 1997, the council shall, within available 
        resources, ensure an opportunity for each participant to have 
        three weeks of training in a residential setting.  If offered, 
        each training session must: 
           (1) orient each participant in the nature, philosophy, and 
        purpose of the program; 
           (2) build an ethic of community service through general 
        community service training; and 
           (3) provide additional training as it determines necessary. 
           (b) Each grantee organization shall also train participants 
        in skills relevant to the community service opportunity. 
           Sec. 9.  Minnesota Statutes 1994, section 121.707, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TRAINING AND EDUCATION REQUIREMENTS.] Each 
        grantee organization shall assess the educational level of each 
        entering participant.  Each grantee shall work to enhance the 
        educational skills of each participant.  The commission and, 
        beginning January 1, 1997, the council may coordinate or 
        contract with educational institutions or other providers for 
        educational services and evaluation.  All grantees shall give 
        priority to educating and training participants who do not have 
        a high school diploma or its equivalent, or who cannot afford 
        post-secondary training and education. 
           Sec. 10.  Minnesota Statutes 1994, section 121.708, is 
        amended to read: 
           121.708 [PRIORITY.] 
           The commission and, beginning January 1, 1997, the council 
        shall give priority to an eligible organization proposing a 
        program that meets the goals of sections 121.704 to 121.707, and 
        that: 
           (1) involves youth in a meaningful way in all stages of the 
        program, including assessing community needs, preparing the 
        application, and assuming postservice leadership and mentoring 
        responsibilities; 
           (2) serves a community with significant unmet needs; 
           (3) provides an approach that is most likely to reduce 
        arrest rates, incarceration rates, teenage pregnancy, and other 
        indicators of troubled youth; 
           (4) builds linkages with existing, successful programs; and 
           (5) can be operational quickly. 
           Sec. 11.  Minnesota Statutes 1994, section 121.709, is 
        amended to read: 
           121.709 [MATCH REQUIREMENTS.] 
           Youth works grant funds must be used for the living 
        allowance, cost of employer taxes under sections 3111 and 3301 
        of the Internal Revenue Code of 1986, workers' compensation 
        coverage, and health benefits for each program participant.  
        Youthworks grant funds may also be used to supplement applicant 
        resources to fund postservice benefits for program participants. 
        Applicant resources, from sources and in a form determined by 
        the commission and, beginning January 1, 1997, the council, must 
        be used to provide for all other program operating costs, 
        including the portion of the applicant's obligation for 
        postservice benefits that is not covered by state or federal 
        grant funds and such costs as supplies, materials, 
        transportation, and salaries and benefits of those staff 
        directly involved in the operation, internal monitoring, and 
        evaluation of the program.  Administrative expenses must not 
        exceed five percent of total program costs.  
           Sec. 12.  Minnesota Statutes 1994, section 121.710, is 
        amended to read: 
           121.710 [EVALUATION AND REPORTING REQUIREMENTS.] 
           Subdivision 1.  [GRANTEE ORGANIZATIONS.] Each grantee 
        organization shall report to the commission and, beginning 
        January 1, 1997, the council at the time and on the matters 
        requested by the commission and, beginning January 1, 1997, the 
        council. 
           Subd. 2.  [INTERIM REPORT.] The commission and, beginning 
        January 1, 1997, the council shall report semiannually to the 
        legislature with interim recommendations to change the program. 
           Subd. 3.  [FINAL REPORT.] The commission and, beginning 
        January 1, 1997, the council shall present a final report to the 
        legislature by January 1, 1998, summarizing grantee evaluations, 
        reporting on individual participants and participating grantee 
        organizations, and recommending any changes to improve or expand 
        the program. 
           Sec. 13.  Minnesota Statutes 1994, section 121.885, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SERVICE LEARNING SERVICE-LEARNING AND 
        WORK-BASED LEARNING PROGRAMS STUDY.] The Minnesota commission on 
        national and community service, established in section 121.703, 
        governor's workforce development council shall assist the 
        commissioner of education in studying how to combine community 
        service activities and service learning service-learning with 
        work-based learning programs. 
           Sec. 14.  Minnesota Statutes 1994, section 121.885, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROGRAMS FOLLOWING YOUTH COMMUNITY SERVICE.] (a) 
        The Minnesota commission on national and community 
        service established in section 121.703, in cooperation with the 
        governor's workforce development council, the commissioner and 
        the higher education coordinating board, shall provide for those 
        participants who successfully complete youth community service 
        under sections 121.703 121.704 to 121.709, the following: 
           (1) for those who have a high school diploma or its 
        equivalent, an opportunity to participate in a youth 
        apprenticeship program at a community or technical college; and 
           (2) for those who are post-secondary students, an 
        opportunity to participate in an educational program that 
        supplements post-secondary courses leading to a degree or a 
        statewide credential of academic and occupational proficiency. 
           (b) Participants who successfully complete a youth 
        community service program under sections 121.704 to 121.710 are 
        eligible to receive an education voucher as provided under 
        section 121.707, subdivision 4.  The voucher recipient may apply 
        the voucher toward the cost of the recipient's tuition and other 
        education-related expenses at a post-secondary school under 
        paragraph (a). 
           (c) The Minnesota commission on national and community 
        service governor's workforce development council, in cooperation 
        with the state board of technical colleges board of trustees of 
        the Minnesota state colleges and universities, shall establish a 
        mechanism to transfer credit earned in a youth apprenticeship 
        program between the technical colleges and other post-secondary 
        institutions offering applied associate degrees. 
           Sec. 15.  Minnesota Statutes 1994, section 121.912, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [TRA AND FICA TRANSFER.] (a) Notwithstanding 
        subdivision 1, a district shall may transfer money from the 
        general fund to the community service fund for the employer 
        contributions for teacher retirement and FICA for employees who 
        are members of a teacher retirement association and who are paid 
        from the community service fund.  
           (b) A district shall not transfer money under paragraph (a) 
        for employees who are paid with money other than normal 
        operating funds, as defined in section 354.05, subdivision 27.  
           Sec. 16.  [124.255] [SCHOOL ENRICHMENT PARTNERSHIP 
        PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT.] The school enrichment 
        partnership program is established.  The purpose of the program 
        is to encourage school districts to expand the involvement of 
        the private sector in the delivery of academic programs.  The 
        program will provide matching state funds for those provided by 
        the private sector. 
           Subd. 2.  [REVENUE ELIGIBILITY.] A school district or group 
        of school districts is eligible to receive state aid under this 
        program.  Districts may enter into joint agreements to provide 
        programs or make expenditures under this section.  The 
        limitations under this subdivision shall apply to these programs 
        or expenditures as if they were operated by a single district.  
        A district may receive $1 of state aid for each $2 raised from 
        the private sector.  The private match must be in the form of 
        cash.  Specific types of noncash support may be considered for 
        the private match.  State aid is limited to the lesser of 
        $75,000 or $10 per pupil unit per district. 
           Subd. 3.  [REVENUE MANAGEMENT.] The use of the state and 
        private funds provided under this section is under the general 
        control of the school board.  The board may establish, without 
        using state funds or public employees, a separate foundation to 
        directly manage the funds.  The private funds must be used to 
        acquire instructional or noninstructional academic materials of 
        a capital nature including, but not limited to, textbooks, 
        globes, maps, and other academic material.  The funds may not be 
        used for salaries or other employee benefits. 
           Subd. 4.  [PROCEDURES; REPORT.] The Minnesota academic 
        excellence foundation, under the direction of the commissioner 
        of education, shall establish application forms, guidelines, 
        procedures, and timelines for the distribution of state aid.  
        The commissioner may require reporting necessary to evaluate the 
        program.  Measures of success will include numbers of 
        partnerships and funds raised; numbers of school foundations 
        formed; and demonstrated linkages of partnerships to improved 
        instructional delivery resulting in increased student learning. 
           Subd. 5.  [RESULTS-ORIENTED CHARTER 
        SCHOOLS.] Notwithstanding section 124.248, subdivision 4, 
        paragraph (b), a results-oriented charter school is eligible to 
        participate in the program under this section as if it were a 
        school district. 
           Sec. 17.  Minnesota Statutes 1994, section 124.261, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AID ELIGIBILITY.] For fiscal year 1996, 
        adult high school graduation aid for eligible pupils age 21 or 
        over, equals 65 percent of the general education formula 
        allowance times 1.30 times the average daily membership under 
        section 124.17, subdivision 2e.  For 1997 and later fiscal 
        years, adult high school graduation aid per eligible pupil 
        equals the amount established by the commissioner of education, 
        in consultation with the commissioner of finance, based on the 
        appropriation for this program.  Adult high school graduation 
        aid must be paid in addition to any other aid to the district.  
        Pupils age 21 or over may not be counted by the district for any 
        purpose other than adult high school graduation aid. 
           Sec. 18.  Minnesota Statutes 1994, section 124.2711, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To 
        obtain early childhood family education revenue, a district may 
        levy an amount equal to the tax rate of .626 .609 percent times 
        the adjusted tax capacity of the district for the year preceding 
        the year the levy is certified.  If the amount of the early 
        childhood family education levy would exceed the early childhood 
        family education revenue, the early childhood family education 
        levy shall equal the early childhood family education revenue. 
           Sec. 19.  Minnesota Statutes 1994, section 124.2713, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMMUNITY EDUCATION LEVY.] To obtain community 
        education revenue, a district may levy the amount raised by a 
        tax rate of 1.13 1.1 percent for fiscal year 1995 and 
        thereafter, times the adjusted net tax capacity of the 
        district.  If the amount of the community education levy would 
        exceed the community education revenue, the community education 
        levy shall be determined according to subdivision 6a.  
           Sec. 20.  Minnesota Statutes 1994, section 124C.45, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GOVERNANCE.] A school district may 
        establish an area learning center either by itself or in 
        cooperation with other districts, an ECSU, an intermediate 
        school district, a local education and employment transitions 
        partnership, public and private secondary and post-secondary 
        institutions, public agencies, businesses, and foundations.  
        Except for a district located in a city of the first class, a 
        center must serve the geographic area of at least two districts. 
           Sec. 21.  Minnesota Statutes 1994, section 124C.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PEOPLE TO BE SERVED.] A center shall provide 
        programs for secondary pupils and adults, giving priority to 
        serving persons between 16 and 21 years of age.  Secondary 
        pupils to be served are those who are chemically dependent, not 
        likely to graduate from high school, need assistance in 
        vocational and basic skills, can benefit from employment 
        experiences, and need assistance in transition from school to 
        employment.  Adults to be served are dislocated homemakers and 
        workers and others who need basic educational and social 
        services.  In addition to offering programs, the center shall 
        coordinate the use of other available educational services, 
        social services, and post-secondary institutions in the 
        community.  The center may also provide programs, including 
        work-based, service-learning, and applied learning opportunities 
        developed in collaboration with a local education and employment 
        transitions partnership, for elementary and secondary pupils who 
        are not attending the center to assist them in completing high 
        school. 
           Sec. 22.  Minnesota Statutes 1994, section 124C.48, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OUTSIDE SOURCES.] A center may accept: 
           (1) resources and services from post-secondary institutions 
        serving center pupils; 
           (2) resources from job training partnership act programs, 
        including funding for jobs skills training for various groups 
        and the percentage reserved for education; 
           (3) resources from the department of human services and 
        county welfare funding; or 
           (4) resources from a local education and employment 
        transitions partnership; or 
           (5) private resources, foundation grants, gifts, corporate 
        contributions, and other grants.  
           Sec. 23.  Minnesota Statutes 1994, section 126B.01, is 
        amended to read: 
           126B.01 [PURPOSE EDUCATION AND EMPLOYMENT TRANSITIONS 
        SYSTEM.] 
           Subdivision 1.  [PURPOSE GOALS.] To better prepare all 
        learners to make transitions between education and employment, a 
        comprehensive education and employment transitions system is 
        established to that is driven by multisector partnerships and 
        takes a lifelong approach to workforce development.  The goals 
        of the statewide education and employment transitions system are:
           (1) to improve the skills learners need to achieve greater 
        levels of self-sufficiency through education, training, and 
        work; 
           (2) assist individuals in planning their futures by 
        providing to improve work-related counseling and information 
        about career opportunities and vocational education programs 
        available to learners to facilitate workforce development; 
           (2) (3) to integrate opportunities for work-based learning, 
        including but not limited to occupation-specific apprenticeship 
        programs and community service programs, service-learning, and 
        other applied learning methods into the elementary, secondary, 
        and post-secondary curriculum and state and local graduation 
        standards; 
           (3) (4) to increase participation in employment 
        opportunities and demonstrate the relationship between education 
        and employment at the elementary, secondary, and post-secondary 
        education levels; 
           (5) to promote the efficient use of public and private 
        resources by coordinating elementary, secondary, and 
        post-secondary education with related government programs; and 
           (4) (6) to expand educational options available to students 
        all learners through collaborative efforts between secondary 
        institutions school districts, post-secondary 
        institutions, business, industry employers, organized 
        labor, workers, learners, parents, community-based 
        organizations, and other interested parties; 
           (7) to increase opportunities for women, minorities, 
        individuals with a disability, and at-risk learners to fully 
        participate in work-based learning; 
           (8) to establish performance standards for learners that 
        integrate state and local graduation standards and generally 
        recognized industry and occupational skill standards; and 
           (9) to provide support systems including a unified labor 
        market information system; a centralized quality assurance 
        system with information on learner achievement, employer 
        satisfaction, and measurable system outcomes; a statewide 
        marketing system to promote the importance of lifework 
        development; a comprehensive professional development system for 
        public and private sector partners; and a comprehensive system 
        for providing technical support to local partnerships for 
        education and employment transitions. 
           Subd. 2.  [FUNDING.] Work-based learning programs 
        incorporating post-secondary instruction implemented under this 
        chapter shall provide for student funding according to section 
        123.3514. 
           Subd. 3.  [GOVERNOR'S WORKFORCE DEVELOPMENT COUNCIL.] The 
        governor's workforce development council is responsible for 
        developing, implementing, and evaluating the statewide education 
        and employment transitions system and achieving the goals of the 
        system. 
           Subd. 4.  [PARTNERSHIP GRANTS.] The council shall award 
        grants to implement local education and employment transition 
        systems to local education and employment transition 
        partnerships established under 126B.10.  Grants under this 
        section may be used for the local education and employment 
        transitions system, youth apprenticeship and other work-based 
        learning programs, youth employer programs, youth 
        entrepreneurship programs, and other programs and purposes the 
        council determines fulfill the purposes of the education and 
        employment transitions system.  The council shall evaluate grant 
        proposals on the basis of the elements required in the local 
        plan described in section 126B.10, subdivision 3.  The council 
        shall develop and publicize the grant application process and 
        review and comment on the proposals submitted.  Priority in 
        awarding grants must be given to local partnerships that include 
        multiple communities and a viable base of educational, 
        work-based learning, and employment opportunities.  
           Subd. 5.  [ANNUAL REVIEW.] The council shall review the 
        activities of each local education and employment transitions 
        partnership annually to ensure that the local partnership is 
        adequately meeting the system standards under section 126B.10 
        and state quality assurance standards established as part of the 
        quality assurance system developed by the council.  This 
        subdivision expires July 1, 1997. 
           Subd. 6.  [REPORT.] The council shall annually publish a 
        report summarizing the data submitted by each local education 
        and employment transitions partnership.  The report shall be 
        published no later than September 1 of the year following the 
        year in which the data was collected.  This subdivision expires 
        July 1, 1997.  
           Sec. 24.  Minnesota Statutes 1994, section 126B.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACADEMIC INSTRUCTION AND WORK-RELATED LEARNING.] 
        (a) A Comprehensive youth apprenticeship program programs and 
        other work-based learning programs under the education and 
        employment transitions system must integrate academic 
        instruction and work-related learning in the classroom and at 
        the workplace. Schools, in collaboration with students' 
        learners' employers, must use competency-based measures to 
        evaluate students' learners' progress in the program.  Students 
        Learners who successfully complete the program must receive 
        academic and occupational credentials from the participating 
        school. 
           (b) The academic instruction provided as part of a 
        comprehensive youth apprenticeship program must: 
           (1) meet applicable secondary and post-secondary education 
        requirements; 
           (2) enable the students to attain academic proficiency in 
        at least the areas of English, mathematics, history, science, 
        and geography; and 
           (3) where appropriate, modify existing secondary and 
        post-secondary curricula to accommodate the changing needs of 
        the workplace. 
           (c) Work-based learning provided as part of the program 
        must: 
           (1) supply students with knowledge, skills, and abilities 
        based on appropriate, nationally accepted standards in the 
        specific industries and occupations for which the students are 
        trained; 
           (2) offer students structured job training at the worksite, 
        including high quality supervised learning opportunities; 
           (3) foster interactive, team-based learning; 
           (4) encourage sound work habits and behaviors; 
           (5) develop workplace skills, including the ability to 
        manage resources, work productively with others, acquire and use 
        information, understand and master systems, and work with 
        technologies; and 
           (6) where feasible, offer students the opportunity to 
        participate in community service and service learning activities.
           (d) Worksite learning and experience provided as part of 
        the program must: 
           (1) help youth apprentices achieve the program's academic 
        and work-based learning requirements; 
           (2) pay apprentices for their work; and 
           (3) assist employers to fulfill their commitment to youth 
        apprentices. 
           Sec. 25.  Minnesota Statutes 1994, section 126B.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROGRAM COMPONENTS YOUTH APPRENTICESHIP 
        PROGRAMS.] (a) A comprehensive youth apprenticeship program must 
        require representatives of secondary and post-secondary school 
        systems, affected local businesses, industries, occupations and 
        labor, as well as the local community, to be actively and 
        collaboratively involved in advising and managing the 
        program and ensuring, in consultation. 
           (b) The entities participating in a program must consult 
        with local private industry councils, to ensure that the youth 
        apprenticeship program meets local labor market demands and, 
        provides student apprentices with the high skill training 
        necessary for career advancement, within an occupation. 
           (c) The program must meet meets applicable state education 
        graduation requirements and labor standards, pays apprentices 
        for their work and provide provides support services to program 
        participants, and accommodate the integrating of work-related 
        learning and academic instruction through flexible schedules for 
        students and teachers and appropriately modified curriculum. 
           (d) (b) Local employers, collaborating with labor 
        organizations where appropriate, must assist the program by 
        analyzing workplace needs, creating work-related curriculum, 
        employing and adequately paying youth apprentices engaged in 
        work-related learning in the workplace, training youth 
        apprentices to become skilled in an occupation, providing 
        student apprentices with a workplace mentor, periodically 
        informing the school of an apprentice's progress, and making a 
        reasonable effort to employ youth apprentices who successfully 
        complete the program. 
           (e) (c) A student participating in a comprehensive youth 
        apprenticeship program must sign a youth apprenticeship 
        agreement with participating entities that obligates youth 
        apprentices, their parents or guardians, employers, and schools 
        to meet program requirements; indicates how academic 
        instruction, work-based learning, and worksite learning and 
        experience will be integrated; ensures that successful youth 
        apprentices will receive a recognized credential of academic and 
        occupational proficiency; and establishes the wage rate and 
        other benefits for which youth apprentices are eligible while 
        employed during the program. 
           (f) (d) Secondary school principals or, counselors, or 
        business mentors familiar with the demonstration project 
        education to employment transitions system must inform entering 
        secondary school students about available occupational and 
        career opportunities and the option of entering a youth 
        apprenticeship program or other work-based learning program to 
        obtain post-secondary academic and occupational credentials. 
           Sec. 26.  [126B.10] [EDUCATION AND EMPLOYMENT TRANSITIONS 
        PARTNERSHIPS.] 
           Subdivision 1.  [LOCAL PARTNERSHIPS; ESTABLISHMENT.] Local 
        education and employment transitions partnerships may be 
        established to implement local education and employment 
        transitions systems.  Local partnerships shall represent 
        multiple sectors in the community, including, at a minimum, 
        representatives of employers, primary and secondary education, 
        labor and professional organizations, workers, learners, 
        parents, community-based organizations, and to the extent 
        possible, post-secondary education.  
           Subd. 2.  [BOARD.] A local education and employment 
        transitions partnership shall establish a governing board for 
        planning and implementing work-based and other applied learning 
        programs.  The board shall consist of at least one 
        representative from each member of the education and employment 
        transitions partnership. A majority of the board must consist of 
        representatives of local or regional employers. 
           Subd. 3.  [LOCAL EDUCATION AND EMPLOYMENT TRANSITIONS 
        SYSTEMS.] A local education and employment transitions 
        partnership shall assess the needs of employers, employees, and 
        learners, and develop a plan for implementing and achieving the 
        objectives of a local or regional education and employment 
        transitions system.  The plan shall provide for a comprehensive 
        local system for assisting learners and workers in making the 
        transition from school to work or for retraining in a new 
        vocational area.  The objectives of a local education and 
        employment transitions system include:  
           (1) increasing the effectiveness of the educational 
        programs and curriculum of elementary, secondary, and 
        post-secondary schools and the work site in preparing students 
        in the skills and knowledge needed to be successful in the 
        workplace; 
           (2) implementing learner outcomes for students in grades 
        kindergarten through 12 designed to introduce the world of work 
        and to explore career opportunities, including nontraditional 
        career opportunities; 
           (3) eliminating barriers to providing effective integrated 
        applied learning, service-learning, or work-based curriculum; 
           (4) increasing opportunities to apply academic knowledge 
        and skills, including skills needed in the workplace, in local 
        settings which include the school, school-based enterprises, 
        post-secondary institutions, the workplace, and the community; 
           (5) increasing applied instruction in the attitudes and 
        skills essential for success in the workplace, including 
        cooperative working, leadership, problem-solving, and respect 
        for diversity; 
           (6) providing staff training for vocational guidance 
        counselors, teachers, and other appropriate staff in the 
        importance of preparing learners for the transition to work, and 
        in methods of providing instruction that incorporate applied 
        learning, work-based learning, and service learning experiences; 
           (7) identifying and enlisting local and regional employers 
        who can effectively provide work-based or service learning 
        opportunities, including, but not limited to, apprenticeships, 
        internships, and mentorships; 
           (8) recruiting community and workplace mentors including 
        peers, parents, employers and employed individuals from the 
        community, and employers of high school students; 
           (9) identifying current and emerging educational, training, 
        and employment needs of the area or region, especially within 
        industries with potential for job growth; 
           (10) improving the coordination and effectiveness of local 
        vocational and job training programs, including vocational 
        education, adult basic education, tech prep, apprenticeship, 
        service learning, youth entrepreneur, youth training and 
        employment programs administered by the commissioner of economic 
        security, and local job training programs under the Job Training 
        Partnership Act, United States Code, title 29, section 1501, et 
        seq.; 
           (11) identifying and applying for federal, state, local, 
        and private sources of funding for vocational or applied 
        learning programs; 
           (12) providing students with current information and 
        counseling about career opportunities, potential employment, 
        educational opportunities in post-secondary institutions, 
        workplaces, and the community, and the skills and knowledge 
        necessary to succeed; 
           (13) providing educational technology, including 
        interactive television networks and other distance learning 
        methods, to ensure access to a broad variety of work-based 
        learning opportunities; 
           (14) including students with disabilities in a district's 
        vocational or applied learning program and ways to serve at-risk 
        learners through collaboration with area learning centers under 
        sections 124C.45 to 124C.49, or other alternative programs; and 
           (15) providing a warranty to employers, post-secondary 
        education programs, and other post-secondary training programs, 
        that learners successfully completing a high school work-based 
        or applied learning program will be able to apply the knowledge 
        and work skills included in the program outcomes or graduation 
        requirements.  The warranty shall require education and training 
        programs to continue to work with those learners that need 
        additional skill development until they can demonstrate 
        achievement of the program outcomes or graduation requirements. 
           Subd. 4.  [ANNUAL REPORTS.] (a) A local education and 
        employment transitions partnership shall annually publish a 
        report and submit information to the council as required.  The 
        report shall include information required by the council for the 
        statewide system performance assessment.  The report shall be 
        available to the public in the communities served by the local 
        education and employment transitions partnership.  The report 
        shall be published no later than September 1 of the year 
        following the year in which the data was collected. 
           Sec. 27.  [MINNESOTA COMMISSION ON NATIONAL AND COMMUNITY 
        SERVICE; TRANSFER OF RESPONSIBILITY.] 
           If the governor's workforce development council meets 
        federal requirements for the commission on national and 
        community service, the duties of the Minnesota commission on 
        national and community service under Minnesota Statutes, 
        sections 121.703 to 121.710, shall transfer to the governor's 
        workforce development council on January 1, 1997.  If, by that 
        date, the workforce development council does not meet federal 
        requirements, the Minnesota commission on national and community 
        service shall continue to perform the duties assigned to it. 
           Sec. 28.  [YOUTH EMPLOYER GRANT PROGRAM.] 
           Subdivision 1.  [YOUTH EMPLOYER GRANTS.] The governor's 
        workforce development council shall establish a pilot program 
        for improving the work-based learning experience of school-aged 
        youth who are employed.  An employer, in partnership with a 
        local education and employment transitions partnership, may 
        apply for a youth employer grant to the governor's workforce 
        development council.  The council shall determine application 
        procedures and criteria for approving grant awards. 
           Subd. 2.  [GRANT APPLICATION.] A grant application shall 
        include a plan to meet the following goals: 
           (1) enhance the work experience of employed youth by 
        integrating appropriate academic and work skills components; 
           (2) develop an applied learning plan for each employed 
        youth that outlines the academic and work skills outcomes to be 
        achieved by the work-based learning experience and describes how 
        these outcomes apply toward attainment of high school graduation 
        requirements; 
           (3) provide training and support to the employer in 
        developing a work experience for meeting the goals of the 
        applied learning plan and for assessing student achievement; and 
           (4) evaluate the effectiveness of the work-based learning 
        program. 
           Subd. 3.  [GRANT AWARDS.] The governor's workforce 
        development council may award youth employer grants to 
        applicants eligible under subdivision 1.  Grant recipients 
        should be geographically distributed throughout the state.  
        Grant proceeds may be used for the costs of planning, materials, 
        and training.  The school district, school, or post-secondary 
        education institution partner shall be the fiscal agent for the 
        grant. 
           Sec. 29.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        or other named fund to the department of education for the 
        fiscal years designated. 
           Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
        education aid according to Minnesota Statutes, sections 124.26 
        in fiscal year 1996 and 124.2601 in fiscal year 1997:  
             $8,374,000    .....    1996
             $8,374,000    .....    1997 
           The 1996 appropriation includes $1,256,000 for 1995 and 
        $7,118,000 for 1996.  
           The 1997 appropriation includes $1,256,000 for 1996 and 
        $7,118,000 for 1997.  
           Up to $199,000 each year may be used for contracts with 
        private, nonprofit organizations for approved programs.  
           Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
        adults with disabilities programs according to Minnesota 
        Statutes, section 124.2715: 
             $695,000    .....    1996 
             $695,000    .....    1997 
           Any balance in the first year does not cancel and is 
        available for the second year. 
           Of these amounts, $25,000 each year is to fund the Michael 
        Ehrlichmann memorial for the Minnesota Statewide Direct Services 
        Initiative, to provide training for:  (1) direct service 
        providers, including staff working in vocational and residential 
        settings, paraprofessionals in education, and persons working in 
        other related settings; and (2) individuals with developmental 
        disabilities and their families.  The commissioner must transmit 
        this amount to the Governor's developmental disabilities council.
           Subd. 4.  [ADULT GRADUATION AID.] For adult graduation aid: 
             $2,245,000     .....     1996
             $2,245,000     .....     1997
           The 1996 appropriation includes $336,000 for 1995 and 
        $1,909,000 for 1996.  
           The 1997 appropriation includes $336,000 for 1996 and 
        $1,909,000 for 1997.  
           Subd. 5.  [ALCOHOL-IMPAIRED DRIVER.] (a) For grants with 
        funds received under Minnesota Statutes, section 171.29, 
        subdivision 2, paragraph (b), clause (4): 
             $514,000     .....     1996
             $514,000     .....     1997
           (b) These appropriations are from the alcohol-impaired 
        driver account of the special revenue fund.  Any funds credited 
        for the department of education to the alcohol-impaired driver 
        account of the special revenue fund in excess of the amounts 
        appropriated in this subdivision are appropriated to the 
        department of education and available in fiscal year 1996 and 
        fiscal year 1997. 
           (c) Up to $226,000 each year may be used by the department 
        of education to contract for services to school districts 
        stressing the dangers of driving after consuming alcohol.  No 
        more than five percent of this amount may be used for 
        administrative costs by the contract recipients. 
           (d) Up to $88,000 each year may be used for grants to 
        support student-centered programs to discourage driving after 
        consuming alcohol. 
           (e) Up to $200,000 and any additional funds each year may 
        be used for chemical abuse prevention grants. 
           Subd. 6. [COMMUNITY EDUCATION AID.] For community education 
        aid according to Minnesota Statutes, section 124.2713: 
             $2,826,000    .....    1996 
             $2,574,000    .....    1997 
           The 1996 appropriation includes $499,000 for 1995 and 
        $2,327,000 for 1996.  
           The 1997 appropriation includes $410,000 for 1996 and 
        $2,164,000 for 1997.  
           Subd. 7.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
        childhood family education aid according to Minnesota Statutes, 
        section 124.2711: 
             $14,224,000    .....    1996 
             $13,832,000    .....    1997
           The 1996 appropriation includes $2,086,000 for 1995 and 
        $12,138,000 for 1996.  
           The 1997 appropriation includes $2,140,000 for 1996 and 
        $11,692,000 for 1997.  
           $10,000 each year may be spent for evaluation of early 
        childhood family education programs.  
           Subd. 8.  [EDUCATION AND EMPLOYMENT TRANSITIONS PROGRAM 
        GRANTS.] For local education and employment transitions program 
        grants: 
             $2,500,000      .....      1996 
             $2,500,000      .....      1997 
           $600,000 each year is for development of a labor-management 
        information system to support education to employment 
        transitions programs. 
           $575,000 each year is for youth apprenticeship program 
        grants.  Youth apprenticeship program grants may only be awarded 
        to local education and employment transitions partnerships or to 
        a youth apprenticeship program that previously received a youth 
        apprenticeship demonstration program grant according to Laws 
        1993, chapter 335, section 7. 
           $1,000,000 each year is for local program grants, of which 
        $100,000 must be used for youth entrepreneurship grants under 
        Minnesota Statutes, section 116J.655, and $100,000 must be used 
        for youth employer grants under section 28.  
           $325,000 each year is for state-level activities, including 
        the governor's workforce development council. 
           Any unexpended balance remaining in the first year does not 
        cancel but is available in the second year. 
           Subd. 9.  [EXTENDED DAY AID.] For extended day aid: 
             $381,000        .....     1996 
             $374,000        .....     1997
           The 1996 appropriation includes $58,000 for 1995 and 
        $323,000 for 1996. 
           The 1997 appropriation includes $56,000 for 1996 and 
        $318,000 for 1997. 
           Subd. 10.  [FAMILY COLLABORATIVES.] For family 
        collaboratives: 
             $6,000,000      .....     1996
             $6,000,000      .....     1997
           Of the appropriation, $150,000 each year is for grants 
        targeted to assist in providing collaborative children's library 
        service programs.  To be eligible, a family collaborative grant 
        recipient must collaborate with at least one public library and 
        one children's or family organization.  The public library must 
        involve the regional public library system and multitype library 
        system to which it belongs in the planning and provide for an 
        evaluation of the program. 
           No more than 2.5 percent of the appropriation is available 
        to the state to administer and evaluate the grant program. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 11.  [GED TESTS.] For payment of 60 percent of the 
        costs of GED tests: 
             $125,000     .....     1996
             $125,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 12.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
        health and developmental screening aid according to Minnesota 
        Statutes, sections 123.702 and 123.7045: 
             $1,550,000    .....    1996 
             $1,550,000    .....    1997 
           The 1996 appropriation includes $232,000 for 1995 and 
        $1,318,000 for 1996.  
           The 1997 appropriation includes $232,000 for 1996 and 
        $1,318,000 for 1997.  
           Any balance in the first year does not cancel but is 
        available in the second year.  
           Subd. 13.  [HEARING IMPAIRED ADULTS.] For programs for 
        hearing impaired adults according to Minnesota Statutes, section 
        121.201: 
             $70,000     .....     1996
             $70,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 14.  [LEARNING READINESS PROGRAM REVENUE.] For 
        revenue for learning readiness programs: 
             $9,506,000      .....     1996
             $9,505,000      .....     1997
           The 1996 appropriation includes $1,424,000 for 1995 and 
        $8,082,000 for 1996. 
           The 1997 appropriation includes $1,425,000 for 1996 and 
        $8,080,000 for 1997.  
           $10,000 each year may be spent for evaluation of learning 
        readiness programs. 
           Subd. 15.  [OMBUDSPERSONS.] For ombudspersons: 
             $33,000      .....     1996
             $33,000      .....     1997
           The appropriation is made to the office of ombudspersons 
        for families for purposes of funding the activities of the 
        ombudsperson authorized by Minnesota Statutes, sections 257.0755 
        to 257.0768.  Any balance in the first year does not cancel but 
        is available in the second year.  
           Subd. 16.  [VIOLENCE PREVENTION EDUCATION GRANTS.] For 
        violence prevention education grants: 
             $1,500,000      .....     1996
             $1,500,000      .....     1997
           Of the amount each year, $50,000 is for program 
        administration. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 17.  [WAY TO GROW.] For grants for existing way to 
        grow programs according to Minnesota Statutes, section 121.835:  
             $475,000     .....    1996
             $475,000     .....    1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 18.  [SCHOOL ENRICHMENT PARTNERSHIP PROGRAM.] For 
        school enrichment partnership program aid: 
              $500,000      .....      1996 
           Any balance remaining in the first year does not cancel but 
        is available in the second year. 
           Subd. 19.  [YOUTHWORKS.] For funding youthworks programs 
        according to Minnesota Statutes, sections 121.70 to 121.710: 
             $1,813,000     .....     1996 
             $1,813,000     .....     1997 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 20.  [YOUTHWORKS PROGRAM.] For implementing 
        youthworks programs: 
             $50,000        .....     1996 
             $50,000        .....     1997 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Sec. 30.  [REVISOR INSTRUCTIONS.] 
           In the next and subsequent editions of Minnesota Statutes, 
        the revisor shall change the title of Minnesota Statutes, 
        chapter 126B, from "YOUTH APPRENTICESHIP SYSTEM" to "EDUCATION 
        AND EMPLOYMENT TRANSITIONS SYSTEM." 
           In the next and subsequent editions of Minnesota Statutes 
        and Minnesota Rules, the revisor shall substitute the term 
        "workforce development council" for "governor's job training 
        council" wherever it appears in statutes and rules. 
           In the next and subsequent editions of Minnesota Statutes 
        and Minnesota Rules, the revisor shall change the term "service 
        learning" to "service-learning" wherever it appears in statutes 
        and rules. 
           Sec. 31.  [REPEALER.] 
           (a) Minnesota Statutes 1994, sections 121.702, subdivision 
        9; and 121.703, are repealed. 
           (b) Minnesota Statutes 1994, sections 126B.02; 126B.03, 
        subdivision 1; 126B.04; and 126B.05, are repealed. 
           Sec. 32.  [EFFECTIVE DATES.] 
           (a) Section 31, paragraph (a), is effective July 1, 1997, 
        if the governor's workforce development council meets all 
        federal requirements for the commission on national and 
        community service. 
           (b) Tax rate changes in sections 18 and 19 are effective 
        beginning with taxes payable in 1996. 
                                   ARTICLE 5 
                                   FACILITIES 
           Section 1.  Minnesota Statutes 1994, section 124.14, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [HEALTH AND SAFETY AID TRANSFER.] The 
        commissioner of education, with the approval of the commissioner 
        of finance, annually may transfer an amount from the 
        appropriation for health and safety aid to the appropriation for 
        debt service aid for the same fiscal year.  The amount of the 
        transfer equals the amount necessary to fund any shortage in the 
        debt service aid appropriation created by a data correction that 
        occurs between November 1 and June 30 of the preceding fiscal 
        year. 
           Sec. 2.  Minnesota Statutes 1994, section 124.243, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CAPITAL EXPENDITURE FACILITIES REVENUE.] (a) For 
        fiscal years 1994 and 1995, Capital expenditure facilities 
        previous formula revenue for a district equals $128 times its 
        actual pupil units for the school year. 
           (b) For fiscal years 1996 and later, capital expenditure 
        facilities revenue for a district equals $100 times the 
        district's maintenance cost index times its actual pupil units 
        for the school year. 
           (c) A district's capital expenditure facilities revenue for 
        a school year shall be reduced if the unreserved balance in the 
        capital expenditure facilities account on June 30 of the prior 
        school year exceeds $675 times the fund balance pupil units in 
        the prior year as defined in section 124A.26, subdivision 1.  If 
        a district's capital expenditure facilities revenue is reduced, 
        the reduction equals the lesser of (1) the amount that the 
        unreserved balance in the capital expenditure facilities account 
        on June 30 of the prior year exceeds $675 times the fund balance 
        pupil units in the prior year, or (2) the capital expenditure 
        facilities revenue for that year. 
           (d) For 1996 and later fiscal years, the previous formula 
        revenue equals the amount of revenue computed for the district 
        according to section 124.243 for fiscal year 1995. 
           (e) (c) Notwithstanding paragraph (b), for fiscal year 
        1996, the revenue for each district equals 25 percent of the 
        amount determined in paragraph (b) plus 75 percent of the 
        previous formula revenue. 
           (f) (d) Notwithstanding paragraph (b), for fiscal year 
        1997, the revenue for each district equals 50 percent of the 
        amount determined in paragraph (b) plus 50 percent of the 
        previous formula revenue. 
           (g) (e) Notwithstanding paragraph (b), for fiscal year 
        1998, the revenue for each district equals 75 percent of the 
        amount determined in paragraph (b) plus 25 percent of the 
        previous formula revenue. 
           (h) (f) The revenue in paragraph (b) for a district that 
        operates a program under section 121.585, is increased by an 
        amount equal to $15 times the number of actual pupil units at 
        the site where the program is implemented. 
           Sec. 3.  Minnesota Statutes 1994, section 124.244, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REVENUE AMOUNT.] (a) For fiscal year 1995, 
        the capital expenditure equipment revenue for each district 
        equals $66 times its actual pupil units for the school year. 
           (b) For fiscal years year 1996 and later, the capital 
        expenditure equipment revenue for each district equals $69 $75 
        times its actual pupil units for the school year.  
           (c) Of a district's capital expenditure equipment revenue, 
        $3 $8 times its actual pupil units for the school year shall be 
        reserved and used according to subdivision 4, paragraph (b). 
           Sec. 4.  Minnesota Statutes 1994, section 124.244, 
        subdivision 4, is amended to read: 
           Subd. 4.  [USES OF REVENUE.] (a) Capital expenditure 
        equipment revenue may be used only for the following purposes:  
           (1) to pay capital expenditure equipment related 
        assessments of any entity formed under a cooperative agreement 
        between two or more districts; 
           (2) to purchase or lease computers and related materials, 
        copying machines, telecommunications equipment, and other 
        noninstructional equipment; 
           (3) to purchase or lease assistive technology or equipment 
        for instructional programs; 
           (4) to purchase textbooks; 
           (5) to purchase new and replacement library books; and 
           (6) to purchase vehicles except those for which a levy is 
        authorized under section 124.226, subdivision 6. 
           (b) The reserved capital expenditure equipment revenue 
        shall only be used to purchase or lease telecommunications 
        equipment, computers, and related equipment for integrated 
        information management systems for: 
           (1) managing and reporting learner outcome information for 
        all students under a results-oriented graduation rule; 
           (2) managing student assessment, services, and achievement 
        information required for students with individual education 
        plans; and 
           (3) other classroom information management needs.; and 
           (4) to pay personnel costs directly related to the 
        acquisition, operation, and maintenance of telecommunications 
        systems, computers, related equipment, and network and 
        applications software. 
           (c) The equipment obtained with reserved revenue shall be 
        utilized, to the greatest extent possible given available 
        funding, on a per instructor or per classroom basis.  A school 
        district may supplement its reserved revenue with other capital 
        expenditure equipment revenue, and cash and in-kind grants from 
        public and private sources. 
           Sec. 5.  Minnesota Statutes 1994, section 124.2445, is 
        amended to read: 
           124.2445 [PURCHASE OF CERTAIN EQUIPMENT.] 
           The board of a school district may issue certificates of 
        indebtedness or capital notes subject to the school district 
        debt limits to purchase vehicles other than school buses, 
        computers, telephone systems, cable equipment, photocopy and 
        office equipment, technological equipment for instruction, and 
        other capital equipment having an expected useful life at least 
        as long as the terms of the certificates or notes.  The 
        certificates or notes must be payable in not more than five 
        years and must be issued on the terms and in the manner 
        determined by the board.  The certificates or notes may be 
        issued by resolution and without the requirement for an 
        election.  The certificates or notes are general obligation 
        bonds for purposes of section 124.755.  A tax levy must be made 
        for the payment of the principal and interest on the 
        certificates or notes, in accordance with section 475.61, as in 
        the case of bonds.  That tax levy for each year must not exceed 
        the amount of the district's total operating capital expenditure 
        equipment levy under section 124.244 revenue for the year the 
        initial debt service levies are certified.  The 
        district's capital expenditure levy under section 
        124.244 general education levy for each year must be reduced by 
        the amount of the tax levies for debt service certified for each 
        year for payment of the principal and interest on the 
        certificates or notes as required by section 475.61.  
           Sec. 6.  Minnesota Statutes 1994, section 124.2455, is 
        amended to read: 
           124.2455 [BONDS FOR CERTAIN CAPITAL FACILITIES.] 
           (a) In addition to other bonding authority, with approval 
        of the commissioner, a school district may issue general 
        obligation bonds for certain capital projects under this 
        section.  The bonds must be used only to make capital 
        improvements including: 
           (1) under section 124.243, subdivision 6, capital 
        expenditure facilities revenue uses specified in clauses (4), 
        (6), (7), (8), (9), and (10); 
           (2) the cost of energy modifications; 
           (3) improving handicap accessibility to school buildings; 
        and 
           (4) bringing school buildings into compliance with life and 
        safety codes and fire codes.  
           (b) Before a district issues bonds under this subdivision, 
        it must publish notice of the intended projects, the amount of 
        the bond issue, and the total amount of district indebtedness.  
           (c) A bond issue tentatively authorized by the board under 
        this subdivision becomes finally authorized unless a petition 
        signed by more than 15 percent of the registered voters of the 
        school district is filed with the school board within 30 days of 
        the board's adoption of a resolution stating the board's 
        intention to issue bonds.  The percentage is to be determined 
        with reference to the number of registered voters in the school 
        district on the last day before the petition is filed with the 
        school board.  The petition must call for a referendum on the 
        question of whether to issue the bonds for the projects under 
        this section.  The approval of 50 percent plus one of those 
        voting on the question is required to pass a referendum 
        authorized by this section. 
           (d) The bonds may be issued in a principal amount, that 
        when combined with interest thereon, will be paid off with not 
        more than 50 percent of current and anticipated revenue for 
        capital facilities under this section or a successor section for 
        the current year plus projected revenue not greater than that of 
        the current year for the next ten years.  Once finally 
        authorized, the district must set aside the lesser of the amount 
        necessary to make the principal and interest payments or 50 
        percent of the current year's revenue for capital facilities 
        under this section or a successor section each year in a 
        separate account until all principal and interest on the bonds 
        is paid.  The district must annually transfer this amount from 
        its capital fund to the debt redemption fund.  The bonds must be 
        paid off within ten years of issuance.  The bonds must be issued 
        in compliance with chapter 475, except as otherwise provided in 
        this section. 
           (e) Notwithstanding paragraph (d), within the first five 
        years following voter approval of a combination according to 
        section 122.243, subdivision 2, bonds may be issued in a 
        principal amount, that when combined with interest thereon, will 
        be paid off with not more than 50 percent of current and 
        anticipated revenue for capital facilities under this section or 
        a successive section for the current year plus projected revenue 
        not greater than that of the current year for the next 20 
        years.  All the other provisions and limitation of paragraph (d) 
        apply. 
           Sec. 7.  Minnesota Statutes 1994, section 124.83, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
        safety revenue, a district may levy an amount equal to the 
        district's health and safety revenue as defined in subdivision 3 
        multiplied by the lesser of one, or the ratio of the quotient 
        derived by dividing the adjusted net tax capacity of the 
        district for the year preceding the year the levy is certified 
        by the actual pupil units in the district for the school year to 
        which the levy is attributable, to 50 percent of the equalizing 
        factor $4,707.50. 
           Sec. 8.  Minnesota Statutes 1994, section 124.84, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEVY AUTHORITY.] The district may levy up to 
        $300,000 under this section, as approved by the commissioner.  
        The approved amount may be levied over five eight or fewer years.
           Sec. 9.  Minnesota Statutes 1994, section 124.91, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POST-JUNE 1992 LEASE PURCHASE, INSTALLMENT 
        BUYS.] (a) Upon application to, and approval by, the 
        commissioner in accordance with the procedures and limits in 
        subdivision 1, a district, as defined in this subdivision, may: 
           (1) purchase real or personal property under an installment 
        contract or may lease real or personal property with an option 
        to purchase under a lease purchase agreement, by which 
        installment contract or lease purchase agreement title is kept 
        by the seller or vendor or assigned to a third party as security 
        for the purchase price, including interest, if any; and 
           (2) annually levy the amounts necessary to pay the 
        district's obligations under the installment contract or lease 
        purchase agreement. 
           (b)(1) The obligation created by the installment contract 
        or the lease purchase agreement must not be included in the 
        calculation of net debt for purposes of section 475.53, and does 
        not constitute debt under other law.  
           (2) An election is not required in connection with the 
        execution of the installment contract or the lease purchase 
        agreement. 
           (c) The proceeds of the levy authorized by this subdivision 
        must not be used to acquire a facility to be primarily used for 
        athletic or school administration purposes. 
           (d) In this subdivision, "district" means: 
           (1) a school district required to have a comprehensive plan 
        for the elimination of segregation whose plan has been 
        determined by the commissioner to be in compliance with the 
        state board of education rules relating to equality of 
        educational opportunity and school desegregation; or 
           (2) a school district that participates in a joint program 
        for interdistrict desegregation with a district defined in 
        clause (1) if the facility acquired under this subdivision is to 
        be primarily used for the joint program. 
           (e) Notwithstanding subdivision 1, the prohibition against 
        a levy by a district to lease or rent a district-owned building 
        to itself does not apply to levies otherwise authorized by this 
        subdivision. 
           (f) Projects may be approved under this section by the 
        commissioner in fiscal years 1993, 1994, and 1995 only. 
           (g) For the purposes of this subdivision, any references in 
        subdivision 1 to building or land shall be deemed to include 
        personal property. 
           Sec. 10.  Minnesota Statutes 1994, section 124.95, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] (a) The following portions of a 
        district's debt service levy qualify for debt service 
        equalization: 
           (1) debt service for repayment of principal and interest on 
        bonds issued before July 2, 1992; 
           (2) debt service for bonds refinanced after July 1, 1992, 
        if the bond schedule has been approved by the commissioner and, 
        if necessary, adjusted to reflect a 20-year maturity schedule; 
        and 
           (3) debt service for bonds issued after July 1, 1992, for 
        construction projects that have received a positive review and 
        comment according to section 121.15, if the commissioner has 
        determined that the district has met the criteria under section 
        124.431, subdivision 2, and if the bond schedule has been 
        approved by the commissioner and, if necessary, adjusted to 
        reflect a 20-year maturity schedule.  
           (b) The criterion in section 124.431, subdivision 2, 
        paragraph (a), clause (2), shall be considered to have been met 
        if the district in the fiscal year in which the bonds are 
        authorized at an election conducted under chapter 475: 
           (i) serves an average of at least 66 pupils per grade in 
        the grades to be served by the facility; or 
           (ii) is eligible for elementary or secondary sparsity 
        revenue. 
           (c) The criterion described in section 124.431, subdivision 
        2, paragraph (a), clause (9), does not apply to bonds authorized 
        by elections held before July 1, 1992. 
           (d) Districts identified in Laws 1990, chapter 562, article 
        11, section 8, do not need to meet the criteria of section 
        124.431, subdivision 2, to qualify. 
           Sec. 11.  Minnesota Statutes 1994, section 124.95, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
        service equalization revenue, a district must levy an amount not 
        to exceed the district's debt service equalization revenue times 
        the lesser of one or the ratio of: 
           (1) the quotient derived by dividing the adjusted net tax 
        capacity of the district for the year before the year the levy 
        is certified by the actual pupil units in the district for the 
        school year ending in the year prior to the year the levy is 
        certified; to 
           (2) 50 percent of the equalizing factor as defined in 
        section 124A.02, subdivision 8, for the year to which the levy 
        is attributable $4,707.50. 
           Sec. 12.  Minnesota Statutes 1994, section 124.95, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DEBT SERVICE EQUALIZATION AID PAYMENT SCHEDULE.] 
        Debt service equalization aid must be paid as 
        follows:  one-third 30 percent before September 15, one-third 30 
        percent before December 15, and one-third 25 percent before 
        March 15 of each year, and a final payment of 15 percent by July 
        15 of the subsequent fiscal year. 
           Sec. 13.  Minnesota Statutes 1994, section 124.961, is 
        amended to read: 
           124.961 [DEBT SERVICE APPROPRIATION.] 
           (a) $17,000,000 in fiscal year 1994, $26,000,000 in fiscal 
        year 1995, and $31,600,000 $30,054,000 in fiscal year 1996, 
        $27,370,000 in fiscal year 1997, and $32,200,000 in fiscal year 
        1998 and each year thereafter is appropriated from the general 
        fund to the commissioner of education for payment of debt 
        service equalization aid under section 124.95.  The 1994 1998 
        appropriation includes $3,000,000 for 1993 and $14,000,000 for 
        1994 $4,830,000 for 1997 and $27,370,000 for 1998. 
           (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. 14.  [ASKOV CAPITAL LOAN.] 
           The liability for the capital loan granted to independent 
        school district No. 588, Askov, in 1982, if not repaid at the 
        end of 30 years, is satisfied and discharged and interest on the 
        loan ceases. 
           Sec. 15.  [ALTERNATIVE DEBT SERVICE PLAN.] 
           Notwithstanding the procedures for dealing with outstanding 
        debt in Minnesota Statutes, section 122.23, subdivision 16, 
        independent school district Nos. 789, Clarissa, and 790, Eagle 
        Bend, may develop an alternative plan for meeting debt service 
        for bonds outstanding at the time of reorganization.  That plan 
        may provide for the obligation of paying bonds outstanding at 
        the time of reorganization to remain with the district that 
        originally issued the bonds except that the plan may provide for 
        independent school district No. 790, Eagle Bend, when its 
        outstanding debt is paid off, to continue making a debt levy and 
        contribute the proceeds of that levy towards the outstanding 
        debt of independent school district No. 789, Clarissa.  This 
        debt plan must be approved by the commissioner of education as 
        in Minnesota Statutes, section 122.23, subdivision 6.  Any 
        contributions toward the debt of independent school district No. 
        789, Clarissa, by independent school district No. 790, Eagle 
        Bend, under this section must not be considered in the 
        calculation of debt equalization aid for independent school 
        district Nos. 790, Eagle Bend, or 789, Clarissa. 
           Sec. 16.  [ELIGIBILITY FOR DEBT SERVICE AID; 
        JANESVILLE-WALDORF-PEMBERTON.] 
           Notwithstanding Minnesota Statutes, section 124.95, 
        subdivision 2, independent school district No. 2835, 
        Janesville-Waldorf-Pemberton, meets the criterion of Minnesota 
        Statutes, section 124.431, subdivision 2, paragraph (a), clause 
        (2), if the district, in the year which the bonds are authorized 
        in an election conducted under Minnesota Statutes, chapter 475, 
        or in the prior fiscal year, serves at least 66 pupils per grade 
        in the grades to be served by the facility. 
           Sec. 17.  [CAPITAL FACILITIES USE.] 
           Notwithstanding Minnesota Statutes, section 124.243, 
        subdivision 8, for fiscal year 1996 a district may use up to 
        one-third of its capital expenditure facilities revenue for 
        equipment uses under Minnesota Statutes, section 124.244. 
           Sec. 18.  [LITCHFIELD LEASE LEVY.] 
           Notwithstanding the instructional purposes limitation of 
        Minnesota Statutes, section 124.91, subdivision 1, independent 
        school district No. 465, Litchfield, may apply to the 
        commissioner of education to make an additional capital levy 
        under Minnesota Statutes, section 124.91, subdivision 1, to rent 
        or lease a building or land for administrative purposes.  The 
        levy may not exceed the amount necessary to obtain space similar 
        in size and quality to the office space already vacated for 
        instructional purposes. 
           Sec. 19.  [JOINT ELEMENTARY FACILITY.] 
           Subdivision 1.  [APPLICATION.] This section applies to 
        independent school district Nos. 622, North St. 
        Paul-Maplewood-Oakdale; 833, South Washington county; and 834, 
        Stillwater, and to the joint elementary facility to be operated 
        by the districts. 
           Subd. 2.  [JOINT POWERS AGREEMENT.] Notwithstanding 
        Minnesota Statutes, section 123.35, subdivision 19a, the 
        districts may obligate themselves to participate in and to 
        provide financial support for a joint powers agreement to govern 
        the administration, financing, and operation of the joint 
        elementary facility during the period when the obligations 
        issued to finance the joint elementary facility remain 
        outstanding. 
           Subd. 3.  [LEASING LEVY.] Notwithstanding any contrary 
        provision of Minnesota Statutes, section 124.91, each district 
        annually may levy the amount necessary to pay its proportionate 
        share of its obligations under the lease or a lease with option 
        to purchase agreement for the joint elementary facility during 
        the term of that agreement.  The agreement is not required to 
        include a nonappropriation clause on the part of the districts.  
        An election is not required in connection with the execution of 
        the lease or lease with option to purchase agreement and the 
        obligation created by the agreement does not constitute debt and 
        must not be included in the calculation of net debt for any of 
        the districts. 
           Subd. 4.  [FACILITY BELONGS TO EACH DISTRICT; 
        ENROLLMENT.] The joint elementary facility shall be considered a 
        facility of each of the three districts and students attending 
        the facility from the three districts shall be treated for all 
        purposes as resident pupils attending a school in their home 
        district. 
           Sec. 20.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [CAPITAL EXPENDITURE FACILITIES AID.] For capital 
        expenditure facilities aid according to Minnesota Statutes, 
        section 124.243, subdivision 5:  
             $76,552,000    .....     1996 
             $11,530,000    .....     1997
           The 1996 appropriation includes $11,214,000 for 1995 and 
        $65,338,000 for 1996.  
           The 1997 appropriation includes $11,530,000 for 1996 and 
        $-0- for 1997.  
           Subd. 3.  [EQUIPMENT AID.] For equipment aid according to 
        Minnesota Statutes, section 124.244, subdivision 3:  
             $44,024,000    .....     1996 
             $ 6,748,000    .....     1997 
           The 1996 appropriation includes $5,782,000 for 1995 and 
        $38,242,000 for 1996.  
           The 1997 appropriation includes $6,748,000 for 1996 and 
        $-0- for 1997.  
           Subd. 4.  [HEALTH AND SAFETY AID.] For health and safety 
        aid according to Minnesota Statutes, section 124.83, subdivision 
        5: 
             $14,725,000    .....     1996 
             $11,760,000    .....     1997 
           The 1996 appropriation includes $2,606,000 for 1995 and 
        $12,119,000 for 1996.  
           The 1997 appropriation includes $2,138,000 for 1996 and 
        $9,622,000 for 1997.  
           Subd. 5.  [DEBT SERVICE AID.] For debt service aid 
        according to Minnesota Statutes, section 124.95, subdivision 5: 
             $30,054,000     .....     1996
             $27,370,000     .....     1997
           The 1996 appropriation includes $30,054,000 for 1996. 
           The 1997 appropriation includes $27,370,000 for 1997.  This 
        appropriation is 85 percent of the aid entitlement for 1997. 
           Subd. 6.  [PLANNING GRANT.] For a grant to independent 
        school district Nos. 325, Lakefield; 328, Sioux Valley; 330, 
        Heron Lake-Okabena; 513, Brewster; and 516, Round Lake acting as 
        a joint powers agreement: 
             $40,000     .....     1996 
           The grant is to cover costs associated with planning for 
        facility needs for a combined district.  The facilities must 
        provide for the location of a significant number of 
        noneducational student and community service programs within the 
        facility.  The joint powers group must consult with independent 
        school district Nos. 324, Jackson; 177, Windom; and 518, 
        Worthington, and include facility needs and availability in 
        those districts in the group's planning. 
           Subd. 7.  [PRESTON-FOUNTAIN; HARMONY DISTRICT.] For a grant 
        to the new school district comprised of independent school 
        district No. 233, Preston-Fountain, and independent school 
        district No. 228, Harmony: 
              $70,000      .....      1996 
           This grant must be placed in the district's debt redemption 
        fund.  The department must reduce the new district debt service 
        levy by this amount. 
           Subd. 8.  [PROGRAM START-UP AND IMPLEMENTATION GRANT.] For 
        a grant to offset extraordinary program start-up and 
        implementation expenses incurred prior to the time the joint 
        facility in section 19 becomes operational: 
              $200,000      .....      1996 
           This appropriation is available until June 30, 1997. 
           Sec. 21.  [REPEALER.] 
           Laws 1991, chapter 265, article 5, section 23, as amended 
        by Laws 1992, chapter 499, article 5, section 25, is repealed 
        July 1, 1995. 
                                   ARTICLE 6
                     EDUCATION ORGANIZATION AND COOPERATION
           Section 1.  Minnesota Statutes 1994, section 121.912, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ACCOUNT TRANSFER FOR REORGANIZING DISTRICTS.] 
        (a) A school district that has reorganized according to section 
        122.22, 122.23, or sections 122.241 to 122.248, or has conducted 
        a successful referendum on the question of combination under 
        section 122.243, subdivision 2, or consolidation under section 
        122.23, subdivision 13, or has been assigned an identification 
        number by the commissioner under section 122.23, subdivision 14, 
        may make permanent transfers between any of the funds in the 
        newly created or enlarged district with the exception of the 
        debt redemption fund, food service fund, and health and safety 
        account of the capital expenditure fund.  Fund transfers under 
        this section may be made only for up to one year prior to the 
        effective date of combination or consolidation and during the 
        year following the effective date of reorganization. 
           (b) A district that has conducted a successful referendum 
        on the question of combination under section 122.243, 
        subdivision 2, may make permanent transfers between any of the 
        funds in the district with the exception of the debt redemption 
        fund, food service fund, and health and safety account of the 
        capital expenditure fund for up to one year prior to the 
        effective date of combination under sections 122.241 to 122.248. 
           Sec. 2.  Minnesota Statutes 1994, section 122.21, 
        subdivision 4, is amended to read: 
           Subd. 4.  Within six months of the time when the petition 
        was filed, the county board shall issue its order either 
        granting or denying the petition, unless all or part of the land 
        area described in the petition is included in a plat for 
        consolidation or combination which has been approved by the 
        state board commissioner of education in which event, no order 
        may be issued while consolidation or combination proceedings are 
        pending.  No order shall be issued which results in attaching to 
        a district any territory not adjoining that district, as defined 
        in subdivision 1(a).  No order shall be issued which reduces the 
        size of any district to less than four sections unless the 
        district is not operating a school within the district.  The 
        order may be made effective at a deferred date not later than 
        July 1 next following its issuance.  If the petition be granted, 
        the auditor shall transmit a certified copy to the 
        commissioner.  Failure to issue an order within six months of 
        the filing of the petition or termination of proceedings upon an 
        approved consolidation plat, whichever is later, is a denial of 
        the petition. 
           Sec. 3.  Minnesota Statutes 1994, section 122.895, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given them. 
           (a) "Teacher" means a teacher as defined in section 125.12, 
        subdivision 1, who is employed by a district or center listed in 
        subdivision 2, except that it does not include a superintendent. 
           (b) "Cooperative" means any district or center to which 
        this section applies. 
           (c) "Withdrawal" means a school district's removal of its 
        students from a program of instruction, counseling, or 
        evaluation provided by a cooperative in order to provide the 
        same educational services by other means. 
           (d) "Education support position" means a position not 
        requiring a teaching license in which an employee assists a 
        teacher by providing instructional, counseling, or evaluative 
        support services directly to students. 
           (e) "Education support employee" means an employee holding 
        an education support position. 
           Sec. 4.  Minnesota Statutes 1994, section 122.895, 
        subdivision 8, is amended to read: 
           Subd. 8.  [NONLICENSED EMPLOYEES UPON DISSOLUTION.] (a) A 
        nonlicensed employee who is terminated by a cooperative that 
        dissolves shall be appointed by a district that is a member of 
        the dissolved cooperative to a position that is created within 
        12 36 months of the dissolution of the cooperative and is 
        created as a result of the dissolution of the cooperative.  A 
        position shall be offered to a nonlicensed employee, who 
        fulfills the qualifications for that position, in order of the 
        employee's seniority within the dissolved cooperative. 
           (b) When an education support employee is terminated by a 
        cooperative that dissolves, a district that is a member of the 
        dissolved cooperative shall appoint the employee to an education 
        support position if the position is created within 36 months of 
        the dissolution of the cooperative as a result of the 
        dissolution.  An education support position shall be offered to 
        an education support employee, who fulfills the qualifications 
        for that position, in order of the employee's seniority within 
        the dissolved cooperative. 
           (c) An employee appointed according to this subdivision 
        shall receive credit for the employee's: 
           (1) continuous years of service with the cooperative on the 
        appointing district's compensation schedule and seniority list; 
        and 
           (2) unused sick leave accumulated while employed by the 
        cooperative. 
           (d) Notwithstanding section 179A.12 or Minnesota Rules, 
        part 5510.0510, subparts 1 to 4, a representation petition 
        seeking the exclusive representation of a unit of education 
        support employees employed by a district formerly a member of a 
        dissolved cooperative may be considered by the commissioner of 
        the bureau of mediation services at any time within 11 months of 
        the dissolution of the cooperative. 
           Sec. 5.  Minnesota Statutes 1994, section 122.895, 
        subdivision 9, is amended to read: 
           Subd. 9.  [NONLICENSED EMPLOYEES UPON WITHDRAWAL.] (a) A 
        nonlicensed employee of a cooperative whose position active 
        employment is discontinued or reduced as a result of the 
        withdrawal of a member district from the cooperative shall be 
        appointed by the withdrawing member district to a position that 
        is created within 12 36 months of the withdrawal and is created 
        as a result of the withdrawal of the member district.  A 
        position shall be offered to a nonlicensed employee, who 
        fulfills the qualifications for that position, in order of the 
        employee's seniority within the cooperative from which a member 
        district withdraws. 
           (b) When an education support employee of a cooperative has 
        active employment discontinued or reduced as a result of the 
        withdrawal of a member district from the cooperative, the 
        withdrawing member district shall appoint the employee to an 
        education support position if the position is created within 36 
        months of the withdrawal as a result of the withdrawal of the 
        member district.  An education support position shall be offered 
        to an education support employee, who meets the qualifications 
        for that position, in order of the employee's seniority within 
        the cooperative from which a member district withdraws. 
           (c) An employee appointed according to this subdivision 
        shall receive credit for the employee's: 
           (1) continuous years of service with the cooperative on the 
        appointing district's compensation schedule and seniority list; 
        and 
           (2) unused sick leave accumulated while employed by the 
        cooperative. 
           (d) Notwithstanding section 179A.12 or Minnesota Rules, 
        part 5510.0510, subparts 1 to 4, a representation petition 
        seeking the exclusive representation of a unit of education 
        support employees employed by a member district which has 
        withdrawn from a cooperative may be considered by the 
        commissioner of the bureau of mediation services at any time 
        within 11 months of the district's withdrawal from the 
        cooperative. 
           Sec. 6.  Minnesota Statutes 1994, section 124.2725, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A school district is 
        eligible for cooperation and combination revenue if it has a 
        plan approved by the commissioner according to section 
        122.243 and it levied under subdivision 3 for taxes payable in 
        1995.  
           Sec. 7.  Minnesota Statutes 1994, section 124.2725, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COOPERATION AND COMBINATION LEVY.] To obtain 
        cooperation and combination revenue, a district may levy an 
        amount equal to the cooperation and combination revenue 
        multiplied by the lesser of one or the following ratio: 
           (1) the quotient derived by dividing the adjusted net tax 
        capacity for the district in the year preceding the year the 
        levy is certified by the actual pupil units in the district for 
        the year to which the levy is attributable, to 
           (2) the percentage, amount specified in subdivision 4, of 
        the equalizing factor for the school year to which the levy is 
        attributable. 
           Sec. 8.  Minnesota Statutes 1994, section 124.2725, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INCREASING LEVY.] (a) For districts that did not 
        enter into an agreement under section 122.541 at least three 
        years before the date of a successful referendum held under 
        section 122.243, subdivision 2, and that combine without 
        cooperating, the percentage amount in subdivision 3, clause (2), 
        shall be: 
           (1) 50 percent $4,707.50 for the first year of combination; 
        and 
           (2) 25 percent $2,353.75 for the second year of combination.
           (b) For districts that entered into an agreement under 
        section 122.541 at least three years before the date of a 
        successful referendum held under section 122.243, subdivision 2, 
        and combine without cooperating, the percentages in subdivision 
        3, clause (2), shall be: 
           (1) 100 percent $9,415 for the first year of combination; 
           (2) 75 percent $7,061.25 for the second year of 
        combination; 
           (3) 50 percent $4,707.50 for the third year of combination; 
        and 
           (4) 25 percent $2,353.75 for the fourth year of combination.
           (c) For districts that combine after one year of 
        cooperation, the percentage in subdivision 3, clause (2), shall 
        be: 
           (1) 100 percent $9,415 for the first year of cooperation; 
           (2) 75 percent $7,061.25 for the first year of combination; 
           (3) 50 percent $4,707.50 for the second year of 
        combination; and 
           (4) 25 percent $2,353.75 for the third year of combination. 
           (d) For districts that combine after two years of 
        cooperation, the percentage in subdivision 3, clause (2), shall 
        be: 
           (1) 100 percent $9,415 for the first year of cooperation; 
           (2) 75 percent $7,061.25 for the second year of 
        cooperation; 
           (3) 50 percent $4,707.50 for the first year of combination; 
        and 
           (4) 25 percent $2,353.75 for the second year of combination.
           Sec. 9.  Minnesota Statutes 1994, section 124.2725, 
        subdivision 15, is amended to read: 
           Subd. 15.  [RETIREMENT AND SEVERANCE LEVY.] A cooperating 
        or combined district that levied under subdivision 3 for taxes 
        payable in 1995 may levy for severance pay or early retirement 
        incentives for licensed and nonlicensed employees who retire 
        early as a result of the cooperation or combination. 
           Sec. 10.  Minnesota Statutes 1994, section 124.2726, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
        that has been reorganized after June 30, 1994, under section 
        122.23 and has not received revenue under section 124.2725 is 
        eligible for consolidation transition revenue.  Revenue is equal 
        to the sum of aid under subdivision 2 and levy under subdivision 
        3.  Consolidation transition revenue may only be used according 
        to this section.  Revenue must initially be used for the payment 
        of district costs for the early retirement incentives granted by 
        the district under section 122.23, subdivision 20.  Any revenue 
        under subdivision 2 remaining after the payment of district 
        costs for the early retirement incentives must be used to reduce 
        operating debt as defined in section 121.915.  Any additional 
        aid remaining after the reduction of operating debt must be 
        deposited in the district's general fund.  Revenue must be used 
        for the following purposes and may be distributed among these 
        purposes at the discretion of the district: 
           (1) to offer early retirement incentives as provided by 
        section 122.23, subdivision 20; 
           (2) to reduce operating debt as defined in section 121.915; 
           (3) to enhance learning opportunities for students in the 
        reorganized district; and 
           (4) for other costs incurred in the reorganization. 
           Revenue received and utilized under clause (3) or (4) may 
        be expended for operating, facilities, and/or equipment.  
        Revenue received under this section shall not be included in the 
        determination of the reduction under section 124A.26, 
        subdivision 1.  
           Sec. 11.  Minnesota Statutes 1994, section 124.2726, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AID.] (a) Consolidation transition aid is equal 
        to $200 times the number of actual pupil units in the newly 
        created district in the year of consolidation and $100 times the 
        number of actual pupil units in the first year following the 
        year of consolidation.  The number of pupil units used to 
        calculate aid in either year shall not exceed 1,000 for 
        districts consolidating July 1, 1994, and 1,500 for districts 
        consolidating July 1, 1995, and thereafter.  
           (b) If the total appropriation for consolidation transition 
        aid for any fiscal year, plus any amount transferred under 
        section 124.14, subdivision 7, is insufficient to pay all 
        districts the full amount of aid earned, the department of 
        education shall first pay the districts in the first year 
        following the year of consolidation the full amount of aid 
        earned and distribute any remaining funds to the newly created 
        districts in the first year of consolidation. 
           Sec. 12.  Minnesota Statutes 1994, section 124.2726, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NEW DISTRICTS.] If a district consolidates with 
        another district that has received consolidation transition 
        aid under 124.2725 or 124.2726 within six years of the effective 
        date of the new consolidation, only the pupil units in the 
        district or districts not previously reorganized shall be 
        counted for aid purposes under subdivision 2.  If two or more 
        districts consolidate and both all districts received aid under 
        subdivision 2 within six years of the effective date of the new 
        consolidation, only one quarter of the pupil units in the newly 
        created district shall be used to determine aid under 
        subdivision 2.  
           Sec. 13.  Minnesota Statutes 1994, section 124.2728, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A school district that 
        reorganizes under section 122.23 or sections 122.241 to 122.248 
        effective on or after July 1, 1994, is eligible for special 
        consolidation aid under this section.  A district may receive 
        aid under this section for only three years. 
           Sec. 14.  [LAC QUI PARLE VALLEY JOINT DISTRICT.] 
           Subdivision 1.  [FUND TRANSFER.] Notwithstanding Minnesota 
        Statutes, section 121.912, or any other law to the contrary, 
        independent school district No. 377, Madison, may transfer 
        $1,000,000 from its capital expenditure fund to the trust and 
        agency fund of joint powers school district No. 6011, Lac qui 
        Parle Valley. 
           Subd. 2.  [BALLOT ISSUES.] Notwithstanding Minnesota 
        Statutes, sections 122.531 and 124A.03, the referendum held in 
        the member districts of joint school district No. 6011, Lac qui 
        Parle Valley, may, as part of the ballot question to approve the 
        plan to combine the districts, include a reference to the 
        referendum revenue amount that will result in not more than $315 
        per pupil unit of revenue in the combined district. 
           Subd. 3.  [LEVY REDUCTION.] Beginning with taxes certified 
        in 2004 payable in 2005, the tax levy on the property that was 
        in independent school district No. 2153, 
        Madison-Marietta-Nassau, on June 30, 1996, is reduced by 
        $100,000 per year for a ten-year period.  In each fiscal year 
        for which this levy that would have been attributed, the amounts 
        necessary to make up for the levy reduction are transferred from 
        the trust and agency fund of the successor district to joint 
        district No. 6011, Lac qui Parle Valley, to the appropriate 
        funds as necessary to replace the levy reduction.  Any funds 
        remaining in the trust and agency fund as a result of the 
        transfer authorized in subdivision 1 after the ten-year period 
        are transferred to the capital expenditure fund or its successor 
        fund of the district.  
           Subd. 4.  [REORGANIZATION OPERATING DEBT LEVY.] Independent 
        school district No. 128, Milan, and its successor district may 
        certify the levy for reorganization operating debt authorized in 
        Minnesota Statutes, section 122.531, subdivision 4a, beginning 
        in the year of a successful vote to combine.  The levy must be 
        certified according to Minnesota Statutes, section 122.531, 
        subdivision 4a, paragraph (a), clause (1), except that the levy 
        may be certified over less than five years.  The reorganization 
        operating debt levy is reduced by the amount of any state grant 
        for the same purpose. 
           Sec. 15.  [LAKE PARK-AUDUBON CONSOLIDATION PROVISION.] 
           Notwithstanding Minnesota Statutes, sections 122.23 and 
        205A.12, independent school district No. 21, Audubon, and 
        independent school district No. 24, Lake Park, as part of an 
        agreement to consolidate according to section 122.23, may agree 
        to provide for two multimember election districts, with each 
        district entitled to elect three members of the board of the 
        consolidated district.  This section applies until it is 
        necessary to take action for the first election using census 
        data from the year 2000. 
           Sec. 16.  [HACA ALLOCATION; EAST CENTRAL.] 
           Independent school district No. 2580, East Central, may, by 
        school board resolution, reallocate any portion of its homestead 
        and agricultural credit aid attributable to the levies in the 
        debt redemption fund to the debt service levies spread 
        separately upon the tax bases of former independent school 
        district Nos. 566, Askov, and 576, Sandstone. 
           Sec. 17.  [PILOT ENHANCED PAIRING AGREEMENT.] 
           Subdivision 1.  [AGREEMENT.] Notwithstanding any law to the 
        contrary, any two or more of the boards of independent school 
        district Nos. 648, Danube, 654, Renville, 655, Sacred Heart, and 
        631, Belview, may enter into an enhanced pairing agreement 
        providing for the discontinuance of one or more grades, or 
        portions of those grades, and for the instruction of those 
        grades in another district that is subject to the agreement.  
        The agreement, and all subsequent amendments, if any, shall be 
        filed with the commissioner of education. 
           Subd. 2.  [SINGLE BOARD.] The districts shall provide in 
        the enhanced pairing agreement that the governance of the 
        districts will be by the combined membership of the separate 
        boards acting as a single board for purposes of quorum and 
        passing resolutions.  A quorum must include a minimum of one 
        member from each of the separate boards.  The membership of the 
        separate boards may be reduced to five members in a manner 
        consistent with Minnesota Statutes, section 123.33, subdivision 
        1.  The actions reserved for the separate boards shall be 
        ratification of amendments to the agreement, serving a notice of 
        withdrawal from the agreement, and other items reserved for the 
        separate boards as defined in the agreement. 
           Subd. 3.  [PERSONNEL.] The districts subject to the 
        enhanced pairing agreement must have one exclusive bargaining 
        representative, one master contract, and a combined seniority 
        list.  The teachers and other employees of the districts will be 
        employees of the single board established by the agreement 
        unless specifically excluded in the agreement.  If the agreement 
        dissolves or a board withdraws from the agreement, the affected 
        employees shall be provided for in a manner consistent with 
        Minnesota Statutes, section 122.895. 
           Subd. 4.  [FINANCIAL.] (a) Fiscal operations shall be 
        merged under the enhanced pairing agreement, and the single 
        board shall be the fiscal agent to meet reporting requirements.  
        The department of education shall assign a single identification 
        number to apply to the districts subject to the agreement.  
        Levies shall be made jointly except for levies under Minnesota 
        Statutes, sections 124A.03 and 124.97.  Districts subject to the 
        agreement shall be considered a single independent school 
        district for purposes of fees or dues assessments. 
           (b) Title to all the unattached property and all cash 
        reserves of any district subject to the enhanced pairing 
        agreement shall become the property of the single board unless 
        otherwise provided for in the agreement.  All legally valid and 
        enforceable claims and contract obligations pass to the single 
        board.  For purposes of litigation, the districts subject to the 
        agreement may be recognized singly or jointly.  If the agreement 
        dissolves or a board withdraws from the agreement, the 
        commissioner shall divide assets and liabilities of the single 
        board proportionately based on the weighted average daily 
        membership over the last three years. 
           Subd. 5.  [NOTICE AND HEARING.] Prior to entering into an 
        enhanced pairing agreement, the school board shall consult with 
        the community at an informational meeting.  The board shall 
        publish notice of the meeting in the official newspaper of the 
        district. 
           Sec. 18.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        or other named fund to the department of education for the 
        fiscal years designated. 
           Subd. 2.  [CAPITAL FACILITY GRANTS FOR COOPERATION AND 
        COMBINATION.] For competitive grants under Minnesota Statutes, 
        section 124C.60: 
             $  408,000     .....     1996
             $  -0-         .....     1997
           Subd. 3.  [SPECIAL CONSOLIDATION AID.] For special 
        consolidation aid under Minnesota Statutes, section 124.2728: 
             $    75,000     .....     1996
             $    40,000     .....     1997
           The 1996 appropriation includes $12,000 for 1995 and 
        $63,000 for 1996. 
           The 1997 appropriation includes $9,000 for 1996 and $31,000 
        for 1997. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 4.  [MILAN REORGANIZATION OPERATING DEBT.] For a 
        grant to independent school district No. 128, Milan, to retire 
        operating debt: 
             $   36,000     .....     1996 
             $   36,000     .....     1997 
           Subd. 5.  [CONSOLIDATION TRANSITION AID.] For districts 
        consolidating under Minnesota Statutes, section 124.2726: 
             $  991,000     .....     1996
             $1,153,000     .....     1997
           The 1996 appropriation includes $75,000 for 1995 and 
        $916,000 for 1996. 
           The 1997 appropriation includes $162,000 for 1996 and 
        $991,000 for 1997. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 6.  [COOPERATION AND COMBINATION AID.] For aid for 
        districts that cooperate and combine according to Minnesota 
        Statutes, section 124.2725: 
             $3,393,000     .....     1996 
             $2,044,000     .....     1997 
           The 1996 appropriation includes $542,000 for 1995 and 
        $2,851,000 for 1996.  
           The 1997 appropriation includes $503,000 for 1996 and 
        $1,541,000 for 1997.  
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 7.  [DISTRICT COOPERATION REVENUE.] For district 
        cooperation revenue aid: 
             $13,485,000     .....     1996
             $12,143,000     .....     1997
           The 1996 appropriation includes $2,115,000 for 1995 and 
        $11,370,000 for 1996. 
           The 1997 appropriation includes $2,006,000 for 1996 and 
        $10,137,000 for 1997. 
           Sec. 19.  [EFFECTIVE DATE.] 
           Sections 3 to 5, and 14, subdivision 2, are effective the 
        day following final enactment.  Section 14, subdivision 1, is 
        effective retroactive to January 1, 1989.  Section 14, 
        subdivisions 3 and 4, and section 18, subdivision 4, are 
        effective following the successful vote to consolidate effective 
        July 1, 1996, by all the members of joint district No. 6011, Lac 
        qui Parle Valley. 
                                   ARTICLE 7
                              EDUCATION EXCELLENCE
           Section 1.  Minnesota Statutes 1994, section 121.11, 
        subdivision 7c, is amended to read: 
           Subd. 7c.  [RESULTS-ORIENTED GRADUATION RULE.] (a) The 
        legislature is committed to establishing a rigorous, 
        results-oriented graduation rule for Minnesota's public school 
        students.  To that end, the state board shall use its rulemaking 
        authority under subdivision 7b to adopt a statewide, 
        results-oriented graduation rule to be implemented starting with 
        students beginning ninth grade in the 1996-1997 school year.  
        The board shall not prescribe in rule or otherwise the delivery 
        system, form of instruction, or a single statewide form of 
        assessment that local sites must use to meet the requirements 
        contained in this rule. 
           (b) Assessments used to measure knowledge required by all 
        students for graduation must be developed according to the most 
        current version of professional standards for educational 
        testing. 
           (c) The content of the graduation rule must differentiate 
        between minimum competencies and rigorous standards.  When fully 
        implemented, the requirements for high school graduation in 
        Minnesota, including both basic requirements and the required 
        profile of learning, shall include a broad range of academic 
        experience and accomplishment necessary to achieve the goal of 
        preparing students to function effectively as purposeful 
        thinkers, effective communicators, self-directed learners, 
        productive group participants, and responsible citizens. 
           (d) The state board shall periodically review and report on 
        the assessment process and student achievement with the 
        expectation of raising the standards and expanding high school 
        graduation requirements. 
           (e) The state board shall report to the legislature 
        annually by January 15 on its progress in developing and 
        implementing the graduation requirements until such time as all 
        the graduation requirements are implemented. 
           Sec. 2.  Minnesota Statutes 1994, section 123.3514, 
        subdivision 4d, is amended to read: 
           Subd. 4d.  [ENROLLMENT PRIORITY.] A post-secondary 
        institution shall give priority to its post-secondary students 
        when enrolling 11th and 12th grade pupils in its courses for 
        secondary credit.  A post-secondary institution may provide 
        information about its programs to a secondary school or to a 
        pupil or parent, but it may not advertise or otherwise recruit 
        or solicit the participation on financial grounds, secondary 
        pupils to enroll in its programs.  An institution shall not 
        enroll secondary pupils, for post-secondary enrollment options 
        purposes, in remedial, developmental, or other courses that are 
        not college level.  Once a pupil has been enrolled in a 
        post-secondary course under this section, the pupil shall not be 
        displaced by another student. 
           Sec. 3.  [PSEO STUDY.] 
           The legislative audit commission is asked to request that 
        the office of the legislative auditor conduct a study of the 
        post-secondary enrollment options program under Minnesota 
        Statutes, section 123.3514, including an assessment of the 
        number of students participating, their demographic 
        characteristics, the types of courses being taken, the fiscal 
        impact of the program, program compliance, and whether the 
        program is responsive to parents, students, and teacher input. 
           Sec. 4.  [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY PILOT 
        PROGRAMS.] 
           Subdivision 1.  [ESTABLISHMENT.] An extended school 
        year/week/day pilot program is established to increase student 
        achievement, skills, and self-confidence through the flexible 
        use of learning time by implementing multitrack year-round 
        school or extending the standard school week or day.  Year-round 
        school/extended week or day pilot program grants shall be 
        available to independent school district Nos. 911, Cambridge; 
        624, White Bear Lake; 625, St. Paul; 833, South Washington 
        county; and two rural school districts selected by the 
        commissioner of education. 
           Subd. 2.  [APPLICATION; EVALUATION.] (a) To participate in 
        the pilot program, a district shall submit an application to the 
        commissioner of education in the form and manner prescribed by 
        the commissioner.  The application shall include a plan for 
        developing and implementing multitrack year-round school or an 
        extended learning time program that provides the following: 
           (1) more time for student learning; 
           (2) more varied resources to meet student learning styles; 
           (3) learning opportunities that typically are not available 
        in the regular student day; 
           (4) home, school, and community involvement, support, and 
        communication; 
           (5) preprogram and postprogram student evaluations; and 
           (6) more efficient use of facilities and other resources. 
           Subd. 3.  [YEAR-ROUND SCHOOL/EXTENDED SCHOOL WEEK OR DAY 
        PILOT PROGRAM GRANTS.] Year-round school/extended week or day 
        pilot program grants may be used for planning, flexible 
        staffing, transportation, technology necessary to implement the 
        multitrack year-round school or extended learning time program, 
        or to install or improve heating, ventilation, and air 
        conditioning systems in existing buildings to accommodate 
        year-round use of the buildings.  Grant proceeds may also be 
        used for deferred maintenance approved by the commissioner.  
        Funds used for capital improvements shall be deposited in the 
        appropriate fund. 
           Sec. 5.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [ADVANCED PLACEMENT AND INTERNATIONAL 
        BACCALAUREATE PROGRAMS.] For the state advanced placement and 
        international baccalaureate programs, including training 
        programs, support programs, and examination fee subsidies: 
             $875,000       .....     1996
             $875,000       .....     1997
           Of this amount $200,000 each year is for training and 
        support programs under Minnesota Statutes, section 126.239, and 
        the balance is for examination fee subsidies.  Notwithstanding 
        Minnesota Statutes, section 126.239, subdivision 3, in each 
        year, the commissioner shall pay the fee for one advanced 
        placement or international baccalaureate examination for the 
        first examination each student takes.  The commissioner shall 
        pay 50 percent of the fee for each additional examination a 
        student takes or more than 50 percent if the student meets the 
        low-income guidelines established by the commissioner.  If this 
        amount is not adequate, the commissioner may pay less than 50 
        percent for the additional examinations. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 3.  [SCHOOL RESTRUCTURING GRANTS.] For school 
        restructuring: 
             $300,000     .....     1996
             $300,000     .....     1997
           This appropriation is for a grant to a nonstate 
        organization to develop systemic site decision-making models and 
        implement systemic site decision-making in school districts. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 4.  [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY PILOT 
        PROGRAM GRANTS.] For year-round school/extended week or day 
        pilot program grants: 
              $1,800,000       .....      1996 
           $500,000 is for a grant to independent school district No. 
        624, White Bear Lake. 
           $500,000 is for a grant to independent school district No. 
        833, South Washington county. 
           $100,000 is for a grant to independent school district No. 
        911, Cambridge. 
           $300,000 is for a grant to independent school district No. 
        625, St. Paul. 
           $400,000 is for grants to two rural school districts 
        selected by the commissioner of education. 
           This appropriation is available until June 30, 1997. 
           Sec. 6.  [REPEALER.] 
           Minnesota Statutes 1994, section 125.138, subdivisions 6, 
        7, 8, 9, 10, and 11; is repealed. 
           Laws 1992, chapter 499, article 7, section 27, is repealed. 
                                   ARTICLE 8
                            OTHER EDUCATION PROGRAMS
           Section 1.  [124.177] [PSEO REPLACEMENT AID.] 
           Subdivision 1.  [ELIGIBILITY.] A school district that meets 
        the following criteria is eligible for PSEO replacement aid: 
           (1) the number of pupils or portions of pupils in average 
        daily membership using the post-secondary enrollment options 
        program exceeds four percent of the district's enrollment in 
        grades 11 and 12; 
           (2) the enrollment in average daily membership in the 
        district is less in the current year than it was five years 
        previous; and 
           (3) the district is adjacent to at least two districts that 
        are eligible for elementary or secondary sparsity revenue. 
           Subd. 2.  [AID AMOUNT.] PSEO replacement aid equals: 
           (1) the number of pupils or portions of pupils in average 
        daily membership using the post-secondary enrollment options 
        program for the portion of time not attending the school 
        district, minus 
           (2) the number of pupils in average daily membership in 
        grades 11 and 12 in the district multiplied by four percent, 
        multiplied by 
           (3) the secondary pupil weighting of 1.3, multiplied by 
           (4) the basic formula allowance for the fiscal year. 
        The PSEO replacement aid is not less than zero. 
           Sec. 2.  Minnesota Statutes 1994, section 124.214, 
        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 school 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 
        school 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 124.912, subdivision 9.  The 
        amount of the abatement adjustment shall be the product of:  
           (1) the net revenue loss as certified by the county 
        auditor, times 
           (2) the ratio of:  
           (a) the sum of the amounts of the district's certified levy 
        in the preceding year according to the following:  
           (i) section 124A.23 if the district receives received 
        general education aid according to that section for the second 
        preceding year, or section 124B.20, if the education district of 
        which the district is a member receives general education aid 
        according to that section; 
           (ii) section 124.226, subdivisions 1 and 4, if the district 
        receives received transportation aid according to section 
        124.225 for the second preceding year; 
           (iii) section 124.243, if the district receives received 
        capital expenditure facilities aid according to that section for 
        the second preceding year; 
           (iv) section 124.244, if the district receives received 
        capital expenditure equipment aid according to that section for 
        the second preceding year; 
           (v) section 124.83, if the district receives received 
        health and safety aid according to that section for the second 
        preceding year; 
           (vi) sections 124.2713, 124.2714, and 124.2715, if the 
        district receives received aid for community education programs 
        according to any of those sections for the second preceding 
        year; 
           (vii) section 124.2711, subdivision 2a, if the district 
        receives received early childhood family education aid according 
        to section 124.2711 for the second preceding year; 
           (viii) section 124.321, subdivision 3, if the district 
        receives received special education levy equalization aid 
        according to that section for the second preceding year; 
           (ix) section 124A.03, subdivision 1g, if the district 
        receives received referendum equalization aid according to that 
        section for the second preceding year; and 
           (x) section 124A.22, subdivision 4a, if the district 
        receives received training and experience aid according to that 
        section for the second preceding year; 
           (b) to the total amount of the district's certified levy in 
        the preceding October, plus or minus auditor's adjustments. 
           Sec. 3.  Minnesota Statutes 1994, section 124.214, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXCESS TAX INCREMENT.] If a return of excess tax 
        increment is made to a school district pursuant to section 
        469.176, subdivision 2, or upon decertification of a tax 
        increment district, the school district's aid and levy 
        limitations must be adjusted for the fiscal year in which the 
        excess tax increment is paid under the provisions of this 
        subdivision. 
           (a) An amount must be subtracted from the school 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 school district, times 
           (2) the ratio of: 
           (A) the sum of the amounts of the school district's 
        certified levy for the fiscal year in which the excess tax 
        increment is paid according to the following: 
           (i) section 124A.23, if the district receives received 
        general education aid according to that section, or section 
        124B.20, if the education district of which the district is a 
        member receives general education aid according to that 
        section for the second preceding year; 
           (ii) section 124.226, subdivisions 1 and 4, if the school 
        district receives received transportation aid according to 
        section 124.225 for the second preceding year; 
           (iii) section 124.243, if the district receives received 
        capital expenditure facilities aid according to that section for 
        the second preceding year; 
           (iv) section 124.244, if the district receives received 
        capital expenditure equipment aid according to that section for 
        the second preceding year; 
           (v) section 124.83, if the district receives received 
        health and safety aid according to that section for the second 
        preceding year; 
           (vi) sections 124.2713, 124.2714, and 124.2715, if the 
        district receives received aid for community education programs 
        according to any of those sections for the second preceding 
        year; 
           (vii) section 124.2711, subdivision 2a, if the district 
        receives received early childhood family education aid according 
        to section 124.2711 for the second preceding year; 
           (viii) section 124.321, subdivision 3, if the district 
        receives received special education levy equalization aid 
        according to that section for the second preceding year; 
           (ix) section 124A.03, subdivision 1g, if the district 
        receives received referendum equalization aid according to that 
        section for the second preceding year; and 
           (x) section 124A.22, subdivision 4a, if the district 
        receives received training and experience aid according to that 
        section for the second preceding year; 
           (B) to the total amount of the school district's certified 
        levy for the fiscal year, plus or minus auditor's adjustments. 
           (b) 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 shall use the payment of excess tax increment to 
        replace the aid and levy revenue reduced under this subdivision. 
           This subdivision applies only to the total amount of excess 
        increments received by a school district for a calendar year 
        that exceeds $25,000. 
           Sec. 4.  Minnesota Statutes 1994, section 124.248, is 
        amended to read: 
           124.248 [REVENUE FOR AN OUTCOME-BASED A RESULTS-ORIENTED 
        CHARTER SCHOOL.] 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] General 
        education revenue shall be paid to an outcome-based a charter 
        school as though it were a school district.  The general 
        education revenue for each pupil unit is the state average 
        general education revenue per pupil unit, calculated without 
        compensatory revenue, plus compensatory revenue as though the 
        school were a school district. 
           Subd. 1a.  [TRANSPORTATION REVENUE.] Transportation revenue 
        shall be paid to a charter school that provides transportation 
        services according to section 120.064, subdivision 15, as though 
        it were a school district.  Transportation aid shall equal 
        transportation revenue.  
           (a) For the first two years that a charter school is 
        providing transportation services, the regular transportation 
        allowance for the charter school shall be equal to the regular 
        transportation allowance for the school district in which the 
        charter school is located.  For the third year of transportation 
        services and later fiscal years, the predicted base cost for the 
        charter school shall be equal to the predicted base cost for the 
        school district in which the charter school is located.  
           (b) For the first two years that a charter school is 
        providing transportation services, the nonregular transportation 
        revenue equals the charter school's actual cost in the current 
        school year for nonregular transportation services, minus the 
        amount of regular transportation revenue attributable to FTE's 
        in the handicapped category in the current school year.  For the 
        third year of transportation services and later fiscal years, 
        the nonregular transportation revenue shall be computed 
        according to section 124.225, subdivision 7d, paragraph (b).  
           Subd. 2.  [CAPITAL EXPENDITURE EQUIPMENT REVENUE.] Capital 
        expenditure equipment aid shall be paid to an outcome-based a 
        charter school according to section 124.245, subdivision 6, as 
        though it were a school district. 
           Capital expenditure equipment aid shall equal capital 
        expenditure equipment revenue.  Notwithstanding section 124.244, 
        subdivision 4, an outcome-based a charter school may use the 
        revenue for any purpose related to the school. 
           Subd. 3.  [SPECIAL EDUCATION AND LIMITED ENGLISH 
        PROFICIENCY AID.] Special education aid shall be paid to an 
        outcome-based a charter school according to section 124.32 as 
        though it were a school district.  The charter school may charge 
        tuition to the district of residence as provided in section 
        120.17, subdivision 4.  Limited English proficiency programs aid 
        shall be paid to a charter school according to section 124.273 
        as though it were a school district.  The outcome-based charter 
        school shall allocate its special education levy equalization 
        revenue to the resident districts of the pupils attending 
        the outcome-based charter school as though it were a 
        cooperative, as provided in section 124.321, subdivision 2, 
        paragraph (a), clause clauses (1) and (3).  The districts of 
        residence shall levy as though they were participating in a 
        cooperative, as provided in section 124.321, subdivision 3. 
           Subd. 4.  [OTHER AID, GRANTS, REVENUE.] (a) An 
        outcome-based A charter school is eligible to receive other 
        aids, grants, and revenue according to chapters 120 to 129, as 
        though it were a school district except that, notwithstanding 
        section 124.195, subdivision 3, the payments shall be of an 
        equal amount on each of the 23 payment dates unless an 
        outcome-based a charter school is in its first year of operation 
        in which case it shall receive on its first payment date 15 
        percent of its cumulative amount guaranteed for the year and 22 
        payments of an equal amount thereafter the sum of which shall be 
        85 percent of the cumulative amount guaranteed.  However, it may 
        not receive aid, a grant, or revenue if a levy is required to 
        obtain the money, except as otherwise provided in this section.  
        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. 
           (b) Any revenue received from any source, other than 
        revenue that is specifically allowed for operational, 
        maintenance, capital facilities revenue under paragraph (c), and 
        capital expenditure equipment costs under this section, may be 
        used only for the planning and operational start-up costs of an 
        outcome-based a charter school.  Any unexpended revenue from any 
        source under this paragraph must be returned to that revenue 
        source or conveyed to the sponsoring school district, at the 
        discretion of the revenue source. 
           (c) An outcome-based A charter school may receive money 
        from any source for capital facilities needs.  Any unexpended 
        capital facilities revenue must be reserved and shall be 
        expended only for future capital facilities purposes. 
           Subd. 5.  [USE OF STATE MONEY.] Money received from the 
        state may not be used to purchase land or buildings.  The school 
        may own land and buildings if obtained through nonstate sources. 
           Sec. 5.  Minnesota Statutes 1994, section 124.916, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes 
        payable in 1994 and 1995 1996, 1997, 1998, and 1999 only, a 
        school district may levy an amount up to the amount the district 
        is required by the collective bargaining agreement in effect on 
        March 30, 1992, to pay for health insurance or unreimbursed 
        medical expenses for licensed and nonlicensed employees who have 
        terminated services in the employing district and withdrawn from 
        active teaching service or other active service, as applicable, 
        before July 1, 1992.  The total amount of the levy each year may 
        not exceed $300,000.  
           Notwithstanding section 121.904, 50 percent of the proceeds 
        of this levy shall be recognized in the fiscal year in which it 
        is certified. 
           Sec. 6.  Minnesota Statutes 1994, section 125.12, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROBATIONARY PERIOD.] The first three 
        consecutive years of a teacher's first teaching experience in 
        Minnesota in a single school district shall be deemed to be a 
        probationary period of employment, and after completion thereof, 
        the probationary period in each school district in which the 
        teacher is thereafter employed shall be one year.  The school 
        site management team, or the school board if there is no school 
        site management team, shall adopt a plan for written evaluation 
        of teachers during the probationary period according to 
        subdivision 3a or 3b.  Evaluation by the peer review committee 
        charged with evaluating probationary teachers under subdivision 
        3a 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.  
        During the probationary 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 probationary teachers under subdivision 3a, shall see 
        fit; provided, however, that the school board shall give any 
        such teacher whose contract it declines to renew for the 
        following school year written notice to that effect before June 
        1.  If the teacher requests reasons for any nonrenewal of a 
        teaching contract, the school board shall 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 123.35, subdivision 5. 
           Sec. 7.  Minnesota Statutes 1994, section 125.623, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANTS.] The commissioner of education in 
        consultation with the multicultural advisory committee 
        established in section 126.82 desegregation/integration advisory 
        board established in section 121.1601, subdivision 3, shall 
        award grants for professional development programs to recruit 
        and educate people of color in the field of education, including 
        early childhood and parent education.  Grant applicants must be 
        a school district with a growing minority population working in 
        collaboration with a state institution of higher education with 
        an approved teacher licensure program or an approved early 
        childhood or parent education licensure program. 
           Sec. 8.  Minnesota Statutes 1994, section 126.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBLE PROGRAMS.] (a) A pupil who is eligible 
        according to subdivision 2 may enroll in any program approved by 
        the state board of education under Minnesota Rules, part 
        3500.3500, or area learning centers under sections 124C.45 to 
        124C.48, or according to section 121.11, subdivision 12. 
           (b) A pupil who is eligible according to subdivision 2 and 
        who is between the ages of 16 and 21 may enroll in 
        post-secondary courses under section 123.3514. 
           (c) A pupil who is eligible under subdivision 2, may enroll 
        in any public elementary or secondary education program.  
        However, a person who is eligible according to subdivision 2, 
        clause (b), may enroll only if the school board has adopted a 
        resolution approving the enrollment. 
           (d) A pupil who is eligible under subdivision 2, may enroll 
        part time, if 16 years of age or older, or full time in any 
        nonprofit, nonpublic, nonsectarian school that has contracted 
        with the serving school district to provide educational services.
           (e) A pupil who is between the ages of 16 and 21 may enroll 
        in any adult basic education programs approved under section 
        124.26 and operated under the community education program 
        contained in section 121.88. 
           Sec. 9.  Minnesota Statutes 1994, section 126.70, is 
        amended to read: 
           126.70 [STAFF DEVELOPMENT PROGRAM.] 
           Subdivision 1.  [STAFF DEVELOPMENT COMMITTEE.] A school 
        board shall use the revenue authorized in section 124A.29 for 
        in-service education for programs under section 126.77, 
        subdivision 2, or for staff development plans under this 
        section.  The board must establish a staff development committee 
        to develop the plan, advise a assist site decision-making team 
        about 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 must be teachers 
        representing various grade levels, subject areas, and special 
        education.  The advisory committee must also include nonteaching 
        staff, parents, and administrators.  Districts shall report 
        staff development results and expenditures to the commissioner 
        in the form and manner determined by the commissioner.  The 
        expenditure report shall include expenditures by the school 
        board for district level activities and expenditures made by the 
        staff.  The commissioner shall report the staff development 
        expenditure data to the education committees of the legislature 
        by February 15 each year. 
           Subd. 2.  [CONTENTS OF THE PLAN.] The plan must include 
        education the staff development outcomes under subdivision 2a, 
        the means to achieve the outcomes, and procedures for evaluating 
        progress at each school site toward meeting education outcomes.  
           Subd. 2a.  [STAFF DEVELOPMENT OUTCOMES.] (a) The staff 
        development committee shall adopt a staff development plan for 
        improving student achievement of education outcomes.  The plan 
        must be consistent with education outcomes that the school board 
        determines.  The plan shall include activities that enhance 
        staff skills for achieving the following outcomes The plan shall 
        include on-going staff development activities that contribute 
        toward continuous improvement in achievement of the following 
        goals: 
           (1) foster readiness for learning for all pupils improve 
        student achievement of state and local education standards in 
        all areas of the curriculum; 
           (2) increase pupils' educational progress by using 
        appropriate outcomes and personal learning goals and by 
        encouraging pupils and their parents to assume responsibility 
        for their education effectively meet the needs of a diverse 
        student population, including at-risk children, children with 
        disabilities, and gifted children, within the regular classroom 
        and other settings; 
           (3) meet pupils' individual needs by using alternative 
        instructional opportunities, accommodations, modifications, 
        after-school child care programs, and family and community 
        resources provide an inclusive curriculum for a racially, 
        ethnically, and culturally diverse student population that is 
        consistent with the state education diversity rule and the 
        district's education diversity plan; 
           (4) effectively meet the needs of children with 
        disabilities within the regular classroom and other settings by 
        improving the knowledge of school personnel about the legal and 
        programmatic requirements affecting students with disabilities, 
        and by improving staff ability to collaborate, consult with one 
        another, and resolve conflicts; and improve staff ability to 
        collaborate and consult with one another and to resolve 
        conflicts; 
           (5) provide equal educational opportunities for all 
        students that are consistent with the school 
        desegregation/integration and inclusive education policies 
        adopted by school districts and approved by the state. 
           (b) The staff development committee is strongly encouraged 
        to include in its plan activities for achieving the following 
        outcomes: 
           (1) facilitate organizational changes by enabling a 
        site-based team composed of pupils, parents, school personnel, 
        representatives of children with disabilities, and community 
        members who generally reflect the racial composition of the 
        school to address the pupils' needs; 
           (2) evaluate the effectiveness of education policies, 
        processes, and products through appropriate evaluation 
        procedures that include multiple criteria and indicators; 
           (3) provide effective mentorship oversight and peer review 
        of probationary, continuing contract, and nonprobationary 
        teachers; 
           (4) assist elementary and secondary students in learning to 
        resolve conflicts in effective, nonviolent ways; 
           (5) effectively teach and model violence prevention policy 
        and curricula that address issues of sexual, racial, and 
        religious harassment; and 
           (6) provide challenging instructional activities and 
        experiences, including advanced placement and international 
        baccalaureate programs, that recognize and cultivate students' 
        advanced abilities and talents. effectively teach and model 
        violence prevention policy and curriculum that address issues of 
        harassment and teach nonviolent alternatives for conflict 
        resolution; and 
           (6) provide teachers and other members of site-based 
        management teams with appropriate management and financial 
        management skills. 
           Sec. 10.  Minnesota Statutes 1994, section 128B.08, is 
        amended to read: 
           128B.08 [REPORTS TO LEGISLATURE.] 
           Before December 1 January 15 of each odd-numbered year, the 
        council must submit a report to the legislature on the school 
        established by this chapter.  The report must document the 
        success or failure of the school. 
           Sec. 11.  Minnesota Statutes 1994, section 128B.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXTENSION.] This chapter is repealed July 
        1, 1995 1997. 
           Sec. 12.  [145.9256] [MN ENABL, MINNESOTA EDUCATION NOW AND 
        BABIES LATER.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of the 
        department of education, in consultation and cooperation with a 
        representative from Minnesota planning and the commissioner of 
        the department of health, shall continue the Minnesota education 
        now and babies later (MN ENABL) program, targeted to adolescents 
        ages 12 to 14, with the goal of reducing the incidence of 
        adolescent pregnancy in the state.  The program must provide a 
        multifaceted, primary prevention, community health promotion 
        approach to educating and supporting adolescents in the decision 
        to postpone sexual involvement modeled after the ENABL program 
        in California. 
           Subd. 1a.  [DEFINITION.] "Community-based local contractor" 
        or "contractor" includes boards of health under section 145A.02, 
        nonprofit organizations, or school districts.  The 
        community-based local contractors may provide the education 
        component of MN ENABL in a variety of settings including, but 
        not limited to, schools, religious establishments, local 
        community centers, and youth camps. 
           Subd. 2.  [DUTIES OF THE COMMISSIONER OF THE DEPARTMENT OF 
        EDUCATION.] The commissioner shall: 
           (1) manage the grant process, including awarding and 
        monitoring grants to community-based local contractors, and may 
        contract with community-based local contractors that can 
        demonstrate at least a 50 percent local match and agree to 
        participate in the four MN ENABL program components under 
        subdivision 3; 
           (2) provide technical assistance to the community-based 
        local contractors as necessary under subdivision 3; 
           (3) develop and implement the evaluation component, and 
        provide centralized coordination at the state level of the 
        evaluation process; and 
           (4) explore and pursue the federal funding possibilities 
        and specifically request funding from the United States 
        Department of Health and Human Services to supplement the 
        development and implementation of the program. 
           Subd. 3.  [PROGRAM COMPONENTS.] The program must include 
        the following four major components. 
           (a) A community organization component in which the 
        community-based local contractors shall include: 
           (1) use of a postponing sexual involvement education 
        curriculum targeted to boys and girls ages 12 to 14 in schools 
        and/or community settings; 
           (2) planning and implementation of community organization 
        strategies to convey and reinforce the MN ENABL message of 
        postponing sexual involvement, including activities promoting 
        awareness and involvement of parents and other primary 
        caregivers/significant adults, schools, and community; and 
           (3) development of local media linkages.  
           (b) A statewide, comprehensive media and public relations 
        campaign to promote changes in sexual attitudes and behaviors, 
        and reinforce the message of postponing adolescent sexual 
        involvement. 
           In developing the campaign, the commissioner of education 
        shall coordinate and consult with representatives from ethnic 
        and local communities to maximize effectiveness of the social 
        marketing approach to health promotion among the culturally 
        diverse population of the state.  The development and 
        implementation of the campaign is subject to input and approval 
        by the commissioner of health. 
           The local community-based contractors shall collaborate and 
        coordinate efforts with other community organizations and 
        interested persons to provide school and community-wide 
        promotional activities that support and reinforce the message of 
        the MN ENABL curriculum. 
           (c) An evaluation component which evaluates the process and 
        the impact of the program. 
           The "process evaluation" must provide information to the 
        state on the breadth and scope of the program.  The evaluation 
        must identify program areas that might need modification and 
        identify local MN ENABL contractor strategies and procedures 
        which are particularly effective.  Contractors must keep 
        complete records on the demographics of clients served, number 
        of direct education sessions delivered, and other appropriate 
        statistics, and must document exactly how the program was 
        implemented.  The commissioner may select contractor sites for 
        more in-depth case studies. 
           The "impact evaluation" must provide information to the 
        state on the impact of the different components of the MN ENABL 
        program and an assessment of the impact of the program on 
        adolescent's related sexual knowledge, attitudes, and 
        risk-taking behavior. 
           (d) A training component to provide comprehensive training 
        to the local MN ENABL community-based local contractors and the 
        direct education program staff.  
           The local community-based contractors may use adolescent 
        leaders slightly older than the adolescents in the program to 
        impart the message to postpone sexual involvement provided: 
           (1) the contractor follows a protocol for adult 
        mentors/leaders and older adolescent leaders established by the 
        commissioner of education; 
           (2) the older adolescent leader is accompanied by an adult 
        leader; and 
           (3) the contractor uses the curriculum as directed and 
        required by the commissioner of the department of health to 
        implement this part of the program.  The commissioner of health 
        shall provide technical assistance to community-based local 
        contractors. 
           Sec. 13.  Laws 1965, chapter 705, section 1, subdivision 3, 
        is amended to read: 
           Subd. 3.  [CONTRACTS FOR SERVICES.] The converted district 
        shall may contract with the city of Saint Paul for such 
        facilities as are furnished by the civil service bureau, and, 
        unless the board and city governing body each adopt a resolution 
        declaring that a particular function would be most more 
        efficiently and effectively handled separately, the board shall 
        contract on a pro rata cost basis with the city for such 
        facilities and services as are provided by the purchasing 
        department, comptroller, legal department, and election and 
        other services supplied by the city, provided, however, that the 
        board may contract for other legal services when the interests 
        of the district and the city are in conflict in any legal 
        matter, and provided further that the board may contract for 
        architectural services for the planning and construction of new 
        school buildings when funds have been made available for their 
        construction of such school buildings. 
           Sec. 14.  Laws 1965, chapter 705, section 1, subdivision 4, 
        is amended to read: 
           Subd. 4.  As of July 1, 1965, the organization, operation, 
        maintenance and conduct of the affairs of the converted district 
        shall be governed by general laws relating to independent 
        districts, except as otherwise provided in Extra Session Laws 
        1959, Chapter 71, as amended, and all special laws and charter 
        provisions relating only to the converted district are 
        repealed.  Where an existing pension law is applicable to 
        employees of the special district such law shall continue to be 
        applicable in the same manner and to the same extent to 
        employees of the converted district.  General laws applicable to 
        independent school districts wholly or partly within cities of 
        the first class shall not be applicable to the converted 
        district.  The provision of the statutes applicable only to 
        teachers retirement fund associations in cities of the first 
        class, limiting the amount of annuity to be paid from public 
        funds, limiting the taxes to be levied to carry out the plan of 
        such associations, and limiting the amount of annuities to be 
        paid to beneficiaries, all as contained in Minnesota Statutes, 
        Section 135.24, shall not be applicable to such converted 
        district, but the statutes applicable to such special district 
        prior to the conversion shall continue to be applicable and the 
        pension plan in operation prior to the conversion shall continue 
        in operation until changed in accordance with law, and the 
        teacher tenure law applicable to the special district shall 
        continue to apply to the converted district in the same manner 
        and to the same extent to teachers in the converted district; 
        provided further, where existing civil service provisions of any 
        law or charter are applicable to special district employees, 
        such provision shall may continue to be applicable in the same 
        manner and to the same extent to employees of the converted 
        district, unless the board and city governing body each adopt a 
        resolution declaring that civil service bureau (city human 
        resources department) functions would be more efficiently and 
        effectively administered separately in each jurisdiction.  
        Notwithstanding any contrary provision of Extra Session Laws 
        1959, Chapter 71, as amended, if there was in the special 
        district a teachers retirement fund association operating and 
        existing under the provisions of Laws 1909, Chapter 343, and all 
        acts amendatory thereof, then such teachers retirement fund 
        association shall continue to exist and operate in the converted 
        district under and to be subject to the provisions of Laws 1909, 
        Chapter 343, and all acts amendatory thereof, to the same extent 
        and in the same manner as before the conversion, and, without 
        limiting the generality of the foregoing, such teachers 
        retirement fund association shall continue, after the conversion 
        as before the conversion, to certify to the same authorities the 
        amount necessary to raise by taxation in order to carry out its 
        retirement plan, and it shall continue, after the conversion as 
        before the conversion, to be the duty of said authorities to 
        include in the tax levy for the ensuing year a tax in addition 
        to all other taxes sufficient to produce so much of the sums so 
        certified as said authorities shall approve, and such teachers 
        retirement fund association shall not be subject after the 
        conversion to any limitation on payments to any beneficiary from 
        public funds or on taxes to be levied to carry out the plan of 
        such association to which it was not subject before the 
        conversion. 
           Sec. 15.  Laws 1993, chapter 224, article 12, section 39, 
        is amended to read: 
           Sec. 39.  [REPEALER.] 
           (a) Minnesota Rules, parts 3500.0500; 3500.0600, subparts 1 
        and 2; 3500.0605; 3500.0800; 3500.1090; 3500.1800; 3500.2950; 
        3500.3100, subparts 1 to 3; 3500.3500; 3500.3600; 3500.4400; 
        3510.2200; 3510.2300; 3510.2400; 3510.2500; 3510.2600; 
        3510.6200; 3520.0200; 3520.0300; 3520.0600; 3520.1000; 
        3520.1200; 3520.1300; 3520.1800; 3520.2700; 3520.3802; 
        3520.3900; 3520.4500; 3520.4620; 3520.4630; 3520.4640; 
        3520.4680; 3520.4750; 3520.4761; 3520.4811; 3520.4831; 
        3520.4910; 3520.5330; 3520.5340; 3520.5370; 3520.5461; 
        3525.2850; 3530.0300; 3530.0600; 3530.0700; 3530.0800; 
        3530.1100; 3530.1300; 3530.1400; 3530.1600; 3530.1700; 
        3530.1800; 3530.1900; 3530.2000; 3530.2100; 3530.2800; 
        3530.2900; 3530.3100, subparts 2 to 4; 3530.3200, subparts 1 to 
        5; 3530.3400, subparts 1, 2, and 4 to 7; 3530.3500; 3530.3600; 
        3530.3900; 3530.4000; 3530.4100; 3530.5500; 3530.5700; 
        3530.6100; 3535.0800; 3535.1000; 3535.1400; 3535.1600; 
        3535.1800; 3535.1900; 3535.2100; 3535.2200; 3535.2600; 
        3535.2900; 3535.3100; 3535.3500; 3535.9930; 3535.9940; 
        3535.9950; 3540.0600; 3540.0700; 3540.0800; 3540.0900; 
        3540.1000; 3540.1100; 3540.1200; 3540.1300; 3540.1700; 
        3540.1800; 3540.1900; 3540.2000; 3540.2100; 3540.2200; 
        3540.2300; 3540.2400; 3540.2800; 3540.2900; 3540.3000; 
        3540.3100; 3540.3200; 3540.3300; 3540.3400; 3545.1000; 
        3545.1100; 3545.1200; 3545.2300; 3545.2700; 3545.3000; 
        3545.3002; 3545.3004; 3545.3005; 3545.3014; 3545.3022; 
        3545.3024; 8700.4200; 8700.6410; 8700.6800; 8700.7100; 
        8700.9000; 8700.9010; 8700.9020; and 8700.9030, are repealed. 
           (b) Minnesota Rules, parts 3520.1600; 3520.2400; 3520.2500; 
        3520.2600; 3520.2800; 3520.2900; 3520.3000; 3520.3100; 
        3520.3200; 3520.3400; 3520.3500; 3520.3680; 3520.3701; 
        3520.3801; 3520.4001; 3520.4100; 3520.4201; 3520.4301; 
        3520.4400; 3520.4510; 3520.4531; 3520.4540; 3520.4550; 
        3520.4560; 3520.4570; 3520.4600; 3520.4610; 3520.4650; 
        3520.4670; 3520.4701; 3520.4711; 3520.4720; 3520.4731; 
        3520.4741; 3520.4801; 3520.4840; 3520.4850; 3520.4900; 
        3520.4930; 3520.4980; 3520.5000; 3520.5010; 3520.5111; 
        3520.5120; 3520.5141; 3520.5151; 3520.5160; 3520.5171; 
        3520.5180; 3520.5190; 3520.5200; 3520.5220; 3520.5230; 
        3520.5300; 3520.5310; 3520.5361; 3520.5380; 3520.5401; 
        3520.5450; 3520.5471; 3520.5481; 3520.5490; 3520.5500; 
        3520.5510; 3520.5520; 3520.5531; 3520.5551; 3520.5560; 
        3520.5570; 3520.5580; 3520.5600; 3520.5611; 3520.5700; 
        3520.5710; 3520.5900; 3520.5910; 3520.5920; 3530.6500; 
        3530.6600; 3530.6700; 3530.6800; 3530.6900; 3530.7000; 
        3530.7100; 3530.7200; 3530.7300; 3530.7400; 3530.7500; 
        3530.7600; 3530.7700; and 3530.7800, are repealed. 
           (c) Minnesota Rules, parts 3500.1400; 3500.3700; 3510.0100; 
        3510.0200; 3510.0300; 3510.0400; 3510.0500; 3510.0600; 
        3510.0800; 3510.1100; 3510.1200; 3510.1300; 3510.1400; 
        3510.1500; 3510.1600; 3510.2800; 3510.2900; 3510.3000; 
        3510.3200; 3510.3400; 3510.3500; 3510.3600; 3510.3700; 
        3510.3800; 3510.7200; 3510.7300; 3510.7400; 3510.7500; 
        3510.7600; 3510.7700; 3510.7900; 3510.8000; 3510.8100; 
        3510.8200; 3510.8300; 3510.8400; 3510.8500; 3510.8600; 
        3510.8700; 3510.9000; 3510.9100; chapters 3515, 3517.0100; 
        3517.0120; 3517.3150; 3517.3170; 3517.3420; 3517.3450; 
        3517.3500; 3517.3650; 3517.4000; 3517.4100; 3517.4200; 
        3517.8500; 3517.8600;, and 3560, are repealed. 
           (d) Minnesota Rules, parts 3500.0710; 3500.1060; 3500.1075; 
        3500.1100; 3500.1150; 3500.1200; 3500.1500; 3500.1600; 
        3500.1900; 3500.2000; 3500.2020; 3500.2100; 3500.2900; 
        3500.5010; 3500.5020; 3500.5030; 3500.5040; 3500.5050; 
        3500.5060; 3500.5070; 3505.2700; 3505.2800; 3505.2900; 
        3505.3000; 3505.3100; 3505.3200; 3505.3300; 3505.3400; 
        3505.3500; 3505.3600; 3505.3700; 3505.3800; 3505.3900; 
        3505.4000; 3505.4100; 3505.4200; 3505.4400; 3505.4500; 
        3505.4600; 3505.4700; 3505.5100; 8700.2900; 8700.3000; 
        8700.3110; 8700.3120; 8700.3200; 8700.3300; 8700.3400; 
        8700.3500; 8700.3510; 8700.3600; 8700.3700; 8700.3810; 
        8700.3900; 8700.4000; 8700.4100; 8700.4300; 8700.4400; 
        8700.4500; 8700.4600; 8700.4710; 8700.4800; 8700.4901; 
        8700.4902; 8700.5100; 8700.5200; 8700.5300; 8700.5310; 
        8700.5311; 8700.5500; 8700.5501; 8700.5502; 8700.5503; 
        8700.5504; 8700.5505; 8700.5506; 8700.5507; 8700.5508; 
        8700.5509; 8700.5510; 8700.5511; 8700.5512; 8700.5800; 
        8700.6310; 8700.6900; 8700.7010; 8700.7700; 8700.7710; 
        8700.8000; 8700.8010; 8700.8020; 8700.8030; 8700.8040; 
        8700.8050; 8700.8060; 8700.8070; 8700.8080; 8700.8090; 
        8700.8110; 8700.8120; 8700.8130; 8700.8140; 8700.8150; 
        8700.8160; 8700.8170; 8700.8180; 8700.8190; 8750.0200; 
        8750.0220; 8750.0240; 8750.0260; 8750.0300; 8750.0320; 
        8750.0330; 8750.0350; 8750.0370; 8750.0390; 8750.0410; 
        8750.0430; 8750.0460; 8750.0500; 8750.0520; 8750.0600; 
        8750.0620; 8750.0700; 8750.0720; 8750.0740; 8750.0760; 
        8750.0780; 8750.0800; 8750.0820; 8750.0840; 8750.0860; 
        8750.0880; 8750.0890; 8750.0900; 8750.0920; 8750.1000; 
        8750.1100; 8750.1120; 8750.1200; 8750.1220; 8750.1240; 
        8750.1260; 8750.1280; 8750.1300; 8750.1320; 8750.1340; 
        8750.1360; 8750.1380; 8750.1400; 8750.1420; 8750.1440; 
        8750.1500; 8750.1520; 8750.1540; 8750.1560; 8750.1580; 
        8750.1600; 8750.1700; 8750.1800; 8750.1820; 8750.1840; 
        8750.1860; 8750.1880; 8750.1900; 8750.1920; 8750.1930; 
        8750.1940; 8750.1960; 8750.1980; 8750.2000; 8750.2020; 
        8750.2040; 8750.2060; 8750.2080; 8750.2100; 8750.2120; 
        8750.2140; 8750.4000; 8750.4100; 8750.4200; 8750.9000; 
        8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 
        8750.9600; and 8750.9700, are repealed. 
           (e) Minnesota Rules, parts 3510.0100; 3510.0200; 3510.0400; 
        3510.0500; 3510.0600; 3510.0800; 3510.1100; 3510.1200; 
        3510.1300; 3510.1400; 3510.1500; 3510.1600; 3510.2800; 
        3510.2900; 3510.3000; 3510.3200; 3510.3400; 3510.3500; 
        3510.3600; 3510.3700; 3510.3800; 3510.7200; 3510.7300; 
        3510.7400; 3510.7500; 3510.7600; 3510.7700; 3510.7900; 
        3510.8000; 3510.8500; 3510.8600; 3510.8700; 3510.9000; 
        3510.9100; 3517.0100; and 3517.0120, are repealed. 
           Sec. 16.  Laws 1993, chapter 224, article 12, section 41, 
        is amended to read: 
           Sec. 41.  [EFFECTIVE DATE.] 
           Sections 22 to 25 are effective July 1, 1995. 
           Section 32, paragraph (b), is effective July 1, 1995.  
        Section 32, paragraph (c), is effective August 1, 1996. 
           Section 39, paragraph (b), is effective August 1, 1994.  
        Section 39, paragraph (c), is effective July 1, 1995.  Section 
        39, paragraph (d), is effective August 1, 1996.  Section 39, 
        paragraph (e), is effective July 1, 1996. 
           Sec. 17.  Laws 1994, chapter 647, article 7, section 15, is 
        amended to read: 
           Sec. 15.  [TEACHER PREPARATION CURRICULUM.] 
           (a) Consistent with Laws 1993, chapter 224, article 12, 
        section 34, the state board of teaching, with the assistance of 
        organizations representing diverse cultures, the state American 
        Indian education committee, shall decide whether or not to 
        include in the curriculum for preparing all beginning elementary 
        and social studies teachers a study of anthropology that 
        encompasses a study of the indigenous people of the midwest, and 
        a study of the history of the indigenous people that encompasses 
        a study of the Minnesota area in precolonial times through the 
        twentieth century, government, and culture of Minnesota based 
        American Indian tribes. 
           (b) Consistent with Laws 1993, chapter 224, article 12, 
        section 34, the state board of teaching shall ensure that the 
        human relations curriculum of all teacher preparation programs 
        includes components of American Indian language, history, 
        government, and culture. 
           Sec. 18.  [RETIREMENT INCENTIVE.] 
           (a) For the 1995-1996 and 1996-1997 school years only, a 
        school board may offer early retirement incentives to licensed 
        and nonlicensed staff of the school district who are under the 
        age of 65.  The early retirement incentive that the board may 
        offer is the employer payment of the premiums for continued 
        health insurance coverage under paragraph (b).  This incentive 
        may only be offered to employees who agree to terminate active 
        employment with the school district.  The board must determine 
        the staff to whom the incentive is offered.  Unilateral 
        implementation of this section by a school board is not an 
        unfair labor practice under Minnesota Statutes, chapter 179A.  
           (b) The board may offer a former employee who is at least 
        age 50 continued employer-paid individual or dependent health 
        insurance coverage.  To be eligible for employer-paid health 
        insurance under this section, the former employee must agree not 
        to return to work in any capacity for the district that will 
        provide the insurance coverage or any other district, except as 
        a substitute teacher.  Coverage may not extend beyond the age of 
        65 or the end of the first month in which the employee is 
        eligible for employer-paid health insurance coverage from a new 
        employer.  For purposes of this section, "employer-paid health 
        insurance coverage" means medical, hospitalization, or health 
        insurance coverage provided through an insurance company that is 
        licensed to do business in the state.  The amount of the payment 
        under this section shall be as agreed between the employee and 
        the school board. 
           Sec. 19.  [PPST TASK FORCE.] 
           The board of teaching shall convene a task force to 
        consider authentic and qualitative assessments for teachers and 
        alternative processes by which the skills examination 
        requirement under Minnesota Statutes, section 125.05, 
        subdivision 1a, might be met for persons who fail the 
        examination.  The board shall present their recommendations to 
        the education committees of the legislature by February 15, 1996.
           Sec. 20.  [SARTELL CAPITAL LOAN.] 
           Notwithstanding any law to the contrary, the board of 
        independent school district No. 748, Sartell, may, by 
        resolution, raise the level of indebtedness of the district by 
        an amount equal to the outstanding capital loan on June 30, 
        1995.  This indebtedness may only be used to refund the loan.  
        This does not constitute an impairment of any obligations issued 
        by the district prior to the enactment of this act. 
           Sec. 21.  [UNRECOVERED RAILROAD AID.] 
           Unrecovered railroad aid payments pursuant to Laws 1984, 
        chapter 502, article 9, section 5, shall be adjusted from the 
        school district's aid in fiscal year 1997.  If the aid reduction 
        required by this section cannot be made to the aid for fiscal 
        year 1997, the reduction must be made from aid for subsequent 
        fiscal years. 
           Sec. 22.  [FUND TRANSFERS.] 
           Subdivision 1.  [CONDITIONS.] (a) A district that transfers 
        revenue from a health and safety account or a disabled access 
        account may not, at a later date, receive health and safety 
        revenue or disabled access revenue for the same project as the 
        project for which the transferred revenue was received.  The 
        transfer request must identify the project that generated the 
        balance to be transferred. 
           (b) Disabled access revenue that is transferred according 
        to this section is included in the district's disabled access 
        revenue limit established in Minnesota Statutes, section 124.84, 
        subdivision 3. 
           (c) Amounts transferred from the health and safety account 
        according to this section shall be considered to be approved 
        health and safety expenditures for the purpose of computing a 
        district's health and safety revenue according to Minnesota 
        Statutes, section 124.83, subdivision 3. 
           (d) A district that transfers funds from its bus purchase 
        account according to this section may not certify a bus purchase 
        levy according to Minnesota Statutes, section 124.226, 
        subdivision 6, for the next three years following the transfer. 
           (e) Fund transfers authorized in this section that involve 
        transferring funds in a disabled access account or a health and 
        safety account may be made by the district only after the 
        commissioner has approved the five-year facilities plan that the 
        district is required to prepare according to Minnesota Statutes, 
        section 124.243, subdivision 1. 
           Subd. 2.  [PELICAN RAPIDS.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, on June 30, 1995, 
        independent school district No. 548, Pelican Rapids, may 
        permanently transfer an amount not to exceed $200,000 from its 
        general fund to its capital expenditure fund. 
           Subd. 3.  [PINE RIVER-BACKUS.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, on June 30, 1995, 
        independent school district No.2174, Pine River-Backus, may 
        permanently transfer an amount not to exceed $200,000 from its 
        general fund to its capital expenditure fund. 
           Subd. 4.  [DETROIT LAKES.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, on June 30, 1995, 
        independent school district No. 22, Detroit Lakes, may 
        permanently transfer an amount not to exceed $325,000 from its 
        general fund to its capital expenditure fund for acquiring 
        computers and related technology needs. 
           Subd. 5.  [ST. CLOUD.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, each year for fiscal years 1996, 
        1997, 1998, and 1999, independent school district No. 742, St. 
        Cloud, may permanently transfer up to $500,000 of referendum 
        revenue received under Minnesota Statutes, section 124A.03, from 
        its general fund to its capital expenditure fund for purchasing 
        technology for instructional use. 
           Subd. 6.  [LITTLE FALLS.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, each year for fiscal 
        years 1996 through 2005, independent school district No. 482, 
        Little Falls, may permanently transfer up to $233 per actual 
        pupil unit of referendum revenue received under Minnesota 
        Statutes, section 124A.03, from its general fund to its capital 
        expenditure fund. 
           Subd. 7.  [MILACA.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, each year for fiscal years 1996 
        through 2005, independent school district No. 912, Milaca, may 
        permanently transfer up to $200 per actual pupil unit of 
        referendum revenue received under Minnesota Statutes, section 
        124A.03, from its general fund to its capital expenditure fund 
        for technology. 
           Subd. 8.  [RUSH CITY.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 139, Rush City, may permanently transfer up 
        to $100,000 from its transportation fund to its capital 
        expenditure fund. 
           Subd. 9.  [MENTOR.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 604, Mentor, may permanently transfer up to 
        $160,000 from the facilities account in its capital expenditure 
        fund to its general fund. 
           Subd. 10.  [GRANADA-HUNTLEY-EAST CHAIN.] Notwithstanding 
        Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 
        1995, independent school district No. 2536, Granada-Huntley-East 
        Chain, may permanently transfer up to $100,000 from the 
        facilities and equipment accounts in its capital expenditure 
        fund to its general fund. 
           Subd. 11.  [CHATFIELD.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 277, Chatfield, may permanently transfer up 
        to $50,000 from the facilities account to the equipment account 
        in its capital expenditure fund. 
           Subd. 12.  [MEDFORD.] Notwithstanding Minnesota Statutes, 
        sections 121.912, 121.9121, and 123.36, subdivision 13, 
        independent school district No. 763, Medford, may deposit the 
        proceeds from a sale of approximately nine acres of land 
        adjacent to and east of its football/baseball complex in Medford 
        into its general fund. 
           Subd. 13.  [EAST GRAND FORKS.] Notwithstanding Minnesota 
        Statutes, section 124.243, subdivision 6, clause (2), in fiscal 
        years 1995 and 1996, independent school district No. 595, East 
        Grand Forks, may use up to $1,400,000 in capital expenditure 
        facilities revenue to acquire and construct buildings for school 
        purposes. 
           Subd. 14.  [BYRON.] Notwithstanding Minnesota Statutes, 
        section 121.912, subdivision 1, if independent school district 
        No. 531, Byron, discontinues operation of its bus fleet, or a 
        portion of the fleet, and transfers the account balance from the 
        transportation fund, the district may spread the required levy 
        reduction for capital levies according to Minnesota Statutes, 
        sections 124.243, 124.244 and 124.83, over a five-year period 
        beginning with 1995 levies payable in 1996.  
           Subd. 15.  [SWANVILLE.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 486, Swanville, may permanently transfer up 
        to $100,000 from the bus purchase account to its general fund 
        without making a levy reduction. 
           Subd. 16.  [TRUMAN.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 458, Truman, may permanently transfer up to 
        $77,000 from the bus purchase account in its transportation fund 
        to its general fund without making a levy reduction. 
           Subd. 17.  [MONTEVIDEO.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, on June 30, 1995, 
        independent school district No. 129, Montevideo, may permanently 
        transfer up to $100,000 from the bus purchase account in its 
        transportation fund to its general fund without making a levy 
        reduction. 
           Subd. 18.  [EDINA.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 273, Edina, may permanently transfer up to 
        $482,432 from the bus purchase account to the undesignated fund 
        balance account in its transportation fund. 
           Subd. 19.  [GARY.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, independent school district No. 
        523, Gary, may permanently transfer the balance in its bonded 
        indebtedness fund and the disabled access account in its capital 
        expenditure fund to the general fund of the successor school 
        district of independent school district Nos. 526, Twin Valley, 
        and 523, Gary. 
           Subd. 20.  [TWIN VALLEY.] Notwithstanding Minnesota 
        Statutes, sections 121.912, 121.9121, 124.243, subdivision 8, 
        independent school district No. 526, Twin Valley, may 
        permanently transfer the balances in its health and safety 
        account and its disabled access account in the capital 
        expenditure fund to the general fund of the successor school 
        district of independent school district Nos. 526, Twin Valley, 
        and 523, Gary. 
           Subd. 21.  [FISHER.] Notwithstanding Minnesota Statutes, 
        section 124.83, subdivision 6, or 124.84, independent school 
        district No. 600, Fisher, may use capital expenditure health and 
        safety revenue or disabled access revenue, or both, to purchase 
        portable classrooms.  Any proceeds from the sale of portable 
        classrooms purchased with the revenue shall be placed in the 
        appropriate account in the capital expenditure fund and used to 
        adjust revenue in that account. 
           Subd. 22.  [NEW PRAGUE.] Notwithstanding Minnesota 
        Statutes, section 121.912, on June 30, 1995, independent school 
        district No. 721, New Prague, may permanently transfer up to 
        $70,000 from its general fund to its capital expenditure fund. 
           Subd. 23.  [GLENCOE.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 422, Glencoe, may permanently transfer up to 
        $125,000 from its debt redemption fund to its capital 
        expenditure fund without making a levy reduction. 
           Subd. 24.  [PIPESTONE.] Notwithstanding Minnesota Statutes, 
        sections 121.912 and 121.9121, on June 30, 1995, independent 
        school district No. 583, Pipestone, may permanently transfer up 
        to $190,000 from its debt redemption fund to its capital 
        expenditure fund without making a levy reduction. 
           Subd. 25.  [HERMAN-NORCROSS.] Notwithstanding Minnesota 
        Statutes, sections 121.912 and 121.9121, on June 30, 1995, 
        independent school district No. 264, Herman-Norcross, may 
        permanently transfer up to $73,000 from the bus purchase account 
        to the general fund without making a levy reduction. 
           Sec. 23.  [GOODRIDGE HEALTH AND SAFETY REVENUE USE.] 
           Notwithstanding Minnesota Statutes, section 124.83, 
        subdivision 6, independent school district No. 561, Goodridge, 
        may use capital health and safety revenue to purchase portable 
        classrooms.  Any proceeds from the subsequent sale of portable 
        classrooms purchased with health and safety revenue shall be 
        placed in the district's health and safety account in the 
        capital fund and shall be used to adjust health and safety 
        revenue. 
           Sec. 24.  [ADULT BASIC EDUCATION LICENSE.] 
           Notwithstanding other law or rule, the board of teaching 
        must continue to make available an adult basic education license 
        for teachers of adult basic education. 
           Sec. 25.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums in this 
        section are appropriated, unless otherwise indicated, from the 
        general fund to the department of education for the fiscal years 
        designated. 
           Subd. 2.  [ABATEMENT AID.] For abatement aid according to 
        Minnesota Statutes, section 124.214:  
             $24,241,000     .....     1996 
             $ 7,905,000     .....     1997 
           The 1996 appropriation includes $1,135,000 for 1995 and 
        $23,106,000 for 1996.  
           The 1997 appropriation includes $4,077,000 for 1996 and 
        $3,828,000 for 1997.  
           Subd. 3.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
        education aid according to Minnesota Statutes, sections 123.79 
        and 123.931 to 123.947: 
              $ 9,686,000      .....      1996 
              $ 9,686,000      .....      1997 
           The 1996 appropriation includes $1,452,000 for 1995 and 
        $8,234,000 for 1996. 
           The 1997 appropriation includes $1,452,000 for 1996 and 
        $8,234,000 for 1997. 
           Subd. 4.  [SCHOOL LUNCH AND FOOD STORAGE AID.] (a) For 
        school lunch aid according to Minnesota Statutes, section 
        124.646, and Code of Federal Regulations, title 7, section 
        210.17, and for food storage and transportation costs for United 
        States Department of Agriculture donated commodities; and for a 
        temporary transfer to the commodity processing revolving fund to 
        provide cash flow to permit schools and other recipients of 
        donated commodities to take advantage of volume processing rates 
        and for school milk aid according to Minnesota Statutes, section 
        124.648:  
             $7,204,000     .....     1996 
             $7,254,000     .....     1997 
           (b) Any unexpended balance remaining from the 
        appropriations in this subdivision shall be prorated among 
        participating schools based on the number of free, reduced, and 
        fully paid federally reimbursable student lunches served during 
        that school year.  
           (c) If the appropriation amount attributable to either year 
        is insufficient, the rate of payment for each fully paid student 
        lunch shall be reduced and the aid for that year shall be 
        prorated among participating schools so as not to exceed the 
        total authorized appropriation for that year.  
           (d) Any temporary transfer processed in accordance with 
        this subdivision to the commodity processing fund will be 
        returned by June 30 in each year so that school lunch aid and 
        food storage costs can be fully paid as scheduled.  
           (e) Not more than $800,000 of the amount appropriated each 
        year may be used for school milk aid. 
           Subd. 5.  [SUMMER FOOD SERVICE.] For summer food service: 
             $15,000     .....     1996
             $15,000     .....     1997
           Subd. 6.  [SCHOOL BREAKFAST.] To operate the school 
        breakfast program: 
             $419,000     .....     1996
             $456,000     .....     1997
           If the appropriation amount attributable to either year is 
        insufficient, the rate of payment for each fully paid student 
        breakfast shall be reduced and the aid for that year shall be 
        prorated among participating schools so as not to exceed the 
        total authorized appropriation for that year.  Any unexpected 
        balance remaining shall be used to subsidize the payments made 
        for school lunch aid per Minnesota Statutes, section 124.646.  
           Up to one percent of the program funding can be used by the 
        department of education for technical and administrative 
        assistance. 
           Subd. 7.  [PILOT BREAKFAST GRANTS.] For grants for free 
        breakfast to elementary school children which began under Laws 
        1994, chapter 647, article 8, section 35: 
             $104,000       .....     1996 
             $ 88,000       .....     1997 
           $18,000 in 1996 is for evaluation of the program. 
           Any balance in the first year does not cancel but is 
        available in the second year.  
           These grants must be made to independent school districts 
        No. 271, Bloomington, for the Oak Grove elementary school; 378, 
        Dawson-Boyd, for the elementary school; 402, Hendricks, and 403, 
        Ivanhoe, for the elementary school; and special school district 
        No. 1, Minneapolis, for the Hans Christian Anderson elementary 
        school. 
           The department is encouraged to solicit private funds to 
        continue the two additional pilot sites added in December 1994. 
           Subd. 8.  [MAGNET SCHOOL GRANTS.] For magnet school and 
        program grants: 
             $1,500,000     .....     1996 
             $1,500,000     .....     1997 
           These amounts must be used for planning and developing 
        magnet schools and magnet programs. 
           Subd. 9.  [INTEGRATION PROGRAMS.] For grants according to: 
        minority fellowship grants according to Laws 1994, chapter 647, 
        article 8, section 29; minority teacher incentives according to 
        Minnesota Statutes, section 124.278; teachers of color grants 
        according to Minnesota Statutes, section 125.623; and cultural 
        exchange grants according to Minnesota Statutes, section 126.43: 
             $1,000,000     .....     1996
             $1,000,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           In awarding teacher of color grants, priority must be given 
        to districts that have students who are currently in the process 
        of completing their academic program. 
           Subd. 10.  [TEACHER EDUCATION IMPROVEMENT.] For board of 
        teaching responsibilities relating to teacher licensure 
        restructuring and implementation of the teaching residency 
        program: 
             $450,000     .....     1996
             $450,000     .....     1997 
           The department must transmit this appropriation to the 
        board of teaching.  Any balance in the first year does not 
        cancel but is available in the second year. 
           The board of teaching shall use the funds for further 
        development of the results-oriented teacher licensure system, 
        for pilot site grants and other methods of implementing the 
        teacher residency program, and for programs relating to teacher 
        mentoring. 
           Subd. 11.  [MN ENABL; MALE RESPONSIBILITY.] For MN ENABL 
        and male responsibility grants: 
             $625,000     .....    1996
             $375,000     .....    1997
           $250,000 the first year is for the Minnesota education now 
        and babies later (MN ENABL) program.  $375,000 each year is for 
        male responsibility and fathering grants. 
           The commissioner of education may enter into cooperative 
        agreements with the commissioner of human services to access 
        federal money for child support and paternity education programs.
           Subd. 12.  [NETT LAKE.] For grants to independent school 
        district No. 707, Nett Lake: 
             $62,000      .....      1996 
             $62,000      .....      1997 
           $32,000 in 1996 and $32,000 in 1997 are for grants to 
        independent school district No. 707, Nett Lake, to pay insurance 
        premiums under Minnesota Statutes, section 466.06. 
           $30,000 in 1996 and $30,000 in 1997 are for grants to 
        independent school district No. 707, Nett Lake, for the payment 
        of obligations of the school district for unemployment 
        compensation.  The appropriation must be paid to the appropriate 
        state agency for such purposes in the name of the school 
        district. 
           Subd. 13.  [MODEL SCHOOL FOR CHRONIC TRUANTS.] For the 
        model school for truants located in the law enforcement center 
        in Mankato: 
             $15,000        .....     1996 
             $15,000        .....     1997 
           Subd. 14.  [ONE ROOM SCHOOLHOUSE.] For a grant to 
        independent school district No. 690, Warroad, to operate the 
        Angle Inlet School:  
             $30,000        .....     1996
             $25,000        .....     1997
           Subd. 15.  [PSEO REPLACEMENT AID.] For PSEO replacement aid:
             $104,000       .....     1996 
             $122,000       .....     1997 
           The 1996 appropriation includes $0 for 1995 and $104,000 
        for 1996. 
           The 1997 appropriation includes $19,000 for 1996 and 
        $103,000 for 1997. 
           Subd. 16.  [AQUILA COMMUNITY TOGETHER PROJECT.] For a grant 
        to independent school district No. 283, St. Louis Park, for the 
        Aquila community together project: 
             $50,000       .....      1996 
           This appropriation must be matched from nonstate sources.  
        This appropriation is available until June 30, 1997. 
           Subd. 17.  [NEW MOON GIRLS PROGRAM.] For a grant to an 
        organization for girls to develop a curriculum to educate 
        school-aged children in Minnesota on the role of women and 
        children around the world: 
              $20,000       .....      1996
           The commissioner of education shall consult with the 
        legislative commission on the economic status of women in 
        awarding the grant.  The curriculum will be used to provide 
        instruction on the purpose and experience of the fourth united 
        nations conference on women in Beijing, China, and will be 
        designed to explore educational opportunities, family 
        structures, customs, and health and safety issues for children 
        around the world.  This appropriation is available until June 
        30, 1997. 
           Subd. 18.  [CAREER TEACHER AID.] For career teacher aid 
        according to Minnesota Statutes, section 124.276: 
             $125,000     .....     1996 
             $125,000     .....     1997 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Notwithstanding Minnesota Statutes, section 124.276, 
        subdivision 2, the aid may be used for the increased district 
        contribution to the teachers' retirement association and to FICA 
        resulting from the portion of the teaching contract that is in 
        addition to the standard teaching contract of the district. 
           Subd. 19.  [EDUCATIONAL PERFORMANCE IMPROVEMENT 
        GRANTS.] For additional grants under Laws 1994, chapter 647, 
        article 7, section 18: 
             $800,000      .....      1996 
           This appropriation is available until June 30, 1997. 
           Sec. 26.  [REPEALER.] 
           Minnesota Statutes 1994, section 124.912, subdivision 8, is 
        repealed effective for revenue for fiscal year 1997. 
           Minnesota Statutes 1994, sections 125.05, subdivision 7; 
        and 125.231, subdivision 2, are repealed. 
           Sec. 27.  [EFFECTIVE DATES.] 
           Sections 18, 20, and 21 are effective the day following 
        final enactment. 
           Section 13 is effective July 1, 1997, if the governing body 
        of the city of Saint Paul and the governing body of independent 
        school district No. 625 have approved it and complied with 
        Minnesota Statutes, section 645.021, subdivision 3, before 
        January 1, 1996.  Section 14 does not abrogate language that 
        references city of St. Paul civil service rules in bargaining 
        unit agreements in existence on March 31, 1995. 
                                   ARTICLE 9
                                 MISCELLANEOUS
           Section 1.  Minnesota Statutes 1994, section 13.43, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PUBLIC DATA.] (a) Except for employees described 
        in subdivision 5, the following personnel data on current and 
        former employees, volunteers, and independent contractors of a 
        state agency, statewide system, or political subdivision and 
        members of advisory boards or commissions is public:  name; 
        actual gross salary; salary range; contract fees; actual gross 
        pension; the value and nature of employer paid fringe benefits; 
        the basis for and the amount of any added remuneration, 
        including expense reimbursement, in addition to salary; job 
        title; job description; education and training background; 
        previous work experience; date of first and last employment; the 
        existence and status of any complaints or charges against the 
        employee, whether or not the complaint or charge resulted in a 
        disciplinary action; the final disposition of any disciplinary 
        action together with the specific reasons for the action and 
        data documenting the basis of the action, excluding data that 
        would identify confidential sources who are employees of the 
        public body; the terms of any agreement settling any dispute 
        arising out of the an employment relationship or of a buyout 
        agreement, as defined in section 123.34, subdivision 9a, 
        paragraph (a); work location; a work telephone number; badge 
        number; honors and awards received; payroll time sheets or other 
        comparable data that are only used to account for employee's 
        work time for payroll purposes, except to the extent that 
        release of time sheet data would reveal the employee's reasons 
        for the use of sick or other medical leave or other not public 
        data; and city and county of residence. 
           (b) For purposes of this subdivision, a final disposition 
        occurs when the state agency, statewide system, or political 
        subdivision makes its final decision about the disciplinary 
        action, regardless of the possibility of any later proceedings 
        or court proceedings.  In the case of arbitration proceedings 
        arising under collective bargaining agreements, a final 
        disposition occurs at the conclusion of the arbitration 
        proceedings, or upon the failure of the employee to elect 
        arbitration within the time provided by the collective 
        bargaining agreement.  Final disposition includes a resignation 
        by an individual when the resignation occurs after the final 
        decision of the state agency, statewide system, political 
        subdivision, or arbitrator. 
           (c) The state agency, statewide system, or political 
        subdivision may display a photograph of a current or former 
        employee to a prospective witness as part of the state agency's, 
        statewide system's, or political subdivision's investigation of 
        any complaint or charge against the employee. 
           (d) A complainant has access to a statement provided by the 
        complainant to a state agency, statewide system, or political 
        subdivision in connection with a complaint or charge against an 
        employee. 
           Sec. 2.  Minnesota Statutes 1994, section 120.064, is 
        amended to read: 
           120.064 [OUTCOME-BASED RESULTS-ORIENTED CHARTER SCHOOLS.] 
           Subdivision 1.  [PURPOSES.] (a) The purpose of this section 
        is to: 
           (1) improve pupil learning; 
           (2) increase learning opportunities for pupils; 
           (3) encourage the use of different and innovative teaching 
        methods; 
           (4) require the measurement of learning outcomes and create 
        different and innovative forms of measuring outcomes; 
           (5) establish new forms of accountability for schools; or 
           (6) create new professional opportunities for teachers, 
        including the opportunity to be responsible for the learning 
        program at the school site. 
           (b) This section does not provide a means to keep open a 
        school that otherwise would be closed.  Applicants in these 
        circumstances bear the burden of proving that conversion to an 
        outcome-based a charter school fulfills a purpose specified in 
        this subdivision, independent of the school's closing. 
           Subd. 2.  [APPLICABILITY.] This section applies only to 
        outcome-based charter schools formed and operated under this 
        section. 
           Subd. 3.  [SPONSOR.] A school board, community college, 
        state university, technical college, or the University of 
        Minnesota may sponsor one or more outcome-based charter schools. 
           A school board may authorize a maximum of five 
        outcome-based schools. 
           No more than a total of 35 outcome-based 40 charter schools 
        may be authorized not more than three of which may be sponsored 
        by public post-secondary institutions.  The state board of 
        education shall advise potential sponsors when the maximum 
        number of outcome-based charter schools has been authorized. 
           Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
        authorize one or more licensed teachers under section 125.05, 
        subdivision 1, to operate an outcome-based a charter school 
        subject to approval by the state board of education.  If a 
        school board elects not to sponsor an outcome-based a charter 
        school, the applicant may appeal the school board's decision to 
        the state board of education if two members of the school board 
        voted to sponsor the school.  If the state board authorizes the 
        school, the state board shall sponsor the school according to 
        this section.  The school shall be organized and operated as a 
        cooperative under chapter 308A or nonprofit corporation under 
        chapter 317A.  
           (b) Before the operators may form and operate a school, the 
        sponsor must file an affidavit with the state board of education 
        stating its intent to authorize an outcome-based a charter 
        school.  The affidavit must state the terms and conditions under 
        which the sponsor would authorize an outcome-based a charter 
        school.  The state board must approve or disapprove the 
        sponsor's proposed authorization within 30 60 days of receipt of 
        the affidavit.  Failure to obtain state board approval precludes 
        a sponsor from authorizing the outcome-based charter school that 
        was the subject of the affidavit.  
           (c) The operators authorized to organize and operate a 
        school shall hold an election for members of the school's board 
        of directors in a timely manner after the school is operating.  
        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.  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.  A provisional board may operate 
        before the election of the school's board of directors.  Board 
        of director meetings must comply with section 471.705. 
           (d) The granting or renewal of a charter by a sponsoring 
        entity shall not be conditioned upon the bargaining unit status 
        of the employees of the school. 
           Subd. 4a.  [CONVERSION OF EXISTING SCHOOLS.] A school board 
        may convert one or more of its existing schools to outcome-based 
        charter schools under this section if 90 percent of the 
        full-time teachers at the school sign a petition seeking 
        conversion.  The conversion must occur at the beginning of an 
        academic year. 
           Subd. 5.  [CONTRACT.] The sponsor's authorization for an 
        outcome-based a charter school shall be in the form of a written 
        contract signed by the sponsor and the board of directors of the 
        outcome-based charter school.  The contract for an outcome-based 
        a charter school shall be in writing and contain at least the 
        following: 
           (1) a description of a program that carries out one or more 
        of the purposes in subdivision 1; 
           (2) specific outcomes pupils are to achieve under 
        subdivision 10; 
           (3) admission policies and procedures; 
           (4) management and administration of the school; 
           (5) requirements and procedures for program and financial 
        audits; 
           (6) how the school will comply with subdivisions 8, 13, 15, 
        and 21; 
           (7) assumption of liability by the outcome-based charter 
        school; 
           (8) types and amounts of insurance coverage to be obtained 
        by the outcome-based charter school; and 
           (9) the term of the contract, which may be up to three 
        years. 
           Subd. 7.  [PUBLIC STATUS; EXEMPTION FROM STATUTES AND 
        RULES.] A charter school is a public school and is part of the 
        state's system of public education.  Except as provided in this 
        section, an outcome-based a charter school is exempt from all 
        statutes and rules applicable to a school, a school board, or a 
        school district, although it may elect to comply with one or 
        more provisions of statutes or rules. 
           Subd. 8.  [REQUIREMENTS.] (a) An outcome-based A charter 
        school shall meet all applicable state and local health and 
        safety requirements. 
           (b) The school must be located in the sponsoring district, 
        unless another school board agrees to locate an outcome-based a 
        charter school sponsored by another district in its boundaries.  
        If a school board denies a request to locate within its 
        boundaries an outcome-based a charter school sponsored by 
        another district, the sponsoring district may appeal to the 
        state board of education.  If the state board authorizes the 
        school, the state board shall sponsor the school.  
           (c) The A charter school must be nonsectarian in its 
        programs, admission policies, employment practices, and all 
        other operations.  A sponsor may not authorize an outcome-based 
        a charter school or program that is affiliated with a nonpublic 
        sectarian school or a religious institution. 
           (d) Charter schools shall not be used as a method of 
        providing education or generating revenue for students who are 
        being home schooled. 
           (e) The primary focus of the a charter school must be to 
        provide a comprehensive program of instruction for at least one 
        grade or age group from five through 18 years of age.  
        Instruction may be provided to people younger than five years 
        and older than 18 years of age. 
           (e) The (f) A charter school may not charge tuition. 
           (f) The (g) A charter school is subject to and shall comply 
        with chapter 363 and section 126.21. 
           (g) The (h) A charter school is subject to and shall comply 
        with the pupil fair dismissal act, sections 127.26 to 127.39, 
        and the Minnesota public school fee law, sections 120.71 to 
        120.76. 
           (h) The (i) A charter school is subject to the same 
        financial audits, audit procedures, and audit requirements as a 
        school district.  The audit must be consistent with the 
        requirements of sections 121.904 to 121.917, except to the 
        extent deviations are necessary because of the program at the 
        school.  The department of education, state auditor, or 
        legislative auditor may conduct financial, program, or 
        compliance audits. 
           (i) The (j) A charter school is a school district for the 
        purposes of tort liability under chapter 466. 
           Subd. 9.  [ADMISSION REQUIREMENTS.] The A charter school 
        may limit admission to: 
           (1) pupils within an age group or grade level; 
           (2) people who are eligible to participate in the high 
        school graduation incentives program under section 126.22; or 
           (3) residents of a specific geographic area where the 
        percentage of the population of non-Caucasian people of that 
        area is greater than the percentage of the non-Caucasian 
        population in the congressional district in which the geographic 
        area is located, and as long as the school reflects the racial 
        and ethnic diversity of the specific area. 
           The A charter school shall enroll an eligible pupil who 
        submits a timely application, unless the number of applications 
        exceeds the capacity of a program, class, grade level, or 
        building.  In this case, pupils shall be accepted by lot. 
           The A charter school may not limit admission to pupils on 
        the basis of intellectual ability, measures of achievement or 
        aptitude, or athletic ability.  
           Subd. 10.  [PUPIL PERFORMANCE.] An outcome-based A charter 
        school must design its programs to at least meet the outcomes 
        adopted by the state board of education.  In the absence of 
        state board requirements, the school must meet the outcomes 
        contained in the contract with the sponsor.  The achievement 
        levels of the outcomes contained in the contract may exceed the 
        achievement levels of any outcomes adopted by the state board. 
           Subd. 11.  [EMPLOYMENT AND OTHER OPERATING MATTERS.] The A 
        charter school shall employ or contract with necessary teachers, 
        as defined by section 125.03, subdivision 1, who hold valid 
        licenses to perform the particular service for which they are 
        employed in the school.  The school may employ necessary 
        employees who are not required to hold teaching licenses to 
        perform duties other than teaching and may contract for other 
        services.  The school may discharge teachers and nonlicensed 
        employees. 
           The board of directors also shall decide matters related to 
        the operation of the school, including budgeting, curriculum and 
        operating procedures. 
           Subd. 12.  [PUPILS WITH A DISABILITY.] The A charter school 
        must comply with sections 120.03 and 120.17 and rules relating 
        to the education of pupils with a disability as though it were a 
        school district. 
           Subd. 13.  [LENGTH OF SCHOOL YEAR.] An outcome-based A 
        charter school shall provide instruction each year for at least 
        the number of days required by section 120.101, subdivision 5.  
        It may provide instruction throughout the year according to 
        sections 120.59 to 120.67 or 121.585. 
           Subd. 14.  [REPORTS.] An outcome-based A charter school 
        must report at least annually to its sponsor and the state board 
        of education the information required by the sponsor or the 
        state board.  The reports are public data under chapter 13. 
           Subd. 15.  [TRANSPORTATION.] (a) By July 1 of each year, a 
        charter school shall notify the district in which the school is 
        located and the department of education if it will provide 
        transportation for pupils enrolled at the school for the fiscal 
        year. 
           (b) If a charter school elects to provide transportation 
        for pupils, the transportation shall be provided by the charter 
        school within the district in which the charter school is 
        located.  The state shall pay transportation aid to the charter 
        school according to section 124.248, subdivision 1a. 
           For pupils who reside outside the district in which the 
        charter school is located, the charter school is not required to 
        provide or pay for transportation between the pupil's residence 
        and the border of the district in which the charter school is 
        located.  A parent may be reimbursed by the charter school for 
        costs of transportation from the pupil's residence to the border 
        of the district in which the charter school is located if the 
        pupil is from a family whose income is at or below the poverty 
        level, as determined by the federal government.  The 
        reimbursement may not exceed the pupil's actual cost of 
        transportation or 15 cents per mile traveled, whichever is 
        less.  Reimbursement may not be paid for more than 250 miles per 
        week.  
           At the time a pupil enrolls in a charter school, the 
        charter school shall provide the parent or guardian with 
        information regarding the transportation.  
           (c) If a charter school does not elect to provide 
        transportation, transportation for pupils enrolled at a the 
        school shall be provided by the district in which the school is 
        located, according to sections 120.062, subdivision 9, and 
        123.39, subdivision 6, for a pupil residing in the same district 
        in which the outcome-based charter school is located.  
        Transportation may be provided by the district in which the 
        school is located, according to sections 120.062, subdivision 9, 
        and 123.39, subdivision 6, for a pupil residing in a different 
        district. 
           Subd. 16.  [LEASED SPACE.] The A charter school may lease 
        space from a board eligible to be a sponsor or other public or 
        private nonprofit nonsectarian organization.  If a charter 
        school is unable to lease appropriate space from an eligible 
        board or other public or private nonprofit nonsectarian 
        organization, the school may lease space from another 
        nonsectarian organization if the department of education, in 
        consultation with the department of administration, approves the 
        lease.  If the school is unable to lease appropriate space from 
        public or private nonsectarian organizations, the school may 
        lease space from a sectarian organization if the leased space is 
        constructed as a school facility and the department of 
        education, in consultation with the department of 
        administration, approves the lease. 
           Subd. 17.  [INITIAL COSTS.] A sponsor may authorize a 
        charter school before the applicant has secured its space, 
        equipment, facilities, and personnel if the applicant indicates 
        the authority is necessary for it to raise working capital.  A 
        sponsor may not authorize a school before the state board of 
        education has approved the authorization. 
           Subd. 18.  [DISSEMINATE INFORMATION.] The sponsor, the 
        operators, and the department of education must disseminate 
        information to the public on how to form and operate an 
        outcome-based a charter school and how to utilize the offerings 
        of an outcome-based a charter school.  Particular groups to be 
        targeted include low-income families and communities, and 
        students of color. 
           Subd. 19.  [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a 
        teacher employed by a school district makes a written request 
        for an extended leave of absence to teach at an outcome-based a 
        charter school, the school district must grant the leave.  The 
        school district must grant a leave for any number of years 
        requested by the teacher, and must extend the leave at the 
        teacher's request. The school district may require that the 
        request for a leave or extension of leave be made up to 90 days 
        before the teacher would otherwise have to report for duty.  
        Except as otherwise provided in this subdivision and except for 
        section 125.60, subdivision 6a, the leave is governed by section 
        125.60, including, but not limited to, reinstatement, notice of 
        intention to return, seniority, salary, and insurance. 
           During a leave, the teacher may continue to aggregate 
        benefits and credits in the teachers' retirement association 
        account by paying both the employer and employee contributions 
        based upon the annual salary of the teacher for the last full 
        pay period before the leave began.  The retirement association 
        may impose reasonable requirements to efficiently administer 
        this subdivision. 
           Subd. 20.  [COLLECTIVE BARGAINING.] Employees of the board 
        of directors of the a charter school may, if otherwise eligible, 
        organize under chapter 179A and comply with its provisions.  The 
        board of directors of the a charter school is a public employer, 
        for the purposes of chapter 179A, upon formation of one or more 
        bargaining units at the school.  Bargaining units at the school 
        are shall be separate from any other units within the sponsoring 
        district, except that bargaining units may remain part of the 
        appropriate unit within the sponsoring district, if the 
        employees of the school, the board of directors of the school, 
        the exclusive representative of the appropriate unit in the 
        sponsoring district, and the board of the sponsoring district 
        agree to include the employees in the appropriate unit of the 
        sponsoring district. 
           Subd. 20a.  [TEACHERS RETIREMENT.] Teachers in a charter 
        school shall be public school teachers for the purposes of 
        chapters 354 and 354a. 
           Subd. 21.  [CAUSES FOR NONRENEWAL OR TERMINATION.] (a) The 
        duration of the contract with a sponsor shall be for the term 
        contained in the contract according to subdivision 5.  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 school board, the school's board of directors 
        may appeal the sponsor's decision to the state board of 
        education.  
           (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) for violations of law; or 
           (4) other good cause shown. 
           If a contract is terminated or not renewed, the school 
        shall be dissolved according to the applicable provisions of 
        chapter 308A or 317A. 
           Subd. 22.  [PUPIL ENROLLMENT.] If a contract is not renewed 
        or is terminated according to subdivision 21, a pupil who 
        attended the school, siblings of the pupil, or another pupil who 
        resides in the same place as the pupil may enroll in the 
        resident district or may submit an application to a nonresident 
        district according to section 120.062 at any time.  Applications 
        and notices required by section 120.062 shall be processed and 
        provided in a prompt manner.  The application and notice 
        deadlines in section 120.062 do not apply under these 
        circumstances. 
           Subd. 23.  [GENERAL AUTHORITY.] The board of directors 
        of an outcome-based a charter school may sue and be sued.  The 
        board may not levy taxes or issue bonds.  
           Subd. 24.  [IMMUNITY.] The state board of education, 
        members of the state board, a sponsor, members of the board of a 
        sponsor in their official capacity, and employees of a sponsor 
        are immune from civil or criminal liability with respect to all 
        activities related to an outcome-based a charter school they 
        approve or sponsor.  The board of directors shall obtain at 
        least the amount of and types of insurance required by the 
        contract, according to subdivision 5. 
           Sec. 3.  Minnesota Statutes 1994, section 120.101, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [CHILDREN UNDER SEVEN.] Once a pupil under the 
        age of seven is enrolled in kindergarten or a higher grade in a 
        public school, the pupil is subject to the compulsory attendance 
        provisions of this chapter and section 127.20, unless the school 
        board of the district in which the pupil is enrolled has a 
        policy that exempts children under seven from this subdivision. 
           In a school district in which children under seven are 
        subject to compulsory attendance under this subdivision, 
        paragraphs (a) to (c) apply. 
           (a) A parent or guardian may withdraw the pupil from 
        enrollment in the school for good cause by notifying the school 
        district.  Good cause includes, but is not limited to, 
        enrollment of the pupil in another school, as defined in 
        subdivision 4, or the immaturity of the child. 
           (b) When the pupil enrolls, the enrolling official must 
        provide the parent or guardian who enrolls the pupil with a 
        written explanation of the provisions of this subdivision. 
           (c) A pupil under the age of seven who is withdrawn from 
        enrollment in the public school under paragraph (a) is no longer 
        subject to the compulsory attendance provisions of this chapter. 
           In a school district that had adopted a policy to exempt 
        children under seven from this subdivision, the school 
        district's chief attendance officer must keep the truancy 
        enforcement authorities supplied with a copy of the school 
        board's current policy certified by the clerk of the school 
        board. 
           Sec. 4.  Minnesota Statutes 1994, section 120.101, 
        subdivision 5c, is amended to read: 
           Subd. 5c.  [EDUCATION RECORDS.] A school district from 
        which a student is transferring must transmit the student's 
        educational records, within ten business days of the date the 
        student withdraws a request, to the school district in which the 
        student is enrolling.  School districts must make reasonable 
        efforts to determine the school district in which a transferring 
        student is next enrolling in order to comply with this 
        subdivision. 
           Sec. 5.  Minnesota Statutes 1994, section 120.74, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) A school board is not authorized to 
        charge fees in the following areas: 
           (a) (1) textbooks, workbooks, art materials, laboratory 
        supplies, towels; 
           (b) (2) supplies necessary for participation in any 
        instructional course except as authorized in sections 120.73 and 
        120.75; 
           (c) (3) field trips which are required as a part of a basic 
        education program or course; 
           (d) (4) graduation caps, gowns, any specific form of dress 
        necessary for any educational program, and diplomas; 
           (e) (5) instructional costs for necessary school personnel 
        employed in any course or educational program required for 
        graduation; 
           (f) (6) library books required to be utilized for any 
        educational course or program; 
           (g) (7) admission fees, dues, or fees for any activity the 
        pupil is required to attend; 
           (h) (8) any admission or examination cost for any required 
        educational course or program; 
           (i) (9) locker rentals; 
           (j) (10) transportation of pupils (1) (i) for which state 
        transportation aid is authorized pursuant to section 124.223 or 
        (2) (ii) for which a levy is authorized under section 124.226, 
        subdivision 5. 
           (b) Notwithstanding paragraph (a), clauses (1) and (6), a 
        school board may charge fees for textbooks, workbooks, and 
        library books, lost or destroyed by students.  The board must 
        annually notify parents or guardians and students about its 
        policy to charge a fee under this paragraph. 
           Sec. 6.  Minnesota Statutes 1994, section 120.75, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Prior to the initiation of any fee not 
        authorized or prohibited by sections 120.73 and 120.74, the 
        local school board shall hold a public hearing within the 
        district upon three weeks published notice in the district's 
        official newspaper.  The local school board shall notify the 
        commissioner of any fee it proposes to initiate under this 
        section.  If within 45 days of this notification, the 
        commissioner does not disapprove the proposed fee, the local 
        school board may initiate the proposed fee, or such notice as is 
        otherwise required for a regular school board meeting given 
        three weeks prior to the hearing on the proposed adoption of the 
        policy. 
           Sec. 7.  Minnesota Statutes 1994, section 121.207, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REPORTS; CONTENT.] On or before January 1, 1994, 
        the commissioner of education, 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.  The form shall 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 an alternative 
        reporting format that allows school districts to provide 
        aggregate data, with an option to use computer technology to 
        report the data. 
           Sec. 8.  Minnesota Statutes 1994, section 121.207, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REPORTS; FILING REQUIREMENTS.] By February 1 and 
        July 1 of each year, each school shall report incidents 
        involving the use or possession of a dangerous weapon in school 
        zones to the commissioner of education.  The reports shall be 
        made on the standardized forms or using the alternative format 
        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. 9.  Minnesota Statutes 1994, section 121.931, is 
        amended to read: 
           121.931 [STATE BOARD POWERS AND DUTIES INFORMATION SYSTEM.] 
           Subdivision 1.  [COMPONENTS; GOVERNANCE INFORMATION 
        SYSTEM.] The statewide elementary, secondary and vocational 
        education management department of education shall develop and 
        maintain a computerized information system shall consist of the 
        ESV-IS and the SDE-IS and shall be governed by the state board 
        according to the provisions of sections 121.93 to 121.936 for 
        state information needs.  
           Subd. 2.  [PURPOSES.] The purposes of the statewide 
        elementary, secondary and vocational education management 
        computerized information system shall be:  
           (a) To provide comparable and accurate educational 
        information in a manner which is timely and economical; 
           (b) To provide a computerized research capability for 
        analysis of education information ensure accountability for 
        state appropriations; 
           (c) To collect data to assess the needs of learners and 
        children; 
           (d) To provide school districts with an educational 
        information system capability which will meet school district 
        management needs; and 
           (d) (e) To provide a capability for the collection and 
        processing for computerized analysis of educational information 
        in order to meet the management needs of the state of Minnesota. 
           Subd. 3.  [SYSTEMS ARCHITECTURE PLAN.] The state board, 
        with the advice and assistance of the ESV computer council, 
        shall develop a systems architecture plan for providing 
        administrative data processing to school districts, the 
        department of education, and the legislature.  In developing the 
        plan, the state board shall consider at least the following:  
        user needs; systems design factors; telecommunication 
        requirements; computer hardware technology; and alternative 
        hardware purchase and lease arrangements.  
           Subd. 4.  [LONG-RANGE PLAN.] The state board, with the 
        advice and assistance of the ESV computer council and the 
        information policy office, shall develop a long-range plan for 
        providing administrative data processing to school districts, 
        the department of education, and the legislature.  In developing 
        the plan, the state board shall consider at least the following: 
        desirable major enhancements to the ESV-IS and SDE-IS; new 
        system development proposals; new or modified approaches to 
        provide support services to districts; the responsibility of 
        regional management information centers to provide reports to 
        the department on behalf of affiliated districts; and related 
        development and implementation time schedules.  The long-range 
        plan shall address the feasibility and practicability of 
        utilizing microcomputers, minicomputers, and larger computer 
        systems.  The plan shall be updated by September 15 of each 
        even-numbered year.  The long-range plan shall consist of one 
        document and shall incorporate the systems architecture plan and 
        all relevant portions of previous documents which have been 
        referred to as the state computing plan. 
           Subd. 5.  [SOFTWARE DEVELOPMENT.] The commissioner shall 
        provide for the development of applications software for ESV-IS 
        and SDE-IS.  The commissioner may charge school districts or 
        cooperative units for the actual cost of software development 
        used by the district or cooperative unit.  Any amount received 
        is annually appropriated to the department of education for this 
        purpose.  A school district or cooperative unit may not 
        implement a payroll, student, or staff software system after 
        June 30, 1994, until the system has been reviewed by the 
        department to ensure that it provides the required data elements 
        and format. 
           Sec. 10.  Minnesota Statutes 1994, section 121.932, is 
        amended to read: 
           121.932 [DEPARTMENT DUTIES.] 
           Subd. 2.  [DATA ACQUISITION CALENDAR.] The department of 
        education shall maintain a current annual data acquisition 
        calendar specifying the reports which districts are required to 
        provide to the department, the reports which regional management 
        information centers are required to provide to the department 
        for their affiliated districts, and the dates these reports are 
        due.  
           Subd. 3.  [EXEMPTION FROM CHAPTER 14.] The annual data 
        acquisition calendar and the essential data elements are exempt 
        from the administrative procedure act but, to the extent 
        authorized by law to adopt rules, the board may use the 
        provisions of section 14.38, subdivisions 5 to 9. 
           Subd. 4.  [SDE-IS DATA SYSTEM.] The department shall 
        develop and operate the SDE-IS with the advice and assistance of 
        the ESV computer council a computerized data system.  The SDE-IS 
        system shall include:  (a) information required by federal or 
        state law or rule; and (b) information needed by the divisions 
        of the department in order to disburse funds, to implement 
        research or special projects approved by the commissioner, and 
        to meet goals or provide information required by the state 
        board, the governor, the legislature or the federal government.  
        The department shall consult the advisory council on uniform 
        financial accounting and reporting standards, the advisory task 
        forces on student reporting and payroll/personnel reporting, and 
        representatives of the senate and the house of representatives 
        and of each division of the department, about needs for 
        information from SDE-IS.  
           Subd. 4a.  [CERTIFICATION OF SOFTWARE VENDORS.] The 
        commissioner shall maintain a list of certified service 
        providers for administrative data processing software and 
        support.  To be certified, a service provider must provide the 
        commissioner with a written statement identifying software 
        products and support functions that will be provided to school 
        districts and stating its intent to meet state standards for 
        software, data elements, edits, and support services.  The 
        standards must ensure the quality of the data reported to the 
        state.  The commissioner must conduct regular training sessions 
        for service providers on the standards.  If a service provider 
        fails to meet the standards, the commissioner must notify the 
        service provider of areas of noncompliance and assist the 
        service provider in correcting the problem.  If the provider 
        fails to comply with standards within two months of being 
        notified of noncompliance, the commissioner may remove the 
        service provider from the list of certified providers.  The 
        commissioner may recertify a service provider when the 
        commissioner determines that the areas of noncompliance have 
        been corrected. 
           Subd. 4b.  [INFORMATION ON CERTIFIED SERVICE 
        PROVIDERS.] The commissioner must include the list of certified 
        service providers in the annual data acquisition calendar.  The 
        commissioner must notify school districts if a service provider 
        is removed from the list and of the areas of noncompliance. 
           Subd. 5.  [ESSENTIAL DATA.] The department shall maintain a 
        list of essential data elements which must be recorded and 
        stored about each pupil, licensed and nonlicensed staff member, 
        and educational program.  Each school district shall send must 
        provide the essential data to the ESV regional computer center 
        to which it belongs, where it shall be edited and transmitted to 
        the department in the form and format prescribed by the 
        department. 
           Subd. 6.  [CONTRACTING.] The department may provide by 
        contract for the technical support of and the development of 
        applications software by a regional management information 
        center or by any other appropriate provider. 
           Sec. 11.  Minnesota Statutes 1994, section 121.933, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PERMITTED DELEGATIONS.] The state board of 
        technical colleges, the state board of education, and the 
        department may provide, by the delegation of powers and duties 
        or by contract, for the implementation and technical support 
        of ESV-IS and SDE-IS a computerized information reporting 
        system, including the development of applications software 
        pursuant to section 121.931, subdivision 5, by a regional 
        management information center or by any other appropriate 
        provider.  
           Sec. 12.  Minnesota Statutes 1994, section 121.935, is 
        amended to read: 
           121.935 [REGIONAL MANAGEMENT INFORMATION CENTERS.] 
           Subdivision 1.  [CREATION.] Any group of two or more 
        independent, special or common school districts may with the 
        approval of the state board pursuant to sections 121.931 and 
        121.936 create a regional management information center pursuant 
        to section 123.58 or 471.59 to provide computer services to 
        school districts.  A regional management information center 
        shall not come into existence until the first July 1 after its 
        creation is approved by the state board or until it can be 
        accommodated by state appropriations, whichever occurs first.  
        Each member of the board of a center created after June 30, 
        1991, shall be a current member of a member school board.  
           Subd. 1a.  [CENTER FOR DISTRICTS WITH ALTERNATIVE SYSTEMS.] 
        Districts that operate alternative systems approved by the state 
        board according to section 121.936 may create one regional 
        management information center under section 471.59.  The center 
        shall have all of the powers authorized under section 
        471.59.  Only districts that operate approved alternative 
        systems may be members of the center.  Upon receiving the 
        approval of the state board to operate an alternative system, a 
        district may become a member of the center.  
           Each member of the center board shall be a current member 
        of a member school board.  
           The center board may purchase or lease equipment.  It may 
        not employ any staff but may enter into a term contract for 
        services.  A person providing services according to a contract 
        with the center board is not a state employee.  
           The center shall perform the duties required by subdivision 
        2, except clauses (c), (d), and (g).  The department shall 
        provide the center all services that are provided to regional 
        centers formed under subdivision 1, including transferring 
        software and providing accounting assistance.  
           Subd. 2.  [DUTIES.] Every regional management information 
        center shall: 
           (a) assist its affiliated districts in complying with the 
        reporting requirements of the annual data acquisition calendar 
        and the rules of the state board of education; 
           (b) respond within 15 calendar days to requests from the 
        department for district information provided to the region for 
        state reporting of information, based on the data elements in 
        the data element dictionary; 
           (c) operate financial management information systems 
        consistent with the uniform financial accounting and reporting 
        standards adopted by the commissioner pursuant to sections 
        121.904 to 121.917; 
           (d) make available to districts the opportunity to 
        participate fully in all the subsystems of ESV-IS; 
           (e) develop and maintain a plan to provide services during 
        a system failure or a disaster; 
           (f) comply with the requirement in section 121.908, 
        subdivision 2, on behalf of districts affiliated with it; and 
           (g) operate fixed assets property management information 
        systems consistent with the uniform property accounting and 
        reporting standards adopted by the commissioner. 
           Subd. 4.  [ANNUAL BUDGET ESTIMATES.] Every regional 
        management information center shall submit to the department by 
        July 1 an annual budget estimate for its administrative and 
        management computer activities.  The budget estimates shall be 
        in a program budget format and shall include all estimated and 
        actual revenues, expenditures, and fund balances of the center.  
        Budget forms developed pursuant to section 16A.10 may be used 
        for these estimates.  The department of education shall assemble 
        this budget information into a supplemental budget summary for 
        the statewide elementary, secondary, and vocational management 
        information system.  Copies of the budget summary shall be 
        provided to the ESV computer council and shall be available to 
        the legislature upon request.  
           Subd. 6.  [FEES.] Regional management information centers 
        may charge fees to affiliated districts for the cost of services 
        provided to the district. 
           Subd. 8.  [COMPUTER HARDWARE PURCHASE.] A regional 
        management information center may not purchase or enter into a 
        lease-purchase agreement for computer hardware in excess of 
        $100,000 without unanimous consent of the center board. 
           Subd. 9.  [FINANCIAL SERVICES.] Regional management 
        information centers may provide financial management information 
        services to cities, counties, towns, or other governmental units 
        at mutually negotiated prices.  
           Sec. 13.  Minnesota Statutes 1994, section 122.91, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE.] The purpose of an education 
        district is to increase educational opportunities for learners 
        by increasing cooperation and coordination among school 
        districts, other governmental units, and post-secondary 
        institutions, and to replace other existing cooperative 
        structures. 
           Sec. 14.  Minnesota Statutes 1994, section 122.91, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGREEMENT.] School boards meeting the 
        requirements of subdivision 3 may enter into a written agreement 
        to establish an education district.  Once established, cities, 
        counties, and other governmental units as defined in section 
        471.59, may become members of the education district.  The 
        agreement and subsequent amendments must be adopted by majority 
        vote of the full membership of each board.  
           Sec. 15.  Minnesota Statutes 1994, section 122.91, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [AGREEMENT; SPECIAL PROVISIONS.] The education 
        district agreement may contain a special provision adopted by 
        the vote of a majority of the full membership of each of the 
        boards of the member school districts to allow a post-secondary 
        institution or cities, counties, and other governmental units to 
        become a member of the education district. 
           Sec. 16.  Minnesota Statutes 1994, section 122.92, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCHOOL DISTRICT REPRESENTATION.] The 
        education district board shall be composed of at least one 
        representative appointed by the school board or governing board 
        of each member district.  Each representative must be a member 
        of the appointing school or governing board.  Each 
        representative shall serve at the pleasure of the 
        appointing school board and may be recalled by a majority vote 
        of the appointing school board.  Each representative shall serve 
        for the term that is specified in the agreement.  The board 
        shall select its officers from among its members and shall 
        determine the terms of the officers.  The board shall adopt 
        bylaws for the conduct of its business.  The board may conduct 
        public meetings via interactive television if the board complies 
        with section 471.705 in each location where board members are 
        present. 
           Sec. 17.  Minnesota Statutes 1994, section 122.93, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COORDINATION.] An education district board 
        shall coordinate the programs and services of the education 
        district according to the terms of the written agreement.  The 
        board shall implement the agreement for delivering educational 
        services defined in section 123.582, subdivisions 7 and 8, 
        needed in the education district. 
           Sec. 18.  Minnesota Statutes 1994, section 122.94, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] An education district 
        board shall adopt a comprehensive agreement for continuous 
        learning.  The agreement must address methods to improve the 
        educational opportunities available in the education district.  
        It must be submitted for review by the educational cooperative 
        service unit within which the majority of the education district 
        membership lies.  The education district board shall review the 
        agreement annually and propose necessary amendments to the 
        member districts. 
           Sec. 19.  Minnesota Statutes 1994, section 123.34, is 
        amended by adding a subdivision to read: 
           Subd. 9a.  [DISCLOSE PAST BUYOUTS OR CONTRACT IS VOID.] (a) 
        For the purposes of paragraph (b), a "buyout agreement" is any 
        agreement under which a person employed as a superintendent left 
        the position before the term of the contract was over and 
        received a sum of money, something else of value, or the right 
        to something of value for some purpose other than performing the 
        services of a superintendent. 
           (b) Before a person may enter into a superintendent's 
        contract with a school board, the candidate shall disclose in 
        writing the existence and terms of any previous buyout 
        agreement, including amounts and the purpose for the payments, 
        relating to a superintendent's contract with another school 
        board.  A disclosure made under this paragraph is public data. 
           (c) The superintendent's contract of a person who fails to 
        make a timely disclosure under paragraph (b) is void. 
           Sec. 20.  Minnesota Statutes 1994, section 123.35, 
        subdivision 19b, is amended to read: 
           Subd. 19b.  [WITHDRAWING FROM COOPERATIVE.] If a school 
        district withdraws from a cooperative unit defined in paragraph 
        (d), the distribution of assets and assignment of liabilities to 
        the withdrawing district shall be determined according to this 
        subdivision. 
           (a) The withdrawing district remains responsible for its 
        share of debt incurred by the cooperative unit according to 
        subdivision 19a.  The school district and cooperative unit may 
        mutually agree, through a board resolution by each, to terms and 
        conditions of the distribution of assets and the assignment of 
        liabilities.  
           (b) If the cooperative unit and the school district cannot 
        agree on the terms and conditions, the commissioner of education 
        shall resolve the dispute by determining the district's 
        proportionate share of assets and liabilities based on the 
        district's enrollment, financial contribution, usage, or other 
        factor or combination of factors determined appropriate by the 
        commissioner.  The assets shall be disbursed to the withdrawing 
        district in a manner that minimizes financial disruption to the 
        cooperative unit.  
           (c) Assets related to an insurance pool shall not be 
        disbursed to a member district under paragraph (b). 
           (d) For the purposes of this section, a cooperative unit is:
           (1) an education district organized under sections 122.91 
        to 122.95; 
           (2) a cooperative vocational center organized under section 
        123.351; 
           (3) an intermediate district organized under chapter 136D; 
           (4) an educational cooperative service unit organized under 
        section 123.58 a service cooperative organized under section 
        123.582; or 
           (5) a regional management information center organized 
        under section 121.935 or as a joint powers district according to 
        section 471.59. 
           Sec. 21.  Minnesota Statutes 1994, section 123.351, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] Two or more independent 
        school districts may enter into an agreement to establish a 
        cooperative center to provide for vocational education and other 
        educational services upon the vote of a majority of the full 
        membership of each of the boards of the districts entering into 
        the agreement.  The agreement may also provide for membership by 
        cities, counties, and other governmental units as defined in 
        section 471.59.  When a resolution approving this action has 
        been adopted by the board of a district, the resolution shall be 
        published once in a newspaper of general circulation in the 
        district.  If a petition for referendum on the question of the 
        district entering into the agreement, containing signatures of 
        qualified voters of the district equal to five percent of the 
        number of voters at the last school district general election, 
        is filed with the clerk of the board within 60 days after 
        publication of the resolution, the board shall not enter into 
        the agreement until the question has been submitted to the 
        voters of the district at a special election.  This election 
        shall be conducted and canvassed in the same manner as school 
        district general elections.  If a majority of the total number 
        of votes cast on the question within the district is in favor of 
        the proposition, the board may enter into an agreement to 
        establish the center for purposes described in this section. 
           Sec. 22.  Minnesota Statutes 1994, section 123.351, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GOVERNING BOARD.] (a) The center shall be 
        operated by a center board of not less than five members which 
        shall consist of members from school boards of each of the 
        participating school districts within the center and member 
        cities, counties, and other governmental units, appointed by 
        their respective school boards.  Each participating school 
        district shall have at least one member on the board.  The board 
        shall choose an administrative officer to administer board 
        policy and directives who shall serve as an ex officio member of 
        the board but shall not have a vote. 
           (b) The terms of office of the first members of the board 
        shall be determined by lot as follows:  one-third of the members 
        for one year, one-third for two years, and the remainder for 
        three years, all terms to expire on June 30 of the appropriate 
        year; provided that if the number of members is not evenly 
        divisible by three, the membership will be as evenly distributed 
        as possible among one, two and three year terms with the 
        remaining members serving the three year term.  Thereafter the 
        terms shall be for three years commencing on July 1 of each 
        year.  If a vacancy occurs on the center board, it shall be 
        filled by the appropriate school board within 90 days.  A person 
        appointed to the center board shall qualify as a board member by 
        filing with the chair a written certificate of appointment from 
        the appointing school board. 
           (c) The first meeting of a center board shall be at a time 
        mutually agreed upon by board members.  At this meeting, the 
        center board shall choose its officers and conduct any other 
        necessary organizational business. Thereafter the center board 
        shall meet on the first of July of each year or as soon 
        thereafter as practicable pursuant to notice sent to all center 
        board members by the chief executive officer of the center. 
           (d) The officers of the center board shall be a chair, 
        vice-chair, clerk and treasurer, no two of whom when possible 
        shall be from the same school district.  The chair shall preside 
        at all meetings of the center board except in the chair's 
        absence the vice-chair shall preside.  The clerk shall keep a 
        complete record of the minutes of each meeting and the treasurer 
        shall be the custodian of the funds of the center.  Insofar as 
        applicable, sections 123.33 and 123.34, shall apply to the board 
        and officers of the center. 
           (e) Each participating school district shall have equal 
        voting power with at least one vote.  A majority of the center 
        board shall be a quorum.  Any motion other than adjournment 
        shall pass only upon receiving a majority of the votes of the 
        entire center board. 
           Sec. 23.  Minnesota Statutes 1994, section 123.351, 
        subdivision 4, is amended to read: 
           Subd. 4.  [POWERS AND DUTIES.] (a) The center board shall 
        have the general charge of the business of the center and the 
        ownership of facilities.  Where applicable, section 123.36, 
        shall apply.  The center board may not issue bonds in its 
        behalf.  Each participating district may issue its bonds for the 
        purpose of acquisition and betterment of center facilities in 
        the amount certified by the center board to such participating 
        district in accordance with chapter 475. 
           (b) The center board (1) may furnish vocational offerings 
        to any eligible person residing in any participating district; 
        (2) may provide special education for the handicapped and 
        disadvantaged; and (3) may provide any other educational 
        programs or services defined in section 123.582, subdivisions 7 
        and 8, agreed upon by the participating districts members.  
        Academic offerings shall be provided only under the direction of 
        properly licensed academic supervisory personnel. 
           (c) In accordance with subdivision 5, clause (b), the 
        center board shall certify to each participating district the 
        amount of funds assessed to the district as its proportionate 
        share required for the conduct of the educational programs, 
        payment of indebtedness, and all other proper expenses of the 
        center. 
           (d) The center board shall employ and contract with 
        necessary qualified teachers and administrators and may 
        discharge the same for cause pursuant to section 125.12.  The 
        authority for selection and employment of a director shall be 
        vested in the center board.  Notwithstanding the provisions of 
        section 125.12, subdivision 6a or 6b, no individual shall have a 
        right to employment as a director based on seniority or order of 
        employment by the center.  The board may employ and discharge 
        other necessary employees and may contract for other services 
        deemed necessary. 
           (e) The center board may provide an educational program for 
        secondary and adult vocational phases of instruction.  The high 
        school phase of its educational program shall be offered as a 
        component of the comprehensive curriculum offered by each of the 
        participating school districts.  Graduation shall be from the 
        student's resident high school district.  Insofar as applicable, 
        sections 123.35 to 123.40, shall apply. 
           (f) The center board may prescribe rates of tuition for 
        attendance in its programs by adults and nonmember district 
        secondary students. 
           Sec. 24.  Minnesota Statutes 1994, section 123.351, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FINANCING.] (a) Any center board established 
        pursuant to this section is a public corporation and agency and 
        may receive and disburse federal, state, and local funds made 
        available to it.  No participating school district or member 
        shall have any additional individual liability for the debts or 
        obligations of the center except that assessment which has been 
        certified as its proportionate share in accordance with 
        subdivision 5, clause (b) and subdivision 4, clauses (a) and 
        (c).  A member of the center board shall have such liability as 
        is applicable to a member of an independent school district 
        board.  Any property, real or personal, acquired or owned by the 
        center board for its purposes shall be exempt from taxation by 
        the state or any of its political subdivisions. 
           (b) The center board may, in each year, for the purpose of 
        paying any administrative, planning, operating, or capital 
        expenses incurred or to be incurred, assess and certify to each 
        participating school district its proportionate share of any and 
        all expenses.  This share shall be based upon an equitable 
        distribution formula agreed upon by the participating 
        districts.  Each participating district shall remit its 
        assessment to the center board within 30 days after receipt.  
        The assessments shall be paid within the maximum levy 
        limitations of each participating district. 
           Sec. 25.  [123.582] [SERVICE COOPERATIVES.] 
           Subdivision 1.  [ESTABLISHMENT OF SERVICE 
        COOPERATIVES.] (a) Ten service cooperatives, hereafter 
        designated as SCs, are established.  Geographical boundaries for 
        each SC shall coincide with those identified in governor's 
        executive orders 8, dated September 1, 1971, and 59, dated May 
        29, 1973, issued pursuant to the regional development act of 
        1969, Minnesota Statutes, sections 462.381 to 462.397, with the 
        following exceptions: 
           (1) development regions one and two shall be combined to 
        form a single SC; 
           (2) development regions six east and six west shall be 
        combined to form a single SC; and 
           (3) development regions seven east and seven west shall be 
        combined to form a single SC. 
           (b) The SC shall cooperate with the regional development 
        commission for the region with which its boundaries coincide but 
        shall not be responsible to nor governed by that regional 
        development commission. 
           (c) Two or more identified SCs may, upon approval by a 
        majority of the members in each affected SC, be combined and 
        administered as a single SC. 
           Subd. 2.  [PURPOSE OF SC.] The primary purposes of 
        designation as a SC shall be to perform planning on a regional 
        basis and to assist in meeting specific needs of clients in 
        participating governmental units which could be better provided 
        by a SC than by the members themselves.  The SC shall provide 
        those programs and services which are determined, pursuant to 
        subdivision 7, to be priority needs of the particular region and 
        shall assist in meeting special needs which arise from 
        fundamental constraints upon individual members. 
           Subd. 3.  [MEMBERSHIP AND PARTICIPATION.] Full membership 
        in a SC shall be limited to public school districts, cities, 
        counties, and other governmental units as defined in section 
        471.59, but nonvoting memberships shall be available to 
        nonpublic school administrative units and other partnership 
        agencies or organizations within the SC.  A school district, 
        city, county, or other governmental unit or nonprofit 
        organization may belong to one or more SCs.  Participation in 
        programs and services provided by the SC shall be 
        discretionary.  No school district, city, county, or other 
        governmental unit shall be compelled to participate in these 
        services under authority of this section. Nonpublic school 
        students and personnel are encouraged to participate in programs 
        and services to the extent allowed by law. 
           Subd. 4.  [GOVERNING BOARD.] (a) The care, management, and 
        control of a SC shall be vested in a board of directors composed 
        of not less than six nor more than 15 members.  A majority of 
        the members of the SC board of directors shall be current 
        members of school boards of participating public school 
        districts.  Election of the school board members to the SC board 
        of directors shall be by vote of all current school board 
        members of participating public school districts with each 
        school board member having one vote.  The remaining board 
        members may be representatives at large appointed by the board 
        members or elected as representatives by other participating 
        agencies, such as cities, counties, or other governmental units. 
           (b) The election timeline shall be compatible with those 
        for school board members and shall be addressed within the 
        bylaws of each SC.  
           (c) A vacancy on the SC board which results in an unexpired 
        term may be filled by appointment by the SC board of directors 
        until such vacancy can be filled at the next board election. 
           (d) At the organizational meeting, the SC board shall 
        choose its officers and conduct any other necessary 
        organizational business.  The SC board may, at its discretion, 
        appoint up to three members at large to the SC board as ex 
        officio, nonvoting members of the board and shall encourage the 
        advisory participation of a cross-section of school and agency 
        personnel within the SC to the extent allowed by law. 
           (e) The officers of the SC board shall be a chair, 
        vice-chair, clerk, and treasurer, no two of whom when possible 
        shall be from the same agency. 
           (f) A member of the SC board shall have the same liability 
        applicable to a member of an independent school board or other 
        elected governmental officials. 
           Subd. 5.  [DUTIES AND POWERS OF SC BOARD OF DIRECTORS.] The 
        board of directors shall have authority to maintain and operate 
        a SC.  Subject to the availability of necessary resources, the 
        powers and duties of this board shall include the following: 
           (a) The board of directors shall submit, by June 1 of each 
        year to each participating member, an annual plan which 
        describes the objectives and procedures to be implemented in 
        assisting in resolution of the needs of the SC.  
           (b) The SC board of directors shall provide adequate 
        office, service center, and administrative facilities by lease, 
        purchase, gift, or otherwise.  
           (c) The SC board of directors shall employ a central 
        administrative staff and other personnel as necessary to provide 
        and support the agreed upon programs and services.  The board 
        may discharge staff and personnel pursuant to applicable 
        provisions of law.  SC staff and personnel may participate in 
        retirement programs and any other programs available to public 
        school staff and personnel.  
           (d) The SC board of directors may appoint special advisory 
        committees composed of superintendents, central office 
        personnel, building principals, teachers, parents, lay persons, 
        and representatives from cities, counties, and other 
        governmental units.  
           (e) The SC board of directors may employ service area 
        personnel pursuant to licensure and certification standards 
        developed by the appropriate state agency such as the state 
        board and the state board of teaching.  
           (f) The SC board of directors may enter into contracts with 
        school boards of local districts including school districts 
        outside the SC area.  
           (g) The SC board of directors may enter into contracts with 
        other public and private agencies and institutions to provide 
        administrative staff and other personnel as necessary to furnish 
        and support the agreed upon programs and services.  
           (h) The SC board of directors shall exercise all powers and 
        carry out all duties delegated to it by members under provisions 
        of the SC bylaws.  The SC board of directors shall be governed, 
        when not otherwise provided, by applicable laws of the state. 
           (i) The SC board of directors shall submit an annual 
        evaluation report of the effectiveness of programs and services 
        to the members by September 1 of each year following the 
        previous June 30 in which the programs and services were 
        provided.  
           (j) The SC board is encouraged to establish cooperative, 
        working relationships and partnerships with post-secondary 
        educational institutions, other public agencies, business, and 
        industry.  
           Subd. 6.  [APPOINTMENT OF AN ADVISORY COUNCIL.] There may 
        be advisory councils selected to give advice and counsel to the 
        SC board of directors.  The councils may be composed of 
        representatives from public and nonpublic schools, cities, 
        counties, and other governmental units.  
           Subd. 7.  [EDUCATIONAL PROGRAMS AND SERVICES.] The board of 
        directors of each SC shall submit annually a plan to the 
        members.  The plan shall identify the programs and services 
        which are suggested for implementation by the SC during the 
        following year and shall contain components of long-range 
        planning determined by the SC.  These programs and services may 
        include, but are not limited to, the following areas: 
           (1) administrative services; 
           (2) curriculum development; 
           (3) data processing; 
           (4) distance learning and other telecommunication services; 
           (5) evaluation and research; 
           (6) staff development; 
           (7) media and technology centers; 
           (8) publication and dissemination of materials; 
           (9) pupil personnel services; 
           (10) planning; 
           (11) secondary, post-secondary, community, adult, and adult 
        vocational education; 
           (12) teaching and learning services, including services for 
        students with special talents and special needs; 
           (13) employee personnel services; 
           (14) vocational rehabilitation; 
           (15) health, diagnostic, and child development services and 
        centers; 
           (16) leadership or direction in early childhood and family 
        education; 
           (17) community services; 
           (18) shared time programs; 
           (19) fiscal services and risk management programs; 
           (20) technology planning, training, and support services; 
           (21) health and safety services; 
           (22) student academic challenges; and 
           (23) cooperative purchasing services. 
           Subd. 8.  [TECHNICAL ASSISTANCE.] Service cooperatives 
        shall, to the extent possible, make technical assistance for 
        long-range planning available to school districts upon request 
        and shall establish a common database for local and regional 
        decision making.  
           Subd. 9.  [FINANCIAL SUPPORT FOR THE SERVICE 
        COOPERATIVES.] (a) Financial support for SC programs and 
        services shall be provided by participating members with 
        private, state, and federal financial support supplementing as 
        available.  The SC board of directors may, in each year, for the 
        purpose of paying any administrative, planning, operating, or 
        capital expenses incurred or to be incurred, assess and certify 
        to each participating school district, nonpublic school 
        administrative unit, city, county, and other governmental unit 
        its proportionate share of all expenses.  This share shall be 
        based upon the extent of participation by each school district, 
        nonpublic school administrative unit, city, county, or other 
        governmental unit and shall be in the form of a service fee.  
        Each participating school district, nonpublic school 
        administrative unit, city, county, or other governmental unit 
        shall remit its assessment to the SC board as provided in the SC 
        bylaws.  The assessments shall be paid within the maximum levy 
        limitations of each participating member.  No participating 
        member shall have any additional liability for the debts or 
        obligations of the SC except that assessment which has been 
        certified as its proportionate share and any other liability the 
        member assumes under section 123.35, subdivision 19b. 
           (b) Any property acquired by the SC board is public 
        property to be used for essential public and governmental 
        purposes which shall be exempt from all taxes and special 
        assessments levied by a city, county, state, or political 
        subdivision thereof.  If the SC is dissolved, its property must 
        be distributed to the members at the time of the dissolution. 
           (c) A member may elect to withdraw participation in the SC 
        by a majority vote of its full board membership and upon 
        compliance with the applicable withdrawal provisions of the SC 
        organizational agreement.  The withdrawal shall be effective on 
        the June 30 following receipt by the board of directors of 
        written notification of the withdrawal by February 1 of the same 
        year.  Notwithstanding the withdrawal, the proportionate share 
        of any expenses already certified to the withdrawing member for 
        the SC shall be paid to the SC board. 
           (d) The SC is a public corporation and agency and its board 
        of directors may make application for, accept, and expend 
        private, state, and federal funds that are available for 
        programs of the members.  
           (e) The SC is a public corporation and agency and as such, 
        no earnings or interests of the SC may inure to the benefit of 
        an individual or private entity. 
           Subd. 10.  [ANNUAL MEETING.] Each SC shall conduct a 
        meeting at least annually for its members. 
           Subd. 11.  [JOINT POWERS ACT.] Nothing in this section 
        shall restrict the authority granted to school district boards 
        of education by section 471.59. 
           Sec. 26.  Minnesota Statutes 1994, section 123.70, 
        subdivision 8, is amended to read: 
           Subd. 8.  The administrator or other person having general 
        control and supervision of the elementary or secondary school 
        shall file a report with the commissioner of education on all 
        persons enrolled in the school, except that the superintendent 
        of each school district shall file a report with the 
        commissioner of education for all persons within the district 
        receiving instruction in a home school in compliance with 
        sections 120.101 and 120.102.  The parent of persons receiving 
        instruction in a home school shall submit the statements as 
        required by subdivisions 1, 2, 3, and 4 to the superintendent of 
        the school district in which the person resides by October 1 of 
        each school year.  The school report shall be prepared on forms 
        developed jointly by the commissioner of health and the 
        commissioner of education and be distributed to the local school 
        districts by the commissioner of health and shall state the 
        number of persons attending the school, the number of persons 
        who have not been immunized according to subdivision 1 or 2, and 
        the number of persons who received an exemption under 
        subdivision 3, clause (c) or (d).  The school report shall be 
        filed with the commissioner of education within 60 days of the 
        commencement of each new school term.  Upon request, a district 
        shall be given a 60-day extension for filing the school report.  
        The commissioner of education shall forward the report, or a 
        copy thereof, to the commissioner of health who shall provide 
        summary reports to boards of health as defined in section 
        145A.02, subdivision 2.  The administrator or other person 
        having general control and supervision of the child care 
        facility shall file a report with the commissioner of human 
        services on all persons enrolled in the child care facility.  
        The child care facility report must be prepared on forms 
        developed jointly by the commissioner of health and the 
        commissioner of human services and be distributed to child care 
        facilities by the commissioner of health and must state the 
        number of persons enrolled in the facility, the number of 
        persons with no immunizations, the number of persons who 
        received an exemption under subdivision 3, clause (c) or (d), 
        and the number of persons with partial or full immunization 
        histories.  The child care facility report shall be filed with 
        the commissioner of human services by November 1 of each year.  
        The commissioner of human services shall forward the report, or 
        a copy thereof, to the commissioner of health who shall provide 
        summary reports to boards of health as defined in section 
        145A.02, subdivision 2.  The report required by this subdivision 
        is not required of a family child care or group family child 
        care facility, for prekindergarten children enrolled in any 
        elementary or secondary school provided services according to 
        section 120.17, subdivision 2, nor for child care facilities in 
        which at least 75 percent of children in the facility 
        participate on a one-time only or occasional basis to a maximum 
        of 45 hours per child, per month.  
           Sec. 27.  Minnesota Statutes 1994, section 124.193, is 
        amended to read: 
           124.193 [PROHIBITED AID AND LEVIES.] 
           Unless specifically permitted in the provision authorizing 
        an aid or a levy, cooperative units of government defined in 
        section 123.35, subdivision 19b, paragraph (d), are prohibited 
        from making a property tax levy or qualifying for or receiving 
        any form of state aid except that a cooperative unit may apply 
        for and receive a grant on behalf of its members. 
           Sec. 28.  Minnesota Statutes 1994, section 126.031, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INSTRUCTION REQUIRED PERMITTED.] Every 
        public elementary and secondary school shall may provide an 
        instructional program in chemical abuse and the prevention of 
        chemical dependency.  The school districts shall involve 
        parents, students, health care professionals, state department 
        staff, and other members of the community with a particular 
        interest in chemical dependency prevention in developing the 
        curriculum.  
           Sec. 29.  Minnesota Statutes 1994, section 126.78, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANT APPLICATION.] To be eligible to receive a 
        grant, a school district, an education district, a service 
        cooperative, or a group of districts that cooperate for a 
        particular purpose must submit an application to the 
        commissioner in the form and manner and according to the 
        timeline established by the commissioner.  The application must 
        describe how the applicant will:  (1) continue or integrate into 
        its existing K-12 curriculum a program for violence prevention 
        that contains the program components listed in section 126.77; 
        (2) collaborate with local organizations involved in violence 
        prevention and intervention; and (3) structure the program to 
        reflect the characteristics of the children, their families and 
        the community involved in the program.  The commissioner may 
        require additional information from the applicant.  When 
        reviewing the applications, the commissioner shall determine 
        whether the applicant has met the requirements of this 
        subdivision. 
           Sec. 30.  [127.311] [GOOD FAITH EXCEPTION.] 
           A violation of the technical provisions of the pupil fair 
        dismissal act of 1974, made in good faith, is not a defense to a 
        disciplinary procedure under the act unless the pupil can 
        demonstrate actual prejudice as a result of the violation. 
           Sec. 31.  Minnesota Statutes 1994, section 127.40, is 
        amended to read: 
           127.40 [DEFINITIONS.] 
           Subdivision 1.  [REMOVAL FROM CLASS.] "Removal from class" 
        and "removal" mean any actions taken by a teacher, principal, or 
        other school district employee to prohibit a pupil from 
        attending a class or activity period for a period of time not to 
        exceed three class or activity periods five days, pursuant to 
        procedures established in the school district discipline policy 
        adopted by the school board pursuant to section 127.41.  
           Subd. 2.  [CLASS PERIOD.] "Class period" or "activity 
        period" means, in secondary grades, instruction for a given 
        course of study.  A class period or activity period means, in 
        elementary grades, a period of time not to exceed one hour, 
        regardless of the subject of instruction a period of time as 
        defined in the district's written discipline policy.  
           Subd. 3.  [SCHOOL SITE MEDIATION BOARD.] "School site 
        mediation board" means a board representative of parents of 
        students in the building, staff, and students that shall have 
        the responsibilities as defined in section 127.411.  The 
        principal or other person having general control and supervision 
        of the school, shall serve as an ex officio member of the board. 
           Subd. 4.  [SCHOOL-BASED OMBUDSPERSON.] "School-based 
        ombudsperson" means an administrator, a teacher, a parent, or a 
        student representative who shall have the responsibilities as 
        outlined in section 127.412. 
           Sec. 32.  Minnesota Statutes 1994, section 127.41, is 
        amended to read: 
           127.41 [DISCIPLINE AND REMOVAL OF STUDENTS FROM CLASS.] 
           Subdivision 1.  [REQUIRED POLICY.] Prior to the beginning 
        of the 1984-1985 school year Each school board shall adopt a 
        written districtwide school discipline policy which shall 
        include written rules of conduct for pupils students, minimum 
        consequences for violations of the rules, and grounds and 
        procedures for removal of pupils a student from class.  The 
        policy shall be developed with the participation of 
        administrators, teachers, employees, pupils, parents, community 
        members, and such other individuals or organizations as the 
        board determines appropriate.  A school site council may adopt 
        additional provisions to the policy subject to the approval of 
        the school board. 
           Subd. 2.  [GROUNDS FOR REMOVAL FROM CLASS.] The policy 
        shall establish the various grounds for which a pupil student 
        may be removed from a class in the district for a period of time 
        pursuant to the procedures specified in the policy.  The grounds 
        in the policy shall include at least the following provisions as 
        well as other grounds determined appropriate by the board:  
           (a) willful conduct which materially and substantially 
        disrupts the rights of others to an education; 
           (b) willful conduct which endangers school district 
        employees, the pupil or other pupils student or other students, 
        or the property of the school; 
           (c) willful violation of any rule of conduct specified in 
        the discipline policy adopted by the board.  
           Subd. 3.  [POLICY COMPONENTS.] The policy shall include at 
        least the following components:  
           (a) rules governing pupil student conduct and procedures 
        for informing pupils students of the rules; 
           (b) the grounds for removal of a pupil student from a 
        class; 
           (c) the authority of the classroom teacher to remove pupils 
        students from the classroom pursuant to procedures and rules 
        established in the district's policy; 
           (d) the procedures for removal of a pupil student from a 
        class by a teacher, school administrator, or other school 
        district employee; 
           (e) the period of time for which a pupil student may be 
        removed from a class, which may not exceed three five class 
        periods for a violation of a rule of conduct; 
           (f) provisions relating to the responsibility for and 
        custody of a pupil student removed from a class; 
           (g) the procedures for return of a pupil student to the 
        specified class from which the pupil student has been removed; 
           (h) the procedures for notifying pupils and parents or 
        guardians a student and the student's parents or guardian of 
        violations of the rules of conduct and of resulting disciplinary 
        actions; 
           (i) any procedures determined appropriate for encouraging 
        early involvement of parents or guardians in attempts to improve 
        a pupil's student's behavior; 
           (j) any procedures determined appropriate for encouraging 
        early detection of behavioral problems; 
           (k) any procedures determined appropriate for referring 
        pupils a student in need of special education services to those 
        services; 
           (1) the procedures for consideration of whether there is a 
        need for a further assessment or of whether there is a need for 
        a review of the adequacy of a current individual education plan 
        of a pupil student with a disability who is removed from class; 
        and 
           (m) procedures for detecting and addressing chemical abuse 
        problems of pupils a student while on the school premises; 
           (n) the minimum consequences for violations of the code of 
        conduct; and 
           (o) procedures for immediate and appropriate interventions 
        tied to violations of the code.  
           Sec. 33.  [127.411] [SCHOOL SITE MEDIATION BOARD.] 
           Subdivision 1.  [BOARD ALLOWED.] A school district or 
        school site council may establish a school site mediation 
        board.  The board shall consist of equal numbers of staff and 
        parents and, in the case of secondary schools, student 
        representatives.  Members shall be representative of the school 
        community and shall be selected by a method as determined in the 
        district's discipline policy. 
           Subd. 2.  [PURPOSES AND DUTIES.] The board shall mediate 
        issues in dispute at the school site related to the 
        implementation of district and school site codes of conduct 
        under sections 127.40 to 127.413, and the application of the 
        codes to a student. 
           Sec. 34.  [127.412] [OMBUDSPERSON SERVICE.] 
           A school district or school site council may establish an 
        ombudsperson service for students, parents, and staff.  The 
        service shall consist of an administrator, a student, a parent, 
        and a teacher.  The school site shall notify students, parents, 
        and staff of the availability of the service.  The service shall 
        provide advocacy for enforcement of the codes of conduct and the 
        procedures to remediate disputes related to implementation of 
        the code of conduct and the goals of the school in maintaining 
        an orderly learning environment for all students. 
           Sec. 35.  [127.413] [NOTIFICATION.] 
           Representatives of the school board and the exclusive 
        representative of the teachers shall discuss issues related to 
        notification prior to placement in classrooms of students with 
        histories of violent behavior and any need for intervention 
        services or conflict resolution or training for staff in such 
        cases. 
           Sec. 36.  Minnesota Statutes 1994, section 127.42, is 
        amended to read: 
           127.42 [REVIEW OF POLICY.] 
           The principal and the licensed employees or other person 
        having general control and supervision of the school, and 
        representatives of parents, students, and staff in a school 
        building shall confer at least annually to review the discipline 
        policy and to assess whether the policy has been enforced.  Each 
        school board shall conduct an annual review of the districtwide 
        discipline policy. 
           Sec. 37.  [136D.93] [OTHER MEMBERSHIP AND POWERS.] 
           In addition to the districts listed in sections 136D.21, 
        136D.71, and 136D.81, the agreement of an intermediate school 
        district established under this chapter may provide for the 
        membership of other school districts and cities, counties, and 
        other governmental units as defined in section 471.59.  In 
        addition to the powers listed in sections 136D.25, 136D.73, and 
        136D.84, an intermediate school board may provide the services 
        defined in section 123.582, subdivisions 7 and 8. 
           Sec. 38.  Laws 1994, chapter 647, article 3, section 25, is 
        amended to read: 
           Sec. 25.  [REPORTS OF INCIDENTS OF MISBEHAVIOR IN SCHOOLS.] 
           (a) For the 1994-1995 and 1995-1996 school years, each 
        school district shall use a standardized form or alternative 
        aggregate reporting format developed by the commissioner of 
        education to report to the commissioner all incidents of 
        misbehavior that result in the suspension or expulsion of 
        students under Minnesota Statutes, sections 127.26 to 127.39.  
        The standardized reporting form, which the commissioner may 
        coordinate with the reporting form required under Minnesota 
        Statutes, section 121.207, shall include the following 
        information: 
           (1) a description of each incident of misbehavior that 
        leads to the suspension or expulsion of the student including, 
        where appropriate, a description of the dangerous weapon as 
        defined in Minnesota Statutes, section 609.02, subdivision 6, 
        involved in the incident; 
           (2) information about the suspended or expelled student, 
        other than the student's name, including the student's age, 
        whether the student is a student of color, and the number of 
        times the student has been suspended or expelled previously and 
        for what misbehavior; 
           (3) whether the student has or had an individualized 
        learning plan (IEP) under Minnesota Statutes, section 120.17, 
        and, if the student has or had an IEP, whether the misbehavior 
        resulting in suspension or expulsion was a manifestation of the 
        student's disabling condition; 
           (4) the actions taken by school officials to respond to the 
        incident of misbehavior; and 
           (5) the duration of the suspension or expulsion. 
           (b) School districts shall use the standardized form or 
        alternative aggregate reporting format to transmit the 
        information described in paragraph (a) to the commissioner 
        biannually by February 1 and July 1, beginning February 1, 1995, 
        and ending July 1, 1996.  The commissioner shall compile and 
        analyze the data and present to the education committees of the 
        legislature an interim report by January 1, 1996, and a final 
        report by February 1, 1997. 
           (c) Based on the data collected, the department shall make 
        recommendations to the legislature by March 15, 1995, for 
        changes in the pupil fair dismissal act. 
           Sec. 39.  [SUCCESSOR TO ECSUS.] 
           Each service cooperative established under section 25 is a 
        continuation of the ECSU it replaces.  The service cooperative 
        is the legal successor in all respects of the ECSU, without need 
        of further proceedings of any kind.  The personnel of the ECSU 
        become personnel of the service cooperative, retaining all their 
        rights and benefits.  All property, obligations, assets, and 
        liabilities of the ECSU become the property, obligations, 
        assets, and liabilities of the service cooperative. 
           Sec. 40.  [SC INSURANCE POOLS.] 
           (a) A service cooperative shall provide all financial 
        information that deals with revenues and expenses on behalf of 
        local school districts that have pooled for insurance purposes. 
           (b) All service cooperative insurance advisory labor 
        management committees must have representation from all 
        exclusive representatives.  The representation must be provided 
        by appointment by the respective exclusive representatives. 
           Sec. 41.  [COMBINED FINANCIAL STATEMENT.] 
           For fiscal year 1995, independent school district Nos. 209, 
        Kensington; 262, Barret; 263, Elbow Lake; and 265, Hoffman, may 
        submit a combined audited financial statement to comply with the 
        requirement of Minnesota Statutes, section 121.908, subdivision 
        3.  The individual districts must also submit separate uniform 
        financial accounting and reporting standards data for fiscal 
        year 1995, according to Minnesota Statutes, section 121.908, 
        subdivisions 2 and 3. 
           Sec. 42.  [REPEALER.] 
           Minnesota Statutes 1994, sections 3.198; 121.93; 121.936; 
        and 123.58, are repealed. 
           Sec. 43.  [EFFECTIVE DATE.] 
           Section 19 applies to contracts to take effect on or after 
        July 1, 1995. 
                                   ARTICLE 10
                                   LIBRARIES 
           Section 1.  Minnesota Statutes 1994, section 134.155, is 
        amended to read: 
           134.155 [LIBRARIANS OF COLOR PROGRAM.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "people of color" means permanent United States residents who 
        are African-American, American Indian or Alaskan native, Asian 
        or Pacific Islander, or Hispanic. 
           Subd. 2.  [GRANTS.] The commissioner of education, in 
        consultation with the multicultural advisory committee 
        established in section 126.82, shall award grants for 
        professional development programs to recruit and educate people 
        of color in the field of library science or information 
        management.  Grant applicants must be a public library 
        jurisdiction with a growing minority population working in 
        collaboration with an accredited institution of higher education 
        with a library education program in the state of Minnesota. 
           Subd. 3.  [PROGRAM REQUIREMENTS.] (a) A grant recipient 
        shall recruit people of color to be librarians library staff in 
        public libraries and provide support in linking program 
        participants with jobs in the recipient's library jurisdiction. 
           (b) A grant recipient shall establish an advisory council 
        composed of representatives of communities of color. 
           (c) A grant recipient, with the assistance of the advisory 
        council, shall may recruit high school students, undergraduate 
        students, or other persons; support them through the higher 
        education application and admission process; advise them while 
        enrolled; and link them with support resources in the college or 
        university and the community.  
           (d) A grant recipient shall award stipends to people of 
        color enrolled in an accredited a library education program to 
        help cover the costs of tuition, student fees, supplies, and 
        books.  Stipend awards must be based upon a student's financial 
        need and students must apply for any additional financial aid 
        for which they are eligible to supplement this program.  No more 
        than ten percent of the grant may be used for costs of 
        administering the program.  Students must agree to work in the 
        grantee library jurisdiction for at least two years after 
        graduation if the student acquires a master's degree and at 
        least three years after graduation if the student acquires both 
        a bachelor's and a master's degree while participating in the 
        program.  If no full-time position is available in the library 
        jurisdiction, the student may fulfill the work requirement in 
        another Minnesota public library.  
           (e) The commissioner of education shall consider the 
        following criteria in awarding grants:  
           (1) whether the program is likely to increase the 
        recruitment and retention of persons of color in librarianship; 
           (2) whether grant recipients will establish or have a 
        mentoring program for persons of color; and 
           (3) whether grant recipients will provide a library 
        internship for persons of color while participating in this 
        program.  
           Sec. 2.  Minnesota Statutes 1994, section 134.34, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [SUPPORT GRANTS.] In state fiscal years 1993, 
        1994, and 1995, and 1996, a regional library basic system 
        support grant also may be made to a regional public library 
        system for a participating city or county which meets the 
        requirements under paragraph (a) or (b). 
           (a) The city or county decreases the dollar amount provided 
        by it for operating purposes of public library service if the 
        amount provided by the city or county is not less than the 
        amount provided by the city or county for such purposes in the 
        second preceding year. 
           (b)(1) The city or county provided for operating purposes 
        of public library services an amount exceeding 125 percent of 
        the state average percentage of the adjusted net tax capacity or 
        125 percent of the state average local support per capita; and 
           (2) the local government aid distribution for the current 
        calendar year under chapter 477A has been reduced below the 
        originally certified amount for payment in the preceding 
        calendar year, if the dollar amount of the reduction from the 
        previous calendar year in support for operating purposes of 
        public library services is not greater than the dollar amount by 
        which support for operating purposes of public library service 
        would be decreased if the reduction in support were in direct 
        proportion to the local government aid reduction as a percentage 
        of the previous calendar year's revenue base as defined in 
        section 477A.011, subdivision 27.  Determination of a grant 
        under paragraph (b) shall be based on the most recent calendar 
        year for which data are available. 
           The city or county shall file a report with the department 
        of education indicating the dollar amount and percentage of 
        reduction in public library operating funds. 
           Sec. 3.  Minnesota Statutes 1994, section 134.351, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GOVERNANCE.] (a) In any area where the 
        boundaries of a proposed multicounty, multitype library system 
        coincide with the boundaries of the regional library system or 
        district, the regional library system or district board shall be 
        designated as the governing board for the multicounty, multitype 
        library system.  In any area where a proposed multicounty, 
        multitype library system encompasses more than one regional 
        library system or district, the governing board of the 
        multicounty, multitype library system shall consist of nine 
        members appointed by the cooperating regional library system or 
        district boards from their own membership in proportion to the 
        population served by each cooperating regional library system or 
        district.  In each multicounty, multitype library system there 
        shall be established an advisory committee consisting of two 
        representatives of public libraries, two representatives of 
        school media services, one representative of special libraries, 
        one representative of public supported academic libraries, and 
        one representative of private academic libraries.  The advisory 
        committee shall recommend needed policy to the system governing 
        board. 
           (b) Upon recommendation from its advisory committee, a 
        multitype library cooperation system governing board may choose 
        to reconstitute the governance of the multitype system by the 
        creation of a combined board which replaces the previous 
        governing board and advisory committee.  A combined board shall 
        consist of five or seven citizens, not employed in library or 
        information services, and four library or information service 
        workers.  The constituent regional public library system boards 
        shall select the citizen members from the at-large population of 
        the region.  In any area where a multicounty, multitype library 
        system encompasses more than one regional public library system, 
        cooperating regional system boards shall appoint citizen members 
        of the combined board members in proportion to the population of 
        each cooperating regional system.  The combined board members 
        who are library and information workers shall be selected, one 
        from each type of library:  academic, public, school, and 
        special.  Governing board members of the combined board shall 
        serve two-year terms for no more than three successive terms 
        with the members of the first combined board serving one- and 
        two-year terms as determined by lot with a simple majority 
        serving for two years.  Elections shall be pursuant to the 
        adopted bylaws of the multitype system and may provide 
        additional requirements to those in this section.  New combined 
        governing boards shall take effect at the beginning of the 
        fiscal year, July 1, and shall continue the authority, 
        ownership, and obligations of the previously constituted 
        multitype system in its region. 
           Sec. 4.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [BASIC SUPPORT GRANTS.] For basic support grants 
        according to Minnesota Statutes, sections 134.32 to 134.35: 
             $7,819,000     .....     1996 
             $7,819,000     .....     1997 
           The 1996 appropriation includes $1,172,000 for 1995 and 
        $6,647,000 for 1996.  
           The 1997 appropriation includes $1,172,000 for 1996 and 
        $6,647,000 for 1997.  
           Subd. 3.  [LIBRARIANS OF COLOR.] For the librarians of 
        color program according to Minnesota Statutes, section 134.155: 
                $55,000     .....     1996
                $55,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 4.  [CHILDREN'S LIBRARY SERVICES GRANTS.] For grants 
        for collaborative programs to strengthen library services to 
        children, young people, and their families: 
                $50,000     .....     1996
                $50,000     .....     1997
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 5.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
        grants according to Minnesota Statutes, sections 134.353 and 
        134.354, to multicounty, multitype library systems: 
               $527,000     .....     1996 
               $527,000     .....     1997 
           The 1996 appropriation includes $79,000 for 1995 and 
        $448,000 for 1996.  
           The 1997 appropriation includes $79,000 for 1996 and 
        $448,000 for 1997. 
                                   ARTICLE 11 
                                 STATE AGENCIES
           Section 1.  Minnesota Statutes 1994, section 124C.07, is 
        amended to read: 
           124C.07 [COMPREHENSIVE ARTS PLANNING PROGRAM.] 
           The department of education Minnesota center for arts 
        education shall prescribe the form and manner of application by 
        one or more school districts to be designated as a site to 
        participate in the comprehensive arts planning program.  Up to 
        30 sites may be selected.  The department of education center 
        shall designate sites in consultation with the Minnesota 
        alliance for arts in education, the Minnesota center for arts 
        education, and the Minnesota state arts board.  
           Sec. 2.  Minnesota Statutes 1994, section 124C.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CRITERIA.] The center, in consultation with the 
        comprehensive arts planning program state steering committee, 
        shall establish criteria for site selection.  Criteria shall 
        include at least the following:  
           (1) a willingness by the district or group of districts to 
        designate a program chair for comprehensive arts planning with 
        sufficient authority to implement the program; 
           (2) a willingness by the district or group of districts to 
        create a committee comprised of school district and community 
        people whose function is to promote comprehensive arts education 
        in the district; 
           (3) commitment on the part of committee members to 
        participate in training offered by the department of education; 
           (4) a commitment of the committee to conduct a needs 
        assessment of arts education; 
           (5) commitment by the committee to evaluate its involvement 
        in the program; 
           (6) a willingness by the district to adopt a long-range 
        plan for arts education in the district; 
           (7) no previous involvement of the district in the 
        comprehensive arts planning program, unless that district has 
        joined a new group of districts; and 
           (8) (7) location of the district or group of districts to 
        assure representation of urban, suburban, and rural districts 
        and distribution of sites throughout the state. 
           Sec. 3.  Minnesota Statutes 1994, section 126A.01, is 
        amended to read: 
           126A.01 [ENVIRONMENTAL EDUCATION GOALS AND PLAN.] 
           The environmental education program described in this 
        chapter has these goals for the pupils and other citizens of 
        this state: 
           (a) Pupils and citizens should be able to apply informed 
        decision-making processes to maintain a sustainable lifestyle.  
        In order to do so, citizens should: 
           (1) to understand ecological systems; 
           (2) to understand the cause and effect relationship between 
        human attitudes and behavior and the environment; 
           (3) to be able to analyze, develop, and use problem-solving 
        skills to understand the decision-making process of individuals, 
        institutions, and nations regarding environmental issues; 
           (4) to be able to evaluate alternative responses to 
        environmental issues before deciding on alternative courses of 
        action; and 
           (5) (4) to understand the potential complementary nature 
        effects of multiple uses of the environment;. 
           (6) to provide experiences to assist citizens to increase 
        their sensitivity and stewardship for the environment; and 
           (7) to provide the (b) Pupils and citizens shall have 
        access to information citizens need and experiences needed to 
        make informed decisions about actions to take on environmental 
        issues. 
           (c) For purposes of this chapter, "state plan" means 
        "Greenprint for Minnesota:  A State Plan for Environmental 
        Education." 
           Sec. 4.  Minnesota Statutes 1994, section 126A.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BOARD MEMBERS.] A 17-member environmental 
        education board shall advise the director commissioner of 
        education.  The board is made up of the commissioners of the 
        department of natural resources; the pollution control agency; 
        the department of agriculture; the department of education; the 
        director of the office of strategic and long-range planning; the 
        chair of the board of water and soil resources; the executive 
        director of the higher education coordinating board; the 
        executive secretary of the board of teaching; the director of 
        the extension service; and eight citizen members representing 
        diverse interests appointed by the governor.  The governor shall 
        appoint one citizen member from each congressional district.  
        The citizen members are subject to section 15.0575.  Two of the 
        citizen members appointed by the governor must be licensed 
        teachers currently teaching in the K-12 system.  The governor 
        shall annually designate a member to serve as chair for the next 
        year. 
           Sec. 5.  Minnesota Statutes 1994, section 128A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TO MANAGE GOVERN.] The state board of 
        education must manage shall govern the state academy for the 
        deaf and the state academy for the blind.  
           Sec. 6.  Minnesota Statutes 1994, section 128A.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MOST BENEFICIAL, LEAST RESTRICTIVE.] The state 
        board must do what is necessary to provide the most beneficial 
        and least restrictive program of education for each pupil at the 
        academies who is handicapped by visual disability or hearing 
        impairment deafness.  
           Sec. 7.  Minnesota Statutes 1994, section 128A.02, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [PLANNING, EVALUATION, AND REPORTING.] To the 
        extent required in school districts, the state board must 
        establish a process for the academies to include parent and 
        community input in the planning, evaluation, and reporting of 
        curriculum and pupil achievement. 
           Sec. 8.  Minnesota Statutes 1994, section 128A.02, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADVISORY COUNCIL SITE COUNCILS.] The state board 
        must have may establish, and appoint members to, an advisory 
        council on management policies at the state academies a site 
        council at each academy.  The site councils shall exercise power 
        and authority granted by the state board.  The state board must 
        appoint to each site council the exclusive representative's 
        employee designee from each exclusive representative at the 
        academies. 
           Sec. 9.  Minnesota Statutes 1994, section 128A.021, is 
        amended to read: 
           128A.021 [RESOURCE CENTER:  HEARING AND VISUALLY 
        IMPAIRED CENTERS; DEAF OR HARD OF HEARING AND BLIND OR VISUALLY 
        IMPAIRED.] 
           Subdivision 1.  [ALSO FOR MULTIPLY DISABLED.] A resource 
        center Resource centers for the hearing-impaired, visually 
        impaired, and deaf or hard of hearing, and the blind or visually 
        impaired, each also serving multiply disabled pupils is 
        established at, are transferred to the state academies 
        department of education. 
           Subd. 2.  [PROGRAMS.] The resource center centers must 
        offer summer institutes and like programs throughout the state 
        for hearing-impaired, visually impaired deaf or hard of hearing, 
        blind or visually impaired, and multiply disabled pupils.  The 
        resource center centers must also offer workshops for teachers, 
        and leadership development for teachers. 
           A program offered through the resource center centers must 
        promote and develop education programs offered by school 
        districts or other organizations.  The program must assist 
        school districts or other organizations to develop innovative 
        programs. 
           Subd. 3.  [PROGRAMS BY NONPROFITS.] The resource center 
        centers may contract to have nonprofit organizations provide 
        programs through the resource center centers. 
           Subd. 4.  [ADVISORY COUNCIL COMMITTEES.] The advisory 
        council for the academies is the advisory council for the 
        resource center.  The special education advisory council shall 
        establish an advisory committee for each resource center.  The 
        advisory committees shall develop recommendations regarding the 
        resource centers. 
           Sec. 10.  Minnesota Statutes 1994, section 128A.022, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PERSONNEL.] The state board of education 
        may employ central administrative staff members and other 
        personnel necessary to provide and support programs and services 
        in at each academy.  
           Sec. 11.  Minnesota Statutes 1994, section 128A.022, 
        subdivision 6, is amended to read: 
           Subd. 6.  [STUDENT TEACHERS AND PROFESSIONAL TRAINEES.] (a) 
        The state board may enter into agreements with teacher-preparing 
        teacher preparation institutions for student teachers to get 
        practical experience at the academies.  A licensed teacher must 
        provide appropriate supervision of each student teacher.  
           (b) The state board may enter into agreements with 
        accredited higher education institutions for certain student 
        trainees to get practical experience at the academies.  The 
        students must be preparing themselves in a professional field 
        that provides special services to children with a disability in 
        school programs.  To be a student trainee in a field, a person 
        must have completed at least two years of an approved program in 
        the field.  A person who is licensed or registered in the field 
        must provide appropriate supervision of each student trainee.  
           Sec. 12.  Minnesota Statutes 1994, section 128A.024, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EDUCATION WITH PUPILS WITHOUT A DISABILITY.] The 
        academies must provide opportunities for their pupils to be 
        educated with pupils without a disability.  A pupil's 
        opportunities must be consistent with the pupil's individual 
        education plan or individual family service plan and assessment. 
           Sec. 13.  Minnesota Statutes 1994, section 128A.025, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACADEMIES' ADMINISTRATOR.] The position of 
        the residential academies' chief administrator at each academy 
        is in the unclassified service.  
           Sec. 14.  Minnesota Statutes 1994, section 128A.025, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEACHER STANDARDS.] A teacher or administrator 
        at the academies is subject to the licensure standards of the 
        board of teaching and or the state board of education.  
           Sec. 15.  Minnesota Statutes 1994, section 128A.026, is 
        amended to read: 
           128A.026 [STATE BOARD RULES ADOPTED PROCEDURES.] 
           Subdivision 1.  [SUBJECTS.] The rules of the state board of 
        education authorized in section 128A.02 must establish 
        procedures for:  
           (1) admission, including short-term admission, to the 
        academies; 
           (2) discharge from the academies; 
           (3) decisions on a pupil's program at the academies; and 
           (4) evaluation of a pupil's progress at the academies.  
           Subd. 2.  [MINIMUM CONTENT.] The discharge procedures must 
        include reasonable notice to the child's district of residence.  
        The procedures set out in the rules must guarantee a pupil and 
        the pupil's parent or guardian appropriate safeguards.  The 
        safeguards must include a review of the placement determination 
        made under sections 120.17 and 128A.05 and the right to 
        participate in educational program decisions.  
           Subd. 3.  [NOT CONTESTED CASE.] A proceeding about 
        admission to or discharge from the academies or about a pupil's 
        program or progress at the academies is not a contested case 
        under section 14.02.  The proceeding is governed instead by the 
        rules of the state board described in this section governing 
        special education.  
           Sec. 16.  Minnesota Statutes 1994, section 128A.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TWO KINDS.] There are two kinds of 
        admission to the academies.  
           (a) A pupil who is deaf or hearing-impaired, hard of 
        hearing, or blind-deaf, may be admitted to the academy for the 
        deaf.  A pupil who is visually blind or visually impaired, 
        blind-deaf, or multiply handicapped may be admitted to the 
        academy for the blind.  For a pupil to be admitted, two 
        decisions must be made under section 120.17. 
           (1) It must be decided by the individual education planning 
        team that education in regular or special education classes in 
        the pupil's district of residence cannot be achieved 
        satisfactorily because of the nature and severity of the hearing 
        deafness or visual blindness or visual impairment respectively. 
           (2) It must be decided by the individual education planning 
        team that the academy provides the most appropriate placement 
        within the least restrictive alternative for the pupil.  
           (b) A deaf or hearing-impaired hard of hearing child or a 
        visually impaired pupil may be admitted to get socialization 
        skills or on a short-term basis for skills development.  
           Sec. 17.  Minnesota Statutes 1994, section 128A.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MULTIPLY HANDICAPPED.] This section does not 
        prevent a pupil with handicaps in addition to being 
           (1) deaf or hearing-impaired hard of hearing, or 
           (2) blind or visually impaired 
        from attending the academy for the deaf or the academy for the 
        blind, respectively.  
           Sec. 18.  Laws 1993, chapter 224, article 8, section 21, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ARTS CENTER.] The sums indicated in this 
        section are appropriated from the general fund to the Minnesota 
        center for arts education in the fiscal year designated: 
              $387,000     .....     1994
              $421,000     .....     1995
           Of the fiscal year 1994 appropriation, $225,000 is to fund 
        artist and arts organization participation in the education 
        residency project, $75,000 is for school support for the 
        residency project, and $87,000 is for further development of the 
        partners:  arts and school for students (PASS) program, 
        including pilots.  Of the fiscal year 1995 appropriation, 
        $215,000 is to fund artist and arts organizations participation 
        in the education residency project, $75,000 is for school 
        support for the residency project, and $121,000 is to fund the 
        PASS program, including additional pilots.  The guidelines for 
        the education residency project and the PASS program shall be 
        developed and defined by the Minnesota arts board.  The 
        Minnesota arts board shall participate in the review and 
        allocation process.  The center for arts education shall 
        cooperate with the Minnesota arts board to fund these projects. 
        Any balance remaining in the first year does not cancel, but is 
        available in the second year. 
           Sec. 19.  Laws 1992, chapter 499, article 11, section 9, as 
        amended by Laws 1994, chapter 647, article 5, section 17, is 
        amended to read: 
           Sec. 9.  [LAND TRANSFER.] 
           Subdivision 1.  [PERMITTED.] (a) Notwithstanding Minnesota 
        Statutes, chapters 94 and 103F or any other law to the contrary, 
        the state of Minnesota may convey the land described in 
        paragraph (b) to independent school district No. 656, Faribault. 
           (b) The land which may be conveyed under paragraph (a) is 
        legally described in general as follows:  
           All that part of the Southeast Quarter of the Southwest 
           Quarter (SE 1/4 of SW 1/4) and all that part of the 
           Southwest Quarter of the Southeast Quarter (SW 1/4 of SE 
           1/4), all in Section 29, Township 110 North, Range 20 West, 
           in the City of Faribault, Rice County, Minnesota, owned by 
           the state of Minnesota or any department or division 
           thereof. 
           or 
           All that part of the Northwest Quarter of the Southwest 
           Quarter (NW 1/4 of SW 1/4) of Section 28, and of the 
           Northeast Quarter of the Southeast Quarter (NE 1/4 of SE 
           1/4) of Section 29, all in Township 110 North, Range 20 
           West, Rice County, Minnesota, owned by the State of 
           Minnesota or any department or division thereof. 
           (c) A more precise legal description in substantial 
        conformance with the description in paragraph (b) must be 
        provided by the grantee in the instruments of 
        conveyance.  Because of the topography of the site, and the need 
        to relocate Parshall street, Faribault, to accommodate the 
        construction of a new elementary school, independent school 
        district No. 656, Faribault, may exchange two small parcels, 2.5 
        to 4.5 acres each, of the land described in paragraph (b) for 
        parcels of comparable value, contiguous to the land.  In 
        addition, independent school district No. 656, Faribault, is 
        purchasing a parcel of about 4.7 acres immediately south of the 
        land described in paragraph (b).  A portion of the land is to be 
        dedicated for the relocation of Parshall street. 
           (d) The state may convey the land described in paragraph 
        (b), without reverter, to independent school district No. 656, 
        Faribault, so that the land transfers may occur.  Once the 
        transfers have occurred and there is a unified parcel for the 
        new elementary school, independent school district No. 656, 
        Faribault, shall convey the entire parcel back to the state, 
        and, the state shall convey this unified parcel back to 
        independent school district No. 656, Faribault, with the right 
        of reverter to the state. 
           (e) Both the precise legal descriptions and the instruments 
        of conveyance must be approved as to form by the attorney 
        general.  
           Subd. 2.  [CONSIDERATION.] The consideration for the 
        conveyance permitted by subdivision 1 is the amount of $1.  
           Subd. 3.  [PURPOSE.] The land permitted to be conveyed 
        under subdivision 1 is to be used as part of a site for an 
        elementary school. 
           Subd. 4.  [TITLE REVERTS TO STATE.] If the lands described 
        in subdivision 1 are If the unified parcel in subdivision 1, 
        paragraph (d), conveyed by the state to independent school 
        district No. 656, Faribault, is not used for a public purpose, 
        or upon discontinuance of such use, the title for the property 
        shall revert to the state. 
           Sec. 20.  Laws 1993, chapter 224, article 12, section 32, 
        as amended by Laws 1993, chapter 374, section 22, is amended to 
        read: 
           Sec. 32.  [REPEALER.] 
           (a) Minnesota Statutes 1992, sections 120.095; 120.101, 
        subdivision 5a; 120.75, subdivision 2; 120.80, subdivision 2; 
        121.11, subdivisions 6 and 13; 121.165; 121.19; 121.49; 121.883; 
        121.90; 121.901; 121.902; 121.904, subdivisions 5, 6, 8, 9, 10, 
        11a, and 11c; 121.908, subdivision 4; 121.9121, subdivisions 3 
        and 5; 121.931, subdivisions 6, 6a, 7, and 8; 121.934; 121.936 
        subdivisions 1, 2, and 3; 121.937; 121.94; 121.941; 121.942; 
        121.943; 123.33, subdivisions 10, 14, 15, and 16; 123.35, 
        subdivision 14; 123.352; 123.36, subdivisions 2, 3, 4, 4a, 6, 8, 
        9, and 12; 123.40, subdivisions 4 and 6; 123.61; 123.67; 
        123.709; 123.744; 124.615; 124.62; 124.64; 124.645; 124.67; 
        124.68; 124.69; 124.79; 125.12, subdivisions 3a and 4a; 125.17, 
        subdivisions 2a and 3a; 126.09; 126.111; 126.112; 126.20, 
        subdivision 4; 126.24; and 126.268, are repealed. 
           (b) Minnesota Statutes 1992, section 121.11, subdivision 
        15, is repealed. 
           (c) Minnesota Statutes 1992, sections 120.101, subdivision 
        5b; 121.11, subdivision 16; 121.585, subdivision 3; 124.19, 
        subdivisions 1, 1b, 6, and 7; 126.02; 126.025; 126.031; 126.06; 
        126.08; 126.12, subdivision 2; 126.662; 126.663; 126.664; 
        126.665; 126.666; 126.67; 126.68; 126A.01; 126A.02; 126A.04; 
        126A.05; 126A.07; 126A.08; 126A.09; 126A.10; 126A.11; and 
        126A.12, are repealed. 
           Sec. 21.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [DEPARTMENT.] For the department of education: 
              $23,150,000       .....      1996
              $21,803,000       .....      1997
           (a) Any balance in the first year does not cancel but is 
        available in the second year. 
           (b) $21,000 each year is from the trunk highway fund. 
           (c) $522,000 each year is for the academic excellence 
        foundation. 
           Up to $50,000 each year is contingent upon the match of $1 
        in the previous year from private sources consisting of either 
        direct monetary contributions or in-kind contributions of 
        related goods or services, for each $1 of the appropriation.  
        The commissioner of education must certify receipt of the money 
        or documentation for the private matching funds or in-kind 
        contributions.  The unencumbered balance from the amount 
        actually appropriated from the contingent amount in 1996 does 
        not cancel but is available in 1997.  The amount carried forward 
        must not be used to establish a larger annual base appropriation 
        for later fiscal years. 
           (d) $204,000 each year is for the state board of education. 
           (e) $227,000 each year is for the board of teaching. 
           (f) $775,000 each year is for educational effectiveness 
        programs according to Minnesota Statutes, sections 121.602 and 
        121.608. 
           (g) $60,000 each year is for contracting with the state 
        fire marshal to provide the services required according to 
        Minnesota Statutes, section 121.1502. 
           (h) $400,000 each year is for health and safety management 
        assistance contracts under Minnesota Statutes, section 124.83. 
           (i) 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. 
           (j) The commissioner shall maintain no more than five total 
        complement in the categories of commissioner, deputy 
        commissioner, assistant commissioner, assistant to the 
        commissioner, and executive assistant. 
           The department of education may establish full-time, 
        part-time, or seasonal positions as necessary to carry out 
        assigned responsibilities and missions.  Actual employment 
        levels are limited by the availability of state funds 
        appropriated for salaries, benefits, and agency operations or 
        funds available from other sources for such purposes. 
           (k) The department of education shall develop a performance 
        report on the quality of its programs and services.  The report 
        must be consistent with the process specified in Minnesota 
        Statutes, sections 15.90 to 15.92.  The goals, objectives, and 
        measures of this report must be developed in cooperation with 
        the chairs of the finance divisions of the education committees 
        of the house of representatives and senate, the department of 
        finance, and the office of legislative auditor.  The report 
        prepared in 1995 must include a complete set of goals, 
        objectives, and measures for the department.  The report 
        presented in 1996 and subsequent years must include data to 
        indicate the progress of the department in meeting its goals and 
        objectives. 
           The department of education must present a plan for a 
        biennial report on the quality and performance of key education 
        programs in Minnesota's public early childhood, elementary, 
        middle, and secondary education programs.  To the extent 
        possible, the plan must be consistent with Minnesota Statutes, 
        sections 15.90 to 15.92.  The department must consult with the 
        chairs of the finance divisions of the education committees of 
        the house of representatives and senate, the department of 
        finance, and the office of legislative auditor in developing 
        this plan.  The plan for this report must be presented in 1995 
        and the first biennial report presented in 1996. 
           (l) The commissioner of education shall perform a 
        facilities standards evaluation of public elementary and 
        secondary facilities in the state.  This evaluation shall 
        include a measure of the following: 
           (1) the physical condition of education facilities; 
           (2) the level of utilization relative to the capacity of 
        education facilities; 
           (3) the intensity of technological use in both 
        administrative and instructional areas in education facilities; 
           (4) the alignment between education programs in place and 
        the structure of education facilities; and 
           (5) an estimate of facility construction over the next 
        decade. 
           This evaluation may be based on a sample of facilities but 
        must include geographic breakdowns of the state. 
           The report shall indicate which construction and repair of 
        district facilities is required to bring a district into 
        compliance with fire safety codes, occupational safety and 
        health requirements, and the Americans with Disabilities Act.  
           The commissioner shall recommend to the 1996 legislature 
        standards for the review and comment process under Minnesota 
        Statutes, section 121.15.  The standards must integrate the use 
        of technology, both current and potential, flexible scheduling, 
        and program adjustments relative to implementation of the 
        graduation rule. 
           (m) $120,000 is for a feasibility and design study to 
        develop a statewide student performance accountability report.  
        The department must identify and assess the current availability 
        of critical data-based information about student performance and 
        feasibility of using information from the existing sources, 
        recommend additional data-based elements and data collection 
        strategies that will provide for ongoing assessment of 
        educational reform and improvement, and recommend methods for 
        improving the coordination and dissemination of local 
        accountability reports as part of a statewide reporting system.  
        The study must include a statewide implementation and budget 
        plan.  The study process must involve other government units, 
        school and citizen leaders, and members of higher education 
        concerned with the education and development of children and 
        youth.  It must also consider ways to access the research and 
        development capacity of institutions of higher education in 
        Minnesota.  The commissioner shall report the results of the 
        study to the education committees of the legislature and the 
        state board of education by February 1, 1996. 
           (n) $1,000,000 in fiscal year 1996 is for grants to special 
        school district No. 1, Minneapolis, and independent school 
        district No. 625, St. Paul, for after school enrichment pilot 
        programs targeted towards junior high and middle school 
        students.  These programs shall be developed collaboratively 
        with city government, park boards, family services 
        collaboratives, and any other community organizations offering 
        similar programming.  Any balance remaining in the first year 
        does not cancel but is available in the second year. 
           (o) $188,000 each year is appropriated from the special 
        revenue fund for the graduation rule.  The department 
        appropriation is to be used to fund continued assessment and 
        standards development and piloting; to broaden public 
        understanding through communication; to continue development of 
        learning benchmarks; for ongoing statewide assessment efforts; 
        to develop system performance standards; and to provide 
        technical assistance to schools throughout the state.  The 
        appropriation from the special revenue fund is to be used for 
        appropriate development efforts in health-related standards and 
        assessments.  Any amount of this appropriation does not cancel 
        and shall be carried forward to the following fiscal year.  
        Notwithstanding any law to the contrary, the commissioner may 
        contract for national expertise and related services in each of 
        these development areas.  Notwithstanding Minnesota Statutes, 
        section 15.53, subdivision 2, the commissioner of education may 
        contract with a school district for a period no longer than five 
        consecutive years for the services of an educator to work in the 
        development, implementation, or both, of the graduation rule.  
        The commissioner may contract for services and expertise as 
        necessary for development and implementation of the graduation 
        standards.  Notwithstanding any law to the contrary, the 
        contracts are not subject to the contract certification 
        procedures of the commissioner of administration or of Minnesota 
        Statutes, chapter 16B, and are not subject to or included in any 
        spending limitations on contracts. 
           (p) $600,000 in 1996 and $350,000 in 1997 is for transition 
        aid for information support. 
           (q) Up to $50,000 each year is for grants to school 
        districts for mentorship cooperative ventures between school 
        districts and post-secondary teacher preparation institutions 
        for alternative licensure programs according to Minnesota 
        Statutes, section 125.188. 
           (r) Up to $50,000 each year is for GED coordination. 
           Subd. 3.  [CHARTER SCHOOL EVALUATION.] For the state board 
        of education to evaluate the performance of charter schools 
        authorized according to Minnesota Statutes, section 120.064: 
             $75,000     .....     1996 
           The state board must review and comment on the evaluation, 
        by the chartering school district, of the performance of a 
        charter school before that charter school's contract is 
        renewed.  The state board may provide assistance to a school 
        district in evaluating a charter school that has been chartered 
        by that school board.  The board must report annually to the 
        education committees of the legislature on the results of its 
        evaluations.  This amount is available until June 30, 1997. 
           Sec. 22.  [APPROPRIATIONS; MINNESOTA CENTER FOR ARTS 
        EDUCATION.] 
           The sums indicated in this section are appropriated from 
        the general fund to the Minnesota center for arts education for 
        the fiscal years designated: 
            $5,217,000     .....     1996
            $5,217,000     .....     1997
           Of the fiscal year 1996 appropriation, $154,000 is to fund 
        artist and arts organization participation in the education 
        residency and education technology projects, $75,000 is for 
        school support for the residency project, and $121,000 is for 
        further development of the partners:  arts and school for 
        students (PASS) program, including pilots.  Of the fiscal year 
        1997 appropriation, $154,000 is to fund artist and arts 
        organizations participation in the education residency project, 
        $75,000 is for school support for the residency project, and 
        $121,000 is to fund the PASS program, including additional 
        pilots.  The guidelines for the education residency project and 
        the pass program shall be developed and defined by the Minnesota 
        arts board.  The Minnesota arts board shall participate in the 
        review and allocation process.  The center for arts education 
        shall cooperate with the Minnesota arts board to fund these 
        projects. 
           Any balance remaining in the first year does not cancel, 
        but is available in the second year. 
           The Minnesota center for arts education may establish 
        full-time, part-time, or seasonal positions as necessary to 
        carry out assigned responsibilities and missions.  Actual 
        employment levels are limited by the availability of state funds 
        appropriated for salaries, benefits and agency operations or 
        funds available from other sources for such purposes.  
           In the next biennial budget, the Minnesota center for arts 
        education must assess its progress in meeting its established 
        performance measures and inform the legislature on the content 
        of that assessment.  The information must include an assessment 
        of its progress by consumers and employees. 
           Sec. 23.  [APPROPRIATIONS; FARIBAULT ACADEMIES.] 
           The sums indicated in this section are appropriated from 
        the general fund to the department of education for the 
        Faribault academies for the fiscal years designated:  
             $8,075,000     .....     1996
             $8,075,000     .....     1997 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           The state board of education may establish full-time, 
        part-time, or seasonal positions as necessary to carry out 
        assigned responsibilities and missions of the Faribault 
        academies.  Actual employment levels are limited by the 
        availability of state funds appropriated for salaries, benefits 
        and agency operations or funds available from other sources for 
        such purposes. 
           In the next biennial budget, the academies must assess 
        their progress in meeting the established performance measures 
        for the Faribault academies and inform the legislature on the 
        content of that assessment.  The information must include an 
        assessment of its progress by consumers and employees. 
           Sec. 24.  [TRANSFER OF FUNDS.] 
           The commissioner of finance must transfer an amount agreed 
        on by the affected agencies from the appropriation for the 
        Faribault Academies to the appropriation to the department of 
        education that reflects the transfer of the resource centers 
        according to section 9. 
           Sec. 25.  [REPEALER.] 
           Minnesota Statutes 1994, sections 128A.02, subdivisions 2 
        and 4; and 128A.03, are repealed. 
           Sec. 26.  [EFFECTIVE DATE.] 
           Sections 18 and 19 are effective the day following final 
        enactment. 
                                   ARTICLE 12
                                   TECHNOLOGY
           Section 1.  Minnesota Statutes 1994, section 16B.465, is 
        amended to read: 
           16B.465 [STATEWIDE TELECOMMUNICATIONS ACCESS ROUTING 
        SYSTEM.] 
           Subdivision 1.  [CREATION.] The statewide 
        telecommunications access routing system provides voice, data, 
        video, and other telecommunications transmission services to 
        state agencies,; educational institutions, including public 
        schools as defined in section 120.05, nonpublic, church or 
        religious organization schools which provide instruction in 
        compliance with sections 120.101 to 120.102, and private 
        colleges ,; public corporations,; and state political 
        subdivisions.  It is not a telephone company for purposes of 
        chapter 237.  It shall not resell or sublease any services or 
        facilities to nonpublic entities except it may serve 
        private schools and colleges.  The commissioner has the 
        responsibility for planning, development, and operations of a 
        statewide telecommunications access routing system in order to 
        provide cost-effective telecommunications transmission services 
        to system users. 
           Subd. 2.  [ADVISORY COUNCIL.] The statewide 
        telecommunications access and routing system is managed by the 
        commissioner.  Subject to section 15.059, subdivisions 1 to 4, 
        the commissioner shall appoint an advisory council to provide 
        advice in implementing and operating a statewide 
        telecommunications access and routing system.  The council shall 
        represent the users of STARS services and shall include 
        representatives of higher education, public and private schools, 
        state agencies, and political subdivisions. 
           Subd. 3.  [DUTIES.] The commissioner, after consultation 
        with the council, shall: 
           (1) provide voice, data, video, and other 
        telecommunications transmission services to the state and to 
        political subdivisions through an account in the 
        intertechnologies revolving fund; 
           (2) manage vendor relationships, network function, and 
        capacity planning in order to be responsive to the needs of the 
        system users; 
           (3) set rates and fees for services; 
           (4) approve contracts relating to the system; 
           (5) develop the system plan, including plans for the 
        phasing of its implementation and maintenance of the initial 
        system, and the annual program and fiscal plans for the system; 
        and 
           (6) develop a plan for interconnection of the network with 
        private colleges and public and private schools in the state. 
           Subd. 4.  [PROGRAM PARTICIPATION.] (a) The commissioner may 
        require the participation of state agencies, the state board of 
        education, and the governing boards of the state universities, 
        the community colleges, and the technical colleges, and may 
        request the participation of the board of regents of the 
        University of Minnesota, in the planning and implementation of 
        the network to provide interconnective technologies.  The 
        commissioner shall establish reimbursement rates in cooperation 
        with the commissioner of finance to be billed to participating 
        agencies and educational institutions sufficient to cover the 
        operating, maintenance, and administrative costs of the system. 
           (b) A direct appropriation made to an educational 
        institution for usage costs associated with the STARS network 
        must only be used by the educational institution for payment of 
        usage costs of the network as billed by the commissioner of 
        administration.  The post-secondary appropriations may be 
        shifted between systems as required by unanticipated usage 
        patterns.  An intersystem transfer must be requested by the 
        appropriate system and may be made only after review and 
        approval by the commissioner of finance, in consultation with 
        the commissioner of administration. 
           Subd. 6.  [REVOLVING FUND.] Money appropriated for the 
        statewide telecommunications access routing system and fees for 
        telecommunications services must be deposited in an account in 
        the intertechnologies revolving fund.  Money in the account is 
        appropriated annually to the commissioner to operate 
        telecommunications services. 
           Subd. 7.  [EXEMPTION.] The system is exempt from the 
        five-year limitation on contracts set by section 16B.07, 
        subdivision 2. 
           Sec. 2.  [120.0112] [STATE GOALS FOR SYSTEMIC CHANGE USING 
        TECHNOLOGICAL ADVANCES.] 
           The general framework outcomes for technology use in 
        education are: 
           (1) all Minnesota educational institutions, libraries, and 
        communities will have access to local, state, and worldwide 
        instructional resources databases; 
           (2) development of policies and procedures that assure 
        instructional resource availability to help students 
        successfully achieve education excellence and state standards; 
           (3) databases are accessible within each district and on 
        the Internet; and 
           (4) development of policies, procedures, and systems that 
        stimulate and promote teacher and student curriculum and 
        learning collaboration. 
           Sec. 3.  Minnesota Statutes 1994, section 124.91, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
        with its central administrative office located within economic 
        development region one, two, three, four, five, six, seven, 
        eight, nine, and ten may apply to the commissioner of education 
        for ITV revenue up to the greater of .5 percent of the adjusted 
        net tax capacity of the district or $25,000 for the 
        construction, maintenance, and lease costs of an interactive 
        television system for instructional purposes.  The approval by 
        the commissioner of education and the application procedures set 
        forth in subdivision 1 shall apply to the revenue in this 
        subdivision.  In granting the approval, the commissioner must 
        consider whether the district is maximizing efficiency through 
        peak use and off-peak use pricing structures. 
           (b) To obtain ITV revenue, a district may levy an amount 
        not to exceed the district's ITV revenue times the lesser of one 
        or the ratio of: 
           (1) the quotient derived by dividing the adjusted net tax 
        capacity of the district for the year before the year the levy 
        is certified by the actual pupil units in the district for the 
        year to which the levy is attributable; to 
           (2) 100 percent of the equalizing factor as defined in 
        section 124A.02, subdivision 8, for the year to which the levy 
        is attributable. 
           (c) A district's ITV aid is the difference between its ITV 
        revenue and the ITV levy. 
           (d) The revenue in the first year after reorganization for 
        a district that has reorganized under section 122.22, 122.23, or 
        122.241 to 122.247 shall be the greater of: 
           (1) the revenue computed for the reorganized district under 
        paragraph (a), or 
           (2)(i) for two districts that reorganized, 75 percent of 
        the revenue computed as if the districts involved in the 
        reorganization were separate, or 
           (ii) for three or more districts that reorganized, 50 
        percent of the revenue computed as if the districts involved in 
        the reorganization were separate. 
           (e) The revenue in paragraph (d) is increased by the 
        difference between the initial revenue and ITV lease costs for 
        leases that had been entered into by the preexisting districts 
        on the effective date of the consolidation or combination and 
        with a term not exceeding ten years.  This increased revenue is 
        only available for the remaining term of the lease.  However, in 
        no case shall the revenue exceed the amount available had the 
        preexisting districts received revenue separately. 
           Sec. 4.  [124C.74] [TELECOMMUNICATION ACCESS GRANT AND 
        STATEWIDE COORDINATION.] 
           Subdivision 1.  [ESTABLISHMENT; PURPOSE.] The purpose of 
        developing a statewide school district telecommunications 
        network is to expand the availability of a broad range of 
        courses and degrees to students throughout the state, to share 
        information resources to improve access, quality, and 
        efficiency, to improve learning, and distance cooperative 
        learning opportunities, and to promote the exchange of ideas 
        among students, parents, teachers, media generalists, 
        librarians, and the public.  In addition, through the 
        development of this statewide telecommunications network 
        emphasizing cost-effective, competitive connections, all 
        Minnesotans will benefit by enhancing access to 
        telecommunications technology throughout the state.  Network 
        connections for school districts and public libraries will be 
        coordinated and fully integrated into the existing state 
        telecommunications and interactive television networks to 
        achieve comprehensive and efficient interconnectivity of school 
        districts and libraries to higher education institutions, state 
        agencies, other governmental units, agencies, and institutions 
        throughout Minnesota.  A school district may apply to the 
        commissioner for a grant under subdivision 2, and a regional 
        public library may apply under subdivision 3.  The Minnesota 
        education telecommunication council established in section 7 
        shall establish priorities for awarding grants, making grant 
        awards, and being responsible for the coordination of networks. 
           Subd. 2.  [SCHOOL DISTRICT TELECOMMUNICATIONS GRANT.] (a) A 
        school district may apply for a grant under this subdivision 
        to:  (1) establish connections among school districts, and 
        between school districts and the MNet statewide 
        telecommunications network administered by the department of 
        administration under section 16B.465; or (2) if such a 
        connection meeting minimum electronic connectivity standards is 
        already established, enhance telecommunications capacity for a 
        school district.  The minimum standards of capacity are a 56 
        kilobyte data line and 768 kilobyte ITV connection, subject to 
        change based on the recommendations by the Minnesota education 
        telecommunications council.  A district may submit a grant 
        application for interactive television with higher capacity 
        connections in order to maintain multiple simultaneous 
        connections.  To ensure coordination among school districts, a 
        school district must submit its grant application to the council 
        through an organization that coordinates the applications and 
        connections of at least ten school districts or through an 
        existing technology cooperative.  
           (b) The application must, at a minimum, contain information 
        to document for each applicant school district the following: 
           (1) that the proposed connection meets the minimum 
        standards and employs an open network architecture that will 
        ensure interconnectivity and interoperability with other 
        education institutions and libraries; 
           (2) that the proposed connection and system will be 
        connected to MNet through the department of administration under 
        section 16B.465 and that a network service and management 
        agreement is in place; 
           (3) that the proposed connection and system will be 
        connected to the higher education telecommunication network and 
        that a governance agreement has been adopted which includes 
        agreements between the school district system, a higher 
        education regional council, libraries, and coordinating 
        entities; 
           (4) the telecommunication vendor, which may be MNet, 
        selected to provide service from the district to an MNet hub or 
        to a more cost-effective connection point to MNet; and 
           (5) other information, as determined by the commissioner in 
        consultation with the education telecommunications council, to 
        ensure that connections are coordinated, meet state standards 
        and are cost effective, and that service is provided in an 
        efficient and cost-effective manner. 
           (c) A grant applicant shall obtain a grant proposal for 
        network services from MNet.  If MNet is not selected as the 
        vendor, the application must provide the reasons for choosing an 
        alternative vendor.  A school district may include, in its grant 
        application, telecommunications access for collaboration with 
        nonprofit arts organizations for the purpose of educational 
        programs, or access for a secondary media center that:  (1) is a 
        member of a multitype library system; (2) is open during periods 
        of the year when classroom instruction is occurring; and (3) has 
        licensed school media staff on site. 
           (d) The Minnesota education telecommunications council 
        shall award grants and the funds shall be dispersed by the 
        commissioner.  The highest priority for these grants shall be to 
        bring school districts up to the minimum connectivity 
        standards.  The telecommunications council shall also give 
        priority to grant proposals from school districts with fewer 
        than 1,000 students which do not have a data connection.  A 
        grant to enhance telecommunications capacity beyond the minimum 
        connectivity standards shall be no more than 75 percent of the 
        maximum grant under this subdivision.  Grant applications for 
        minimum connection and enhanced telecommunications capacity 
        grants must be submitted to the commissioner by a coordinating 
        organization including, but not limited to, service cooperatives 
        and education districts.  For the purposes of this section, a 
        school district includes charter schools under section 120.064.  
        Based on the award made by the council, all grants under this 
        subdivision shall be paid by the commissioner directly to a 
        school district, (unless this application requests that the 
        funds be paid to the coordinating agency). 
           (e) Money awarded under this section may be used only for 
        the purposes explicitly stated in the grant application. 
           Subd. 3.  [REGIONAL LIBRARY TELECOMMUNICATION GRANT.] (a) A 
        regional public library system may apply for a telecommunication 
        access grant.  The grant must be used to create or expand the 
        capacity of electronic data access and connect the library 
        system with the MNet statewide telecommunications network 
        administered by the department of administration under section 
        16B.465.  Connections must meet minimum system standards of a 56 
        kilobyte data line and 768 kilobyte ITV connection.  To be 
        eligible for a telecommunications access grant, a regional 
        public library system must:  (1) meet the level of local support 
        required under section 134.34; (2) be open at least 20 hours per 
        week; and (3) provide a local match for the grant with local 
        funds under section 134.46. 
           (b) Any grant award under this subdivision may not be used 
        to substitute for any existing local funds allocated to provide 
        electronic access, or equipment for library staff or the public, 
        or local funds previously dedicated to other library operations. 
           (c) An application for a regional public library 
        telecommunications access grant must, at a minimum, contain 
        information to document the following: 
           (1) that the connection meets the minimum standards and 
        employs an open network architecture that will ensure 
        interconnectivity and interoperability with other libraries and 
        the educational system; 
           (2) that the connection is being established through the 
        most cost-effective means and that the public library has 
        explored and coordinated connections through school districts or 
        other governmental agencies; 
           (3) that the proposed connection and system will be 
        connected to MNet through the department of administration under 
        section 16B.465 and that a network service and management 
        agreement is in place; 
           (4) that the proposed connection and system will be 
        connected to the higher education and to the school district 
        telecommunication networks subject to a governance agreement 
        with one or more school districts and a higher education 
        regional council specifying how the system will be coordinated; 
           (5) the telecommunication vendor, which may be MNet, 
        selected to provide service from the library to an MNet hub or 
        through a more cost-effective connection point to MNet; and 
           (6) other information, as determined by the commissioner, 
        to ensure that connections are coordinated, meet state 
        standards, are cost effective, and that service is provided in 
        an efficient and cost-effective manner so that libraries 
        throughout the state are connected in as seamless a manner as 
        technically possible. 
           (d) A grant applicant shall obtain a grant proposal for 
        network services from MNet.  If MNet is not selected as the 
        vendor, the application must provide the reasons for choosing an 
        alternative vendor. 
           Subd. 4.  [AWARD OF GRANTS.] The council shall develop 
        application forms and procedures for school district minimum 
        connectivity grants, enhanced telecommunications grants, and 
        regional library telecommunication access grants.  The council 
        shall select the grant recipient and shall promptly notify any 
        applicant that is found not to be qualified.  The commissioner 
        shall make the grant payments directly to the school district or 
        regional library system.  At the request of the district, the 
        commissioner may make the grant payment directly to the 
        coordinating organization.  If appropriations are insufficient 
        to fund all applications, the commissioner shall first fully 
        fund the minimum connectivity grants.  Unsuccessful applicants 
        may reapply for a grant. 
           Sec. 5.  [134.46] [REGIONAL LIBRARY TELECOMMUNICATIONS 
        AID.] 
           (a) A regional public library system may apply to the 
        commissioner for telecommunications aid to support data access 
        through regional public library systems, including access to 
        Internet for library staff and the public.  The maximum amount 
        of aid for each public library shall be calculated as follows: 
           (1) multiply $1 times the lesser of the population of the 
        area served by the regional public library system, or the sum of 
        the populations of the participating portions of the system; and 
           (2) deduct an amount equal to the sum of .1 percent times 
        the adjusted net tax capacity for each participating city or 
        county for the year preceding the year the levy is certified. 
           (b) A regional public library must match state aid with 
        local funds equal to .1 percent times the adjusted net tax 
        capacity for each participating city or county for the year 
        preceding the year the levy is certified.  A regional public 
        library that receives a telecommunications access grant under 
        section 124C.74 may use local funds under this section for the 
        grant match in the year the grant is awarded, without a 
        reduction in state aid.  Local matching funds must be an 
        increase in the amount of local funds allocated to support 
        library operations in the year prior to the first year of the 
        telecommunication access grant.  Local matching funds are exempt 
        from section 134.34.  A grant award under this section may not 
        be used to substitute for any existing local funds allocated to 
        provide electronic data access or equipment for library staff or 
        the public, or local funds previously dedicated to other library 
        operations. 
           (c) Telecommunications aid under this section may be used 
        for the: 
           (1) construction, maintenance, and lease costs of data 
        access connections, including Internet connections; 
           (2) purchase, maintenance, professional development, and 
        support of computer hardware and software for data access; 
           (3) cost of technical support for a regional library 
        systems' technology investments, including technical support, 
        personnel, contracted services for technical support, and 
        training; and 
           (4) promotion of electronic access through public libraries 
        for members of the public. 
           (d) If appropriations are insufficient to fully fund aid 
        under this section, the commissioner shall prorate aid payments 
        to participating regional library systems. 
           Sec. 6.  Minnesota Statutes 1994, section 237.065, is 
        amended to read: 
           237.065 [RATES FOR SPECIAL SERVICE TO SCHOOLS.] 
           Each telephone company, including a company that has 
        developed an incentive plan under section 237.625, that provides 
        local telephone service in a service area that includes a public 
        school that has classes within the range from kindergarten to 
        12th grade shall provide, upon request, additional service to 
        the school that is sufficient to ensure access to basic 
        telephone service from each classroom and other areas within the 
        school, as determined by the school board.  Each company shall 
        set a flat rate for this additional service that is less than 
        the company's flat rate for an access line for a business and 
        the same as or greater than the company's flat rate for an 
        access line for a residence in the same local telephone service 
        exchange.  When a company's flat rates for businesses and 
        residences are the same, the company shall use the residential 
        rate for service to schools under this section.  The rate 
        required under this section is available only for a school that 
        installs additional service that includes access to basic 
        telephone service from each classroom and other areas within the 
        school, as determined by the school board. 
           Sec. 7.  [MINNESOTA EDUCATION TELECOMMUNICATIONS COUNCIL.] 
           Subdivision 1.  [STATE COUNCIL MEMBERSHIP.] The membership 
        of the Minnesota education telecommunications council 
        established in Laws 1993, First Special Session chapter 2, is 
        expanded to include representatives of elementary and secondary 
        education.  The membership shall consist of three 
        representatives from the University of Minnesota; three 
        representatives of the board of trustees for Minnesota state 
        colleges and universities; one representative of the higher 
        education services offices; one representative appointed by the 
        private college council; eight representatives selected by the 
        commissioner of education, at least one of which must come from 
        each of the six higher education telecommunication regions; a 
        representative from the information policy office; one member 
        each from the senate and the house of representatives selected 
        by the subcommittee on committees of the committee on rules and 
        administration of the senate and the speaker of the house; and 
        three representatives of libraries, one representing regional 
        public libraries, one representing multitype libraries, and one 
        representing community libraries, selected by the governor.  The 
        council shall: 
           (1) develop a statewide vision and plans for the use of 
        distance learning technologies and provide leadership in 
        implementing the use of such technologies; 
           (2) recommend to the commissioner and the legislature by 
        December 15, 1996, a plan for long-term governance and a 
        proposed structure for statewide and regional 
        telecommunications; 
           (3) recommend educational policy relating to 
        telecommunications; 
           (4) determine priorities for use; 
           (5) oversee coordination of networks for post-secondary 
        campuses, K-12 education, and regional and community libraries; 
           (6) review application for telecommunications access grants 
        under Minnesota Statutes, section 124C.74 and recommend to the 
        department grants for funding; and 
           (7) determine priorities for grant funding proposals. 
           The council shall consult with representatives of the 
        telecommunication industry in implementing this section.  
           Subd. 2.  [DISTRICT COUNCIL MEMBERSHIP.] District 
        organizations that coordinate applications for telecommunication 
        access grants are encouraged to become members of the regional 
        higher education telecommunication council in their area. 
           Subd. 3.  [CRITERIA.] In addition to responsibilities of 
        the council under Laws 1993, First Special Session chapter 2, as 
        amended, the telecommunications council shall evaluate grant 
        applications under Minnesota Statutes, section 124C.74 and 
        applications from district organizations using the following 
        criteria: 
           (1) evidence of cooperative arrangements with other 
        post-secondary institutions, school districts, and community and 
        regional libraries in the geographic region; 
           (2) plans for shared classes and programs; 
           (3) avoidance of network duplication; 
           (4) evidence of efficiencies to be achieved in delivery of 
        instruction due to use of telecommunications; 
           (5) a plan for development of a list of all courses 
        available in the region for delivery at a distance; 
           (6) a plan for coordinating and scheduling courses; and 
           (7) a plan for evaluation of costs, access, and outcomes. 
           Sec. 8.  [INSTRUCTIONAL TRANSFORMATION THROUGH TECHNOLOGY 
        GRANTS.] 
           Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A grant program 
        is established to help school districts work together and with 
        higher education institutions, businesses, local government 
        units, libraries, and community organizations in order to 
        facilitate individualized learning and manage information by 
        employing technological advances, especially computers and 
        related products.  Recipients shall use grant proceeds to: 
           (1) enhance teaching and learning productivity through the 
        use of technology; 
           (2) develop individual learner classroom-based teaching and 
        learning systems that can be aggregated into site, district, and 
        state frameworks; 
           (3) develop personalized learning plans designed to give 
        learners more responsibility for their learning success and 
        change the role of teacher to learning facilitator; 
           (4) match and allocate resources; 
           (5) create a curriculum environment that is multiplatform; 
           (6) provide user and contributor access to electronic 
        libraries; 
           (7) schedule activities; 
           (8) automate progress reports; 
           (9) increase collaboration between school districts and 
        sites, and with businesses, higher education institutions, 
        libraries, and local government units; 
           (10) correlate state-defined outcomes to curriculum units 
        for each student; 
           (11) increase accountability through a reporting system; 
        and 
           (12) provide technical support, project evaluation, 
        dissemination services, and replication. 
           Subd. 2.  [ELIGIBILITY; APPLICATION.] A grant applicant 
        must be a school district or a group of school districts that 
        demonstrates collaboration with libraries, businesses, and 
        higher education institutions.  Community organizations and 
        local government units may also be involved.  The commissioner 
        of education shall prescribe the form and manner of 
        applications.  The commissioner may award grants to applicants 
        likely to meet the outcomes in subdivision 1.  The commissioner 
        shall ensure that business partners do not participate in more 
        than one grant award in each round of grants. 
           Subd. 3.  [REPORTING.] A grant recipient shall report to 
        the commissioner annually at a time specified by the 
        commissioner on the extent to which it is meeting the outcomes 
        specified in subdivision 1. 
           Sec. 9.  [TALENTED STUDENT PROGRAM NEEDS ASSESSMENT.] 
           The commissioner of education shall conduct a needs 
        assessment to determine whether the talented youth program in 
        south central Minnesota, or a similar program, should be 
        available throughout the state to serve talented junior and 
        senior high school students.  The commissioner shall report the 
        findings to the education committees of the legislature by 
        February 1, 1996. 
           Sec. 10.  [ELECTRONIC COST REDUCTION.] 
           The commissioner of education shall identify methods to 
        reduce the costs of Internet access for school districts.  The 
        commissioner shall work in conjunction with MNet, the department 
        of administration, and the telecommunication industry to provide 
        Internet access and long distance phone service at a favorable 
        group rate. 
           Sec. 11.  [FEDERAL MATCHING FUNDS.] 
           Appropriations for telecommunications access grants for 
        school districts and regional public library systems under 
        section 4 may be counted as matching funds for federal grants to 
        provide telecommunication access. 
           Sec. 12.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        to the department of education for the fiscal years designated. 
           Subd. 2.  [STATE AGENCY LIBRARIES.] For maintaining and 
        upgrading the online computer-based library catalog system in 
        state agency libraries: 
             $40,000        .....     1996 
             $40,000        .....     1997 
           Any balance in the first year does not cancel and is 
        available in the second year.  These amounts are added to 
        amounts included in the appropriation for the department of 
        education budget that are for the same purpose. 
           Subd. 3.  [INFORMS GRANTS.] For grants to continue the 
        internet access for Minnesota schools project (InforMNS): 
             $400,000      .....     1996 
             $400,000      .....     1997 
           Subd. 4.  [SCIENCE-MATHEMATICS GRANT.] For continuation of 
        systemic change in science and mathematics education programs: 
             $1,322,000     .....     1996
             $1,322,000     .....     1997
           $30,000 of the appropriation in 1996 and $30,000 in 1997 is 
        for the south central Minnesota talented youth program. 
           Any balance in the first year does not cancel but is 
        available in the second year. 
           Subd. 5.  [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 
        grants to regional public libraries to support electronic data 
        access according to section 134.46: 
             $800,000     .....     1996 
           This appropriation is available until June 30, 1997. 
           Subd. 6.  [INTERACTIVE TELEVISION (ITV) AID.] For 
        interactive television (ITV) aid under section 124.91, 
        subdivision 5: 
             $2,573,000     .....     1996 
             $3,814,000     .....     1997 
           The 1996 appropriation includes $473,000 for 1995 ITV aid 
        and $2,100,000 for 1996 ITV aid. 
           The 1997 appropriation includes $370,000 for 1996 ITV aid 
        and $3,344,000 for 1997 ITV aid. 
           Subd. 7.  [TELECOMMUNICATION ACCESS GRANTS.] For grants to 
        school districts and regional public library systems to 
        establish connections to MNet according to section 124C.74: 
             $5,500,000     .....     1996 
             $5,000,000     .....     1997
           This appropriation is available until June 30, 1997. 
           Subd. 8.  [INSTRUCTIONAL TRANSFORMATION THROUGH TECHNOLOGY 
        GRANTS.] For grants according to section 8: 
              $2,700,000      .....      1996
              $2,700,000      .....      1997
           The commissioner shall give priority to grant applicants 
        that match private sector contributions, involve multiple school 
        districts, and involve graduation rule pilot sites. 
           Subd. 9.  [ITV GRANT; FLOODWOOD.] For a grant to 
        independent school district No. 698, Floodwood: 
             $125,000       .....     1996 
           This appropriation is available until June 30, 1997.  
           The grant must be used to construct an interactive 
        television transmission line and an electronic data access line. 
        This appropriation is only available to the extent it is matched 
        by the district with local and nonlocal sources.  The district 
        may levy up to $50,000 to provide its share of local sources.  
        School district No. 698, Floodwood, is not eligible for a 
        minimum connection grant under Minnesota Statutes, section 
        124C.74. 
           Subd. 10.  [ITV GRANT; CROMWELL.] For a grant to 
        independent school district No. 95, Cromwell: 
             $125,000       .....     1996 
           This appropriation is available until June 30, 1997.  
           The grant must be used to construct an interactive 
        television transmission line and an electronic data access 
        line.  This appropriation is only available to the extent it is 
        matched by the district with local and nonlocal sources.  The 
        district may levy up to $50,000 to provide its share of local 
        sources.  School district No. 95, Cromwell, is not eligible for 
        a minimum connection grant under Minnesota Statutes, section 
        124C.74.  The appropriation and levy authorized in this 
        subdivision are reduced by any amounts received according to 
        Laws 1994, chapter 647, article 6, section 41, subdivision 8.  
        School district No. 95, Cromwell, is not eligible for a minimum 
        connection grant under Minnesota Statutes, section 124C.74. 
           Sec. 13.  [REPEALER.] 
           Laws 1993, First Special Session chapter 2, article 5, 
        section 1, is repealed. 
           Laws 1993, First Special Session chapter 2, article 5, 
        section 2, as amended by Laws 1994, chapter 532, article 2, 
        section 13, is repealed. 
                                   ARTICLE 13 
                      TECHNICAL AND CONFORMING AMENDMENTS 
           Section 1.  Minnesota Statutes 1994, section 43A.316, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purpose of this section, 
        the terms defined in this subdivision have the meaning given 
        them.  
           (a)  [COMMISSIONER.] "Commissioner" means the commissioner 
        of employee relations.  
           (b)  [EMPLOYEE.] "Employee" means: 
           (1) a person who is a public employee within the definition 
        of section 179A.03, subdivision 14, who is insurance eligible 
        and is employed by an eligible employer; 
           (2) an elected public official of an eligible employer who 
        is insurance eligible; or 
           (3) a person employed by a labor organization or employee 
        association certified as an exclusive representative of 
        employees of an eligible employer or by another public employer 
        approved by the commissioner, so long as the plan meets the 
        requirements of a governmental plan under United States Code, 
        title 29, section 1002(32).  
           (c) [ELIGIBLE EMPLOYER.] "Eligible employer" means: 
           (1) a public employer within the definition of section 
        179A.03, subdivision 15, that is a town, county, city, school 
        district as defined in section 120.02, educational service 
        cooperative service unit as defined in section 123.58 123.582, 
        intermediate district as defined in section 136C.02, subdivision 
        7, cooperative center for vocational education as defined in 
        section 123.351, regional management information center as 
        defined in section 121.935, or an education unit organized under 
        the joint powers action, section 471.59; or 
           (2) an exclusive representative of employees, as defined in 
        paragraph (b); or 
           (3) another public employer approved by the commissioner. 
           (d)  [EXCLUSIVE REPRESENTATIVE.] "Exclusive representative" 
        means an exclusive representative as defined in section 179A.03, 
        subdivision 8.  
           (e)  [LABOR-MANAGEMENT COMMITTEE.] "Labor-management 
        committee" means the committee established by subdivision 4.  
           (f)  [PLAN.] "Plan" means the statewide public employees 
        insurance plan created by subdivision 3.  
           Sec. 2.  Minnesota Statutes 1994, section 62L.08, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [PARTIAL EXEMPTION; POLITICAL SUBDIVISIONS.] (a) 
        Health coverage provided by a political subdivision of the state 
        to its employees, officers, retirees, and their dependents, by 
        participation in group purchasing of health plan coverage by or 
        through an association of political subdivisions or by or 
        through an educational a service cooperative service unit 
        created under section 123.58 123.582 or by participating in a 
        joint self-insurance pool authorized under section 471.617, 
        subdivision 2, is subject to this subdivision.  Coverage that is 
        subject to this subdivision may have separate index rates and 
        separate premium rates, based upon data specific to the 
        association, educational cooperative service unit, or pool, so 
        long as the rates, including the rating bands, otherwise comply 
        with this chapter.  The association, educational cooperative 
        service unit, or pool is not required to offer the small 
        employer plans described in section 62L.05 and is not required 
        to comply with this chapter for employers that are not small 
        employers or that are not eligible for coverage through the 
        association, educational cooperative service unit, or pool.  A 
        health carrier that offers a health plan only under this 
        subdivision need not offer that health plan to other small 
        employers on a guaranteed issue basis. 
           (b) An association, educational cooperative service unit, 
        or pool described in paragraph (a) may elect to be treated under 
        paragraph (a) by filing a notice of the election with the 
        commissioner of commerce no later than January 1, 1995.  The 
        election remains in effect for three years and applies to all 
        health coverage provided to members of the group.  It may be 
        renewed for subsequent three-year periods.  An entity eligible 
        for treatment under paragraph (a) that forms after January 1, 
        1995, must make the election prior to provision of coverage, and 
        the election remains in effect until January 1, 1998, or if 
        filed after that date, until the next regular renewal date.  
           Sec. 3.  Minnesota Statutes 1994, section 121.935, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREATION.] Any group of two or more 
        independent, special or common school districts may with the 
        approval of the state board pursuant to sections 121.931 and 
        121.936 create a regional management information center pursuant 
        to section 123.58 123.582 or 471.59 to provide computer services 
        to school districts.  A regional management information center 
        shall not come into existence until the first July 1 after its 
        creation is approved by the state board or until it can be 
        accommodated by state appropriations, whichever occurs first.  
        Each member of the board of a center created after June 30, 
        1991, shall be a current member of a member school board. 
           Sec. 4.  Minnesota Statutes 1994, section 124.223, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SUMMER INSTRUCTIONAL PROGRAMS.] (a) State 
        transportation aid is authorized for services described in 
        subdivisions 1 to 7, 9, and 10 when provided for pupils with a 
        disability in conjunction with a summer instructional program 
        that meets the requirements of section 124A.27, subdivision 9 is 
        offered for credit or required for graduation or that provides 
        academic enrichment or remediation.  The reserved revenue may 
        not be used for recreational sports, leisure activities, 
        entertainment, recreational activities, crafts, hobbies, or any 
        other classes of a similar nature.  Summer programs for a pupil 
        with a disability shall relate to the pupil's individual 
        education plan. 
           (b) State transportation aid is authorized for services 
        described in subdivision 1 when provided during the summer in 
        conjunction with a learning year program established under 
        section 121.585. 
           Sec. 5.  Minnesota Statutes 1994, section 124.574, 
        subdivision 7, is amended to read: 
           Subd. 7.  A district shall not receive aid pursuant to 
        section 124.32 124.3201, 124.3202, 124.321, or 124.573 for 
        salaries, supplies, travel or equipment for which the district 
        receives aid pursuant to this section. 
           Sec. 6.  Minnesota Statutes 1994, section 124A.02, 
        subdivision 16, is amended to read: 
           Subd. 16.  [PUPIL UNITS, AFDC.] "AFDC pupil units" for 
        fiscal year 1992 means pupil units identified in section 124.17, 
        subdivision 1b. 
           "AFDC pupil units" for fiscal year 1993 and thereafter 
        means pupil units identified in section 124.17, subdivision 1d.  
           Sec. 7.  Minnesota Statutes 1994, section 124A.22, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] (a) For fiscal 
        year 1992, the compensatory education revenue for each district 
        equals the formula allowance times the AFDC pupil units counted 
        according to section 124.17, subdivision 1b. 
           (b) For fiscal year 1993 and thereafter, the maximum 
        compensatory education revenue for each district equals the 
        formula allowance times the AFDC pupil units computed according 
        to section 124.17, subdivision 1d. 
           (c) (b) For fiscal year 1993 and thereafter, the previous 
        formula compensatory education revenue for each district equals 
        the formula allowance times the AFDC pupil units computed 
        according to Minnesota Statutes 1994, section 124.17, 
        subdivision 1b. 
           (d) (c) For fiscal year 1993, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory revenue plus one-fourth of the difference between 
        the district's maximum compensatory education revenue and the 
        district's previous formula compensatory education revenue.  
           (e) (d) For fiscal year 1994, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory education revenue plus one-half of the difference 
        between the district's maximum compensatory education revenue 
        and the district's previous formula compensatory education 
        revenue.  
           (f) (e) For fiscal year 1995, the compensatory education 
        revenue for each district equals the district's previous formula 
        compensatory education revenue plus three-fourths of the 
        difference between the district's maximum compensatory education 
        revenue and the district's previous formula compensatory 
        education revenue.  
           (g) (f) For fiscal year 1996 and thereafter, the 
        compensatory education revenue for each district equals the 
        district's maximum compensatory education revenue.  
           Sec. 8.  Minnesota Statutes 1994, section 124A.225, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INSTRUCTOR DEFINED.] Primary instructor means a 
        public employee licensed by the board of teaching whose duties 
        are full-time instruction, excluding a teacher for whom 
        categorical aids are received pursuant to sections 124.273 and 
        124.32 124.3201, 124.3202, and 124.321.  Except as provided in 
        section 125.230, subdivision 6, instructor does not include 
        supervisory and support personnel, except school social workers 
        as defined in section 125.03.  An instructor whose duties are 
        less than full-time instruction must be included as an 
        equivalent only for the number of hours of instruction in grades 
        kindergarten through 6. 
           Sec. 9.  Minnesota Statutes 1994, section 126.666, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CURRICULUM ADVISORY COMMITTEE.] Each school 
        board shall establish a curriculum advisory committee to permit 
        active community participation in all phases of the PER process. 
        The district advisory committee, to the extent possible, shall 
        be representative of the diversity of the community served by 
        the district and the learning sites within the district, and 
        include principals, teachers, parents, support staff, pupils, 
        and other community residents.  The district may establish 
        building teams as subcommittees of the district advisory 
        committee.  The district committee shall retain responsibility 
        for recommending to the school board districtwide learner 
        outcomes, assessments, and program evaluations.  Learning sites 
        may establish expanded curriculum, assessments, and program 
        evaluations.  Whenever possible, parents and other community 
        residents shall comprise at least two-thirds of the advisory 
        committee.  The committee shall make recommendations to the 
        board about the programs enumerated in section 124A.27, that the 
        committee determines should be offered.  The recommendations 
        shall be based on district and learning site needs and 
        priorities. 
                                   ARTICLE 14
                       BUDGET RESERVE AND COST MANAGEMENT 
           Section 1.  Minnesota Statutes 1994, section 16A.152, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [BUDGET RESERVE.] A budget reserve account is 
        created in the general fund in the state treasury.  The 
        commissioner of finance shall transfer to the budget reserve 
        account on July 1 of each odd-numbered year any amounts 
        specifically appropriated by law to the budget reserve. 
           Sec. 2.  Minnesota Statutes 1994, section 16A.152, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
        of a forecast of general fund revenues and expenditures the 
        commissioner of finance determines that there will be a positive 
        unrestricted budgetary general fund balance at the close of the 
        biennium, the commissioner of finance must allocate money to the 
        budget reserve and cash flow account until the total amount in 
        the account equals five percent of total general fund 
        appropriations for the current biennium as established by the 
        most recent legislative session.  Beginning July 1, 1993, 
        forecast unrestricted budgetary general fund balances are first 
        appropriated to restore the budget reserve and cash flow account 
        to $500,000,000 is $220,000,000.  Additional biennial 
        unrestricted budgetary general fund balances available after 
        November 1 of every odd-numbered calendar year are appropriated 
        in January of the following year to reduce the property tax levy 
        recognition percent under section 121.904, subdivision 4a, to 
        zero before additional money beyond $500,000,000 $220,000,000 is 
        allocated to the budget reserve and cash flow account.  
        $180,000,000 of the budget reserve and cash flow account shall 
        be dedicated to elementary and secondary education. 
           The amounts necessary to meet the requirements of this 
        section are appropriated from the general fund. 
           Sec. 3.  Minnesota Statutes 1994, section 16A.152, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REDUCTION.] (a) If the commissioner determines 
        that probable receipts for the general fund will be less than 
        anticipated, and that the amount available for the remainder of 
        the biennium will be less than needed, the commissioner shall, 
        with the approval of the governor, and after consulting the 
        legislative advisory commission, reduce the amount in the budget 
        reserve and cash flow account as needed to balance expenditures 
        with revenue.  
           (b) An additional deficit shall, with the approval of the 
        governor, and after consulting the legislative advisory 
        commission, be made up by reducing unexpended allotments of any 
        prior appropriation or transfer.  Notwithstanding any other law 
        to the contrary, the commissioner is empowered to defer or 
        suspend prior statutorily created obligations which would 
        prevent effecting such reductions.  
           (c) If the commissioner determines that probable receipts 
        for any other fund, appropriation, or item will be less than 
        anticipated, and that the amount available for the remainder of 
        the term of the appropriation or for any allotment period will 
        be less than needed, the commissioner shall notify the agency 
        concerned and then reduce the amount allotted or to be allotted 
        so as to prevent a deficit. 
           (d) In reducing allotments, the commissioner may consider 
        other sources of revenue available to recipients of state 
        appropriations and may apply allotment reductions based on all 
        sources of revenue available.  
           (e) In like manner, the commissioner shall reduce 
        allotments to an agency by the amount of any saving that can be 
        made over previous spending plans through a reduction in prices 
        or other cause. 
           Sec. 4.  Minnesota Statutes 1994, section 124.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
        pupil in average daily membership shall be counted according to 
        this subdivision.  
           (a) A prekindergarten pupil with a disability who is 
        enrolled for the entire fiscal year in a program approved by the 
        commissioner and has an individual education plan that requires 
        up to 437 hours of assessment and education services in the 
        fiscal year is counted as one-half of a pupil unit.  If the plan 
        requires more than 437 hours of assessment and education 
        services, the pupil is counted as the ratio of the number of 
        hours of assessment and education service to 875, but not more 
        than one. 
           (b) A prekindergarten pupil with a disability who is 
        enrolled for less than the entire fiscal year in a program 
        approved by the commissioner is counted as the greater of: 
           (1) one-half times the ratio of the number of instructional 
        days from the date the pupil is enrolled to the date the pupil 
        withdraws to the number of instructional days in the school 
        year; or 
           (2) the ratio of the number of hours of assessment and 
        education service required in the fiscal year by the pupil's 
        individual education program plan to 875, but not more than one. 
           (c) A prekindergarten pupil who is assessed but determined 
        not to be handicapped is counted as the ratio of the number of 
        hours of assessment service to 875.  
           (d) A kindergarten pupil with a disability who is enrolled 
        in a program approved by the commissioner is counted as the 
        ratio of the number of hours of assessment and education 
        services required in the fiscal year by the pupil's individual 
        education program plan to 875, but not more than one. 
           (e) A kindergarten pupil who is not included in paragraph 
        (d) is counted as .515 of a pupil unit for fiscal year 1994 and 
        .53 of a pupil unit for fiscal year 1995 and thereafter. 
           (f) A pupil who is in any of grades 1 to 6 is counted as 
        1.03 pupil units for fiscal year 1994 and 1.06 pupil units for 
        fiscal year 1995 and thereafter. 
           (g) For fiscal year 1996 and fiscal year 1997, a pupil who 
        is in any of grades 7 to 12 is counted as 1.3 pupil units.  For 
        fiscal year 1998, a pupil who is in any of grades 7 to 12 is 
        counted as 1.25 pupil units.  For fiscal year 1999 and later 
        years, a pupil who is in any of grades 7 to 12 is counted as 1.2 
        pupil units. 
           (h) For fiscal year 1996 and fiscal year 1997, a pupil who 
        is in the post-secondary enrollment options program is counted 
        as 1.3 pupil units.  For fiscal year 1998, a pupil who is in the 
        post-secondary enrollment options program is counted as 1.25 
        pupil units.  For fiscal year 1999 and later years, a pupil who 
        is in the post-secondary enrollment options program is counted 
        as 1.2 pupil units. 
           (i) In fiscal year 1998, the sum of a district's general 
        education revenue and referendum revenue may not be reduced by 
        more than two percent due to the reduction in the secondary 
        pupil weight from 1.3 as specified in paragraphs (g) and (h).  
        In fiscal year 1999 and later years, the sum of a district's 
        general education revenue and referendum revenue may not be 
        decreased by more than four percent due to the reduction in the 
        secondary weight from 1.3 as specified in paragraphs (g) and (h).
           Sec. 5.  [FISCAL YEAR 1998 AND 1999 APPROPRIATIONS.] 
           The appropriations for the 1998-99 biennium for programs 
        contained in this act shall be $2,943,900,000 for fiscal year 
        1998 and $3,076,600,000 for fiscal year 1999, plus or minus any 
        adjustments due to variance in pupil forecasts, levies, or other 
        factors generating entitlements for the general revenue 
        program.  These amounts shall first be allocated to fully fund 
        the general revenue program.  Amounts remaining shall be 
        allocated to other programs in proportion to the fiscal year 
        1997 appropriations or to entitlements generated by existing law 
        for those programs for each year, up to the amount of the 
        entitlement or the fiscal year 1997 appropriations.  Any amounts 
        remaining after allocation to these other programs shall be 
        maintained for allocation recommendations by the governor and 
        legislature in the 1997 session. 
           Sec. 6.  [BUDGET RESERVE.] 
           $200,000,000 is appropriated from the general fund to the 
        commissioner of finance for transfer to the budget reserve 
        account created in Minnesota Statutes, section 16A.152.  In 
        addition, the commissioner of finance shall transfer to the 
        budget reserve account on July 1, 1995, any unrestricted general 
        fund budgetary balance forecast for fiscal year 1997.  The 
        transfer shall be based on the forecast unrestricted budgetary 
        balance at the end of the 1995 legislative session after giving 
        effect to all tax, revenue, and appropriation laws enacted in 
        the 1995 session. 
                                   ARTICLE 15
                             TARGETED NEEDS REVENUE 
           Section 1.  Minnesota Statutes 1994, section 124.273, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [REVENUE.] A district's limited English 
        proficiency programs revenue for fiscal year 1996 and later 
        equals the product of: 
           (1) the district's base revenue for limited English 
        proficiency programs under this section and section 124.321, 
        times 
           (2) the ratio of: 
           (i) the greater of 20 or the number of pupils of limited 
        English proficiency enrolled in the district during the current 
        fiscal year to 
           (ii) the greater of 20 or the number of pupils of limited 
        English proficiency enrolled in the district during fiscal year 
        1995. 
           Sec. 2.  Minnesota Statutes 1994, section 124.273, is 
        amended by adding a subdivision to read: 
           Subd. 1d.  [LEP BASE REVENUE.] The limited English 
        proficiency programs base revenue equals the sum of the 
        following amounts, computed using fiscal year 1995 data:  
           (1) 68 percent of the salaries paid limited English 
        proficiency program teachers; and 
           (2) for supplies and equipment purchased or rented for use 
        in the instruction of pupils of limited English proficiency an 
        amount equal to 47 percent of the sum actually spent by the 
        district but not to exceed an average of $47 in any one school 
        year for each pupil of limited English proficiency receiving 
        instruction. 
           Sec. 3.  Minnesota Statutes 1994, section 124.273, is 
        amended by adding a subdivision to read: 
           Subd. 1e.  [AID.] A district's limited English proficiency 
        aid for fiscal year 1996 and later equals the aid percentage 
        factor under section 124.3201, subdivision 1, times the 
        district's limited English proficiency revenue. 
           Sec. 4.  [124.312] [TARGETED NEEDS PROGRAM REVENUE.] 
           Subdivision 1.  [USE OF THE REVENUE.] The targeted needs 
        revenue under this section must be used to meet the educational 
        needs of learners whose progress toward meeting state or local 
        content or performance standards is below the level that is 
        appropriate for learners of their age.  Any of the following may 
        be provided to meet these learners needs: 
           (1) remedial or individualized instruction in reading, 
        language arts, mathematics, other content areas, or study skills 
        to improve the achievement level of these learners; 
           (2) additional teachers and teacher aides to provide more 
        individualized instruction to these learners through individual 
        tutoring, lower instructor-to-learner ratios, or team teaching; 
           (3) flexible school day or school year programs that enable 
        these learners to improve their achievement or that provide 
        additional learning opportunities outside of the normal school 
        schedule; 
           (4) comprehensive and on-going staff development consistent 
        with district and site plans according to section 126.70, for 
        teachers, teacher aides, principals, and other personnel to 
        improve their ability to identify the needs of these learners 
        and provide appropriate remediation, intervention, 
        accommodations, or modifications; 
           (5) instructional materials and technology appropriate for 
        meeting the individual needs of these learners; 
           (6) programs established under a desegregation plan 
        mandated by the state board or under court order, to increase 
        learning opportunities and reduce the learning gap between 
        learners living in high concentrations of poverty and their 
        peers; 
           (7) programs to reduce truancy, encourage completion of 
        high school, enhance self-concept, provide health services, 
        provide nutrition services, provide a safe and secure learning 
        environment, provide coordination for learners receiving 
        services from other governmental agencies, provide home visiting 
        services, provide psychological services to determine the level 
        of social, emotional, cognitive, and intellectual development, 
        and provide counseling services, guidance services, and social 
        work services; 
           (8) bilingual programs, bicultural programs, and programs 
        for learners of limited English proficiency; and 
           (9) substantial parent involvement in developing and 
        implementing remedial education or intervention plans for a 
        learner, including learning contracts between the school, the 
        learner, and the parent that establish achievement goals and 
        responsibilities of the learner and the learner's parent or 
        guardian. 
           Subd. 2.  [BUILDING ALLOCATION.] A district must consider 
        the concentration of children from low-income families, children 
        with limited English proficiency, and children with disabilities 
        in each school building in the district when allocating targeted 
        needs revenue. 
           Subd. 3.  [SEPARATE ACCOUNT.] Targeted needs revenue shall 
        be maintained in a separate account to identify expenditures for 
        salaries and programs related to this revenue. 
           Subd. 4.  [INTEGRATION REVENUE.] For fiscal year 1996 and 
        later fiscal years, integration revenue equals the sum of 
        integration aid and integration levy under section 124.912, 
        subdivision 2. 
           Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 and later 
        fiscal years integration aid equals the following amounts: 
           (1) for independent school district No. 709, Duluth, 
        $1,385,000; 
           (2) for independent school district No. 625, St. Paul, 
        $8,090,700; and 
           (3) for special school district No. 1, Minneapolis, 
        $9,368,300. 
           Sec. 5.  [124.313] [TARGETED NEEDS REVENUE.] 
           For fiscal year 1996 and thereafter, a school district's 
        targeted needs revenue equals the sum of: 
           (1) assurance of mastery revenue according to section 
        124.311; plus 
           (2) the district's limited English proficiency revenue 
        computed according to section 124.273, subdivision 1d; plus 
           (3) integration revenue computed according to section 
        124.312, subdivision 4. 
           Sec. 6.  [124.314] [TARGETED NEEDS AID AND LEVY.] 
           Subdivision 1.  [AID.] For fiscal year 1996 and thereafter, 
        a school district's targeted needs aid equals the sum of its 
        assurance of mastery aid according to section 124.311, its 
        limited English proficiency aid according to section 124.273, 
        subdivision 1e, and its integration aid according to section 
        124.312, subdivision 5. 
           Subd. 2.  [LEVY.] For fiscal year 1997 and thereafter, a 
        school district's targeted needs levy equals the sum of its 
        integration levy under section 124.912, subdivision 2, and that 
        portion of its special education levy attributed to the limited 
        English proficiency program. 
           Sec. 7.  Minnesota Statutes 1994, section 124.32, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PROGRAM AND AID APPROVAL.] Before June 1 of each 
        year, each district providing special instruction and services 
        to children with a disability shall submit to the commissioner 
        an application for approval of these programs and their budgets 
        for the next school fiscal year.  The application shall include 
        an enumeration of the costs proposed as eligible for state aid 
        pursuant to this section and of the estimated number and grade 
        level of children with a disability in the district who will 
        receive special instruction and services during the regular 
        school year and in summer school programs during the next school 
        fiscal year.  The application shall also include any other 
        information deemed necessary by the commissioner for the 
        calculation of state aid and for the evaluation of the necessity 
        of the program, the necessity of the personnel to be employed in 
        the program, for determining the amount which the program will 
        receive from grants from federal funds, or special grants from 
        other state sources, and the program's compliance with the rules 
        and standards of the state board.  The commissioner shall review 
        each application to determine whether the program and the 
        personnel to be employed in the program are actually necessary 
        and essential to meet the district's obligation to provide 
        special instruction and services to children with a disability 
        pursuant to sections 120.17 and 120.1701.  The commissioner 
        shall not approve aid pursuant to this section for any program 
        or for the salary of any personnel determined to be unnecessary 
        or unessential on the basis of this review.  The commissioner 
        may also withhold all or any portion of the aid for programs 
        which receive grants from federal funds, or special grants from 
        other state sources.  By August 31 the commissioner shall 
        approve, disapprove or modify each application, and notify each 
        applying district of the action and of the estimated amount of 
        aid for the programs.  The commissioner shall provide procedures 
        for districts to submit additional applications for program and 
        budget approval during the school fiscal year, for programs 
        needed to meet any substantial changes in the needs of children 
        with a disability in the district.  Notwithstanding the 
        provisions of section 124.15, the commissioner may modify or 
        withdraw the program or aid approval and withhold aid pursuant 
        to this section without proceeding according to section 124.15 
        at any time the commissioner determines that the program does 
        not comply with rules of the state board or that any facts 
        concerning the program or its budget differ from the facts in 
        the district's approved application. 
           Sec. 8.  Minnesota Statutes 1994, section 124.32, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SUMMER SCHOOL.] The state shall pay aid for 
        summer school programs for children with a disability on the 
        basis of subdivisions 1b, 1d, and 5 for the current school 
        year.  The state shall also pay to the Minnesota state academy 
        for the deaf or the Minnesota state academy for the blind a part 
        of the salary of each instructional aide assigned to a child 
        attending the academy, if that aide is required by the child's 
        individual education plan.  By March 15 of each year, districts 
        shall submit separate applications for program and budget 
        approval for summer school programs.  The review of these 
        applications shall be as provided in subdivision 7.  By May 1 of 
        each year, the commissioner shall approve, disapprove or modify 
        the applications and notify the districts of the action and of 
        the estimated amount of aid for the summer school programs.  
           Sec. 9.  Minnesota Statutes 1994, section 124.32, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ALLOCATION FROM COOPERATIVE CENTERS, 
        EDUCATIONAL COOPERATIVE SERVICE UNITS, EDUCATION DISTRICTS, AND 
        INTERMEDIATE DISTRICTS.] For purposes of this section, a special 
        education cooperative, service cooperative, education district, 
        or an intermediate district shall allocate its approved 
        expenditures for special education programs among participating 
        school districts.  Special education aid for services provided 
        by a cooperative, service cooperative, education district, or 
        intermediate district shall be paid to the participating school 
        districts. 
           Sec. 10.  [124.3201] [SPECIAL EDUCATION REVENUE.] 
           Subdivision 1.  [DEFINITIONS] For the purposes of this 
        section and sections 124.3202 and 124.321, the definitions in 
        this subdivision apply. 
           (a) "Base year" for fiscal year 1996 means fiscal year 1995.
        Base year for later fiscal years means the second fiscal year 
        preceding the fiscal year for which aid will be paid. 
           (b) "Basic revenue" has the meaning given it in section 
        124A.22, subdivision 2.  For the purposes of computing basic 
        revenue pursuant to this section, each child with a disability 
        shall be counted as prescribed in section 124.17, subdivision 1. 
           (c) "Essential personnel" means teachers, related services, 
        and support services staff providing direct services to students.
           (d) "Average daily membership" has the meaning given it in 
        section 124.17. 
           (e) "Program growth factor" means 1.00 for fiscal year 1998 
        and later. 
           (f) "Aid percentage factor" means 60 percent for fiscal 
        year 1996, 70 percent for fiscal year 1997, 80 percent for 
        fiscal year 1998, 90 percent for fiscal year 1999, and 100 
        percent for fiscal years 2000 and later. 
           (g) "Levy percentage factor" means 100 minus the aid 
        percentage factor for that year. 
           Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] The special 
        education base revenue equals the sum of the following amounts 
        computed using base year data: 
           (1) 68 percent of the salary of each essential person 
        employed in the district's program for children with a 
        disability during the regular school year, whether the person is 
        employed by one or more districts; 
           (2) for the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind, 68 percent of the salary 
        of each instructional aide assigned to a child attending the 
        academy, if that aide is required by the child's individual 
        education plan; 
           (3) for special instruction and services provided to any 
        pupil by contracting with public, private, or voluntary agencies 
        other than school districts, in place of special instruction and 
        services provided by the district, 52 percent of the difference 
        between the amount of the contract and the basic revenue of the 
        district for that pupil for the fraction of the school day the 
        pupil receives services under the contract; 
           (4) for special instruction and services provided to any 
        pupil by contracting for services with public, private, or 
        voluntary agencies other than school districts, that are 
        supplementary to a full educational program provided by the 
        school district, 52 percent of the amount of the contract for 
        that pupil; 
           (5) for supplies and equipment purchased or rented for use 
        in the instruction of children with a disability an amount equal 
        to 47 percent of the sum actually expended by the district but 
        not to exceed an average of $47 in any one school year for each 
        child with a disability receiving instruction; and 
           (6) for fiscal years 1997 and later, special education base 
        revenue shall include amounts under clauses (1) to (5) for 
        special education summer programs provided during that fiscal 
        year. 
           Subd. 3.  [ADJUSTED SPECIAL EDUCATION BASE REVENUE.] For 
        fiscal year 1996 and later, a district's adjusted special 
        education base revenue equals the district's special education 
        base revenue times the ratio of the district's average daily 
        membership for the current school year to the district's average 
        daily membership for the base year. 
           Subd. 4.  [STATE TOTAL SPECIAL EDUCATION REVENUE.] The 
        state total special education revenue for fiscal year 1996 
        equals $327,846,000.  The state total special education revenue 
        for fiscal year 1997 equals $347,810,000.  The state total 
        special education revenue for later fiscal years equals:  
           (1) the state total special education revenue for the 
        preceding fiscal year; times 
           (2) the program growth factor; times 
           (3) the ratio of the state total average daily membership 
        for the current fiscal year to the state total average daily 
        membership for the preceding fiscal year. 
           Subd. 5.  [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] A 
        school district's special education revenue for fiscal year 1996 
        and later equals the state total special education revenue times 
        the ratio of the district's adjusted special education base 
        revenue to the state total adjusted special education base 
        revenue.  If the state board of education modifies its rules for 
        special education in a manner that increases a school district's 
        special education obligations or service requirements, the 
        commissioner of education shall annually increase each 
        district's special education revenue by the amount necessary to 
        compensate for the increased service requirements.  The 
        additional revenue equals the cost in the current year 
        attributable to rule changes not reflected in the computation of 
        special education base revenue, multiplied by the appropriate 
        percentages from subdivision 2. 
           Subd. 6.  [SPECIAL EDUCATION AID.] A school district's 
        special education aid for fiscal year 1996 and later equals the 
        district's special education revenue times the aid percentage 
        factor for that year. 
           Subd. 7.  [REVENUE ALLOCATION FROM COOPERATIVE CENTERS AND 
        INTERMEDIATES.] For the purposes of this section and section 
        124.321, a special education cooperative or an intermediate 
        district shall allocate its approved expenditures for special 
        education programs among participating school districts.  
           Sec. 11.  [124.3202] [SPECIAL EDUCATION SUMMER PROGRAM 
        REVENUE.] 
           Subdivision 1.  [SUMMER PROGRAM BASE REVENUE.] The summer 
        program base revenue for fiscal year 1996 equals the sum of the 
        following amounts computed using base year data: 
           (1) 68 percent of the summer program salary of each 
        essential person employed in the district's program for children 
        with a disability, whether the person is employed by one or more 
        districts; 
           (2) for the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind, 68 percent of the summer 
        program salary of each instructional aide assigned to a child 
        attending the academy, if that aide is required by the child's 
        individual education plan; 
           (3) for special instruction and services provided to any 
        pupil by contracting with public, private, or voluntary agencies 
        other than school districts, in place of special instruction and 
        services provided by the district, 52 percent of the difference 
        between the amount of the contract for the summer program and 
        the basic revenue of the district for that pupil for the 
        fraction of the school day the pupil receives services under the 
        contract; and 
           (4) for special instruction and services provided to any 
        pupil by contracting for services with public, private, or 
        voluntary agencies other than school districts, that are 
        supplementary to a full educational program provided by the 
        school district, 52 percent of the amount of the summer program 
        contract for that pupil. 
           Subd. 2.  [ADJUSTED SUMMER PROGRAM BASE REVENUE.] For 
        fiscal year 1996 and later, a district's adjusted summer program 
        base revenue equals the district's summer program base revenue 
        times the ratio of the district's average daily membership for 
        the current school year to the district's average daily 
        membership for the base year. 
           Subd. 3.  [STATE TOTAL SUMMER PROGRAM REVENUE.] The state 
        total summer program revenue for fiscal year 1996 equals 
        $7,152,000. 
           Subd. 4.  [SCHOOL DISTRICT SUMMER PROGRAM REVENUE.] A 
        school district's summer program revenue for fiscal year 1996 
        equals the state total summer program revenue times the ratio of 
        the district's adjusted summer program base revenue to the state 
        total adjusted summer program base revenue. 
           Subd. 5.  [SPECIAL EDUCATION SUMMER PROGRAM AID.] A school 
        district's special education summer program aid for fiscal year 
        1996 equals the district's summer program revenue times the aid 
        percentage factor for that year. 
           Subd. 6.  [REVENUE ALLOCATION FROM COOPERATIVE CENTERS AND 
        INTERMEDIATES.] For the purposes of this section and section 
        124.321, a special education cooperative or an intermediate 
        district shall allocate its approved expenditures for special 
        education programs among participating school districts.  
        Special education summer program aid for services provided by a 
        cooperative or intermediate district shall be paid to the 
        participating school districts. 
           Sec. 12.  Minnesota Statutes 1994, section 124.321, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LEVY EQUALIZATION REVENUE.] (a) For fiscal 
        years 1996 and later, special education levy equalization 
        revenue for a school district, excluding an intermediate school 
        district, equals the sum of the following amounts: 
           (1) 68 percent of the salaries paid to essential personnel 
        in that district minus the amount of state aid and any federal 
        aid, if applicable, paid to that district for salaries of these 
        essential personnel under section 124.32, subdivisions 1b and 
        10, for the year to which the levy is attributable, plus 
           (2) 68 percent of the salaries paid to essential personnel 
        in that district minus the amount of state aid and any federal 
        aid, if applicable, paid to that district for salaries of those 
        essential personnel under section 124.574, subdivision 2b, for 
        the year to which the levy is attributable, plus 
           (3) 68 percent of the salaries paid to limited English 
        proficiency program teachers in that district minus the amount 
        of state aid and any federal aid, if applicable, paid to that 
        district for salaries of these teachers under section 124.273, 
        subdivision 1b, for the year to which the levy is attributable, 
        plus 
           (4) the alternative delivery levy revenue determined 
        according to section 124.322, subdivision 4, plus 
           (5) the amount allocated to the district by special 
        education cooperatives or intermediate districts in which it 
        participates according to subdivision 2. 
           A district that receives alternative delivery levy revenue 
        according to section 124.322, subdivision 4, shall not receive 
        levy equalization revenue under clause (1) or subdivision 2, 
        clause (1), for the same fiscal year. 
           (1) the levy percentage factor for that year times the 
        district's special education revenue under section 124.3201; 
        plus 
           (2) the levy percentage factor for that year times the 
        district's special education summer program revenue under 
        section 124.3202; plus 
           (3) the levy percentage factor for that year times the 
        district's special education excess cost revenue under section 
        124.323; plus 
           (4) the levy percentage factor for that year times the 
        district's secondary vocational education for children with a 
        disability revenue under section 124.574; plus 
           (5) the levy percentage factor for that year times the 
        district's limited English proficiency programs revenue under 
        section 124.273. 
           Sec. 13.  Minnesota Statutes 1994, section 124.321, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REVENUE ALLOCATION FROM COOPERATIVES AND 
        INTERMEDIATE DISTRICTS STATE ACADEMIES.] (a) For purposes of 
        this section, a special education cooperative or an intermediate 
        district shall allocate to participating school districts the 
        sum of the following amounts: 
           (1) 68 percent of the salaries paid to essential personnel 
        in that cooperative or intermediate district minus the amount of 
        state aid and any federal aid, if applicable, paid to that 
        cooperative or intermediate district for salaries of these 
        essential personnel under section 124.32, subdivisions 1b and 
        10, for the year to which the levy is attributable, plus 
           (2) 68 percent of the salaries paid to essential personnel 
        in that district minus the amount of state aid and any federal 
        aid, if applicable, paid to that district for salaries of those 
        essential personnel under section 124.574, subdivision 2b, for 
        the year to which the levy is attributable, plus 
           (3) 68 percent of the salaries paid to limited English 
        proficiency program teachers in that cooperative or intermediate 
        district minus the amount of state aid and any federal aid, if 
        applicable, paid to that cooperative or intermediate district 
        for salaries of these teachers under section 124.273, 
        subdivision 1b, for the year to which the levy is attributable. 
           (b) A special education cooperative or an intermediate 
        district that allocates amounts to participating school 
        districts under this subdivision must report the amounts 
        allocated to the department of education. 
           (c) For purposes of this subdivision section, the Minnesota 
        state academy for the deaf or the Minnesota state academy for 
        the blind each year shall allocate an amount equal to 68 percent 
        of salaries paid to instructional aides in either academy minus 
        the amount of state aid and any federal aid, if applicable, paid 
        to either academy for salaries of these instructional aides 
        under sections 124.32, subdivisions 1b and 10, the levy 
        percentage factor for that year times their special education 
        revenue under section 124.3201 and their special education 
        summer program revenue under section 124.3202 for the year to 
        each school district that assigns a child with an individual 
        education plan requiring an instructional aide to attend either 
        academy.  The school districts that assign a child who requires 
        an instructional aide may make a levy in the amount of the costs 
        allocated to them by either academy. 
           (d) (b) When the Minnesota state academy for the deaf or 
        the Minnesota state academy for the blind allocates unreimbursed 
        portions of salaries of instructional aides revenue among school 
        districts that assign a child who requires an instructional 
        aide, for purposes of the districts making a levy under this 
        subdivision, the academy shall provide information to the 
        department of education on the amount of unreimbursed costs of 
        salaries revenue it allocated to the school districts that 
        assign a child who requires an instructional aide. 
           Sec. 14.  Minnesota Statutes 1994, section 124.322, is 
        amended to read: 
           124.322 [ALTERNATIVE DELIVERY BASE REVENUE ADJUSTMENT.] 
           Subdivision 1.  [ELIGIBILITY.] A district is eligible 
        for an alternative delivery base revenue adjustment if the 
        commissioner of education has approved the application of the 
        district according to section 120.173. 
           Subd. 1a.  [DEFINITIONS BASE REVENUE ADJUSTMENT.] In this 
        section, the definitions in this subdivision apply. 
           (a) "Base revenue" means the following: 
           (1) for the first fiscal year after approval of the 
        district's application, base revenue means the sum of the 
        district's revenue for the preceding fiscal year for its special 
        education program under sections 124.32, subdivisions 1b, 1d, 2, 
        5, and 10, and 124.321, subdivision 1; 
           (2) for the second fiscal year after approval of a 
        district's application, base revenue means the sum of the 
        district's revenue for the second prior fiscal year for its 
        special education program under sections 124.32, subdivisions 
        1b, 1d, 2, 5, and 10, and 124.321, subdivision 1; and 
           (3) For the third fiscal year after approval of a 
        district's application, and thereafter, the special education 
        base revenue under section 124.3201, subdivision 1, and the 
        summer program base revenue means the sum of the revenue a 
        district would have been entitled to in the second prior fiscal 
        year for its special education program under sections 124.32, 
        subdivisions 1b, 1d, 2, 5, and 10, and 124.321, subdivision 
        1, under section 124.3202, subdivision 1, shall be computed 
        based on activities defined as reimbursable under state board 
        rules for special education and nonspecial education students, 
        and additional activities as detailed and approved by the 
        commissioner of education. 
           (b) "Base aid" means the following: 
           (1) for the first fiscal year after approval of a 
        district's application, base aid means the sum of the district's 
        gross aid for the preceding fiscal year for its special 
        education program under section 124.32, subdivisions 1b, 1d, 2, 
        5, and 10; 
           (2) for the second fiscal year after approval of a 
        district's application, base aid means the sum of the district's 
        gross aid for the second prior fiscal year for its special 
        education program under section 124.32, subdivisions 1b, 1d, 2, 
        5, and 10; and 
           (3) for the third fiscal year after approval of a 
        district's application and thereafter, base aid means the sum of 
        the gross aid the district would have been entitled to in the 
        second prior fiscal year for its special education program under 
        section 124.32, subdivisions 1b, 1d, 2, 5, and 10, based on 
        activities defined as reimbursable under state board of 
        education rules for special education and nonspecial education 
        students, and additional activities as detailed and approved by 
        the commissioner of education in the application plan. 
           (c) Notwithstanding paragraphs (a) and (b), base revenue 
        and base aid for 1995 and later fiscal years must not include 
        revenue and aid under section 124.32, subdivision 5. 
           (d) "Alternative delivery revenue inflator" means: 
           (1) for the first fiscal year after approval of a 
        district's application, the greater of 1.017 or the ratio of (i) 
        the statewide average special education revenue under sections 
        124.32 and 124.321 per pupil in average daily membership for the 
        current fiscal year, to (ii) the statewide average special 
        education revenue per pupil in average daily membership for the 
        previous fiscal year. 
           (2) for the second and later fiscal years, the greater of 
        1.034 or the ratio of (i) the statewide average special 
        education revenue under sections 124.32 and 124.321 per pupil in 
        average daily membership for the current fiscal year, to (ii) 
        the statewide average special education revenue per pupil in 
        average daily membership for the second prior fiscal year. 
           (e) The commissioner of education shall adjust each 
        district's base revenue and base aid to reflect any changes in 
        special education services required by rule or statute.  
           Subd. 2.  [AMOUNT OF ALTERNATIVE DELIVERY REVENUE.] For the 
        first fiscal year after approval of an application, a district's 
        alternative delivery revenue equals its base revenue multiplied 
        by the product of the alternative delivery revenue inflator 
        times the ratio of the district's average daily membership for 
        the current fiscal year to the district's average daily 
        membership for the immediately preceding fiscal year.  For the 
        second and later fiscal years a district's alternative delivery 
        revenue equals its base revenue multiplied by the product of the 
        alternative delivery revenue inflator times the ratio of the 
        district's average daily membership for the current fiscal year 
        to the district's average daily membership for the second 
        preceding fiscal year. 
           Subd. 3.  [ALTERNATIVE DELIVERY AID.] For the first fiscal 
        year after approval of an application, a district's alternative 
        delivery aid equals its base aid multiplied by the product of 
        1.017 times the ratio of the district's average daily membership 
        for the current fiscal year to the district's average daily 
        membership for the preceding fiscal year.  For the second and 
        later fiscal years a district's alternative delivery aid equals 
        its base aid multiplied by the product of 1.034 times the ratio 
        of the district's average daily membership for the current 
        fiscal year to the district's average daily membership for the 
        second preceding fiscal year.  A district that receives aid 
        under this subdivision shall not receive aid under section 
        124.32, subdivisions 1b, 1d, 2, 5, and 10, for the same fiscal 
        year. 
           Subd. 4.  [ALTERNATIVE DELIVERY LEVY REVENUE.] A district 
        shall receive alternative delivery levy revenue equal to the 
        difference between the alternative delivery revenue and the 
        alternative delivery aid.  If the alternative delivery aid for a 
        district is prorated, the alternative delivery levy revenue 
        shall be increased by the amount not paid by the state due to 
        proration.  The alternative delivery levy revenue shall be 
        included under section 124.321, subdivision 1, for purposes of 
        computing the special education levy under section 124.321, 
        subdivision 3, and the special education levy equalization aid 
        under section 124.321, subdivision 4. 
           Subd. 5.  [USE OF REVENUE.] Revenue under this section 
        sections 124.3201 and 124.3202 shall be used to implement the 
        approved program.  
           Sec. 15.  Minnesota Statutes 1994, section 124.323, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] In 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, and equipment eligible for revenue under 
        sections 124.32, subdivisions 1b, 1d, 2, and 10, and 124.322, 
        subdivision 2 124.3201, 124.3202, and 124.321; plus 
           (2) expenditures for tuition bills received under section 
        120.17; minus 
           (3) revenue for teachers' salaries, contracted services, 
        supplies, and equipment under sections 124.32, subdivisions 1b, 
        1d, 2, and 10; 124.321, subdivision 1, clause (1); and 124.322, 
        subdivision 2 124.3201, 124.3202, and 124.321; minus 
           (4) tuition receipts under section 120.17. 
           (b) "General revenue," for fiscal year 1996, means the sum 
        of the general education revenue according to section 124A.22, 
        subdivision 1, plus the total referendum revenue according to 
        section 124A.03, subdivision 1e.  For fiscal years 1997 and 
        later, "general revenue" means the sum of the general education 
        revenue according to section 124A.22, subdivision 1, plus the 
        total referendum revenue minus transportation sparsity revenue 
        minus total operating capital revenue. 
           Sec. 16.  Minnesota Statutes 1994, section 124.323, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCESS COST AID REVENUE.] For 1995 1996 and 
        later fiscal years, a district's special education excess 
        cost aid revenue equals the product of: 
           (1) 70 percent of the difference between (i) the district's 
        unreimbursed special education cost per actual pupil unit and 
        (ii) six percent for fiscal year 1996 and 5.7 percent for fiscal 
        year 1997 and later years of the district's general revenue per 
        actual pupil unit, times 
           (2) the district's actual pupil units for that year. 
           Sec. 17.  Minnesota Statutes 1994, section 124.323, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [EXCESS COST AID.] For 1996 and later fiscal 
        years, a district's special education excess cost aid equals the 
        district's special education excess cost revenue times the aid 
        percentage factor for that year. 
           Sec. 18.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [DEFINITIONS.] For the purposes of this section 
        and section 124.321, the definitions in this subdivision apply. 
           (a) "Base year" for fiscal year 1996 means fiscal year 1995.
        Base year for later fiscal years means the second fiscal year 
        preceding the fiscal year for which aid will be paid. 
           (b) "Basic revenue" has the meaning given it in section 
        124A.22, subdivision 2.  For the purposes of computing basic 
        revenue pursuant to this section, each child with a disability 
        shall be counted as prescribed in section 124.17, subdivision 1. 
           (c) "Average daily membership" has the meaning given it in 
        section 124.17. 
           (d) "Program growth factor" means 1.00 for fiscal year 1998 
        and later. 
           (e) "Aid percentage factor" means 60 percent for fiscal 
        year 1996, 70 percent for fiscal year 1997, 80 percent for 
        fiscal year 1998, 90 percent for fiscal year 1999, and 100 
        percent for fiscal year 2000 and later. 
           Sec. 19.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2d.  [BASE REVENUE.] The secondary vocational 
        disabled program base revenue equals the sum of the following 
        amounts computed using base year data: 
           (1) 68 percent of the salary of each essential licensed 
        person who provides direct instructional services to students 
        employed during that fiscal year for services rendered in that 
        district's secondary vocational education programs for children 
        with a disability; 
           (2) 47 percent of the costs of necessary equipment for 
        secondary vocational education programs for children with a 
        disability; 
           (3) 47 percent of the costs of necessary travel between 
        instructional sites by secondary vocational education teachers 
        of children with a disability but not including travel to and 
        from local, regional, district, state, or national vocational 
        student organization meetings; 
           (4) 47 percent of the costs of necessary supplies for 
        secondary vocational education programs for children with a 
        disability but not to exceed an average of $47 in any one school 
        year for each child with a disability receiving these services; 
           (5) for secondary vocational education programs for 
        children with disabilities provided by a contract approved by 
        the commissioner with public, private, or voluntary agencies 
        other than a Minnesota school district or cooperative center, in 
        place of programs provided by the district, 52 percent of the 
        difference between the amount of the contract and the basic 
        revenue of the district for that pupil for the fraction of the 
        school day the pupil receives services under the contract; 
           (6) for secondary vocational education programs for 
        children with disabilities provided by a contract approved by 
        the commissioner with public, private, or voluntary agencies 
        other than a Minnesota school district or cooperative center, 
        that are supplementary to a full educational program provided by 
        the school district, 52 percent of the amount of the contract; 
        and 
           (7) for a contract approved by the commissioner with 
        another Minnesota school district or cooperative center for 
        vocational evaluation services for children with a disability 
        for children that are not yet enrolled in grade 12, 52 percent 
        of the amount of the contract. 
           Sec. 20.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2e.  [ADJUSTED SECONDARY VOCATIONAL-DISABLED BASE 
        REVENUE.] For fiscal year 1996 and later, a district's adjusted 
        secondary vocational-disabled base revenue equals the district's 
        secondary vocational-disabled base revenue times the ratio of 
        the district's average daily membership for the current school 
        year to the district's average daily membership for the base 
        year. 
           Sec. 21.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2f.  [STATE TOTAL SECONDARY VOCATIONAL-DISABLED 
        REVENUE.] The state total secondary vocational-disabled revenue 
        for fiscal year 1996 equals $7,645,000.  The state total 
        secondary vocational-disabled revenue for fiscal year 1997 
        equals $7,960,000.  The state total secondary 
        vocational-disabled revenue for later fiscal years equals:  
           (1) the state total secondary vocational-disabled revenue 
        for the preceding fiscal year; times 
           (2) the program growth factor; times 
           (3) the ratio of the state total average daily membership 
        for the current fiscal year to the state total average daily 
        membership for the preceding fiscal year. 
           Sec. 22.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2g.  [SCHOOL DISTRICT SECONDARY VOCATIONAL-DISABLED 
        REVENUE.] A school district's secondary vocational-disabled 
        revenue for fiscal year 1996 and later equals the state total 
        secondary vocational-disabled revenue times the ratio of the 
        district's adjusted secondary vocational-disabled base revenue 
        to the state total adjusted secondary vocational-disabled base 
        revenue. 
           Sec. 23.  Minnesota Statutes 1994, section 124.574, is 
        amended by adding a subdivision to read: 
           Subd. 2h.  [SCHOOL DISTRICT SECONDARY VOCATIONAL-DISABLED 
        AID.] A school district's secondary vocational-disabled aid for 
        fiscal year 1996 and later equals the district's secondary 
        vocational-disabled revenue times the aid percentage factor for 
        that year. 
           Sec. 24.  Minnesota Statutes 1994, section 124.574, 
        subdivision 9, is amended to read: 
           Subd. 9.  [REVENUE ALLOCATION FROM COOPERATIVE CENTERS AND 
        INTERMEDIATE DISTRICTS.] For purposes of this section and 
        section 124.321, a cooperative center or an intermediate 
        district shall allocate its approved expenditures for secondary 
        vocational programs for children with a disability among 
        participating school districts.  Aid for secondary vocational 
        programs for children with a disability for services provided by 
        a cooperative or intermediate district shall be paid to the 
        participating school districts. 
           Sec. 25.  [HOMESTEAD AND AGRICULTURAL CREDIT ADJUSTMENT.] 
           (a) For the computation of homestead and agricultural aid 
        for taxes payable in 1996, the commissioner of revenue shall 
        reduce a school district's homestead and agricultural aid by an 
        amount equal to the lesser of:  (1) 25 percent of the amount of 
        the district's homestead and agricultural aid for calendar year 
        1995; or (2) an amount equal to one percent times the district's 
        adjusted net tax capacity for assessment year 1994. 
           (b) Prior to the computation of homestead and agricultural 
        aid for taxes payable in 1997, the commissioner of revenue shall 
        reduce the school district's homestead and agricultural aid by 
        an amount equal to the lesser of:  (1) 50 percent of the amount 
        of the district's homestead and agricultural aid for calendar 
        year 1995; or (2) an amount equal to one percent times the 
        district's adjusted net tax capacity for assessment year 1994. 
           (c) Prior to the computation of homestead and agricultural 
        aid for taxes payable in 1998, the commissioner of revenue shall 
        reduce a school district's homestead and agricultural aid by an 
        amount equal to the lesser of:  (1) 75 percent of the amount of 
        the district's homestead and agricultural aid for calendar year 
        1995; or (2) an amount equal to one percent times the district's 
        adjusted net tax capacity for assessment year 1994. 
           (d) Prior to the computation of homestead and agricultural 
        aid for taxes payable in 1999, the commissioner of revenue shall 
        reduce a school district's homestead and agricultural aid by an 
        amount equal to the lesser of:  (1) the amount of the district's 
        homestead and agricultural aid for calendar year 1995; or (2) an 
        amount equal to one percent times the district's adjusted net 
        tax capacity for assessment year 1994. 
           (e) Prior to the computation of homestead and agricultural 
        aid for taxes payable in 2000 and later years, the commissioner 
        of revenue shall reduce a school district's homestead and 
        agricultural aid by an amount equal to the lesser of:  (1) any 
        remaining amount of the district's homestead and agricultural 
        aid; or (2) an amount equal to one percent times the district's 
        adjusted net tax capacity for assessment year 1994. 
           Sec. 26.  [APPROPRIATIONS.] 
           Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
        indicated in this section are appropriated from the general fund 
        or other named fund to the department of education for the 
        fiscal years designated. 
           Subd. 2.  [SPECIAL EDUCATION AID.] For special education 
        aid according to Minnesota Statutes, section 124.32: 
             $195,432,000     .....     1996 
             $236,453,000     .....     1997 
           The 1996 appropriation includes $28,230,000 for 1995 and 
        $206,947,000 for 1996.  
           The 1997 appropriation includes $29,506,000 for 1996 and 
        $206,947,000 for 1997.  
           Subd. 3.  [SPECIAL PUPIL AID.] For special education aid 
        according to Minnesota Statutes, section 124.32, subdivision 6, 
        for pupils with handicaps placed in residential facilities 
        within the district boundaries for whom no district of residence 
        can be determined: 
             $470,000     .....     1996 
             $479,000     .....     1997 
           If the appropriation for either year is insufficient, the 
        appropriation for the other year is available.  If the 
        appropriations for both years are insufficient, the 
        appropriation for special education aid may be used to meet the 
        special pupil obligations. 
           Subd. 4.  [SUMMER SPECIAL EDUCATION AID.] For special 
        education summer program aid according to Minnesota Statutes, 
        section 124.32, subdivision 10: 
             $4,310,000     .....     1996
             $2,610,000     .....     1997 
           The 1996 appropriation is for 1995 summer programs.  
           The 1997 appropriation is for 1996 summer programs provided 
        in fiscal year 1996.  
           Subd. 5.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
        teacher travel for home-based services according to Minnesota 
        Statutes, section 124.32, subdivision 2b: 
             $77,000     .....     1996 
             $80,000     .....     1997 
           The 1996 appropriation includes $11,000 for 1995 and 
        $66,000 for 1996.  
           The 1997 appropriation includes $11,000 for 1996 and 
        $69,000 for 1997.  
           Subd. 6.  [SPECIAL EDUCATION EXCESS COST AID.] For excess 
        cost aid: 
             $6,297,000     .....     1996 
             $12,196,000    .....     1997 
           The 1996 appropriation includes $760,000 for 1995 and 
        $5,537,000 for 1996.  
           The 1997 appropriation includes $976,000 for 1996 and 
        $11,220,000 for 1997. 
           Subd. 7.  [TARGETED NEEDS AID.] For targeted needs aid: 
             $37,682,000    .....     1996 
             $41,597,000    .....     1997 
           (a) Of the 1996 amount, $945,000 is for 1995 LEP aid and 
        $4,359,000 is for 1996 LEP aid.  Of the 1996 amount, $1,979,000 
        is for 1995 AOM aid and $11,555,000 is for 1996 AOM aid.  Of the 
        1996 amount, $18,844,000 is for 1996 integration aid. 
           (b) Of the 1997 amount, $1,089,000 is for 1996 LEP aid and 
        $7,913,000 is for 1997 LEP aid.  Of the 1997 amount, $2,039,000 
        is for 1996 AOM aid and $11,712,000 is for 1997 AOM aid.  Of the 
        1997 amount, $18,844,000 is for 1997 integration aid. 
           (c) As a condition of receiving a grant, each district must 
        continue to report its costs according to the uniform financial 
        accounting and reporting system.  As a further condition of 
        receiving a grant, each district must submit a report to the 
        chairs of the education committees of the legislature about the 
        actual expenditures it made for integration using the grant 
        money including achievement results. These grants may be used to 
        transport students attending a nonresident district under 
        Minnesota Statutes, section 120.062, to the border of the 
        resident district.  A district may allocate a part of the grant 
        to the transportation fund for this purpose. 
           Subd. 8.  [SECONDARY VOCATIONAL; STUDENTS WITH 
        DISABILITIES.] For aid for secondary vocational education for 
        pupils with disabilities according to Minnesota Statutes, 
        section 124.574: 
             $4,489,000     .....     1996 
             $5,424,000     .....     1997 
           The 1996 appropriation includes $590,000 for 1995 and 
        $3,899,000 for 1996.  
           The 1997 appropriation includes $688,000 for 1996 and 
        $4,736,000 for 1997.  
           Subd. 9.  [SPECIAL PROGRAMS EQUALIZATION AID.] For special 
        education levy equalization aid according to Minnesota Statutes, 
        section 124.321: 
             $24,525,000     .....     1996
             $19,030,000     .....     1997
           The 1996 appropriation includes $2,584,000 for 1995 and 
        $21,941,000 for 1996.  
           The 1997 appropriation includes $3,872,000 for 1996 and 
        $15,158,000 for 1997. 
           Subd. 10.  [LOW-INCOME CONCENTRATION GRANTS.] For 
        low-income concentration grants according to Laws 1994, chapter 
        647, article 8, section 43: 
             $1,150,000     .....     1996 
             $1,150,000     .....     1997 
           Sec. 27.  [REPEALER.] 
           Minnesota Statutes 1994, sections 124.273, subdivisions 1b 
        and 2c; 124.32, subdivisions 1b, 1c, 1d, 1f, 2, and 3a; and 
        124.574, subdivisions 2b, 3, 4, and 4a, are repealed. 
                                   ARTICLE 16
                 DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING
           Section 1.  [119A.01] [ABOLISHMENT; ESTABLISHMENT; PURPOSE; 
        AND GOALS.] 
           Subdivision 1.  [ABOLISHMENT.] The position of commissioner 
        of education and the department of education are abolished.  The 
        employees of the department of education are transferred to the 
        department of children, families, and learning under section 
        15.039, subdivision 7. 
           Subd. 2.  [ESTABLISHMENT.] The department of children, 
        families, and learning is established. 
           Subd. 3.  [PURPOSE.] The purpose in creating the department 
        is to increase the capacity of Minnesota communities to 
        measurably improve the well-being of children and families by: 
           (1) coordinating and integrating state funded and locally 
        administered family and children programs; 
           (2) improving flexibility in the design, funding, and 
        delivery of programs affecting children and families; 
           (3) providing greater focus on strategies designed to 
        prevent problems affecting the well-being of children and 
        families; 
           (4) enhancing local decision making, collaboration, and the 
        development of new governance models; 
           (5) improving public accountability through the provision 
        of research, information, and the development of measurable 
        program outcomes; 
           (6) increasing the capacity of communities to respond to 
        the whole child by improving the ability of families to gain 
        access to services; 
           (7) encouraging all members of a community to nurture all 
        the children in the community; and 
           (8) supporting parents in their dual roles as breadwinners 
        and parents. 
           Sec. 2.  [119A.02] [DEFINITIONS.] 
           Subdivision 1.  [APPLICATION.] The definitions in this 
        section apply to this chapter. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of children, families, and learning. 
           Subd. 3.  [DEPARTMENT.] "Department" means the department 
        of children, families, and learning. 
           Subd. 4.  [LOCAL GRANTEE.] "Local grantee" means a local 
        unit of government or an agency or organization that receives 
        funds under section 119A.04. 
           Sec. 3.  [119A.03] [COMMISSIONER.] 
           Subdivision 1.  [GENERAL.] The department is under the 
        administrative control of the commissioner.  The commissioner is 
        appointed by the governor with the advice and consent of the 
        senate.  The commissioner must possess broad knowledge and 
        experience in strengthening children and families.  The 
        commissioner has the general powers as provided in section 
        15.06, subdivision 6. 
           The commissioner's salary must be established according to 
        the procedure in section 15A.081, subdivision 1, in the same 
        range as that specified for the commissioner of finance. 
           Subd. 2.  [DUTIES OF THE COMMISSIONER.] The commissioner 
        shall:  
           (1) identify measurable outcomes by which programs 
        administered by the department will be evaluated at the state 
        and local level; 
           (2) develop linkages with other state departments to ensure 
        coordination and consistent state policies promoting healthy 
        development of children and families; 
           (3) prepare, in consultation with the children's cabinet, 
        the commission on children, youth, and their families, and 
        affected parties, prior to January 1, 1996, and prior to July 1 
        of each year thereafter, guidelines governing planning, 
        reporting, and other procedural requirements necessary to 
        administer this chapter; 
           (4) facilitate inclusive processes when designing or 
        implementing guidelines and strategies to achieve agency goals 
        for children and families listed in section 119A.01, subdivision 
        3; 
           (5) facilitate intergovernmental and public-private 
        partnership strategies necessary to implement this chapter; 
           (6) submit to the federal government, or provide assistance 
        to local governments and organizations in submitting, where 
        appropriate and feasible, requests for federal waivers or 
        recommendations for changes in federal law necessary to carry 
        out the purposes of this chapter; 
           (7) coordinate review of all plans and other documents 
        required under the guidelines provided for in clause (3); 
           (8) coordinate development of the management support system 
        components required for implementation of this chapter; 
           (9) review other programs serving children and families to 
        determine the feasibility for transfer to the department of 
        children, families, and learning or the feasibility of inclusion 
        in the funding consolidation process; and 
           (10) monitor local compliance with this chapter. 
           Sec. 4.  [119A.04] [TRANSFERS FROM OTHER AGENCIES.] 
           Subdivision 1.  [DEPARTMENT OF HUMAN SERVICES.] The powers 
        and duties of the department of human services with respect to 
        the following programs are transferred to the department of 
        children, families, and learning under section 15.039.  The 
        programs needing federal approval to transfer shall be 
        transferred when the federal government grants transfer 
        authority to the commissioner: 
           (1) children's trust fund under sections 257.80 to 257.807; 
           (2) the family services and community-based collaboratives 
        under section 121.8355; 
           (3) the early childhood care and education council under 
        section 256H.195; 
           (4) the child care programs under sections 256H.01 to 
        256H.19; 
           (5) the migrant child care program under section 256.01; 
           (6) the child care resource and referral program under 
        sections 256H.196 and 256H.20; and 
           (7) the child care service development program under 
        sections 256H.21 to 256H.24. 
           Subd. 2.  [DEPARTMENT OF ECONOMIC SECURITY.] The powers and 
        duties of the department of economic security with respect to 
        the following programs are transferred to the department of 
        children, families, and learning under section 15.039 on July 1, 
        1997:  (1) the Head Start program, including Project 
        Cornerstone, under sections 268.912 to 268.916; and (2) 
        community action agency programs and financial assistance under 
        sections 268.52 and 268.54. 
           Subd. 3.  [OFFICE OF STRATEGIC AND LONG-RANGE PLANNING.] 
        The powers and duties of the office of strategic and long-range 
        planning with respect to the following programs are transferred 
        to the department of children, families, and learning under 
        section 15.039.  The programs needing federal approval to 
        transfer shall be transferred when the federal government grants 
        transfer authority to the commissioner: 
           (1) the information redesign project under section 4A.01; 
           (2) the action for children activity under section 4A.01; 
           (3) the teen pregnancy prevention program under section 
        4A.01; and 
           (4) the Minnesota children's initiative project under 
        section 4A.01. 
           Subd. 4.  [DEPARTMENT OF CORRECTIONS.] The powers and 
        duties with respect to the following program is transferred to 
        the department of children, families, and learning under section 
        15.039:  child abuse and child victims services under chapter 
        611A. 
           Subd. 5.  [DEPARTMENT OF PUBLIC SAFETY.] The powers and 
        duties with respect to the following program is transferred to 
        the department of children, families, and learning under section 
        15.039:  drug policy and violence prevention and the community 
        advisory violence prevention councils under sections 299A.29 to 
        299A.37 and 299A.40. 
           Subd. 6.  [FUNDING FOR TRANSFERRED PROGRAMS.] State 
        appropriations for programs transferred under this section may 
        not be used to replace appropriations for K-12 programs. 
           Sec. 5.  [119A.05] [FUNDING CONSOLIDATION.] 
           Subdivision 1.  [AUTHORITY FOR FUNDING CONSOLIDATION.] 
        Notwithstanding existing law governing allocation of funds by 
        local grantees, mode of service delivery, grantee planning and 
        reporting requirements, and other procedural requirements for 
        the grant programs identified in this section, a local grantee 
        may elect to consolidate all or a portion of funding received 
        from the programs under subdivision 5 in a collaboration funding 
        plan, if all conditions specified in this section are 
        satisfied.  County boards, school boards, or governing boards of 
        other grantees may elect not to consolidate funding for a 
        program.  
           For grantees electing consolidation, the commissioner may, 
        with the approval of the board of government innovation and 
        cooperation, waive all provisions of rules inconsistent with the 
        intent of this section.  This waiver authority does not apply to 
        rules governing client protections, due process, or inclusion of 
        clients, parents, cultures, and ethnicities in decision making.  
        Funding to a local grantee must be determined according to the 
        funding formulas or allocation rules governing the individual 
        programs listed in section 119A.04.  
           Subd. 2.  [ACCOUNT.] A consolidated funding account is 
        established under the control of the commissioner of children, 
        families, and learning.  The purpose of this account is to 
        clearly identify and provide accountability for funds previously 
        distributed to local grantees through the individual categorical 
        grant programs in subdivision 5.  By direction of the 
        commissioner, after consultation with the partnership planning 
        team and, upon a finding that the conditions specified in this 
        section have been satisfied, funds must be transmitted to this 
        account and allocated to local grantees by the commissioner. 
           Subd. 3.  [ELIGIBILITY; ACCOUNTABILITY.] To be eligible to 
        receive funding for local consolidation, as provided for in this 
        section, a grantee must meet the following requirements:  
           (1) demonstrate participation by counties and schools in a 
        local collaborative process as defined in section 121.8355 or in 
        a similar process of collaboration with other local governments 
        and community organizations which satisfies the governance and 
        planning guidelines published by the commissioner as provided 
        for in this section; 
           (2) document consultation by counties and schools with 
        community action agencies and other community groups; 
           (3) complete and document, according to guidelines 
        published by the commissioner, a collaborative planning process 
        which clearly identifies:  
           (i) allocation of resources in the collaboration annual 
        funding plan; 
           (ii) a description of the governance structure for the 
        execution of the funding plan; 
           (iii) outcomes consistent with the statewide goals 
        identified in this chapter and in statutes governing previous 
        categorical funding included in the collaboration funding plan; 
        and 
           (iv) indicators sufficient to measure improvement or 
        decline in specified outcomes compared to baseline performance; 
           (4) conduct a public hearing on the funding consolidation 
        plan under section 471.705; 
           (5) agree to periodically report information concerning 
        progress in addressing outcomes, as provided for in guidelines 
        to be published by the commissioner; and 
           (6) execute a written agreement between the commissioner 
        and the local grantees setting forth responsibilities, 
        obligations, and conditions consistent with this section.  The 
        agreement must state that the funds that are being locally 
        consolidated will be used collectively only to achieve the 
        objectives of the separate programs being locally consolidated.  
           Subd. 4.  [GEOGRAPHIC AREA.] The geographic area for a 
        local consolidated funding process must be an entire county, a 
        multicounty area, or, with the approval of the county board and 
        commissioner, a subcounty area, if county funds are used.  The 
        process may provide for coordination of service delivery in 
        jurisdictions that extend across county boundaries. 
           Subd. 5.  [PROGRAMS INCLUDED.] Grant programs transferred 
        to the department of children, families, and learning in section 
        119A.04 and programs transferred from the abolished department 
        of education are eligible for local funding consolidation.  
        Eligibility of any federally funded programs for local funding 
        consolidation is conditioned upon obtaining necessary federal 
        waivers or changes in federal law. 
           Subd. 6.  [ENTRY INTO PROGRAM.] Grantees who meet all 
        requirements of this section may elect to begin using funding 
        for a local consolidated funding process beginning January 1, 
        1996, or at each six-month interval.  Other local grantees that 
        meet all requirements of this section may elect to begin using 
        funding for a local consolidation funding process beginning July 
        1, 1996, or at each six-month interval. 
           Subd. 7.  [SANCTIONS.] If the commissioner finds that a 
        grantee has failed to comply with this section, the grantee 
        becomes subject to all requirements of individual grant programs 
        as specified in statutes and rules. 
           Sec. 6.  Minnesota Statutes 1994, section 256F.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEDERAL REVENUE ENHANCEMENT.] (a) [DUTIES 
        OF THE COMMISSIONER OF HUMAN SERVICES.] The commissioner of 
        human services may enter into an agreement with one or more 
        family services collaboratives to enhance federal reimbursement 
        under Title IV-E of the Social Security Act and federal 
        administrative reimbursement under Title XIX of the Social 
        Security Act.  The commissioner may contract with the department 
        of children, families, and learning for purposes of transferring 
        the federal reimbursement to the commissioner of children, 
        families, and learning to be distributed to the collaboratives 
        according to clause (2).  The commissioner shall have the 
        following authority and responsibilities regarding family 
        services collaboratives: 
           (1) the commissioner shall submit amendments to state plans 
        and seek waivers as necessary to implement the provisions of 
        this section; 
           (2) the commissioner shall pay the federal reimbursement 
        earned under this subdivision to each collaborative based on 
        their earnings.  Notwithstanding section 256.025, subdivision 2, 
        payments to collaboratives for expenditures under this 
        subdivision will only be made of federal earnings from services 
        provided by the collaborative; 
           (3) the commissioner shall review expenditures of family 
        services collaboratives using reports specified in the agreement 
        with the collaborative to ensure that the base level of 
        expenditures is continued and new federal reimbursement is used 
        to expand education, social, health, or health-related services 
        to young children and their families; 
           (4) the commissioner may reduce, suspend, or eliminate a 
        family services collaborative's obligations to continue the base 
        level of expenditures or expansion of services if the 
        commissioner determines that one or more of the following 
        conditions apply: 
           (i) imposition of levy limits that significantly reduce 
        available funds for social, health, or health-related services 
        to families and children; 
           (ii) reduction in the net tax capacity of the taxable 
        property eligible to be taxed by the lead county or 
        subcontractor that significantly reduces available funds for 
        education, social, health, or health-related services to 
        families and children; 
           (iii) reduction in the number of children under age 19 in 
        the county, collaborative service delivery area, subcontractor's 
        district, or catchment area when compared to the number in the 
        base year using the most recent data provided by the state 
        demographer's office; or 
           (iv) termination of the federal revenue earned under the 
        family services collaborative agreement; 
           (5) the commissioner shall not use the federal 
        reimbursement earned under this subdivision in determining the 
        allocation or distribution of other funds to counties or 
        collaboratives; 
           (6) the commissioner may suspend, reduce, or terminate the 
        federal reimbursement to a provider that does not meet the 
        reporting or other requirements of this subdivision; 
           (7) the commissioner shall recover from the family services 
        collaborative any federal fiscal disallowances or sanctions for 
        audit exceptions directly attributable to the family services 
        collaborative's actions in the integrated fund, or the 
        proportional share if federal fiscal disallowances or sanctions 
        are based on a statewide random sample; and 
           (8) the commissioner shall establish criteria for the 
        family services collaborative for the accounting and financial 
        management system that will support claims for federal 
        reimbursement. 
           (b)  [FAMILY SERVICES COLLABORATIVE RESPONSIBILITIES.] The 
        family services collaborative shall have the following authority 
        and responsibilities regarding federal revenue enhancement: 
           (1) the family services collaborative shall be the party 
        with which the commissioner contracts.  A lead county shall be 
        designated as the fiscal agency for reporting, claiming, and 
        receiving payments; 
           (2) the family services collaboratives may enter into 
        subcontracts with other counties, school districts, special 
        education cooperatives, municipalities, and other public and 
        nonprofit entities for purposes of identifying and claiming 
        eligible expenditures to enhance federal reimbursement, or to 
        expand education, social, health, or health-related services to 
        families and children; 
           (3) the family services collaborative must continue the 
        base level of expenditures for education, social, health, or 
        health-related services to families and children from any state, 
        county, federal, or other public or private funding source 
        which, in the absence of the new federal reimbursement earned 
        under this subdivision, would have been available for those 
        services, except as provided in subdivision 1, paragraph (a), 
        clause (4).  The base year for purposes of this subdivision 
        shall be the four-quarter calendar year ending at least two 
        calendar quarters before the first calendar quarter in which the 
        new federal reimbursement is earned; 
           (4) the family services collaborative must use all new 
        federal reimbursement resulting from federal revenue enhancement 
        to expand expenditures for education, social, health, or 
        health-related services to families and children beyond the base 
        level, except as provided in subdivision 1, paragraph (a), 
        clause (4); 
           (5) the family services collaborative must ensure that 
        expenditures submitted for federal reimbursement are not made 
        from federal funds or funds used to match other federal funds.  
        Notwithstanding section 256B.19, subdivision 1, for the purposes 
        of family services collaborative expenditures under agreement 
        with the department, the nonfederal share of costs shall be 
        provided by the family services collaborative from sources other 
        than federal funds or funds used to match other federal funds; 
           (6) the family services collaborative must develop and 
        maintain an accounting and financial management system adequate 
        to support all claims for federal reimbursement, including a 
        clear audit trail and any provisions specified in the agreement; 
        and 
           (7) the family services collaborative shall submit an 
        annual report to the commissioner as specified in the agreement. 
           Sec. 7.  [PARTNERSHIP PLANNING TEAM AND FAMILY ADVISORY 
        GROUP.] 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
        children, families, and learning shall select not more than 15 
        persons knowledgeable about serving children and families to 
        serve on the partnership planning team. 
           The partnership planning team must include representatives 
        from community-based organizations serving primarily communities 
        of color, county boards, school boards, community action 
        agencies, and parents, representing a broad cross-section of 
        income groups, racial and ethnic groups, and ages of children. 
           Subd. 2.  [DUTIES.] The team shall advise the commissioner 
        in the following areas: 
           (1) structure of the department; 
           (2) appropriate department advisory board structure; 
           (3) the appropriateness of specific applications for 
        funding consolidation and the consistency of those applications 
        with the purposes of chapter 119A; 
           (4) potential funding reductions; and 
           (5) technical refinements to the legislation establishing 
        the new department and funding consolidation. 
           Subd. 3.  [REPORT.] The team must also provide a report to 
        the 1996 legislature that describes the new department 
        structure, provides a summary of the ways in which the 
        department is fulfilling the purposes and achieving the goals 
        specified in Minnesota Statutes, section 119A.01, and provides a 
        recommendation for technical refinements related to the 
        legislation creating the department. 
           Sec. 8.  [DEMONSTRATION PROJECT; ALLOWING CONSOLIDATION OF 
        COUNTY PLANS.] 
           Subdivision 1.  [AUTHORIZATION FOR DEMONSTRATION PROJECT.] 
        The commissioners of human services; corrections; health; and 
        children, families, and learning shall allow counties to 
        consolidate the plans required under Minnesota Statutes, 
        chapters 145A, 256E, and 401, into one plan, to be submitted to 
        those commissioners. 
           Subd. 2.  [DUTIES OF COMMISSIONERS.] The several 
        commissioners shall work together and shall work with the 
        counties participating in the pilot project when developing the 
        single county plan.  Each commissioner shall also provide 
        technical assistance to the county, if requested by the county. 
           Subd. 3.  [INTEGRATED COUNTY PLANNING.] The counties 
        participating in the pilot project may submit one plan 
        consolidating the community health, community social services, 
        and community corrections plans required under Minnesota 
        Statutes, chapters 145A, 256E, and 401, respectively.  County 
        boards, corrections advisory boards, community health boards, 
        community action agencies, private industry councils, and school 
        districts shall collaborate in planning for and providing a 
        continuum of services in each county. 
           Subd. 4.  [COUNTY PLAN.] The plan must comply with federal 
        requirements.  The plan may be submitted to the commissioners by 
        computer.  The plan must be a three-part plan in that it must 
        provide a summary of: 
           (1) intracounty collaboration; 
           (2) collaboration with other service providers; and 
           (3) collaboration with local nonprofit organizations, 
        including churches and ecumenical organizations. 
           The two parts of the plan shall each provide information on 
        the existence or nonexistence of efforts to integrate funding, 
        collaborate governance, cross-train, coordinate information 
        gathering and management, and provide a one-stop service center 
        or community-based service delivery system to improve the 
        provision of services offered to children and families.  The 
        plan must also address the barriers to collaboration. 
           Subd. 5.  [COMMISSIONERS' REPORT.] For purposes of this 
        section, the several commissioners shall provide one 
        consolidated report to the legislature by January 1, 1996.  The 
        report shall evaluate the pilot counties' single plan and shall 
        provide the advantages and problems with consolidating the plans.
           Sec. 9.  [REPORT ON STRUCTURE OF AGENCIES.] 
           The commissioner of administration in separate consultation 
        with the commissioners of the departments of human services, 
        health, corrections, public safety, housing finance, and the 
        office of strategic and long-range planning shall prepare a 
        report by February 15, 1996, examining the organization of 
        programs remaining in those departments after transfer of the 
        programs identified in this bill, and identifying alternative 
        organizational structures that may be more effective and 
        efficient than the organization prior to the transfer. 
           Sec. 10.  [WORKER PROVISIONS.] 
           Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
        finds that the reorganization of state agencies, including the 
        abolishment of agencies or their functions and the merger of 
        agency functions to the extent possible, makes the best use of 
        affected agency employees and improves the direct service 
        capabilities of state employees to provide public services to 
        citizens of the state and to customers of the agency.  To ensure 
        that quality services are delivered to citizens of Minnesota, 
        appointing authorities shall comply with this section. 
           Subd. 2.  [RESTRUCTURING PROVISIONS.] The restructuring of 
        agencies required by this act must be conducted in accordance 
        with Minnesota Statutes, sections 15.039 and 43A.045. 
           Subd. 3.  [WORKER PARTICIPATION COMMITTEES.] (a) After the 
        commissioner-designate of children, families, and learning has 
        been appointed, before the restructuring of executive branch 
        agencies under this act, a labor and management committee 
        including representatives of employees and employers must be 
        established and given adequate time to perform the activities 
        prescribed by paragraph (b).  Each exclusive representative of 
        employees shall select a committee member from each of its 
        bargaining units in each affected agency.  The head of each 
        agency shall select an employee member from each unit of 
        employees not represented by an exclusive representative.  The 
        agency head shall also appoint one or more committee members to 
        represent the agency.  The number of members appointed by the 
        agency head, however, may not exceed the total number of members 
        selected by exclusive representatives.  The labor and management 
        committee must be participatory and nonauthoritarian.  Exclusive 
        representatives must be directly involved in the work of the 
        committee. 
           (b) The committee established under paragraph (a) shall: 
           (1) in cooperation with the commissioner of education and 
        the commissioner-designate, review and reevaluate the powers and 
        duties of the department of education and identify those that 
        are consistent with the purpose and goals of the department of 
        children, families, and learning; 
           (2) identify tasks related to agency reorganization and 
        adopt plans for addressing those tasks; 
           (3) identify other employer and employee issues related to 
        reorganization and adopt plans for addressing those issues; 
           (4) adopt plans for implementing this act, including 
        detailed plans for providing retraining for affected employees; 
        and 
           (5) guide the implementation of the reorganization. 
           Subd. 4.  [EMPLOYEE JOB SECURITY.] The head of an agency 
        that is scheduled to be restructured shall meet and negotiate 
        with the exclusive representatives of affected employees of the 
        agency in the event that employees are at risk of being laid off 
        due to restructuring or significant change in the activities of 
        the agency.  Bargaining under this subdivision must have as its 
        purpose the achievement of the highest possible degree of public 
        service delivery to the citizens of Minnesota and the provision 
        of appropriate incentives to state employees.  Incentives may 
        include, but are not limited to, early retirement incentives, 
        negotiated options in place of layoff, methods to mitigate 
        layoffs and the effect of layoffs, job training and retraining 
        opportunities, and enhanced severance. 
           Subd. 5.  [EMPLOYEE TRAINING AND RETRAINING.] The 
        legislature recognizes that a well-trained and well-educated 
        work force is needed to provide effective and efficient public 
        service delivery and that training and retraining of state 
        employees is a priority when merger and reorganization of state 
        agencies occur.  The labor and management committee required by 
        subdivision 2 shall determine the employee training and 
        retraining required because of agency reorganization.  Employees 
        whose job duties are affected by reorganization must be given 
        the opportunity to take part in training or retraining for the 
        new job duties.  Existing employees must be trained or retrained 
        for agency positions before new hiring takes place. 
           Sec. 11.  [APPOINTMENT; TRANSFERS OF EDUCATION FUNCTIONS.] 
           By July 1, 1995, the governor shall appoint a 
        commissioner-designate of the department of children, families, 
        and learning.  The person appointed becomes the governor's 
        appointee as commissioner on the effective date of Minnesota 
        Statutes, sections 119A.01, subdivision 2, and 119A.03.  The 
        commissioner-designee, in cooperation with the commissioner of 
        education, shall review and reevaluate the powers and duties of 
        the department of education and identify those that are 
        consistent with the purpose and goals of the department of 
        children, families, and learning.  The functions identified by 
        the commissioner-designate are transferred to the department of 
        children, families, and learning under Minnesota Statutes, 
        section 15.039, effective October 1, 1995. 
           Sec. 12.  [REPORT ON INTEGRATION WITH OTHER INCOME 
        MAINTENANCE AND ECONOMIC SECURITY PROGRAMS.] 
           The children's cabinet shall prepare a report by November 
        15, 1996, examining the integration of programs in the 
        department of children, families, and learning with income 
        maintenance and economic security programs operated by other 
        departments.  The report shall make recommendations on the 
        appropriate agency placement of the income maintenance and 
        economic security programs reviewed. 
           Sec. 13.  [REVISOR INSTRUCTION.] 
           The revisor of statutes shall identify in Minnesota 
        Statutes and Minnesota Rules all references to the commissioner 
        of education and the department of education and shall make the 
        following terminology changes: 
           (1) all references to the commissioner of education shall 
        be changed to the commissioner of children, families, and 
        learning; 
           (2) all references to the department of education shall be 
        changed to the department of children, families, and learning; 
           (3) all references involving the commissioner of education 
        shall be rewritten to give all relevant responsibilities or 
        authorities to the commissioner of children, families, and 
        learning; and 
           (4) all references to the programs being transferred to the 
        department of children, families, and learning to reflect that 
        those programs are under the jurisdiction of the commissioner of 
        children, families, and learning. 
           The revisor shall prepare a report for the 1996 legislature 
        showing where these changes were made. 
           The changes identified by the revisor shall be made 
        effective October 1, 1995, pursuant to the effective date in 
        section 15. 
           Sec. 14.  [REPEALER.] 
           Laws 1995, chapter 207, article 1, section 9, subdivision 
        3, is repealed effective the day following final enactment. 
           Sec. 15.  [EFFECTIVE DATE.] 
           Section 1, subdivision 1, is effective September 30, 1995.  
        Section 1, subdivisions 2 and 3, and sections 2, 3, 5, 7, and 
        13, are effective October 1, 1995.  Section 4 is effective July 
        1, 1996.  Sections 8 and 10 are effective July 1, 1995.  Section 
        11 is effective the day following final enactment. 
           Presented to the governor May 26, 1995 
           Signed by the governor June 8, 1995, 1:00 p.m.

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