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1998 Minnesota Session Laws

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                            CHAPTER 397-S.F.No. 2082 
                  An act relating to education; recodifying and making 
                  technical amendments to kindergarten through grade 12 
                  education statutes; amending Minnesota Statutes 1996, 
                  sections 120.02, subdivisions 1, 13, 14, 15, and 18; 
                  120.06, subdivisions 1 and 2a; 120.062, subdivisions 
                  4, 5, and 8a; 120.0621, as amended; 120.064, 
                  subdivisions 4, 4a, 5, 7, 9, 11, 12, 13, 14, 15, 17, 
                  19, 20, 21, 22, and 24; 120.075, subdivisions 1, 2, 
                  3a, and 4; 120.0751, subdivisions 1, 2, 3, 4, and 5; 
                  120.0752, subdivisions 1, 2, and 3; 120.08; 120.101, 
                  subdivisions 5a, 7, 8, 9, and 10; 120.102, 
                  subdivisions 1, 3, and 4; 120.103, subdivisions 3, 4, 
                  5, and 6; 120.11; 120.14; 120.17, subdivisions 1, 1b, 
                  2, 3, 3a, 3b, 3d, 4, 4a, 5, 5a, 6, 7, 7a, 8a, 9, 10, 
                  16, 18, and 19; 120.1701, subdivisions 2, 4, 5, 6, 7, 
                  8, 8a, 9, 10, 11, 12, 15, 17, 19, 20, 21, and 22; 
                  120.172, subdivision 2; 120.173, subdivisions 1, 3, 4, 
                  and 6; 120.1811; 120.182; 120.183; 120.185; 120.188; 
                  120.189; 120.190; 120.59; 120.60; 120.61; 120.62; 
                  120.63; 120.64; 120.66; 120.73, subdivisions 1, 2a, 
                  2b, 3, and 4; 120.74; 120.75; 120.76; 120.80; 121.11, 
                  subdivision 7; 121.1115, subdivisions 1 and 2; 
                  121.155; 121.201; 121.203, subdivision 1; 121.207, 
                  subdivisions 2 and 3; 121.585, subdivisions 2, 6, and 
                  7; 121.615, subdivision 11; 121.704; 121.705, 
                  subdivision 2; 121.706; 121.707, subdivisions 3, 4, 5, 
                  6, and 7; 121.708; 121.710, subdivisions 2 and 3; 
                  121.831, subdivisions 6, 7, 8, 9, 10, 11, and 12; 
                  121.835, subdivisions 4, 5, 7, and 8; 121.8355, 
                  subdivisions 2, 3, 5, and 6; 121.88, subdivisions 2, 
                  3, 4, 6, 7, and 9; 121.882, subdivisions 1, 2b, 3, 7, 
                  7a, 8, and 9; 121.885, subdivisions 1 and 4; 121.904, 
                  subdivisions 1, 2, 3, 4c, and 13; 121.906; 121.908; 
                  121.911; 121.912, subdivisions 1a, 1b, 2, 3, 5, and 6; 
                  121.9121, subdivisions 2 and 4; 121.914, subdivisions 
                  2, 3, 4, 5, 6, 7, and 8; 121.917; 122.01; 122.02; 
                  122.03; 122.21; 122.22, subdivisions 1, 4, 5, 6, 7a, 
                  9, 13, 14, 18, 20, and 21; 122.23, subdivisions 2, 2b, 
                  3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 16c, 18, 18a, 
                  and 20; 122.241; 122.242, subdivisions 1, 3, 8, and 9; 
                  122.243; 122.245, subdivision 2; 122.246; 122.247, 
                  subdivisions 2 and 2a; 122.248; 122.25, subdivisions 2 
                  and 3; 122.32; 122.34; 122.355; 122.41; 122.43; 
                  122.44; 122.45, subdivisions 2 and 3a; 122.46; 122.47; 
                  122.48; 122.531, subdivisions 2c, 5a, and 9; 122.5311, 
                  subdivision 1; 122.532, subdivisions 2, 3a, and 4; 
                  122.535, subdivisions 2, 3, 4, 5, and 6; 122.541, 
                  subdivisions 1, 2, 4, 5, 6, and 7; 122.895; 122.91, 
                  subdivisions 2, 2a, 3a, 4, and 6; 122.93, subdivisions 
                  3 and 8; 122.95, subdivisions 1, 1a, 2, and 4; 123.11, 
                  subdivisions 1, 2, 3, 4, and 7; 123.12; 123.13; 
                  123.15; 123.33, subdivisions 1, 2, 2a, 3, 4, 6, 7, 11, 
                  and 11a; 123.335; 123.34, subdivisions 1, 2, 7, 8, 9, 
                  9a, and 10; 123.35, subdivisions 1, 2, 4, 5, 8a, 9b, 
                  12, 13, 15, 19a, 19b, 20, and 21; 123.351, 
                  subdivisions 1, 3, 4, 5, 8, and 8a; 123.3513; 
                  123.3514, subdivisions 3, 4b, 4d, 5, 6, 6b, 7a, and 
                  7b; 123.36, subdivisions 1, 5, 10, 11, 13, and 14; 
                  123.37, subdivisions 1, 1a, and 1b; 123.38, 
                  subdivisions 1, 2, 2a, 2b, and 3; 123.39, subdivisions 
                  1, 2, 8, 8a, 8b, 8c, 8d, 8e, 9a, 11, 12, 13, 14, 15, 
                  and 16; 123.40, subdivisions 1, 2, and 8; 123.41; 
                  123.582, subdivision 2; 123.63; 123.64; 123.66; 
                  123.681; 123.70, subdivisions 2, 4, and 8; 123.702, 
                  subdivisions 1, 1b, 2, 3, 4, 4a, 5, 6, and 7; 123.704; 
                  123.7045; 123.71; 123.72; 123.75, subdivisions 2, 3, 
                  and 5; 123.751, subdivisions 1, 2, and 3; 123.76; 
                  123.78, subdivisions 1a and 2; 123.79, subdivision 1; 
                  123.799, as amended; 123.7991, subdivision 3; 123.801; 
                  123.805; 123.932, subdivision 1b; 123.933; 123.935, 
                  subdivisions 1, 2, 4, 5, and 6; 123.936; 123.9361; 
                  123.9362; 123.947; 124.06; 124.07, subdivision 2; 
                  124.078; 124.08; 124.09; 124.10, subdivisions 1 and 2; 
                  124.12; 124.14, subdivisions 2, 3, 3a, 4, 6, 7, and 8; 
                  124.15, subdivisions 2, 2a, 3, 4, 5, 6, and 8; 124.17, 
                  subdivisions 1f, 2, 2a, 2b, and by adding 
                  subdivisions; 124.175; 124.19, subdivision 5; 124.195, 
                  subdivisions 1, 3, 3a, 3b, 4, 5, 6, and 14; 124.196; 
                  124.2131, subdivisions 1, 2, 3a, 5, 6, 7, 8, 9, and 
                  11; 124.214; 124.225, subdivisions 7f, 8l, 8m, and 9; 
                  124.227; 124.239, subdivision 3; 124.242; 124.248, 
                  subdivisions 1 and 1a; 124.255; 124.26, subdivision 
                  1c; 124.2601, subdivision 7; 124.2605; 124.2615, 
                  subdivision 4; 124.2711, as amended; 124.2713, 
                  subdivision 7; 124.2715, subdivision 3; 124.2716, 
                  subdivisions 1 and 2; 124.2725, subdivision 15; 
                  124.2726, subdivisions 1, 2, and 4; 124.2727, 
                  subdivisions 6a, as added, 6c, as added, and 9; 
                  124.273, subdivisions 3, 4, 6, and 7; 124.276, 
                  subdivisions 1 and 3; 124.278, subdivision 3; 124.311, 
                  subdivision 1; 124.32; 124.3201, subdivisions 5, 6, 
                  and 7; 124.322, subdivision 1; 124.35; 124.37; 124.38, 
                  subdivisions 1, 4a, and 7; 124.381; 124.39; 124.40; 
                  124.41, subdivision 3; 124.42, as amended; 124.431, 
                  subdivisions 4, 5, 6, 10, 12, 13, and 14; 124.44; 
                  124.46, as amended; 124.48, as amended; 124.492; 
                  124.493, subdivision 1; 124.494, subdivisions 1, 2, 
                  2a, 3, 5, and 7; 124.4945; 124.511; 124.573, 
                  subdivisions 2, 2b, 2e, 2f, 3, 3a, and 5a; 124.625; 
                  124.63; 124.646; 124.6462; 124.6469, subdivision 3; 
                  124.647; 124.6471; 124.6472; 124.648, as amended; 
                  124.71, subdivision 1; 124.72; 124.73; 124.74; 124.75; 
                  124.755, subdivisions 2, 3, 4, 5, 6, 7, 8, and 9; 
                  124.82, subdivisions 1 and 3; 124.83, subdivision 8; 
                  124.84, subdivisions 1 and 2; 124.85, subdivisions 2, 
                  2a, 2b, 2c, 5, 6, and 7; 124.86, subdivisions 1, 3, 
                  and 4; 124.90; 124.91, subdivisions 4 and 6; 124.912, 
                  subdivisions 7 and 9; 124.914; 124.916, as amended; 
                  124.918, subdivisions 2, 3, and 7; 124.95, subdivision 
                  1; 124.97; 124A.02, subdivisions 1, 3a, 20, 21, 22, 
                  23, and 24; 124A.029, subdivisions 1, 3, and 4; 
                  124A.03, subdivisions 2, 2a, and 3c; 124A.0311, 
                  subdivisions 2, 3, and 4; 124A.032; 124A.034; 
                  124A.035; 124A.036, as amended; 124A.04, as amended; 
                  124A.22, subdivisions 2a, 5, 8, 12, and 14, as added; 
                  124A.225, subdivisions 4 and 5; 124A.29; 124A.30; 
                  124C.07; 124C.08, subdivisions 2 and 3; 124C.09; 
                  124C.12, subdivision 2; 124C.41, subdivision 4; 
                  124C.45, subdivision 1; 124C.49; 124C.498, as amended; 
                  124C.60, subdivision 2; 124C.72, subdivision 2; 
                  124C.73, subdivision 3; 125.03, subdivisions 1 and 6; 
                  125.04; 125.05, subdivisions 1, 1a, 6, and 8; 125.06; 
                  125.09; 125.11; 125.12, subdivisions 1a, 2, 2a, 3, 3b, 
                  4, 6, 6a, 6b, 7, 8, 9, 9a, 10, 11, and 13; 125.121, 
                  subdivisions 1 and 2; 125.135; 125.138, subdivisions 
                  1, 3, 4, and 5; 125.16; 125.17, subdivisions 2b, 3, 
                  3b, 4, 5, 6, 7, 8, 9, 10, 10a, 11, and 12; 125.18; 
                  125.181; 125.183, subdivisions 1, 4, and 5; 125.184; 
                  125.185, subdivisions 1, 2, 4, 5, and 7; 125.187; 
                  125.188, subdivisions 1, 3, and 5; 125.1885, 
                  subdivision 5; 125.189; 125.1895, subdivision 4; 
                  125.211, subdivision 2; 125.230, subdivisions 4, 6, 
                  and 7; 125.231, subdivision 3; 125.53; 125.54; 125.60, 
                  subdivisions 2, 3, 4, 6a, and 8; 125.611, subdivisions 
                  1 and 13; 125.62, subdivisions 2, 3, and 7; 125.623, 
                  subdivision 3; 125.702; 125.703; 125.704, subdivision 
                  1; 125.705, subdivisions 1, 3, 4, and 5; 125.80; 
                  126.05; 126.12; 126.13; 126.14; 126.15, subdivisions 2 
                  and 3; 126.1995; 126.21, subdivisions 3 and 5; 126.22, 
                  subdivisions 5 and 6; 126.235; 126.239, subdivision 1; 
                  126.262, subdivisions 3 and 6; 126.264; 126.265; 
                  126.266, subdivision 1; 126.267; 126.36, subdivisions 
                  1, 5, and 7; 126.43, subdivisions 1 and 2; 126.48, 
                  subdivisions 1, 2, 3, 4, and 5; 126.49, subdivisions 
                  1, 5, 6, and 8; 126.50; 126.501; 126.51, subdivisions 
                  1a and 2; 126.52, subdivisions 5 and 8; 126.531, 
                  subdivision 1; 126.54, subdivisions 1, 2, 3, 4, 5, and 
                  6; 126.56, subdivision 6; 126.69, subdivision 1; 
                  126.70, subdivisions 1 and 2a; 126.72, subdivisions 3 
                  and 6; 126.78, subdivision 4; 126.84, subdivisions 1, 
                  3, 4, and 5; 126A.01; 126B.01, subdivisions 2 and 4; 
                  126B.10; 127.02; 127.03; 127.04; 127.17, subdivisions 
                  1, 3, and 4; 127.19; 127.20; 127.40, subdivision 4; 
                  127.41; 127.411; 127.412; 127.413; 127.42; 127.44; 
                  127.45, subdivision 2; 127.455; 127.46; 127.47, 
                  subdivision 2; 127.48; 129C.10, subdivisions 3a, 3b, 
                  4, and 6; and 129C.15; Minnesota Statutes 1997 
                  Supplement, sections 120.05; 120.062, subdivisions 3, 
                  6, and 7; 120.064, subdivisions 8, 10, 14a, and 20a; 
                  120.101, subdivisions 5 and 5c; 120.1015; 120.1701, 
                  subdivision 3; 120.181; 121.1113, subdivision 1; 
                  121.615, subdivisions 2, 3, 9, and 10; 121.831, 
                  subdivision 3; 121.88, subdivision 10; 121.882, 
                  subdivision 2; 121.904, subdivision 4a; 121.912, 
                  subdivision 1; 123.35, subdivision 8; 123.3514, 
                  subdivisions 4, 4a, 4e, 6c, and 8; 123.7991, 
                  subdivision 2; 124.155, subdivisions 1 and 2; 124.17, 
                  subdivisions 1 and 4; 124.195, subdivisions 2, 7, and 
                  10; 124.2445; 124.2455; 124.248, subdivisions 3 and 4; 
                  124.26, subdivision 2; 124.2601, subdivision 6; 
                  124.2615, subdivision 2; 124.2713, subdivision 8; 
                  124.321, subdivisions 1 and 2; 124.322, subdivision 
                  1a; 124.323, subdivision 1; 124.41, subdivision 2; 
                  124.431, subdivisions 2 and 11; 124.45, subdivision 2; 
                  124.481; 124.574, subdivision 9; 124.83, subdivision 
                  1; 124.86, subdivision 2; 124.91, subdivision 5; 
                  124.912, subdivisions 1 and 6; 124.918, subdivisions 
                  1, 6, and 8; 124A.22, subdivisions 2, as added, 6, 11, 
                  13, and 13b, as added; 124A.23, subdivisions 1, 2, and 
                  3; 124A.28, subdivision 3; 124C.45, subdivision 1a; 
                  125.05, subdivision 1c; 125.12, subdivision 14; 
                  126.22, subdivisions 2, 3a, and 8; 126.23, subdivision 
                  1; 126.51, subdivision 1; 126.531, subdivision 3; 
                  126.72, subdivision 2; 126.77, subdivision 1; and 
                  129C.10, subdivision 3; proposing coding for new law 
                  as Minnesota Statutes, chapters 120B; and 120C; 
                  repealing Minnesota Statutes 1996, sections 16B.43; 
                  120.71; 120.72; 120.90; 122.52; 122.532, subdivision 
                  1; 122.541, subdivision 3; 123.35, subdivision 10; 
                  123.42; 124.01; 124.19, subdivision 4; 124.2725, 
                  subdivisions 1, 2, 3, 4, 5, 6, 7, 9, 10, 12, 13, 14, 
                  and 16; 124.312, as amended; 124.38, subdivision 9; 
                  124.472; 124.473; 124.474; 124.476; 124.477; 124.478; 
                  124.479; 124.71, subdivision 2; 124A.02, subdivisions 
                  15 and 16; 124A.029, subdivision 2; 124A.03, 
                  subdivision 3b; 124A.22, subdivision 13f; 124A.225, 
                  subdivision 6; 124A.31; 124C.55; 124C.56; 124C.57; 
                  124C.58; 125.10; 126.84, subdivision 6; 127.01; 
                  127.08; 127.09; 127.10; 127.11; 127.12; 127.13; 
                  127.15; 127.16; 127.17, subdivision 2; 127.21; and 
                  127.23; Minnesota Statutes 1997 Supplement, sections 
                  124.2725, subdivision 11; 124.313; 124.314; and 
                  124A.26. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                                  CHAPTER 120A 
                          ENROLLMENT; ATTENDANCE; FEES 
           Section 1.  Minnesota Statutes 1996, section 120.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] For the purposes of this chapter 
        the words, phrases and terms defined in this section shall have 
        the meanings respectively ascribed to given them. 
           Sec. 2.  Minnesota Statutes 1996, section 120.02, 
        subdivision 13, is amended to read: 
           Subd. 13.  [COMMON DISTRICT.] A "Common district" is 
        means any school district validly created and existing as a 
        common school district or joint common school district as of 
        July 1, 1957, or pursuant to the terms of the education code. 
           Sec. 3.  Minnesota Statutes 1996, section 120.02, 
        subdivision 14, is amended to read: 
           Subd. 14.  [INDEPENDENT DISTRICT.] An "Independent district 
        "  is means any school district validly created and existing as 
        an independent, consolidated, joint independent, county or a ten 
        or more township district as of July 1, 1957, or pursuant to the 
        education code. 
           Sec. 4.  Minnesota Statutes 1996, section 120.02, 
        subdivision 15, is amended to read: 
           Subd. 15.  [SPECIAL DISTRICT.] A "Special district" is 
        means a district established by a charter granted by the 
        legislature or by a home rule charter including any 
        district which is designated a special independent school 
        district by the legislature. 
           Sec. 5.  Minnesota Statutes 1996, section 120.02, 
        subdivision 18, is amended to read: 
           Subd. 18.  [SCHOOL DISTRICT TAX.] "School district tax" is 
        means the tax levied and collected to provide the amount of 
        money voted or levied by the district or the board for school 
        purposes. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        120.05, is amended to read: 
           120.05 [PUBLIC SCHOOLS.] 
           Subd. 2.  [DEFINITIONS ELEMENTARY SCHOOL.] (1) "Elementary 
        school" means any school with building, equipment, courses of 
        study, class schedules, enrollment of pupils ordinarily in 
        prekindergarten through grade 6 or any portion thereof, and 
        staff meeting the standards established by the state board of 
        education. 
           The state board of education shall not close a school or 
        deny any state aids to a district for its elementary schools 
        because of enrollment limitations classified in accordance with 
        the provisions of clause (1). 
           (2) Subd. 3.  [MIDDLE SCHOOL.] "Middle school" means any 
        school other than a secondary school giving an approved course 
        of study in a minimum of three consecutive grades above 4th but 
        below 10th with building, equipment, courses of study, class 
        schedules, enrollment, and staff meeting the standards 
        established by the state board of education. 
           (3) Subd. 4.  [SECONDARY SCHOOL.] "Secondary school" means 
        any school with building, equipment, courses of study, class 
        schedules, enrollment of pupils ordinarily in grades 7 through 
        12 or any portion thereof, and staff meeting the standards 
        established by the state board of education. 
           (4) Subd. 5.  [VOCATIONAL CENTER SCHOOL.] A "Vocational 
        center school" is one means any school serving a group of 
        secondary schools with approved areas of secondary vocational 
        training and offering vocational secondary and adult programs 
        necessary to meet local needs and meeting standards established 
        by the state board of education. 
           Sec. 7.  Minnesota Statutes 1996, section 120.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AGE LIMITATIONS; PUPILS.] All schools 
        supported in whole or in part by state funds are public schools. 
        Admission to a public school is free to any person who resides 
        within the district which that operates the school, who is under 
        21 years of age, and who satisfies the minimum age requirements 
        imposed by this section.  Notwithstanding the provisions of any 
        law to the contrary, the conduct of all students under 21 years 
        of age attending a public secondary school shall be is governed 
        by a single set of reasonable rules and regulations promulgated 
        by the school board.  No person shall be admitted to any public 
        school (1) as a kindergarten pupil, unless the pupil is at least 
        five years of age on September 1 of the calendar year in which 
        the school year for which the pupil seeks admission commences; 
        or (2) as a 1st grade student, unless the pupil is at least six 
        years of age on September 1 of the calendar year in which the 
        school year for which the pupil seeks admission commences or has 
        completed kindergarten; except that any school board may 
        establish a policy for admission of selected pupils at an 
        earlier age. 
           Sec. 8.  Minnesota Statutes 1996, section 120.06, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [EDUCATION OF HOMELESS.] Notwithstanding 
        subdivision 1, a school district must not deny free admission to 
        a homeless person of school age solely because the school 
        district cannot determine that the person is a resident of 
        the school district. 
           Sec. 9.  Minnesota Statutes 1997 Supplement, section 
        120.062, subdivision 3, is amended to read: 
           Subd. 3.  [LIMITED ENROLLMENT OF NONRESIDENT PUPILS.] (a) A 
        school board may, by resolution, limit the enrollment of 
        nonresident pupils in its schools or programs according to this 
        section to a number not less than the lesser of: 
           (1) one percent of the total enrollment at each grade level 
        in the district; or 
           (2) the number of district residents at that grade level 
        enrolled in a nonresident district according to this section.  
           (b) A district that limits enrollment of nonresident pupils 
        under paragraph (a) shall report to the commissioner by July 15 
        on the number of nonresident pupils denied admission due to the 
        limitations on the enrollment of nonresident pupils. 
           Sec. 10.  Minnesota Statutes 1996, section 120.062, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PUPIL APPLICATION PROCEDURES.] In order that a 
        pupil may attend a school or program in a nonresident district, 
        the pupil's parent or guardian must submit an application to the 
        nonresident district.  Before submitting an application, the 
        pupil and the pupil's parent or guardian must explore with a 
        school guidance counselor, or other appropriate staff member 
        employed by the district the pupil is currently attending, the 
        pupil's academic or other reason for applying to enroll in a 
        nonresident district.  The pupil's application must identify the 
        reason for enrolling in the nonresident district.  The parent or 
        guardian of a pupil must submit an application by January 15 for 
        initial enrollment beginning the following school year.  The 
        application shall must be on a form provided by the department 
        of children, families, and learning.  A particular school or 
        program may be requested by the parent.  Once enrolled in a 
        nonresident district, the pupil may remain enrolled and is not 
        required to submit annual or periodic applications.  To return 
        to the resident district or to transfer to a different 
        nonresident district, the parent or guardian of the pupil must 
        provide notice to the resident district or apply to a different 
        nonresident district by January 15 for enrollment beginning the 
        following school year. 
           Sec. 11.  Minnesota Statutes 1996, section 120.062, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DESEGREGATION DISTRICT TRANSFERS.] (a) This 
        subdivision applies to a transfer into or out of a district that 
        has a desegregation plan approved by the commissioner of 
        children, families, and learning.  
           (b) An application to transfer may be submitted at any time 
        for enrollment beginning at any time. 
           (c) The parent or guardian of a pupil who is a resident of 
        a district that has a desegregation plan must submit an 
        application to the resident district.  If the district accepts 
        the application, it must forward the application to the 
        nonresident district. 
           (d) The parent or guardian of a pupil who applies for 
        enrollment in a nonresident district that has a desegregation 
        plan must submit an application to the nonresident district.  
           (e) Each district must accept or reject an application it 
        receives and notify the parent or guardian in writing within 30 
        calendar days of receiving the application.  A notification of 
        acceptance must include the date enrollment can begin. 
           (f) If an application is rejected, the district must state 
        the reason for rejection in the notification.  If a district 
        that has a desegregation plan rejects an application for a 
        reason related to the desegregation plan, the district must 
        state with specificity how acceptance of the application would 
        result in noncompliance with state board rules with respect to 
        the school or program for which application was made.  
           (g) If an application is accepted, the parent or guardian 
        must notify the nonresident district in writing within 15 
        calendar days of receiving the acceptance whether the pupil 
        intends to enroll in the nonresident district.  Notice of 
        intention to enroll obligates the pupil to enroll in the 
        nonresident district, unless the school boards of the resident 
        and nonresident districts agree otherwise.  If a parent or 
        guardian does not notify the nonresident district, the pupil may 
        not enroll in that nonresident district at that time, unless the 
        school boards of the resident and nonresident district agree 
        otherwise. 
           (h) Within 15 calendar days of receiving the notice from 
        the parent or guardian, the nonresident district shall notify 
        the resident district in writing of the pupil's intention to 
        enroll in the nonresident district.  
           (i) A pupil enrolled in a nonresident district under this 
        subdivision is not required to make annual or periodic 
        application for enrollment but may remain enrolled in the same 
        district.  A pupil may transfer to the resident district at any 
        time.  
           (j) A pupil enrolled in a nonresident district and applying 
        to transfer into or out of a district that has a desegregation 
        plan must follow the procedures of this subdivision.  For the 
        purposes of this type of transfer, "resident district" means the 
        nonresident district in which the pupil is enrolled at the time 
        of application.  
           (k) A district that has a desegregation plan approved by 
        the state board of education must accept or reject each 
        individual application in a manner that will enable compliance 
        with its desegregation plan. 
           Sec. 12.  Minnesota Statutes 1997 Supplement, section 
        120.062, subdivision 6, is amended to read: 
           Subd. 6.  [NONRESIDENT DISTRICT PROCEDURES.] A district 
        shall notify the parent or guardian in writing by February 15 
        whether the application has been accepted or rejected.  If an 
        application is rejected, the district must state in the 
        notification the reason for rejection.  The parent or guardian 
        shall must notify the nonresident district by March 1 whether 
        the pupil intends to enroll in the nonresident district.  Notice 
        of intent to enroll in the nonresident district obligates the 
        pupil to attend the nonresident district during the following 
        school year, unless the school boards of the resident and the 
        nonresident districts agree in writing to allow the pupil to 
        transfer back to the resident district, or the pupil's parents 
        or guardians change residence to another district.  If a parent 
        or guardian does not notify the nonresident district, the pupil 
        may not enroll in that nonresident district during the following 
        school year, unless the school boards of the resident and 
        nonresident district agree otherwise.  The nonresident district 
        shall must notify the resident district by March 15 of the 
        pupil's intent to enroll in the nonresident district.  The same 
        procedures apply to a pupil who applies to transfer from one 
        participating nonresident district to another participating 
        nonresident district. 
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        120.062, subdivision 7, is amended to read: 
           Subd. 7.  [BASIS FOR DECISIONS.] The school board must 
        adopt, by resolution, specific standards for acceptance and 
        rejection of applications.  Standards may include the capacity 
        of a program, class, or school building.  The school board may 
        not reject applications for enrollment in a particular grade 
        level if the nonresident enrollment at that grade level does not 
        exceed the limit set by the board under subdivision 3.  
        Standards may not include previous academic achievement, 
        athletic or other extracurricular ability, disabling conditions, 
        proficiency in the English language, previous disciplinary 
        proceedings, or the student's district of residence. 
           Sec. 14.  Minnesota Statutes 1996, section 120.062, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [EXCEPTIONS TO DEADLINES.] Notwithstanding 
        subdivision 4, the following pupil application procedures apply: 
           (a) Upon agreement of the resident and nonresident school 
        districts, a pupil may submit an application to a nonresident 
        district after January 15 for enrollment beginning the following 
        school year.  
           (b) If, as a result of entering into, modifying, or 
        terminating an agreement between school boards, a pupil is 
        assigned after December 1 to a different school for enrollment 
        beginning at any time, the pupil, the pupil's siblings, or any 
        other pupil residing in the pupil's residence may submit an 
        application to a nonresident district at any time before July 1 
        for enrollment beginning the following school year. 
           (c) A pupil who becomes a resident of a school district 
        after December 1 may submit an application to a nonresident 
        district on January 15 or any time after that date for 
        enrollment beginning any time before the following December 1. 
           (d) If the commissioner of children, families, and learning 
        and the commissioner of human rights determine that the 
        policies, procedures, or practices of a school district are in 
        violation of Title VI of the Civil Rights Act of 1964 (Public 
        Law Number 88-352) or chapter 363, any pupil in the district may 
        submit an application to a nonresident district at any time for 
        enrollment beginning at any time. 
           For exceptions under this subdivision, the applicant, the 
        applicant's parent or guardian, the district of residence, and 
        the district of attendance must observe, in a prompt and 
        efficient manner, the application and notice procedures in 
        subdivisions 4 and 6, except that the application and notice 
        deadlines do not apply. 
           Sec. 15.  Minnesota Statutes 1996, section 120.0621, as 
        amended by Laws 1997, First Special Session chapter 4, article 
        4, sections 1, 2, and 3, is amended to read: 
           120.0621 [ENROLLMENT OPTIONS PROGRAMS IN BORDER STATES.] 
           Subdivision 1.  [OPTIONS FOR ENROLLMENT IN ADJOINING 
        STATES.] Minnesota pupils and pupils residing in adjoining 
        states may enroll in school districts in the other state 
        according to: 
           (1) section 120.08, subdivision 2; or 
           (2) this section. 
           Subd. 2.  [PUPILS IN MINNESOTA.] A Minnesota resident pupil 
        may enroll in a school district in an adjoining state if the 
        district to be attended borders Minnesota.  
           Subd. 3.  [PUPILS IN BORDERING STATES.] A non-Minnesota 
        pupil who resides in an adjoining state in a school district 
        that borders Minnesota may enroll in a Minnesota school district 
        if either the school board of the district in which the pupil 
        resides or state in which the pupil resides pays tuition to the 
        school district in which the pupil is enrolled. 
           Subd. 3a.  [CANADIAN PUPILS.] A pupil who resides in Canada 
        may enroll in a Minnesota school district if the province in 
        which the pupil resides pays tuition to the school district in 
        which the pupil is enrolled.  A pupil may enroll either full 
        time or part time for all instructional programs and shall be 
        considered eligible for all other purposes for all other 
        programs offered by the district.  The tuition must be an amount 
        that is at least comparable to the tuition specified in section 
        120.08, subdivision 1.  A school district may accept funds from 
        any international agency for these programs. 
           Subd. 4.  [PROCEDURAL REQUIREMENTS.] Except as otherwise 
        provided in this section, the rights and duties set forth in 
        section 120.062 apply to Minnesota pupils, parents, and school 
        districts if a pupil enrolls in a nonresident district according 
        to this section.  
           Subd. 5a.  [TUITION PAYMENTS.] In each odd-numbered year, 
        before March 1, the commissioner shall must agree to rates of 
        tuition for Minnesota elementary and secondary pupils attending 
        in other states for the next two fiscal years when the other 
        state agrees to negotiate tuition rates.  The commissioner shall 
        must negotiate equal, reciprocal rates with the designated 
        authority in each state for pupils who reside in an adjoining 
        state and enroll in a Minnesota school district.  The rates must 
        be at least equal to the tuition specified in section 120.08, 
        subdivision 1.  If the other state does not agree to negotiate a 
        general tuition rate, a Minnesota school district may negotiate 
        a tuition rate with the school district in the other state that 
        sends a pupil to or receives a pupil from the Minnesota school 
        district.  The tuition rate for a pupil with a disability must 
        be equal to the actual cost of instruction and services 
        provided.  The resident district of a Minnesota pupil attending 
        in another state under this section must pay the amount of 
        tuition agreed upon in this section to the district of 
        attendance, prorated on the basis of the proportion of the 
        school year attended. 
           Subd. 5b.  [TRANSPORTATION OF STUDENTS.] (a) The agreement 
        under subdivision 5a with each state must specify that the 
        attending district in each state transport a pupil from the 
        district boundary to the school of attendance.  
           (b) Notwithstanding paragraph (a), the districts of 
        residence and attendance may agree that either district may 
        provide transportation from a pupil's home or agreed upon 
        location to school.  Transportation aid for Minnesota students 
        eligible for aid shall must be paid only for transportation 
        within the resident district. 
           Subd. 6.  [EFFECTIVE IF RECIPROCAL.] This section is 
        effective with respect to South Dakota upon enactment of 
        provisions by South Dakota that the commissioner determines are 
        essentially similar to the provisions for Minnesota pupils in 
        this section.  After July 1, 1993, This section is effective 
        with respect to any other bordering state upon enactment of 
        provisions by the bordering state that the commissioner 
        determines are essentially similar to the provisions for 
        Minnesota pupils in this section. 
           Subd. 7.  [APPEAL TO THE COMMISSIONER.] If a Minnesota 
        school district cannot agree with an adjoining state on a 
        tuition rate for a Minnesota student attending school in that 
        state and that state has met the requirements in subdivision 6, 
        then the student's parent or guardian may request that the 
        commissioner agree on a tuition rate for the student.  The 
        Minnesota school district must pay the amount of tuition the 
        commissioner agrees upon.  
           Sec. 16.  Minnesota Statutes 1996, section 120.075, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREVIOUS ENROLLMENT.] Any pupil who, 
        pursuant to the provisions of Minnesota Statutes 1976, section 
        120.065, or Minnesota Statutes, 1977 Supplement, section 123.39, 
        subdivision 5a, was enrolled on either January 1, 1978, or April 
        5, 1978, in a school district of which the pupil was not a 
        resident may continue in enrollment in that district.  
           Sec. 17.  Minnesota Statutes 1996, section 120.075, 
        subdivision 2, is amended to read: 
           Subd. 2.  [UNDER SCHOOL AGE.] Any child who was under 
        school age on either January 1, 1978, or April 5, 1978, but who 
        otherwise would have qualified pursuant to the provisions of 
        Minnesota Statutes 1976, section 120.065, or Minnesota Statutes, 
        1977 Supplement, section 123.39, subdivision 5a, for enrollment 
        in a school district of which the child was not a resident may 
        enroll in that district.  
           Sec. 18.  Minnesota Statutes 1996, section 120.075, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [ADOPTED CHILD.] Any child who was born on or 
        before January 1, 1978 but who was adopted after January 1, 1978 
        and whose adoptive parent on January 1, 1978 owned property 
        residence upon which would have qualified the child for 
        enrollment pursuant to Minnesota Statutes 1976, section 120.065, 
        in a school district of which the child was not a resident may 
        enroll in that district.  Any child who was born on or before 
        January 1, 1978 but who was adopted after January 1, 1978 and 
        whose adoptive parent on January 1, 1978 owned or was a tenant 
        upon property so as to qualify a child for enrollment pursuant 
        to Minnesota Statutes, 1977 Supplement, section 123.39, 
        subdivision 5a, in a school district of which the child was not 
        a resident may enroll in that district. 
           Sec. 19.  Minnesota Statutes 1996, section 120.075, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SIBLING OF QUALIFIED PUPIL.] Subdivisions 1, 1a, 
        2, 3 and 3a shall also apply to any brother or sister of a 
        qualified pupil who is related to that pupil by blood, adoption, 
        or marriage and to any foster child of that pupil's parents.  
        The enrollment of any pupil pursuant to subdivision 1, 2, 3 or 
        3a and of a brother or sister of that pupil or of a foster child 
        of that pupil's parents pursuant to this subdivision shall must 
        remain subject to the provisions of Minnesota Statutes 1976, 
        section 120.065 and Minnesota Statutes, 1977 Supplement, section 
        123.39, subdivision 5a, as they read on January 1, 1978. 
           Sec. 20.  Minnesota Statutes 1996, section 120.0751, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER MAY PERMIT ENROLLMENT.] The 
        commissioner may permit a pupil to enroll in a school district 
        of which the pupil is not a resident under this section.  
           Sec. 21.  Minnesota Statutes 1996, section 120.0751, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION TO THE COMMISSIONER.] The pupil or 
        the pupil's parent or guardian shall must make application to 
        the commissioner, explaining the particular circumstances which 
        that make the nonresident district the appropriate district of 
        attendance for the pupil.  The application must be signed by the 
        pupil's parent or guardian and the superintendent of the 
        nonresident district.  
           Sec. 22.  Minnesota Statutes 1996, section 120.0751, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CRITERIA FOR APPROVAL.] In approving or 
        disapproving the application the commissioner shall must 
        consider the following:  
           (a) (1) if the circumstances of the pupil are similar or 
        analogous to the exceptions permitted by section 120.075, 
        whether attending school in the district of residence creates a 
        particular hardship for the pupil; or 
           (b) (2) if the pupil has been continuously enrolled for at 
        least two years in a district of which the pupil was not a 
        resident because of an error made in good faith about the actual 
        district of residence, whether attending school in the district 
        of residence creates a particular hardship for the pupil.  If 
        the commissioner finds that a good faith error was made and that 
        attending school in the district of residence would create a 
        particular hardship for the siblings of that pupil or foster 
        children of that pupil's parents, the commissioner may 
        separately approve an application for any or all of the siblings 
        of the pupil who are related by blood, adoption, or marriage and 
        for foster children of the pupil's parents.  
           Sec. 23.  Minnesota Statutes 1996, section 120.0751, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DECISION DEADLINE.] The commissioner shall must 
        render its decision in each case within 60 days of receiving the 
        application in subdivision 2.  
           Sec. 24.  Minnesota Statutes 1996, section 120.0751, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FORMS.] The commissioner shall must provide the 
        forms required by subdivision 2 and shall must adopt the 
        procedures necessary to implement this section. 
           Sec. 25.  Minnesota Statutes 1996, section 120.0752, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ENROLLMENT EXCEPTION.] A pupil may enroll 
        in a school district of which the pupil is not a resident under 
        this section.  
           Sec. 26.  Minnesota Statutes 1996, section 120.0752, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BOARD APPROVAL.] The pupil's parent or guardian 
        must receive the approval of the school board of the nonresident 
        district and the school board of the resident district.  The 
        nonresident school board shall notify the resident school board 
        of the approval. 
           Sec. 27.  Minnesota Statutes 1996, section 120.0752, 
        subdivision 3, is amended to read: 
           Subd. 3.  [11TH AND 12TH GRADE STUDENTS.] Notwithstanding 
        subdivision 2, an 11th or 12th grade pupil who has been enrolled 
        in a district and whose parent or guardian moves to another 
        district, may continue to enroll in the nonresident district 
        upon the approval of the school board of the nonresident 
        district.  The approval of the school board of the pupil's 
        resident district is not required.  
           Sec. 28.  Minnesota Statutes 1996, section 120.08, is 
        amended to read: 
           120.08 [ATTENDANCE; SCHOOL IN ANOTHER STATE; SEVERANCE 
        PAY.] 
           Subdivision 1.  [ATTENDANCE IN ANOTHER STATE.] Any person 
        under 21 years of age residing in any district not maintaining a 
        secondary school who has successfully completed the elementary 
        school may, with the consent of the board of such district, 
        attend any secondary school of a district in an adjoining state 
        willing to admit the person, which if the secondary school is 
        nearer to the place of residence than any duly established 
        secondary school in Minnesota, the distances being measured by 
        the usual traveled routes.  Any tuition charged by the district 
        so attended shall must be paid to the district attended by the 
        district in which the person resides.  This tuition shall must 
        not be more than (a) such the district charges nonresident 
        pupils of that state, (b) the average maintenance cost exclusive 
        of transportation per pupil unit in average daily membership in 
        the school attended, nor (c) the tuition rate provided for in 
        section 124.18, subdivision 2.  
           Any pupil attending a secondary school in an adjoining 
        state for whom tuition is paid from district funds is entitled 
        to transportation services in accordance with Minnesota Statutes.
           Subd. 2.  [TUITION.] A school board of a district 
        maintaining a secondary school may by a majority vote provide 
        for the instruction of any resident pupil attending an 
        elementary school, a middle school, or a secondary school in 
        a school district in an adjoining state.  Any charge for tuition 
        or transportation, by the district in the adjoining state, shall 
        must be paid by the resident district.  The pupil shall must be 
        considered a pupil of the resident district for the purposes of 
        state aid. 
           Subd. 3.  [SEVERANCE PAY.] A district shall must pay 
        severance pay to a teacher who is placed on unrequested leave of 
        absence by the district as a result of an agreement under this 
        section.  A teacher is eligible under this subdivision if the 
        teacher: 
           (1) is a teacher, as defined in section 125.12, subdivision 
        1, but not a superintendent; 
           (2) has a continuing contract with the district according 
        to section 125.12, subdivision 4. 
           The amount of severance pay shall must be equal to the 
        teacher's salary for the school year during which the teacher 
        was placed on unrequested leave of absence minus the gross 
        amount the teacher was paid during the 12 months following the 
        teacher's termination of salary, by an entity whose teachers by 
        statute or rule must possess a valid Minnesota teaching license, 
        and minus the amount a teacher receives as severance or other 
        similar pay according to a contract with the district or 
        district policy.  These entities include, but are not limited 
        to, the school district that placed the teacher on unrequested 
        leave of absence, another school district in Minnesota, an 
        education district, an intermediate school district, a SC, a 
        board formed under section 471.59, a state residential academy, 
        the Lola and Rudy Perpich Minnesota center for arts education, a 
        vocational center, or a special education cooperative.  These 
        entities do not include a school district in another state, a 
        Minnesota public post-secondary institution, or a state agency.  
        Only amounts earned by the teacher as a substitute teacher or in 
        a position requiring a valid Minnesota teaching license shall be 
        subtracted.  A teacher may decline any offer of employment as a 
        teacher without loss of rights to severance pay. 
           To determine the amount of severance pay that is due for 
        the first six months following termination of the teacher's 
        salary, the district may require the teacher to provide 
        documented evidence of the teacher's employers and gross 
        earnings during that period.  The district shall must pay the 
        teacher the amount of severance pay it determines to be due from 
        the proceeds of the levy for this purpose.  To determine the 
        amount of severance pay that is due for the second six months of 
        the 12 months following the termination of the teacher's salary, 
        the district may require the teacher to provide documented 
        evidence of the teacher's employers and gross earnings during 
        that period.  The district shall must pay the teacher the amount 
        of severance pay it determines to be due from the proceeds of 
        the levy for this purpose. 
           A teacher who receives severance pay under this subdivision 
        waives all further reinstatement rights under section 125.12, 
        subdivision 6a or 6b.  If the teacher receives severance pay, 
        the teacher shall must not receive credit for any years of 
        service in the district paying severance pay prior to the year 
        in which the teacher becomes eligible to receive severance pay.  
           The severance pay is subject to section 465.72.  The 
        district may levy annually according to section 124.912, 
        subdivision 1, for the severance pay. 
           Sec. 29.  Minnesota Statutes 1997 Supplement, section 
        120.101, subdivision 5, is amended to read: 
           Subd. 5.  [AGES AND TERMS.] Every child between seven and 
        16 years of age shall must receive instruction.  Every child 
        under the age of seven who is enrolled in a half-day 
        kindergarten, or a full-day kindergarten program on alternate 
        days, or other kindergarten programs shall receive instruction.  
        Except as provided in subdivision 5a, a parent may withdraw a 
        child under the age of seven from enrollment at any time.  
           Sec. 30.  Minnesota Statutes 1996, section 120.101, 
        subdivision 5a, is amended 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. 31.  Minnesota Statutes 1997 Supplement, section 
        120.101, subdivision 5c, is amended to read: 
           Subd. 5c.  [EDUCATION RECORDS.] (a) A school district from 
        which a student is transferring must transmit the student's 
        educational records, within ten business days of 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. 
           (b) A school district that transmits a student's 
        educational records to another school district or other 
        educational entity to which the student is transferring must 
        include in the transmitted records information about 
        disciplinary action taken as a result of any incident in which 
        the student possessed or used a dangerous weapon. 
           Sec. 32.  Minnesota Statutes 1996, section 120.101, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REQUIREMENTS FOR INSTRUCTORS.] A person who is 
        providing instruction to a child must meet at least one of the 
        following requirements:  
           (1) hold a valid Minnesota teaching license in the field 
        and for the grade level taught; 
           (2) be directly supervised by a person holding a valid 
        Minnesota teaching license; 
           (3) successfully complete a teacher competency examination; 
           (4) provide instruction in a school that is accredited by 
        an accrediting agency, recognized according to section 123.935, 
        subdivision 7, or recognized by the state board of education; 
           (5) hold a baccalaureate degree; or 
           (6) be the parent of a child who is assessed according to 
        the procedures in subdivision 8.  
           Any person providing instruction in a public school must 
        meet the requirements of clause (1). 
           Sec. 33.  Minnesota Statutes 1996, section 120.101, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ASSESSMENT OF PERFORMANCE.] (a) Each year the 
        performance of every child who is not enrolled in a public 
        school must be assessed using a nationally norm-referenced 
        standardized achievement examination.  The superintendent of the 
        district in which the child receives instruction and the person 
        in charge of the child's instruction must agree about the 
        specific examination to be used and the administration and 
        location of the examination.  
           (b) To the extent the examination in paragraph (a) does not 
        provide assessment in all of the subject areas in subdivision 6, 
        the parent must assess the child's performance in the applicable 
        subject area.  This requirement applies only to a parent who 
        provides instruction and does not meet the requirements of 
        subdivision 7, clause (1), (2), or (3).  
           (c) If the results of the assessments in paragraphs (a) and 
        (b) indicate that the child's performance on the total battery 
        score is at or below the 30th percentile or one grade level 
        below the performance level for children of the same age, the 
        parent shall must obtain additional evaluation of the child's 
        abilities and performance for the purpose of determining whether 
        the child has learning problems.  
           (d) A child receiving instruction from a nonpublic school, 
        person, or institution that is accredited by an accrediting 
        agency, recognized according to section 123.935, subdivision 7, 
        or recognized by the state board of education, is exempt from 
        the requirements of this subdivision.  
           Sec. 34.  Minnesota Statutes 1996, section 120.101, 
        subdivision 9, is amended to read: 
           Subd. 9.  [LEGITIMATE EXEMPTIONS.] A parent, guardian, or 
        other person having control of a child may apply to a school 
        district to have the child excused from attendance for the whole 
        or any part of the time school is in session during any school 
        year.  Application may be made to any member of the board, a 
        truant officer, a principal, or the superintendent.  The school 
        board of the district in which the child resides may approve the 
        application upon the following being demonstrated to the 
        satisfaction of that board: 
           (1) That the child's bodily or mental condition is such as 
        to prevent attendance at school or application to study for the 
        period required; or 
           (2) That for the school years 1988-1989 through 1999-2000 
        the child has already completed the studies ordinarily required 
        in the 10th grade and that for the school years beginning with 
        the 2000-2001 school year the child has already completed the 
        studies ordinarily required to graduate from high school; or 
           (3) That it is the wish of the parent, guardian, or other 
        person having control of the child, that the child attend for a 
        period or periods not exceeding in the aggregate three hours in 
        any week, a school for religious instruction conducted and 
        maintained by some church, or association of churches, or any 
        Sunday school association incorporated under the laws of this 
        state, or any auxiliary thereof.  This school for religious 
        instruction shall must be conducted and maintained in a place 
        other than a public school building, and in no event it must 
        not, in whole or in part, shall be conducted and maintained at 
        public expense.  However, a child may be absent from school on 
        such days as the child attends upon instruction according to the 
        ordinances of some church. 
           Sec. 35.  Minnesota Statutes 1996, section 120.101, 
        subdivision 10, is amended to read: 
           Subd. 10.  [ISSUING AND REPORTING EXCUSES.] The clerk or 
        any authorized officer of the school board shall must issue and 
        keep a record of such excuses, under such rules as the board may 
        from time to time establish. 
           Sec. 36.  Minnesota Statutes 1997 Supplement, section 
        120.1015, is amended to read: 
           120.1015 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
           A school board's annual school calendar shall must include 
        at least three additional days of student instruction beyond the 
        number of days of student instruction the board formally adopted 
        as its school calendar at the beginning of the 1996-1997 school 
        year. 
           Sec. 37.  Minnesota Statutes 1996, section 120.102, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REPORTS TO SUPERINTENDENT.] The person in 
        charge of providing instruction to a child shall must submit the 
        following information to the superintendent of the district in 
        which the child resides: 
           (1) by October 1 of each school year, the name, age, and 
        address of each child receiving instruction; 
           (2) the name of each instructor and evidence of compliance 
        with one of the requirements specified in section 120.101, 
        subdivision 7; 
           (3) an annual instructional calendar showing that 
        instruction will occur on at least the number of days required 
        under section 120.101, subdivision 5b; and 
           (4) for each child instructed by a parent who meets only 
        the requirement of section 120.101, subdivision 7, clause (6), a 
        quarterly report card on the achievement of the child in each 
        subject area required in section 120.101, subdivision 6. 
           Sec. 38.  Minnesota Statutes 1996, section 120.102, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXEMPTIONS.] A nonpublic school, person, or 
        other institution that is accredited by an accrediting agency, 
        recognized according to section 123.935, or recognized by the 
        state board of education, is exempt from the requirements in 
        subdivisions 1 and 2, except for the requirement in subdivision 
        1, clause (1). 
           Sec. 39.  Minnesota Statutes 1996, section 120.102, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORTS TO THE STATE.] A superintendent shall 
        must make an annual report to the commissioner of children, 
        families, and learning.  The report must include the following 
        information: 
           (1) the number of children residing in the district 
        attending nonpublic schools or receiving instruction from 
        persons or institutions other than a public school; 
           (2) the number of children in clause (1) who are in 
        compliance with section 120.101 and this section; and 
           (3) the names, ages, and addresses of children whom the 
        superintendent has determined are not in compliance with section 
        120.101 and this section.  
           Sec. 40.  Minnesota Statutes 1996, section 120.103, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NOTICE TO PARENTS.] The superintendent shall 
        must notify the parent, in writing, if a child is alleged to be 
        receiving instruction in violation of sections 120.101 and 
        120.102.  The written notification shall must include a list of 
        the specific alleged violations. 
           Sec. 41.  Minnesota Statutes 1996, section 120.103, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FACT-FINDING AND MEDIATION.] If the specified 
        alleged violations of the compulsory attendance requirements are 
        not corrected within 15 days of receipt of the written 
        notification, the superintendent shall must request fact-finding 
        and mediation services from the commissioner of children, 
        families, and learning. 
           Sec. 42.  Minnesota Statutes 1996, section 120.103, 
        subdivision 5, is amended to read: 
           Subd. 5.  [NOTICE TO COUNTY ATTORNEY.] If the alleged 
        violations are not corrected through the fact-finding and 
        mediation process under subdivision 4, the superintendent shall 
        must notify the county attorney of the alleged violations.  The 
        superintendent shall must notify the parents, by certified mail, 
        of the superintendent's intent to notify the county attorney of 
        the alleged violations. 
           Sec. 43.  Minnesota Statutes 1996, section 120.103, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CRIMINAL COMPLAINT; PROSECUTION.] The county 
        attorney in the county in which the alleged violations have 
        occurred has jurisdiction to conduct a prosecution for 
        violations of section 120.101, 120.102, or 120.103.  A criminal 
        complaint may be filed in any court in the county exercising 
        criminal jurisdiction and shall must name the persons neglecting 
        or refusing to comply with section 120.101, 120.102, or 120.103. 
        After the complaint has been filed, a warrant shall must be 
        issued and proceedings in trial shall must commence as provided 
        by law in misdemeanor cases.  
           Sec. 44.  Minnesota Statutes 1996, section 120.11, is 
        amended to read: 
           120.11 [SCHOOL BOARDS AND TEACHERS, DUTIES.] 
           It shall be is the duty of each board through its clerk or 
        other authorized agent or employee, to report the names of 
        children required to attend school, with excuses, if any, 
        granted in such the district, to the superintendent or 
        principals thereof of the district, within the first week of 
        school.  Subsequent excuses granted shall must be forthwith 
        reported in the same manner.  The clerk or principal shall must 
        provide the teachers in the several schools supervised, with the 
        necessary information for the respective grades of school, 
        relating to the list of pupils with excuses granted.  On receipt 
        of the list of such pupils of school age and the excuses granted 
        Within five days after receiving the report, the clerk or 
        principals shall must report the names of children not excused, 
        who are not attending school, with the names and addresses of 
        their parents, to the district superintendent within five days 
        after receiving the report.  
           Sec. 45.  Minnesota Statutes 1996, section 120.14, is 
        amended to read: 
           120.14 [ATTENDANCE OFFICERS.] 
           The board of any district may authorize the employment of 
        attendance officers, who shall must investigate truancy or 
        nonattendance at school, make complaints, serve notice and 
        process, and attend to the enforcement of all laws and district 
        rules regarding school attendance.  When any attendance officer 
        learns of any case of habitual truancy or continued 
        nonattendance of any child required to attend school the officer 
        shall must immediately notify the person having control of such 
        the child to forthwith send to and keep the child in school.  
        The attendance officer shall must also refer a habitual truant 
        child as defined in section 260.015, subdivision 19, and the 
        child's parent or legal guardian to appropriate services and 
        procedures under chapter 260A, if available within the school 
        district.  Attendance officers or other designated school 
        officials shall must ensure that the notice required by section 
        260A.03 for a child who is a continuing truant is sent.  The 
        officer shall must act under the general supervision of 
        the district superintendent. 
           Sec. 46.  Minnesota Statutes 1996, section 120.73, 
        subdivision 1, is amended to read: 
           Subdivision 1.  A school board is authorized to require 
        payment of fees in the following areas: 
           (a) in any program where the resultant product, in excess 
        of minimum requirements and at the pupil's option, becomes the 
        personal property of the pupil; 
           (b) admission fees or charges for extra curricular 
        activities, where attendance is optional; 
           (c) a security deposit for the return of materials, 
        supplies, or equipment; 
           (d) personal physical education and athletic equipment and 
        apparel, although any pupil may personally provide it if it 
        meets reasonable requirements and standards relating to health 
        and safety established by the school board; 
           (e) items of personal use or products which that a student 
        has an option to purchase such as student publications, class 
        rings, annuals, and graduation announcements; 
           (f) fees specifically permitted by any other statute, 
        including but not limited to section 171.04, subdivision 1, 
        clause (1); 
           (g) field trips considered supplementary to a district 
        educational program; 
           (h) any authorized voluntary student health and accident 
        benefit plan; 
           (i) for the use of musical instruments owned or rented by 
        the district, a reasonable rental fee not to exceed either the 
        rental cost to the district or the annual depreciation plus the 
        actual annual maintenance cost for each instrument; 
           (j) transportation of pupils to and from extra curricular 
        activities conducted at locations other than school, where 
        attendance is optional; 
           (k) transportation of pupils to and from school for which 
        aid for fiscal year 1996 is not authorized under Minnesota 
        Statutes 1994, section 124.223, subdivision 1, and for which 
        levy for fiscal year 1996 is not authorized under Minnesota 
        Statutes 1994, section 124.226, subdivision 5, if a district 
        charging fees for transportation of pupils establishes 
        guidelines for that transportation to ensure that no pupil is 
        denied transportation solely because of inability to pay; 
           (l) motorcycle classroom education courses conducted 
        outside of regular school hours; provided the charge shall must 
        not exceed the actual cost of these courses to the school 
        district; 
           (m) transportation to and from post-secondary institutions 
        for pupils enrolled under the post-secondary enrollment options 
        program under section 123.39, subdivision 16.  Fees collected 
        for this service must be reasonable and shall must be used to 
        reduce the cost of operating the route.  Families who qualify 
        for mileage reimbursement under section 123.3514, subdivision 8, 
        may use their state mileage reimbursement to pay this fee.  If 
        no fee is charged, districts shall must allocate costs based on 
        the number of pupils riding the route.  
           Sec. 47.  Minnesota Statutes 1996, section 120.73, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  Students may be required to furnish their own 
        transportation to and from an instructional community-based 
        employment station which that is part of an approved 
        occupational experience secondary vocational program.  As an 
        alternative, a school board may require the payment of 
        reasonable fees for transportation to and from these 
        instructional community-based employment stations.  This 
        subdivision shall only be applied applies to students who 
        receive remuneration for their participation in these programs.  
           Sec. 48.  Minnesota Statutes 1996, section 120.73, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [SCHOOL UNIFORMS.] Notwithstanding section 
        120.74, a school board may require students to furnish or 
        purchase clothing that constitutes a school uniform if the board 
        has adopted a uniform requirement or program for the student's 
        school.  In adopting a uniform requirement, the board shall 
        promote student, staff, parent, and community involvement in the 
        program and account for the financial ability of students to 
        purchase uniforms.  
           Sec. 49.  Minnesota Statutes 1996, section 120.73, 
        subdivision 3, is amended to read: 
           Subd. 3.  Sections 120.71 to 120.76 shall may not preclude 
        the operation of a school store wherein where pupils may 
        purchase school supplies and materials.  
           Sec. 50.  Minnesota Statutes 1996, section 120.73, 
        subdivision 4, is amended to read: 
           Subd. 4.  A school board may waive any such deposit or fee 
        if any pupil or the pupil's parent or guardian is unable to pay 
        it. 
           Sec. 51.  Minnesota Statutes 1996, section 120.74, is 
        amended to read: 
           120.74 [PROHIBITED FEES.] 
           Subdivision 1.  (a) A school board is not authorized to 
        charge fees in the following areas: 
           (1) textbooks, workbooks, art materials, laboratory 
        supplies, towels; 
           (2) supplies necessary for participation in any 
        instructional course except as authorized in sections 120.73 and 
        120.75; 
           (3) field trips which that are required as a part of a 
        basic education program or course; 
           (4) graduation caps, gowns, any specific form of dress 
        necessary for any educational program, and diplomas; 
           (5) instructional costs for necessary school personnel 
        employed in any course or educational program required for 
        graduation; 
           (6) library books required to be utilized for any 
        educational course or program; 
           (7) admission fees, dues, or fees for any activity the 
        pupil is required to attend; 
           (8) any admission or examination cost for any required 
        educational course or program; 
           (9) locker rentals; 
           (10) transportation of pupils (i) for which state 
        transportation aid for fiscal year 1996 is authorized pursuant 
        to Minnesota Statutes 1994, section 124.223, or (ii) for which a 
        levy for fiscal year 1996 is authorized under Minnesota Statutes 
        1994, 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. 
           Subd. 2.  No pupil's rights or privileges, including the 
        receipt of grades or diplomas may be denied or abridged for 
        nonpayment of fees; but this provision shall does not prohibit a 
        school district from maintaining any action provided by law for 
        the collection of such fees authorized by sections 120.73 and 
        120.75. 
           Sec. 52.  Minnesota Statutes 1996, section 120.75, is 
        amended to read: 
           120.75 [HEARING.] 
           Subdivision 1.  [PUBLIC HEARING.] Prior to Before the 
        initiation of any fee not authorized or prohibited by sections 
        120.73 and 120.74, the local school board shall must hold a 
        public hearing within the district upon three weeks published 
        notice in the district's official newspaper, or such notice as 
        is otherwise required for a regular school board meeting given 
        three weeks prior to before the hearing on the proposed adoption 
        of the policy. 
           Sec. 53.  Minnesota Statutes 1996, section 120.76, is 
        amended to read: 
           120.76 [POST-SECONDARY INSTRUCTIONAL PROGRAMS.] 
           Sections 120.71 to 120.76 shall may not be construed to 
        prohibit a school board from charging reasonable fees for goods 
        and services provided in connection with any post-secondary 
        instructional program, including but not limited to vocational 
        technical, veteran farmer cooperative training, and community 
        education programs, and continuing education and evening school 
        programs other than those conducted pursuant to section 124.26.  
           Sec. 54.  Minnesota Statutes 1996, section 123.35, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [SECONDARY SCHOOL PROGRAMS.] The board may 
        permit a person who is over the age of 21 or who has graduated 
        from high school to enroll as a part-time student in a class or 
        program at a secondary school if there is space available.  In 
        determining if there is space available, full-time public school 
        students, shared-time students, and students returning to 
        complete a regular course of study shall be given priority over 
        part-time students seeking enrollment pursuant to this 
        subdivision.  The following are not prerequisites for enrollment:
           (a) (1) residency in the school district; 
           (b) (2) United States citizenship; or 
           (c) (3) for a person over the age of 21, a high school 
        diploma or equivalency certificate.  A person may enroll in a 
        class or program even if that person attends evening school, an 
        adult or continuing education, or a post-secondary educational 
        program or institution. 
           Sec. 55.  Minnesota Statutes 1996, section 127.19, is 
        amended to read: 
           127.19 [OFFICERS, TEACHERS; NEGLECT OF DUTY; PENALTY.] 
           Any school officer, truant officer, public or nonpublic 
        school teacher, principal, district superintendent, or person 
        providing instruction other than a parent refusing, willfully 
        failing, or neglecting to perform any duty imposed by sections 
        120.101 to 120.14 is guilty of a misdemeanor; and, upon 
        conviction,.  All persons found guilty shall be punished for 
        each offense by a fine of not more than $10 or by imprisonment 
        for not more than ten days.  All fines, when collected, shall be 
        paid into the county treasury for the benefit of the school 
        district in which the offense is committed. 
           Sec. 56.  Minnesota Statutes 1996, section 127.20, is 
        amended to read: 
           127.20 [VIOLATIONS; PENALTIES.] 
           Any person who fails or refuses to provide for instruction 
        of a child of whom the person has legal custody, and who is 
        required by section 120.101, subdivision 5, to receive 
        instruction, when notified so to do by a truant officer or other 
        official, or any person who induces or attempts to induce any 
        such child unlawfully to be absent from school, or who knowingly 
        harbors or employs, while school is in session, any child 
        unlawfully absent from school, shall be guilty of a 
        misdemeanor.  Any fines collected shall be paid into the county 
        treasury for the benefit of the school district in which the 
        offense is committed. 
           Sec. 57.  [REPEALER.] 
           Minnesota Statutes 1996, section 120.90, is repealed. 
           Sec. 58.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             120.01                         120A.01
             120.011                        120A.02
             120.0112                       120A.03
             120.02, subd. 1                120A.04, subd. 1
                     subd. 2                         subd. 4
                     subd. 3                         subd. 8
                     subd. 4                         subd. 3
                     subd. 5                         subd. 6
                     subd. 6                         subd. 16
                     subd. 8                         subd. 7
                     subd. 9                         subd. 2
                     subd. 12                        subd. 15
                     subd. 13                        subd. 5
                     subd. 14                        subd. 10
                     subd. 15                        subd. 14
                     subd. 18                        subd. 12
             120.05, subd. 2                120A.04, subd. 9
                     subd. 3                         subd. 11
                     subd. 4                         subd. 13
                     subd. 5                         subd. 17
             120.06, subd. 1                120A.10, subd. 1
                     subd. 2a                        subd. 2
                     subd. 3                         subd. 3
             123.35, subd. 8a               120A.11, subd. 1
                     subd. 8b                        subd. 2
                     subd. 9                         subd. 3
             120.062, subd. 2               120A.12, subd. 1
                      subd. 3                        subd. 2
                      subd. 4                        subd. 3
                      subd. 5                        subd. 4
                      subd. 6                        subd. 5
                      subd. 7                        subd. 6
                      subd. 8a                       subd. 7
                      subd. 9                        subd. 8
                      subd. 10                       subd. 9
                      subd. 11                       subd. 10
                      subd. 12                       subd. 11
             120.0621, subd. 1              120A.13, subd. 1
                       subd. 2                       subd. 2
                       subd. 3                       subd. 3
                       subd. 3a                      subd. 4
                       subd. 4                       subd. 5
                       subd. 5a                      subd. 6
                       subd. 5b                      subd. 7
                       subd. 6                       subd. 8
                       subd. 7                       subd. 9
             120.08                         120A.14
             120.075, subd. 1               120A.15, subd. 1
                      subd. 1a                       subd. 2
                      subd. 2                        subd. 3
                      subd. 3                        subd. 4
                      subd. 3a                       subd. 5
                      subd. 4                        subd. 6
                      subd. 5                        subd. 7
             120.0751                       120A.16
             120.0752                       120A.17
             120.063                        120A.19
             120.101, subd. 1               120A.20, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 4                        subd. 4
                      subd. 5                        subd. 5
                      subd. 5a                       subd. 6
                      subd. 5c                       subd. 7
                      subd. 5d                       subd. 8
                      subd. 6                        subd. 9
                      subd. 7                        subd. 10
                      subd. 8                        subd. 11
                      subd. 9                        subd. 12
                      subd. 10                       subd. 13
             120.102                        120A.21
             120.103                        120A.22
             120.11                         120A.23
             120.14                         120A.24
             120.19                         120A.25
             120.20                         120A.26
             120.1015                       120A.28
             120.106                        120A.29
             120.73, subd. 1                120A.40, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 2b                        subd. 4
                     subd. 3                         subd. 5
                     subd. 4                         subd. 6
             120.74                         120A.41
             120.75                         120A.42
             120.76                         120A.43
                                   ARTICLE 2 
                                  CHAPTER 120B 
                           EDUCATIONAL OPPORTUNITIES 
           Section 1.  [120B.01] [DEFINITIONS.] 
           For purposes of this chapter, the words defined in section 
        120.02 have the same meaning. 
           Sec. 2.  Minnesota Statutes 1996, section 120.064, 
        subdivision 4, is amended to read:  
           Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
        authorize one or more licensed teachers under section 125.05, 
        subdivision 1, to operate a charter school subject to approval 
        by the state board of education.  If a school board elects not 
        to sponsor 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 must sponsor 
        the school according to this section.  The school shall must 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 a charter school.  The affidavit 
        must state the terms and conditions under which the sponsor 
        would authorize a charter school.  The state board must approve 
        or disapprove the sponsor's proposed authorization within 60 
        days of receipt of the affidavit.  Failure to obtain state board 
        approval precludes a sponsor from authorizing the charter school 
        that was the subject of the affidavit.  
           (c) The operators authorized to organize and operate a 
        school shall must 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 must not be conditioned upon the bargaining unit 
        status of the employees of the school.  
           Sec. 3.  Minnesota Statutes 1996, section 120.064, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [CONVERSION OF EXISTING SCHOOLS.] A school board 
        may convert one or more of its existing schools to 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.  
           Sec. 4.  Minnesota Statutes 1996, section 120.064, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CONTRACT.] The sponsor's authorization for a 
        charter school shall must be in the form of a written contract 
        signed by the sponsor and the board of directors of the charter 
        school.  The contract for a charter school shall must be in 
        writing and contain at least the following: 
           (1) a description of a program that carries out one or more 
        of the purposes in subdivision 1; 
           (2) specific outcomes pupils are to achieve under 
        subdivision 10; 
           (3) admission policies and procedures; 
           (4) management and administration of the school; 
           (5) requirements and procedures for program and financial 
        audits; 
           (6) how the school will comply with subdivisions 8, 13, 15, 
        and 21; 
           (7) assumption of liability by the charter school; 
           (8) types and amounts of insurance coverage to be obtained 
        by the charter school; and 
           (9) the term of the contract, which may be up to three 
        years.  
           Sec. 5.  Minnesota Statutes 1996, section 120.064, 
        subdivision 7, is amended to read: 
           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, 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.  
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        120.064, subdivision 8, is amended to read: 
           Subd. 8.  [REQUIREMENTS.] (a) A charter school shall meet 
        all applicable state and local health and safety requirements. 
           (b) A school sponsored by a school board may be located in 
        any district, unless the school board of the district of the 
        proposed location disapproves by written resolution.  If such a 
        school board denies a request to locate within its boundaries a 
        charter school sponsored by another school board, the sponsoring 
        school board may appeal to the state board of education.  If the 
        state board authorizes the school, the state board shall must 
        sponsor the school.  
           (c) A charter school must be nonsectarian in its programs, 
        admission policies, employment practices, and all other 
        operations.  A sponsor may not authorize a charter school or 
        program that is affiliated with a nonpublic sectarian school or 
        a religious institution. 
           (d) Charter schools shall must not be used as a method of 
        providing education or generating revenue for students who are 
        being home-schooled. 
           (e) The primary focus of 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. 
           (f) A charter school may not charge tuition. 
           (g) A charter school is subject to and shall must comply 
        with chapter 363 and section 126.21. 
           (h) A charter school is subject to and shall must 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. 
           (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 children, families, and learning, state auditor, or 
        legislative auditor may conduct financial, program, or 
        compliance audits. 
           (j) A charter school is a school district for the purposes 
        of tort liability under chapter 466.  
           Sec. 7.  Minnesota Statutes 1996, section 120.064, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ADMISSION REQUIREMENTS.] 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 
        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. 
           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 must be accepted by lot. 
           A charter school may not limit admission to pupils on the 
        basis of intellectual ability, measures of achievement or 
        aptitude, or athletic ability.  
           Sec. 8.  Minnesota Statutes 1997 Supplement, section 
        120.064, subdivision 10, is amended to read: 
           Subd. 10.  [PUPIL PERFORMANCE.] A charter school must 
        design its programs to at least meet the outcomes adopted by the 
        state board of education for public school students.  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 for public school students.  
           Sec. 9.  Minnesota Statutes 1996, section 120.064, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EMPLOYMENT AND OTHER OPERATING MATTERS.] A 
        charter school shall must 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.  
           Sec. 10.  Minnesota Statutes 1996, section 120.064, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PUPILS WITH A DISABILITY.] 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.  
           Sec. 11.  Minnesota Statutes 1996, section 120.064, 
        subdivision 13, is amended to read:  
           Subd. 13.  [LENGTH OF SCHOOL YEAR.] A charter school shall 
        must 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.  
           Sec. 12.  Minnesota Statutes 1996, section 120.064, 
        subdivision 14, is amended to read: 
           Subd. 14.  [REPORTS.] 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.  
           Sec. 13.  Minnesota Statutes 1997 Supplement, section 
        120.064, subdivision 14a, is amended to read: 
           Subd. 14a.  [REVIEW AND COMMENT.] The department shall must 
        review and comment on the evaluation, by the chartering school 
        district, of the performance of a charter school before the 
        charter school's contract is renewed.  The information from the 
        review and comment shall be reported to the state board of 
        education in a timely manner.  Periodically, the state board 
        shall report trends or suggestions based on the evaluation of 
        charter school contracts to the education committees of the 
        state legislature.  
           Sec. 14.  Minnesota Statutes 1996, section 120.064, 
        subdivision 15, is amended to read: 
           Subd. 15.  [TRANSPORTATION.] (a) By July 1 of each year, a 
        charter school shall must notify the district in which the 
        school is located and the department of children, families, and 
        learning if it will provide transportation for pupils 
        enrolled at in the school for the fiscal year. 
           (b) If a charter school elects to provide transportation 
        for pupils, the transportation shall must be provided by the 
        charter school within the district in which the charter school 
        is located.  The state shall must 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 must provide the parent or guardian with 
        information regarding the transportation.  
           (c) If a charter school does not elect to provide 
        transportation, transportation for pupils enrolled at the school 
        shall must 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 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.  
           Sec. 15.  Minnesota Statutes 1996, section 120.064, 
        subdivision 17, is amended to read: 
           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.  
           Sec. 16.  Minnesota Statutes 1996, section 120.064, 
        subdivision 19, is amended to read: 
           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 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.  
           Sec. 17.  Minnesota Statutes 1996, section 120.064, 
        subdivision 20, is amended to read: 
           Subd. 20.  [COLLECTIVE BARGAINING.] Employees of the board 
        of directors of a charter school may, if otherwise eligible, 
        organize under chapter 179A and comply with its provisions.  The 
        board of directors of 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 
        shall must 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.  
           Sec. 18.  Minnesota Statutes 1997 Supplement, section 
        120.064, subdivision 20a, is amended to read: 
           Subd. 20a.  [TEACHER AND OTHER EMPLOYEE RETIREMENT.] (a) 
        Teachers in a charter school shall must be public school 
        teachers for the purposes of chapters 354 and 354a. 
           (b) Except for teachers under paragraph (a), employees in a 
        charter school shall must be public employees for the purposes 
        of chapter 353.  
           Sec. 19.  Minnesota Statutes 1996, section 120.064, 
        subdivision 21, is amended to read: 
           Subd. 21.  [CAUSES FOR NONRENEWAL OR TERMINATION.] (a) The 
        duration of the contract with a sponsor shall must 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 must be dissolved according to the applicable provisions 
        of chapter 308A or 317A.  
           Sec. 20.  Minnesota Statutes 1996, section 120.064, 
        subdivision 22, is amended to read: 
           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 must be processed 
        and provided in a prompt manner.  The application and notice 
        deadlines in section 120.062 do not apply under these 
        circumstances.  
           Sec. 21.  Minnesota Statutes 1996, section 120.064, 
        subdivision 24, is amended to read: 
           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 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. 22.  Minnesota Statutes 1996, section 120.17, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SPECIAL INSTRUCTION FOR CHILDREN WITH A 
        DISABILITY.] Every district shall must provide special 
        instruction and services, either within the district or in 
        another district, for children with a disability who are 
        residents of the district and who are disabled as set forth in 
        section 120.03.  Notwithstanding any age limits in laws to the 
        contrary, special instruction and services must be provided from 
        birth until September 1 after the child with a disability 
        becomes 22 years old but shall not extend beyond secondary 
        school or its equivalent, except as provided in section 126.22, 
        subdivision 2.  Local health, education, and social service 
        agencies shall must refer children under age five who are known 
        to need or suspected of needing special instruction and services 
        to the school district.  Districts with less than the minimum 
        number of eligible children with a disability as determined by 
        the state board shall must cooperate with other districts to 
        maintain a full range of programs for education and services for 
        children with a disability.  This subdivision does not alter the 
        compulsory attendance requirements of section 120.101.  
           Sec. 23.  Minnesota Statutes 1996, section 120.17, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [HIGH SCHOOL DIPLOMA.] Upon completion of 
        secondary school or the equivalent, a pupil with a disability 
        who satisfactorily attains the objectives in the pupil's 
        individual education plan shall must be granted a high school 
        diploma that is identical to the diploma granted to a pupil 
        without a disability.  
           Sec. 24.  Minnesota Statutes 1996, section 120.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [METHOD OF SPECIAL INSTRUCTION.] (a) Special 
        instruction and services for children with a disability must be 
        based on the assessment and individual education plan.  The 
        instruction and services may be provided by one or more of the 
        following methods: 
           (1) in connection with attending regular elementary and 
        secondary school classes; 
           (2) establishment of special classes; 
           (3) at the home or bedside of the child; 
           (4) in other districts; 
           (5) instruction and services by special education 
        cooperative centers established under this section, or in 
        another member district of the cooperative center to which the 
        resident district of the child with a disability belongs; 
           (6) in a state residential school or a school department of 
        a state institution approved by the commissioner; 
           (7) in other states; 
           (8) by contracting with public, private, or voluntary 
        agencies; 
           (9) for children under age five and their families, 
        programs and services established through collaborative efforts 
        with other agencies; 
           (10) for children under age five and their families, 
        programs in which children with a disability are served with 
        children without a disability; and 
           (11) any other method approved by the commissioner. 
           (b) Preference shall be given to providing special 
        instruction and services to children under age three and their 
        families in the residence of the child with the parent or 
        primary caregiver, or both, present. 
           (c) The primary responsibility for the education of a child 
        with a disability shall must remain with the district of the 
        child's residence regardless of which method of providing 
        special instruction and services is used.  If a district other 
        than a child's district of residence provides special 
        instruction and services to the child, then the district 
        providing the special instruction and services shall must notify 
        the child's district of residence before the child's individual 
        education plan is developed and shall must provide the district 
        of residence an opportunity to participate in the plan's 
        development.  The district of residence must inform the parents 
        of the child about the methods of instruction that are available.
           (d) Paragraphs (e) to (i) may be cited as the "Blind 
        Persons' Literacy Rights and Education Act." 
           (e) The following definitions apply to paragraphs (f) to 
        (i). 
           "Blind student" means an individual who is eligible for 
        special educational services and who: 
           (1) has a visual acuity of 20/200 or less in the better eye 
        with correcting lenses or has a limited field of vision such 
        that the widest diameter subtends an angular distance of no 
        greater than 20 degrees; or 
           (2) has a medically indicated expectation of visual 
        deterioration. 
           "Braille" means the system of reading and writing through 
        touch commonly known as standard English Braille.  
           "Individualized education plan" means a written statement 
        developed for a student eligible for special education and 
        services pursuant to this section and section 602(a)(20) of part 
        A of the Individuals with Disabilities Education Act, United 
        States Code, title 20, section 1401(a). 
           (f) In developing an individualized education plan for each 
        blind student the presumption must be that proficiency in 
        Braille reading and writing is essential for the student to 
        achieve satisfactory educational progress.  The assessment 
        required for each student must include a Braille skills 
        inventory, including a statement of strengths and deficits.  
        Braille instruction and use are not required by this paragraph 
        if, in the course of developing the student's individualized 
        education program, team members concur that the student's visual 
        impairment does not affect reading and writing performance 
        commensurate with ability.  This paragraph does not require the 
        exclusive use of Braille if other special education services are 
        appropriate to the student's educational needs.  The provision 
        of other appropriate services does not preclude Braille use or 
        instruction.  Instruction in Braille reading and writing shall 
        must be available for each blind student for whom the 
        multidisciplinary team has determined that reading and writing 
        is appropriate. 
           (g) Instruction in Braille reading and writing must be 
        sufficient to enable each blind student to communicate 
        effectively and efficiently with the same level of proficiency 
        expected of the student's peers of comparable ability and grade 
        level.  
           (h) The student's individualized education plan must 
        specify: 
           (1) the results obtained from the assessment required under 
        paragraph (f); 
           (2) how Braille will be implemented through integration 
        with other classroom activities; 
           (3) the date on which Braille instruction will begin; 
           (4) the length of the period of instruction and the 
        frequency and duration of each instructional session; 
           (5) the level of competency in Braille reading and writing 
        to be achieved by the end of the period and the objective 
        assessment measures to be used; and 
           (6) if a decision has been made under paragraph (f) that 
        Braille instruction or use is not required for the student:  
           (i) a statement that the decision was reached after a 
        review of pertinent literature describing the educational 
        benefits of Braille instruction and use; and 
           (ii) a specification of the evidence used to determine that 
        the student's ability to read and write effectively without 
        Braille is not impaired. 
           (i) Instruction in Braille reading and writing is a service 
        for the purpose of special education and services under this 
        section. 
           (j) Paragraphs (e) to (i) shall must not be construed to 
        supersede any rights of a parent or guardian of a child with a 
        disability under federal or state law. 
           Sec. 25.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RULES OF THE STATE BOARD.] (a) The state board 
        shall promulgate must adopt rules relative to qualifications of 
        essential personnel, courses of study, methods of instruction, 
        pupil eligibility, size of classes, rooms, equipment, 
        supervision, parent consultation, and any other rules it deems 
        necessary for instruction of children with a disability.  These 
        rules shall must provide standards and procedures appropriate 
        for the implementation of and within the limitations of 
        subdivisions 3a and 3b.  These rules shall must also provide 
        standards for the discipline, control, management, and 
        protection of children with a disability.  The state board shall 
        must not adopt rules for pupils served in level 1, 2, or 3, as 
        defined in Minnesota Rules, part 3525.2340, establishing either 
        case loads or the maximum number of pupils that may be assigned 
        to special education teachers.  The state board, in consultation 
        with the departments of health and human services, shall must 
        adopt permanent rules for instruction and services for children 
        under age five and their families.  These rules are binding on 
        state and local education, health, and human services agencies.  
        The state board shall must adopt rules to determine eligibility 
        for special education services.  The rules shall must include 
        procedures and standards by which to grant variances for 
        experimental eligibility criteria.  The state board shall must, 
        according to section 14.05, subdivision 4, notify a district 
        applying for a variance from the rules within 45 calendar days 
        of receiving the request whether the request for the variance 
        has been granted or denied.  If a request is denied, the 
        board shall must specify the program standards used to evaluate 
        the request and the reasons for denying the request.  
           (b) The state's regulatory scheme should support schools by 
        assuring that all state special education rules adopted by the 
        state board of education result in one or more of the following 
        outcomes: 
           (1) increased time available to teachers for educating 
        students through direct and indirect instruction; 
           (2) consistent and uniform access to effective education 
        programs for students with disabilities throughout the state; 
           (3) reduced inequalities, conflict, and court actions 
        related to the delivery of special education instruction and 
        services for students with disabilities; 
           (4) clear expectations for service providers and for 
        students with disabilities; 
           (5) increased accountability for all individuals and 
        agencies that provide instruction and other services to students 
        with disabilities; 
           (6) greater focus for the state and local resources 
        dedicated to educating students with disabilities; and 
           (7) clearer standards for evaluating the effectiveness of 
        education and support services for students with disabilities.  
           Sec. 26.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [SCHOOL DISTRICT OBLIGATIONS.] Every district 
        shall must ensure that the following: 
           (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 must be agreed upon through the 
        development of an individual education plan.  The plan shall 
        must 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 must 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 
        including assistive technology 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 used 
        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. 27.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [PROCEDURES FOR DECISIONS.] Every district shall 
        utilize must use at least the following procedures for decisions 
        involving identification, assessment, and educational placement 
        of children with a disability: 
           (a) Parents and guardians shall must 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 must not proceed with the initial 
        formal assessment of a child, the initial placement of a child 
        in a special education program, or the initial provision of 
        special education services for a child without the prior written 
        consent of the child's parent or guardian.  The refusal of a 
        parent or guardian to consent may be overridden by the decision 
        in a hearing held pursuant to clause paragraph (e) at the 
        district's initiative;. 
           (c) Parents and guardians shall must 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 paragraph (a).  The conciliation process or other form 
        of alternative dispute resolution shall must 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 must be deemed to be satisfied.  
        Notwithstanding other law, in any proceeding following a 
        conciliation conference, the school district must not offer a 
        conciliation conference memorandum into evidence, except for any 
        portions that describe the district's final proposed offer of 
        service.  Otherwise, with respect to forms of dispute 
        resolution, mediation, or conciliation, Minnesota Rule of 
        Evidence 408 applies.  The department of children, families, and 
        learning may reimburse the districts or directly pay the costs 
        of lay advocates, not to exceed $150 per dispute, used in 
        conjunction with alternative dispute resolution. 
           (d) The commissioner shall must establish a mediation 
        process to assist parents, school districts, or other parties to 
        resolve disputes arising out of the identification, assessment, 
        or educational placement of children with a disability.  The 
        mediation process must be offered as an informal alternative to 
        the due process hearing provided under clause paragraph (e), but 
        must not be used to deny or postpone the opportunity of a parent 
        or guardian to obtain a due process hearing. 
           (e) Parents, guardians, and the district shall must 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. 
           Within five business days after the request for a hearing, 
        or as directed by the hearing officer, the objecting party shall 
        must provide the other party with a brief written statement of 
        particulars of the objection, the reasons for the objection, and 
        the specific remedies sought.  The other party shall provide the 
        objecting party with a written response to the statement of 
        objections within five business days of receipt of the statement.
           The hearing shall must take place before an impartial 
        hearing officer mutually agreed to by the school board and the 
        parent or guardian.  Within four business days of the receipt of 
        the request for the hearing, if the parties have not agreed on 
        the hearing officer, the school board shall must request the 
        commissioner to appoint a hearing officer.  The school board 
        shall must include with the request the name of the person 
        requesting the hearing, the name of the student, the attorneys 
        involved, if any, and the date the hearing request was 
        received.  The hearing officer shall must 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 that 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 must be 
        at district expense.  The proceedings shall must be recorded and 
        preserved, at the expense of the school district, pending 
        ultimate disposition of the action. 
           (f) The decision of the hearing officer pursuant to clause 
        paragraph (e) shall be rendered not more than 45 calendar days 
        from the date of the receipt of the request for the hearing, 
        except that hearing officers are encouraged to accelerate the 
        timeline to 30 days for children birth through two whose needs 
        change rapidly and require quick resolution of complaints.  A 
        hearing officer may not grant specific extensions of time beyond 
        the 45-day period unless requested by either party for good 
        cause shown on the record.  The decision of the hearing 
        officer shall be is binding on all parties unless appealed to 
        the commissioner by the parent; guardian; school board of the 
        district where the child resides pursuant to clause 
        paragraph (g); and also in the case of children birth through 
        two, by the county board. 
           The local decision shall must: 
           (1) be in writing; 
           (2) state the controlling facts upon which the decision is 
        made in sufficient detail to apprise the parties and the hearing 
        review officer of the basis and reason for the decision; and 
           (3) be based on the standards set forth in subdivision 3a 
        and the rules of the state board. 
           (g) Any local decision issued pursuant to clauses 
        paragraphs (e) and (f) may be appealed to the commissioner 
        within 30 calendar days of receipt of that written decision, by 
        the parent, guardian, or the school board of the district 
        responsible for assuring that an appropriate program is provided 
        in accordance with state board rules.  The appealing party shall 
        must note the specific parts of the hearing decision being 
        appealed. 
           If the decision is appealed, a written transcript of the 
        hearing shall must be made by the school district and provided 
        by the district to the parties involved and the hearing review 
        officer within five calendar days of the filing of the appeal.  
        The hearing review officer shall must conduct an appellate 
        review and issue a final independent decision based on an 
        impartial review of the local decision and the entire record 
        within 30 calendar days after the filing of the appeal.  
        However, the hearing review officer shall must 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 must be an impartial due process 
        hearing but shall be is deemed not to be a contested case 
        hearing for purposes of chapter 14.  The hearing review officer 
        may grant specific extensions of time beyond the 30-day period 
        at the request of any party for good cause shown on the record. 
           The final decision shall must: 
           (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 is 
        final unless appealed by the parent or guardian or school board 
        to the Minnesota court of appeals or federal district court as 
        provided by federal law.  State judicial review shall must be in 
        accordance with chapter 14.  
           (i) The commissioner of children, families, and learning 
        shall must select an individual who has the qualifications 
        enumerated in this paragraph to serve as the hearing review 
        officer: 
           (1) the individual must be knowledgeable and impartial; 
           (2) the individual must not have a personal interest in or 
        specific involvement with the student who is a party to the 
        hearing; 
           (3) the individual must not have been employed as an 
        administrator by the district that is a party to the hearing; 
           (4) the individual must not have been involved in the 
        selection of the administrators of the district that is a party 
        to the hearing; 
           (5) the individual must not have a personal, economic, or 
        professional interest in the outcome of the hearing other than 
        the proper administration of the federal and state laws, rules, 
        and policies; 
           (6) the individual must not have substantial involvement in 
        the development of a state or local policy or procedures that 
        are challenged in the appeal; 
           (7) the individual is not a current employee or board 
        member of a Minnesota public school district, education 
        district, intermediate unit or regional education agency, the 
        department of children, families, and learning, and the state 
        board of education; and 
           (8) the individual is not a current employee or board 
        member of a disability advocacy organization or group.  
           (j) In all appeals, the parent or guardian of the pupil 
        with a disability or the district that is a party to the hearing 
        may challenge the impartiality or competence of the proposed 
        hearing review officer by applying to the hearing review officer.
           (k) 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 must remain in the 
        child's current educational placement and shall must not be 
        denied initial admission to school. 
           (l) The child's school district of residence, a resident 
        district, and providing district shall must 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 must schedule and hold a prehearing conference.  
        At that conference, or later, the hearing officer may take any 
        appropriate action that a court might may 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 is 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 must participate in training 
        and follow procedures as designated by the commissioner. 
           (q) The hearing officer may admit all evidence which that 
        possesses probative value, including hearsay, if it is the type 
        of evidence on which reasonable, prudent persons are accustomed 
        to rely in the conduct of their serious affairs.  The hearing 
        officer shall must give effect to the rules of privilege 
        recognized by law.  Evidence which that is incompetent, 
        irrelevant, immaterial, or unduly repetitious shall be excluded. 
           Sec. 28.  Minnesota Statutes 1996, section 120.17, 
        subdivision 3d, is amended 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 must 
        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 must 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. 29.  Minnesota Statutes 1996, section 120.17, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SPECIAL INSTRUCTIONS FOR NONRESIDENT CHILDREN.] 
        When a school district provides instruction and services outside 
        the district of residence, board and lodging, and any tuition to 
        be paid, shall be paid by the district of residence.  The 
        tuition rate to be charged for any child with a disability shall 
        must be the actual cost of providing special instruction and 
        services to the child including a proportionate amount for 
        capital outlay and debt service but not including any amount for 
        transportation, minus the amount of special aid for children 
        with a disability received on behalf of that child.  If the 
        boards involved do not agree upon the tuition rate, either board 
        may apply to the commissioner to fix the rate.  The commissioner 
        shall must then set a date for a hearing, giving each board at 
        least ten days' notice, and after the hearing the 
        commissioner shall must make an order fixing the tuition rate, 
        which shall be is binding on both school districts. 
           When a district provides instruction and services in a day 
        program outside the district of residence, the district of 
        residence shall be is responsible for providing transportation.  
        When a district provides instruction and services requiring 
        board and lodging or placement in a residential program outside 
        the district of residence, the nonresident district in which the 
        child is placed shall be is responsible for providing 
        transportation.  Transportation costs shall be paid by the 
        district responsible for providing transportation and the state 
        shall pay transportation aid to that district.  
           For the purposes of this section, any school district may 
        enter into an agreement, upon mutually agreed upon terms and 
        conditions which are mutually agreed upon, to provide special 
        instruction and services for children with a disability.  In 
        that event, one of the participating units may employ and 
        contract with necessary qualified personnel to offer services in 
        the several districts.  Each participating unit shall must 
        reimburse the employing unit a proportionate amount of the 
        actual cost of providing the special instruction and services, 
        less the amount of state special education aid, which shall be 
        claimed in full by the employing district.  
           Sec. 30.  Minnesota Statutes 1996, section 120.17, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [ATTENDANCE IN ANOTHER DISTRICT.] No resident of 
        a district who is eligible for special instruction and services 
        pursuant to this section shall may be denied provision of this 
        instruction and service because of attending a public school in 
        another school district pursuant to section 123.39, subdivision 
        5, if the attendance is not subject to section 120.075, 
        120.0751, or 120.0752.  If the pupil attends a public school 
        located in a contiguous district and the district of attendance 
        does not provide special instruction and services, the district 
        of residence shall must provide necessary transportation for the 
        pupil between the boundary of the district of residence and the 
        educational facility where special instruction and services are 
        provided within the district of residence.  The district of 
        residence may provide necessary transportation for the pupil 
        between its boundary and the school attended in the contiguous 
        district, but shall must not pay the cost of transportation 
        provided outside the boundary of the district of residence.  
           Sec. 31.  Minnesota Statutes 1996, section 120.17, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL OF PARENTS' CHOICE.] Nothing in this 
        chapter shall must be construed as preventing parents of a child 
        with a disability from sending such the child to a school of 
        their choice, if they so elect, subject to admission standards 
        and policies adopted according to chapter 128A, and all other 
        provisions of chapters 120 to 129. 
           Sec. 32.  Minnesota Statutes 1996, section 120.17, 
        subdivision 5a, is amended to read:  
           Subd. 5a.  [SUMMER PROGRAMS.] A district may provide summer 
        programs for children with a disability living within the 
        district and nonresident children temporarily placed in the 
        district pursuant to subdivision 6 or 7.  Prior to March 31 or 
        30 days after the child with a disability is placed in the 
        district, whichever is later, the providing district shall give 
        notice to the district of residence of any nonresident children 
        temporarily placed in the district pursuant to subdivision 6 or 
        7, of its intention to provide these programs.  Notwithstanding 
        any contrary provisions in subdivisions 6 and 7, the school 
        district providing the special instruction and services shall 
        must apply for special education aid for the summer program.  
        The unreimbursed actual cost of providing the program for 
        nonresident children with a disability, including the cost of 
        board and lodging, may be billed to the district of the child's 
        residence and shall must be paid by the resident district.  
        Transportation costs shall must be paid by the district 
        responsible for providing transportation pursuant to subdivision 
        6 or 7 and transportation aid shall must be paid to that 
        district.  
           Sec. 33.  Minnesota Statutes 1996, section 120.17, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PLACEMENT IN ANOTHER DISTRICT; RESPONSIBILITY.] 
        The responsibility for special instruction and services for a 
        child with a disability temporarily placed in another district 
        for care and treatment shall be determined in the following 
        manner: 
           (a) The school district of residence of a child shall be 
        the district in which the child's parent resides, if living, or 
        the child's guardian, or the district designated by the 
        commissioner of children, families, and learning if neither 
        parent nor guardian is living within the state. 
           (b) When a child is temporarily placed for care and 
        treatment in a day program located in another district and the 
        child continues to live within the district of residence during 
        the care and treatment, the district of residence is responsible 
        for providing transportation and an appropriate educational 
        program for the child.  The district may provide the educational 
        program at a school within the district of residence, at the 
        child's residence, or in the district in which the day treatment 
        center is located by paying tuition to that district. 
           (c) When a child is temporarily placed in a residential 
        program for care and treatment, the nonresident district in 
        which the child is placed is responsible for providing an 
        appropriate educational program for the child and necessary 
        transportation while the child is attending the educational 
        program; and shall must bill the district of the child's 
        residence for the actual cost of providing the program, as 
        outlined in subdivision 4, except that.  However, the board, 
        lodging, and treatment costs incurred in behalf of a child with 
        a disability placed outside of the school district of residence 
        by the commissioner of human services or the commissioner of 
        corrections or their agents, for reasons other than for making 
        provision providing for the child's special educational 
        needs shall must not become the responsibility of either the 
        district providing the instruction or the district of the 
        child's residence. 
           (d) The district of residence shall pay tuition and other 
        program costs, not including transportation costs, to the 
        district providing the instruction and services.  The district 
        of residence may claim general education aid for the child as 
        provided by law.  Transportation costs shall must be paid by the 
        district responsible for providing the transportation and the 
        state shall must pay transportation aid to that district.  
           Sec. 34.  Minnesota Statutes 1996, section 120.17, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PLACEMENT IN STATE INSTITUTION; 
        RESPONSIBILITY.] (a) Responsibility for special instruction and 
        services for a child with a disability placed in a state 
        institution on a temporary basis shall must be determined in the 
        following manner: 
           (a) (1) the legal residence of such the child shall be 
        is the school district in which the child's parent resides, if 
        living, or the child's guardian.; and 
           (b) (2) when the educational needs of such the child can be 
        met through the institutional program, the costs for such the 
        instruction shall must be paid by the department to which the 
        institution is assigned.  
           (c) (b) When it is determined that such the child can 
        benefit from public school enrollment, provision for such the 
        instruction shall be made in the following manner: 
           (1) determination of eligibility for special instruction 
        and services shall must be made by the commissioner of children, 
        families, and learning and the commissioner of the department 
        responsible for the institution; 
           (2) the school district where the institution is located 
        shall be is responsible for providing transportation and an 
        appropriate educational program for the child and shall must 
        make a tuition charge to the child's district of residence for 
        the actual cost of providing the program; and 
           (3) the district of the child's residence shall pay the 
        tuition and other program costs excluding transportation costs 
        and may claim general education aid for the child.  
        Transportation costs shall must be paid by the district where 
        the institution is located and the state shall must pay 
        transportation aid to that district.  
           Sec. 35.  Minnesota Statutes 1996, section 120.17, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [ATTENDANCE AT SCHOOL FOR THE DISABLED.] 
        Responsibility for special instruction and services for a 
        visually disabled or hearing impaired child attending the 
        Minnesota state academy for the deaf or the Minnesota state 
        academy for the blind shall must be determined in the following 
        manner: 
           (a) The legal residence of the child shall be is the school 
        district in which the child's parent or guardian resides. 
           (b) When it is determined pursuant to section 128A.05, 
        subdivision 1 or 2, that the child is entitled to attend either 
        school, the state board shall must provide the appropriate 
        educational program for the child.  The state board shall must 
        make a tuition charge to the child's district of residence for 
        the cost of providing the program.  The amount of tuition 
        charged shall must not exceed the basic revenue of the district 
        for that child, for the amount of time the child is in the 
        program.  For purposes of this subdivision, "basic revenue" has 
        the meaning given it in section 124A.22, subdivision 2.  The 
        district of the child's residence shall must pay the tuition and 
        may claim general education aid for the child.  Tuition received 
        by the state board, except for tuition received under clause 
        paragraph (c), shall must be deposited in the state treasury as 
        provided in clause paragraph (g). 
           (c) In addition to the tuition charge allowed in clause 
        paragraph (b), the academies may charge the child's district of 
        residence for the academy's unreimbursed cost of providing an 
        instructional aide assigned to that child, if that aide is 
        required by the child's individual education plan.  Tuition 
        received under this clause paragraph must be used by the 
        academies to provide the required service. 
           (d) When it is determined that the child can benefit from 
        public school enrollment but that the child should also remain 
        in attendance at the applicable school, the school district 
        where the institution is located shall must provide an 
        appropriate educational program for the child and shall must 
        make a tuition charge to the state board for the actual cost of 
        providing the program, less any amount of aid received pursuant 
        to section 124.32.  The state board shall must pay the tuition 
        and other program costs including the unreimbursed 
        transportation costs.  Aids for children with a disability shall 
        must be paid to the district providing the special instruction 
        and services.  Special transportation shall must be provided by 
        the district providing the educational program and the 
        state shall must reimburse such that district within the limits 
        provided by law.  
           (e) Notwithstanding the provisions of clauses paragraphs (b)
        and (d), the state board may agree to make a tuition charge for 
        less than the amount specified in clause paragraph (b) for 
        pupils attending the applicable school who are residents of the 
        district where the institution is located and who do not board 
        at the institution, if that district agrees to make a tuition 
        charge to the state board for less than the amount specified 
        in clause paragraph (d) for providing appropriate educational 
        programs to pupils attending the applicable school. 
           (f) Notwithstanding the provisions of clauses paragraphs (b)
        and (d), the state board may agree to supply staff from the 
        Minnesota state academy for the deaf and the Minnesota state 
        academy for the blind to participate in the programs provided by 
        the district where the institutions are located when the 
        programs are provided to students in attendance at the state 
        schools.  
           (g) On May 1 of each year, the state board shall count the 
        actual number of Minnesota resident kindergarten and elementary 
        students and the actual number of Minnesota resident secondary 
        students enrolled and receiving education services at the 
        Minnesota state academy for the deaf and the Minnesota state 
        academy for the blind.  The state board shall deposit in the 
        state treasury an amount equal to all tuition received less:  
           (1) the total number of students on May 1 less 175, times 
        the ratio of the number of kindergarten and elementary students 
        to the total number of students on May 1, times the general 
        education formula allowance; plus 
           (2) the total number of students on May 1 less 175, times 
        the ratio of the number of secondary students on May 1 to the 
        total number of students on May 1, times 1.3, times the general 
        education formula allowance.  
           (h) The sum provided by the calculation in clause 
        paragraph (g), subclauses clauses (1) and (2), must be deposited 
        in the state treasury and credited to the general operation 
        account of the academy for the deaf and the academy for the 
        blind.  
           (i) There is annually appropriated to the department of 
        children, families, and learning for the Faribault academies the 
        tuition amounts received and credited to the general operation 
        account of the academies under this section.  A balance in an 
        appropriation under this paragraph does not cancel but is 
        available in successive fiscal years.  
           Sec. 36.  Minnesota Statutes 1996, section 120.17, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [RESIDENCE OF CHILD UNDER SPECIAL CONDITIONS.] 
        The legal residence of a child with a disability placed in a 
        foster facility for care and treatment when: 
           (1) parental rights have been terminated by court order; 
           (2) parent or guardian is not living within the state; 
           (3) no other school district residence can be established; 
        or 
           (4) parent or guardian having legal custody of the child is 
        an inmate of a Minnesota correctional facility or is a resident 
        of a halfway house under the supervision of the commissioner of 
        corrections; 
        shall be is the school district in which the child resides.  
        The school board of the district of residence shall must provide 
        the same educational program for such the child as it provides 
        for all resident children with a disability in the district.  
           Sec. 37.  Minnesota Statutes 1996, section 120.17, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SPECIAL INSTRUCTION.] No resident of a district 
        who is eligible for special instruction and services pursuant to 
        this section shall may be denied provision of this instruction 
        and service on a shared time basis because of attendance at a 
        nonpublic school defined in section 123.932, subdivision 3.  If 
        a resident pupil with a disability attends a nonpublic school 
        located within the district of residence, the district shall 
        must provide necessary transportation for that pupil within the 
        district between the nonpublic school and the educational 
        facility where special instruction and services are provided on 
        a shared time basis.  If a resident pupil with a disability 
        attends a nonpublic school located in another district and if no 
        agreement exists pursuant to section 124A.034, subdivision 1 or 
        1a, for the provision of special instruction and services on a 
        shared time basis to that pupil by the district of attendance 
        and where the special instruction and services are provided 
        within the district of residence, the district of 
        residence shall must provide necessary transportation for that 
        pupil between the boundary of the district of residence and the 
        educational facility.  The district of residence may provide 
        necessary transportation for that pupil between its boundary and 
        the nonpublic school attended, but the nonpublic school shall 
        must pay the cost of transportation provided outside the 
        district boundary.  
           Sec. 38.  Minnesota Statutes 1996, section 120.17, 
        subdivision 10, is amended to read: 
           Subd. 10.  [NONRESIDENT EDUCATION; BILLING.] All tuition 
        billing for the education of nonresident children pursuant to 
        this section shall must be done on uniform forms prescribed by 
        the commissioner.  The billing shall contain an itemized 
        statement of costs which that are being charged to the district 
        of residence.  One copy of each such billing shall must be filed 
        with the commissioner.  
           Sec. 39.  Minnesota Statutes 1996, section 120.17, 
        subdivision 16, is amended to read: 
           Subd. 16.  [COMMUNITY TRANSITION INTERAGENCY COMMITTEE.] A 
        district, group of districts, or special education cooperative, 
        in cooperation with the county or counties in which the district 
        or cooperative is located, shall must establish a community 
        transition interagency committee for youth with disabilities, 
        beginning at grade 9 or age equivalent, and their families.  
        Members of the committee shall must consist of representatives 
        from special education;, vocational and regular education;, 
        community education;, post-secondary education and training 
        institutions;, adults with disabilities who have received 
        transition services if such persons are available;, parents of 
        youth with disabilities;, local business or industry;, 
        rehabilitation services;, county social services;, health 
        agencies;, and additional public or private adult service 
        providers as appropriate.  The committee shall must elect a 
        chair and shall must meet regularly.  The committee shall must: 
           (1) identify current services, programs, and funding 
        sources provided within the community for secondary and 
        post-secondary aged youth with disabilities and their families; 
           (2) facilitate the development of multiagency teams to 
        address present and future transition needs of individual 
        students on their individual education plans; 
           (3) develop a community plan to include mission, goals, and 
        objectives, and an implementation plan to assure that transition 
        needs of individuals with disabilities are met; 
           (4) recommend changes or improvements in the community 
        system of transition services; 
           (5) exchange agency information such as appropriate data, 
        effectiveness studies, special projects, exemplary programs, and 
        creative funding of programs; and 
           (6) following procedures determined by the commissioner, 
        prepare a yearly summary assessing the progress of transition 
        services in the community including follow-up of individuals 
        with disabilities who were provided transition services to 
        determine postschool outcomes.  The summary must be disseminated 
        to all adult services agencies involved in the planning and to 
        the commissioner of children, families, and learning by October 
        1 of each year.  
           Sec. 40.  Minnesota Statutes 1996, section 120.17, 
        subdivision 18, is amended to read: 
           Subd. 18.  [AGENCY ACCESS TO NONPUBLIC DATA.] The 
        commissioner of administration shall must prepare a form and 
        disseminate guidelines for state agencies, political 
        subdivisions, and other responsible authorities to use to enable 
        a responsible authority to allow another responsible authority 
        access to data about a child with a disability that is 
        classified as not public.  The form and guidelines must be 
        consistent with section 13.05, subdivision 9, and federal law, 
        and are not subject to the rulemaking requirements under chapter 
        14. 
           Sec. 41.  Minnesota Statutes 1996, section 120.17, 
        subdivision 19, is amended to read: 
           Subd. 19.  [PARENT ADVISORY COMMITTEES.] Provisions of 
        Minnesota Rules, part 3525.1100, regarding parent advisory 
        committees shall apply to local school boards or cooperative 
        boards carrying out the provisions of this section. 
           Sec. 42.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section 
        the following terms have the meaning meanings given them.  
           (a) "Coordinate" means to provide ready access to a 
        community's services and resources to meet child and family 
        needs.  
           (b) "Core early intervention services" means services that 
        are available at no cost to children and families.  These 
        services include: 
           (1) identification and referral; 
           (2) screening; 
           (3) evaluation; 
           (4) assessment; 
           (5) service coordination; 
           (6) special education and related services provided under 
        section 120.17, subdivision 3a, and United States Code, title 
        20, section 1401; and 
           (7) protection of parent and child rights by means of 
        procedural safeguards. 
           (c) "County board" means a county board established under 
        chapter 375. 
           (d) "Early intervention record" means any personally 
        identifiable information about a child or the child's family 
        that is generated by the early intervention system, and that 
        pertains to evaluation and assessment, development of an 
        individualized family service plan, and the delivery of early 
        intervention services. 
           (e) "Early intervention services" means services provided 
        in conformity with an individualized family service plan that 
        are designed to meet the special developmental needs of a child 
        eligible under Code of Federal Regulations, title 34, part 303, 
        and the needs of the child's family related to enhancing the 
        child's development and that are selected in collaboration with 
        the parent.  These services include core early intervention 
        services and additional early intervention services listed in 
        subdivision 4 and services defined in Code of Federal 
        Regulations, title 34, section 303, et seq. 
           (f) "Early intervention system" means the total effort in 
        the state to meet the needs of eligible children and their 
        families, including, but not limited to: 
           (1) any public agency in the state that receives funds 
        under the Individuals with Disabilities Education Act, United 
        States Code, title 20, sections 1471 to 1485 (Part H, Public Law 
        Number 102-119); 
           (2) other state and local agencies administering programs 
        involved in the provision of early intervention services, 
        including, but not limited to: 
           (i) the Maternal and Child Health program under title V of 
        the Social Security Act, United States Code, title 42, sections 
        701 to 709; 
           (ii) the Individuals with Disabilities Education Act, 
        United States Code, title 20, sections 1411 to 1420 (Part B); 
           (iii) medical assistance under the Social Security Act, 
        United States Code, title 42, section 1396 et seq.; 
           (iv) the Developmental Disabilities Assistance and Bill of 
        Rights Act, United States Code, title 42, sections 6021 to 6030 
        (Part B); and 
           (v) the Head Start Act, United States Code, title 42, 
        sections 9831 to 9852; and 
           (3) services provided by private groups or third-party 
        payers in conformity with an individualized family service plan. 
           (g) "Eligibility for Part H" means eligibility for early 
        childhood special education under section 120.03 and Minnesota 
        Rules, part 3525.2335, subpart 1, items A and B. 
           (h) "Facilitate payment" means helping families access 
        necessary public or private assistance that provides payment for 
        services required to meet needs identified in a service plan, 
        individual education plan (IEP), individual service plan (ISP), 
        or individualized family service plan (IFSP), according to time 
        frames required by the plan.  This may also include activities 
        to collect fees for services provided on a sliding fee basis, 
        where permitted by state law. 
           (i) "Individualized family service plan" or "IFSP" means a 
        written plan for providing services to a child and the child's 
        family.  
           (j) "Interagency child find systems" means activities 
        developed on an interagency basis with the involvement of 
        interagency early intervention committees and other relevant 
        community groups to actively seek out, identify, and refer 
        infants and young children with, or at risk of, disabilities, 
        and their families. 
           (k) "Local primary agency" means the agency designated 
        jointly by the school and county board under subdivision 4. 
           (l) "Parent" means the biological parent with parental 
        rights, adoptive parent, legal guardian, or surrogate parent. 
           (m) "Part H state plan" means the annual state plan 
        application approved by the federal government under the 
        Individuals with Disabilities Education Act, United States Code, 
        title 20, section 1471 et seq. (Part H, Public Law Number 
        102-119). 
           (n) "Pay for" means using federal, state, local, and 
        private dollars available for early intervention services. 
           (o) "Respite" means short-term, temporary care provided to 
        a child with a disability due to the temporary absence or need 
        for relief of the family member or members or primary caregiver, 
        normally providing the care. 
           (p) "State lead agency" means the state agency receiving 
        federal funds under the Individuals with Disabilities Education 
        Act, United States Code, title 20, section 1471 et seq. (Part H, 
        Public Law Number 102-119). 
           (q) "Surrogate parent" means a person appointed by the 
        local education agency to assure that the rights of the child to 
        early intervention services are protected.  
           Sec. 43.  Minnesota Statutes 1997 Supplement, section 
        120.1701, subdivision 3, is amended to read: 
           Subd. 3.  [STATE INTERAGENCY COORDINATING COUNCIL.] An 
        interagency coordinating council of at least 17, but not more 
        than 25 members is established, in compliance with Public Law 
        Number 102-119, section 682.  The members shall must be 
        appointed by the governor.  Council members shall must elect the 
        council chair.  The representative of the commissioner of 
        children, families, and learning may not serve as the chair.  
        The council shall must be composed of at least five parents, 
        including persons of color, of children with disabilities under 
        age 12, including at least three parents of a child with a 
        disability under age seven, five representatives of public or 
        private providers of services for children with disabilities 
        under age five, including a special education director, county 
        social service director, and a community health services or 
        public health nursing administrator, one member of the senate, 
        one member of the house of representatives, one representative 
        of teacher preparation programs in early childhood-special 
        education or other preparation programs in early childhood 
        intervention, at least one representative of advocacy 
        organizations for children with disabilities under age five, one 
        physician who cares for young children with special health care 
        needs, one representative each from the commissioners of 
        commerce, children, families, and learning, health, human 
        services, and economic security, and a representative from 
        Indian health services or a tribal council.  Section 15.059, 
        subdivisions 2 to 5, apply to the council.  The council shall 
        must meet at least quarterly.  
           The council shall must address methods of implementing the 
        state policy of developing and implementing comprehensive, 
        coordinated, multidisciplinary interagency programs of early 
        intervention services for children with disabilities and their 
        families. 
           The duties of the council include recommending policies to 
        ensure a comprehensive and coordinated system of all state and 
        local agency services for children under age five with 
        disabilities and their families.  The policies must address how 
        to incorporate each agency's services into a unified state and 
        local system of multidisciplinary assessment practices, 
        individual intervention plans, comprehensive systems to find 
        children in need of services, methods to improve public 
        awareness, and assistance in determining the role of interagency 
        early intervention committees.  
           Each year By June 1, the council shall must recommend to 
        the governor and the commissioners of children, families, and 
        learning, health, human services, commerce, and economic 
        security policies for a comprehensive and coordinated system. 
           Notwithstanding any other law to the contrary, the state 
        interagency coordinating council shall expire expires on June 
        30, 2001.  
           Sec. 44.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESPONSIBILITIES OF COUNTY BOARDS AND SCHOOL 
        BOARDS.] (a) It is the joint responsibility of county boards and 
        school boards to coordinate, provide, and pay for appropriate 
        services, and to facilitate payment for services from public and 
        private sources.  Appropriate services for children eligible 
        under section 120.03 must be determined in consultation with 
        parents, physicians, and other educational, medical, health, and 
        human services providers.  The services provided must be in 
        conformity with an IFSP for each eligible infant and toddler 
        from birth through age two and its family, or an individual 
        education plan (IEP) or individual service plan (ISP) for each 
        eligible child ages three through four.  
           (b) Appropriate services include family education and 
        counseling, home visits, occupational and physical therapy, 
        speech pathology, audiology, psychological services, special 
        instruction, nursing, respite, nutrition, assistive technology, 
        transportation and related costs, social work, vision services, 
        case management including service coordination under subdivision 
        8, medical services for diagnostic and evaluation purposes, 
        early identification, and screening, assessment, and health 
        services necessary to enable children with disabilities to 
        benefit from early intervention services. 
           (c) School and county boards shall coordinate early 
        intervention services.  In the absence of agreements established 
        according to subdivision 13, service responsibilities for 
        children birth through age two are as follows: 
           (1) school boards are required to must provide, pay for, 
        and facilitate payment for special education and related 
        services required under section 120.17, subdivision 2; 
           (2) county boards are required to must provide, pay for, 
        and facilitate payment for noneducational services of social 
        work, psychology, transportation and related costs, nursing, 
        respite, and nutrition services not required under clause (1). 
           (d) School and county boards may develop an interagency 
        agreement according to subdivision 13 to establish agency 
        responsibility that assures that early intervention services are 
        coordinated, provided, paid for, and that payment is facilitated 
        from public and private sources. 
           (e) County and school boards shall must jointly determine 
        the primary agency in this cooperative effort and must notify 
        the commissioner of the state lead agency of their decision.  
           Sec. 45.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INTERAGENCY EARLY INTERVENTION COMMITTEES.] (a) 
        A school district, group of districts, or special education 
        cooperative, in cooperation with the health and human service 
        agencies located in the county or counties in which the district 
        or cooperative is located, shall must establish an interagency 
        early intervention committee for children with disabilities 
        under age five and their families.  Committees shall must 
        include representatives of local and regional health, education, 
        and county human service agencies;, county boards;, school 
        boards;, early childhood family education programs;, parents of 
        young children with disabilities under age 12;, current service 
        providers;, and may also include representatives from other 
        private or public agencies.  The committee shall must elect a 
        chair from among its members and shall must meet at least 
        quarterly. 
           (b) The committee shall must develop and implement 
        interagency policies and procedures concerning the following 
        ongoing duties: 
           (1) develop public awareness systems designed to inform 
        potential recipient families of available programs and services; 
           (2) implement interagency child find systems designed to 
        actively seek out, identify, and refer infants and young 
        children with, or at risk of, disabilities and their families; 
           (3) establish and evaluate the identification, referral, 
        child and family assessment systems, procedural safeguard 
        process, and community learning systems to recommend, where 
        necessary, alterations and improvements; 
           (4) assure the development of individualized family service 
        plans for all eligible infants and toddlers with disabilities 
        from birth through age two, and their families, and individual 
        education plans and individual service plans when necessary to 
        appropriately serve children with disabilities, age three and 
        older, and their families and recommend assignment of financial 
        responsibilities to the appropriate agencies.  Agencies are 
        encouraged; 
           (5) encourage agencies to develop individual family service 
        plans for children with disabilities, age three and older; 
           (5) (6) implement a process for assuring that services 
        involve cooperating agencies at all steps leading to 
        individualized programs; 
           (6) (7) facilitate the development of a transitional plan 
        if a service provider is not recommended to continue to provide 
        services; 
           (7) (8) identify the current services and funding being 
        provided within the community for children with disabilities 
        under age five and their families; 
           (8) (9) develop a plan for the allocation and expenditure 
        of additional state and federal early intervention funds under 
        United States Code, title 20, section 1471 et seq.  (Part H, 
        Public Law Number 102-119) and United States Code, title 20, 
        section 631, et seq. (Chapter I, Public Law Number 89-313); and 
           (9) (10) develop a policy that is consistent with section 
        13.05, subdivision 9, and federal law to enable a member of an 
        interagency early intervention committee to allow another member 
        access to data classified as not public. 
           (c) The local committee shall also: 
           (1) participate in needs assessments and program planning 
        activities conducted by local social service, health and 
        education agencies for young children with disabilities and 
        their families; 
           (2) review and comment on the early intervention section of 
        the total special education system for the district, the county 
        social service plan, the section or sections of the community 
        health services plan that address needs of and service 
        activities targeted to children with special health care needs, 
        and the section of the maternal and child health special project 
        grants that address needs of and service activities targeted to 
        children with chronic illness and disabilities; and 
           (3) prepare a yearly summary on the progress of the 
        community in serving young children with disabilities, and their 
        families, including the expenditure of funds, the identification 
        of unmet service needs identified on the individual family 
        services plan and other individualized plans, and local, state, 
        and federal policies impeding the implementation of this section.
           (d) The summary must be organized following a format 
        prescribed by the commissioner of the state lead agency and must 
        be submitted to each of the local agencies and to the state 
        interagency coordinating council by October 1 of each year. 
           The departments of children, families, and learning, 
        health, and human services must provide assistance to the local 
        agencies in developing cooperative plans for providing services. 
           Sec. 46.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LOCAL PRIMARY AGENCY.] (a) The local primary 
        agency shall must: 
           (1) facilitate the development of annual fund requests that 
        identify arrangements with other local and regional agencies 
        providing services as part of the state's early childhood 
        intervention system and that result in service availability on a 
        year-round basis, as necessary; 
           (2) administer funds received through the annual fund 
        request; 
           (3) provide oversight for data collection efforts; 
           (4) facilitate completion of interagency early intervention 
        committee duties as indicated in subdivision 5; 
           (5) request mediation from the state lead agency, if 
        necessary; 
           (6) request assistance from the state lead agency when 
        disputes between agencies cannot be resolved within 20 calendar 
        days; and 
           (7) receive written requests from parents for matters that 
        may be resolved through due process hearings. 
           (b) When the local primary agency is not an education 
        agency, resources distributed under the early intervention fund 
        shall must be transferred from a local educational agency to a 
        noneducation agency using a state provided contract.  A local 
        primary agency may budget for indirect costs at an amount not to 
        exceed five percent of the amount allocated from the early 
        intervention fund. 
           Sec. 47.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 7, is amended to read: 
           Subd. 7.  [INDIVIDUALIZED FAMILY SERVICE PLAN.] (a) A team 
        must participate in IFSP meetings to develop the individualized 
        family service plan IFSP.  The team shall include:  
           (1) a parent or parents of the child; 
           (2) other family members, as requested by the parent, if 
        feasible to do so; 
           (3) an advocate or person outside of the family, if the 
        parent requests that the person participate; 
           (4) the service coordinator who has been working with the 
        family since the initial referral, or who has been designated by 
        the public agency to be responsible for implementation of the 
        IFSP; and 
           (5) a person or persons involved in conducting evaluations 
        and assessments.  
           (b) The IFSP must include: 
           (1) information about the child's developmental status; 
           (2) family information, with the consent of the family; 
           (3) major outcomes expected to be achieved by the child and 
        the family, that include the criteria, procedures, and 
        timelines; 
           (4) specific early intervention services necessary to meet 
        the unique needs of the child and the family to achieve the 
        outcomes; 
           (5) payment arrangements, if any; 
           (6) medical and other services that the child needs, but 
        that are not required under the Individual with Disabilities 
        Education Act, United States Code, title 20, section 1471 et 
        seq. (Part H, Public Law Number 102-119) including funding 
        sources to be used in paying for those services and the steps 
        that will be taken to secure those services through public or 
        private sources; 
           (7) dates and duration of early intervention services; 
           (8) name of the service coordinator; 
           (9) steps to be taken to support a child's transition from 
        early intervention services to other appropriate services; and 
           (10) signature of the parent and authorized signatures of 
        the agencies responsible for providing, paying for, or 
        facilitating payment, or any combination of these, for early 
        intervention services.  
           Sec. 48.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SERVICE COORDINATION.] (a) The team developing 
        the individualized family service plan IFSP under subdivision 7 
        shall must select a service coordinator to carry out service 
        coordination activities on an interagency basis.  Service 
        coordination must actively promote a family's capacity and 
        competency to identify, obtain, coordinate, monitor, and 
        evaluate resources and services to meet the family's needs.  
        Service coordination activities include: 
           (1) coordinating the performance of evaluations and 
        assessments; 
           (2) facilitating and participating in the development, 
        review, and evaluation of individualized family service plans; 
           (3) assisting families in identifying available service 
        providers; 
           (4) coordinating and monitoring the delivery of available 
        services; 
           (5) informing families of the availability of advocacy 
        services; 
           (6) coordinating with medical, health, and other service 
        providers; 
           (7) facilitating the development of a transition plan at 
        least six months prior to before the time the child is no longer 
        eligible for early intervention services, if appropriate; 
           (8) managing the early intervention record and submitting 
        additional information to the local primary agency at the time 
        of periodic review and annual evaluations; and 
           (9) notifying a local primary agency when disputes between 
        agencies impact service delivery required by an individualized 
        family service plan IFSP. 
           (b) A service coordinator must be knowledgeable about 
        children and families receiving services under this section, 
        requirements of state and federal law, and services available in 
        the interagency early childhood intervention system.  
           Sec. 49.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [EARLY INTERVENTION RESPITE.] The provision of 
        respite services for an eligible child and family shall must be 
        determined in the context of the IFSP development based on the 
        individual needs of the child and family and with consideration 
        given to the following criteria: 
           (1) severity of the child's disability and needs; 
           (2) potential risk of out-of-home placement for the child 
        if respite services are not provided; 
           (3) parental lack of access to informal support systems, 
        including, but not limited to, extended family, supportive 
        friends, and community supports; 
           (4) presence of factors known to increase family stress, 
        including, but not limited to, family size and presence of 
        another child or family member with a disability; 
           (5) the availability of other public services provided to 
        the family which that assist the parent or primary caretaker in 
        obtaining relief from caretaking responsibilities; and 
           (6) the perceived and expressed level of need for respite 
        services by the parent. 
           Counties are encouraged to make a variety of respite 
        service models available, which may include in or out-of-home 
        respite, family reimbursement programs, and parent-to-parent 
        respite projects.  
           Sec. 50.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EARLY INTERVENTION FLOW-THROUGH DOLLARS.] (a) 
        The state lead agency shall must administer the early 
        intervention account which that consists of federal 
        allocations.  The Part H state plan shall must state the amount 
        of federal resources in the early intervention account available 
        for use by local agencies.  The state lead agency shall must 
        distribute the funds to the local primary agency based on a 
        December 1 count of the prior year of Part H eligible children 
        for the following purposes:  
           (1) as provided in Code of Federal Regulations, title 34, 
        part 303.425, to arrange for payment for early intervention 
        services not elsewhere available, or to pay for services during 
        the pendency of a conflict procedure, including mediation, 
        complaints, due process hearings, and interagency disputes; and 
           (2) to support interagency child find system activities.  
           (b) The priority purpose for this fund is paragraph (a), 
        clause (1).  The local primary agency shall must reallocate 
        resources from the early intervention fund as necessary in order 
        to meet this priority. 
           (c) Nothing in this subdivision shall limit limits the 
        state lead agency's authority to allocate discretionary federal 
        funds for any purpose consistent with the Individuals with 
        Disabilities Education Act, United States Code, title 20, 
        sections 1471 to 1485 (Part H, Public Law Number 102-119) and 
        regulations adopted under United States Code, title 20, sections 
        1471 to 1485. 
           (d) Each county board must continue to spend for early 
        intervention services under subdivision 2, paragraph (e), an 
        amount equal to the total county expenditure during the period 
        from January 1, 1993, to December 31, 1993, for these same 
        services.  The commissioner of human services, in consultation 
        with the commissioner of health and the association of Minnesota 
        counties, shall must establish a process for determining base 
        year 1993 expenditures. 
           (e) County boards that have submitted base year 1993 
        expenditures as required under paragraph (d) are not required to 
        pay any increased cost over the base year 1993 for early 
        intervention services resulting from implementing the early 
        intervention system.  Increased costs to county boards may be 
        paid for with early intervention flow-through dollars. 
           (f) School boards are not required to pay for services 
        defined in subdivision 4, paragraph (c), clause (2). 
           Sec. 51.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 10, is amended to read: 
           Subd. 10.  [PAYMENT FOR SERVICES.] Core early intervention 
        services shall must be provided at public expense with no cost 
        to parents.  Parents shall must be requested to assist in the 
        cost of additional early intervention services by using 
        third-party payment sources and applying for available 
        resources.  Payment structures permitted under state law shall 
        must be used to pay for additional early intervention services.  
        Parental financial responsibility shall must be clearly defined 
        in the individualized family service plan IFSP.  A parent's 
        inability to pay shall must not prohibit a child from receiving 
        needed early intervention services.  
           Sec. 52.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 11, is amended to read: 
           Subd. 11.  [PAYOR OF LAST RESORT.] (a) For fiscal years 
        1995 and 1996, the state lead agency shall must establish a 
        reserve account from federal sources to pay for services in 
        dispute or to pay for early intervention services when local 
        agencies have exhausted all other public and private funds 
        available for Part H eligible children. 
           (b) The lead agency shall must report to the legislature by 
        January 1, 1996, regarding county board expenditures for early 
        intervention services and the continuing need and funding of the 
        reserve account.  
           Sec. 53.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 12, is amended to read: 
           Subd. 12.  [MAINTENANCE OF EFFORT.] A county human services 
        agency or county board shall must continue to provide services 
        set forth in their county social service agency plan.  The 
        county human services agency or county board shall must serve 
        children with disabilities under age five, and their families, 
        or as specified in the individualized family service plan IFSP 
        for children with disabilities, birth through age two, or the 
        individual service plan of each child.  Special instruction and 
        related services for which a child with a disability is eligible 
        under this section are the responsibility of the local school 
        board.  It is the joint responsibility of county boards and 
        school boards to coordinate, provide, and pay for all 
        appropriate services required in subdivision 11b and to 
        facilitate payment for services from public and private sources. 
           Sec. 54.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 15, is amended to read: 
           Subd. 15.  [BENEFITS COORDINATION.] The department of 
        health shall must provide technical assistance in a timely 
        manner to service coordinators, parents of children with 
        disabilities, and agencies in situations requiring the 
        coordination of health insurance benefits, or the identification 
        of third-party payor responsibilities to provide necessary 
        health benefits. 
           Sec. 55.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 17, is amended to read: 
           Subd. 17.  [MEDIATION PROCEDURE.] The commissioner of the 
        state lead agency shall must use federal funds to provide 
        mediation for the activities in paragraphs (a) and (b). 
           (a) A parent may resolve a dispute regarding issues in 
        subdivision 16, paragraph (b), clause (5), through mediation. If 
        the parent chooses mediation, all public agencies involved in 
        the dispute shall must participate in the mediation process.  
        The parent and the public agencies must complete the mediation 
        process within 20 calendar days of the date the commissioner 
        receives a parent's written request for mediation.  The 
        mediation process may not be used to delay a parent's right to a 
        due process hearing.  The resolution of the mediation is not 
        binding on any party. 
           (b) The local primary agency may request mediation on 
        behalf of involved agencies when there are disputes between 
        agencies regarding responsibilities to coordinate, provide, pay 
        for, or facilitate payment for early intervention services.  
           Sec. 56.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 19, is amended to read: 
           Subd. 19.  [INTERAGENCY DISPUTE PROCEDURE.] (a) A dispute 
        between a school board and a county board that is responsible 
        for implementing the provisions of subdivision 4 regarding early 
        identification, child and family assessment, service 
        coordination, and IFSP development and implementation shall must 
        be resolved according to this subdivision when the dispute 
        involves services provided to children and families eligible 
        under the Individuals with Disabilities Education Act, United 
        States Code, title 20, section 1471 et seq. (Part H, Public Law 
        Number 102-119). 
           (b) A dispute occurs when the school board and county board 
        are unable to agree as to who is responsible to coordinate, 
        provide, pay for, or facilitate payment for services from public 
        and private sources. 
           (c) Written and signed disputes shall must be filed with 
        the local primary agency. 
           (d) The local primary agency shall have attempted must 
        attempt to resolve the matter with the involved school board and 
        county board and may request mediation from the commissioner of 
        the state lead agency for this purpose. 
           (e) When interagency disputes have not been resolved within 
        30 calendar days, the local primary agency shall must request 
        the commissioner of the state lead agency to review the matter 
        with the commissioners of health and human services and make a 
        decision.  The commissioner shall must provide a consistent 
        process for reviewing those procedures.  The commissioners' 
        decision is binding subject to the right of an aggrieved party 
        to appeal to the state court of appeals. 
           (f) The local primary agency shall must ensure that 
        eligible children and their families receive early intervention 
        services during resolution of a dispute.  While a local dispute 
        is pending, the local primary agency shall must either assign 
        financial responsibility to an agency or pay for the service 
        from the early intervention account under subdivision 9.  If in 
        resolving the dispute, it is determined that the assignment of 
        financial responsibility was inappropriate, the responsibility 
        for payment must be reassigned to the appropriate agency and the 
        responsible agency shall must make arrangements for reimbursing 
        any expenditures incurred by the agency originally assigned 
        financial responsibility. 
           Sec. 57.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 20, is amended to read:  
           Subd. 20.  [DUE PROCESS HEARINGS.] The procedures for due 
        process hearings and appeals shall must be the same as those in 
        section 120.17, subdivision 3b.  The responsibility for payment 
        of costs and conducting due process hearings and appeals shall 
        be allocated to the appropriate agency in accordance with 
        subdivisions 5, 13, and 16. 
           Sec. 58.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 21, is amended to read:  
           Subd. 21.  [DATA COLLECTION.] By July 1, 1994, the 
        departments of children, families, and learning, health, and 
        human services shall must develop a plan to collect data about 
        which early intervention services are being provided to children 
        and families eligible under the Individuals with Disabilities 
        Education Act, United States Code, title 20, section 1471 et 
        seq. (Part H, Public Law Number 102-119) and sources of payment 
        for those services.  
           Sec. 59.  Minnesota Statutes 1996, section 120.1701, 
        subdivision 22, is amended to read: 
           Subd. 22.  [STATE INTERAGENCY AGREEMENT.] (a) The 
        commissioners of the departments of children, families, and 
        learning, health, and human services shall must enter into an 
        agreement to implement this section and Part H, Public Law 
        Number 102-119, and as required by Code of Federal Regulations, 
        title 34, section 303.523, to promote the development and 
        implementation of interagency, coordinated, multidisciplinary 
        state and local early childhood intervention service systems for 
        serving eligible young children with disabilities, birth through 
        age two, and their families.  The agreement must be reviewed 
        annually. 
           (b) The state interagency agreement shall must outline at a 
        minimum the conditions, procedures, purposes, and 
        responsibilities of the participating state and local agencies 
        for the following: 
           (1) membership, roles, and responsibilities of a state 
        interagency committee for the oversight of priorities and budget 
        allocations under Part H, Public Law Number 102-119, and other 
        state allocations for this program; 
           (2) child find; 
           (3) establishment of local interagency agreements; 
           (4) review by a state interagency committee of the 
        allocation of additional state and federal early intervention 
        funds by local agencies; 
           (5) fiscal responsibilities of the state and local 
        agencies; 
           (6) intraagency and interagency dispute resolution; 
           (7) payor of last resort; 
           (8) maintenance of effort; 
           (9) procedural safeguards, including mediation; 
           (10) complaint resolution; 
           (11) quality assurance; 
           (12) data collection; 
           (13) an annual summary to the state interagency 
        coordinating council regarding conflict resolution activities 
        including disputes, due process hearings, and complaints; and 
           (14) other components of the state and local early 
        intervention system consistent with Public Law Number 102-119. 
        Written materials must be developed for parents, IEIC's, and 
        local service providers that describe procedures developed under 
        this section as required by Code of Federal Regulations, title 
        34, section 303. 
           Sec. 60.  Minnesota Statutes 1996, section 120.172, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATE PLAN.] The state board of education shall 
        not adopt any provision in the state plan for special education 
        which that reduces the opportunities for parents and school 
        districts to resolve their differences through conciliation.  
           Sec. 61.  Minnesota Statutes 1996, section 120.173, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMMISSIONER APPROVAL.] The commissioner 
        of children, families, and learning may approve applications 
        from school districts to provide prevention services as an 
        alternative to special education and other compensatory programs 
        during three school years.  A district with an approved program 
        may provide instruction and services in a regular education 
        classroom to eligible pupils.  Pupils eligible to participate in 
        the program are low-performing pupils who, based on documented 
        experience, the professional judgment of a classroom teacher, or 
        a team of licensed professionals, would eventually qualify for 
        special education instruction or related services under section 
        120.17 if the intervention services authorized by this section 
        were unavailable.  Pupils may be provided services during 
        extended school days and throughout the entire year.  
           Sec. 62.  Minnesota Statutes 1996, section 120.173, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EVALUATION.] The application shall must also set 
        forth the review and evaluation procedures to be used by the 
        district addressing at least the following:  
           (1) the number of pupils with and without a disability 
        served; 
           (2) the impact of the program on the academic progress and 
        social adjustment of the pupils; 
           (3) the level of satisfaction teachers, parents, and pupils 
        have with the program; 
           (4) the effect of the program on the number of referrals 
        for special education, federal chapter 1, and other programs; 
           (5) the amount of time spent by teachers on procedural 
        activities; 
           (6) the increased amount of time the pupil is in a regular 
        education classroom; and 
           (7) cost implications.  
           Sec. 63.  Minnesota Statutes 1996, section 120.173, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REVIEW FOR EXCESS EXPENDITURES.] The 
        commissioner shall must review each application to determine 
        whether the personnel, equipment, supplies, residential aid, and 
        summer school are necessary to meet the district's obligation to 
        provide special instruction and services to children with a 
        disability according to section 120.17.  The commissioner shall 
        may not approve revenue for any expenditures determined to be 
        unnecessary. 
           Sec. 64.  Minnesota Statutes 1996, section 120.173, 
        subdivision 6, is amended to read:  
           Subd. 6.  [PUPIL RIGHTS.] A pupil participating in the 
        program must be individually evaluated according to the pupil's 
        actual abilities and needs.  A pupil who is eligible for 
        services under section 120.17 is entitled to procedural 
        protections provided under Public Law Number 94-142 in any 
        matter that affects the identification, evaluation, placement, 
        or change in placement of a pupil.  The district must ensure the 
        protection of a pupil's civil rights, provide equal educational 
        opportunities, and prohibit discrimination.  Failure to comply 
        with this subdivision will at least cause a district to become 
        ineligible to participate in the program.  Notwithstanding rules 
        of the state board of education, a pupil's rights under this 
        section cannot be waived by the state board. 
           Sec. 65.  Minnesota Statutes 1997 Supplement, section 
        120.181, is amended to read: 
           120.181 [PLACEMENT OF CHILDREN WITHOUT DISABILITIES; 
        EDUCATION AND TRANSPORTATION.] 
           The responsibility for providing instruction and 
        transportation for a pupil without a disability who has a 
        short-term or temporary physical or emotional illness or 
        disability, as determined by the standards of the state board, 
        and who is temporarily placed for care and treatment for that 
        illness or disability, shall must be determined as provided in 
        this section.  
           (a) The school district of residence of the pupil shall be 
        is the district in which the pupil's parent or guardian resides, 
        or when the district designated by the commissioner if neither 
        the pupil's parent nor guardian resides is living within the 
        state and tuition has been denied, the district designated by 
        the commissioner of children, families, and learning.  
           (b) Prior to Before the placement of a pupil for care and 
        treatment, the district of residence shall must be notified and 
        provided an opportunity to participate in the placement 
        decision.  When an immediate emergency placement is necessary 
        and time does not permit resident district participation in the 
        placement decision, the district in which the pupil is 
        temporarily placed, if different from the district of residence, 
        shall must notify the district of residence of the emergency 
        placement within 15 days of the placement.  
           (c) When a pupil without a disability is temporarily placed 
        for care and treatment in a day program and the pupil continues 
        to live within the district of residence during the care and 
        treatment, the district of residence shall must provide 
        instruction and necessary transportation for the pupil.  The 
        district may provide the instruction at a school within the 
        district of residence, at the pupil's residence, or in the case 
        of a placement outside of the resident district, in the district 
        in which the day treatment program is located by paying tuition 
        to that district.  The district of placement may contract with a 
        facility to provide instruction by teachers licensed by the 
        state board of teaching.  
           (d) When a pupil without a disability is temporarily placed 
        in a residential program for care and treatment, the district in 
        which the pupil is placed shall must provide instruction for the 
        pupil and necessary transportation while the pupil is receiving 
        instruction, and in the case of a placement outside of the 
        district of residence, the nonresident district shall must bill 
        the district of residence for the actual cost of providing the 
        instruction for the regular school year and for summer school, 
        excluding transportation costs.  When a pupil without a 
        disability is temporarily placed in a residential program 
        outside the district of residence, the administrator of the 
        court placing the pupil shall must send timely written notice of 
        the placement to the district of residence.  The district of 
        placement may contract with a residential facility to provide 
        instruction by teachers licensed by the state board of teaching. 
           (e) The district of residence shall must include the pupil 
        in its residence count of pupil units and pay tuition as 
        provided in section 124.18 to the district providing the 
        instruction.  Transportation costs shall must be paid by the 
        district providing the transportation and the state shall must 
        pay transportation aid to that district.  For purposes of 
        computing state transportation aid, pupils governed by this 
        subdivision shall must be included in the disabled 
        transportation category.  
           Sec. 66.  Minnesota Statutes 1996, section 120.1811, is 
        amended to read: 
           120.1811 [RESIDENTIAL TREATMENT FACILITIES; EDUCATION.] 
           Subdivision 1.  [EDUCATIONAL SCREENING.] Secure and 
        nonsecure residential treatment facilities licensed by the 
        department of human services or the department of corrections 
        shall must screen each juvenile who is held in a facility for at 
        least 72 hours, excluding weekends or holidays, using an 
        educational screening tool identified by the department of 
        children, families, and learning, unless the facility determines 
        that the juvenile has a current individual education plan and 
        obtains a copy of it.  The department of children, families, and 
        learning shall must develop or identify an education screening 
        tool for use in residential facilities.  The tool must include a 
        life skills development component. 
           Subd. 2.  [RULEMAKING.] The state board of education may, 
        in consultation with the commissioners of corrections and human 
        services, make or amend rules relating to education programs in 
        residential treatment facilities, if necessary, to implement 
        this section. 
           Sec. 67.  Minnesota Statutes 1996, section 120.182, is 
        amended to read: 
           120.182 [SPECIAL EDUCATION DIRECTOR.] 
           The authority for the selection and employment of the 
        director of a special education cooperative established pursuant 
        to section 120.17 or 471.59 shall be is vested in the governing 
        board of the cooperative.  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 cooperative.  
           Sec. 68.  Minnesota Statutes 1996, section 120.183, is 
        amended to read: 
           120.183 [INTERAGENCY OFFICE ON TRANSITION SERVICES.] 
           The commissioner of children, families, and learning shall 
        must establish an interagency office on transition services to:  
           (1) gather and coordinate data on transition services for 
        secondary age pupils with a disability; 
           (2) provide information, consultation, and technical 
        assistance to state and local agencies involved in the delivery 
        of services to pupils with a disability in transition from 
        secondary school programs to employment and post-secondary 
        training programs; 
           (3) assist agencies in establishing local interagency 
        agreements to assure the necessary services for efficient and 
        appropriate transition from school to work or post-secondary 
        training programs; and 
           (4) assist regions and local areas in planning interagency 
        in-service training to develop and improve transition services.  
           Sec. 69.  Minnesota Statutes 1996, section 120.185, is 
        amended to read: 
           120.185 [ACCOMMODATING STUDENTS WITH DISABILITIES.] 
           A school or school district shall must provide a student 
        who is an "individual with a disability" under Section 504 of 
        the Rehabilitation Act of 1973, United States Code, title 29, 
        section 794, or under the Americans with Disabilities Act, 
        Public Law Number 101-336, with reasonable accommodations or 
        modifications in programs.  
           Sec. 70.  Minnesota Statutes 1996, section 120.188, is 
        amended to read: 
           120.188 [PURCHASING GUIDELINES.] 
           Subdivision 1.  [RIGHTS OF SCHOOL DISTRICTS TO PURCHASE 
        SCHOOL-OWNED ASSISTIVE TECHNOLOGY.] (a) When a child with a 
        disability exits a school district and enters a new school 
        district, the child's new school district may purchase any 
        assistive technology devices that the child's former school 
        district has purchased on the child's behalf.  The child's new 
        school district must notify, in writing, the child's former 
        school district of the intent to purchase the device.  The 
        child's new school district must complete a purchase agreement 
        according to section 120.1701, subdivision 10.  The child's 
        former school district must respond, in writing, to the request 
        to purchase within 30 days.  
           (b) School Districts may decline to sell a device if they 
        can demonstrate the technology is a general use device or can be 
        modified for use by other students. 
           Subd. 2.  [LIABILITY FOR USED EQUIPMENT.] The child's 
        former school district shall is not be liable for any 
        nonconformities in the equipment after it is purchased by the 
        child's new school district, or for injuries arising out of the 
        use of the assistive technology device.  This section does not 
        foreclose the child's right to bring suit against the 
        manufacturer, assistive device lessor, or assistive device 
        dealer for nonconformities in or injuries arising out of the use 
        of the assistive technology device. 
           Subd. 3.  [THIRD-PARTY PAYORS.] Nothing contained in this 
        section shall may be construed as decreasing the obligation of 
        an insurance company or other third-party payor to provide 
        coverage for assistive technology. 
           Sec. 71.  Minnesota Statutes 1996, section 120.189, is 
        amended to read: 
           120.189 [INTERAGENCY AGREEMENT TO PURCHASE USED ASSISTIVE 
        TECHNOLOGY DEVICES.] 
           Subdivision 1.  [OPTION TO PURCHASE BY DEPARTMENT OF 
        ECONOMIC SECURITY.] (a) When a child with a disability 
        transitions into a work environment or enrolls in a 
        post-secondary course or program, the department of economic 
        security may purchase any assistive technology device that the 
        child's former school district purchased on the child's behalf. 
           (b) The department of economic security may purchase an 
        assistive technology device initially purchased by a school 
        district for a child who is currently a recipient of 
        rehabilitation services and who needs the identical assistive 
        technology device as stated on the recipient's individual 
        written rehabilitation plan.  The purchase may be made not more 
        than three months prior to before the child exiting exits the 
        school district. 
           Subd. 2.  [LIABILITY FOR USED EQUIPMENT.] The department of 
        economic security and the department of children, families, and 
        learning shall are not be liable for any nonconformities in the 
        equipment after it is purchased by the department of economic 
        security, or for injuries arising out of the use of the 
        assistive technology device.  This section does not foreclose 
        the child's right to bring suit against the manufacturer, 
        assistive device lessor, or assistive device dealer for 
        nonconformities in or injuries arising out of the use of the 
        assistive technology device. 
           Subd. 3.  [THIRD-PARTY PAYOR.] Nothing contained in this 
        section shall may be construed as decreasing the obligation of 
        an insurance company or other third-party payor to provide 
        coverage for assistive technology. 
           Sec. 72.  Minnesota Statutes 1996, section 120.190, is 
        amended to read: 
           120.190 [PURCHASE AGREEMENT; PRICE FORMULA.] 
           The commissioner shall must develop guidelines for the sale 
        of used assistive technology including a purchase agreement, a 
        formula for establishing the sale price, and other terms and 
        conditions of the sale. 
           Sec. 73.  Minnesota Statutes 1996, section 120.80, is 
        amended to read: 
           120.80 [EARLY GRADUATION.] 
           Subdivision 1.  Notwithstanding any law to the contrary, 
        any secondary school student who has completed all required 
        courses may, with the approval of the student, the student's 
        parent or guardian, and local school officials, graduate prior 
        to before the completion of the school year.  General education 
        revenue attributable to the student must be paid as though the 
        student was in attendance for the entire year. 
           Sec. 74.  Minnesota Statutes 1996, section 123.3513, is 
        amended to read: 
           123.3513 [ADVANCED ACADEMIC CREDIT.] 
           A school district shall must grant academic credit to a 
        pupil attending an accelerated or advanced academic course 
        offered by a higher education institution or a nonprofit public 
        agency other than the district, if the pupil successfully 
        completes the course attended and passes an examination approved 
        by the district.  If no comparable course is offered by the 
        district, the commissioner shall determine the number of credits 
        which shall be granted to a pupil who successfully completes and 
        passes the course.  If a comparable course is offered by the 
        district, the school board shall must grant a comparable number 
        of credits to the pupil.  If there is a dispute between the 
        district and the pupil regarding the number of credits granted 
        for a particular course, the pupil may appeal the school board's 
        decision to the commissioner.  The commissioner's decision 
        regarding the number of credits shall be final.  
           The credits granted to a pupil shall be counted toward the 
        graduation requirements and subject area requirements of the 
        school district.  Evidence of successful completion of each 
        class and credits granted shall be included in the pupil's 
        secondary school record.  
           Sec. 75.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFINITIONS.] For purposes of this section, an 
        the following terms have the meanings given to them. 
           (a) "Eligible institution" means a Minnesota public 
        post-secondary institution, a private, nonprofit two-year trade 
        and technical school granting associate degrees, an 
        opportunities industrialization center accredited by the North 
        Central Association of Colleges and Schools, or a private, 
        residential, two-year or four-year, liberal arts, 
        degree-granting college or university located in Minnesota.  
        "Course" means a course or program.  
           (b) "Course" means a course or program.  
           Sec. 76.  Minnesota Statutes 1997 Supplement, section 
        123.3514, subdivision 4, is amended to read: 
           Subd. 4.  [AUTHORIZATION; NOTIFICATION.] Notwithstanding 
        any other law to the contrary, an 11th or 12th grade pupil 
        enrolled in a school or an American Indian-controlled tribal 
        contract or grant school eligible for aid under section 124.86, 
        except a foreign exchange pupil enrolled in a district under a 
        cultural exchange program, may apply to an eligible institution, 
        as defined in subdivision 3, to enroll in nonsectarian courses 
        offered by that post-secondary institution.  If an institution 
        accepts a secondary pupil for enrollment under this section, the 
        institution shall send written notice to the pupil, the pupil's 
        school or school district, and the commissioner of children, 
        families, and learning within ten days of acceptance.  The 
        notice shall must indicate the course and hours of enrollment of 
        that pupil.  If the pupil enrolls in a course for post-secondary 
        credit, the institution shall must notify the pupil about 
        payment in the customary manner used by the institution. 
           Sec. 77.  Minnesota Statutes 1997 Supplement, section 
        123.3514, subdivision 4a, is amended to read:  
           Subd. 4a.  [COUNSELING.] To the extent possible, the school 
        or school district shall must provide counseling services to 
        pupils and their parents or guardian before the pupils enroll in 
        courses under this section to ensure that the pupils and their 
        parents or guardian are fully aware of the risks and possible 
        consequences of enrolling in post-secondary courses.  The school 
        or school district shall must provide information on the program 
        including who may enroll, what institutions and courses are 
        eligible for participation, the decision-making process for 
        granting academic credits, financial arrangements for tuition, 
        books and materials, eligibility criteria for transportation 
        aid, available support services, the need to arrange an 
        appropriate schedule, consequences of failing or not completing 
        a course in which the pupil enrolls, the effect of enrolling in 
        this program on the pupil's ability to complete the required 
        high school graduation requirements, and the academic and social 
        responsibilities that must be assumed by the pupils and their 
        parents or guardian.  The person providing counseling shall 
        encourage pupils and their parents or guardian to also use 
        available counseling services at the post-secondary institutions 
        before the quarter or semester of enrollment to ensure that 
        anticipated plans are appropriate.  
           Prior to enrolling in a course, the pupil and the pupil's 
        parents or guardian must sign a form that must be provided by 
        the school or school district and may be obtained from a 
        post-secondary institution stating that they have received the 
        information specified in this subdivision and that they 
        understand the responsibilities that must be assumed in 
        enrolling in this program.  The department of children, 
        families, and learning shall must, upon request, provide 
        technical assistance to a school or school district in 
        developing appropriate forms and counseling guidelines. 
           Sec. 78.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [DISSEMINATION OF INFORMATION; NOTIFICATION OF 
        INTENT TO ENROLL.] By March 1 of each year, a school district 
        shall must provide general information about the program to all 
        pupils in grades 10 and 11.  To assist the district in planning, 
        a pupil shall inform the district by March 30 of each year of 
        the pupil's intent to enroll in post-secondary courses during 
        the following school year.  A pupil is not bound by notifying or 
        not notifying the district by March 30.  
           Sec. 79.  Minnesota Statutes 1996, 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.  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 must not enroll secondary 
        pupils, for post-secondary enrollment options purposes, in 
        remedial, developmental, or other courses that are not college 
        level.  Once a pupil has been enrolled in a post-secondary 
        course under this section, the pupil shall not be displaced by 
        another student.  
           Sec. 80.  Minnesota Statutes 1997 Supplement, section 
        123.3514, subdivision 4e, is amended to read: 
           Subd. 4e.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
        pupil, according to subdivision 4, may enroll in a nonsectarian 
        course taught by a secondary teacher or a post-secondary faculty 
        member and offered at a secondary school, or another location, 
        according to an agreement between a public school board and the 
        governing body of an eligible public post-secondary system or an 
        eligible private post-secondary institution, as defined in 
        subdivision 3.  All provisions of this section shall apply to a 
        pupil, public school board, school district, and the governing 
        body of a post-secondary institution, except as otherwise 
        provided.  
           Sec. 81.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CREDITS.] A pupil may enroll in a course under 
        this section for either secondary credit or post-secondary 
        credit.  At the time a pupil enrolls in a course, the pupil 
        shall designate whether the course is for secondary or 
        post-secondary credit.  A pupil taking several courses may 
        designate some for secondary credit and some for post-secondary 
        credit.  A pupil must not audit a course under this section. 
           A school district shall grant academic credit to a pupil 
        enrolled in a course for secondary credit if the pupil 
        successfully completes the course.  Seven quarter or four 
        semester college credits equal at least one full year of high 
        school credit.  Fewer college credits may be prorated.  A school 
        district shall must also grant academic credit to a pupil 
        enrolled in a course for post-secondary credit if secondary 
        credit is requested by a pupil.  If no comparable course is 
        offered by the district, the district shall must, as soon as 
        possible, notify the commissioner, which who shall determine the 
        number of credits that shall be granted to a pupil who 
        successfully completes a course.  If a comparable course is 
        offered by the district, the school board shall grant a 
        comparable number of credits to the pupil.  If there is a 
        dispute between the district and the pupil regarding the number 
        of credits granted for a particular course, the pupil may appeal 
        the school board's decision to the commissioner.  The 
        commissioner's decision regarding the number of credits shall be 
        final.  
           The secondary credits granted to a pupil shall must be 
        counted toward the graduation requirements and subject area 
        requirements of the school district.  Evidence of successful 
        completion of each course and secondary credits granted shall 
        must be included in the pupil's secondary school record.  A 
        pupil must shall provide the school with a copy of the pupil's 
        grade in each course taken for secondary credit under this 
        section.  Upon the request of a pupil, the pupil's secondary 
        school record shall must also include evidence of successful 
        completion and credits granted for a course taken for 
        post-secondary credit.  In either case, the record shall must 
        indicate that the credits were earned at a post-secondary 
        institution. 
           If a pupil enrolls in a post-secondary institution after 
        leaving secondary school, the post-secondary institution shall 
        must award post-secondary credit for any course successfully 
        completed for secondary credit at that institution.  Other 
        post-secondary institutions may award, after a pupil leaves 
        secondary school, post-secondary credit for any courses 
        successfully completed under this section.  An institution may 
        not charge a pupil for the award of credit. 
           Sec. 82.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 6, is amended to read:  
           Subd. 6.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled in 
        a course under this section, the department of children, 
        families, and learning shall must make payments according to 
        this subdivision for courses that were taken for secondary 
        credit.  
           The department shall must not make payments to a school 
        district or post-secondary institution for a course taken for 
        post-secondary credit only.  The department shall must not make 
        payments to a post-secondary institution for a course from which 
        a student officially withdraws during the first 14 days of the 
        quarter or semester or who has been absent from the 
        post-secondary institution for the first 15 consecutive school 
        days of the quarter or semester and is not receiving instruction 
        in the home or hospital. 
           A post-secondary institution shall receive the following: 
           (1) for an institution granting quarter credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the formula allowance, multiplied by 
        1.3, and divided by 45; or 
           (2) for an institution granting semester credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the general revenue formula allowance, 
        multiplied by 1.3, and divided by 30. 
           The department of children, families, and learning shall 
        must pay to each post-secondary institution 100 percent of the 
        amount in clause (1) or (2) within 30 days of receiving initial 
        enrollment information each quarter or semester.  If changes in 
        enrollment occur during a quarter or semester, the change shall 
        be reported by the post-secondary institution at the time the 
        enrollment information for the succeeding quarter or semester is 
        submitted.  At any time the department of children, families, 
        and learning notifies a post-secondary institution that an 
        overpayment has been made, the institution shall promptly remit 
        the amount due.  
           Sec. 83.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 6b, is amended to read: 
           Subd. 6b.  [FINANCIAL ARRANGEMENTS, PUPILS AGE 21 OR OVER.] 
        For a pupil enrolled in a course according to this section, the 
        department of children, families, and learning shall must make 
        payments according to this subdivision for courses taken to 
        fulfill high school graduation requirements by pupils eligible 
        for adult high school graduation aid.  
           The department must not make payments to a school district 
        or post-secondary institution for a course taken for 
        post-secondary credit only.  The department shall must not make 
        payments to a post-secondary institution for a course from which 
        a student officially withdraws during the first 14 days of the 
        quarter or semester or who has been absent from the 
        post-secondary institution for the first 15 consecutive school 
        days of the quarter or semester and is not receiving instruction 
        in the home or hospital. 
           A post-secondary institution shall receive the following: 
           (1) for an institution granting quarter credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the formula allowance, multiplied by 
        1.3, and divided by 45; or 
           (2) for an institution granting semester credit, the 
        reimbursement per credit hour shall be an amount equal to 88 
        percent of the product of the general revenue formula allowance 
        multiplied by 1.3, and divided by 30. 
           The department of children, families, and learning shall 
        must pay to each post-secondary institution 100 percent of the 
        amount in clause (1) or (2) within 30 days of receiving initial 
        enrollment information each quarter or semester.  If changes in 
        enrollment occur during a quarter or semester, the change shall 
        be reported by the post-secondary institution at the time the 
        enrollment information for the succeeding quarter or semester is 
        submitted.  At any time the department of children, families, 
        and learning notifies a post-secondary institution that an 
        overpayment has been made, the institution shall promptly remit 
        the amount due. 
           A school district shall receive: 
           (1) for a pupil who is not enrolled in classes at a 
        secondary program, 12 percent of the general education formula 
        allowance times .65, times 1.3; or 
           (2) for a pupil who attends classes at a secondary program 
        part time, the general education formula allowance times .65, 
        times 1.3, times the ratio of the total number of hours the 
        pupil is in membership for courses taken by the pupil for credit 
        to 1020 hours.  
           Sec. 84.  Minnesota Statutes 1997 Supplement, section 
        123.3514, subdivision 6c, is amended to read: 
           Subd. 6c.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
        ACCORDING TO AGREEMENTS.] (a) The agreement between a public 
        school board and the governing body of a public post-secondary 
        system or private post-secondary institution shall set forth the 
        payment amounts and arrangements, if any, from the public school 
        board to the post-secondary institution.  No payments shall be 
        made by the department of children, families, and learning 
        according to subdivision 6 or 6b.  For the purpose of computing 
        state aids for a school district, a pupil enrolled according to 
        subdivision 4e shall be counted in the average daily membership 
        of the school district as though the pupil were enrolled in a 
        secondary course that is not offered in connection with an 
        agreement.  Nothing in this subdivision shall be construed to 
        prohibit a public post-secondary system or private 
        post-secondary institution from receiving additional state 
        funding that may be available under any other law.  
           (b) If a course is provided under subdivision 4e, offered 
        at a secondary school, and taught by a secondary teacher, the 
        post-secondary system or institution must not require a payment 
        from the school board that exceeds the cost to the 
        post-secondary institution that is directly attributable to 
        providing that course.  
           Sec. 85.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [TEXTBOOKS; MATERIALS.] All textbooks and 
        equipment provided to a pupil, and paid for under subdivision 6, 
        are the property of the pupil's school district of residence.  
        Each pupil is required to return all textbooks and equipment to 
        the school district after the course has ended. 
           Sec. 86.  Minnesota Statutes 1996, section 123.3514, 
        subdivision 7b, is amended to read:  
           Subd. 7b.  [SUPPORT SERVICES.] The post-secondary 
        institution shall must 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 must 
        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. 87.  Minnesota Statutes 1997 Supplement, 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 state shall provide state aid to a 
        district in an amount sufficient to reimburse the parent or 
        guardian for the necessary transportation costs when the 
        family's or guardian's income is at or below the poverty level, 
        as determined by the federal government.  The reimbursement 
        shall be 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 must pay aid to the district according to this subdivision.
           Sec. 88.  Minnesota Statutes 1996, section 124.227, is 
        amended to read: 
           124.227 [INTERDISTRICT DESEGREGATION OR INTEGRATION 
        TRANSPORTATION GRANTS.] 
           (a) A district that provides transportation of pupils to 
        and from an interdistrict program for desegregation or 
        integration purposes may apply to the commissioner of children, 
        families, and learning for a grant to cover the additional costs 
        of transportation.  
           (b) A district in the metropolitan area may apply to the 
        commissioner for a grant to cover the costs of transporting 
        pupils who are enrolled under section 120.062 if the enrollment 
        of the student in the nonresident district contributes to 
        desegregation or integration purposes.  The commissioner must 
        shall develop the form and manner of applications, the criteria 
        to be used to determine when transportation is for desegregation 
        or integration purposes, and the accounting procedure to be used 
        to determine excess costs.  In determining the grant amount, the 
        commissioner must shall consider other revenue received by the 
        district for transportation for desegregation or integration 
        purposes. 
           (c) Grants may be awarded under paragraph (b) only if 
        grants awarded under paragraph (a) have been fully funded. 
           Sec. 89.  Minnesota Statutes 1996, section 124.248, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL EDUCATION REVENUE.] General 
        education revenue shall must be paid to a charter school as 
        though it were a school district.  The general education revenue 
        for each pupil unit is the state average general education 
        revenue per pupil unit minus $170, calculated without 
        compensatory revenue, transportation sparsity revenue, and the 
        transportation portion of the transition revenue adjustment, 
        plus compensatory revenue as though the school were a school 
        district. 
           Sec. 90.  Minnesota Statutes 1996, section 124.248, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TRANSPORTATION REVENUE.] Transportation revenue 
        shall must be paid to a charter school that provides 
        transportation services according to section 120.064, 
        subdivision 15, according to this subdivision.  Transportation 
        aid shall equal transportation revenue.  
           (a) In addition to the revenue under subdivision 1, a 
        charter school providing transportation services shall must 
        receive general education aid for each pupil unit equal to the 
        sum of $170, plus the transportation sparsity allowance for the 
        school district in which the charter school is located, plus the 
        transportation transition allowance for the school district in 
        which the charter school is located.  
           (b) For the first two years that a charter school is 
        providing transportation services, the special programs 
        transportation revenue equals the charter school's actual cost 
        in the current school year for transportation services for 
        children with disabilities under section 124.223, subdivisions 
        4, 5, 7, and 8.  For the third year of transportation services 
        and later fiscal years, the special programs transportation 
        revenue shall be computed according to section 124.225, 
        subdivision 14.  
           Sec. 91.  Minnesota Statutes 1997 Supplement, section 
        124.248, subdivision 3, is amended to read: 
           Subd. 3.  [SPECIAL EDUCATION AID.] Except as provided in 
        subdivision 1a, paragraph (b), special education aid shall must 
        be paid to a charter school according to section 124.3201, 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.  The charter school shall allocate its 
        special education levy equalization revenue to the resident 
        districts of the pupils attending the charter school.  The 
        districts of residence shall levy as though they were 
        participating in a cooperative, as provided in section 124.321, 
        subdivision 3. 
           Sec. 92.  Minnesota Statutes 1997 Supplement, section 
        124.248, subdivision 4, is amended to read: 
           Subd. 4.  [OTHER AID, GRANTS, REVENUE.] (a) 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 must be of an equal amount on 
        each of the 23 payment dates unless a charter school is in its 
        first year of operation in which case it shall receive on its 
        first payment date ten percent of its cumulative amount 
        guaranteed for the year and 22 payments of an equal amount 
        thereafter the sum of which shall be 90 percent of the 
        cumulative amount guaranteed.  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) A charter school may receive money from any source for 
        capital facilities needs.  In the year-end report to the state 
        board of education, the charter school shall report the total 
        amount of funds received from grants and other outside sources. 
           Sec. 93.  Minnesota Statutes 1996, section 124.273, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PARTICIPATION OF NONPUBLIC SCHOOL PUPILS.] In 
        counting the number of pupils of limited English proficiency for 
        purposes of this section, districts may include pupils of 
        limited English proficiency who attend nonpublic schools in the 
        district.  A district which counts those pupils and receives aid 
        pursuant to this section shall must offer those pupils the same 
        programs on the same terms that it offers to pupils of limited 
        English proficiency who attend the public school.  A program 
        provided for a nonpublic school pupil pursuant to this 
        subdivision shall must be provided at a public school or a 
        neutral site as defined in section 123.932, subdivision 9.  
        Nonpublic school pupils served by a district's educational 
        program for pupils of limited English proficiency shall must be 
        counted for average daily membership pursuant to sections 
        124A.02, subdivisions 20 to 22, and 124A.034, subdivisions 1 to 
        2.  
           Sec. 94.  Minnesota Statutes 1996, section 124.273, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPLICATION DATES.] To obtain aid for limited 
        English proficiency programs, a district shall must submit 
        information required by the department to implement this section.
           Sec. 95.  Minnesota Statutes 1996, section 124.273, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RECORDS; AUDIT.] A district which applies for 
        aid pursuant to this section shall must maintain records which 
        support the information contained in all of its applications.  
        The commissioner of children, families, and learning may audit 
        these records upon request.  A district which receives aid 
        pursuant to this section shall must keep such additional records 
        in the manner prescribed by the commissioner to ensure that an 
        educational program for pupils of limited English proficiency is 
        implemented and operated in accordance with sections 126.261 to 
        126.269.  
           Sec. 96.  Minnesota Statutes 1996, section 124.273, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MONEY FROM OTHER SOURCES.] A school district 
        providing a program for pupils of limited English proficiency 
        shall must be eligible to receive moneys for these programs from 
        other government agencies and from private sources when these 
        moneys are available. 
           Sec. 97.  Minnesota Statutes 1996, section 124.311, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INSTRUCTION.] A school district may 
        receive assurance of mastery revenue to provide direct 
        instructional services to eligible pupils.  
           Sec. 98.  Minnesota Statutes 1996, section 124.32, is 
        amended to read: 
           124.32 [CHILDREN WITH A DISABILITY.] 
           Subd. 2b.  [TRAVEL AID.] The state shall must pay each 
        district one-half of the sum actually expended by a district for 
        necessary travel of essential personnel providing home-based 
        services to children with a disability under age five and their 
        families.  
           Subd. 4.  [AID PAYMENT.] The aids provided for children 
        with a disability shall must be paid to the district providing 
        the special instruction and services.  General education 
        aid shall must be paid to the district of the pupil's 
        residence.  The total amount of aid paid may not exceed the 
        amount expended for children with a disability in the year for 
        which the aid is paid.  
           Subd. 6.  [FULL STATE PAYMENT.] The state shall must pay 
        each district the actual cost incurred in providing instruction 
        and services for a child with a disability whose district of 
        residence has been determined by section 120.17, subdivision 8a, 
        and who is temporarily placed in a state institution or a 
        licensed residential facility for care and treatment.  This 
        section does not apply to a child placed in a foster home or a 
        foster group home. 
           Upon following the procedure specified by the commissioner 
        of children, families, and learning, the district may bill the 
        state the actual cost incurred in providing the services 
        including transportation costs and a proportionate amount of 
        capital expenditures and debt service, minus the amount of the 
        basic revenue, as defined in section 124A.22, subdivision 2, of 
        the district for the child and the special education aid, 
        transportation aid, and any other aid earned on behalf of the 
        child.  The limit set forth in subdivision 4 shall apply applies 
        to aid paid pursuant to this subdivision.  
           To the extent possible, the commissioner shall obtain 
        reimbursement from another state for the cost of serving any 
        child whose parent or guardian resides in that state.  The 
        commissioner may contract with the appropriate authorities of 
        other states to effect reimbursement.  All money received from 
        other states shall must be paid to the state treasury and placed 
        in the general fund.  
           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 must submit to the 
        commissioner an application for approval of these programs and 
        their budgets for the next fiscal year.  The application shall 
        must 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 fiscal year.  The application shall must 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 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 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.  
           Subd. 8.  [REGULAR CLASSROOM PROGRAMS.] When planning 
        programs for the education of children with a disability in the 
        regular classroom, school districts are encouraged to consider 
        the size of the regular class and to provide the support 
        services necessary to insure ensure successful mainstreaming.  
           Subd. 10.  [SUMMER SCHOOL.] By March 15 of each year, 
        districts shall must submit separate applications for program 
        and budget approval for summer school programs.  The review of 
        These applications shall must be reviewed 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.  
           Subd. 12.  [ALLOCATION FROM COOPERATIVE CENTERS, SERVICE 
        COOPERATIVES, EDUCATION DISTRICTS, AND INTERMEDIATE DISTRICTS.] 
        For purposes of this section, a special education cooperative, 
        service cooperative, education district, or an intermediate 
        district shall must 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 must be paid to the participating school 
        districts. 
           Sec. 99.  Minnesota Statutes 1996, section 124.3201, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] (a) 
        A school district's special education revenue for fiscal year 
        1996 and later equals the state total special education revenue, 
        minus the amount determined under paragraph (b), times the ratio 
        of the district's adjusted special education base revenue to the 
        state total adjusted special education base revenue.  If the 
        state board of education modifies its rules for special 
        education in a manner that increases a school district's special 
        education obligations or service requirements, the commissioner 
        of children, families, and learning shall annually increase each 
        district's special education revenue by the amount necessary to 
        compensate for the increased service requirements.  The 
        additional revenue equals the cost in the current year 
        attributable to rule changes not reflected in the computation of 
        special education base revenue, multiplied by the appropriate 
        percentages from subdivision 2. 
           (b) Notwithstanding paragraph (a), if the special education 
        base revenue for a district equals zero, the special education 
        revenue equals the amount computed according to subdivision 2 
        using current year data. 
           Sec. 100.  Minnesota Statutes 1996, section 124.3201, 
        subdivision 6, is amended to read:  
           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. 
           Sec. 101.  Minnesota Statutes 1996, section 124.3201, 
        subdivision 7, is amended to read:  
           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 must allocate its approved expenditures for 
        special education programs among participating school districts. 
           Sec. 102.  Minnesota Statutes 1997 Supplement, section 
        124.321, subdivision 1, is amended to read: 
           Subdivision 1.  [LEVY EQUALIZATION REVENUE.] (a) For fiscal 
        year 1999, special education levy equalization revenue for a 
        school district, excluding an intermediate school district, 
        equals the sum of the following amounts: 
           (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 excess cost revenue under section 
        124.323; plus 
           (3) the levy percentage factor for that year times the 
        district's school-to-work program for children with a disability 
        revenue under section 124.574.  
           Sec. 103.  Minnesota Statutes 1997 Supplement, section 
        124.321, subdivision 2, is amended to read: 
           Subd. 2.  [REVENUE ALLOCATION FROM STATE ACADEMIES.] (a) 
        For purposes of this section, the Minnesota state academy for 
        the deaf or the Minnesota state academy for the blind each year 
        shall must allocate an amount equal to the levy percentage 
        factor for that year times their special education revenue under 
        section 124.3201 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. 
           (b) When the Minnesota state academy for the deaf or the 
        Minnesota state academy for the blind allocates 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 must provide 
        information to the department of children, families, and 
        learning on the amount of revenue it allocated to the school 
        districts that assign a child who requires an instructional aide.
           Sec. 104.  Minnesota Statutes 1996, section 124.322, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A district is eligible for 
        an alternative delivery base revenue adjustment if the 
        commissioner of children, families, and learning has approved 
        the application of the district according to section 120.173.  
           Sec. 105.  Minnesota Statutes 1997 Supplement, section 
        124.322, subdivision 1a, is amended to read: 
           Subd. 1a.  [BASE REVENUE ADJUSTMENT.] 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, shall must 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 
        children, families, and learning. 
           Sec. 106.  Minnesota Statutes 1997 Supplement, section 
        124.323, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] In For the purposes of this 
        section, the definitions in this subdivision apply. 
           (a) "Unreimbursed special education cost" means the sum of 
        the following: 
           (1) expenditures for teachers' salaries, contracted 
        services, supplies, equipment, and transportation services 
        eligible for revenue under section 124.3201; plus 
           (2) expenditures for tuition bills received under section 
        120.17 for services eligible for revenue under sections 
        124.3201, subdivision 2, and 124.3202, subdivision 1; minus 
           (3) revenue for teachers' salaries, contracted services, 
        supplies, and equipment under sections 124.3201 and 124.3202; 
        minus 
           (4) tuition receipts under section 120.17 for services 
        eligible for revenue under sections 124.3201, subdivision 2, and 
        124.3202, subdivision 1. 
           (b) "General revenue," for fiscal year 1996, means for 
        fiscal year 1996, the sum of the general education revenue 
        according to section 124A.22, subdivision 1, as adjusted 
        according to section 124A.036, subdivision 5, 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, as adjusted according to section 
        124A.036, subdivision 5, plus the total referendum revenue minus 
        transportation sparsity revenue minus total operating capital 
        revenue. 
           Sec. 107.  Minnesota Statutes 1996, section 124.48, as 
        amended by Laws 1997, chapter 192, section 20, is amended to 
        read: 
           124.48 [INDIAN SCHOLARSHIPS.] 
           Subdivision 1.  [AWARDS.] The state board, with the advice 
        and counsel of the Minnesota Indian scholarship committee, may 
        award scholarships to any Minnesota resident student who is of 
        one-fourth or more Indian ancestry, who has applied for other 
        existing state and federal scholarship and grant programs, and 
        who, in the opinion of the board, has the capabilities to 
        benefit from further education.  Scholarships shall must be for 
        advanced or specialized education in accredited or approved 
        colleges or in business, technical or vocational schools.  
        Scholarships shall be used to defray the total cost of education 
        including tuition, incidental fees, books, supplies, 
        transportation, other related school costs and the cost of board 
        and room and shall be paid directly to the college or school 
        concerned.  The total cost of education includes all tuition and 
        fees for each student enrolling in a public institution and the 
        portion of tuition and fees for each student enrolling in a 
        private institution that does not exceed the tuition and fees at 
        a comparable public institution.  Each student shall be awarded 
        a scholarship based on the total cost of the student's education 
        and a standardized need analysis.  The amount and type of each 
        scholarship shall be determined through the advice and counsel 
        of the Minnesota Indian scholarship committee.  
           When an Indian student satisfactorily completes the work 
        required by a certain college or school in a school year the 
        student is eligible for additional scholarships, if additional 
        training is necessary to reach the student's educational and 
        vocational objective.  Scholarships may not be given to any 
        Indian student for more than five years of study without special 
        approval of the Minnesota Indian scholarship committee.  
           Subd. 3.  [INDIAN SCHOLARSHIP COMMITTEE.] The Minnesota 
        Indian scholarship committee is established.  Members shall be 
        appointed by The state board must appoint members with the 
        assistance of the Indian affairs council as provided in section 
        3.922, subdivision 6.  Members shall be reimbursed for expenses 
        as provided in section 15.059, subdivision 6.  The state board 
        shall determine the membership terms and duration of the 
        committee, which expires no later than June 30, 2001.  The 
        committee shall provide advice to the state board in awarding 
        scholarships to eligible American Indian students and in 
        administering the state board's duties regarding awarding of 
        American Indian post-secondary preparation grants to school 
        districts.  
           Sec. 108.  Minnesota Statutes 1997 Supplement, section 
        124.481, is amended to read: 
           124.481 [INDIAN POST-SECONDARY PREPARATION GRANTS.] 
           The state board of education, with the advice of the 
        Minnesota Indian scholarship committee, may make grants to 
        school districts or tribal grant or contract schools to support 
        post-secondary preparation for secondary pupils who are of 
        one-fourth or more Indian ancestry and who, in the opinion of 
        the superintendent, have the capabilities to benefit from higher 
        education.  Distribution of the grants must be in accordance 
        with a plan prepared by the state board, with the advice of the 
        Minnesota Indian scholarship committee, that describes the 
        objectives and methods of implementing the grant program, 
        including the manner in which grants will be distributed in 
        proportion to the geographical distribution of the Indian 
        population of the state. 
           Sec. 109.  Minnesota Statutes 1996, section 124.573, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMIT.] The commissioner may withhold all or any 
        portion of the aid paid under this section for a secondary 
        vocational education program which receives funds from any other 
        source.  In no event shall A district or center must not receive 
        a total amount of state aid pursuant to this section which, when 
        added to funds from other sources, will provide the program an 
        amount for salaries and travel which exceeds 100 percent of the 
        amount of its expenditures for salaries and travel in the 
        program.  
           Sec. 110.  Minnesota Statutes 1996, section 124.573, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [SECONDARY VOCATIONAL AID.] A district's 
        secondary vocational education aid for a fiscal year equals the 
        lesser of: 
           (a) $80 times the district's average daily membership in 
        grades 10 to 12; or 
           (b) 25 percent of approved expenditures for the following: 
           (1) salaries paid to essential, licensed personnel 
        providing direct instructional services to students in that 
        fiscal year for services rendered in the district's approved 
        secondary vocational education programs; 
           (2) contracted services provided by a public or private 
        agency other than a Minnesota school district or cooperative 
        center under subdivision 3a; 
           (3) necessary travel between instructional sites by 
        licensed secondary vocational education personnel; 
           (4) necessary travel by licensed secondary vocational 
        education personnel for vocational student organization 
        activities held within the state for instructional purposes; 
           (5) curriculum development activities that are part of a 
        five-year plan for improvement based on program assessment; 
           (6) necessary travel by licensed secondary vocational 
        education personnel for noncollegiate credit bearing 
        professional development; and 
           (7) specialized vocational instructional supplies. 
           (c) Up to ten percent of a district's secondary vocational 
        aid may be spent on equipment purchases.  Districts using 
        secondary vocational aid for equipment purchases must report to 
        the department of children, families, and learning on the 
        improved learning opportunities for students that result from 
        the investment in equipment.  
           Sec. 111.  Minnesota Statutes 1996, section 124.573, 
        subdivision 2e, is amended to read: 
           Subd. 2e.  [ALLOCATION FROM COOPERATIVE CENTERS AND 
        INTERMEDIATE DISTRICTS.] For purposes of subdivisions 2b, 
        paragraph (b), and 2f, paragraph (b), a cooperative center or an 
        intermediate district shall must allocate its approved 
        expenditures for secondary vocational education programs among 
        participating school districts.  For purposes of subdivision 2f, 
        paragraph (a), a cooperative center or an intermediate 
        district shall must allocate its secondary vocational aid for 
        fiscal year 1994 among participating school districts.  For 1995 
        and later fiscal years, secondary vocational aid for services 
        provided by a cooperative center or an intermediate district 
        shall be paid to the participating school district.  
           Sec. 112.  Minnesota Statutes 1996, section 124.573, 
        subdivision 2f, is amended to read: 
           Subd. 2f.  [AID GUARANTEE.] Notwithstanding subdivision 2b, 
        the secondary vocational education aid for a school district is 
        not less than the lesser of: 
           (a) 95 percent of the secondary vocational education aid 
        the district received for the previous fiscal year; or 
           (b) 40 percent of the approved expenditures for secondary 
        vocational programs included in subdivision 2b, paragraph (b). 
           Sec. 113.  Minnesota Statutes 1996, section 124.573, 
        subdivision 3, is amended to read:  
           Subd. 3.  [COMPLIANCE WITH RULES.] Aid shall must be paid 
        under this section only for services rendered or for costs 
        incurred in secondary vocational education programs approved by 
        the commissioner and operated in accordance with rules 
        promulgated by the state board.  These rules shall must provide 
        minimum student-staff ratios required for a secondary vocational 
        education program area to qualify for this aid.  The rules must 
        not require the collection of data at the program or course 
        level to calculate secondary vocational aid.  The rules shall 
        must not require any minimum number of administrative staff, any 
        minimum period of coordination time or extended employment for 
        secondary vocational education personnel, or the availability of 
        vocational student activities or organizations for a secondary 
        vocational education program to qualify for this aid.  The 
        requirement in these rules that program components be available 
        for a minimum number of hours shall must not be construed to 
        prevent pupils from enrolling in secondary vocational education 
        courses on an exploratory basis for less than a full school 
        year.  The state board shall must not require a school district 
        to offer more than four credits or 560 hours of vocational 
        education course offerings in any school year.  Rules relating 
        to secondary vocational education programs shall must not 
        incorporate the provisions of the state plan for vocational 
        education by reference.  This aid shall be paid only for 
        services rendered and for costs incurred by essential, licensed 
        personnel who meet the work experience requirements for 
        licensure pursuant to the rules of the state board.  Licensed 
        personnel means persons holding a valid secondary vocational 
        license issued by the commissioner, except that when.  If an 
        average of five or fewer secondary full-time equivalent students 
        are enrolled per teacher in an approved post-secondary program 
        at intermediate district No. 287, 916, or 917, licensed 
        personnel means persons holding a valid vocational license 
        issued by the commissioner, the state board for vocational 
        technical education, or the board of trustees of the Minnesota 
        state colleges and universities.  Notwithstanding section 
        124.15, the commissioner may modify or withdraw the program or 
        aid approval and withhold aid under this section without 
        proceeding under section 124.15 at any time.  To do so, the 
        commissioner must determine 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. 114.  Minnesota Statutes 1996, section 124.573, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [AID FOR CONTRACTED SERVICES.] In addition to 
        the provisions of subdivisions 2 and 3, a school district or 
        cooperative center may contract with a public or private agency 
        other than a Minnesota school district or cooperative center for 
        the provision of secondary vocational education services.  The 
        state board shall must promulgate rules relating to program 
        approval procedures and criteria for these contracts and 
        aid shall must be paid only for contracts approved by the 
        commissioner of children, families, and learning.  For the 
        purposes of subdivision 4, The district or cooperative center 
        contracting for these services shall must be construed to be 
        providing the services.  
           Sec. 115.  Minnesota Statutes 1996, section 124.573, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [DISTRICT REPORTS.] Each district or cooperative 
        center shall must report data to the department for all 
        secondary vocational education programs as required by the 
        department to implement the secondary vocational aid formula.  
           Sec. 116.  Minnesota Statutes 1997 Supplement, 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 must allocate its approved expenditures for 
        school-to-work programs for children with a disability among 
        participating school districts.  Aid for school-to-work programs 
        for children with a disability for services provided by a 
        cooperative or intermediate district shall be paid to the 
        participating school districts.  
           Sec. 117.  Minnesota Statutes 1996, section 124.86, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] (a) Each year each 
        American Indian-controlled tribal contract or grant school 
        authorized by the United States Code, title 25, section 450f, 
        that is located on a reservation within the state is eligible to 
        receive tribal contract or grant school aid subject to the 
        requirements in this subdivision paragraphs (b) to (d). 
           (a) (b) The school must plan, conduct, and administer an 
        education program that complies with the requirements of either 
        this chapter and chapters 120, 121, 122, 123, 124A, 124C, 125, 
        126, 129, and 268A or Code of Federal Regulations, title 25, 
        sections 31.0 to 45.80. 
           (b) (c) The school must comply with all other state 
        statutes governing independent school districts or their 
        equivalent in the Code of Federal Regulations, title 25.  
           (c) (d) The state tribal contract or grant school aid must 
        be used to supplement, and not to replace, the money for 
        American Indian education programs provided by the federal 
        government. 
           Sec. 118.  Minnesota Statutes 1997 Supplement, section 
        124.86, subdivision 2, is amended to read: 
           Subd. 2.  [REVENUE AMOUNT.] An American Indian-controlled 
        tribal contract or grant school that is located on a reservation 
        within the state and that complies with the requirements in 
        subdivision 1 is eligible to receive tribal contract or grant 
        school aid.  The amount of aid is derived by: 
           (1) multiplying the formula allowance under section 
        124A.22, subdivision 2, less $170, times the difference between 
        (a) (i) the actual pupil units as defined in section 124A.02, 
        subdivision 15, in average daily membership, excluding section 
        124.17, subdivision 2f, and (b) (ii) the number of pupils for 
        the current school year, weighted according to section 124.17, 
        subdivision 1, receiving benefits under section 123.933 or 
        123.935 or for which the school is receiving reimbursement under 
        section 126.23; 
           (2) adding to the result in clause (1) an amount equal to 
        the product of the formula allowance under section 124A.22, 
        subdivision 2, less $300 times the tribal contract compensation 
        revenue pupil units; 
           (3) subtracting from the result in clause (2) the amount of 
        money allotted to the school by the federal government through 
        Indian School Equalization Program of the Bureau of Indian 
        Affairs, according to Code of Federal Regulations, title 25, 
        part 39, subparts A to E, for the basic program as defined by 
        section 39.11, paragraph (b), for the base rate as applied to 
        kindergarten through twelfth grade, excluding small school 
        adjustments and additional weighting, but not money allotted 
        through subparts F to L for contingency funds, school board 
        training, student training, interim maintenance and minor 
        repair, interim administration cost, prekindergarten, and 
        operation and maintenance, and the amount of money that is 
        received according to section 126.23; 
           (4) dividing the result in clause (3) by the sum of the 
        actual pupil units in average daily membership, excluding 
        section 124.17, subdivision 2f, plus the tribal contract 
        compensation revenue pupil units; and 
           (5) multiplying the sum of the actual pupil units, 
        including section 124.17, subdivision 2f, in average daily 
        membership plus the tribal contract compensation revenue pupil 
        units by the lesser of $1,500 or the result in clause (4). 
           Sec. 119.  Minnesota Statutes 1996, section 124.86, 
        subdivision 3, is amended to read: 
           Subd. 3.  [WAIVER.] Notwithstanding subdivision 1, 
        paragraphs (a) (b) and (b) (c), a tribal contract or grant 
        school: 
           (1) is not subject to the Minnesota election law; 
           (2) has no authority under this section to levy for 
        property taxes, issue and sell bonds, or incur debt; and 
           (3) may request through its managing tribal organization a 
        recommendation of the state board of education, for 
        consideration of the legislature, that a tribal contract or 
        grant school not be subject to specified statutes related to 
        independent school districts. 
           Sec. 120.  Minnesota Statutes 1996, section 124.86, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EARLY CHILDHOOD FAMILY EDUCATION REVENUE.] A 
        school receiving aid under this section is eligible to receive 
        early childhood family education revenue to provide early 
        childhood family education programs for parents and children who 
        are enrolled or eligible for enrollment in a federally 
        recognized tribe.  The revenue equals 1.5 times the statewide 
        average expenditure per participant under section 124.2711, 
        times the number of children and parents participating full time 
        in the program.  The program shall must comply with section 
        121.882, except that the school is not required to provide a 
        community education program or establish a community education 
        advisory council.  The program shall must be designed to improve 
        the skills of parents and promote American Indian history, 
        language, and culture.  The school shall must make affirmative 
        efforts to encourage participation by fathers.  Admission may 
        not be limited to those enrolled in or eligible for enrollment 
        in a federally recognized tribe. 
           Sec. 121.  Minnesota Statutes 1996, section 124.90, is 
        amended to read: 
           124.90 [MEDICAL ASSISTANCE PAYMENTS TO SCHOOL DISTRICTS.] 
           Subdivision 1.  [ELIGIBILITY.] A school district may enroll 
        as a provider in the medical assistance program and receive 
        medical assistance payments for covered special education 
        services provided to persons eligible for medical assistance 
        under chapter 256B.  To receive medical assistance payments, the 
        school district must comply with relevant provisions of state 
        and federal statutes and regulations governing the medical 
        assistance program. 
           Subd. 2.  [FUNDING.] A school district that provides a 
        covered service to an eligible person and complies with relevant 
        requirements of the medical assistance program shall be is 
        entitled to receive payment for the service provided, including 
        that portion of the payment that will subsequently be reimbursed 
        by the federal government, in the same manner as other medical 
        assistance providers.  The school district is not required to 
        provide matching funds or pay part of the costs of the service, 
        as long as the rate charged for the service does not exceed 
        medical assistance limits that apply to all medical assistance 
        providers. 
           Subd. 3.  [CONTRACT FOR SERVICES.] A school district may 
        contract for the provision of medical assistance-covered 
        services, and may contract with a third party agency to assist 
        in administering and billing for these services. 
           Subd. 4.  [PRIVATE INSURERS.] A school district may enroll 
        as a provider for insurance companies to provide covered special 
        education services to eligible persons.  To receive payments, 
        the district must comply with relevant state and federal 
        statutes.  A district may contract for services, and may 
        contract with a third party agency to assist in administering 
        and billing for these services. 
           Subd. 5.  [NO REDUCTION IN REVENUE.] A school district's 
        revenue for special education programs shall must not be reduced 
        by any payments for medical assistance or insurance received 
        according to this section. 
           Sec. 122.  Minnesota Statutes 1997 Supplement, section 
        126.22, subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBLE PUPILS.] The following pupils are 
        eligible to participate in the graduation incentives program:  
           (a) any pupil under the age of 21 who:  
           (1) performs substantially 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 
           (11) has withdrawn from school or has been chronically 
        truant; 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. 123.  Minnesota Statutes 1997 Supplement, section 
        126.22, subdivision 3a, is amended to read: 
           Subd. 3a.  [ADDITIONAL ELIGIBLE PROGRAM.] A pupil who is at 
        least 16 years of age, who is eligible under subdivision 2, 
        clause (a), and who has been enrolled only in a public school, 
        if the pupil has been enrolled in any school, during the year 
        immediately before transferring under this subdivision, may 
        transfer to any nonpublic school that has contracted with the 
        serving school district to provide nonsectarian educational 
        services.  Such a The school must enroll every eligible pupil 
        who seeks to transfer to the school under this program subject 
        to available space. 
           Sec. 124.  Minnesota Statutes 1996, section 126.22, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISSEMINATION OF INFORMATION.] A school district 
        shall must disseminate information, developed by the department 
        of children, families, and learning, about the graduation 
        incentives program to residents in the district who are under 
        the age of 21. 
           Sec. 125.  Minnesota Statutes 1996, section 126.22, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DESEGREGATION PLANS.] Notwithstanding any 
        provision to the contrary, students may not enroll in a 
        nonresident district under this section if their enrollment in 
        another school district would result in a violation of a 
        district's desegregation plan, as mandated and approved by the 
        state board of education. 
           Sec. 126.  Minnesota Statutes 1997 Supplement, section 
        126.22, subdivision 8, is amended to read: 
           Subd. 8.  [ENROLLMENT VERIFICATION.] (a) For a pupil 
        attending an eligible program full time under subdivision 3, 
        paragraph (d), the department of children, families, and 
        learning shall must pay 90 percent of the district's average 
        general education revenue less compensatory revenue to the 
        eligible program and ten percent of the district's average 
        general education revenue less compensatory revenue to the 
        resident district within 30 days after the eligible program 
        verifies enrollment using the form provided by the department.  
        For a pupil attending an eligible program part time, revenue 
        shall be reduced proportionately, according to the amount of 
        time the pupil attends the program, and the payments to the 
        eligible program and the resident district shall be reduced 
        accordingly.  A pupil for whom payment is made according to this 
        section may not be counted by any district for any purpose other 
        than computation of general education revenue.  If payment is 
        made for a pupil under this subdivision, a school district shall 
        not reimburse a program under section 126.23 for the same pupil. 
        Compensatory revenue shall be paid according to section 124A.22, 
        subdivision 3. 
           (b) The department of children, families, and learning 
        shall must pay up to 100 percent of the revenue to the eligible 
        program if there is an agreement to that effect between the 
        school district and the eligible program.  
           Sec. 127.  Minnesota Statutes 1997 Supplement, section 
        126.23, subdivision 1, is amended to read: 
           Subdivision 1.  [AID.] If a pupil enrolls in an alternative 
        program, eligible under section 126.22, subdivision 3, paragraph 
        (d), or subdivision 3a, operated by a private organization that 
        has contracted with a school district to provide educational 
        services for eligible pupils under section 126.22, subdivision 
        2, the district contracting with the private organization must 
        reimburse the provider an amount equal to at least 90 percent of 
        the district's average general education less compensatory 
        revenue per pupil unit times the number of pupil units for 
        pupils attending the program.  Compensatory revenue must be 
        allocated according to section 124A.28, subdivision 1a.  For a 
        pupil attending the program part time, the revenue paid to the 
        program shall must be reduced proportionately, according to the 
        amount of time the pupil attends the program, and revenue paid 
        to the district shall be reduced accordingly.  Pupils for whom a 
        district provides reimbursement may not be counted by the 
        district for any purpose other than computation of general 
        education revenue.  If payment is made to a district or program 
        for a pupil under this section, the department of children, 
        families, and learning shall must not make a payment for the 
        same pupil under section 126.22, subdivision 8. 
           Sec. 128.  Minnesota Statutes 1996, section 126.235, is 
        amended to read: 
           126.235 [EDUCATIONAL PROGRAM FOR PREGNANT MINORS AND MINOR 
        PARENTS.] 
           Upon request, a school district must make available to a 
        pregnant minor or a minor custodial parent an educational 
        program to enable the minor to earn a high school diploma.  The 
        department of children, families, and learning shall must 
        develop program designs and provide districts with technical 
        assistance.  A district's educational program must use 
        appropriate community services and must recognize each pupil's 
        individual needs and parental responsibilities.  The district 
        shall must designate at least one person to review quarterly 
        each pupil's progress in the program. 
           If a pupil receives social services according to section 
        257.33 or employment and training services according to section 
        256.736, the district shall must develop the pupil's educational 
        program in consultation with the providers of the services and 
        shall provide a liaison when necessary.  The pupil may request 
        that an adult, selected by the pupil, assist in developing the 
        educational program. 
           Sec. 129.  Minnesota Statutes 1996, section 126.239, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TRAINING PROGRAMS FOR TEACHERS.] A 
        secondary teacher assigned by a school district to teach an 
        advanced placement or international baccalaureate course may 
        participate in a training program offered by the college board 
        or International Baccalaureate North America, Inc.  The state 
        may pay a portion of the tuition, room, and board costs a 
        teacher incurs in participating in a training program.  The 
        commissioner of children, families, and learning shall determine 
        application procedures and deadlines, and select teachers to 
        participate in the training program.  The procedures determined 
        by the commissioner shall, to the extent possible, ensure that 
        advanced placement and international baccalaureate courses 
        become available in all parts of the state and that a variety of 
        course offerings are available in school districts.  This 
        subdivision does not prevent teacher participation in training 
        programs offered by the college board or International 
        Baccalaureate North America, Inc., when tuition is paid by a 
        source other than the state. 
           Sec. 130.  Minnesota Statutes 1996, section 126.262, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ESSENTIAL INSTRUCTIONAL PERSONNEL.] "Essential 
        instructional personnel" means the following:  
           (a) A teacher licensed by the state board of teaching to 
        teach bilingual education or English as a second language; 
           (b) A teacher with an exemption from a teaching license 
        requirement pursuant to section 126.266 who is employed in a 
        school district's English as a second language or bilingual 
        education program; 
           (c) Any teacher as defined in section 125.03 who holds a 
        valid license from the state board of teaching, if the district 
        assures the department of children, families, and learning that 
        the teacher will obtain the preservice and in-service training 
        the department considers necessary to enable the teacher to 
        provide appropriate service to pupils of limited English 
        proficiency.  
           Sec. 131.  Minnesota Statutes 1996, section 126.262, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PRIMARY LANGUAGE.] "Primary language" is means a 
        language other than English which is the language normally used 
        by the child or the language which is spoken in the child's home 
        environment.  
           Sec. 132.  Minnesota Statutes 1996, section 126.264, is 
        amended to read: 
           126.264 [RIGHTS OF PARENTS.] 
           Subdivision 1.  [NOVICE.] No later than Within ten days 
        after the enrollment of any pupil in an instructional program 
        for limited English proficient students, the school district in 
        which the pupil resides shall must notify the parent or guardian 
        by mail.  This notice shall must:  
           (a) Be in writing in English and in the primary language of 
        the pupil's parents; 
           (b) Inform the parents that their child has been enrolled 
        in an instructional program for limited English proficient 
        students; 
           (c) Contain a simple, nontechnical description of the 
        purposes, method and content of the program; 
           (d) Inform the parents that they have the right to visit 
        the educational program for limited English proficient students 
        in which their child is enrolled; 
           (e) Inform the parents of the time and manner in which to 
        request and receive a conference for the purpose of explaining 
        the nature and purpose of the program; and 
           (f) Inform the parents of their rights to withdraw their 
        child from an educational program for limited English proficient 
        students and the time and manner in which to do so.  
           The department of children, families, and learning shall, 
        at the request of the school district, prepare the notice in the 
        primary language of the parent or guardian.  
           Subd. 2.  [WITHDRAWAL FROM PROGRAM.] Any parent whose child 
        is enrolled in an educational program for limited English 
        proficient students shall have the right, either at the time of 
        the original notification of enrollment or at the close of any 
        semester thereafter, to withdraw the child from the program by 
        providing written notice of this intent to the principal of the 
        school in which the child is enrolled or to the superintendent 
        of the school district in which the child resides.  Nothing 
        herein in this section shall preclude a parent from reenrolling 
        a child of limited English proficiency in an educational program 
        for limited English proficient students. 
           Subd. 3.  [PARENTAL INVOLVEMENT.] A district which receives 
        moneys pursuant to section 124.273 shall must encourage 
        involvement of parents of pupils enrolled in the educational 
        program for limited English proficient students in this 
        program.  The district shall solicit the views of parents about 
        the program and its effects upon their children. 
           Sec. 133.  Minnesota Statutes 1996, section 126.265, is 
        amended to read: 
           126.265 [GENERAL REQUIREMENTS FOR PROGRAMS.] 
           A district which receives aid pursuant to section 124.273 
        shall must comply with the following program requirements: 
           (a) To the extent possible, the district shall must avoid 
        isolating children of limited English proficiency for a 
        substantial part of the school day; and 
           (b) In predominantly nonverbal subjects, such as art, 
        music, and physical education, pupils of limited English 
        proficiency shall be permitted to participate fully and on an 
        equal basis with their contemporaries in public school classes 
        provided for these subjects.  To the extent possible, the school 
        district shall must assure to pupils enrolled in a program for 
        limited English proficient students an equal and meaningful 
        opportunity to participate fully with other pupils in all 
        extracurricular activities. 
           Sec. 134.  Minnesota Statutes 1996, section 126.266, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTIONS.] The commissioner of children, 
        families, and learning may grant an exemption from the licensure 
        requirement in the hiring of teachers of English as a second 
        language or bilingual education teachers to a school district if 
        the commissioner finds that compliance would impose a hardship 
        upon the district in the securing of teachers for its 
        educational programs for limited English proficient students.  
        The commissioner of children, families, and learning shall 
        notify the board of teaching of any exemptions granted pursuant 
        to this section. 
           Sec. 135.  Minnesota Statutes 1996, section 126.267, is 
        amended to read: 
           126.267 [TECHNICAL ASSISTANCE.] 
           The commissioner shall provide technical assistance to 
        school districts receiving aid pursuant to section 124.273 and 
        to post-secondary institutions for preservice and in-service 
        training for bilingual education teachers and English as a 
        second language teachers employed in educational programs for 
        limited English proficient students, teaching methods, 
        curriculum development, testing and testing mechanisms, and the 
        development of instructional materials for these educational 
        programs. 
           Sec. 136.  Minnesota Statutes 1996, section 126.43, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CULTURAL EXCHANGE PROGRAM GOALS.] (a) A 
        cultural exchange grant program is established to develop and 
        create opportunities for children and staff of different ethnic, 
        racial, and other cultural backgrounds to experience educational 
        and social exchange.  Student and staff exchanges under this 
        section may only take place between a district with a 
        desegregation plan approved by the state board of education and 
        a district without a desegregation plan.  Participating school 
        districts shall offer summer programs for credit with the goals 
        set forth in paragraphs (a) (b) to (d) (e). 
           (a) (b) The program shall must develop curriculum 
        reflective of particular ethnic, racial, and other cultural 
        aspects of various demographic groups in the state. 
           (b) (c) The program shall must develop immersion programs 
        that are coordinated with the programs offered in 
        paragraph (a) (b). 
           (c) (d) The program shall must create opportunities for 
        students from across the state to enroll in summer programs 
        in school districts other than the one of residence, or in other 
        schools within their district of residence. 
           (d) (e) The program shall must create opportunities for 
        staff exchanges on a cultural basis. 
           Sec. 137.  Minnesota Statutes 1996, section 126.43, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CULTURAL EXCHANGE GRANTS.] A school district 
        together with a group of school districts, a cooperative 
        governmental unit, the center for arts and education, or a 
        post-secondary institution may apply for cultural exchange 
        grants.  The commissioner of children, families, and learning 
        shall determine grant recipients and may adopt application 
        guidelines.  The grants must be competitively determined and 
        applicants must demonstrate: 
           (1) the capacity to develop a focused curriculum that 
        reflects the particular ethnic, racial, and other cultural 
        aspects of the community in which the school where the program 
        is offered is located; 
           (2) the capacity to develop immersion programs coordinated 
        with the curriculum developed in clause (1); 
           (3) the capacity to coordinate a cultural exchange program 
        with other curriculum programs to assure continuity in a pupil's 
        education; 
           (4) the capacity to maximize diversity of ethnic, racial, 
        and other cultural backgrounds of participants; 
           (5) that the application is jointly developed by 
        participants; and 
           (6) that the outcomes of the exchange program are clearly 
        articulated. 
           Sec. 138.  Minnesota Statutes 1996, section 126.48, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM DESCRIBED.] American Indian 
        language and culture education programs shall be are programs in 
        elementary and secondary schools enrolling American Indian 
        children designed: 
           (1) to make the curriculum more relevant to the needs, 
        interests, and cultural heritage of American Indian pupils; 
           (2) to provide positive reinforcement of the self-image of 
        American Indian pupils; and 
           (3) to develop intercultural awareness among pupils, 
        parents, and staff.  Program components may include:  
        instruction in American Indian language, literature, history, 
        and culture; development of support components for staff, 
        including in-service training and technical assistance in 
        methods of teaching American Indian pupils; research projects, 
        including experimentation with and evaluation of methods of 
        relating to American Indian pupils; provision of personal and 
        vocational counseling to American Indian pupils; modification of 
        curriculum, instructional methods, and administrative procedures 
        to meet the needs of American Indian pupils; and establishment 
        of cooperative liaisons with nonsectarian nonpublic, community, 
        tribal or alternative schools offering curricula which reflect 
        American Indian culture.  Districts offering programs may make 
        contracts for the provision of program components by 
        nonsectarian nonpublic, community, tribal or alternative 
        schools.  These programs may also be provided as components of 
        early childhood and family education programs. 
           Sec. 139.  Minnesota Statutes 1996, section 126.48, 
        subdivision 2, is amended to read: 
           Subd. 2.  [VOLUNTARY ENROLLMENT.] Enrollment in American 
        Indian language and culture education programs shall must be 
        voluntary.  School districts and participating schools shall 
        must make affirmative efforts to encourage participation.  They 
        shall encourage parents to visit classes or come to school for a 
        conference explaining the nature of the program and provide 
        visits by school staff to parents' homes to explain the nature 
        of the program. 
           Sec. 140.  Minnesota Statutes 1996, section 126.48, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ENROLLMENT OF OTHER CHILDREN; SHARED TIME 
        ENROLLMENT.] To the extent it is economically feasible, a school 
        district or participating school may make provision for the 
        voluntary enrollment of non-American Indian children in the 
        instructional components of an American Indian language and 
        culture education program in order that they may acquire an 
        understanding of the cultural heritage of the American Indian 
        children for whom that particular program is designed.  However, 
        in determining eligibility to participate in a program, priority 
        shall must be given to American Indian children.  American 
        Indian children and other children enrolled in an existing 
        nonpublic school system may be enrolled on a shared time basis 
        in American Indian language and culture education programs. 
           Sec. 141.  Minnesota Statutes 1996, section 126.48, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LOCATION OF PROGRAMS.] American Indian language 
        and culture education programs shall must be located in 
        facilities in which regular classes in a variety of subjects are 
        offered on a daily basis. 
           Sec. 142.  Minnesota Statutes 1996, section 126.48, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ASSIGNMENT OF STUDENTS.] No A school district or 
        participating school shall must not, in providing these programs 
        , assign students to schools in a way which will have the effect 
        of promoting segregation of students by race, sex, color, or 
        national origin. 
           Sec. 143.  Minnesota Statutes 1996, section 126.49, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMERICAN INDIAN LANGUAGE AND CULTURE 
        EDUCATION LICENSES.] The board of teaching shall must grant 
        initial and continuing teaching licenses in American Indian 
        language and culture education that bear the same duration as 
        other initial and continuing licenses.  The board shall must 
        grant licenses to persons who present satisfactory evidence that 
        they: 
           (a) Possess competence in an American Indian language or 
        possess unique qualifications relative to or knowledge and 
        understanding of American Indian history and culture; or 
           (b) Possess a bachelor's degree or other academic degree 
        approved by the board or meet such requirements as to course of 
        study and training as the board may prescribe, or possess such 
        relevant experience as the board may prescribe. 
           This evidence may be presented by affidavits, resolutions, 
        or by such other methods as the board may prescribe.  
        Individuals may present applications for licensure on their own 
        behalf or these applications may be submitted by the 
        superintendent or other authorized official of a school 
        district, participating school, or an American Indian school.  
           Sec. 144.  Minnesota Statutes 1996, section 126.49, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PERSONS ELIGIBLE FOR EMPLOYMENT; EXEMPTIONS.] 
        Any person licensed under this section shall be eligible for 
        employment by a school board or a participating school as a 
        teacher in an American Indian language and culture education 
        program in which the American Indian language or culture in 
        which the person is licensed is taught.  A school district or 
        participating school may prescribe only those additional 
        qualifications for teachers licensed under this section as are 
        approved by the board of teaching.  Any school board or 
        participating school upon request may be exempted from the 
        licensure requirements of this section in the hiring of one or 
        more American Indian language and culture education teachers for 
        any school year in which compliance would, in the opinion of the 
        commissioner of children, families, and learning, create a 
        hardship in the securing of the teachers.  
           Sec. 145.  Minnesota Statutes 1996, section 126.49, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PERSONS SERVING UNDER EXEMPTIONS; LICENSURE; 
        TENURE.] An American Indian language and culture education 
        teacher serving under an exemption as provided in subdivision 5 
        6 shall be granted a license as soon as that teacher achieves 
        the qualifications for it the license.  Not more than one year 
        of service by an American Indian language and culture education 
        teacher under an exemption shall be credited to the teacher for 
        the purposes of section 125.12 and not more than two years shall 
        be credited for the purposes of section 125.17; and the one or 
        two years shall be deemed to precede immediately and be 
        consecutive with the year in which a teacher becomes licensed.  
           Sec. 146.  Minnesota Statutes 1996, section 126.49, 
        subdivision 8, is amended to read: 
           Subd. 8.  [AFFIRMATIVE EFFORTS IN HIRING.] In hiring for 
        all positions in these programs, school districts and 
        participating schools shall give preference to and make 
        affirmative efforts to seek, recruit, and employ persons who 
        share the culture of the American Indian children who are 
        enrolled in the program.  The district or participating school 
        shall provide procedures for the involvement of the parent 
        advisory committees in designing the procedures for the 
        recruitment, screening and selection of applicants, provided 
        that nothing herein.  This subdivision shall not be construed to 
        limit the school board's authority to hire and discharge 
        personnel. 
           Sec. 147.  Minnesota Statutes 1996, section 126.50, is 
        amended to read: 
           126.50 [TEACHERS AIDES; COMMUNITY COORDINATORS.] 
           In addition to employing American Indian language and 
        culture education teachers, each district or participating 
        school providing programs pursuant to sections 126.45 to 126.55 
        may employ teachers' aides.  Teachers' aides shall must not be 
        employed for the purpose of supplanting American Indian language 
        and culture education teachers. 
           Any district or participating school which conducts 
        American Indian language and culture education programs pursuant 
        to sections 126.45 to 126.55 shall must employ one or more full- 
        time or part-time community coordinators if there are 100 or 
        more students enrolled in the program.  Community coordinators 
        shall promote communication understanding, and cooperation 
        between the schools and the community and shall visit the homes 
        of children who are to be enrolled in an American Indian 
        language and culture education program in order to convey 
        information about the program. 
           Sec. 148.  Minnesota Statutes 1996, section 126.501, is 
        amended to read: 
           126.501 [RECRUITING AND RETAINING INDIAN TEACHERS.] 
           This section applies to a school board of a school district 
        in which there are at least ten American Indian children 
        enrolled.  The school board shall must actively recruit teacher 
        applicants who are American Indian from the time it is 
        reasonably expected that a position will become available until 
        the position is filled or September 1, whichever is earlier.  
        Notwithstanding section 125.12, subdivision 4, 6a, or 6b, 
        125.17, subdivisions 3 and 11, any other law to the contrary, or 
        any provision of a contract entered into after May 7, 1988, to 
        the contrary, when placing a teacher on unrequested leave of 
        absence, the board may retain a probationary teacher or a 
        teacher with less seniority in order to retain an American 
        Indian teacher. 
           Sec. 149.  Minnesota Statutes 1997 Supplement, section 
        126.51, subdivision 1, is amended to read: 
           Subdivision 1.  [PARENT COMMITTEE.] School boards and 
        American Indian schools shall must provide for the maximum 
        involvement of parents of children enrolled in education 
        programs, including language and culture education programs, 
        programs for elementary and secondary grades, special education 
        programs, and support services.  Accordingly, the school board 
        of a school district in which there are ten or more American 
        Indian children enrolled and each American Indian school shall 
        must establish a parent committee.  If a committee whose 
        membership consists of a majority of parents of American Indian 
        children has been or is established according to federal, 
        tribal, or other state law, that committee may serve as the 
        committee required by this section and shall be is subject to, 
        at least, the requirements of this subdivision and subdivision 
        1a.  
           The parent committee shall must develop its recommendations 
        in consultation with the curriculum advisory committee required 
        by section 123.972, subdivision 3.  This committee shall must 
        afford parents the necessary information and the opportunity 
        effectively to express their views concerning all aspects of 
        American Indian education and the educational needs of the 
        American Indian children enrolled in the school or program.  The 
        committee shall must also address the need for adult education 
        programs for American Indian people in the community.  The 
        school board or American Indian school shall must ensure that 
        programs are planned, operated, and evaluated with the 
        involvement of and in consultation with parents of children 
        served by the programs.  
           Sec. 150.  Minnesota Statutes 1996, section 126.51, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [RESOLUTION OF CONCURRENCE.] Each year by Prior 
        to December 1, the school board or American Indian school shall 
        must submit to the department of children, families, and 
        learning a copy of a resolution adopted by the parent 
        committee.  The copy must be signed by the chair of the 
        committee and must state whether the committee concurs with the 
        educational programs for American Indian children offered by the 
        school board or American Indian school.  If the committee does 
        not concur with the educational programs, the reasons for 
        nonconcurrence and recommendations shall be submitted with the 
        resolution.  By resolution, the school board shall must respond, 
        in cases of nonconcurrence, to each recommendation made by the 
        committee and state its reasons for not implementing the 
        recommendations.  
           Sec. 151.  Minnesota Statutes 1996, section 126.51, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEMBERSHIP.] The committee shall must be 
        composed of parents of children eligible to be enrolled in 
        American Indian education programs; secondary students eligible 
        to be served; American Indian language and culture education 
        teachers and aides; American Indian teachers; counselors; adult 
        American Indian people enrolled in educational programs; and 
        representatives from community groups.  A majority of each 
        committee shall must be parents of children enrolled or eligible 
        to be enrolled in the programs.  The number of parents of 
        American Indian and non-American Indian children shall reflect 
        approximately the proportion of children of those groups 
        enrolled in the programs. 
           Sec. 152.  Minnesota Statutes 1996, section 126.52, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMMUNITY INVOLVEMENT.] The state board shall 
        must provide for the maximum involvement of the state committees 
        on American Indian education, parents of American Indian 
        children, secondary students eligible to be served, American 
        Indian language and culture education teachers, American Indian 
        teachers, teachers' aides, representatives of community groups, 
        and persons knowledgeable in the field of American Indian 
        education, in the formulation of policy and procedures relating 
        to the administration of sections 126.45 to 126.55.  
           Sec. 153.  Minnesota Statutes 1996, section 126.52, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TECHNICAL ASSISTANCE.] The commissioner shall 
        provide technical assistance to school districts, schools and 
        post-secondary institutions for preservice and in-service 
        training for American Indian education teachers and teacher's 
        aides, teaching methods, curriculum development, testing and 
        testing mechanisms, and the development of materials for 
        American Indian education programs.  
           Sec. 154.  Minnesota Statutes 1996, section 126.531, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] The state board of 
        education shall create one or more American Indian education 
        committees.  Members shall must include representatives of 
        tribal bodies, community groups, parents of children eligible to 
        be served by the programs, American Indian administrators and 
        teachers, persons experienced in the training of teachers for 
        American Indian education programs, persons involved in programs 
        for American Indian children in American Indian schools, and 
        persons knowledgeable in the field of American Indian 
        education.  Members shall be appointed so as to be 
        representative of significant segments of the population of 
        American Indians.  
           Sec. 155.  Minnesota Statutes 1997 Supplement, section 
        126.531, subdivision 3, is amended to read: 
           Subd. 3.  [EXPENSES.] Each committee shall must be 
        reimbursed for expenses according to section 15.059, subdivision 
        6.  The state board shall must determine the membership terms 
        and the duration of each committee, which expire no later than 
        June 30, 2001. 
           Sec. 156.  Minnesota Statutes 1996, section 126.54, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GRANTS; PROCEDURES.] Each fiscal year the 
        state board of education shall must make grants to no fewer than 
        six American Indian language and culture education programs.  At 
        least three programs shall must be in urban areas and at least 
        three shall must be on or near reservations.  The board of a 
        local district, a participating school or a group of boards may 
        develop a proposal for grants in support of American Indian 
        language and culture education programs.  Proposals may provide 
        for contracts for the provision of program components by 
        nonsectarian nonpublic, community, tribal, or alternative 
        schools.  The commissioner shall prescribe the form and manner 
        of application for grants, and no grant shall be made for a 
        proposal not complying with the requirements of sections 126.45 
        to 126.55.  The state board shall must submit all proposals to 
        the state advisory task force on American Indian language and 
        culture education programs for its recommendations concerning 
        approval, modification, or disapproval and the amounts of grants 
        to approved programs. 
           Sec. 157.  Minnesota Statutes 1996, section 126.54, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PLANS.] Each school district or participating 
        school submitting a proposal under subdivision 1 shall must 
        develop and submit with the proposal a plan which shall: 
           (a) Identify the measures to be used to meet the 
        requirements of sections 126.45 to 126.55; 
           (b) Identify the activities, methods and programs to meet 
        the identified educational needs of the children to be enrolled 
        in the program; 
           (c) Describe how district goals and objectives as well as 
        the objectives of sections 126.45 to 126.55 are to be achieved; 
           (d) Demonstrate that required and elective courses as 
        structured do not have a discriminatory effect within the 
        meaning of section 126.48, subdivision 5; 
           (e) Describe how each school program will be organized, 
        staffed, coordinated, and monitored; and 
           (f) Project expenditures for programs under sections 126.45 
        to 126.55. 
           Sec. 158.  Minnesota Statutes 1996, section 126.54, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADDITIONAL REQUIREMENTS.] Each school district 
        receiving a grant under this section shall must each year 
        conduct a count of American Indian children in the schools of 
        the district; test for achievement; identify the extent of other 
        educational needs of the children to be enrolled in the American 
        Indian language and culture education program; and classify the 
        American Indian children by grade, level of educational 
        attainment, age and achievement.  Participating schools shall 
        must maintain records concerning the needs and achievements of 
        American Indian children served. 
           Sec. 159.  Minnesota Statutes 1996, section 126.54, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NONDISCRIMINATION; TESTING.] In accordance with 
        recognized professional standards, all testing and evaluation 
        materials and procedures utilized for the identification, 
        testing, assessment and classification of American Indian 
        children shall must be selected and administered so as not to be 
        racially or culturally discriminatory and shall must be valid 
        for the purpose of identifying, testing, assessing, and 
        classifying American Indian children. 
           Sec. 160.  Minnesota Statutes 1996, section 126.54, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RECORDS.] Participating schools and school 
        districts shall keep records and afford access to them as the 
        commissioner finds necessary to ensure that American Indian 
        language and culture education programs are implemented in 
        conformity with sections 126.45 to 126.55.  Each school district 
        or participating school shall must keep accurate, detailed, and 
        separate revenue and expenditure accounts for pilot American 
        Indian language and culture education programs funded under this 
        section. 
           Sec. 161.  Minnesota Statutes 1996, section 126.54, 
        subdivision 6, is amended to read: 
           Subd. 6.  [MONEY FROM OTHER SOURCES.] A school district or 
        participating school providing American Indian language and 
        culture education programs shall be eligible to receive moneys 
        for these programs from other government agencies and from 
        private sources when the moneys are available. 
           Sec. 162.  Minnesota Statutes 1996, section 126.56, 
        subdivision 6, is amended to read: 
           Subd. 6.  [INFORMATION.] The higher education services 
        office, in cooperation with the academic excellence foundation, 
        shall must assemble and distribute information about 
        scholarships and eligible programs. 
           Sec. 163.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 124C.55; 124C.56; 
        124C.57; and 124C.58, are repealed. 
           (b) Minnesota Statutes 1996, section 124.312, as amended by 
        Laws 1997, First Special Session chapter 4, article 2, sections 
        13 and 14; Minnesota Statutes 1997 Supplement, sections 124.313; 
        and 124.314, are repealed effective for revenue for fiscal year 
        1999. 
           Sec. 164.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             120.03, subd. 1                120B.02, subd. 1
                     subd. 5                         subd. 2
             120.17, subd. 1                120B.03, subd. 1
                     subd. 1b                        subd. 2
                     subd. 2                         subd. 3
                     subd. 3                         subd. 4
                     subd. 3a                        subd. 5
                     subd. 3b                        subd. 6
                     subd. 3d                        subd. 7
                     subd. 4                         subd. 8
                     subd. 4a                        subd. 9
                     subd. 5                         subd. 10
                     subd. 5a                        subd. 11
                     subd. 6                         subd. 12
                     subd. 7                         subd. 13
                     subd. 7a                        subd. 14
                     subd. 8a                        subd. 15
                     subd. 9                         subd. 16
                     subd. 10                        subd. 17
                     subd. 11                        subd. 18
                     subd. 15                        subd. 19
                     subd. 16                        subd. 20
                     subd. 18                        subd. 21
                     subd. 19                        subd. 22
             120.1701, subd. 1              120B.04, subd. 1
                       subd. 2                       subd. 2
                       subd. 3                       subd. 3
                       subd. 4                       subd. 4
                       subd. 5                       subd. 5
                       subd. 6                       subd. 6
                       subd. 7                       subd. 7
                       subd. 8                       subd. 8
                       subd. 8a                      subd. 9
                       subd. 9                       subd. 10
                       subd. 10                      subd. 11
                       subd. 11                      subd. 12
                       subd. 12                      subd. 13
                       subd. 13                      subd. 14
                       subd. 14                      subd. 15
                       subd. 15                      subd. 16
                       subd. 16                      subd. 17
                       subd. 17                      subd. 18
                       subd. 18                      subd. 19
                       subd. 19                      subd. 20
                       subd. 20                      subd. 21
                       subd. 21                      subd. 22
                       subd. 22                      subd. 23
             120.172                        120B.08
             120.173                        120B.09
             120.181                        120B.10
             120.1811                       120B.11
             120.182                        120B.12
             120.183                        120B.13
             120.185                        120B.14
             126.237                        120B.15
             124.32, subd. 2b               120B.20, subd. 1
                     subd. 4                         subd. 2
                     subd. 6                         subd. 3
                     subd. 7                         subd. 4
                     subd. 8                         subd. 5
                     subd. 10                        subd. 6
                     subd. 12                        subd. 7
             124.3201                       120B.21
             124.321                        120B.22
             124.322, subd. 1               120B.23, subd. 1
                      subd. 1a                       subd. 2
                      subd. 5                        subd. 3
             124.323                        120B.24
             124.90                         120B.26
             120.187                        120B.30
             120.188                        120B.31
             120.189                        120B.32
             120.190                        120B.33
             126.261                        120B.40
             126.262                        120B.41
             126.264                        120B.42
             126.265                        120B.43
             126.266                        120B.44
             126.267                        120B.45
             126.269                        120B.46
             124.273, subd. 1c              120B.47, subd. 1
                      subd. 1d                       subd. 2
                      subd. 1e                       subd. 3
                      subd. 1f                       subd. 4
                      subd. 1g                       subd. 5
                      subd. 3                        subd. 6
                      subd. 4                        subd. 7
                      subd. 5                        subd. 8
                      subd. 6                        subd. 9
                      subd. 7                        subd. 10
             124.3111                       120B.50
             124.311                        120B.51
             126.22, subd. 1                120B.57, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 3a                        subd. 4
                     subd. 4                         subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                     subd. 8                         subd. 9
                     subd. 9                         subd. 10
             126.23                         120B.58
             124.225                        120B.59
             126.235                        120B.61
             124.573, subd. 1               120B.66, subd. 1
                      subd. 2                        subd. 2
                      subd. 2b                       subd. 3
                      subd. 2e                       subd. 4
                      subd. 2f                       subd. 5
                      subd. 3                        subd. 6
                      subd. 3a                       subd. 7
                      subd. 5a                       subd. 8
             124.574, subd. 1               120B.67, subd. 1
                      subd. 2c                       subd. 2
                      subd. 2d                       subd. 3
                      subd. 2e                       subd. 4
                      subd. 2f                       subd. 5
                      subd. 2g                       subd. 6
                      subd. 2h                       subd. 7
                      subd. 5                        subd. 8
                      subd. 6                        subd. 9
                      subd. 7                        subd. 10
                      subd. 9                        subd. 11
             126.45                         120B.70
             126.46                         120B.71
             126.47                         120B.72
             126.48                         120B.73
             126.49, subd. 1                120B.74, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 3                         subd. 4
                     subd. 4                         subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                     subd. 8                         subd. 9
             126.50                         120B.75
             126.501                        120B.76
             126.51, subd. 1                120B.77, subd. 1
                     subd. 1a                        subd. 2
                     subd. 2                         subd. 3
                     subd. 4                         subd. 4
             126.52, subd. 5                120B.78, subd. 1
                     subd. 8                         subd. 2
                     subd. 9                         subd. 3
             126.531                        120B.79
             126.54                         120B.80
             126.55                         120B.81
             124.86                         120B.82
             124.48, subd. 1                120B.83, subd. 1
                     subd. 3                         subd. 2
             124.481                        120B.84
             126.43                         120B.86
             124.315                        120B.88
             124.227                        120B.89
             120.064, subd. 1               129B.90, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 4                        subd. 4
                      subd. 4a                       subd. 5
                      subd. 5                        subd. 6
                      subd. 7                        subd. 7
                      subd. 8                        subd. 8
                      subd. 9                        subd. 9
                      subd. 10                       subd. 10
                      subd. 11                       subd. 11
                      subd. 12                       subd. 12
                      subd. 13                       subd. 13
                      subd. 14                       subd. 14
                      subd. 14a                      subd. 15
                      subd. 15                       subd. 16
                      subd. 16                       subd. 17
                      subd. 17                       subd. 18
                      subd. 18                       subd. 19
                      subd. 19                       subd. 20
                      subd. 20                       subd. 21
                      subd. 20a                      subd. 22
                      subd. 21                       subd. 23
                      subd. 22                       subd. 24
                      subd. 23                       subd. 25
                      subd. 24                       subd. 26
             124.248, subd. 1               120B.91, subd. 1
                      subd. 1a                       subd. 2
                      subd. 2                        subd. 3
                      subd. 2a                       subd. 4
                      subd. 3                        subd. 5
                      subd. 4                        subd. 6
                      subd. 5                        subd. 7
                      subd. 6                        subd. 8
             126.239                        120B.92
             123.3513                       120B.93
             123.3514, subd. 1              120B.94, subd. 1
                       subd. 2                       subd. 2
                       subd. 3                       subd. 3
                       subd. 3a                      subd. 4
                       subd. 4                       subd. 5
                       subd. 4a                      subd. 6
                       subd. 4b                      subd. 7
                       subd. 4c                      subd. 8
                       subd. 4d                      subd. 9
                       subd. 4e                      subd. 10
                       subd. 5                       subd. 11
                       subd. 6                       subd. 12
                       subd. 6a                      subd. 13
                       subd. 6b                      subd. 14
                       subd. 6c                      subd. 15
                       subd. 6d                      subd. 16
                       subd. 6e                      subd. 17
                       subd. 7                       subd. 18
                       subd. 7a                      subd. 19
                       subd. 7b                      subd. 20
                       subd. 8                       subd. 21
                       subd. 9                       subd. 22
                       subd. 10                      subd. 23
                       subd. 11                      subd. 24
                       subd. 11a                     subd. 25
             120.80                         120B.95
             126.56, subd. 1                120B.96, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 4                         subd. 4
                     subd. 4a                        subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                                   ARTICLE 3 
                                  CHAPTER 120C 
                              COMMUNITY EDUCATION 
           Section 1.  [120C.01] [DEFINITIONS.] 
           For the purposes of this chapter, the words defined in 
        section 120.02 have the same meaning. 
           Sec. 2.  Minnesota Statutes 1996, section 121.201, is 
        amended to read: 
           121.201 [HEARING IMPAIRED EDUCATIONAL SUPPORT SERVICES.] 
           Subdivision 1.  [RESPONSIBILITY OF COMMISSIONER.] The 
        commissioner shall coordinate and may pay for support services 
        for hearing impaired persons to assure access to educational 
        opportunities.  Services may be provided to adult students who 
        are hearing impaired and (a) (1) have been denied access to 
        educational opportunities because of the lack of support 
        services or (b) (2) are presently enrolled or (c) (3) are 
        contemplating enrollment in an educational program and would 
        benefit from support services.  The commissioner shall also be 
        responsible for conducting in-service training for public and 
        private agencies regarding the needs of hearing impaired persons 
        in the adult education system.  
           Subd. 2.  [SUPPORT SERVICES.] The state board may pay 
        school districts or public or private community agencies for the 
        following support services:  
           (a) (1) interpreter services to provide translation for an 
        individual or a group of students; or 
           (b) (2) notetaker services to convert spoken language to 
        written language when the student must maintain visual contact 
        with other persons such as an interpreter or instructor.  
           Subd. 3.  [PROGRAMS INCLUDED.] Support services may be 
        provided for:  
           (a) (1) local school district adult education programs; 
           (b) (2) adult technical college programs; and 
           (c) (3) avocational education programs sponsored by public 
        or private community agencies.  
           Sec. 3.  Minnesota Statutes 1996, section 121.203, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AIDS PROGRAM.] The commissioner of 
        children, families, and learning, in consultation with the 
        commissioner of health, shall assist districts in developing and 
        implementing a program to prevent and reduce the risk of 
        acquired immune deficiency syndrome.  Each district shall must 
        have a program that includes at least: 
           (1) planning materials, guidelines, and other technically 
        accurate and updated information; 
           (2) a comprehensive, technically accurate, and updated 
        curriculum; 
           (3) cooperation and coordination among districts and SCs; 
           (4) a targeting of adolescents, especially those who may be 
        at high risk of contracting AIDS, for prevention efforts; 
           (5) involvement of parents and other community members; 
           (6) in-service training for appropriate district staff and 
        school board members; 
           (7) collaboration with state agencies and organizations 
        having an AIDS prevention or AIDS risk reduction program; 
           (8) collaboration with local community health services, 
        agencies and organizations having an AIDS prevention or AIDS 
        risk reduction program; and 
           (9) participation by state and local student organizations. 
           The department may provide assistance at a neutral site to 
        a nonpublic school participating in a district's program.  
        District programs must not conflict with the health and wellness 
        curriculum developed under Laws 1987, chapter 398, article 5, 
        section 2, subdivision 7. 
           If a district fails to develop and implement a program to 
        prevent and reduce the risk of AIDS, the department shall must 
        assist the SC service cooperative in the region serving that 
        district to develop or implement the program. 
           Sec. 4.  Minnesota Statutes 1997 Supplement, section 
        121.615, subdivision 2, is amended to read: 
           Subd. 2.  [CREATION OF FOUNDATION.] There is created the 
        Minnesota school-to-work student organization foundation.  The 
        purpose of the foundation shall be is to promote vocational 
        student organizations and applied leadership opportunities in 
        Minnesota public and nonpublic schools through public-private 
        partnerships.  The foundation shall be is a nonprofit 
        organization.  The board of directors of the foundation and 
        activities of the foundation are under the direction of the 
        state board of education.  
           Sec. 5.  Minnesota Statutes 1997 Supplement, section 
        121.615, subdivision 3, is amended to read: 
           Subd. 3.  [BOARD OF DIRECTORS.] The board of directors of 
        the school-to-work student organization foundation shall consist 
        consists of: 
           (1) seven members appointed by the board of directors of 
        the school-to-work student organizations and chosen so that each 
        represents one of the following career areas:  agriculture, 
        family and consumer sciences, service occupations, health 
        occupations, marketing, business, and technical/industrial; 
           (2) seven members from business, industry, and labor 
        appointed by the governor to staggered terms and chosen so that 
        each represents one of the following career areas:  agriculture, 
        family and consumer sciences, service occupations, health 
        occupations, marketing, business, and technical/industrial; 
           (3) five students or alumni of school-to-work student 
        organizations representing diverse career areas, three from 
        secondary student organizations, and two from post-secondary 
        student organizations.  The students or alumni shall be 
        appointed by the criteria and process agreed upon by the 
        executive directors of the student-to-work organizations; and 
           (4) four members from education appointed by the governor 
        to staggered terms and chosen so that each represents one of the 
        following groups:  school district level administrators, 
        secondary school administrators, middle school administrators, 
        and post-secondary administrators. 
           Executive directors of vocational education student 
        organizations are ex officio, nonvoting members of the board. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        121.615, subdivision 9, is amended to read: 
           Subd. 9.  [PRIVATE FUNDING.] The foundation shall must seek 
        private resources to supplement the available public money.  
        Individuals, businesses, and other organizations may contribute 
        to the foundation in any manner specified by the board of 
        directors.  All money received shall be administered by the 
        board of directors. 
           Sec. 7.  Minnesota Statutes 1997 Supplement, section 
        121.615, subdivision 10, is amended to read: 
           Subd. 10.  [REPORT.] The board of directors of the 
        foundation shall must submit an annual report on the progress of 
        its activities to the state board of education and to the board 
        of trustees of the Minnesota state colleges and universities.  
        The annual report shall contain a financial report for the 
        preceding year.  The foundation shall submit a biennium report 
        to the legislature before February 15, in the odd-numbered year. 
           Sec. 8.  Minnesota Statutes 1996, section 121.615, 
        subdivision 11, is amended to read: 
           Subd. 11.  [APPROPRIATION.] There is annually appropriated 
        to the foundation All the amounts received by the foundation 
        pursuant to this section are annually appropriated to the 
        foundation. 
           Sec. 9.  Minnesota Statutes 1996, section 121.704, is 
        amended to read: 
           121.704 [YOUTH WORKS PROGRAM.] 
           The youth works program is established to fulfill the 
        purposes of section 121.701.  The youth works program shall must 
        supplement existing programs and services.  The program shall 
        must not displace existing programs and services, existing 
        funding of programs or services, or existing employment and 
        employment opportunities.  No eligible organization may 
        terminate, layoff, or reduce the hours of work of an employee to 
        place or hire a program participant.  No eligible organization 
        may place or hire an individual for a project if an employee is 
        on layoff from the same or a substantially equivalent position. 
           Sec. 10.  Minnesota Statutes 1996, section 121.705, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GRANT AUTHORITY.] The commission and, beginning 
        January 1, 1997, the council shall must use any state 
        appropriation and any available federal funds, including any 
        grant received under federal law, to award grants to establish 
        programs for youth works meeting the requirements of section 
        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. 11.  Minnesota Statutes 1996, 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 must develop, and the 
        applying organizations shall must comply with, the form and 
        manner of the application. 
           Subd. 2.  [APPLICATION CONTENT.] An applicant on its 
        application shall must: 
           (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. 12.  Minnesota Statutes 1996, section 121.707, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POSTSERVICE BENEFIT.] (a) Each eligible 
        organization shall must agree to provide to every participant 
        who fulfills the terms of a contract under section 121.707, 
        subdivision 2, a nontransferable postservice benefit.  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 must 
        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 
        must 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 services office shall must 
        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, the amount of the 
        postservice benefit shall must be 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 services office for the costs of 
        administering the postservice benefits accounts.  
           (d) The state shall must 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. 13.  Minnesota Statutes 1996, 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 workforce 
        development council, and beginning January 1, 1997, the 
        workforce development council, shall must 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 must not be included in 
        determining financial need when establishing eligibility or 
        award amounts for financial assistance programs under chapter 
        136A. 
           Sec. 14.  Minnesota Statutes 1996, section 121.707, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LIVING ALLOWANCE.] (a) A participant in a 
        full-time community service program shall receive a monthly 
        stipend of not less than $500.  An eligible organization may 
        provide participants with additional amounts from nonstate 
        sources.  The amount of the living allowance may be prorated for 
        part-time participants. 
           (b) Nothing in this subdivision requires an existing 
        program to decrease any stipend, salary, or living allowance 
        provided to a participant under the program. 
           (c) In addition to the living allowance provided under 
        paragraph (a), a grantee organization shall provide health and 
        child care coverage to each participant in a full-time youth 
        works program who does not otherwise have access to health or 
        child care coverage.  The state shall must include the cost of 
        group health and child care coverage in the grant to the 
        eligible organization. 
           Sec. 15.  Minnesota Statutes 1996, section 121.707, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROGRAM TRAINING.] (a) The commission and, 
        beginning January 1, 1997, the council shall must, within 
        available resources, ensure an opportunity for each participant 
        to have three weeks of training in a residential setting.  If 
        offered, each training session must: 
           (1) orient each participant in the nature, philosophy, and 
        purpose of the program; 
           (2) build an ethic of community service through general 
        community service training; and 
           (3) provide additional training as it determines necessary. 
           (b) Each grantee organization shall also train participants 
        in skills relevant to the community service opportunity. 
           Sec. 16.  Minnesota Statutes 1996, section 121.707, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TRAINING AND EDUCATION REQUIREMENTS.] Each 
        grantee organization shall must 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. 17.  Minnesota Statutes 1996, section 121.708, is 
        amended to read: 
           121.708 [PRIORITY.] 
           The commission and, beginning January 1, 1997, the council 
        shall must 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. 18.  Minnesota Statutes 1996, section 121.710, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INTERIM REPORT.] The commission and, beginning 
        January 1, 1997, the council shall must report semiannually to 
        the legislature with interim recommendations to change the 
        program. 
           Sec. 19.  Minnesota Statutes 1996, section 121.710, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FINAL REPORT.] The commission and, beginning 
        January 1, 1997, the council shall must 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. 20.  Minnesota Statutes 1997 Supplement, section 
        121.831, subdivision 3, is amended to read: 
           Subd. 3.  [PROGRAM ELIGIBILITY.] A learning readiness 
        program shall must include the following: 
           (1) a comprehensive plan to anticipate and meet the needs 
        of participating families by coordinating existing social 
        services programs and by fostering collaboration among agencies 
        or other community-based organizations and programs that provide 
        a full range of flexible, family-focused services to families 
        with young children; 
           (2) a development and learning component to help children 
        develop appropriate social, cognitive, and physical skills, and 
        emotional well-being; 
           (3) health referral services to address children's medical, 
        dental, mental health, and nutritional needs; 
           (4) a nutrition component to meet children's daily 
        nutritional needs; 
           (5) parents' involvement in meeting children's educational, 
        health, social service, and other needs; 
           (6) community outreach to ensure participation by families 
        who represent the racial, cultural, and economic diversity of 
        the community; 
           (7) community-based staff and program resources, including 
        interpreters, that reflect the racial and ethnic characteristics 
        of the children participating in the program; and 
           (8) a literacy component to ensure that the literacy needs 
        of parents are addressed through referral to and cooperation 
        with adult basic education programs and other adult literacy 
        programs. 
           Sec. 21.  Minnesota Statutes 1996, section 121.831, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COORDINATION WITH OTHER PROVIDERS.] (a) The 
        district shall must coordinate the learning readiness program 
        with existing community-based social services providers and 
        foster collaboration among agencies and other community-based 
        organizations and programs that provide flexible, family-focused 
        services to families with children.  The district shall must 
        actively encourage greater sharing of responsibility and 
        accountability among service providers and facilitate children's 
        transition between programs.  
           (b) To the extent possible, resources shall must follow the 
        children so that children receive appropriate services in a 
        stable environment and are not moved from one program location 
        to another.  Where geographically feasible, the district shall 
        must actively promote colocating of services for children and 
        their families. 
           Sec. 22.  Minnesota Statutes 1996, section 121.831, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ADVISORY COUNCIL.] Each learning readiness 
        program shall must have an advisory council composed of members 
        of existing early education-related boards, parents of 
        participating children, child care providers, culturally 
        specific service organizations, local resource and referral 
        agencies, and representatives of early childhood service 
        providers.  The council shall must advise the school board in 
        creating and administering the program and shall must monitor 
        the progress of the program.  The council shall must ensure that 
        children at greatest risk receive appropriate services.  If 
        the school board is unable to appoint to the advisory council 
        members of existing early education-related boards, it shall 
        must appoint parents of children enrolled in the program who 
        represent the racial, cultural, and economic diversity of the 
        district and representatives of early childhood service 
        providers as representatives to an existing advisory council. 
           Sec. 23.  Minnesota Statutes 1996, section 121.831, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PRIORITY CHILDREN.] The district shall must give 
        greatest priority to providing services to eligible children 
        identified, through a means such as the early childhood 
        screening process, as being developmentally disadvantaged or 
        experiencing risk factors that could impede their learning 
        readiness. 
           Sec. 24.  Minnesota Statutes 1996, section 121.831, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CHILD RECORDS.] (a) A record of a child's 
        progress and development shall must be maintained in the child's 
        cumulative record while enrolled in the learning readiness 
        program.  The cumulative record shall must be used for the 
        purpose of planning activities to suit individual needs and 
        shall become part of the child's permanent record.  The 
        cumulative record is private data under chapter 13.  Information 
        in the record may be disseminated to an educator or service 
        provider only to the extent that that person has a need to know 
        the information.  
           (b) An educator or service provider may transmit 
        information in the child's cumulative record to an educator or 
        service provider in another program for young children when the 
        child applies to enroll in that other program. 
           Sec. 25.  Minnesota Statutes 1996, section 121.831, 
        subdivision 10, is amended to read: 
           Subd. 10.  [SUPERVISION.] A program provided by a school 
        board shall must be supervised by a licensed early childhood 
        teacher, a certified early childhood educator, or a licensed 
        parent educator.  A program provided according to a contract 
        between a school district and a nonprofit organization or 
        another private organization shall must be supervised and 
        staffed according to the terms of the contract.  
           Sec. 26.  Minnesota Statutes 1996, section 121.831, 
        subdivision 11, is amended to read: 
           Subd. 11.  [DISTRICT STANDARDS.] The school board of the 
        district shall must develop standards for the learning readiness 
        program that reflect the eligibility criteria in subdivision 3.  
        The board shall must consider including in the standards the 
        program characteristics in subdivision 4. 
           Sec. 27.  Minnesota Statutes 1996, section 121.831, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PROGRAM FEES.] A district may adopt a sliding 
        fee schedule based on a family's income but shall must waive a 
        fee for a participant unable to pay.  The fees charged must be 
        designed to enable eligible children of all socioeconomic levels 
        to participate in the program. 
           Sec. 28.  Minnesota Statutes 1996, section 121.835, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISTRIBUTION.] The commissioner of children, 
        families, and learning shall give priority to funding existing 
        programs. 
           To the extent possible, the commissioner shall award grants 
        to applicants with experience or demonstrated ability in 
        providing comprehensive, multidisciplinary, community-based 
        programs with objectives similar to those listed in subdivision 
        2, or in providing other human services or social services 
        programs using a multidisciplinary, community-based approach. 
           Sec. 29.  Minnesota Statutes 1996, section 121.835, 
        subdivision 5, is amended to read: 
           Subd. 5.  [APPLICATIONS.] Each grant application must 
        propose a five-year program designed to accomplish the purposes 
        of this section.  The application must be submitted on forms 
        provided by the commissioner of children, families, and 
        learning.  The grant application must include: 
           (1) a description of the specific neighborhoods that will 
        be served under the program and the name, address, and a 
        description of each community agency or agencies with which the 
        applicant intends to contract to provide services using grant 
        money; 
           (2) a letter of intent from each community agency 
        identified in clause (1) that indicates the agency's willingness 
        to participate in the program and approval of the proposed 
        program structure and components; 
           (3) a detailed description of the structure and components 
        of the proposed program and an explanation of how each component 
        will contribute to accomplishing the purposes of this section; 
           (4) a description of how public and private resources, 
        including schools, health care facilities, government agencies, 
        neighborhood organizations, and other resources, will be 
        coordinated and made accessible to families in target 
        neighborhoods, including letters of intent from public and 
        private agencies indicating their willingness to cooperate with 
        the program; 
           (5) a detailed, proposed budget that demonstrates the 
        ability of the program to accomplish the purposes of this 
        section using grant money and other available resources, 
        including funding sources other than a grant; and 
           (6) a comprehensive evaluation plan for measuring the 
        success of the program in meeting the objectives of the overall 
        grant program and the individual grant project, including an 
        assessment of the impact of the program in terms of at least 
        three of the following criteria:  
           (i) utilization rates of community services; 
           (ii) availability of support systems for families; 
           (iii) birth weights of newborn babies; 
           (iv) child accident rates; 
           (v) utilization rates of prenatal care; 
           (vi) reported rates of child abuse; 
           (vii) rates of health screening and evaluation; and 
           (viii) school readiness of way to grow participants 
        compared to nonparticipants. 
           Sec. 30.  Minnesota Statutes 1996, section 121.835, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ADVISORY COMMITTEES.] The commissioner of 
        children, families, and learning shall establish a program 
        advisory committee consisting of persons knowledgeable in child 
        development, child health, and family services, who reflect the 
        geographic, cultural, racial, and ethnic diversity of the state; 
        and representatives of the commissioners of children, families, 
        and learning, human services, and health.  This program advisory 
        committee shall must review grant applications, assist in 
        distribution of the grants, and monitor progress of the way to 
        grow/school readiness program.  Each grantee must establish a 
        program advisory board of 12 or more members to advise the 
        grantee on program design, operation, and evaluation.  The board 
        must include representatives of local units of government and 
        representatives of the project area who reflect the geographic, 
        cultural, racial, and ethnic diversity of that community.  
           Sec. 31.  Minnesota Statutes 1996, section 121.835, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPORT.] The advisory committee shall must 
        report to the education committee of the legislature by January 
        15, 1993, on the evaluation required in subdivision 5, clause 
        (6), and shall make recommendations for establishing successful 
        way to grow programs in unserved areas of the state. 
           Sec. 32.  Minnesota Statutes 1996, section 121.8355, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES.] (a) Each collaborative shall must: 
           (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. 33.  Minnesota Statutes 1996, section 121.8355, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INTEGRATED LOCAL SERVICE DELIVERY SYSTEM.] A 
        collaborative shall must design an integrated local service 
        delivery system that coordinates funding streams and the 
        delivery of services between existing agencies.  The integrated 
        local service delivery system may: 
           (1) improve outreach and early identification of children 
        and families in need of services and intervene across service 
        systems on behalf of families; 
           (2) offer an inclusive service system that supports all 
        families within a community; 
           (3) coordinate services that eliminate the need to match 
        funding streams, provider eligibilities, or clients with 
        multiple providers; 
           (4) improve access to services by coordinating 
        transportation services; 
           (5) provide initial outreach to all new mothers and 
        periodic family visits to children who are potentially at risk; 
           (6) coordinate assessment across systems to determine which 
        children and families need coordinated multiagency services and 
        supplemental services; 
           (7) include multiagency service plans and coordinate 
        unitary case management; and 
           (8) integrate funding of services. 
           Sec. 34.  Minnesota Statutes 1996, section 121.8355, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LOCAL PLANS.] The collaborative plan shall must 
        describe how the collaborative will carry out the duties and 
        implement the integrated local services delivery system required 
        under this section.  The plan shall must include a list of the 
        collaborative participants, a copy of the agreement required 
        under subdivision 1, the amount and source of resources each 
        participant will contribute to the integrated fund, and methods 
        for increasing local participation in the collaborative, 
        involving parents and other community members in implementing 
        and operating the collaborative, and providing effective 
        outreach services to all families with young children in the 
        community.  The plan shall must also include specific goals that 
        the collaborative intends to achieve and methods for objectively 
        measuring progress toward meeting the goals.  
           Sec. 35.  Minnesota Statutes 1996, section 121.8355, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PLAN APPROVAL BY THE CHILDREN'S CABINET.] (a) 
        The children's cabinet shall must approve local plans for 
        collaboratives.  In approving local plans, the children's 
        cabinet shall must give highest priority to a plan that provides:
           (1) early intervention and family outreach services; 
           (2) family visitation services; 
           (3) a continuum of services for children from birth to age 
        18; 
           (4) family preservation services; 
           (5) culturally sensitive approaches for delivering services 
        and utilizing culturally specific organizations; 
           (6) clearly defined outcomes and valid methods of 
        assessment; 
           (7) effective service coordination; 
           (8) participation by the maximum number of jurisdictions 
        and local, county, and state funding sources; 
           (9) integrated community service providers and local 
        resources; 
           (10) integrated transportation services; 
           (11) integrated housing services; and 
           (12) coordinated services that include a children's mental 
        health collaborative authorized by law. 
           (b) The children's cabinet shall must ensure that the 
        collaboratives established under this section do not conflict 
        with any state or federal policy or program and do not 
        negatively impact the state budget. 
           Sec. 36.  Minnesota Statutes 1996, section 121.88, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADVISORY COUNCIL.] Each board shall must provide 
        for an advisory council to consist of members who represent:  
        various service organizations; churches; public and nonpublic 
        schools; local government including elected officials; public 
        and private nonprofit agencies serving youth and families; 
        parents; youth; park, recreation or forestry services of 
        municipal or local government units located in whole or in part 
        within the boundaries of the school district; and any other 
        groups participating in the community education program in the 
        school district. 
           Sec. 37.  Minnesota Statutes 1996, section 121.88, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COOPERATION.] The council shall must function in 
        cooperation with the community education director in an advisory 
        capacity in the interest of promoting the goals and objectives 
        of sections 121.85 to 121.88.  
           Sec. 38.  Minnesota Statutes 1996, section 121.88, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DUPLICATION POLICY.] Each council shall must 
        adopt a policy to reduce and eliminate program duplication 
        within the district. 
           Sec. 39.  Minnesota Statutes 1996, section 121.88, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROGRAMS FOR ADULTS WITH DISABILITIES.] A school 
        board may offer, as part of a community education program, a 
        program for adults with disabilities.  Boards are encouraged to 
        offer programs cooperatively with other districts and 
        organizations.  Programs may not be limited to district 
        residents.  Programs may include: 
           (1) services enabling the adults to participate in 
        community activities or community education classes; 
           (2) classes specifically for adults with disabilities; 
           (3) outreach activities to identify adults needing service; 
           (4) activities to increase public awareness of the roles of 
        people with disabilities; 
           (5) activities to enhance the role of people with 
        disabilities in the community; and 
           (6) other direct and indirect services and activities 
        benefiting adults with disabilities.  
           Sec. 40.  Minnesota Statutes 1996, section 121.88, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PROGRAM APPROVAL.] To be eligible for revenue 
        for the program for adults with disabilities, a program and 
        budget must receive approval from the community education 
        section in the department of children, families, and learning.  
        Approval may be for five years.  During that time, a school 
        board must report any significant changes to the department for 
        approval.  For programs offered cooperatively, the request for 
        approval must include an agreement on the method by which local 
        money is to be derived and distributed.  A request for approval 
        must include all of the following:  
           (1) characteristics of the people to be served; 
           (2) description of the program services and activities; 
           (3) program budget and amount of aid requested; 
           (4) participation by adults with disabilities in developing 
        the program; 
           (5) assessment of the needs of adults with disabilities; 
        and 
           (6) cooperative efforts with community organizations.  
           Sec. 41.  Minnesota Statutes 1996, section 121.88, 
        subdivision 9, is amended to read: 
           Subd. 9.  [YOUTH SERVICE PROGRAMS.] A school board may 
        offer, as part of a community education program with a youth 
        development program, a youth service program that provides young 
        people with meaningful opportunities to become involved in their 
        community, develop individual capabilities, make career 
        connections, seek support networks and services, become active 
        citizens, and address community needs through youth service.  
        The school board may award up to one credit, or the equivalent, 
        toward graduation for a pupil who completes the youth service 
        requirements of the district.  The community education advisory 
        council, after considering the results of the commissioner's 
        study under section 121.885, subdivision 1, shall must design 
        the program in cooperation with the district planning, 
        evaluating and reporting committee and local organizations that 
        train volunteers or need volunteers' services.  Programs must 
        include: 
           (1) preliminary training for pupil volunteers conducted, 
        when possible, by organizations experienced in such training; 
           (2) supervision of the pupil volunteers to ensure 
        appropriate placement and adequate learning opportunity; 
           (3) sufficient opportunity, in a positive setting for human 
        development, for pupil volunteers to develop general skills in 
        preparation for employment, to enhance self-esteem and 
        self-worth, and to give genuine service to their community; 
           (4) integration of academic learning with the service 
        experience; and 
           (5) integration of youth community service with elementary 
        and secondary curriculum. 
           Youth service projects include, but are not limited to, the 
        following: 
           (1) human services for the elderly, including home care and 
        related services; 
           (2) tutoring and mentoring; 
           (3) training for and providing emergency services; 
           (4) services at extended day programs; 
           (5) environmental services; and 
           (6) service-learning programs in which schools, including 
        post-secondary schools, and employers work together with young 
        people to provide them with meaningful opportunities for 
        community service and with the academic and technical skills 
        that employers require. 
           The commissioner shall maintain a list of acceptable 
        projects with a description of each project.  A project that is 
        not on the list must be approved by the commissioner.  
           A youth service project must have a community sponsor that 
        may be a governmental unit or nonprofit organization.  To assure 
        that pupils provide additional services, each sponsor must 
        assure that pupil services do not displace employees or reduce 
        the workload of any employee. 
           The commissioner must shall assist districts in planning 
        youth service programs, implementing programs, and developing 
        recommendations for obtaining community sponsors.  
           Sec. 42.  Minnesota Statutes 1997 Supplement, section 
        121.88, subdivision 10, is amended to read: 
           Subd. 10.  [EXTENDED DAY PROGRAMS.] (a) A school board may 
        offer, as part of a community education program, an extended day 
        program for children from kindergarten through grade 6 for the 
        purpose of expanding students' learning opportunities.  A 
        program must include the following: 
           (1) adult supervised programs while school is not in 
        session; 
           (2) parental involvement in program design and direction; 
           (3) partnerships with the K-12 kindergarten through grade 
        12 system, and other public, private, or nonprofit entities; and 
           (4) opportunities for trained secondary school pupils to 
        work with younger children in a supervised setting as part of a 
        community service program. 
           (b) The district may charge a sliding fee based upon family 
        income for extended day programs.  The district may receive 
        money from other public or private sources for the extended day 
        program.  The school board of the district shall must develop 
        standards for school age child care programs.  Districts with 
        programs in operation before July 1, 1990, must adopt standards 
        before October 1, 1991.  All other districts must adopt 
        standards within one year after the district first offers 
        services under a program authorized by this subdivision.  The 
        state board of education may not adopt rules for extended day 
        programs. 
           (c) The district shall maintain a separate account within 
        the community services fund for all funds related to the 
        extended day program. 
           Sec. 43.  Minnesota Statutes 1996, section 121.882, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] A district that provides a 
        community education program under sections 121.85 to 121.88 may 
        establish an early childhood family education program.  Two or 
        more districts, each of which provides a community education 
        program, may cooperate to jointly provide an early childhood 
        family education program. 
           Sec. 44.  Minnesota Statutes 1997 Supplement, section 
        121.882, subdivision 2, is amended to read: 
           Subd. 2.  [PROGRAM CHARACTERISTICS.] Early childhood family 
        education programs are programs for children in the period of 
        life from birth to kindergarten, for the parents of such 
        children, and for expectant parents.  The programs may include 
        the following:  
           (1) programs to educate parents about the physical, mental, 
        and emotional development of children; 
           (2) programs to enhance the skills of parents in providing 
        for their children's learning and development; 
           (3) learning experiences for children and parents that 
        promote children's development; 
           (4) activities designed to detect children's physical, 
        mental, emotional, or behavioral problems that may cause 
        learning problems; 
           (5) activities and materials designed to encourage 
        self-esteem, skills, and behavior that prevent sexual and other 
        interpersonal violence; 
           (6) educational materials which may be borrowed for home 
        use; 
           (7) information on related community resources; 
           (8) programs to prevent child abuse and neglect; 
           (9) other programs or activities to improve the health, 
        development, and learning readiness of children; or 
           (10) activities designed to maximize development during 
        infancy.  
           The programs shall must not include activities for children 
        that do not require substantial involvement of the children's 
        parents.  The programs shall must be reviewed periodically to 
        assure the instruction and materials are not racially, 
        culturally, or sexually biased.  The programs shall must 
        encourage parents to be aware of practices that may affect 
        equitable development of children. 
           Sec. 45.  Minnesota Statutes 1996, section 121.882, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [HOME VISITING PROGRAM.] (a) The commissioner of 
        children, families, and learning shall include as part of the 
        early childhood family education programs a parent education 
        component to prevent child abuse and neglect.  This parent 
        education component must include: 
           (1) expanding statewide the home visiting component of the 
        early childhood family education programs; 
           (2) training parent educators, child educators, community 
        outreach workers, and home visitors in the dynamics of child 
        abuse and neglect and positive parenting and discipline 
        practices; and 
           (3) developing and disseminating education and public 
        information materials that promote positive parenting skills and 
        prevent child abuse and neglect. 
           (b) The parent education component must: 
           (1) offer to isolated or at-risk families home visiting 
        parent education services that at least address parenting 
        skills, a child's development and stages of growth, 
        communication skills, managing stress, problem-solving skills, 
        positive child discipline practices, methods of improving 
        parent-child interactions and enhancing self-esteem, using 
        community support services and other resources, and encouraging 
        parents to have fun with and enjoy their children; 
           (2) develop a risk assessment tool to determine the 
        family's level of risk; 
           (3) establish clear objectives and protocols for home 
        visits; 
           (4) determine the frequency and duration of home visits 
        based on a risk-need assessment of the client, with home visits 
        beginning in the second trimester of pregnancy and continuing, 
        based on client need, until a child is six years old; 
           (5) encourage families to make a transition from home 
        visits to site-based parenting programs to build a family 
        support network and reduce the effects of isolation; 
           (6) develop and distribute education materials on 
        preventing child abuse and neglect that may be used in home 
        visiting programs and parent education classes and distributed 
        to the public; 
           (7) initially provide at least 40 hours of training and 
        thereafter ongoing training for parent educators, child 
        educators, community outreach workers, and home visitors that 
        covers the dynamics of child abuse and neglect, domestic 
        violence and victimization within family systems, signs of abuse 
        or other indications that a child may be at risk of being abused 
        or neglected, what child abuse and neglect are, how to properly 
        report cases of child abuse and neglect, respect for cultural 
        preferences in child rearing, what community resources, social 
        service agencies, and family support activities and programs are 
        available, child development and growth, parenting skills, 
        positive child discipline practices, identifying stress factors 
        and techniques for reducing stress, home visiting techniques, 
        and risk assessment measures; 
           (8) provide program services that are community-based, 
        accessible, and culturally relevant; and 
           (9) foster collaboration among existing agencies and 
        community-based organizations that serve young children and 
        their families. 
           (c) Home visitors should reflect the demographic 
        composition of the community the home visitor is serving to the 
        extent possible.  
           Sec. 46.  Minnesota Statutes 1996, section 121.882, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SEPARATE ACCOUNTS.] The district shall must 
        maintain a separate account within the community education fund 
        for money for early childhood family education programs. 
           Sec. 47.  Minnesota Statutes 1996, section 121.882, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DISTRICT ADVISORY COUNCILS.] The school 
        board shall must appoint an advisory council from the area in 
        which the program is provided.  A majority of the council shall 
        must be parents participating in the program.  The council shall 
        must assist the board in developing, planning, and monitoring 
        the early childhood family education program.  The council shall 
        must report to the school board and the community education 
        advisory council.  
           Sec. 48.  Minnesota Statutes 1996, section 121.882, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [ALTERNATIVE COUNCIL.] A school board may direct 
        the community education council, required according to section 
        121.88, subdivision 2, to perform the functions of the advisory 
        council for early childhood family education.  
           Sec. 49.  Minnesota Statutes 1996, section 121.882, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TEACHERS.] A school board shall must employ 
        necessary qualified teachers for its early childhood family 
        education programs. 
           Sec. 50.  Minnesota Statutes 1996, section 121.882, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ASSISTANCE.] The department of children, 
        families, and learning shall must provide assistance to 
        districts with programs described in this section.  The 
        department must establish guidelines that list barriers to 
        learning and development affecting children served by early 
        childhood family education programs. 
           Sec. 51.  Minnesota Statutes 1996, section 121.885, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SERVICE-LEARNING AND WORK-BASED LEARNING 
        PROGRAMS STUDY.] The governor's workforce development council 
        shall must assist the commissioner of children, families, and 
        learning in studying how to combine community service activities 
        and service-learning with work-based learning programs. 
           Sec. 52.  Minnesota Statutes 1996, 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 in 
        cooperation with the governor's workforce development council, 
        the commissioner and the higher education services office, shall 
        provide for those participants who successfully complete youth 
        community service under sections 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 governor's workforce development council, in 
        cooperation with the board of trustees of the Minnesota state 
        colleges and universities, shall must 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. 53.  Minnesota Statutes 1997 Supplement, section 
        123.35, subdivision 8, is amended to read:  
           Subd. 8.  [EVENING SCHOOLS; ADULT AND CONTINUING 
        EDUCATION.] The board may establish and maintain public evening 
        schools and adult and continuing education programs and such.  
        The evening schools and adult and continuing education 
        programs when so maintained shall by the board must be available 
        to all persons over 16 years of age who, from any cause, are 
        unable to attend the full-time elementary or secondary schools 
        of such district. 
           Sec. 54.  Minnesota Statutes 1996, section 123.70, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SCHEDULE OF IMMUNIZATIONS.] No person who has 
        commenced a treatment schedule of immunization pursuant to 
        subdivision 1, clause (2), may remain enrolled in any child care 
        facility, elementary, or secondary school in this state after 18 
        months of enrollment unless there is submitted to the 
        administrator, or other person having general control and 
        supervision of the school or child care facility, a statement 
        from a physician or a public clinic which provides immunizations 
        that the person has completed the primary schedule of 
        immunizations for diphtheria, tetanus, pertussis, and polio and 
        in which the month and year of each additional immunization 
        received is included.  The statement must include the month and 
        year of each additional immunization received.  For a child less 
        than seven years of age, a primary schedule of immunizations 
        shall consist of four doses of vaccine for diphtheria, tetanus, 
        and pertussis and three doses of vaccine for poliomyelitis.  For 
        a child seven years of age or older, a primary schedule of 
        immunizations shall consist of three doses of vaccine for 
        diphtheria, tetanus, and polio. 
           Sec. 55.  Minnesota Statutes 1996, section 123.70, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SUBSTITUTE IMMUNIZATION STATEMENT.] A person who 
        is enrolling or enrolled in an elementary or secondary school or 
        child care facility may substitute a statement from the 
        emancipated person or a parent or guardian if the person is a 
        minor child in lieu of the statement from a physician or public 
        clinic which provides immunizations.  If the statement is from a 
        parent or guardian or emancipated person, the statement shall 
        must indicate the month and year of each immunization given.  In 
        order for the statement to be acceptable for a person who is 
        enrolling in an elementary school and who is six years of age or 
        younger, it must indicate that the following was given:  no less 
        than one dose of vaccine each for measles, mumps, and rubella 
        given separately or in combination, and no less than four doses 
        of vaccine for poliomyelitis, unless the third dose was given 
        after the fourth birthday, then three doses are minimum, and no 
        less than five doses of vaccine for diphtheria, tetanus, and 
        pertussis, unless the fourth dose was given after the fourth 
        birthday, then four are minimum.  In order for the statement to 
        be acceptable for a person who is enrolling in an elementary or 
        secondary school and is age seven through age 19, the statement 
        must indicate that the person has received no less than one dose 
        of vaccine each for measles, mumps, and rubella given separately 
        or in combination and consistent with subdivision 10, and no 
        less than three doses of vaccine for poliomyelitis, diphtheria, 
        and tetanus.  
           In order for the statement to be acceptable for a person 
        who is enrolling in a secondary school, and who was born after 
        1956 and is 20 years of age or older, the statement must 
        indicate that the person has received no less than one dose of 
        vaccine each for measles, mumps, and rubella given separately or 
        in combination, and no less than one dose of vaccine for 
        diphtheria and tetanus within the preceding ten years.  In order 
        for the statement to be acceptable for a person who is enrolling 
        in a child care facility and who is at least 15 months old but 
        who has not reached five years of age, it must indicate that the 
        following were given:  no less than one dose of vaccine each for 
        measles, mumps, and rubella given separately or in combination; 
        no less than one dose of vaccine for haemophilus influenza type 
        b; no less than four doses of vaccine for diphtheria, tetanus, 
        and pertussis; and no less than three doses of vaccine for 
        poliomyelitis.  In order for the statement to be acceptable for 
        a person who is enrolling in a child care facility and who is 
        five or six years of age, it must indicate that the following 
        was given:  no less than one dose of vaccine each for measles, 
        mumps, and rubella given separately or in combination, no less 
        than four doses of vaccine for diphtheria, tetanus, and 
        pertussis, and no less than three doses of vaccine for 
        poliomyelitis.  In order for the statement to be acceptable for 
        a person who is enrolling in a child care facility and who is 
        seven years of age or older, the statement must indicate that 
        the person has received no less than one dose of vaccine each 
        for measles, mumps, and rubella given separately or in 
        combination and consistent with subdivision 10, and no less than 
        three doses of vaccine for poliomyelitis, diphtheria, and 
        tetanus.  The commissioner of health, on finding that any of the 
        above requirements are not necessary to protect the public's 
        health, may suspend for one year that requirement.  
           Sec. 56.  Minnesota Statutes 1996, section 123.70, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPORT.] The administrator or other person 
        having general control and supervision of the elementary or 
        secondary school shall file a report with the commissioner of 
        children, families, and learning on all persons enrolled in the 
        school, except that.  The superintendent of each school district 
        shall file a report with the commissioner of children, families, 
        and learning 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 must be prepared on forms 
        developed jointly by the commissioner of health and the 
        commissioner of children, families, and learning and be 
        distributed to the local school districts by the commissioner of 
        health and shall.  The school report must 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 must be filed with the 
        commissioner of children, families, and learning within 60 days 
        of the commencement of each new school term.  Upon request, a 
        district shall must be given a 60-day extension for filing the 
        school report.  The commissioner of children, families, and 
        learning 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.  The 
        child care facility report 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 must 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. 57.  Minnesota Statutes 1996, section 123.702, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EARLY CHILDHOOD DEVELOPMENTAL SCREENING.] 
        Every school board shall must provide for a mandatory program of 
        early childhood developmental screening for children once before 
        school entrance, targeting children who are between 3-1/2 and 
        four years old.  This screening program shall must be 
        established either by one board, by two or more boards acting in 
        cooperation, by service cooperatives, by early childhood family 
        education programs, or by other existing programs.  This 
        screening examination is a mandatory requirement for a student 
        to continue attending kindergarten or first grade in a public 
        school.  A child need not submit to developmental screening 
        provided by a school board if the child's health records 
        indicate to the school board that the child has received 
        comparable developmental screening from a public or private 
        health care organization or individual health care provider.  
        The school Districts are encouraged to reduce the costs of 
        preschool developmental screening programs by utilizing 
        volunteers in implementing the program. 
           Sec. 58.  Minnesota Statutes 1996, section 123.702, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [SCREENING PROGRAM.] (a) A screening program 
        shall must include at least the following components:  
        developmental assessments, hearing and vision screening or 
        referral, immunization review and referral, the child's height 
        and weight, identification of risk factors that may influence 
        learning, an interview with the parent about the child, and 
        referral for assessment, diagnosis, and treatment when potential 
        needs are identified.  The school district and the person 
        performing or supervising the screening shall must provide a 
        parent or guardian with clear written notice that the parent or 
        guardian may decline to answer questions or provide information 
        about family circumstances that might affect development and 
        identification of risk factors that may influence learning.  The 
        notice shall must clearly state that declining to answer 
        questions or provide information does not prevent the child from 
        being enrolled in kindergarten or first grade if all other 
        screening components are met.  If a parent or guardian is not 
        able to read and comprehend the written notice, the school 
        district and the person performing or supervising the screening 
        must convey the information in another manner.  The notice shall 
        must also inform the parent or guardian that a child need not 
        submit to the school district screening program if the child's 
        health records indicate to the school that the child has 
        received comparable developmental screening performed within the 
        preceding 365 days by a public or private health care 
        organization or individual health care provider.  The notice 
        shall must be given to a parent or guardian at the time the 
        district initially provides information to the parent or 
        guardian about screening and shall must be given again at the 
        screening location.  
           (b) All screening components shall be consistent with the 
        standards of the state commissioner of health for early 
        developmental screening programs.  No A developmental screening 
        program shall must not provide laboratory tests or a physical 
        examination to any child.  The school district shall must 
        request from the public or private health care organization or 
        the individual health care provider the results of any 
        laboratory test or physical examination within the 12 months 
        preceding a child's scheduled screening.  
           (c) If a child is without health coverage, the school 
        district shall must refer the child to an appropriate health 
        care provider.  
           (d) A school board may offer additional components such as 
        nutritional, physical and dental assessments, review of family 
        circumstances that might affect development, blood pressure, 
        laboratory tests, and health history.  
           (e) If a statement signed by the child's parent or guardian 
        is submitted to the administrator or other person having general 
        control and supervision of the school that the child has not 
        been screened because of conscientiously held beliefs of the 
        parent or guardian, the screening is not required.  
           Sec. 59.  Minnesota Statutes 1996, section 123.702, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FOLLOW-UP SCREENING.] If any child's screening 
        indicates a condition which requires diagnosis or treatment, the 
        child's parents shall be notified of the condition and 
        the school board shall ensure that an appropriate follow-up and 
        referral process is available.  
           Sec. 60.  Minnesota Statutes 1996, section 123.702, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEVELOPMENTAL SCREENING PROGRAM INFORMATION.] 
        The school board shall must inform each resident family with a 
        child eligible to participate in the developmental screening 
        program about the availability of the program and the state's 
        requirement that a child receive developmental screening not 
        later than 30 days after the first day of attending kindergarten 
        in a public school.  
           Sec. 61.  Minnesota Statutes 1996, section 123.702, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEVELOPMENTAL SCREENING SERVICES.] A school 
        board may contract with or purchase service from an approved 
        early developmental screening program in the area.  
        Developmental screening must be conducted by either an 
        individual who is licensed as, or has training that is similar 
        to a special education teacher, school psychologist, 
        kindergarten teacher, prekindergarten teacher, school nurse, 
        public health nurse, registered nurse, or physician.  The 
        individual may be a volunteer.  
           Sec. 62.  Minnesota Statutes 1996, section 123.702, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [SCREENING RECORD.] The school district 
        shall must provide the parent or guardian of the child screened 
        with a record indicating the month and year the child received 
        developmental screening and the results of the screening.  The 
        district shall must keep a duplicate copy of the record of each 
        child screened.  
           Sec. 63.  Minnesota Statutes 1996, section 123.702, 
        subdivision 5, is amended to read: 
           Subd. 5.  [VOLUNTEER SCREENING PROGRAMS.] Every school 
        board shall must integrate and utilize volunteer screening 
        programs in implementing sections 123.702 to 123.7045 wherever 
        possible.  
           Sec. 64.  Minnesota Statutes 1996, section 123.702, 
        subdivision 6, is amended to read: 
           Subd. 6.  [HEALTH CARE PROVIDER SOCIETIES.] A school board 
        may consult with local societies of health care providers.  
           Sec. 65.  Minnesota Statutes 1996, section 123.702, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PRIORITY TO VOLUNTEERS.] In selecting personnel 
        to implement the screening program, the school district shall 
        must give priority first to qualified volunteers. 
           Sec. 66.  Minnesota Statutes 1996, section 123.704, is 
        amended to read: 
           123.704 [DATA USE.] 
           Data on individuals collected in screening programs 
        established pursuant to section 123.702 is private, as defined 
        by section 13.02, subdivision 12.  Individual and summary data 
        shall must be reported to the school district by the health 
        provider who performs the screening services, for the purposes 
        of developing appropriate educational programs to meet the 
        individual needs of children and designing appropriate health 
        education programs for the district; provided,.  No data on an 
        individual shall be disclosed to the district without the 
        consent of that individual's parent or guardian. 
           Sec. 67.  Minnesota Statutes 1996, section 123.7045, is 
        amended to read: 
           123.7045 [DEVELOPMENTAL SCREENING AID.] 
           Each school year, the state shall must pay a school 
        district $25 for each child screened according to the 
        requirements of section 123.702.  If this amount of aid is 
        insufficient, the district may permanently transfer from the 
        general fund an amount that, when added to the aid, is 
        sufficient. 
           Sec. 68.  Minnesota Statutes 1996, section 124.255, is 
        amended to read: 
           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 shall 
        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 children, families, and learning, shall must 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. 69.  Minnesota Statutes 1996, section 124.26, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [PROGRAM APPROVAL.] (a) To receive aid under 
        this section, a district, a consortium of districts, or a 
        private nonprofit organization must submit an application by 
        June 1 describing the program, on a form provided by the 
        department.  The program must be approved by the commissioner 
        according to the following criteria:  
           (1) how the needs of different levels of learning will be 
        met; 
           (2) for continuing programs, an evaluation of results; 
           (3) anticipated number and education level of participants; 
           (4) coordination with other resources and services; 
           (5) participation in a consortium, if any, and money 
        available from other participants; 
           (6) management and program design; 
           (7) volunteer training and use of volunteers; 
           (8) staff development services; 
           (9) program sites and schedules; and 
           (10) program expenditures that qualify for aid.  
           (b) The commissioner may grant adult basic education funds 
        to a private, nonprofit organization to provide services that 
        are not offered by a district or that are supplemental to a 
        district's program.  The program provided under this provision 
        must be approved and funded according to the same criteria used 
        for district programs. 
           (c) Adult basic education programs may be approved under 
        this subdivision for up to five years.  Five-year program 
        approval shall must be granted to an applicant who has 
        demonstrated the capacity to: 
           (1) offer comprehensive learning opportunities and support 
        service choices appropriate for and accessible to adults at all 
        basic skill need levels; 
           (2) provide a participatory and experiential learning 
        approach based on the strengths, interests, and needs of each 
        adult, that enables adults with basic skill needs to: 
           (i) identify, plan for, and evaluate their own progress 
        toward achieving their defined educational and occupational 
        goals; 
           (ii) master the basic academic reading, writing, and 
        computational skills, as well as the problem-solving, decision 
        making, interpersonal effectiveness, and other life and learning 
        skills they need to function effectively in a changing society; 
           (iii) locate and be able to use the health, governmental, 
        and social services and resources they need to improve their own 
        and their families' lives; and 
           (iv) continue their education, if they desire, to at least 
        the level of secondary school completion, with the ability to 
        secure and benefit from continuing education that will enable 
        them to become more employable, productive, and responsible 
        citizens; 
           (3) plan, coordinate, and develop cooperative agreements 
        with community resources to address the needs that the adults 
        have for support services, such as transportation, flexible 
        course scheduling, convenient class locations, and child care; 
           (4) collaborate with business, industry, labor unions, and 
        employment-training agencies, as well as with family and 
        occupational education providers, to arrange for resources and 
        services through which adults can attain economic 
        self-sufficiency; 
           (5) provide sensitive and well trained adult education 
        personnel who participate in local, regional, and statewide 
        adult basic education staff development events to master 
        effective adult learning and teaching techniques; 
           (6) participate in regional adult basic education peer 
        program reviews and evaluations; and 
           (7) submit accurate and timely performance and fiscal 
        reports.  
           Sec. 70.  Minnesota Statutes 1997 Supplement, section 
        124.26, subdivision 2, is amended to read: 
           Subd. 2.  [ACCOUNTS; REVENUE; AID.] Each district, group of 
        districts, or private nonprofit organization providing adult 
        basic education programs shall must establish and maintain 
        accounts separate from all other district accounts for the 
        receipt and disbursement of all funds related to these 
        programs.  All revenue received pursuant to this section shall 
        must be utilized solely for the purposes of adult basic 
        education programs.  In no case shall Federal and state aid plus 
        levy must not equal more than 100 percent of the actual cost of 
        providing these programs. 
           Sec. 71.  Minnesota Statutes 1997 Supplement, section 
        124.2601, subdivision 6, is amended to read: 
           Subd. 6.  [AID GUARANTEE.] (a) For fiscal year 1994, any 
        adult basic education program that receives less state aid under 
        subdivisions 3 and 7 than from the aid formula for fiscal year 
        1992 shall must receive the amount of aid it received in fiscal 
        year 1992. 
           (b) For 1995, 1996, and 1997 fiscal years, an adult basic 
        education program that receives aid shall must receive at least 
        the amount of aid it received in fiscal year 1992 under 
        subdivisions 3 and 7, plus aid equal to the amount of revenue 
        that would have been raised for taxes payable in 1994 under 
        Minnesota Statutes 1992, section 124.2601, subdivision 4, minus 
        the amount raised under subdivision 4. 
           (c) For fiscal year 1998, any adult basic education program 
        that receives less state aid than in fiscal year 1997 shall 
        receive additional aid equal to 80 percent of the difference 
        between its 1997 aid and the amount of aid under subdivision 5.  
        For fiscal year 1999 and later, additional aid under this 
        paragraph must be reduced by 20 percent each year. 
           Sec. 72.  Minnesota Statutes 1996, section 124.2601, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PRORATION.] If the total appropriation for adult 
        basic education aid is insufficient to pay all approved programs 
        the full amount of aid earned, the department of children, 
        families, and learning shall must proportionately reduce each 
        approved program's aid. 
           Sec. 73.  Minnesota Statutes 1996, section 124.2605, is 
        amended to read: 
           124.2605 [GED TEST FEES.] 
           The commissioner of children, families, and learning shall 
        pay 60 percent of the fee that is charged to an eligible 
        individual for the full battery of a GED test, but not more than 
        $20 for an eligible individual. 
           Sec. 74.  Minnesota Statutes 1997 Supplement, section 
        124.2615, subdivision 2, is amended to read: 
           Subd. 2.  [AMOUNT OF AID.] (a) A district is eligible to 
        receive learning readiness aid if the program plan as required 
        by subdivision 1 has been approved by the commissioner of 
        children, families, and learning.  
           (b) For fiscal year 1998 and thereafter, a district 
        shall must receive learning readiness aid equal to: 
           (1) the number of eligible four-year old children in the 
        district times the ratio of 50 percent of the total learning 
        readiness aid for that year to the total number of eligible 
        four-year old children reported to the commissioner for that 
        year; plus 
           (2) the number of pupils enrolled in the school district 
        from families eligible for the free or reduced school lunch 
        program times the ratio of 50 percent of the total learning 
        readiness aid for that year to the total number of pupils in the 
        state from families eligible for the free or reduced school 
        lunch program. 
           Sec. 75.  Minnesota Statutes 1996, section 124.2615, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SEPARATE ACCOUNTS.] The district shall must 
        deposit learning readiness aid in a separate account within the 
        community education fund.  
           Sec. 76.  Minnesota Statutes 1996, section 124.2711, as 
        amended by Laws 1997, chapter 162, article 1, sections 6 and 7, 
        is amended to read: 
           124.2711 [EARLY CHILDHOOD FAMILY EDUCATION REVENUE.] 
           Subdivision 1.  [REVENUE.] The revenue for early childhood 
        family education programs for a school district equals $101.25 
        for 1998 and $113.50 for 1999 and later fiscal years times the 
        greater of: 
           (1) 150; or 
           (2) the number of people under five years of age residing 
        in the school district on October 1 of the previous school year. 
           Subd. 2.  [POPULATION.] For the purposes of subdivision 1, 
        data reported to the department of children, families, and 
        learning may be used to determine the number of people under 
        five years of age residing in the district.  The commissioner, 
        with the assistance of the state demographer, shall review the 
        number reported by any district operating an early childhood 
        family education program.  If requested, the district shall 
        submit to the commissioner an explanation of its methods and 
        other information necessary to document accuracy.  If the 
        commissioner determines that the district has not provided 
        sufficient documentation of accuracy, the commissioner may 
        request the state demographer to prepare an estimate of the 
        number of people under five years of age residing in the 
        district and may use this estimate for the purposes of 
        subdivision 1.  
           Subd. 2a.  [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To 
        obtain early childhood family education revenue, a district may 
        levy an amount equal to the tax rate of .653 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 must equal the early childhood family education 
        revenue.  
           Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] If a 
        district complies with the provisions of section 121.882, it 
        shall must receive early childhood family education aid equal to 
        the difference between the early childhood family education 
        revenue and the early childhood family education levy.  If the 
        district does not levy the entire amount permitted, the early 
        childhood family education aid shall must be reduced in 
        proportion to the actual amount levied.  
           Subd. 4.  [USE OF REVENUE RESTRICTED.] Early childhood 
        family education revenue may be used only for early childhood 
        family education programs.  Not more than five percent of early 
        childhood family education revenue may be used to administer 
        early childhood family education programs.  The increase in 
        revenue for fiscal years 1992 and 1993 shall be used to: 
           (1) increase participation of families so that the total 
        participation in early childhood family education programs in 
        the district more nearly reflects the demographic, racial, 
        cultural, and ethnic diversity of the district; and 
           (2) provide programs for families who, because of poverty 
        and other barriers to learning, may need programs designed to 
        meet their needs.  
           Subd. 5.  [HOME VISITING LEVY.] A school district that 
        enters into a collaborative agreement to provide education 
        services and social services to families with young children may 
        levy an amount equal to $1.60 times the number of people under 
        five years of age residing in the district on September 1 of the 
        last school year.  Levy revenue under this subdivision shall 
        must not be included as revenue under subdivision 1.  The 
        revenue shall must be used for home visiting programs under 
        section 121.882, subdivision 2b.  
           Subd. 6.  [RESERVE ACCOUNT.] Early childhood family 
        education revenue, which includes aids, levies, fees, grants, 
        and all other revenues received by the school district for early 
        childhood family education programs, must be maintained in a 
        reserve account within the community service fund. 
           Sec. 77.  Minnesota Statutes 1996, section 124.2713, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COMMUNITY EDUCATION AID.] A district's community 
        education aid is the difference between its community education 
        revenue and the community education levy.  If the district does 
        not levy the entire amount permitted, the community education 
        aid shall must be reduced in proportion to the actual amount 
        levied.  
           Sec. 78.  Minnesota Statutes 1997 Supplement, section 
        124.2713, subdivision 8, is amended to read: 
           Subd. 8.  [USES OF GENERAL REVENUE.] (a) General community 
        education revenue may be used for: 
           (1) nonvocational, recreational, and leisure time 
        activities and programs; 
           (2) programs for adults with disabilities, if the programs 
        and budgets are approved by the department of children, 
        families, and learning; 
           (3) adult basic education programs, according to section 
        124.26; 
           (4) summer programs for elementary and secondary pupils; 
           (5) implementation of a youth development plan; 
           (6) implementation of a youth service program; 
           (7) early childhood family education programs, according to 
        section 121.882; and 
           (8) extended day programs, according to section 121.88, 
        subdivision 10. 
           (9) In addition to money from other sources, a district may 
        use up to ten percent of its community education revenue for 
        equipment that is used exclusively in community education 
        programs.  This revenue may be used only for the following 
        purposes:  
           (i) to purchase or lease computers and related materials; 
           (ii) to purchase or lease equipment for instructional 
        programs; and 
           (iii) to purchase textbooks and library books. 
           (b) General community education revenue must not be used to 
        subsidize the direct activity costs for adult enrichment 
        programs.  Direct activity costs include, but are not limited 
        to, the cost of the activity leader or instructor, cost of 
        materials, or transportation costs. 
           Sec. 79.  Minnesota Statutes 1996, section 124.2715, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LEVY.] A district may levy for a program for 
        adults with disabilities an amount up to the amount designated 
        in subdivision 2.  In the case of a program offered by a group 
        of districts, the levy amount shall must be apportioned among 
        the districts according to the agreement submitted to the 
        department of children, families, and learning.  
           Sec. 80.  Minnesota Statutes 1996, section 124.2716, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A school district that 
        offers an extended day program according to section 121.88, 
        subdivision 10, is eligible for extended day revenue for the 
        additional costs of providing services to children with 
        disabilities or to children experiencing family or related 
        problems of a temporary nature who participate in the extended 
        day program. 
           Sec. 81.  Minnesota Statutes 1996, section 124.2716, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXTENDED DAY REVENUE.] The extended day revenue 
        for an eligible school district equals the approved additional 
        cost of providing services to children with disabilities or 
        children experiencing family or related problems of a temporary 
        nature who participate in the extended day program.  
           Sec. 82.  Minnesota Statutes 1996, section 124.276, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A school district that has a 
        family connections program, according to sections 125.70 to 
        125.705, for one or more of its teachers is eligible for aid to 
        extend the teaching contract of a family connections teacher.  
           Sec. 83.  Minnesota Statutes 1996, section 124.276, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSIONER APPROVAL.] The commissioner may 
        approve plans and applications for districts throughout the 
        state for family connections aid.  Application procedures and 
        deadlines shall be established by The commissioner shall 
        establish application procedures and deadlines. 
           Sec. 84.  Minnesota Statutes 1996, section 124C.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY.] An applicant for revenue may be 
        any one of the following: 
           (1) a school district located in a city of the first class 
        offering a program in cooperation with other districts or by 
        itself, in one or more areas in the district or in the entire 
        district; 
           (2) at least two cooperating school districts located in 
        the seven-county metropolitan area but not located in a city of 
        the first class; 
           (3) a group of school districts that are all members of the 
        same education district; 
           (4) an education district; 
           (5) a group of cooperating school districts none of which 
        are members of any education district; or 
           (6) a school district. 
           Sec. 85.  Minnesota Statutes 1996, section 125.702, is 
        amended to read: 
           125.702 [PROGRAM SELECTION.] 
           Subdivision 1.  [AUTHORIZATION.] A school district or group 
        of districts may establish an improved learning program.  
           Subd. 2.  [RULES AND RIGHTS.] The state board of education 
        may waive school district compliance with its rules which would 
        prevent implementation of an improved learning program.  
        Participation in an improved learning program as a 
        principal-teacher, counselor-teacher, or career teacher shall 
        must not affect seniority in the district or rights under the 
        applicable collective bargaining agreement.  
           Subd. 3.  [ADDITIONAL FUNDING.] A school district providing 
        an improved learning program may receive funds for the program 
        from private sources and governmental agencies, including state 
        or federal funds.  
           Sec. 86.  Minnesota Statutes 1996, section 125.703, is 
        amended to read: 
           125.703 [ADVISORY COUNCIL.] 
           The school board of a district providing a family 
        connections program shall must appoint an advisory council.  
        Council members shall must be selected from the school 
        attendance area in which programs are provided.  Members of the 
        council may include students, teachers, principals, 
        administrators and community members.  A majority of the members 
        shall must be parents with children participating in the local 
        program.  The local advisory council shall must advise the 
        school board in the development, coordination, supervision, and 
        review of the career teacher program.  The council shall must 
        meet at least two times each year with any established community 
        education advisory council in the district.  Members of the 
        council may be members of the community education advisory 
        council.  The council shall must report to the school board. 
           Sec. 87.  Minnesota Statutes 1996, section 125.704, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MANDATORY COMPONENTS.] A family 
        connections program shall must include:  
           (1) participation by a designated individual as a career 
        teacher, principal-teacher, or counselor teacher; 
           (2) an emphasis on each individual child's unique learning 
        and development needs; 
           (3) procedures to give the career teacher a major 
        responsibility for leadership of the instructional and 
        noninstructional activities of each child beginning with early 
        childhood family education; 
           (4) procedures to involve parents in the learning and 
        development experiences of their children; 
           (5) procedures to implement outcome based education by 
        focusing on the needs of the learner; 
           (6) procedures to coordinate and integrate the 
        instructional program with all community education programs; 
           (7) procedures to concentrate career teacher programs at 
        sites that provide early childhood family education and 
        subsequent learning and development programs; and 
           (8) procedures for the district to fund the program.  
           Sec. 88.  Minnesota Statutes 1996, section 125.705, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATUS.] A family connections program may 
        include a career teacher, principal-teacher, and counselor 
        teacher component.  The career teacher, principal-teacher, and 
        counselor teacher shall must not be the exclusive teacher for 
        students assigned to them but shall serve as a primary teacher 
        and perform the function of developing and implementing a 
        student's overall learning and development program.  The career 
        teacher, principal-teacher, and counselor teacher may be 
        responsible for regular assignments as well as learning and 
        development programs for other assigned students.  
           Sec. 89.  Minnesota Statutes 1996, section 125.705, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STAFF/STUDENT RATIO.] (a) Except as provided in 
        clause (b), one career teacher, principal-teacher, or counselor 
        teacher shall be assigned for every 125 students.  For each 
        special education student included in the assignment, the 1:125 
        ratio shall must be reduced by one.  
           (b) One principal-teacher shall be assigned for every 50 
        students when the principal-teacher is also the principal of the 
        school.  
           Sec. 90.  Minnesota Statutes 1996, section 125.705, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SELECTION; RENEWAL.] (a) The school board 
        shall must establish procedures for teachers, principals, and 
        counselors to apply for the position of career teacher, 
        principal-teacher, or counselor teacher.  The authority for 
        selection of career teachers, principal-teachers, and counselor 
        teachers shall be is vested in the board and no individual shall 
        have a right to employment as a career teacher, 
        principal-teacher, or counselor teacher based on seniority or 
        order of employment in the district.  
           (b) Employment of the career teacher, principal-teacher, 
        and counselor teacher may be on a 12-month basis with vacation 
        time negotiated individually with the board.  The annual 
        contract of a career teacher, principal-teacher, or counselor 
        teacher may not be renewed, as the board shall see fit; 
        provided, however,.  The board shall must give any such 
        teacher whose contract as a career teacher, principal-teacher, 
        or counselor teacher it declines to renew for the following year 
        written notice to that effect before April 15.  If the board 
        fails to renew the contract of a career teacher, 
        principal-teacher, or counselor teacher, that individual shall 
        must be reinstated to another position in the district if 
        eligible pursuant to section 125.12 or 125.17.  
           Sec. 91.  Minnesota Statutes 1996, section 125.705, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DUTIES.] The career teacher, principal-teacher, 
        and counselor teacher shall be is responsible for:  
           (1) the overall education, learning, and development plan 
        of assigned students.  This plan shall be designed by The career 
        teacher, principal-teacher, and counselor teacher must design 
        this plan with the student, parents, and other faculty, 
        and shall must seek to maximize the learning and development 
        potential and maturation level of each pupil; 
           (2) measuring the proficiency of the assigned students and 
        assisting other staff in identifying pupil needs and making 
        appropriate educational and subject groupings; 
           (3) when part of the district's plan, taking responsibility 
        for the parent and early childhood education of assigned 
        students; 
           (4) designing and being responsible for program components 
        which meet special learning needs of high potential and talented 
        students; 
           (5) coordinating the ongoing, year-to-year learning and 
        development program for assigned students; and 
           (6) developing learning and development portfolios.  
           Sec. 92.  Minnesota Statutes 1997 Supplement, section 
        126.77, subdivision 1, is amended to read: 
           Subdivision 1.  [VIOLENCE PREVENTION CURRICULUM.] (a) The 
        commissioner of children, families, and learning, in 
        consultation with the commissioners of health and human 
        services, state minority councils, battered women's programs, 
        sexual assault centers, representatives of religious 
        communities, and the assistant commissioner of the office of 
        drug policy and violence prevention, shall assist districts on 
        request in developing or implementing a violence prevention 
        program for students in kindergarten to grade 12 that can be 
        integrated into existing curriculum.  The purpose of the program 
        is to help students learn how to resolve conflicts within their 
        families and communities in nonviolent, effective ways.  
           (b) Each district is encouraged to integrate into its 
        existing curriculum a program for violence prevention that 
        includes at least: 
           (1) a comprehensive, accurate, and age appropriate 
        curriculum on violence prevention, nonviolent conflict 
        resolution, sexual, racial, and cultural harassment, and student 
        hazing that promotes equality, respect, understanding, effective 
        communication, individual responsibility, thoughtful decision 
        making, positive conflict resolution, useful coping skills, 
        critical thinking, listening and watching skills, and personal 
        safety; 
           (2) planning materials, guidelines, and other accurate 
        information on preventing physical and emotional violence, 
        identifying and reducing the incidence of sexual, racial, and 
        cultural harassment, and reducing child abuse and neglect; 
           (3) a special parent education component of early childhood 
        family education programs to prevent child abuse and neglect and 
        to promote positive parenting skills, giving priority to 
        services and outreach programs for at-risk families; 
           (4) involvement of parents and other community members, 
        including the clergy, business representatives, civic leaders, 
        local elected officials, law enforcement officials, and the 
        county attorney; 
           (5) collaboration with local community services, agencies, 
        and organizations that assist in violence intervention or 
        prevention, including family-based services, crisis services, 
        life management skills services, case coordination services, 
        mental health services, and early intervention services; 
           (6) collaboration among districts and SCs service 
        cooperatives; 
           (7) targeting early adolescents for prevention efforts, 
        especially early adolescents whose personal circumstances may 
        lead to violent or harassing behavior; 
           (8) opportunities for teachers to receive in-service 
        training or attend other programs on strategies or curriculum 
        designed to assist students in intervening in or preventing 
        violence in school and at home; and 
           (9) administrative policies that reflect, and a staff that 
        models, nonviolent behaviors that do not display or condone 
        sexual, racial, or cultural harassment or student hazing. 
           (c) The department may provide assistance at a neutral site 
        to a nonpublic school participating in a district's program. 
           Sec. 93.  Minnesota Statutes 1996, section 126.78, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GRANT PROCEEDS.] A successful applicant 
        shall must use the grant money to develop and implement or to 
        continue a violence prevention program according to the terms of 
        the grant application. 
           Sec. 94.  Minnesota Statutes 1996, section 126.84, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
        children, families, and learning, in consultation with the 
        commissioner of human services, shall make male responsibility 
        and fathering grants to youth or parenting programs that 
        collaborate with school districts to educate young people, 
        particularly males ages ten to 21, on the responsibilities of 
        parenthood. 
           Sec. 95.  Minnesota Statutes 1996, section 126.84, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXPECTED OUTCOMES.] Grant recipients shall must 
        use the funds for programs designed to prevent teen pregnancy 
        and to prevent crime in the long term.  Recipient programs must 
        assist youth to: 
           (1) understand the connection between sexual behavior, 
        adolescent pregnancy, and the roles and responsibilities of 
        marriage and parenting; 
           (2) understand the long-term responsibility of fatherhood; 
           (3) understand the importance of fathers in the lives of 
        children; 
           (4) acquire parenting skills and knowledge of child 
        development; and 
           (5) find community support for their roles as fathers and 
        nurturers of children. 
           Sec. 96.  Minnesota Statutes 1996, section 126.84, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GRANT APPLICATIONS.] (a) An application for a 
        grant may be submitted by a youth or parenting program whose 
        purpose is to reduce teen pregnancy or teach child development 
        and parenting skills in collaboration with a school district.  
        Each grant application must include a description of the 
        program's structure and components, including collaborative and 
        outreach efforts; an implementation and evaluation plan to 
        measure the program's success; a plan for using males as 
        instructors and mentors; and a cultural diversity plan to ensure 
        that staff or teachers will reflect the cultural backgrounds of 
        the population served and that the program content is culturally 
        sensitive. 
           (b) Grant recipients must, at a minimum, provide education 
        in responsible parenting and child development, responsible 
        decision-making related to marriage and relationships, and the 
        legal implications of paternity.  Grant recipients also must 
        provide public awareness efforts in the collaborating school 
        district.  Grant recipients may offer support groups, health and 
        nutrition education, and mentoring and peer teaching. 
           (c) A grant applicant must establish an advisory committee 
        to assist the applicant in planning and implementation of a 
        grant.  The advisory committee must include student 
        representatives, adult males from the community, representatives 
        of community organizations, teachers, parent educators, and 
        representatives of family social service agencies. 
           Sec. 97.  Minnesota Statutes 1996, section 126.84, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADMINISTRATION.] The commissioner of children, 
        families, and learning shall administer male responsibility and 
        fathering grants.  The commissioner shall establish a grant 
        review committee composed of teachers and representatives of 
        community organizations, student organizations, and education or 
        family social service agencies that offer parent education 
        programs. 
           Sec. 98.  Minnesota Statutes 1996, section 126A.01, is 
        amended to read: 
           126A.01 [ENVIRONMENTAL EDUCATION GOALS AND PLAN.] 
           The environmental education program described in this 
        chapter section and section 126A.06 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) understand ecological systems; 
           (2) understand the cause and effect relationship between 
        human attitudes and behavior and the environment; 
           (3) be able to evaluate alternative responses to 
        environmental issues before deciding on alternative courses of 
        action; and 
           (4) understand the effects of multiple uses of the 
        environment. 
           (b) Pupils and citizens shall have access to information 
        and experiences needed to make informed decisions about actions 
        to take on environmental issues. 
           (c) For the purposes of this chapter section and section 
        126A.06, "state plan" means "Greenprint for Minnesota:  A State 
        Plan for Environmental Education." 
           Sec. 99.  Minnesota Statutes 1996, section 126B.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FUNDING.] Work-based learning programs 
        incorporating post-secondary instruction implemented under this 
        chapter section and sections 126B.03 to 126B.10 shall provide 
        for student funding according to section 123.3514. 
           Sec. 100.  Minnesota Statutes 1996, section 126B.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PARTNERSHIP GRANTS.] The council shall must 
        award grants to implement local education and employment 
        transition systems to local education and employment transition 
        partnerships established under section 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 must evaluate 
        grant proposals on the basis of the elements required in the 
        local plan described in section 126B.10, subdivision 3.  The 
        council shall must 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.  
           Sec. 101.  Minnesota Statutes 1996, section 126B.10, is 
        amended to read: 
           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 must 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 must establish a governing board 
        for planning and implementing work-based and other applied 
        learning programs.  The board shall must 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 must 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 must 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 local education and 
        employment transitions partnership shall must annually publish a 
        report and submit information to the council as required.  The 
        report shall must include information required by the council 
        for the statewide system performance assessment.  The 
        report shall must be available to the public in the communities 
        served by the local education and employment transitions 
        partnership.  The report shall must be published no later than 
        September 1 of the year following the year in which the data was 
        collected. 
           Sec. 102.  [REPEALER.] 
           Minnesota Statutes 1996, section 126.84, subdivision 6, is 
        repealed. 
           Sec. 103.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             126A.01                        115A.073
             126A.06                        115A.074
             123.70                         120C.05
             123.701                        120C.06
             123.702, subd. 1               120C.07, subd. 1
                      subd. 1a                       subd. 2
                      subd. 1b                       subd. 3
                      subd. 2                        subd. 4
                      subd. 3                        subd. 5
                      subd. 4                        subd. 6
                      subd. 4a                       subd. 7
                      subd. 5                        subd. 8
                      subd. 6                        subd. 9
                      subd. 7                        subd. 10
             123.704                        120C.08
             123.7045                       120C.09
             123.35, subd. 17               120C.11
             126.202                        120C.12
             121.203                        120C.13
             121.831                        120C.20
             124.2615                       120C.21
             121.835                        120C.22
             121.882, subd. 1               120C.25, subd. 1
                      subd. 2                        subd. 2
                      subd. 2a                       subd. 3
                      subd. 2b                       subd. 4
                      subd. 3                        subd. 5
                      subd. 4                        subd. 6
                      subd. 5                        subd. 7
                      subd. 6                        subd. 8
                      subd. 7                        subd. 9
                      subd. 7a                       subd. 10
                      subd. 8                        subd. 11
                      subd. 9                        subd. 12
             124.2711, subd. 1              120C.26, subd. 1
                       subd. 2                       subd. 2
                       subd. 2a                      subd. 3
                       subd. 3                       subd. 4
                       subd. 4                       subd. 5
                       subd. 5                       subd. 6
                       subd. 6                       subd. 7
             121.85                         120C.30
             121.88, subd. 1                120C.31, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 3                         subd. 4
                     subd. 4                         subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                     subd. 8                         subd. 9
                     subd. 9                         subd. 10
                     subd. 10                        subd. 11
             124.2713, subd. 1              120C.32, subd. 1
                       subd. 2                       subd. 2
                       subd. 3                       subd. 3
                       subd. 5                       subd. 4
                       subd. 6                       subd. 5
                       subd. 6a                      subd. 6
                       subd. 6b                      subd. 7
                       subd. 7                       subd. 8
                       subd. 8                       subd. 9
                       subd. 9                       subd. 10
                       subd. 10                      subd. 11
             124.2714                       120C.33
             124.2716                       120C.34
             121.8355, subd. 1              120C.35, subd. 1
                       subd. 2                       subd. 2
                       subd. 2a                      subd. 3
                       subd. 3                       subd. 4
                       subd. 3a                      subd. 5
                       subd. 4                       subd. 6
                       subd. 5                       subd. 7
                       subd. 6                       subd. 8
                       subd. 7                       subd. 9
             125.70                         120C.37
             125.701                        120C.38
             125.702                        120C.39
             125.703                        120C.40
             125.704                        120C.41
             125.705                        120C.42
             125.276, subd. 1               120C.43, subd. 1
                      subd. 2a                       subd. 2
                      subd. 3                        subd. 3
                      subd. 4                        subd. 4
             124A.291                       120C.44
             126.77                         120C.45
             126.78                         120C.46
             126.79                         120C.47
             126.84                         120C.48
             121.615                        120C.50
             121.70                         120C.51
             121.701                        120C.52
             121.702                        120C.53
             121.704                        120C.54
             121.705                        120C.55
             121.706                        120C.56
             121.707                        120C.57
             121.708                        120C.58
             121.709                        120C.59
             121.710                        120C.60
             126B.01                        120C.62
             126B.03, subd. 2               120C.63, subd. 1
                      subd. 3                        subd. 2
             126B.06                        120C.64
             126B.10                        120C.65
             121.885                        120C.67
             123.35, subd. 8                120C.70
             124.26, subd. 1b               120C.71, subd. 1
                     subd. 1c                        subd. 2
                     subd. 2                         subd. 3
             124.2601                       120C.72
             124.261                        120C.73
             124.2605                       120C.74
             124.2715                       120C.76
             121.201                        120C.77
             121.612                        120C.82
             124.255                        120C.84
             124C.10                        120C.86
             124C.11                        120C.87
             124C.12                        120C.88
                                   ARTICLE 4 
                                  CHAPTER 121A 
                              STATE ADMINISTRATION 
           Section 1.  Minnesota Statutes 1996, section 121.11, 
        subdivision 7, is amended to read: 
           Subd. 7.  [GENERAL SUPERVISION OVER EDUCATIONAL AGENCIES.] 
        The state board of education shall adopt goals for and exercise 
        general supervision over public schools and public educational 
        agencies in the state, classify and standardize public 
        elementary and secondary schools, and prepare for them outlines 
        and suggested courses of study.  The state board shall develop a 
        plan to attain the adopted goals.  At the state board's request, 
        the commissioner may assign department of children, families, 
        and learning staff to assist the state board in attaining its 
        goals.  The commissioner shall explain to the state board in 
        writing any reason for refusing or delaying a request for staff 
        assistance.  The state board may recognize educational 
        accrediting agencies for the sole purposes of sections 120.101, 
        120.102, and 120.103. 
           Sec. 2.  Minnesota Statutes 1997 Supplement, section 
        121.1113, subdivision 1, is amended to read: 
           Subdivision 1.  [STATEWIDE TESTING.] (a) The commissioner, 
        with advice from experts with appropriate technical 
        qualifications and experience and stakeholders, shall include in 
        the comprehensive assessment system, for each grade level to be 
        tested, a single statewide norm-referenced or 
        criterion-referenced test, or a combination of a norm-referenced 
        and a criterion-referenced test, which shall be highly 
        correlated with the state's graduation standards and 
        administered annually to all students in the third, fifth, and 
        eighth grades.  The commissioner shall establish one or more 
        months during which schools shall administer the tests to 
        students each school year.  The Minnesota basic skills tests in 
        reading and mathematics shall fulfill students' eighth grade 
        testing requirements.  
           (b) In addition, at the secondary level, districts shall 
        assess student performance in all required learning areas and 
        selected required standards within each area of the profiles 
        profile of learning.  The testing instruments and testing 
        process shall be determined by the commissioner.  The results 
        shall be aggregated at the site and district level.  The testing 
        shall be administered beginning in the 1999-2000 school year and 
        thereafter. 
           (c) The comprehensive assessment system shall include an 
        evaluation of school site and school district performance levels 
        during the 1997-1998 school year and thereafter using an 
        established performance baseline developed from students' test 
        scores under this section that records, at a minimum, students' 
        unweighted mean test scores in each tested subject, a second 
        performance baseline that reports, at a minimum, the same 
        unweighted mean test scores of only those students enrolled in 
        the school by January 1 of the previous school year, and a third 
        performance baseline that reports the same unweighted test 
        scores of all students except those students receiving limited 
        English proficiency instruction.  The evaluation also shall 
        record separately, in proximity to the performance baselines, 
        the percentages of students who are eligible to receive a free 
        or reduced price school meal, demonstrate limited English 
        proficiency, or are eligible to receive special education 
        services. 
           (d) In addition to the testing and reporting requirements 
        under paragraphs (a), (b), and (c), the commissioner, in 
        consultation with the state board of education, shall include 
        the following components in the statewide educational 
        accountability and public reporting system: 
           (1) uniform statewide testing of all third, fifth, eighth, 
        and post-eighth grade students with exemptions, only with parent 
        or guardian approval, from the testing requirement only for 
        those very few students for whom the student's individual 
        education plan team under section 120.17, subdivision 2, 
        determines that the student is incapable of taking a statewide 
        test, or a limited English proficiency student under section 
        126.262, subdivision 2, if the student has been in the United 
        States for fewer than 12 months and for whom special language 
        barriers exist, such as the student's native language does not 
        have a written form or the district does not have access to 
        appropriate interpreter services for the student's native 
        language; 
           (2) educational indicators that can be aggregated and 
        compared across school districts and across time on a statewide 
        basis; 
           (3) students' scores on the American College Test; 
           (4) participation in the National Assessment of Educational 
        Progress so that the state can benchmark its performance against 
        the nation and other states, and, where possible, against other 
        countries, and contribute to the national effort to monitor 
        achievement; and 
           (5) basic skills and advanced competencies connecting 
        teaching and learning to high academic standards, assessment, 
        and transitions to citizenship and employment. 
           (e) Districts must report exemptions under paragraph (d), 
        clause (1), to the commissioner consistent with a format 
        provided by the commissioner. 
           Sec. 3.  Minnesota Statutes 1996, section 121.1115, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EDUCATIONAL ACCOUNTABILITY AND PUBLIC 
        REPORTING.] Consistent with the state board of education process 
        to adopt a results-oriented graduation rule under section 
        121.11, subdivision 7c, the state board of education and the 
        department of children, families, and learning, in consultation 
        with education and other system stakeholders, shall must 
        establish a coordinated and comprehensive system of educational 
        accountability and public reporting that promotes higher 
        academic achievement.  
           Sec. 4.  Minnesota Statutes 1996, section 121.1115, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATISTICAL ADJUSTMENTS.] In developing policies 
        and assessment processes to hold schools and school districts 
        accountable for high levels of academic standards, including the 
        profile of learning, the commissioner shall aggregate student 
        data over time to report student performance levels measured at 
        the school district, regional, or statewide level.  When 
        collecting and reporting the data, the commissioner shall:  (1) 
        acknowledge the impact of significant demographic factors such 
        as residential instability, the number of single parent 
        families, parents' level of education, and parents' income level 
        on school outcomes; and (2) organize and report the data so that 
        state and local policymakers can understand the educational 
        implications of changes in districts' demographic profiles over 
        time.  Any report the commissioner disseminates containing 
        summary data on student performance must integrate student 
        performance and the demographic factors that strongly correlate 
        with that performance.  
           Sec. 5.  Minnesota Statutes 1996, section 124.078, is 
        amended to read: 
           124.078 [PERMANENT SCHOOL FUND ADVISORY COMMITTEE.] 
           A state permanent school fund advisory committee is 
        established to advise the department of natural resources on the 
        management of permanent school fund land, which is held in trust 
        for the school districts of the state.  The advisory committee 
        shall must consist of the following persons or their designees:  
        the chairs of the education committees of the legislature, the 
        chairs of the senate committee on finance and house committee on 
        ways and means, the commissioner of children, families, and 
        learning, one superintendent from a nonmetropolitan district, 
        and one superintendent from a metropolitan area district.  The 
        school district superintendents shall be appointed by the 
        commissioner of children, families, and learning.  
           The advisory committee shall review the policies of the 
        department of natural resources on management of school trust 
        fund lands and shall recommend necessary changes in policy and 
        implementation in order to ensure provident utilization of the 
        permanent school fund lands.  
           Sec. 6.  Minnesota Statutes 1996, section 124.08, is 
        amended to read: 
           124.08 [SCHOOL ENDOWMENT FUND,; DESIGNATION.] 
           For the purpose of aid to public schools, a school 
        endowment fund is established.  
           The school endowment fund shall consist of the income from 
        the permanent school fund.  The commissioner of children, 
        families, and learning may accept for and on behalf of the 
        permanent school fund a donation of cash, marketable securities, 
        or other personal property.  A noncash donation, other than a 
        donation of marketable securities, must be disposed of for cash 
        as soon as the commissioner can obtain fair market value for the 
        donation.  Marketable securities may be disposed of at the 
        discretion of the state board of investment consistent with 
        sections 11A.16 and 11A.24.  A cash donation and the cash 
        receipts from a donation disposed of for cash must be credited 
        immediately to the permanent school fund.  Earnings from 
        marketable securities are earnings of the permanent school fund. 
           Sec. 7.  Minnesota Statutes 1996, section 124.09, is 
        amended to read: 
           124.09 [SCHOOL ENDOWMENT FUND,; APPORTIONMENT.] 
           The commissioner shall apportion the school endowment fund 
        shall be apportioned semiannually by the commissioner, on the 
        first Monday in March and September in each year, to districts 
        whose schools have been in session at least nine months.  The 
        apportionment shall be in proportion to the number of pupils in 
        average daily membership during the preceding year; provided, 
        that.  The apportionment shall not be paid to a district for 
        pupils for whom tuition is received by the district. 
           Sec. 8.  Minnesota Statutes 1996, section 124.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COPY TO COMMISSIONER OF FINANCE.] The 
        commissioner shall furnish a copy of the apportionment of the 
        school endowment fund shall be furnished by the commissioner to 
        the commissioner of finance, who thereupon shall draw warrants 
        on the state treasury, payable to the several districts, for the 
        amount due each district.  There is hereby annually appropriated 
        from the school endowment fund the amount of such apportionments.
           Sec. 9.  Minnesota Statutes 1996, section 124.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPORTIONMENTS TO DISTRICTS.] The county auditor 
        each year shall apportion to the school districts within the 
        county the amount received from power line taxes under section 
        273.42, liquor licenses, fines, estrays, and other sources 
        belonging to the general fund.  The apportionments shall must be 
        made in proportion to each district's net tax capacity within 
        the county in the prior year.  The apportionments shall must be 
        made and amounts distributed to the school districts at the 
        times provided for the settlement and distribution of real and 
        personal property taxes under sections 276.09, 276.11, and 
        276.111, except that all of the power line taxes apportioned to 
        a school district from the county school fund shall must be 
        included in the first half distribution of property taxes to the 
        school district.  No district shall receive any part of the 
        money received from liquor licenses unless all sums paid for 
        such licenses in such district are apportioned to the county 
        school fund.  
           Sec. 10.  Minnesota Statutes 1996, section 124.12, is 
        amended to read: 
           124.12 [MANNER OF PAYMENT OF STATE AIDS.] 
           Subd. 2.  It shall be the duty of the commissioner of 
        children, families, and learning to deliver to the commissioner 
        of finance a certificate for each district entitled to receive 
        state aid under the provisions of this chapter.  Upon the 
        receipt of such certificate, it shall be the duty of the 
        commissioner of finance to draw a warrant upon the state 
        treasurer in favor of the district for the amount shown by each 
        certificate to be due to the district.  The commissioner of 
        finance shall transmit such warrants to the district together 
        with a copy of the certificate prepared by the commissioner. 
           Sec. 11.  Minnesota Statutes 1996, section 124.14, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ERRORS IN DISTRIBUTION.] On determining that the 
        amount of state aid distributed to a school district is in 
        error, the commissioner is authorized to adjust the amount of 
        aid consistent with this subdivision.  On determining that the 
        amount of aid is in excess of the school district's entitlement, 
        the commissioner is authorized to recover the amount of the 
        excess by any appropriate means.  Notwithstanding the fiscal 
        years designated by the appropriation, the excess may be 
        recovered by reducing future aid payments to the school 
        district.  Notwithstanding any law to the contrary, if the aid 
        reduced is not of the same type as that overpaid, the school 
        district shall must adjust all necessary financial accounts to 
        properly reflect all revenues earned in accordance with the 
        uniform financial accounting and reporting standards pursuant to 
        sections 121.904 to 121.917.  Notwithstanding the fiscal years 
        designated by the appropriation, on determining that the amount 
        of an aid paid is less than the school district's entitlement, 
        the commissioner is authorized to increase such aid from the 
        current appropriation. 
           Sec. 12.  Minnesota Statutes 1996, section 124.14, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AUDITS.] The commissioner shall establish 
        procedures for conducting and shall conduct audits of school 
        district records and files for the purpose of verifying school 
        district pupil counts, levy limitations, and aid entitlements.  
        The commissioner shall establish procedures for selecting and 
        shall select districts to be audited.  Disparities, if any, 
        between pupil counts, levy limitations, or aid entitlements 
        determined by audit of school district records and files and 
        data reported by school districts in reports, claims and other 
        documents shall be reviewed by the commissioner who shall order 
        increases or decreases accordingly.  Whenever possible, the 
        commissioner shall audit at least 25 districts each year 
        pursuant to this subdivision. 
           Sec. 13.  Minnesota Statutes 1996, section 124.14, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [LESS THAN 25 DISTRICTS AUDITED.] If the 
        commissioner audits fewer than 25 school districts in a fiscal 
        year pursuant to subdivision 3, the commissioner shall report 
        the reasons for the number audited to the following legislative 
        committees:  house education, house appropriations, senate 
        education, and senate finance. 
           Sec. 14.  Minnesota Statutes 1996, section 124.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FINAL DECISION AND RECORDS.] A reduction of aid 
        under this section may be appealed to the state board of 
        education and its decision shall be final.  Public schools shall 
        at all times be open to the inspection of the commissioner, and. 
        The accounts and records of any district shall must be open to 
        inspection by the state auditor, the state board, or the 
        commissioner for the purpose of audits conducted under this 
        section.  Each district shall keep for a minimum of three years 
        at least the following:  (1) identification of the annual 
        session days held, together with a record of the length of each 
        session day, (2) a record of each pupil's daily attendance, with 
        entrance and withdrawal dates, and (3) identification of the 
        pupils transported who are reported for transportation aid.  
           Sec. 15.  Minnesota Statutes 1996, section 124.14, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ADJUSTMENT APPROPRIATION.] There is annually 
        appropriated from the general fund to the department of 
        children, families, and learning any additional amounts 
        necessary for the adjustments made pursuant to section 124.155, 
        subdivision 1.  
           Sec. 16.  Minnesota Statutes 1996, section 124.14, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPROPRIATION TRANSFERS.] If a direct 
        appropriation from the general fund to the department of 
        children, families, and learning for any education aid or grant 
        authorized in this chapter and chapters 121, 123, 124A, 124C, 
        125, 126, and 134 exceeds the amount required, the commissioner 
        of children, families, and learning may transfer the excess to 
        any education aid or grant appropriation that is insufficient.  
        However, section 124A.032 applies to a deficiency in the direct 
        appropriation for general education aid.  Excess appropriations 
        shall must be allocated proportionately among aids or grants 
        that have insufficient appropriations.  The commissioner of 
        finance shall make the necessary transfers among appropriations 
        according to the determinations of the commissioner of children, 
        families, and learning.  If the amount of the direct 
        appropriation for the aid or grant plus the amount transferred 
        according to this subdivision is insufficient, the commissioner 
        shall prorate the available amount among eligible districts.  
        The state is not obligated for any additional amounts.  
           Sec. 17.  Minnesota Statutes 1996, section 124.14, 
        subdivision 8, is amended to read: 
           Subd. 8.  [HEALTH AND SAFETY AID TRANSFER.] The 
        commissioner of children, families, and learning, 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. 18.  Minnesota Statutes 1996, section 124.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [VIOLATIONS OF LAW.] The commissioner shall 
        reduce the district's special state aid for any school year 
        whenever the board of the district authorizes or permits within 
        the district violations of law within the district by: 
           (1) employment in a public school of the district of 
        employing a teacher who does not hold a valid teaching license 
        or permit, or in a public school; 
           (2) noncompliance with a mandatory rule of general 
        application promulgated by the state board in accordance with 
        statute in the absence of, unless special circumstances 
        making make enforcement thereof inequitable, contrary to the 
        best interest of, or imposing impose an extraordinary hardship 
        on, the district affected, or, or the rule is contrary to the 
        district's best interests; 
           (3) the district's continued performance by the district of 
        a contract made for the rental of rooms or buildings for school 
        purposes or for the rental of any facility owned or operated by 
        or under the direction of any private organization, which if the 
        contract has been disapproved where, the time for review of the 
        determination of disapproval has expired, and no proceeding for 
        review is pending, or; 
           (4) any practice which is a violation of sections 1 and 2 
        of article 13 of the Constitution of the state of Minnesota, or; 
           (5) failure to provide reasonably provide for the a 
        resident pupil's school attendance to which a resident pupil is 
        entitled under Minnesota Statutes,; or 
           (6) noncompliance with state laws prohibiting 
        discrimination because of race, color, creed, religion, national 
        origin, sex, age, marital status, status with regard to public 
        assistance or disability, as defined in section 363.03,. 
        the special state aid to which a district is otherwise entitled 
        for any school year shall be reduced The reduction must be made 
        in the amount and upon the procedure provided in this section 
        or, in the case of the violation stated in clause (1), upon the 
        procedure provided in section 124.19, subdivision 3. 
           Sec. 19.  Minnesota Statutes 1996, section 124.15, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ASSURANCE OF COMPLIANCE.] After consultation 
        with the commissioner of human rights, the state board of 
        education shall adopt rules in conformance with chapter 
        14 which.  The rules must direct school districts to file with 
        the commissioner of children, families, and learning assurances 
        of compliance with state and federal laws prohibiting 
        discrimination and which specify the information required to be 
        submitted in support of the assurances.  The commissioner of 
        children, families, and learning shall provide copies of the 
        assurances and the supportive information to the commissioner of 
        human rights.  If, after reviewing the assurances and the 
        supportive information it appears that one or more violations of 
        the Minnesota human rights act are occurring in the district, 
        the commissioner of human rights shall notify the commissioner 
        of children, families, and learning of the violations, and the 
        commissioner of children, families, and learning may then 
        proceed pursuant to subdivision 3. 
           Sec. 20.  Minnesota Statutes 1996, section 124.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NOTICE TO BOARD.] When it appears that one or 
        more of the violations an enumerated violation is occurring in a 
        district, the commissioner shall forthwith notify the board of 
        that district in writing thereof.  Such The notice shall must 
        specify the violations, set a reasonable time within which the 
        district shall must correct the specified violations, describe 
        the correction required, and advise that if the correction is 
        not made within the time allowed, special state aids to the 
        district will be reduced.  The time allowed for correction may 
        be extended by the commissioner if there is reasonable ground 
        therefor.  
           Sec. 21.  Minnesota Statutes 1996, section 124.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISPUTE VIOLATIONS; HEARING.] The board to which 
        such notice is given may, by a majority vote of the whole board, 
        decide to dispute that the specified violation exists or that 
        the time allowed is reasonable or the correction specified is 
        correct, or that the commissioner may reduce aids, in which case 
        written notice of such decision shall be given.  The board must 
        give the commissioner written notice of the decision.  If the 
        commissioner, after such further investigation as the 
        commissioner deems necessary, adheres to the previous notice, 
        such the board shall be entitled to a hearing by the state board 
        , in which event a.  The state board must set a hearing time and 
        place shall be set therefor and notice and the board of the 
        district must be given notice by mail to the board of the 
        district.  The state board shall must adopt rules governing the 
        proceedings for hearings which shall.  The hearings must be 
        designed to give a full and fair hearing and permit interested 
        parties an opportunity to produce evidence relating to the 
        issues involved.  Such The rules may provide that any question 
        of fact to be determined upon such review at the hearing may be 
        referred to one or more members of the board or to an employee 
        of the state board acting as a referee to hear evidence and 
        report to the state board the testimony taken to the state board.
        The state board, or any a person designated to receive evidence 
        upon a review under this act at a hearing, shall have the same 
        right to issue subpoenas and administer oaths and parties to the 
        review hearing shall have the same right to subpoenas issued as 
        are accorded with respect to allowed for proceedings before the 
        industrial commission.  There shall be A stenographic 
        record must be made of all testimony given and other proceedings 
        during such the hearing, and as far as.  If practicable, rules 
        governing reception admission of evidence in courts shall obtain 
        apply to the hearing.  The decision of the state board shall 
        must be in writing and the controlling facts upon which the 
        decision is made shall must be stated in sufficient detail to 
        apprise the parties and the reviewing court of the basis and 
        reason of for the decision.  The decision shall must be confined 
        to whether or not any of the specified violations or any of them 
        existed at the date of the commissioner's first notice, 
        whether such the violations as did exist were corrected within 
        the time permitted, and whether such the violations require 
        reduction of the state aids under this section.  
           Sec. 22.  Minnesota Statutes 1996, section 124.15, 
        subdivision 5, is amended to read: 
           Subd. 5.  [VIOLATION; AID REDUCTION.] The commissioner 
        shall not reduce state aids payable to the district if the 
        violation specified is corrected within the time permitted, or 
        if the commissioner on being notified of the district board's 
        decision to dispute decides the violation does not exist, or if 
        the state board decides after hearing no violation specified in 
        the commissioner's notice existed at the time of it the notice, 
        or that any that existed the violations were corrected within 
        the time permitted, there shall be no reduction of state aids 
        payable to the school district.  Otherwise state aids payable to 
        the district for the year in which the violation occurred shall 
        be reduced as follows:  The total amount of state aids to which 
        the district may be entitled shall be reduced in the proportion 
        that the period during which a specified violation continued, 
        computed from the last day of the time permitted for correction, 
        bears to the total number of days school is held in the district 
        during the year in which a violation exists, multiplied by 60 
        percent of the basic revenue, as defined in section 124A.22, 
        subdivision 2, of the district for that year. 
           Sec. 23.  Minnesota Statutes 1996, section 124.15, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REDUCTION IN AIDS PAYABLE.] Reductions in aid 
        under this section and section 124.19 shall must be from general 
        education aid.  If there is not sufficient general education aid 
        remaining to be paid for the school year in which the violation 
        occurred, the reduction shall be from the other aids listed in 
        section 124.155, subdivision 2, that are payable to the district 
        for that year in the order in which the aids are listed in 
        section 124.155, subdivision 2.  If there is not a sufficient 
        amount of state aids remaining payable to the district for the 
        school year in which the violation occurred to permit the full 
        amount of reduction required, that part of the required 
        reduction not taken from that school year's aids will be taken 
        from the state aids payable to the district for the next school 
        year, and the reduction will be made from the various aids 
        payable for the next year in the order above specified. 
           Sec. 24.  Minnesota Statutes 1996, section 124.15, 
        subdivision 8, is amended to read: 
           Subd. 8.  [NOTICE TO DISTRICT.] Any notice to be given to 
        the board of a district will be deemed given when a copy thereof 
        is mailed, registered, to the superintendent of the district, if 
        there is a superintendent, and to the clerk of the board of the 
        district, unless.  If it is shown that neither the 
        superintendent nor the clerk in fact received such notice in the 
        ordinary course of mail, in which event then the time for 
        correction will be accordingly extended by the commissioner so 
        that a reasonable time will be allowed from actual receipt of 
        notice for correction.  If notice is sent by the commissioner 
        with respect to a violation which is continued by the district 
        in a succeeding year, no separate notice for that violation for 
        the succeeding year will be required.  Proceedings initiated by 
        such notice shall include any continuing violation 
        notwithstanding that a part thereof occurs in a year different 
        from that the year in which it started.  The commissioner may 
        require reasonable proof of the time that a violation ceased for 
        the determination of the amount of aids to be withheld.  Costs 
        and disbursements of the review by the district court, exclusive 
        of those incurred in the administrative proceedings, may be 
        taxed against the losing party and in the event taxed against 
        the state shall must be paid from the appropriations made to the 
        department for the payment of special state aids. 
           Sec. 25.  Minnesota Statutes 1997 Supplement, section 
        124.155, subdivision 1, is amended to read: 
           Subdivision 1.  [AMOUNT OF ADJUSTMENT.] Each year state 
        aids and credits enumerated in subdivision 2 payable to any 
        school district for that fiscal year shall be adjusted, in the 
        order listed, by an amount equal to (1) the amount the district 
        recognized as revenue for the prior fiscal year pursuant to 
        section 121.904, subdivision 4a, clause (b), minus (2) the 
        amount the district recognizes as revenue for the current fiscal 
        year pursuant to section 121.904, subdivision 4a, clause (b).  
        For the purposes of making the aid adjustment under this 
        subdivision, the amount the district recognizes as revenue for 
        either the prior fiscal year or the current fiscal year pursuant 
        to section 121.904, subdivision 4a, clause (b), shall not 
        include any amount levied pursuant to sections 124.315, 
        subdivision 4, 124.912, subdivisions 1, paragraph (2), 2, and 3, 
        124.916, subdivisions 1, 2, and 3, paragraphs 4, 5, and 6, 
        124.918, subdivision 6, and 124A.03, subdivision 2.  Payment 
        from the permanent school fund shall not be adjusted pursuant to 
        this section.  The school district shall be notified of the 
        amount of the adjustment made to each payment pursuant to this 
        section. 
           Sec. 26.  Minnesota Statutes 1997 Supplement, 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 section 124A.23; 
           (2) secondary vocational aid authorized in section 124.573; 
           (3) special education aid authorized in sections 124.32 and 
        124.3201; 
           (4) school-to-work program 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 section 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; 
           (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; 
        and 
           (19) cooperation-combination aid authorized in section 
        124.2725. 
           (b) The commissioner of children, families, and learning 
        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. 27.  Minnesota Statutes 1996, section 124.195, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICABILITY.] This section applies to 
        all aids or credits paid by the commissioner of children, 
        families, and learning from the general fund to school districts.
           Sec. 28.  Minnesota Statutes 1997 Supplement, section 
        124.195, subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) The term "other district 
        receipts" means payments by county treasurers pursuant to 
        section 276.10, apportionments from the school endowment fund 
        pursuant to section 124.09, apportionments by the county auditor 
        pursuant to section 124.10, subdivision 2, and payments to 
        school districts by the commissioner of revenue pursuant to 
        chapter 298.  
           (b) The term "cumulative amount guaranteed" means the sum 
        of the following: 
           (1) one-third of the final adjustment payment according to 
        subdivision 6; plus 
           (2) the product of 
           (i) the cumulative disbursement percentage shown in 
        subdivision 3; times 
           (ii) the sum of 
           90 percent of the estimated aid and credit entitlements 
        paid according to subdivision 10; plus 
           100 percent of the entitlements paid according to 
        subdivisions 8 and 9; plus 
           the other district receipts; plus 
           the final adjustment payment according to subdivision 6.  
           (c) The term "payment date" means the date on which state 
        payments to school districts are made by the electronic funds 
        transfer method.  If a payment date falls on a Saturday, a 
        Sunday, or a weekday which is a legal holiday, the payment shall 
        be made on the immediately following business day.  The 
        commissioner of children, families, and learning may make 
        payments on dates other than those listed in subdivision 3, but 
        only for portions of payments from any preceding payment dates 
        which could not be processed by the electronic funds transfer 
        method due to documented extenuating circumstances.  
           Sec. 29.  Minnesota Statutes 1996, section 124.195, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] The commissioner 
        of children, families, and learning shall pay to a school 
        district on the dates indicated an amount computed as follows:  
        the cumulative amount guaranteed minus the sum of (a) the 
        district's other district receipts through the current payment, 
        and (b) the aid and credit payments through the immediately 
        preceding payment.  For purposes of this computation, the 
        payment dates and the cumulative disbursement percentages are as 
        follows:  
                                 Payment date               Percentage 
        Payment 1    July 15:                                   2.25
        Payment 2    July 30:                                   4.50 
        Payment 3    August 15:  the greater of (a) the final        
                     adjustment for the prior fiscal year for
                     the state paid property tax credits
                     established in section 273.1392, or
                     (b) the amount needed to provide 6.75 percent
        Payment 4    August 30:                                 9.0 
        Payment 5    September 15:                             12.75 
        Payment 6    September 30:                             16.50
        Payment 7    October 15:  the greater of (a) one-half of
                     the final adjustment for the prior fiscal year
                     for all aid entitlements except state paid
                     property tax credits, or (b) the amount needed to
                     provide 20.75 percent
        Payment 8    October 30:  the greater of (a) one-half of the
                     final adjustment for the prior fiscal year for all
                     aid entitlements except state paid property
                     tax credits, or (b) the amount needed
                     to provide 25.0 percent
        Payment 9    November 15:                               31.0
        Payment 10   November 30:                               37.0
        Payment 11   December 15:                               40.0
        Payment 12   December 30:                               43.0
        Payment 13   January 15:                                47.25
        Payment 14   January 30:                                51.5
        Payment 15   February 15:                               56.0
        Payment 16   February 28:                               60.5
        Payment 17   March 15:                                  65.25
        Payment 18   March 30:                                  70.0
        Payment 19   April 15:                                  73.0
        Payment 20   April 30:                                  79.0 
        Payment 21   May 15:                                    82.0 
        Payment 22   May 30:                                    90.0 
        Payment 23   June 20:                                  100.0
           Sec. 30.  Minnesota Statutes 1996, section 124.195, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [APPEAL.] The commissioner, in consultation with 
        the commissioner of finance, may revise the payment dates and 
        percentages in subdivision 3 for a district if it is determined 
        that there is an emergency or there are serious cash flow 
        problems in the district that cannot be resolved by issuing 
        warrants or other forms of indebtedness.  The commissioner shall 
        establish a process and criteria for school districts to appeal 
        the payment dates and percentages established in subdivision 3.  
           Sec. 31.  Minnesota Statutes 1996, section 124.195, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [CASH FLOW ADJUSTMENT.] During each year in 
        which the cash flow low points for August, September, and 
        October estimated by the commissioner of finance for invested 
        treasurer's cash exceeds $360,000,000, the commissioner of 
        children, families, and learning shall increase the cumulative 
        disbursement percentages established in subdivision 3 to the 
        following amounts: 
        Payment 3   August 15:                         12.75 percent
        Payment 4   August 30:                         15.00 percent
        Payment 5   September 15:                      17.25 percent
        Payment 6   September 30:                      19.50 percent
        Payment 7   October 15:                        21.75 percent
           Sec. 32.  Minnesota Statutes 1996, section 124.195, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PAYMENT LIMIT.] Subdivision 3 does not authorize 
        the commissioner of children, families, and learning to pay to a 
        district's operating funds an amount of state general fund cash 
        that exceeds the sum of:  
           (a) its estimated aid and credit payments for the current 
        year according to subdivision 10; 
           (b) its actual aid payments according to subdivisions 8 and 
        9; and 
           (c) the final adjustment payment for the prior year.  
           Sec. 33.  Minnesota Statutes 1996, section 124.195, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMMISSIONER'S ASSUMPTIONS.] For purposes of 
        determining the amount of state general fund cash to be paid to 
        school districts pursuant to subdivision 3, the commissioner of 
        children, families, and learning shall:  
           (a) (1) assume that the payments to school districts by the 
        county treasurer of revenues accruing to the fiscal year of 
        receipt pursuant to section 276.11 are made in the following 
        manner: 
           (1) (i) 50 percent within seven business days of each due 
        date; and 
           (2) (ii) 100 percent within 14 business days of each due 
        date; 
           (b) (2) assume that the payments to school districts by the 
        county treasurer of revenues accruing to the fiscal year of 
        receipt pursuant to section 276.111 are made in the following 
        manner: 
           (1) (i) 50 percent within seven business days of the 
        October 15 due date; 
           (2) (ii) 100 percent within 14 business days of the October 
        15 due date; and 
           (3) (iii) 100 percent within ten business days of the 
        November 15 due date.; and 
           (c) (3) assume that the payments to school districts by 
        county auditors pursuant to section 124.10, subdivision 2, are 
        made at the end of the months indicated in that subdivision.  
           Sec. 34.  Minnesota Statutes 1996, section 124.195, 
        subdivision 6, is amended to read: 
           Subd. 6.  [FINAL ADJUSTMENT PAYMENT.] For all aids and 
        credits paid according to subdivision 10, the final adjustment 
        payment shall must include the amounts necessary to pay the 
        district's full aid entitlement for the prior year based on 
        actual data.  This payment shall must be used to correct all 
        estimates used for the payment schedule in subdivision 3.  The 
        payment shall must be made as specified in subdivision 3.  In 
        the event actual data are not available, the final adjustment 
        payment may be computed based on estimated data.  A corrected 
        final adjustment payment shall must be made when actual data are 
        available.  
           Sec. 35.  Minnesota Statutes 1997 Supplement, section 
        124.195, subdivision 7, is amended to read: 
           Subd. 7.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
        fiscal year state general fund payments for a district 
        nonoperating fund shall must be made at 90 percent of the 
        estimated entitlement during the fiscal year of the 
        entitlement.  This amount shall be paid in 12 equal monthly 
        installments.  The amount of the actual entitlement, after 
        adjustment for actual data, minus the payments made during the 
        fiscal year of the entitlement shall must be paid prior to 
        October 31 of the following school year.  The commissioner may 
        make advance payments of homestead and agricultural credit aid 
        for a district's debt service fund earlier than would occur 
        under the preceding schedule if the district submits evidence 
        showing a serious cash flow problem in the fund.  The 
        commissioner may make earlier payments during the year and, if 
        necessary, increase the percent of the entitlement paid to 
        reduce the cash flow problem. 
           Sec. 36.  Minnesota Statutes 1997 Supplement, 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, 124D, 125, 126, 134, and section 273.1392, shall be paid 
        at 90 percent of the estimated entitlement during the fiscal 
        year of the entitlement.  The final adjustment payment, 
        according to subdivision 6, shall must be the amount of the 
        actual entitlement, after adjustment for actual data, minus the 
        payments made during the fiscal year of the entitlement. 
           Sec. 37.  Minnesota Statutes 1996, section 124.195, 
        subdivision 14, is amended 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 children, families, 
        and learning for education aids or credits is insufficient to 
        make the next scheduled payment or payments, the commissioner of 
        children, families, and learning 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 
        children, families, and learning 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 
        must 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 must 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. 38.  Minnesota Statutes 1996, section 124.196, is 
        amended to read: 
           124.196 [CHANGE IN PAYMENT OF AIDS AND CREDITS.] 
           If the commissioner of finance determines that 
        modifications in the payment schedule would reduce the need for 
        state short-term borrowing, the commissioner of children, 
        families, and learning shall modify payments to school districts 
        according to this section.  The modifications shall must begin 
        no sooner than September 1 of each fiscal year, and shall must 
        remain in effect until no later than May 30 of that same fiscal 
        year.  In calculating the payment to a school district pursuant 
        to section 124.195, subdivision 3, the commissioner may subtract 
        the sum specified in that subdivision, plus an additional amount 
        no greater than the following: 
           (1) the net cash balance in each of the district's four 
        operating funds on June 30 of the preceding fiscal year; minus 
           (2) the product of $150 times the number of actual pupil 
        units in the preceding fiscal year; minus 
           (3) the amount of payments made by the county treasurer 
        during the preceding fiscal year, pursuant to section 276.11, 
        which is considered revenue for the current school year.  
        However, no additional amount shall be subtracted if the total 
        of the net unappropriated fund balances in the district's four 
        operating funds on June 30 of the preceding fiscal year, is less 
        than the product of $350 times the number of actual pupil units 
        in the preceding fiscal year.  The net cash balance shall must 
        include all cash and investments, less certificates of 
        indebtedness outstanding, and orders not paid for want of funds. 
           A district may appeal the payment schedule established by 
        this section according to the procedures established in section 
        124.195, subdivision 3a. 
           Sec. 39.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ADJUSTED NET TAX CAPACITY.] (a)  
        [COMPUTATION.] The department of revenue shall must annually 
        conduct an assessment/sales ratio study of the taxable property 
        in each school district in accordance with the procedures in 
        paragraphs (b) and (c).  Based upon the results of this 
        assessment/sales ratio study, the department of revenue shall 
        must determine an aggregate equalized net tax capacity for the 
        various classes of taxable property in each school district, 
        which tax capacity shall be designated as the adjusted net tax 
        capacity.  The adjusted net tax capacities shall be determined 
        using the net tax capacity percentages in effect for the 
        assessment year following the assessment year of the study.  The 
        department of revenue shall must make whatever estimates are 
        necessary to account for changes in the classification system.  
        The department of revenue may incur the expense necessary to 
        make the determinations.  The commissioner of revenue may 
        reimburse any county or governmental official for requested 
        services performed in ascertaining the adjusted net tax 
        capacity.  On or before March 15 annually, the department of 
        revenue shall file with the chair of the tax committee of the 
        house of representatives and the chair of the committee on taxes 
        and tax laws of the senate a report of adjusted net tax 
        capacities.  On or before June 15 annually, the department of 
        revenue shall file its final report on the adjusted net tax 
        capacities established by the previous year's assessments and 
        the current year's net tax capacity percentages with the 
        commissioner of children, families, and learning and each county 
        auditor for those school districts for which the auditor has the 
        responsibility for determination of local tax rates.  A copy of 
        the report so filed shall be mailed to the clerk of each 
        district involved and to the county assessor or supervisor of 
        assessments of the county or counties in which each district is 
        located. 
           (b)  [METHODOLOGY.] In making its annual assessment/sales 
        ratio studies, the department of revenue shall must use a 
        methodology consistent with the most recent Standard on 
        Assessment Ratio Studies published by the assessment standards 
        committee of the International Association of Assessing 
        Officers.  The commissioner of revenue shall supplement this 
        general methodology with specific procedures necessary for 
        execution of the study in accordance with other Minnesota laws 
        impacting the assessment/sales ratio study.  The commissioner 
        shall document these specific procedures in writing and shall 
        publish the procedures in the State Register, but these 
        procedures will not be considered "rules" pursuant to the 
        Minnesota Administrative Procedure Act.  For purposes of this 
        section, sections 270.12, subdivision 2, clause (8), and 278.05, 
        subdivision 4, the commissioner of revenue shall exclude from 
        the assessment/sales ratio study the sale of any nonagricultural 
        property which does not contain an improvement, if (1) the 
        statutory basis on which the property's taxable value as most 
        recently assessed is less than market value as defined in 
        section 273.11, or (2) the property has undergone significant 
        physical change or a change of use since the most recent 
        assessment.  
           (c)  [AGRICULTURAL LANDS.] For purposes of determining the 
        adjusted net tax capacity of agricultural lands for the 
        calculation of adjusted net tax capacities, the market value of 
        agricultural lands shall must be the price for which the 
        property would sell in an arms length transaction. 
           (d)  [FORCED SALES.] The commissioner of revenue may 
        include forced sales in the assessment/sales ratio studies if it 
        is determined by the commissioner of revenue that these forced 
        sales indicate true market value. 
           (e)  [STIPULATED VALUES AND ABATEMENTS.] The estimated 
        market value to be used in calculating sales ratios shall must 
        be the value established by the assessor before any stipulations 
        resulting from appeals by property owners and before any 
        abatement unless the abatement was granted for the purpose of 
        correcting mere clerical errors. 
           (f)  [SALES OF INDUSTRIAL PROPERTY.] Separate sales 
        ratios shall must be calculated for commercial property and for 
        industrial property.  These two classes shall be combined only 
        in jurisdictions in which there is not an adequate sample of 
        sales in each class. 
           Sec. 40.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADJUSTED NET TAX CAPACITY; GROWTH LIMIT.] In the 
        calculation of adjusted net tax capacities for 1987 and each 
        year thereafter, the commissioner of revenue shall not increase 
        the adjusted net tax capacity of taxable property for any school 
        district over the adjusted net tax capacity established and 
        filed with the commissioner of children, families, and learning 
        for the immediately preceding year by more than the greater of 
        (1) 19 percent of the certified adjusted net tax capacity 
        established and filed with the commissioner of children, 
        families, and learning for the year immediately preceding, or 
        (2) 40 percent of the difference between the district's total 
        adjusted net tax capacity for the current year calculated 
        without the application of this subdivision and the district's 
        certified adjusted net tax capacity established and filed with 
        the commissioner of children, families, and learning for the 
        immediately preceding year.  
           Sec. 41.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [CAPTURED TAX CAPACITY ADJUSTMENT.] In 
        calculating adjusted net tax capacity, the commissioner of 
        revenue shall increase the adjusted net tax capacity of a school 
        district containing a tax increment financing district for which 
        an election is made under section 469.1782, subdivision 1, 
        clause (1).  The amount of the increase equals the captured net 
        tax capacity of the tax increment financing district in the year 
        preceding the first taxes payable year in which the special law 
        permits collection beyond that permitted by the general law 
        duration limit that otherwise would apply.  The addition applies 
        beginning for aid and levy for the first taxes payable year in 
        which the special law permits collection of increment beyond 
        that permitted by the general law duration limit that otherwise 
        would apply.  The addition continues to apply for each taxes 
        payable year the district remains in effect.  
           Sec. 42.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 5, is amended to read:  
           Subd. 5.  [ADJUSTED NET TAX CAPACITY; APPEALS.] Should 
        any If a district, within 30 days after receipt of a copy of a 
        report filed with the commissioner of children, families, and 
        learning made pursuant to subdivision 1 or 3, be is of the 
        opinion that the commissioner of revenue has made an error in 
        the determination of the school district's market value, it may 
        appeal from the report or portion thereof relating to the school 
        district to the commissioner of revenue for a review and 
        determination of the matters contained in the appeal.  The 
        commissioner of revenue shall advise the school district of the 
        determination within 30 days.  If the school district wishes to 
        appeal the determination of the commissioner of revenue, it must 
        file a notice of appeal with the tax court, as provided in 
        subdivisions 6 to 11 within ten days of the notice of 
        determination from the commissioner of revenue. 
           Sec. 43.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 6, is amended to read: 
           Subd. 6.  [NOTICE OF APPEAL.] The school district shall 
        must file with the court administrator of the tax court a notice 
        of appeal from the determination of the commissioner of revenue 
        fixing the market value of the school district, and such notice 
        shall must show the basis of the alleged error.  A copy of 
        such the notice of appeal shall must be served upon the 
        commissioner of revenue, and proof of service shall must be 
        filed with the court administrator. 
           Sec. 44.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HEARING.] Upon receipt of the notice of appeal 
        the tax court shall must review the notice of appeal and 
        determine whether it appears from the allegations and proofs 
        therein contained that an error has been made in the 
        determination by the commissioner of revenue of the market value 
        of the property in the school district.  If the court finds it 
        probable that such an error has been made, it shall must notice 
        the matter for hearing; otherwise, it shall must dismiss the 
        appeal and notify the parties thereof.  Hearing shall Hearings 
        must be set and held in the same manner as other hearings of the 
        tax court are set and heard, except that an appeal filed under 
        subdivision 5 shall must take precedence over other appeals 
        pending before the court.  The attorney general shall represent 
        the commissioner of revenue.  The Administrative Procedure Act, 
        sections 14.09 to 14.28, 14.38, 14.44 to 14.45, and 14.57 to 
        14.69, shall apply to hearings insofar as it is applicable.  
           Sec. 45.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 8, is amended to read: 
           Subd. 8.  [TAX COURT DETERMINATION.] The tax court shall 
        hear, consider, and determine such appeal, de novo upon the 
        issues made by the notice of appeal, if a hearing has been 
        granted thereon.  At the conclusion of the hearing, the court 
        shall must:  (1) file findings of fact, or (2) refer the issues 
        to the commissioner of revenue with instructions and 
        recommendations for a determination and correction of the market 
        value of the appealing school district.  The decision of the tax 
        court, if it decides the matter de novo, shall have the same 
        force and effect as a determination by the commissioner of 
        revenue in the first instance under this section, and the 
        commissioner of revenue shall must be notified thereof.  If the 
        matter is rereferred to the commissioner of revenue, a 
        redetermination by the commissioner of revenue in accordance 
        with the recommendations of the tax court shall must likewise 
        have the same force and effect as a determination by it in the 
        first instance under this section. 
           Sec. 46.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 9, is amended to read: 
           Subd. 9.  [HEARING EXAMINER.] In addition to the powers and 
        duties of the tax court as prescribed by chapter 271, and any 
        act amendatory thereof, any hearing ordered pursuant to the 
        provisions hereunder this section may be heard by a hearing 
        examiner in lieu of one or more judges of the tax court.  If a 
        hearing is conducted by a hearing examiner, such hearing 
        examiner shall exercise the same powers conferred by law upon 
        one or more judges of the tax court.  The hearing examiner shall 
        report to the court.  The court is authorized to make findings 
        of fact based on the report of the hearing examiner in the same 
        manner as is required by these provisions when the hearing is 
        conducted by the court.  The tax court may employ hearing 
        examiners upon such terms and conditions as it shall prescribe.  
        A hearing examiner so appointed shall be in the unclassified 
        service of the state.  
           Sec. 47.  Minnesota Statutes 1996, section 124.2131, 
        subdivision 11, is amended to read: 
           Subd. 11.  [AIDS PENDING APPEALS.] During the pendency of 
        any appeal from the commissioner of revenue evaluation, state 
        aids to the appealing district so appealing shall must be paid 
        on the basis of the evaluation subject to adjustment upon final 
        determination of the appeal. 
           Sec. 48.  Minnesota Statutes 1996, section 124.214, is 
        amended to read: 
           124.214 [AID ADJUSTMENTS.] 
           Subdivision 1.  [OMISSIONS.] No adjustments to any aid 
        payments made pursuant to this chapter or chapter 124A, 
        resulting from omissions in school district reports, except 
        those adjustments determined by the legislative auditor, shall 
        be made for any school year after December 30 of the next school 
        year, unless otherwise specifically provided by law. 
           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 children, 
        families, and learning 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 must be the product of:  
           (1) the net revenue loss as certified by the county 
        auditor, times 
           (2) the ratio of:  
           (a) (i) the sum of the amounts of the district's certified 
        levy in the preceding year according to the following:  
           (i) (A) section 124A.23 if the district received general 
        education aid according to that section for the second preceding 
        year; 
           (ii) (B) section 124.226, subdivisions 1 and 4, if the 
        district received transportation aid according to section 
        124.225 for the second preceding year; 
           (iii) (C) section 124.243, if the district received capital 
        expenditure facilities aid according to that section for the 
        second preceding year; 
           (iv) (D) section 124.244, if the district received capital 
        expenditure equipment aid according to that section for the 
        second preceding year; 
           (v) (E) section 124.83, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (vi) (F) sections 124.2713, 124.2714, and 124.2715, if the 
        district received aid for community education programs according 
        to any of those sections for the second preceding year; 
           (vii) (G) section 124.2711, subdivision 2a, if the district 
        received early childhood family education aid according to 
        section 124.2711 for the second preceding year; 
           (viii) (H) section 124.321, subdivision 3, if the district 
        received special education levy equalization aid according to 
        that section for the second preceding year; 
           (ix) (I) section 124A.03, subdivision 1g, if the district 
        received referendum equalization aid according to that section 
        for the second preceding year; and 
           (x) (J) section 124A.22, subdivision 4a, if the district 
        received training and experience aid according to that section 
        for the second preceding year; to 
           (b) to (ii) the total amount of the district's certified 
        levy in the preceding October, plus or minus auditor's 
        adjustments. 
           Subd. 3.  [EXCESS TAX INCREMENT.] (a) 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) (b) 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) (i) 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) (A) section 124A.23, if the district received general 
        education aid according to that section for the second preceding 
        year; 
           (ii) (B) section 124.226, subdivisions 1 and 4, if the 
        school district received transportation aid according to section 
        124.225 for the second preceding year; 
           (iii) (C) section 124.243, if the district received capital 
        expenditure facilities aid according to that section for the 
        second preceding year; 
           (iv) (D) section 124.244, if the district received capital 
        expenditure equipment aid according to that section for the 
        second preceding year; 
           (v) (E) section 124.83, if the district received health and 
        safety aid according to that section for the second preceding 
        year; 
           (vi) (F) sections 124.2713, 124.2714, and 124.2715, if the 
        district received aid for community education programs according 
        to any of those sections for the second preceding year; 
           (vii) (G) section 124.2711, subdivision 2a, if the district 
        received early childhood family education aid according to 
        section 124.2711 for the second preceding year; 
           (viii) (H) section 124.321, subdivision 3, if the district 
        received special education levy equalization aid according to 
        that section for the second preceding year; 
           (ix) (I) section 124A.03, subdivision 1g, if the district 
        received referendum equalization aid according to that section 
        for the second preceding year; and 
           (x) (J) section 124A.22, subdivision 4a, if the district 
        received training and experience aid according to that section 
        for the second preceding year; to 
           (B) to (ii) the total amount of the school district's 
        certified levy for the fiscal year, plus or minus auditor's 
        adjustments. 
           (b) (c) An amount must be subtracted from the school 
        district's levy limitation for the next levy certified equal to 
        the difference between: 
           (1) the amount of the distribution of excess increment,; 
        and 
           (2) the amount subtracted from aid pursuant to clause (a). 
           If the aid and levy reductions required by this subdivision 
        cannot be made to the aid for the fiscal year specified or to 
        the levy specified, the reductions must be made from aid for 
        subsequent fiscal years, and from subsequent levies.  The school 
        district shall must use the payment of excess tax increment to 
        replace the aid and levy revenue reduced under this subdivision. 
           (d) This subdivision applies only to the total amount of 
        excess increments received by a school district for a calendar 
        year that exceeds $25,000. 
           Sec. 49.  Minnesota Statutes 1996, section 124.625, is 
        amended to read: 
           124.625 [VETERANS TRAINING.] 
           The commissioner shall continue the veterans training 
        program.  All receipts to the veterans training revolving fund 
        for the veterans training program are appropriated to the 
        commissioner to pay the necessary expenses of operation of the 
        program.  The department of children, families, and learning 
        shall must act as the state agency for approving educational 
        institutions for purposes of United States Code, title 38, 
        chapter 36, relating to educational benefits for veterans and 
        other persons.  The state board may adopt rules to fulfill its 
        obligations as the state approving agency.  All federal money 
        received for purposes of the veterans training program shall 
        must be deposited in the veterans training revolving fund and is 
        appropriated to the department for those purposes.  
           Sec. 50.  Minnesota Statutes 1996, section 124A.036, as 
        amended by Laws 1997, chapter 7, article 1, section 65, is 
        amended to read: 
           124A.036 [PAYMENTS TO RESIDENT AND NONRESIDENT DISTRICTS.] 
           Subdivision 1.  [AID TO DISTRICT OF RESIDENCE.] General 
        education aid shall must be paid to the district of residence 
        unless otherwise specifically provided by law.  
           Subd. 1a.  [REPORTING; REVENUE FOR HOMELESS.] For all 
        school purposes, unless otherwise specifically provided by law, 
        a homeless pupil must be considered a resident of the school 
        district that enrolls the pupil. 
           Subd. 2.  [DISTRICT WITHOUT SCHOOLS.] Except as otherwise 
        provided in law, any district not maintaining classified 
        elementary or secondary schools shall must pay the tuition 
        required in order to enable resident pupils to attend school in 
        another district when necessary, and shall must receive general 
        education aid on the same basis as other districts.  The 
        aid shall must be computed as if the pupils were enrolled in the 
        district of residence.  
           Subd. 3.  [NOTIFICATION OF RESIDENT DISTRICT.] A district 
        educating a pupil who is a resident of another district shall 
        must notify the district of residence within 60 days of the date 
        the pupil is determined by the district to be a nonresident, but 
        not later than August 1 following the end of the school year in 
        which the pupil is educated.  If the district of residence does 
        not receive a notification from the providing district pursuant 
        to this subdivision, it shall is not be liable to that district 
        for any tuition billing received after August 1 of the next 
        school year.  
           Subd. 4.  [STATE AGENCY AND COURT PLACEMENTS.] If a state 
        agency or a court of the state desires to place a child in a 
        school district which that is not the child's district of 
        residence, that agency or court shall must, prior to before 
        placement, allow the district of residence an opportunity to 
        participate in the placement decision and notify the district of 
        residence, the district of attendance and the commissioner of 
        children, families, and learning of the placement decision.  
        When a state agency or court determines that an immediate 
        emergency placement is necessary and that time does not permit 
        district participation in the placement decision or notice to 
        the districts and the commissioner of children, families, and 
        learning of the placement decision prior to before the 
        placement, the agency or court may make the decision and 
        placement without that participation or prior notice.  The 
        agency or court shall must notify the district of residence, the 
        district of attendance and the commissioner of children, 
        families, and learning of an emergency placement within 15 days 
        of the placement.  
           Subd. 5.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
        education aid for districts must be adjusted for each pupil 
        attending a nonresident district under sections 120.062, 
        120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22.  
        The adjustments must be made according to this subdivision. 
           (a) General education aid paid to a resident district must 
        be reduced by an amount equal to the general education revenue 
        exclusive of compensatory revenue attributable to the pupil in 
        the resident district. 
           (b) General education aid paid to a district serving a 
        pupil in programs listed in this subdivision shall must be 
        increased by an amount equal to the general education revenue 
        exclusive of compensatory revenue attributable to the pupil in 
        the nonresident district.  
           (c) If the amount of the reduction to be made from the 
        general education aid of the resident district is greater than 
        the amount of general education aid otherwise due the district, 
        the excess reduction must be made from other state aids due the 
        district. 
           (d) The district of residence shall must pay tuition to a 
        district or an area learning center, operated according to 
        paragraph (e), providing special instruction and services to a 
        pupil with a disability, as defined in section 120.03, or a 
        pupil, as defined in section 120.181, who is enrolled in a 
        program listed in this subdivision.  The tuition shall must be 
        equal to (1) the actual cost of providing special instruction 
        and services to the pupil, including a proportionate amount for 
        debt service and for capital expenditure facilities and 
        equipment, and debt service but not including any amount for 
        transportation, minus (2) the amount of general education aid 
        and special education aid, attributable to that pupil, that is 
        received by the district providing special instruction and 
        services. 
           (e) An area learning center operated by a service 
        cooperative, intermediate district, education district, or a 
        joint powers cooperative may elect through the action of the 
        constituent boards to charge tuition for pupils rather than to 
        calculate general education aid adjustments under paragraph (a), 
        (b), or (c).  The tuition must be equal to the greater of the 
        average general education revenue per pupil unit attributable to 
        the pupil, or the actual cost of providing the instruction, 
        excluding transportation costs, if the pupil meets the 
        requirements of section 120.03 or 120.181. 
           Subd. 6.  [CHARTER SCHOOLS.] (a) The general education aid 
        for districts must be adjusted for each pupil attending a 
        charter school under section 120.064.  The adjustments must be 
        made according to this subdivision. 
           (b) General education aid paid to a resident district must 
        be reduced by an amount equal to the general education revenue 
        exclusive of compensatory revenue. 
           (c) General education aid paid to a district in which a 
        charter school not providing transportation according to section 
        120.064, subdivision 15, is located shall must be increased by 
        an amount equal to the product of:  (1) the sum of $170, plus 
        the transportation sparsity allowance for the district, plus the 
        transportation transition allowance for the district; times (2) 
        the pupil units attributable to the pupil.  
           (d) If the amount of the reduction to be made from the 
        general education aid of the resident district is greater than 
        the amount of general education aid otherwise due the district, 
        the excess reduction must be made from other state aids due the 
        district. 
           Sec. 51.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             121.01                         121A.01
             121.81                         121A.02
             121.82                         121A.03
             121.02, subd. 1                121A.04, subd. 1
                     subd. 2a                        subd. 2
                     subd. 3                         subd. 3
                     subd. 4                         subd. 4
             121.03                         121A.05
             121.04                         121A.06
             121.05                         121A.07
             121.06                         121A.08
             121.14                         121A.09
             121.11, subd. 7                121A.10, subd. 1
                     subd. 7b                        subd. 2
                     subd. 7d                        subd. 3
                     subd. 9                         subd. 4
                     subd. 11                        subd. 5
                     subd. 7c               121A.11
             121.1113                       121A.12
             121.1115, subd. 1              121A.13, subd. 1
                       subd. 1a                      subd. 2
                       subd. 2                       subd. 3
             126.685                        121A.15
             121.48                         121A.17 
             121.1601                       121A.19
             126.82                         121A.20
             121.16, subd. 1                121A.22, subd. 1
                     subd. 3                         subd. 2
             121.161                        121A.23
             121.162                        121A.24
             121.163                        121A.25
             121.175                        121A.27
             121.15, subd. 1                121A.31, subd. 1
                     subd. 1a                        subd. 2
                     subd. 1b                        subd. 3
                     subd. 2                         subd. 4
                     subd. 3                         subd. 5
                     subd. 4                         subd. 6
                     subd. 5                         subd. 7
                     subd. 6                         subd. 8
                     subd. 7                         subd. 9
                     subd. 7a                        subd. 10
                     subd. 8                         subd. 11
                     subd. 9                         subd. 12
             121.1501                       121A.32
             121.1502                       121A.33
             121.931, subd. 1               121A.36, subd. 1
                      subd. 2                        subd. 2
                      subd. 5                        subd. 3
             121.932, subd. 2               121A.37, subd. 1
                      subd. 3                        subd. 2
                      subd. 4                        subd. 3
                      subd. 4a                       subd. 4
                      subd. 4b                       subd. 5
                      subd. 5                        subd. 6
                      subd. 6                        subd. 7
             121.933, subd. 1               121A.38
             121.95                         121A.39
             121.498                        121A.41
             121.496, subd. 2               121A.43, subd. 1
                      subd. 3                        subd. 2
             121.11, subd. 5                121A.50
             121.918                        121A.51
             121.919                        121A.52
             124.078                        121A.54
             124.079                        121A.55
             124.08                         121A.56
             124.09                         121A.57
             124.10                         121A.58
             124.12                         121A.60
             124.14, subd. 1                121A.61, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 3a                        subd. 4
                     subd. 4                         subd. 5
                     subd. 6                         subd. 6
                     subd. 7                         subd. 7
                     subd. 8                         subd. 8
             124.15, subd. 1                121A.62, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 3                         subd. 4
                     subd. 4                         subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                     subd. 8                         subd. 9
             124.155                        121A.63
             124.18                         121A.65
             124.195, subd. 1               121A.67, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 3a                       subd. 4
                      subd. 3b                       subd. 5
                      subd. 3c                       subd. 6
                      subd. 4                        subd. 7
                      subd. 5                        subd. 8
                      subd. 6                        subd. 9
                      subd. 7                        subd. 10
                      subd. 8                        subd. 11
                      subd. 9                        subd. 12
                      subd. 10                       subd. 13
                      subd. 11                       subd. 14
                      subd. 14                       subd. 15
                      subd. 15                       subd. 16
             124.196                        121A.68
             124A.036                       121A.69
             124.2131, subd. 1              121A.70, subd. 1
                       subd. 2                       subd. 2
                       subd. 3                       subd. 3
                       subd. 3a                      subd. 4
                       subd. 5                       subd. 5
                       subd. 6                       subd. 6
                       subd. 7                       subd. 7
                       subd. 8                       subd. 8
                       subd. 9                       subd. 9
                       subd. 10                      subd. 10
                       subd. 11                      subd. 11
             124.214                        121A.72
             124.2141                       121A.73
             126.256                        121A.80
             126.115                        121A.82
             124.625                        121A.84
                                   ARTICLE 5
                                  CHAPTER 122A 
                  SCHOOL DISTRICTS; FORMATION AND COOPERATION
           Section 1.  Minnesota Statutes 1996, section 121.155, is 
        amended to read: 
           121.155 [JOINT POWERS AGREEMENTS FOR FACILITIES.] 
           Subdivision 1.  [INSTRUCTIONAL FACILITIES.] Any group of 
        districts may form a joint powers district under section 471.59 
        representing all participating districts to build or acquire a 
        facility to be used for instructional purposes.  The joint 
        powers board must submit the project for review and comment 
        under section 121.15.  The joint powers board must hold a 
        hearing on the proposal.  The joint powers district must submit 
        the question of authorizing the borrowing of funds for the 
        project to the voters of the joint powers district at a special 
        election.  The question submitted shall state the total amount 
        of funding needed from all sources.  The joint powers board may 
        issue the bonds according to chapter 475 and certify the levy 
        required by section 475.61 only if a majority of those voting on 
        the question vote in the affirmative and only after the school 
        boards of each member district have adopted a resolution 
        pledging the full faith and credit of that district.  The 
        resolution shall irrevocably commit that district to pay a 
        proportionate share, based on pupil units, of any debt levy 
        shortages that, together with other funds available, would allow 
        the joint powers board to pay the principal and interest on the 
        obligations.  The district's payment of its proportionate share 
        of the shortfall shall be made from the district's capital 
        expenditure fund.  The clerk of the joint powers board must 
        certify the vote of the bond election to the commissioner of 
        children, families, and learning. 
           Subd. 2.  [SHARED FACILITIES.] A group of governmental 
        units may form a joint powers district under section 471.59 
        representing all participating units to build or acquire a 
        facility.  The joint powers board must submit the project for 
        review and comment under section 121.15.  The joint powers board 
        must hold a hearing on the proposal.  The joint powers district 
        must submit the question of authorizing the borrowing of funds 
        for the project to the voters of the joint powers district at a 
        special election.  The question submitted shall state the total 
        amount of funding needed from all sources.  The joint powers 
        board may issue the bonds according to chapter 475 and certify 
        the levy required by section 475.61 only if a majority of those 
        voting on the question vote in the affirmative and only after 
        the boards of each member unit have adopted a resolution 
        pledging the full faith and credit of that unit.  The resolution 
        must irrevocably commit that unit to pay an agreed upon share of 
        any debt levy shortages that, together with other funds 
        available, would allow the joint powers board to pay the 
        principal and interest on the obligations.  The clerk of the 
        joint powers board must certify the vote of the bond election to 
        the commissioner of children, families, and learning. 
           Sec. 2.  Minnesota Statutes 1996, section 122.01, is 
        amended to read: 
           122.01 [DEFINITIONS.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        chapter, the words defined in section 120.02, have the same 
        meaning. 
           Subd. 2.  [TEACHER.] For purposes of this chapter, "teacher"
        means a teacher as defined in section 125.12, subdivision 1. 
           Sec. 3.  Minnesota Statutes 1996, section 122.02, is 
        amended to read: 
           122.02 [CLASSES, NUMBER.] 
           School Districts shall be classified as common, 
        independent, or special districts, each of which is a public 
        corporation.  Each district shall be known by its classification 
        and each shall be assigned a number by the commissioner so that 
        its title will be .......... school district number ..... . 
           Sec. 4.  Minnesota Statutes 1996, section 122.03, is 
        amended to read: 
           122.03 [ASSIGNMENT OF IDENTIFICATION NUMBERS.] 
           Subdivision 1.  [ASSIGNMENT.] The commissioner of children, 
        families, and learning shall, by order, assign an identification 
        number to each district.  The assignment shall be made so that 
        each classified district has an exclusive identification number 
        which is exclusive to it in its classification. 
           Subd. 2.  [NOTIFICATION.] Upon making the assignment of an 
        identification number, the commissioner of children, families, 
        and learning shall forthwith notify the clerk of the district 
        and the county auditors of the counties in which any part of the 
        district lies of the identification number assigned.  A 
        certified copy of the order may be recorded in the office of the 
        county recorder to show the new legal name of the district. 
           Subd. 3.  [LEGAL IDENTIFICATION.] From and after the making 
        of the order, The legal identification of the district shall 
        become and be as assigned the assigned identification number.  
        All records, correspondence, reports and references to the 
        district shall must thereafter refer to the district by its 
        proper title as assigned. 
           Subd. 4.  [USE OF NUMBERS.] A number once assigned to a 
        district under section 122.02 or under any prior law, shall must 
        not be used again to identify any district in the same 
        classification.  As the need arises, and as required by law, as 
        new districts are formed, the commissioner of children, 
        families, and learning shall assign unused numbers as 
        identification.  When numbered districts are dissolved, the 
        numbers assigned to them will not be reassigned to any other 
        district. 
           Sec. 5.  Minnesota Statutes 1996, section 122.21, is 
        amended to read: 
           122.21 [DETACHMENT AND ANNEXATION OF LAND.] 
           Subdivision 1.  [DETACHMENT AND ANNEXATION.] The owner of 
        land which adjoins any independent district, and whose land is 
        not in a special district may petition the county board of the 
        county in which the greater part of the area proposed for 
        detachment and annexation lies to detach all or any part of the 
        land together with the intervening lands as defined 
        in subparagraph paragraph (b) below, from the district it now is 
        in, and to attach it, together with such intervening land, to 
        the adjoining district.  For purpose of this section, land is 
        adjoining a school district if: 
           (a) The boundary of the area proposed for detachment and 
        annexation is the same as the district boundary to which 
        attachment is sought at any point, including corners, or 
           (b) The area proposed for detachment and annexation is 
        separated at any point from the district to which annexation is 
        sought by not more than one-half mile and the intervening land 
        is vacant and unoccupied or is owned by one or more of the 
        following:  The United States, or the state of Minnesota or any 
        of its political subdivisions, or an owner who is unknown or 
        cannot be found or 
           (c) The area proposed by a land owner for detachment and 
        annexation is adjoining, (as defined in subparagraphs 
        paragraphs (a) and (b) above), any land proposed for detachment 
        from and annexation to the same district in another pending 
        petition. 
           Subd. 2.  [PETITION.] The petition shall must contain: 
           (a) A correct description of the area proposed for 
        detachment and annexation, together with such including 
        supporting data with regard to regarding location and title to 
        land as will establish facts conformable to subdivision 1 to 
        establish that the land is adjoining a district. 
           (b) The reasons for the proposed change with facts showing 
        that the granting of the petition will not reduce the size of 
        any district to less than four sections, unless the district is 
        not operating a school within the district. 
           (c) Consent to the petition, endorsed thereon at any time 
        before the hearing by the board of the district from which the 
        area is to be removed, if, at the time of the filing of the 
        petition, any part of the area proposed for detachment is part 
        of a district which maintains and operates a secondary school 
        within the district.  Before the hearing, the consent of the 
        board of the district in which the area proposed for detachment 
        lies must be endorsed on the petition. 
           (d) An identification of the district to which annexation 
        is sought. 
           (e) Such Other information as the petitioners may desire to 
        affix. 
           (f) An acknowledgment by the petitioner. 
           Subd. 3.  [FILING PETITION.] The petition shall must be 
        filed with the auditor who shall present it to the county board 
        at its next meeting.  At the meeting, the county board shall 
        must fix a time and place for hearing the petition, which time.  
        The hearing shall be not more than 60 nor less than ten days 
        from the date of the meeting.  The auditor shall forthwith serve 
        notice of the hearing on each district directly affected by the 
        petition, by mail addressed to the clerk.  If any area affected 
        by the petition is in another county, the auditor shall mail a 
        notice of hearing to the auditor of such county and shall also 
        give one week's published notice of the hearing in the county 
        wherein in which the hearing is to be held, and ten days' posted 
        notice in each school district affected.  Such posted and 
        published notice may combine pending petitions.  At the hearing 
        on the petition, the county board shall must receive and hear 
        any evidence for or against the petition.  The hearing may be 
        adjourned from time to time. 
           Subd. 4.  [ORDER.] Within six months of the time when the 
        petition was filed filing of the petition, the county board 
        shall must issue its order either granting or denying the 
        petition, unless all or part.  If any of the land area described 
        in the petition is included in a plat for consolidation or 
        combination which has been approved by the commissioner of 
        children, families, and learning in which event, then 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 have a deferred effective date 
        not later than July 1 next immediately following its issuance.  
        If the petition be is 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. 
           Subd. 5.  [MODIFICATION OF RECORDS.] Upon receipt of the 
        order, the commissioner shall forthwith modify the records and 
        any plats and petitions and proceedings involving districts 
        affected by such order presently before the commissioner for 
        action or record, to conform to the order. 
           Subd. 6.  [TAXABLE PROPERTY.] Upon the effective date of 
        the order, the detachment and annexation ordered therein is 
        effected.  All taxable property in the area so detached and 
        annexed remains taxable for payment of any school purpose 
        obligations theretofore authorized by or on that date 
        outstanding already authorized by or outstanding on the 
        effective date of the order against the district from which 
        detached.  Such property is not by virtue of the order 
        relieved The order does not relieve such property from the 
        obligation of any bonded debt theretofore already incurred to 
        which it was subject prior to the order.  All taxable property 
        in the area so detached and annexed is taxable for payment of 
        any school district obligations authorized on or subsequent to 
        the effective date of the order by the district to which 
        annexation is made. 
           Sec. 6.  Minnesota Statutes 1996, section 122.22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISSOLUTION.] Any district may be 
        dissolved and the territory be attached to other districts by 
        proceeding in accordance with this section.  
           Sec. 7.  Minnesota Statutes 1996, section 122.22, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PETITION.] A petition executed pursuant to 
        subdivision 2(b) shall be filed with the auditor.  It shall The 
        petition must contain the following: 
           (a) A statement that petitioners desire proceedings 
        instituted leading to dissolution of the district and other 
        provisions made for the education of the inhabitants of the 
        territory and that petitioners are eligible voters of the 
        district; 
           (b) An identification of the district; and 
           (c) The reasons supporting the petition which may include 
        recommendations as to disposition of territory to be dissolved.  
        The recommendations are advisory in nature only and are not 
        binding on any petitioners or county board for any purpose. 
           The persons circulating the petition shall attach their 
        affidavit swearing or affirming that the persons executing the 
        petition are eligible voters, as defined in section 201.014, of 
        the district and that they signed in the presence of one of the 
        circulators. 
           The auditor shall present the petition to the county board 
        at its next meeting.  At that meeting, the county board shall 
        must determine a date for a hearing.  The hearing shall be not 
        less than 20 nor more than 60 days from the date of that meeting.
           Sec. 8.  Minnesota Statutes 1996, section 122.22, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CERTIFICATION.] Certification executed pursuant 
        to subdivision 2(c) shall must be filed with the auditor.  It 
        shall The certification must contain the following: 
           (a) A copy of the resolution initiating the election; 
           (b) A copy of the notice of election with an affidavit of 
        publication or posting; 
           (c) The question voted on; 
           (d) The results of the election by number of votes cast for 
        and number against the question; and 
           (e) If an advisory ballot is taken on annexation, the 
        question voted on and number of ballots cast for and against the 
        proposal.  
           The auditor shall present the certification to the county 
        board at its next meeting.  At that meeting, the county board 
        shall must determine a date for a hearing.  The hearing shall be 
        not less than 20 nor more than 60 days from the date of that 
        meeting.  
           Sec. 9.  Minnesota Statutes 1996, section 122.22, 
        subdivision 6, is amended to read: 
           Subd. 6.  [HEARING.] When a hearing is ordered under this 
        section, the auditor shall have give ten days' posted notice of 
        the hearing in the district proposed for dissolution, one week's 
        published notice in the county, and ten days' mailed notice to 
        the clerk of the district proposed for dissolution and to the 
        clerk of each adjoining district and to the commissioner.  
        If all or any part of the district proposed for dissolution or 
        any adjoining district lies in another county, the auditor shall 
        forthwith upon establishment of the hearing date, mail notice of 
        the hearing to the auditor of each county so situated upon 
        establishment of the hearing date.  
           Sec. 10.  Minnesota Statutes 1996, section 122.22, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  [INFORMATION TO COUNTY AUDITOR.] (a) Before the 
        day of a hearing ordered pursuant to this section, each district 
        adjoining the district proposed for dissolution shall must 
        provide the following information and resolution to the county 
        auditor of the county containing the greatest land area of the 
        district proposed for dissolution:  
           (1) The outstanding bonded debt, outstanding energy loans 
        made according to section 216C.37 or sections 298.292 to 
        298.298, and the capital loan obligation of the district; 
           (2) The net tax capacity of the district; 
           (3) The most current school tax rates for the district, 
        including any referendum, discretionary, or other optional 
        levies being assessed currently and the expected duration of the 
        levies; 
           (4) A resolution passed by the school board of the district 
        stating that if taxable property of the dissolved district is 
        attached to it, one of the following requirements is imposed:  
           (i) the taxable property of the dissolving district which 
        is attached to its district shall not be liable for the bonded 
        debt, outstanding energy loans made according to section 216C.37 
        or sections 298.292 to 298.298, or the capital loan obligation 
        of the district which existed as of the time of the attachment; 
           (ii) the taxable property of the dissolving district which 
        is attached to its district shall be liable for the payment of 
        the bonded debt, outstanding energy loans made according to 
        section 216C.37 or sections 298.292 to 298.298, or the capital 
        loan obligation of the district which existed as of the time of 
        the attachment in the proportion which the net tax capacity of 
        that part of the dissolving district which is included in the 
        newly enlarged district bears to the net tax capacity of the 
        entire district as of the time of attachment; or 
           (iii) the taxable property of the dissolving district which 
        is attached to its district shall be liable for some specified 
        portion of the amount that could be requested pursuant to 
        subclause (ii).  
           (b) An apportionment pursuant to paragraph (a), clause (4), 
        subclause (ii) or (iii), shall be made by the county auditor of 
        the county containing the greatest land area of the district 
        proposed for transfer.  
           (c) An apportionment of bonded indebtedness, outstanding 
        energy loans made according to section 216C.37 or sections 
        298.292 to 298.298, or capital loan obligation pursuant to 
        paragraph (a), clause (4), subclause (ii) or (iii), shall not 
        relieve any property from any tax liability for payment of any 
        bonded or capital obligation, but taxable property in a district 
        enlarged pursuant to this section becomes primarily liable for 
        the payment of the bonded debt, outstanding energy loans made 
        according to section 216C.37 or sections 298.292 to 298.298, or 
        capital loan obligation to the extent of the proportion stated.  
           Sec. 11.  Minnesota Statutes 1996, section 122.22, 
        subdivision 9, is amended to read: 
           Subd. 9.  [ORDER FOR DISSOLUTION.] (a) An order issued 
        under subdivision 8, clause (b), shall must contain the 
        following: 
           (1) A statement that the district is dissolved unless the 
        results of an election held pursuant to subdivision 11 provide 
        otherwise; 
           (2) A description by words or plat or both showing the 
        disposition of territory in the district to be dissolved; 
           (3) The outstanding bonded debt, outstanding energy loans 
        made according to section 216C.37 or sections 298.292 to 
        298.298, and the capital loan obligation of the district to be 
        dissolved; 
           (4) A statement requiring the fulfillment of the 
        requirements imposed by each adjoining district to which 
        territory in the dissolving district is to be attached regarding 
        the assumption of its outstanding preexisting bonded 
        indebtedness by any territory from the dissolving district which 
        is attached to it; 
           (5) An effective date for the order.  The effective date 
        shall be July 1 of an odd-numbered year unless the school board 
        and the exclusive representative of the teachers in each 
        affected district agree to an effective date of July 1 of an 
        even-numbered year.  The agreement must be in writing and 
        submitted to the commissioner of children, families, and 
        learning; and 
           (6) Other information the county board may desire to 
        include. 
           (b) The auditor shall within ten days from its issuance 
        serve a copy of the order by mail upon the clerk of the district 
        to be dissolved and upon the clerk of each district to which the 
        order attaches any territory of the district to be dissolved and 
        upon the auditor of each other county in which all or any part 
        of the district to be dissolved or any district to which the 
        order attaches territory lies, and upon the commissioner.  
           Sec. 12.  Minnesota Statutes 1996, section 122.22, 
        subdivision 13, is amended to read: 
           Subd. 13.  [ELECTION DATE.] If an election is required 
        under subdivision 11, then before the expiration of a 45 day 
        period after the date of the order for dissolution and 
        attachment, the auditor shall set a date and call the election 
        by filing a written order therefor for the election and serving 
        a copy thereof of the order personally or by mail on the clerk 
        of the district in which the election is to be held.  The date 
        shall be not less than 15 nor more than 30 days after the date 
        of the order, upon which date a special election shall be held 
        in the district proposed for dissolution.  The auditor 
        shall cause post and publish notice of the election to be posted 
        and published according to law.  Upon receipt of the notice, the 
        board shall conduct the election.  
           Sec. 13.  Minnesota Statutes 1996, section 122.22, 
        subdivision 14, is amended to read: 
           Subd. 14.  [ELECTION RESULTS.] The board must certify the 
        results of the election shall be certified by the board to the 
        auditor.  If a majority of all votes cast on the question at the 
        election approve the order, the order becomes final and 
        effective as of the date specified in the order.  Each person 
        served with the order shall be so notified.  If a majority of 
        all votes cast on the question disapprove the order, the 
        proceedings are dismissed, and the order becomes void.  
           Sec. 14.  Minnesota Statutes 1996, section 122.22, 
        subdivision 18, is amended to read: 
           Subd. 18.  [BONDED DEBT.] The bonded debt of a district 
        dissolved under provisions of this section shall must be paid 
        according to levies made therefor for that debt under provision 
        of chapter 475.  The obligation of the taxable property in the 
        dissolved district with reference to the payment of such bonded 
        debt is not affected by this section.  
           Sec. 15.  Minnesota Statutes 1996, section 122.22, 
        subdivision 20, is amended to read: 
           Subd. 20.  [CURRENT ASSETS AND LIABILITIES.] If the 
        dissolved district is not divided by the order of dissolution 
        and attachment, all of its current assets and liabilities, real 
        and personal, and all its legally valid and enforceable claims 
        and contract obligations shall must pass to the district to 
        which it is attached, except as provided in section 122.532.  If 
        the district to be dissolved is divided by the order of 
        dissolution and attachment, the commissioner shall, within 30 
        days after the order is issued, issue an order for the 
        distribution of its current assets and liabilities, real and 
        personal.  If the commissioner's order provides for the transfer 
        of an interest in real estate to a district, this order may also 
        impose a dollar amount as a claim against that district in favor 
        of other districts, and this claim shall be paid and enforced in 
        the manner provided by law for the payment of judgments against 
        a district.  The obligations of districts to the teachers 
        employed by the dissolved district shall be governed by the 
        provisions of section 122.532.  
           Sec. 16.  Minnesota Statutes 1996, section 122.22, 
        subdivision 21, is amended to read: 
           Subd. 21.  [LEVIES.] (a) In the year prior to the effective 
        date of the dissolution of a district, the school board of a 
        district to which all of the dissolving district is to be 
        attached may adopt a resolution directing the school board of 
        the dissolving district to certify levies for general education, 
        basic transportation, and capital expenditure equipment and 
        facilities in an amount not to exceed the maximum amount 
        authorized for the dissolving district for taxes payable in the 
        year the dissolution is effective.  If the dissolving district 
        is to be attached to more than one school district, the boards 
        of the districts to which the dissolving district is to be 
        attached may adopt a joint resolution that accomplishes the 
        purpose in this paragraph. 
           (b) Notwithstanding any other law to the contrary, upon 
        receipt of a resolution under paragraph (a), the board of the 
        dissolving district must certify levies in the amounts specified 
        in the resolution for taxes payable in the year the dissolution 
        is effective.  
           Sec. 17.  Minnesota Statutes 1996, section 122.23, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RESOLUTION.] (a) Upon a resolution of a school 
        board in the area proposed for consolidation or upon receipt of 
        a petition therefor executed by 25 percent of the voters 
        resident in the area proposed for consolidation or by 50 such 
        voters, whichever is lesser less, the county auditor of the 
        county which contains the greatest land area of the proposed new 
        district shall forthwith cause a plat to be prepared prepare a 
        plat.  The resolution or petition shall must show the 
        approximate area proposed for consolidation.  
           (b) The resolution or petition may propose the following: 
           (1) that the bonded debt of the component districts will be 
        paid according to the levies previously made for that debt under 
        chapter 475, or that the taxable property in the newly created 
        district will be taxable for the payment of all or a portion of 
        the bonded debt previously incurred by any component district as 
        provided in subdivision 16; 
           (2) that obligations for a capital loan or an energy loan 
        made according to section 216C.37 or sections 298.292 to 298.298 
        outstanding in a preexisting district as of the effective date 
        of consolidation remain solely with the preexisting district 
        that obtained the loan, or that all or a portion of the loan 
        obligations will be assumed by the newly created or enlarged 
        district and paid by the newly created or enlarged district on 
        behalf of the preexisting district that obtained the loan; 
           (3) that referendum levies previously approved by voters of 
        the component districts pursuant to section 124A.03, subdivision 
        2, or its predecessor provision, be combined as provided in 
        section 122.531, subdivision 2a or 2b, or that the referendum 
        levies be discontinued; 
           (4) that the board of the newly created district consist of 
        the number of members determined by the component districts, 
        which may be six or seven members elected according to 
        subdivision 18, or any number of existing school board members 
        of the component districts, and a method to gradually reduce the 
        membership to six or seven; or 
           (5) that separate election districts from which school 
        board members will be elected, the boundaries of these election 
        districts, and the initial term of the member elected from each 
        of these election districts be established. 
           The resolution must provide for election of board members 
        from one of the following options:  single-member districts; 
        multimember districts; at large; or a combination of these 
        options.  The resolution must include a plan for the orderly 
        transition to the option chosen. 
           A group of districts that operates a cooperative secondary 
        facility funded under section 124.494 may also propose a 
        temporary school board structure as specified in section 
        124.494, subdivision 7. 
           If a county auditor receives more than one request for a 
        plat and the requests involve parts of identical districts, the 
        auditor shall forthwith prepare a plat which in the auditor's 
        opinion best serves the educational interests of the inhabitants 
        of the districts or areas affected.  
           (c) The plat shall must show: 
           (1) Boundaries of the proposed district, as determined by 
        the county auditor, and present district boundaries, 
           (2) The location of school buildings in the area proposed 
        as a new district and the location of school buildings in 
        adjoining districts, 
           (3) The boundaries of any proposed separate election 
        districts, and 
           (4) Other pertinent information as determined by the county 
        auditor.  
           Sec. 18.  Minnesota Statutes 1996, section 122.23, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [ORDERLY REDUCTION PLAN.] As part of the 
        resolution required by subdivision 2, the school board must 
        prepare a plan for the orderly reduction of the membership of 
        the board to six or seven members and a plan for the 
        establishment or dissolution of election districts.  The plan 
        must be submitted to the secretary of state for review and 
        comment.  
           Sec. 19.  Minnesota Statutes 1996, section 122.23, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SUPPORTING STATEMENT.] The county auditor shall 
        prepare a supporting statement to accompany the plat shall be 
        prepared by the county auditor.  The statement shall must 
        contain: 
           (a) The adjusted net tax capacity of property in the 
        proposed district, 
           (b) If a part of any district is included in the proposed 
        new district, the adjusted net tax capacity of the property and 
        the approximate number of pupils residing in the part of the 
        district included shall be shown separately and the adjusted net 
        tax capacity of the property and the approximate number of 
        pupils residing in the part of the district not included shall 
        also be shown, 
           (c) The reasons for the proposed consolidation, including a 
        statement that at the time the plat is submitted to the state 
        board of education, no proceedings are pending to dissolve any 
        district involved in the plat unless all of the district to be 
        dissolved and all of each district to which attachment is 
        proposed is included in the plat, 
           (d) A statement showing that the jurisdictional fact 
        requirements of subdivision 1 are met by the proposal, 
           (e) Any proposal contained in the resolution or petition 
        regarding the disposition of the bonded debt, outstanding energy 
        loans made according to section 216C.37 or sections 298.292 to 
        298.298, capital loan obligations, or referendum levies of 
        component districts, 
           (f) Any other information the county auditor desires to 
        include, and 
           (g) The signature of the county auditor.  
           Sec. 20.  Minnesota Statutes 1996, section 122.23, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMMISSIONER.] The commissioner shall, upon 
        receipt of a plat, forthwith examine it and approve, modify or 
        reject it.  The commissioner shall also approve or reject any 
        proposal contained in the resolution or petition regarding the 
        disposition of the bonded debt of the component districts.  If 
        the plat shows the boundaries of proposed separate election 
        districts and if the commissioner modifies the plat, the 
        commissioner shall also modify the boundaries of the proposed 
        separate election districts.  The commissioner shall conduct a 
        hearing at the nearest county seat in the area upon reasonable 
        notice to the affected districts and county boards if requested 
        within 20 days after submission of the plat.  Such a hearing may 
        be requested by The board of any affected district, a county 
        board of commissioners, or the petition of 20 resident voters 
        living within the area proposed for consolidation may request 
        such a hearing.  The commissioner shall endorse on the plat 
        action regarding any proposal for the disposition of the bonded 
        debt of component districts and the reasons for these actions 
        and.  Within 60 days of the date of the receipt of the plat, the 
        commissioner shall return it to the county auditor who submitted 
        it.  The commissioner shall furnish a copy of that plat, and the 
        supporting statement and its endorsement to the auditor of each 
        county containing any land area of the proposed new district.  
        If land area of a particular county was included in the plat, as 
        submitted by the county auditor, and all of such land area is 
        excluded in the plat as modified and approved, the commissioner 
        shall also furnish a copy of the modified plat, supporting 
        statement, and any endorsement to the auditor of such county.  
           Sec. 21.  Minnesota Statutes 1996, section 122.23, 
        subdivision 7, is amended to read: 
           Subd. 7.  [NOTICE TO BOARD.] Upon receipt of an approved 
        plat, the county auditor shall forthwith notify the board of any 
        district, all or part of whose land is included in the proposed 
        new district.  
           Sec. 22.  Minnesota Statutes 1996, section 122.23, 
        subdivision 8, is amended to read: 
           Subd. 8.  [BOARD ADOPTION.] The board of any independent 
        district maintaining a secondary school, the board of any common 
        district maintaining a secondary school, all or part of whose 
        land is included in the proposed new district, shall must, 
        within 45 days of the approval of the plat by the commissioner, 
        either adopt or reject the plan as proposed in the approved 
        plat.  If the board of any such district entitled to act on the 
        petition rejects the proposal, the proceedings are terminated 
        and dismissed.  If any board fails to act on the plat within the 
        time allowed, the proceedings are terminated.  
           Sec. 23.  Minnesota Statutes 1996, section 122.23, 
        subdivision 9, is amended to read: 
           Subd. 9.  [MULTIPLE DISTRICTS; APPROVAL.] If the approved 
        plat contains land area in more than one independent district 
        maintaining a secondary school, or common district maintaining a 
        secondary school, and if each board entitled to act on the plat 
        approves the plat, each board shall cause publish notice of its 
        action to be published at least once in its official newspaper.  
        If all of the school boards entitled to act on the plat call, by 
        resolution, for an election on the question, or if five percent 
        of the eligible voters of any such district petition the clerk 
        of the district, within 30 days after the publication of the 
        notice, for an election on the question, the consolidation shall 
        not become effective until approved by a majority vote in the 
        district at an election held in the manner provided in 
        subdivisions 11, 12, and 13.  
           Sec. 24.  Minnesota Statutes 1996, section 122.23, 
        subdivision 10, is amended to read: 
           Subd. 10.  [APPROVAL BY RESIDENTS.] If an approved plat 
        contains land area in any district not entitled to act on 
        approval or rejection of the plat by action of its board, the 
        plat may be approved by the residents of the land area within 60 
        days of approval of plat by the commissioner in the following 
        manner: 
           A petition calling upon the county auditor to call and 
        conduct an election on the question of adoption or rejection of 
        the plat may be circulated in the land area by any person 
        residing in the area.  Upon the filing of the petition with the 
        county auditor, executed by at least 25 percent of the eligible 
        voters in each district or part of a district contained in the 
        land area, the county auditor shall forthwith call and conduct a 
        special election of the electors resident in the whole land area 
        on the question of adoption of the plat.  For the purposes of 
        this section, the term "electors resident in the whole land area"
        means any person residing on any remaining portion of land, a 
        part of which is included in the consolidation plat.  Any 
        eligible voter owning land included in the plat who lives upon 
        land adjacent or contiguous to that part of the voter's land 
        included in the plat shall be included and counted in computing 
        the 25 percent of the eligible voters necessary to sign the 
        petition and shall also be qualified to sign the petition.  
        Failure to file the petition within 60 days of approval of the 
        plat by the commissioner terminates the proceedings.  
           Sec. 25.  Minnesota Statutes 1996, section 122.23, 
        subdivision 11, is amended to read: 
           Subd. 11.  [NOTICE OF ELECTION.] Upon an election becoming 
        callable under provisions of subdivision 9 or 10, the school 
        board shall give ten days' posted notice of election in the area 
        in which the election is to be held and also if there be a 
        newspaper is published in the area, one weeks' published notice 
        shall be given.  The notice shall must specify the time, place 
        and purpose of the election.  
           Sec. 26.  Minnesota Statutes 1996, section 122.23, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ELECTION.] The school board shall determine the 
        date of the election, the number of boundaries of voting 
        precincts, and the location of the polling places where voting 
        shall be conducted, and the hours the polls will be open.  
        The school board shall also provide official ballots which shall 
        must be used exclusively and shall be in the following form: 
           For consolidation .... 
           Against consolidation .... 
           The school board shall must appoint election judges who 
        shall act as clerks of election.  The ballots and results shall 
        must be certified to the school board who shall canvass and 
        tabulate the total vote cast for and against the proposal.  
           Sec. 27.  Minnesota Statutes 1996, section 122.23, 
        subdivision 13, is amended to read: 
           Subd. 13.  [EFFECTIVE DATE.] If a majority of the votes 
        cast on the question at the election approve the consolidation, 
        and if the necessary approving resolutions of boards entitled to 
        act on the plat have been adopted, the school board shall must, 
        within ten days of the election, notify the county auditor who 
        shall, within ten days of the notice or of the expiration of the 
        period during which an election can be called, issue an order 
        setting a date for the effective date of the change.  The 
        effective date shall must be July 1 of the year determined by 
        the school board in the original resolution adopted under 
        subdivision 2.  The auditor shall mail or deliver a copy of such 
        order to each auditor holding a copy of the plat and to the 
        clerk of each district affected by the order and to the 
        commissioner.  The school board shall must similarly notify the 
        county auditor if the election fails.  The proceedings are then 
        terminated and the county auditor shall so notify the 
        commissioner and the auditors and the clerk of each school 
        district affected.  
           Sec. 28.  Minnesota Statutes 1996, section 122.23, 
        subdivision 14, is amended to read: 
           Subd. 14.  [IDENTIFICATION NUMBER.] Upon receipt of the 
        order creating a new district, the commissioner shall forthwith, 
        by order, assign an identification number to the new district 
        and shall mail a copy of the order to the county auditor and to 
        each auditor who holds a copy of the plat.  If all of the 
        territory in one and only one independent district maintaining a 
        secondary school is included in the new independent district 
        created pursuant to consolidation, and if the commissioner finds 
        that it is more practical and reasonable and in the interest of 
        efficiency and economy of operation to so do, the commissioner 
        may assign to the new district the same number as previously 
        held by the included independent district.  
           Sec. 29.  Minnesota Statutes 1996, section 122.23, 
        subdivision 16, is amended to read: 
           Subd. 16.  [BONDED DEBT.] As of the effective date of the 
        consolidation, the bonded debt of all component districts shall 
        must be paid according to the plan for consolidation proposed in 
        the approved plat and according to this subdivision. 
           (a) If the plan for consolidation so provides, the bonded 
        debt of all component districts shall must be paid according to 
        levies previously made for that debt under chapter 475.  In this 
        case, the obligation of the taxable property in the component 
        districts with reference to the payment of such bonded debt is 
        not affected by the consolidation. 
           (b) If the plan for consolidation makes no provision for 
        the disposition of bonded debt, all the taxable property in the 
        newly created district is taxable for the payment of any bonded 
        debt incurred by any component district in the proportion which 
        the net tax capacity of that part of a preexisting district 
        which is included in the newly created district bears to the net 
        tax capacity of the entire preexisting district as of the time 
        of the consolidation. 
           (c) If the plan for consolidation so provides, all the 
        taxable property in the newly created district will be taxable 
        for a portion of the bonded debt incurred by any component 
        district prior to the consolidation. 
           The county auditor shall make the apportionment required 
        under paragraphs (b) and (c) shall be made by the county auditor 
        and shall be incorporated and incorporate the apportionment as 
        an annex to the order of the commissioner dividing the assets 
        and liabilities of the component parts.  This subdivision shall 
        not relieve any property from any tax liability for payment of 
        any bonded obligation but taxable property in the newly created 
        district becomes primarily liable for the payment of bonded 
        debts to the extent of the proportion stated. 
           Sec. 30.  Minnesota Statutes 1996, section 122.23, 
        subdivision 16c, is amended to read: 
           Subd. 16c.  [BONDS; ELECTION.] The board of the newly 
        created district, when constituted as provided in subdivision 
        17, may provide for an election of that district on the issuance 
        of bonds.  It may issue and sell bonds authorized at the 
        election, or bonds authorized at an election previously held in 
        any preexisting district wholly included within the newly 
        created district, or bonds for a purpose for which an election 
        is not required by law.  The actions may be taken at any time 
        after the date of the county auditor's order issued under 
        subdivision 13, and before or after the date upon which the 
        consolidation becomes effective for other purposes, and taxes 
        for the payment of the bonds shall be levied upon all taxable 
        property in the newly created district.  No bonds shall be 
        delivered to purchasers until 30 days after the date of the 
        county auditor's order.  If within this period a notice of 
        appeal from the county auditor's order to the district court is 
        filed in accordance with section 127.25, no bonds shall be 
        delivered by the newly created district to purchasers unless: 
           (1) the county auditor's order is affirmed by final order 
        of the district court in the special proceeding, and a period of 
        30 days from the service of the final order expires without an 
        appeal being commenced; or, 
           (2) if an appeal is taken, the order is affirmed and the 
        time for petitioning for further review has expired; except 
        that.  Notwithstanding the pendency of the appeal, if all of the 
        territory of one and only one independent district maintaining a 
        secondary school is included in the newly created district, and 
        if the net tax capacity of taxable property in the territory 
        comprises 90 percent or more of the net tax capacity of all 
        taxable property in the newly created district, then the board 
        may issue, sell, and deliver any bonds voted by the preexisting 
        independent district and any bonds voted or otherwise authorized 
        by the newly created district, notwithstanding the pendency of 
        the appeal, and the bonds shall must be paid by the levy of 
        taxes upon the property within the territory of the preexisting 
        independent district and within the other areas, if any, that 
        are finally determined to be properly included within the newly 
        created district.  In any election held in the newly created 
        district as authorized in the preceding sentence, all qualified 
        electors residing within the area of that district as defined in 
        the county auditor's order shall be entitled to vote, but the 
        votes cast by residents of former districts or portions of 
        former districts included in the area, other than the 
        independent district maintaining the secondary school, shall be 
        received and counted separately.  The bonds shall must not be 
        issued and sold unless authorized by a majority of the votes 
        cast thereon by electors of the independent district maintaining 
        the secondary school, and also by a majority of the votes cast 
        thereon by electors residing within the entire area of the newly 
        created district.  
           Sec. 31.  Minnesota Statutes 1996, section 122.23, 
        subdivision 18, is amended to read: 
           Subd. 18.  [BOARD ELECTION; DUTIES.] (a) The county auditor 
        shall determine a date, not less than 30 nor more than 60 days 
        from the date that the order setting the effective date of the 
        consolidation according to subdivision 13 was issued, upon which 
        date shall be held to hold a special election in the district 
        for the purpose of electing a board of six members for terms of 
        four years and until a successor is elected and qualifies 
        according to provisions of law governing the election of board 
        members in independent districts.  Notwithstanding the 
        foregoing, three members of the first board must be elected to 
        terms that expire on the first Monday in January following the 
        first regularly scheduled school district general election that 
        occurs more than six months after the election of the first 
        board and three members must be elected to terms that expire on 
        the first Monday in January following the second school district 
        general election that occurs more than six months after the 
        election of the first board.  If the first board consists of 
        seven members, then four members may be elected at either the 
        first or second regularly scheduled school district general 
        election following the election of the first board.  If the 
        resolution or petition for consolidation pursuant to subdivision 
        2 proposed the establishment of separate election districts, 
        these members shall be elected from separate election districts 
        according to the provisions of that resolution or petition and 
        of chapter 205A. 
           (b) The county auditor shall give ten days' posted notice 
        of election in the area in which the election is to be held and 
        also if there be a newspaper is published in the proposed new 
        district, one weeks' published notice shall be given.  The 
        notice shall must specify the time, place, and purpose of the 
        election. 
           (c) Any person desiring to be a candidate for a school 
        election shall file an application with the county auditor to 
        have the applicant's name placed on the ballot for such office, 
        specifying the term for which the application is made.  The 
        application shall must be filed not less than 21 days before the 
        election. 
           (d) The county auditor shall prepare, at the expense of the 
        county, necessary ballots for the election of officers, placing 
        thereon the names of the proposed candidates for each office.  
        The ballots shall must be marked and signed as official ballots 
        and shall be used exclusively at the election.  The county 
        auditor shall determine the number of voting precincts and the 
        boundaries of each.  The county auditor shall determine the 
        location of polling places and the hours the polls shall be open 
        and shall appoint three election judges for each polling place 
        who shall act as clerks of election.  Election judges shall 
        certify ballots and results to the county auditor for tabulation 
        and canvass. 
           (e) After making a canvass and tabulation, the county 
        auditor shall issue a certificate of election to the candidate 
        for each office who received the largest number of votes cast 
        for the office.  The county auditor shall deliver such 
        certificate to the person entitled thereto to a certificate by 
        certified mail, and each person so certified shall file an 
        acceptance and oath of office with the county auditor within 30 
        days of the date of mailing of the certificate.  A person who 
        fails to qualify prior to the time specified shall be deemed to 
        have refused to serve, but such filing may be made at any time 
        before action to fill vacancy has been taken. 
           (f) The board of each district included in the new enlarged 
        district shall continue to maintain school the schools therein 
        until the effective date of the consolidation.  Such boards 
        shall have power and authority only to make such contracts, to 
        do such things as are necessary to maintain properly maintain 
        the schools for the period prior to that date, and to certify to 
        the county auditor according to levy limitations applicable to 
        the component districts the taxes collectible in the calendar 
        year when the consolidation becomes effective. 
           (g) It shall be the immediate duty of The newly elected 
        board of the new enlarged district has the immediate duty, when 
        after the members thereof have qualified and the board has been 
        organized, to plan for the maintenance of the school or schools 
        of the new district for the next school year, to enter into the 
        necessary negotiations and contracts for the employment of 
        personnel, purchase of equipment and supplies, and other 
        acquisition and betterment purposes, when authorized by the 
        voters to issue bonds under the provisions of chapter 475; and.  
        On the effective date of the consolidation to, the newly elected 
        board must assume the full duties of the care, management and 
        control of the new enlarged district.  The board of the new 
        enlarged district shall must give due consideration to the 
        feasibility of maintaining such existing attendance centers and 
        of establishing such other attendance centers, especially in 
        rural areas, as will afford equitable and efficient school 
        administration and assure the convenience and welfare of the 
        pupils residing in the enlarged district.  The obligations of 
        the new board to teachers employed by component districts shall 
        be governed by the provisions of section 122.532.  The 
        obligations of the new board to nonlicensed employees employed 
        by component districts is governed by subdivision 18a.  
           Sec. 32.  Minnesota Statutes 1996, section 122.23, 
        subdivision 18a, is amended to read: 
           Subd. 18a.  [NONLICENSED EMPLOYEES.] (a) As of the 
        effective date of a consolidation of two or more districts or 
        parts of them, each nonlicensed employee employed by an affected 
        district must be assigned to the newly created district. 
           (b) As of the effective date of a consolidation, any 
        employee organization may petition the commissioner of the 
        bureau of mediation services for a certification election under 
        chapter 179A.  An organization certified as the exclusive 
        representative for nonlicensed employees in a particular 
        preexisting district continues as the exclusive representative 
        for those particular employees for a period of 90 days from the 
        effective date of a consolidation.  If a petition for 
        representation of nonlicensed employees is filed within 90 days, 
        an exclusive representative for those particular nonlicensed 
        employees continues as the exclusive representative until the 
        bureau of mediation services certification proceedings are 
        concluded. 
           (c) The terms and conditions of employment of nonlicensed 
        employees assigned to the newly created district are temporarily 
        governed by contracts executed by an exclusive representative 
        for a period of 90 days from the effective date of the 
        consolidation.  If a petition for representation is filed with 
        the bureau of mediation services within the 90 days, the 
        contractual terms and conditions of employment for those 
        nonlicensed employees who were governed by a preexisting 
        contract continue in effect until the bureau of mediation 
        services proceedings are concluded and, if an exclusive 
        representative has been elected, until successor contracts are 
        executed between the board of the newly created district and the 
        new exclusive representative.  The terms and conditions of 
        employment of nonlicensed employees assigned to the newly 
        created district who were not governed by a collective 
        bargaining agreement at the time of the consolidation are 
        governed by the policies of the board of the newly created 
        district. 
           (d) The date of first employment in the newly created 
        district is the date on which services were first performed by 
        the employee in the preexisting district.  Any sick leave, 
        vacation time, or severance pay benefits accumulated under 
        policies of the preexisting district or contracts between the 
        exclusive representatives and the board of the preexisting 
        district continue to apply in the newly created district to the 
        employees of the preexisting districts, subject to any maximum 
        accumulation limitations negotiated in a successor contract.  
        Future leaves of absence, vacations, or other benefits to be 
        accumulated in the newly created district are governed by board 
        policy or by contract between the exclusive representative of an 
        appropriate unit of employees and the board of the newly created 
        district.  The board of the newly created district shall must 
        provide, to transferred nonlicensed employees, open enrollment 
        in all insurance plans with no limit on preexisting conditions.  
           Sec. 33.  Minnesota Statutes 1996, section 122.23, 
        subdivision 20, is amended to read: 
           Subd. 20.  [RETIREMENT INCENTIVES.] (a) For consolidations 
        effective July 1, 1994, and thereafter, a school board of a 
        district may offer early retirement incentives to licensed and 
        nonlicensed staff.  The early retirement incentives that the 
        board may offer are: 
           (1) the payment of employer pension plan contributions for 
        a specified period of allowable service credit for district 
        employees who have at least ten years of allowable service 
        credit in the applicable pension plan under paragraph (b); 
           (2) an extended leave of absence for an eligible employee 
        under section 125.60; 
           (3) severance payment incentives under paragraph (c); and 
           (4) the employer payment of the premiums for continued 
        health insurance coverage under paragraph (d). 
           These incentives may only be offered to employees who 
        terminate active employment with the school district or who 
        enter into an extended leave of absence as a result of the 
        consolidation, whichever applies.  The board may determine the 
        staff to whom the incentives are offered.  Unilateral 
        implementation of this section by a school board is not an 
        unfair labor practice under chapter 179A. 
           (b) An employee with at least ten years of allowable 
        service credit in the applicable pension plan who is offered an 
        early retirement incentive under paragraph (a), clause (1), may 
        purchase up to five additional years of allowable service credit 
        from the applicable pension plan.  To do so, the former employee 
        must pay the member contributions to the pension plan annually 
        in a manner and in accord with a schedule specified by the 
        executive director of the applicable fund.  If the former 
        employee makes the member contribution, the board shall must 
        make the applicable employer contribution.  The salary used to 
        determine these contributions is the salary of the person in the 
        last year that the former employee was employed by the 
        district.  During the period of continuing member and employer 
        contributions, the person is not considered to be an active 
        member of the applicable pension plan, is not eligible for any 
        active member disability or survivorship benefit coverage, and 
        is not included in any postemployment termination benefit plan 
        changes unless the applicable benefit legislation provides 
        otherwise.  Continued eligibility to purchase service credit 
        under this paragraph expires if the person is subsequently 
        employed during the service purchase period by a public employer 
        with retirement coverage under a pension plan specified in 
        section 356.30, subdivision 3. 
           (c) Severance payment incentives must conform with sections 
        465.72, 465.721, and 465.722. 
           (d) The board may offer a former employee continued 
        employer-paid health insurance coverage.  Coverage may not 
        extend beyond age 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 subdivision, 
        "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 and for which the employing unit pays more than one-half 
        of the cost of the insurance premiums. 
           (e) A school board may offer these incentives beginning on 
        the day that the consolidation is approved under section 122.23, 
        subdivision 12 or, if an election is not called under section 
        122.23, subdivision 9 or 10, on the day that the plat is 
        approved by the commissioner.  A board may offer these 
        incentives until the June 30 following the effective date of the 
        consolidation.  
           Sec. 34.  Minnesota Statutes 1996, section 122.241, is 
        amended to read: 
           122.241 [COOPERATION AND COMBINATION.] 
           Subdivision 1.  [SCOPE.] Sections 122.241 to 122.248 
        establish procedures for school boards that adopt, by 
        resolution, a five-year written agreement: 
           (1) to provide at least secondary instruction cooperatively 
        for at least one or two years, if the districts cooperate 
        according to subdivision 2; and 
           (2) to combine into one district.  
           Subd. 2.  [COOPERATION REQUIREMENTS.] Cooperating districts 
        shall must: 
           (1) implement a written agreement according to section 
        122.541 no later than the first year of cooperation; 
           (2) all be members of one education district, if any one of 
        the districts is a member, no later than the end of the second 
        year of cooperation; and 
           (3) all be members of one SC, if any one of the districts 
        is a member. 
           Clause (1) does not apply to a district that implemented an 
        agreement for secondary education, according to section 122.535, 
        during any year before the 1991-1992 school year.  If the 
        districts cooperate for one or more years, the agreement may be 
        continued during those years. 
           Subd. 3.  [COMBINATION REQUIREMENTS.] Combining districts 
        must be contiguous and meet one of the following requirements at 
        the time of combination:  
           (1) at least two districts with at least 400 resident 
        pupils enrolled in grades 7 through 12 in the combined district 
        and projections, approved by the department of children, 
        families, and learning, of enrollment at least at that level for 
        five years; 
           (2) at least two districts if either: 
           (i) both of the districts qualify for secondary sparsity 
        revenue under section 124A.22, subdivision 6, and have an 
        average isolation index over 23; or 
           (ii) the combined district qualifies for secondary sparsity 
        revenue; 
           (3) at least three districts with fewer than 400 resident 
        pupils enrolled in grades 7 through 12 in the combined district; 
        or 
           (4) at least two districts with fewer than 400 resident 
        pupils enrolled in grades 7 through 12 in the combined district 
        if either district is located on the border of the state. 
           A combination under clause (2), (3), or (4) must be 
        approved by the commissioner of children, families, and 
        learning.  The commissioner shall disapprove a combination under 
        clause (2), (3), or (4) if the combination is educationally 
        unsound or would not reasonably enable the districts to fulfill 
        statutory and rule requirements. 
           Sec. 35.  Minnesota Statutes 1996, section 122.242, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ADOPTION AND STATE BOARD REVIEW.] Each 
        school board must adopt, by resolution, a plan for cooperation 
        and combination.  The plan must address each item in this 
        section.  The plan must be specific for any item that will occur 
        within three years and may be general or set forth alternative 
        resolutions for an item that will occur in more than three 
        years.  The plan must be submitted to the state board of 
        education and the secretary of state for review and comment.  
        Significant modifications and specific resolutions of items must 
        be submitted to the state board for review and comment.  In the 
        official newspaper of each district proposed for combination, 
        the school board must publish at least a summary of the adopted 
        plans, each significant modification and resolution of items, 
        and each state board review and comment. 
           Sec. 36.  Minnesota Statutes 1996, section 122.242, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOARD FORMATION.] The plan must state:  
           (1) whether the new district would have one elected school 
        board or whether it would have one elected school board and one 
        elected board for each elementary school exercising powers and 
        duties delegated to it by the school board of the entire 
        district; 
           (2) how many of the existing members of each district would 
        become members of the school board of the combined district and, 
        if so, a method to gradually reduce the membership to six or 
        seven; and 
           (3) if desired, election districts that include the 
        establishment of separate areas from each of the combining 
        districts from which school board members will be elected, the 
        boundaries of these election districts, and the initial term of 
        the member elected from each of these election districts.  
           Sec. 37.  Minnesota Statutes 1996, section 122.242, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REFERENDUM.] The plan must set forth:  
           (1) procedures for a referendum, held prior to the year of 
        the proposed combination, to approve combining the school 
        districts; and 
           (2) whether a majority of those voting in each district 
        proposed for combination or a majority of those voting on the 
        question in the entire area proposed for combination would be 
        needed to pass the referendum.  
           Sec. 38.  Minnesota Statutes 1996, section 122.242, 
        subdivision 9, is amended to read: 
           Subd. 9.  [FINANCES.] The plan must state:  
           (1) whether debt service for the bonds outstanding at the 
        time of combination remains solely with the district that issued 
        the bonds or whether all or a portion of the debt service for 
        the bonds will be assumed by the combined district and paid by 
        the combined district on behalf of the district that issued the 
        bonds; 
           (2) whether obligations for a capital loan or energy loan 
        made according to section 216C.37 or sections 298.292 to 298.298 
        outstanding at the time of combination remain solely with the 
        district that obtained the loan, or whether all or a portion of 
        all the loan obligations will be assumed by the combined 
        district and paid by the combined district on behalf of the 
        district that obtained the loan; 
           (3) the treatment of debt service levies, down payment 
        levies under section 124.82, and referendum levies; 
           (4) whether the cooperating or combined district will levy 
        for reorganization operating debt according to section 121.915, 
        clause (1); and 
           (5) two- and five-year projections, prepared by the 
        department of children, families, and learning upon the request 
        of any district, of revenues, expenditures, and property taxes 
        for each district if it cooperated and combined and if it did 
        not. 
           Sec. 39.  Minnesota Statutes 1996, section 122.243, is 
        amended to read: 
           122.243 [STATE BOARD AND VOTER APPROVAL.] 
           Subdivision 1.  [COMMISSIONER APPROVAL.] Before submitting 
        the question of combining school districts to the voters at a 
        referendum, the cooperating districts shall must submit the 
        proposed combination to the commissioner of children, families, 
        and learning.  The commissioner shall determine the date for 
        submission and may require any information it determines 
        necessary.  The commissioner shall disapprove the proposed 
        combination if it is educationally unsound, will not reasonably 
        enable the combined district to fulfill statutory and rule 
        requirements, or if the plan or modifications are incomplete.  
        If disapproved by the commissioner, the referendum shall be 
        postponed, but not canceled, by the school boards. 
           Subd. 2.  [VOTER APPROVAL.] A referendum on the question of 
        combination shall must be conducted during the first or second 
        year of cooperation for districts that cooperate according to 
        section 122.241, or no more than 18 months before the effective 
        date of combination for districts that do not cooperate.  The 
        referendum shall must be on a date called by the school boards.  
        The referendum shall must be conducted by the school boards 
        according to the Minnesota election law, as defined in section 
        200.01.  If the referendum fails, the same question or a 
        modified question may be submitted.  If the referendum fails 
        again, the districts shall must modify their cooperation and 
        combination plan.  A third referendum may be conducted.  If a 
        second or third referendum is conducted after October 1, the 
        newly combined district may not levy under section 124.2725 
        until the following year.  Referendums shall be conducted on the 
        same date in all districts. 
           Sec. 40.  Minnesota Statutes 1996, section 122.245, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NONLICENSED EMPLOYEES TERMINATION.] If 
        compatible plans are not negotiated according to section 
        122.242, subdivision 5, the school boards shall comply with this 
        subdivision with respect to nonlicensed employees.  Nonlicensed 
        employees whose positions are discontinued as a result of 
        cooperation or combination, as applicable, shall be:  
           (1) employed by a cooperating board or the combined board, 
        if possible; 
           (2) assigned to work in a cooperating district or the 
        combined district, if possible; or 
           (3) terminated in the inverse order in which they were 
        employed in a district, according to a combined seniority list 
        of nonlicensed employees in the cooperating or combined 
        district, as applicable.  
           Sec. 41.  Minnesota Statutes 1996, section 122.246, is 
        amended to read: 
           122.246 [COUNTY AUDITOR PLAT.] 
           Upon the request of two or more districts that have adopted 
        a resolution to cooperate and combine, the county auditor shall 
        prepare a plat.  If the proposed combined district is located in 
        more than one county, the request shall must be submitted to the 
        county auditor of the county that has the greatest land area in 
        the proposed district.  The plat shall must show: 
           (1) the boundaries of each of the present districts; 
           (2) the boundaries of the proposed district; 
           (3) the boundaries of proposed election districts, if 
        requested; and 
           (4) other information deemed pertinent by the school boards 
        or the county auditor. 
           Sec. 42.  Minnesota Statutes 1996, section 122.247, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BONDED DEBT.] Debt service for bonds outstanding 
        at the time of the combination may be levied by the 
        combined school board consistent with the plan adopted according 
        to section 122.242, and any subsequent modifications, subject to 
        section 475.61.  The primary obligation to pay the bonded 
        indebtedness that is outstanding on the effective date of 
        combination remains with the district that issued the bonds.  
        However, the combined district may make debt service payments on 
        behalf of a preexisting district.  
           Sec. 43.  Minnesota Statutes 1996, section 122.247, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [CAPITAL LOAN.] The combined school board may 
        levy for the obligations for a capital loan outstanding at the 
        time of combination, consistent with the plan adopted according 
        to section 122.242 and any subsequent modifications.  The 
        primary obligation to levy as required by the capital loan 
        remains with taxable property in the preexisting district that 
        obtained the capital loan.  However, the obligation of a capital 
        loan may be extended to all of the taxable property in the 
        combined district.  
           Sec. 44.  Minnesota Statutes 1996, section 122.248, is 
        amended to read: 
           122.248 [REPORTS TO DEPARTMENT OF CHILDREN, FAMILIES, AND 
        LEARNING.] 
           Cooperating districts may submit joint reports and jointly 
        provide information required by the department of children, 
        families, and learning.  The joint reports must allow 
        information to be attributed to each district.  A combined 
        district must report and provide information as a single unit.  
           Sec. 45.  Minnesota Statutes 1996, section 122.25, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BOARD ELECTION.] At the annual meeting, if a 
        majority of the votes cast on the question favors the conversion 
        to an independent district, a board of six members shall be 
        elected.  Nominations may be made from the floor of the meeting 
        and election shall be by secret ballot.  All board members 
        elected at this meeting shall serve for terms expiring on the 
        third Tuesday in the next May next following the election on 
        which date a regular annual election shall be held in the manner 
        provided by law.  At this first annual election for independent 
        districts, six directors shall be elected, two to hold office 
        until July 1 following the next annual election, two to hold 
        office until the expiration of one year from said July 1 and two 
        to hold office until the expiration of two years from said July 
        1; the time which each director shall hold office being 
        designated on the ballot.  
           Sec. 46.  Minnesota Statutes 1996, section 122.25, 
        subdivision 3, is amended to read: 
           Subd. 3.  [IDENTIFICATION NUMBER.] If the organization of 
        the district is changed from common to independent at the 
        meeting, the clerk shall forthwith notify the auditor and the 
        commissioner.  
           Upon receipt of such notification, the commissioner shall 
        forthwith assign a new identification number to the district and 
        shall notify the auditor and the clerk of the district thereof.  
           Sec. 47.  Minnesota Statutes 1996, section 122.32, is 
        amended to read: 
           122.32 [REMAINING DISTRICTS, ACTION OF COUNTY BOARD; 
        ELECTION.] 
           Subdivision 1.  [DISSOLUTION.] If there be Any organized 
        school district not maintaining a classified school within the 
        district, except those districts which have a contract with a 
        state university or with the board of regents of the University 
        of Minnesota for the education of all the children of the 
        district, such district shall hereby be dissolved as of the date 
        the district ceases to maintain a classified school.  Any such 
        district not maintaining a classified school shall forthwith 
        must be attached by order of the county board to such district 
        maintaining classified elementary or secondary schools upon 
        notice and hearing as provided in section 122.22 for the 
        attachment of dissolved districts. 
           Subd. 2.  [SPECIAL ELECTION.] Prior to the order of the 
        county board, the board may direct the county auditor to call a 
        special election in the manner and form in which district 
        elections are held.  The purpose of the election shall be to 
        determine to which district or districts the dissolved district 
        shall be attached.  The county board after hearing shall must 
        determine the form of question as it should appear on the 
        ballot.  The results of the election shall be advisory in nature 
        only. 
           Subd. 3.  [ORDER; ASSET AND LIABILITY TRANSFER.] The county 
        auditor shall certify the results of the election shall be 
        certified by the county auditor to the county board and.  Within 
        45 days after such election, the county board shall must issue 
        its order dissolving the district.  The order shall must also 
        attach the dissolved district to a proper district as determined 
        by the county board, and a copy of such order shall must be 
        filed with the commissioner of children, families, and 
        learning.  Title to all the property, real and personal, of the 
        district dissolved passes to the district to which such 
        dissolved district is attached.  If a district is divided by 
        virtue of the proceedings the county board shall issue its order 
        providing for the division of the current assets and liabilities 
        according to such terms as it may deem just and equitable.  If 
        the order of the county board attaches any land area to a 
        district with bonded debt, the taxable property in such area 
        assumes its proportionate share of the authorized and 
        outstanding debt of the district to which it is attached. 
           Sec. 48.  Minnesota Statutes 1996, section 122.34, is 
        amended to read: 
           122.34 [PRIVATE SCHOOLS IN NONOPERATING DISTRICTS.] 
           Section 122.32 shall not apply to any school district in 
        which is located any existing private school maintaining 
        elementary and secondary education for 75 percent of eligible 
        pupils within the district and complying with the requirements 
        of section 120.101.  
           Sec. 49.  Minnesota Statutes 1996, section 122.355, is 
        amended to read: 
           122.355 [BORDER DISTRICTS; CONTINUED OPERATION.] 
           Subdivision 1.  [BORDER DISTRICTS.] The common school 
        districts situated along the border of the state of Minnesota 
        and the state of Wisconsin which have, for the preceding 25 
        years, prior to May 26, 1965 been educating pupils of their 
        district in school districts in Wisconsin may continue to 
        operate as common school districts notwithstanding that any of 
        such school districts do not maintain classified schools.  
        Such school districts are not subject to the terms and 
        provisions of sections 122.32 to 122.52. 
           Subd. 2.  [CONTINUED OPERATION.] The provisions of 
        subdivision 1 shall remain in effect as long as the school 
        district does not discontinue the practice of education for 
        their district as described in subdivision 1. 
           Sec. 50.  Minnesota Statutes 1996, section 122.41, is 
        amended to read: 
           122.41 [DUTY TO MAINTAIN ELEMENTARY AND SECONDARY SCHOOLS.] 
           Each school district shall must maintain classified 
        elementary and secondary schools, grades 1 through 12, unless 
        the district is exempt according to section 122.34 or 122.355, 
        has made an agreement with another district or districts as 
        provided in sections 122.535, 122.541, or sections 122.241 to 
        122.248, or 122.93, subdivision 8, or has received a grant under 
        sections 124.492 to 124.495.  A district that has an agreement 
        according to sections 122.241 to 122.248 or 122.541 shall must 
        operate a school with the number of grades required by those 
        sections.  A district that has an agreement according to section 
        122.535 or 122.93, subdivision 8, or has received a grant under 
        sections 124.492 to 124.495 shall must operate a school for the 
        grades not included in the agreement, but not fewer than three 
        grades.  
           Sec. 51.  Minnesota Statutes 1996, section 122.43, is 
        amended to read: 
           122.43 [PHASE OUT OF DISSOLVED DISTRICT.] 
           Subd. 2.  [MAINTAIN SCHOOLS.] The board of each district so 
        dissolved shall continue to maintain school schools until all 
        its territory has been attached to a proper district not later 
        than July 1.  Such boards shall only make such contracts and do 
        such things as are necessary to properly maintain schools 
        properly for the period they may be in session prior to the 
        attachment.  
           Sec. 52.  Minnesota Statutes 1996, section 122.44, is 
        amended to read: 
           122.44 [PROCEDURE FOR ATTACHMENT TO ORGANIZED DISTRICTS.] 
           Subdivision 1.  [ATTACHMENT.] Upon notice and hearing, as 
        provided in section 122.22 for the attachment of dissolved 
        districts, all territory of school districts dissolved by 
        sections 122.41 to 122.52 and all area of the state not in a 
        district maintaining classified elementary and secondary schools 
        shall must be attached by order of the county board to organized 
        districts maintaining classified elementary and secondary 
        schools, grades 1 through 12, unless a district has made an 
        agreement with another district or districts as provided in 
        section 122.535 or 122.541. 
           Sec. 53.  Minnesota Statutes 1996, section 122.45, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TAXABLE PROPERTY.] As of the effective date of 
        the attachment, all the taxable property in the newly enlarged 
        district is taxable for the payment of any bonded debt 
        theretofore already incurred by any component district in the 
        proportion which the net tax capacity of that part of a 
        preexisting district which is included in the newly enlarged 
        district bears to the net tax capacity of the entire preexisting 
        district as of the time of the attachment.  The county auditor 
        shall make this apportionment shall be made by the county 
        auditor and shall be incorporated and incorporate the 
        apportionment as an annex to the order of the commissioner 
        dividing the assets and liabilities of the component parts.  
        This subdivision shall not relieve any property from any tax 
        liability for payment of any bonded obligation but taxable 
        property in the newly enlarged district becomes primarily liable 
        for the payment of bonded debts to the extent of the proportion 
        stated.  
           Sec. 54.  Minnesota Statutes 1996, section 122.45, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [REIMBURSEMENT; SPECIAL LEVY.] (a) Liabilities 
        of a dissolved district existing at the time of the attachment 
        other than bonded debt within the purview of subdivision 2 shall 
        must be obligations of the consolidated district after 
        attachment (in the amount and kind determined by the 
        commissioner according to subdivision 1, where a dissolved 
        district is divided), for the payment of which the consolidated 
        district has a right to reimbursement by special levy or 
        levies.  The amount of reimbursement will be equal to the 
        liabilities of the dissolved district for which the consolidated 
        district is obligated less the aggregate of the following which 
        has been or will be received by the consolidated district at or 
        after the time of attachment from or as a result of the 
        dissolution and attachment of the dissolved district: 
           (1) all taxes inuring to the consolidating district upon 
        levies made by the dissolved district; 
           (2) all cash, bank accounts, investments, and other current 
        assets; 
           (3) earned state aids of the dissolved districts; 
           (4) returns from the sale of property of the dissolved 
        district. 
           (b) The amount of such special levy so computed shall be 
        certified to the county auditor with the other tax requirements 
        of the consolidated district but separately stated and 
        identified.  The auditor shall add the amount of special levy so 
        certified to the school rate for the territory in the 
        consolidated district which came from the dissolved district and 
        include it in the levy on the taxable property in that 
        territory; provided,.  The county auditor shall not spread more 
        of the amount certified for special levy in any year than will 
        amount to 20 percent of the school levy without the special 
        levy, leaving the remaining part of the certified amount for 
        levy in successive years without further certification.  Any 
        amount of reimbursement to which it is entitled omitted by the 
        consolidated district from its initial certification for special 
        levy may be certified in a subsequent year for levy in the same 
        manner as the levy upon initial certification. 
           The levy authorized by this subdivision shall be in 
        addition to those otherwise authorized for a school district.  
           Sec. 55.  Minnesota Statutes 1996, section 122.46, is 
        amended to read: 
           122.46 [OFFICERS AND TEACHERS, TRANSITIONAL PROVISIONS.] 
           Subdivision 1.  [BOARD.] The board of the district 
        maintaining a secondary school to which district is attached 
        territory of districts discontinued by sections 122.41 to 122.52 
        shall must assume the duties and responsibilities of the board 
        of the district so enlarged for the balance of the term to which 
        the members were elected.  At the next annual school election 
        the successors to the members whose terms then expire shall be 
        elected by the legally qualified voters of the newly enlarged 
        district.  Thereafter board members shall be elected according 
        to the election procedure established for the election of board 
        members in independent districts. 
           Sec. 56.  Minnesota Statutes 1996, section 122.47, is 
        amended to read: 
           122.47 [SPECIAL SCHOOL DISTRICTS, APPLICATION.] 
           When provisions of sections 122.41 to 122.52 are made to 
        apply to any special school district, such district shall hereby 
        be converted to an independent school district on the effective 
        date specified in the orders issued under provisions of sections 
        122.41 to 122.52.  All applicable provisions of Minnesota 
        Statutes 1965, section 122.26, relating to such conversions 
        shall otherwise be in force.  To the extent that any law or 
        charter provision of any special district is inconsistent with 
        the status of an independent school district or the powers 
        common to independent school districts, such law or charter 
        provision is hereby repealed.  Provided, however, that nothing 
        in sections 122.41 to 122.52 shall in any way invalidate 
        remaining portions of such laws or home rule charters, or the 
        continuance of such special school districts to which no new 
        territory is attached under the provisions of sections 122.41 to 
        122.52.  
           Sec. 57.  Minnesota Statutes 1996, section 122.48, is 
        amended to read: 
           122.48 [PRIVATE SCHOOLS.] 
           Sections 122.41 to 122.46 shall not apply to any school 
        district in which is located any existing private school 
        maintaining elementary and secondary education for 75 percent of 
        the eligible pupils within the district and complying with the 
        requirements of section 120.101. 
           Sec. 58.  Minnesota Statutes 1996, section 122.531, 
        subdivision 2c, is amended to read: 
           Subd. 2c.  [DISCONTINUED REFERENDUM REVENUE.] If the plan 
        for consolidation provides for discontinuance of referendum 
        revenue previously approved by voters of the component districts 
        pursuant to section 124A.03, subdivision 2, or its predecessor 
        provision, the newly created district shall must not receive 
        referendum revenue unless the voters of the newly created 
        district authorize referendum revenue pursuant to section 
        124A.03, subdivision 2.  
           Sec. 59.  Minnesota Statutes 1996, section 122.531, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [SUPPLEMENTAL REVENUE.] (a) For purposes of 
        computing the supplemental revenue and the minimum allowance 
        under section 124A.22, subdivision 9, paragraph (b), in the case 
        of a consolidation, the newly created district's 1991-1992 
        revenue and 1991-1992 actual pupil units are the sum of the 
        1991-1992 revenue and 1991-1992 pupil units, respectively, of 
        the former districts comprising the new district. 
           (b) For purposes of computing the supplemental revenue and 
        the minimum allowance under section 124A.22, subdivision 9, 
        paragraph (b), in the case of a dissolution and attachment, a 
        district's 1991-1992 revenue is the revenue of the existing 
        district plus the result of the following calculation: 
           (1) the 1991-1992 revenue of the dissolved district divided 
        by 
           (2) the dissolved district's 1991-1992 actual pupil units, 
        multiplied by 
           (3) the pupil units of the dissolved district in the most 
        recent year before the dissolution allocated to the newly 
        created or enlarged district. 
           (c) In the case of a dissolution and attachment, the 
        department of children, families, and learning shall allocate 
        the pupil units of the dissolved district to the newly enlarged 
        district based on the allocation of the property on which the 
        pupils generating the pupil units reside.  
           Sec. 60.  Minnesota Statutes 1996, section 122.531, 
        subdivision 9, is amended to read: 
           Subd. 9.  [LEVY FOR SEVERANCE PAY OR EARLY RETIREMENT 
        INCENTIVES.] The school board of a newly created or enlarged 
        district to which part or all of a dissolved district was 
        attached according to section 122.22 may levy for severance pay 
        or early retirement incentives for licensed and nonlicensed 
        employees who resign or retire early as a result of the 
        dissolution or consolidation, if the commissioner of children, 
        families, and learning approves the incentives and the amount to 
        be levied.  The amount may be levied over a period of up to five 
        years and shall must be spread in whole or in part on the 
        property of a preexisting district or the newly created or 
        enlarged district, as determined by the school board of the 
        newly created or enlarged district. 
           Sec. 61.  Minnesota Statutes 1996, section 122.5311, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CAPITAL LOAN OBLIGATIONS.] If a district 
        has a capital loan outstanding at the time of reorganization 
        according to section 122.22, 122.23, or sections 122.241 to 
        122.248, and if the plan for reorganization provides for payment 
        of all or a portion of the capital loan obligation by the newly 
        created or enlarged district or makes no provision for payment, 
        all of the taxable property in the newly created or enlarged 
        district is taxable for the payment to the extent stated in the 
        plan.  Notwithstanding any contract to the contrary, if all of 
        the taxable property in the newly created or enlarged district 
        is taxable for the payment of the capital loan and until the 
        capital loan is retired or canceled, the maximum effort debt 
        service levy shall must be recalculated annually by the 
        department of children, families, and learning to be equal to 
        the required debt service levy plus an additional amount.  The 
        additional amount shall must be the greater of: 
           (i) zero, or 
           (ii) the maximum effort debt service levy of the 
        preexisting district minus the required debt service levy of the 
        preexisting district that received the capital loan. 
           For the purpose of the recalculation, additional bond 
        issues after the date of the reorganization shall not impact the 
        maximum effort debt service levy or the required debt service 
        levy. 
           Notwithstanding any contract to the contrary, the plan for 
        reorganization may specify that the obligation for a capital 
        loan remains solely with the preexisting district that incurred 
        the obligation.  This subdivision does not relieve any property 
        from any tax liability for payment of any capital loan 
        obligation. 
           Sec. 62.  Minnesota Statutes 1996, section 122.532, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEACHER ASSIGNMENT.] (a) As of the effective 
        date of a consolidation in which a district is divided or the 
        dissolution of a district and its attachment to two or more 
        existing districts, each teacher employed by an affected 
        district shall be assigned to the newly created or enlarged 
        district on the basis of a ratio of the pupils assigned to each 
        district according to the new district boundaries.  The district 
        receiving the greatest number of pupils must be assigned the 
        teacher with the greatest seniority, and the remaining teachers 
        must be alternately assigned to each district until the district 
        receiving the fewest pupils has received its ratio of teachers 
        who will not be retiring before the effective date of the 
        consolidation or dissolution. 
           (b) Notwithstanding paragraph (a), the school board and the 
        exclusive representative of teachers in each school district 
        involved in the consolidation or dissolution and attachment may 
        negotiate a plan for assigning teachers to each newly created or 
        enlarged district. 
           Sec. 63.  Minnesota Statutes 1996, 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. 64.  Minnesota Statutes 1996, section 122.532, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONTRACTS; TERMINATION; TENURE.] Except as 
        provided in this section, the provisions of section 125.12 or 
        125.17 shall apply to the employment of each teacher by the new 
        employing district on the same basis as they would have applied 
        to the employment if the teacher had been employed by that new 
        district before the effective date of the consolidation or 
        dissolution and attachment.  For the purpose of applying the 
        provisions of subdivision 3, clause (c), and the provisions of 
        section 125.12, subdivision 6b, each school district must be 
        considered to have started school each year on the same date.  
           Sec. 65.  Minnesota Statutes 1996, section 122.535, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGREEMENT.] The school board may enter into one 
        or more agreements providing for instruction of its secondary 
        pupils in one or more districts.  The agreement shall must be 
        effective on July 1 and shall be for a specified or indefinite 
        number of years.  The agreement shall must set forth the 
        obligations of transportation, the tuition to be paid to the 
        providing district, and all additional charges and fees to be 
        paid to the providing district.  The amount of tuition shall not 
        be subject to the provisions of section 124.18, subdivision 2.  
        The agreement may provide for negotiation of a plan for the 
        assignment or employment in a providing district as an exchange 
        teacher according to section 125.13, or placement on unrequested 
        leave of absence of teachers whose positions are discontinued as 
        a result of the agreement.  "Teacher" has the meaning given it 
        in section 125.12, subdivision 1.  
           Sec. 66.  Minnesota Statutes 1996, section 122.535, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INFORMATIONAL MEETING.] Before entering into 
        agreements permitted by subdivision 2 of this section, the 
        school board shall must hold a public hearing.  The board shall 
        must publish notice of the hearing in the newspaper with the 
        largest circulation in the district.  If the board proposes to 
        enter into agreements with two or more districts, the board may 
        conduct separate or consolidated hearings.  
           Sec. 67.  Minnesota Statutes 1996, section 122.535, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REVIEW AND COMMENT.] After the hearing required 
        by subdivision 3 and before entering into an agreement, the 
        board shall must submit the agreement to the commissioner of 
        children, families, and learning for review and comment.  
           Sec. 68.  Minnesota Statutes 1996, section 122.535, 
        subdivision 5, is amended to read: 
           Subd. 5.  [AID PAYMENTS.] A district entering into an 
        agreement permitted in subdivision 2 of this section shall must 
        continue to count its resident pupils who are educated in other 
        districts as resident pupils in the calculation of pupil units 
        for the purposes of state aids, levy limitations, and any other 
        purpose.  A district may continue to provide transportation and 
        collect transportation aid for its resident pupils.  For 
        purposes of aid calculations, the commissioner of children, 
        families, and learning may adjust the cost per eligible pupil 
        transported to reflect changes in cost resulting from the 
        agreement, if any.  
           Sec. 69.  Minnesota Statutes 1996, section 122.535, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SEVERANCE PAY.] A district shall must pay 
        severance pay to a teacher who is placed on unrequested leave of 
        absence by the district as a result of the agreement.  A teacher 
        is eligible under this subdivision if the teacher: 
           (1) is a teacher, as defined in section 125.12, subdivision 
        1, but not a superintendent; 
           (2) has a continuing contract with the district according 
        to section 125.12, subdivision 4. 
           The amount of severance pay shall must be equal to the 
        teacher's salary for the school year during which the teacher 
        was placed on unrequested leave of absence minus the gross 
        amount the teacher was paid during the 12 months following the 
        teacher's termination of salary, by an entity whose teachers by 
        statute or rule must possess a valid Minnesota teaching license, 
        and minus the amount a teacher receives as severance or other 
        similar pay according to a contract with the district or 
        district policy.  These entities requiring a valid Minnesota 
        teaching license include, but are not limited to, the school 
        district that placed the teacher on unrequested leave of 
        absence, another school district in Minnesota, an education 
        district, an intermediate school district, a SC, a board formed 
        under section 471.59, a state residential academy, the Lola and 
        Rudy Perpich Minnesota center for arts education, a vocational 
        center, or a special education cooperative.  These entities do 
        not include a school district in another state, a Minnesota 
        public post-secondary institution, or a state agency.  Only 
        amounts earned by the teacher as a substitute teacher or in a 
        position requiring a valid Minnesota teaching license shall be 
        subtracted.  A teacher may decline any offer of employment as a 
        teacher without loss of rights to severance pay. 
           To determine the amount of severance pay that is due for 
        the first six months following termination of the teacher's 
        salary, the district may require the teacher to provide 
        documented evidence of the teacher's employers and gross 
        earnings during that period.  The district shall must pay the 
        teacher the amount of severance pay it determines to be due from 
        the proceeds of the levy for this purpose.  To determine the 
        amount of severance pay that is due for the second six months of 
        the 12 months following the termination of the teacher's salary, 
        the district may require the teacher to provide documented 
        evidence of the teacher's employers and gross earnings during 
        that period.  The district shall must pay the teacher the amount 
        of severance pay it determines to be due from the proceeds of 
        the levy for this purpose.  
           A teacher who receives severance pay under this subdivision 
        waives all further reinstatement rights under section 125.12, 
        subdivision 6a or 6b.  If the teacher receives severance pay, 
        the teacher shall not receive credit for any years of service in 
        the district paying severance pay prior to the year in which the 
        teacher becomes eligible to receive severance pay. 
           The severance pay is subject to section 465.72.  The 
        district may levy annually according to section 124.912, 
        subdivision 1, for the severance pay.  
           Sec. 70.  Minnesota Statutes 1996, section 122.541, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISTRICT REQUIREMENTS.] The school boards 
        of two or more districts may, after consultation with the 
        department of children, families, and learning, enter into an 
        agreement providing for:  
           (1) discontinuance by all districts except one of at least 
        the 10th, 11th, and 12th grades; and 
           (2) instruction of the pupils in the discontinued grades in 
        one of the cooperating districts.  Each district shall must 
        continue to operate a school with at least three grades.  Before 
        entering into a final agreement, the boards shall must provide a 
        copy of this agreement to the commissioner of children, 
        families, and learning.  
           Sec. 71.  Minnesota Statutes 1996, section 122.541, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AID; TRANSPORTATION.] (a) Each district shall 
        must continue to count its resident pupils who are educated in a 
        cooperating district as resident pupils in the calculation of 
        pupil units for all purposes.  The agreement shall must provide 
        for tuition payments between or among the districts.  
           (b) Each district shall must continue to provide 
        transportation and collect transportation aid for its resident 
        pupils pursuant to sections 123.39, 124.223, and 124.225.  A 
        district may provide some or all transportation to its resident 
        pupils by contracting with a cooperating district.  For purposes 
        of section 124.225, the commissioner may adjust the base cost 
        per eligible pupil transported to reflect changes in costs 
        resulting from the agreement.  
           Sec. 72.  Minnesota Statutes 1996, section 122.541, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NEGOTIATED PLAN FOR DISCONTINUED TEACHERS.] 
        The school board and exclusive bargaining representative of the 
        teachers in each district discontinuing grades may negotiate a 
        plan to assign or employ in a cooperating district or to place 
        on unrequested leave of absence all teachers whose positions are 
        discontinued as a result of the agreement.  The school board and 
        exclusive bargaining representative of the teachers in each 
        district providing instruction to nonresident pupils may 
        negotiate a plan to employ teachers from a cooperating district 
        whose positions are discontinued as a result of the agreement.  
        If plans are negotiated and if the boards determine the plans 
        are compatible, the boards shall include the plans in their 
        agreement.  
           Sec. 73.  Minnesota Statutes 1996, section 122.541, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMBINED SENIORITY LIST.] If compatible plans 
        are not negotiated before the March 1 preceding any year of the 
        agreement, the cooperating districts shall be governed by this 
        subdivision.  Insofar as possible, teachers who have acquired 
        continuing contract rights and whose positions are discontinued 
        as a result of the agreement shall be employed by a cooperating 
        district or assigned to teach in a cooperating district as 
        exchange teachers pursuant to section 125.13.  If necessary, 
        teachers whose positions are discontinued as a result of the 
        agreement and who have acquired continuing contract rights shall 
        be placed on unrequested leave of absence in fields in which 
        they are licensed in the inverse order in which they were 
        employed by a cooperating district, according to a combined 
        seniority list of teachers in the cooperating districts.  For 
        the purpose of establishing a combined seniority list, each 
        school district must be considered to have started school each 
        year on the same date.  
           Sec. 74.  Minnesota Statutes 1996, section 122.541, 
        subdivision 6, is amended to read: 
           Subd. 6.  [NOTICE AND HEARING.] Prior to entering into an 
        agreement, the school board shall consult with the community at 
        an informational meeting.  The board shall must publish notice 
        of the meeting in the official newspaper of the district and may 
        send written notice of the meeting to parents of pupils who 
        would be affected. 
           Sec. 75.  Minnesota Statutes 1996, section 122.541, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MEETING LOCATION.] Notwithstanding any law to 
        the contrary, school boards that have an agreement may hold a 
        valid joint meeting at any location that would be permissible 
        for one of the school boards participating in the meeting.  A 
        school board that has an agreement may hold a meeting in any 
        district that is a party to the agreement.  The school board 
        shall comply with section 471.705 and any other law applicable 
        to a meeting of a school board.  
           Sec. 76.  Minnesota Statutes 1996, section 122.895, is 
        amended to read: 
           122.895 [EMPLOYEES OF COOPERATIVE DISTRICTS UPON 
        DISSOLUTION OR WITHDRAWAL.] 
           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.  
           Subd. 2.  [APPLICABILITY.] This section applies to: 
           (1) an education district organized according to sections 
        122.91 to 122.95; 
           (2) a cooperative vocational center organized according to 
        section 123.351; 
           (3) a joint powers district or board organized according to 
        section 471.59 which employs teachers to provide instruction; 
           (4) an intermediate district organized according to chapter 
        136D; 
           (5) a service cooperative which employs teachers to provide 
        instruction; and 
           (6) school districts participating in an agreement for the 
        cooperative provision of special education services to children 
        with disabilities according to section 120.17, subdivision 4.  
           Subd. 2a.  [AGREEMENTS FOR COOPERATIVE SPECIAL EDUCATION.] 
        (a) Upon the termination of an agreement according to section 
        120.17, subdivision 4, a teacher employed to provide special 
        education services by a school district participating in the 
        agreement will be afforded rights to employment by other school 
        districts according to subdivisions 3, 4, and 5.  Nonlicensed 
        employees of a participating district employed to provide 
        special education services will, upon the agreement's 
        termination, be afforded rights to employment by other 
        participating districts according to subdivision 8. 
           (b) Upon a school district's withdrawal from the 
        cooperative provision of special education under an agreement 
        according to section 120.17, subdivision 4, a teacher employed 
        to provide special education services by a participating 
        district will be afforded rights to employment by other school 
        districts according to subdivisions 3, 6, and 7.  Nonlicensed 
        employees of a participating district employed to provide 
        special education services will be afforded rights to employment 
        by the withdrawing district according to subdivision 9.  
           Subd. 3.  [NOTIFICATION OF TEACHERS.] In any year in which 
        a cooperative dissolves or a member withdraws from a 
        cooperative, the governing board of a cooperative shall must 
        provide all teachers employed by the cooperative written 
        notification by March 10 of: 
           (1) the dissolution of the cooperative and the effective 
        date of dissolution; or 
           (2) the withdrawal of a member of the cooperative and the 
        effective date of withdrawal. 
           Subd. 4.  [RIGHTS OF A TEACHER WITH A CONTINUING CONTRACT 
        IN A MEMBER DISTRICT UPON DISSOLUTION.] (a) This subdivision 
        applies to a teacher previously employed in a member district 
        who: 
           (1) had a continuing contract with that member district; 
           (2) has been continuously employed immediately after 
        leaving that member district by one or more cooperatives that 
        provided instruction to pupils enrolled in that member district; 
        and 
           (3) is either a probationary teacher or has a continuing 
        contract with the cooperative that is dissolving. 
           (b) A teacher may elect to resume the teacher's continuing 
        contract with the member district by which the teacher was 
        previously employed by filing a written notice of the election 
        with the member school board on or before March 20.  Failure by 
        a teacher to file a written notice by March 20 of the year the 
        teacher receives a notice according to subdivision 3 constitutes 
        a waiver of the teacher's rights under this subdivision. 
           The member district shall must make reasonable realignments 
        of positions to accommodate the seniority rights of a teacher 
        electing to resume continuing contract rights in the member 
        district according to this subdivision. 
           Upon returning the teacher shall receive credit for: 
           (1) all years of continuous service under contract with the 
        cooperative and the member district for all purposes relating to 
        seniority, compensation, and employment benefits; and 
           (2) the teacher's current educational attainment on the 
        member district's salary schedule.  
           (c) A teacher who does not elect to return to the member 
        district according to this subdivision may exercise rights under 
        subdivision 5. 
           Subd. 5.  [RIGHTS OF OTHER TEACHERS.] (a) This subdivision 
        applies to a teacher who: 
           (1) has a continuing contract with the cooperative; and 
           (2) either did not have a continuing contract with any 
        member district or does not return to a member district 
        according to the procedures set forth in subdivision 4, 
        paragraph (b). 
           (b) By May 10 of the school year in which the cooperative 
        provides the notice required by subdivision 3, clause (1), the 
        cooperative shall must provide to each teacher described in 
        subdivision 4 and this subdivision a written notice of available 
        teaching positions in any member district to which the 
        cooperative was providing services at the time of dissolution.  
        Available teaching positions are all teaching positions that, 
        during the school year following dissolution: 
           (1) are positions for which the teacher is licensed; and 
           (2) are not assigned to a continuing contract teacher 
        employed by a member school district after any reasonable 
        realignments which may be necessary under the applicable 
        provisions of section 125.12, subdivision 6a or 6b, to 
        accommodate the seniority rights of teachers employed by the 
        member district. 
           (c) On or before June 1 of the school year in which the 
        cooperative provides the notice required by subdivision 3, 
        clause (1), any teacher wishing to do so must file with the 
        school board a written notice of the teacher's intention to 
        exercise the teacher's rights to an available teaching 
        position.  Available teaching positions shall must be offered to 
        teachers in order of their seniority within the dissolved 
        cooperative. 
           (d) Paragraph (e) applies to: 
           (1) a district that was a member of a dissolved 
        cooperative; or 
           (2) any other district that, except as a result of open 
        enrollment according to section 120.062, provides essentially 
        the same instruction provided by the dissolved cooperative to 
        pupils enrolled in a former member district. 
           (e) For five years following dissolution of a cooperative, 
        a district to which this paragraph applies may not appoint a new 
        teacher or assign a probationary or provisionally licensed 
        teacher to any position requiring licensure in a field in which 
        the dissolved cooperative provided instruction until the 
        following conditions are met: 
           (1) a district to which this paragraph applies has provided 
        each teacher formerly employed by the dissolved cooperative, who 
        holds the requisite license, written notice of the position; and 
           (2) no teacher holding the requisite license has filed a 
        written request to be appointed to the position with the school 
        board within 30 days of receiving the notice. 
           If no teacher files a request according to clause (2), the 
        district may fill the position as it sees fit.  During any part 
        of the school year in which dissolution occurs and the first 
        school year following dissolution, a teacher may file a request 
        for an appointment according to this paragraph regardless of 
        prior contractual commitments with other member districts.  
        Available teaching positions shall must be offered to teachers 
        in order of their seniority on a combined seniority list of the 
        teachers employed by the cooperative and the appointing district.
           (f) A teacher appointed according to this subdivision is 
        not required to serve a probationary period.  The teacher shall 
        receive credit on the appointing district's salary schedule for 
        the teacher's years of continuous service under contract with 
        the cooperative and the member district and the teacher's 
        educational attainment at the time of appointment or shall 
        receive a comparable salary, whichever is less.  The teacher 
        shall receive credit for accumulations of sick leave and rights 
        to severance benefits as if the teacher had been employed by the 
        member district during the teacher's years of employment by the 
        cooperative. 
           Subd. 6.  [RIGHTS OF A TEACHER WITH A CONTINUING CONTRACT 
        IN A MEMBER DISTRICT UPON WITHDRAWAL OF THE DISTRICT.] (a) This 
        subdivision applies to a teacher previously employed by a member 
        district who: 
           (1) had a continuing contract with the member district 
        which withdraws from a cooperative; 
           (2) has been continuously employed immediately after 
        leaving that member district by one or more cooperatives that 
        provided instruction to pupils enrolled in that member district; 
        and 
           (3) is either a probationary teacher or has a continuing 
        contract with the cooperative from which the member district is 
        withdrawing. 
           (b) A teacher may elect to resume the teacher's continuing 
        contract with the withdrawing district by which the teacher was 
        previously employed by filing a written notice of the election 
        with the withdrawing school board on or before March 20.  
        Failure by a teacher to file written notice by March 20 of the 
        year the teacher receives a notice according to subdivision 3 
        constitutes a waiver of a teacher's rights under this 
        subdivision. 
           The member district shall must make reasonable realignments 
        of positions to accommodate the seniority rights of a teacher 
        electing to resume continuing contract rights in the member 
        district according to this subdivision. 
           Upon returning, the teacher shall receive credit for: 
           (1) all years of continuous service under contract with the 
        cooperative and the member district for all purposes relating to 
        seniority, compensation, and employment benefits; and 
           (2) the teacher's current educational attainment on the 
        member district's salary schedule.  
           Subd. 7.  [RIGHTS OF A TEACHER PLACED ON UNREQUESTED LEAVE 
        UPON WITHDRAWAL.] (a) This subdivision applies to a teacher who 
        is placed on unrequested leave of absence, according to section 
        125.12, subdivision 6a or 6b, in the year in which the 
        cooperative provides the notice required by subdivision 3, 
        clause (2), by a cooperative from which a member district is 
        withdrawing. 
           This subdivision applies to a district that, except as a 
        result of open enrollment according to section 120.062, provides 
        essentially the same instruction provided by the cooperative to 
        pupils enrolled in the withdrawing district. 
           (b) A teacher shall be appointed by a district to which 
        this subdivision applies to an available teaching position which:
           (1) is in a field of licensure in which pupils enrolled in 
        the withdrawing district received instruction from the 
        cooperative; and 
           (2) is within the teacher's field of licensure. 
           For the purpose of this paragraph, an available teaching 
        position means any position that is vacant or would otherwise be 
        occupied by a probationary or provisionally licensed teacher. 
           (c) A board may not appoint a new teacher to an available 
        teaching position unless no teacher holding the requisite 
        license on unrequested leave from the cooperative has filed a 
        written request for appointment.  The request shall must be 
        filed with the board of the appointing district within 30 days 
        of receiving written notice from the appointing board that it 
        has an available teaching position.  If no teacher holding the 
        requisite license files a request according to this paragraph, 
        the district may fill the position as it sees fit.  Available 
        teaching positions shall must be offered to teachers in order of 
        their seniority on a combined seniority list of the teachers 
        employed by the cooperative and the withdrawing member district. 
           (d) A teacher appointed according to this subdivision is 
        not required to serve a probationary period.  The teacher shall 
        receive credit on the appointing district's salary schedule for 
        the teacher's years of continuous service under contract with 
        the cooperative and the member district and the teacher's 
        educational attainment at the time of appointment or shall 
        receive a comparable salary, whichever is less.  The teacher 
        shall receive credit for accumulations of sick leave and rights 
        to severance benefits as if the teacher had been employed by the 
        member district during the teacher's years of employment by the 
        cooperative.  
           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 
        36 months of the dissolution of the cooperative and is created 
        as a result of the dissolution of the cooperative.  A position 
        shall must 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 must 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 must 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.  
           Subd. 9.  [NONLICENSED EMPLOYEES UPON WITHDRAWAL.] (a) A 
        nonlicensed employee of a cooperative whose 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 
        36 months of the withdrawal and is created as a result of the 
        withdrawal of the member district.  A position shall must 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 must 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 must 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. 
           Subd. 10.  [COOPERATIVES THAT MERGE.] Notwithstanding 
        subdivisions 1 to 9, the following paragraphs apply to 
        cooperatives that merge. 
           (a) If a cooperative enters into an agreement to merge with 
        another cooperative, the boards of the cooperatives and the 
        exclusive representatives of the teachers in the cooperatives 
        and the teachers in each member district may negotiate a plan to 
        assign or employ in a member district or to place on unrequested 
        leave of absence all teachers whose positions are discontinued 
        as a result of the agreement.  If plans are negotiated and if 
        the boards determine the plans are compatible, the boards shall 
        must include the plans in their agreement. 
           (b) If compatible plans are not negotiated under paragraph 
        (a) by the March 1 preceding the effective date of the merger of 
        the cooperatives, subdivisions 2 to 9 apply to teachers and 
        nonlicensed employees whose positions are terminated as a result 
        of an agreement to merge cooperatives.  
           Sec. 77.  Minnesota Statutes 1996, 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. 78.  Minnesota Statutes 1996, 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. 79.  Minnesota Statutes 1996, section 122.91, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [MEETING WITH REPRESENTATIVES.] Before entering 
        into an agreement, the school board of each member district must 
        meet and confer with the exclusive representatives of the 
        teachers of each school district proposing to enter the 
        education district.  
           Sec. 80.  Minnesota Statutes 1996, section 122.91, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NOTICE AND HEARING.] Before entering into an 
        agreement, the school board of each member district shall must 
        publish a summary of the proposed agreement and its effect upon 
        the district at least once in a newspaper of general circulation 
        in the district a summary of the proposed agreement and its 
        effect upon the district.  The board shall must conduct a public 
        hearing on the proposed agreement not more than ten days after 
        the notice and at least 30 days before entering into an 
        agreement.  
           Sec. 81.  Minnesota Statutes 1996, section 122.91, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SERVICE COOPERATIVES.] If requested, service 
        cooperatives shall must provide assistance to districts in 
        establishing education districts.  The assistance may include 
        determination of appropriate boundaries of the education 
        district and development of the agreement.  The service 
        cooperatives may provide any other services requested by the 
        education district. 
           Sec. 82.  Minnesota Statutes 1996, section 122.93, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTRACTS.] The board may enter into contracts 
        with school districts and other public and private agencies to 
        provide services needed in the education district.  
           Sec. 83.  Minnesota Statutes 1996, section 122.93, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DISCONTINUING GRADES.] The board of a school 
        district that is a member of an education district may 
        discontinue any of kindergarten through grade 12 or part of 
        those grades and provide instruction for those grades or parts 
        of grades within the education district.  
           Sec. 84.  Minnesota Statutes 1996, section 122.95, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] For the purposes of this 
        section, "teacher" has the meaning given it in section 125.12, 
        subdivision 1, except that it does not include a superintendent. 
           Sec. 85.  Minnesota Statutes 1996, section 122.95, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [FILLING POSITIONS; NEGOTIATED AGREEMENTS.] 
        The school boards in all member districts and exclusive 
        bargaining representatives of the teachers in all member 
        districts may negotiate a plan for filling positions resulting 
        from implementation of the education district agreement.  If the 
        plan is negotiated among the member school districts and the 
        exclusive bargaining representative of each member school 
        district and unanimously agreed upon, in writing, the education 
        district shall must include the plan in the education district 
        agreement.  If a plan is not negotiated, the education district 
        is governed by subdivision 2.  
           Sec. 86.  Minnesota Statutes 1996, section 122.95, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FILLING POSITIONS.] (a) When an education 
        district board or a member board is filling a position resulting 
        from implementation of the agreement, the board may offer the 
        position to a teacher currently employed by a member district 
        according to the exchange teacher provisions of section 125.13. 
           (b) If the position is not filled by a currently employed 
        teacher, the board shall must offer the position to an available 
        teacher in the order of seniority in fields of licensure on a 
        combined seniority list of all available teachers in the member 
        districts.  For the purpose of establishing a combined seniority 
        list, each school district must be considered to have started 
        school each year on the same date.  An available teacher is a 
        teacher in a member district who:  
           (1) was placed on unrequested leave of absence by a member 
        district, according to section 125.12, subdivision 6a or 6b, or 
        was terminated according to section 125.17, subdivision 11, not 
        more than one year before the initial formation of an education 
        district as a result of an intention to enter into an education 
        district agreement; 
           (2) was placed on unrequested leave of absence by a member 
        district, according to section 125.12, subdivision 6a or 6b, or 
        was terminated according to section 125.17, subdivision 11, as a 
        result of implementing the education district agreement, after 
        the formation of the education district; or 
           (3) is placed on unrequested leave of absence by a member 
        district, according to section 125.12, subdivision 6a or 6b, or 
        is terminated according to section 125.17, subdivision 11, as a 
        result of implementing the education district, in the same year 
        the position is filled. 
           (c) If no currently employed teacher or available teacher 
        accepts the position, the board may fill the position with any 
        other teacher.  
           (d) Any teacher who has been placed on unrequested leave of 
        absence or who has been terminated has a right to a position 
        only as long as the teacher has a right to reinstatement in a 
        member district under section 125.12, subdivision 6a or 6b, or 
        125.17, subdivision 11.  
           Sec. 87.  Minnesota Statutes 1996, section 122.95, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DETERMINATION OF REASON FOR LEAVE.] When a 
        school board that intends to enter into an education district 
        agreement, and at the time a school board that has entered into 
        an education district agreement places a teacher on unrequested 
        leave of absence, according to section 125.12, subdivision 6a or 
        6b, or terminates a teacher's services under section 125.17, 
        subdivision 11, the board shall must make a determination 
        whether the placement or termination is a result of implementing 
        the education district agreement.  That determination shall must 
        be included in the notice of proposed placement or termination, 
        may be reviewed at a hearing upon request of the teacher, 
        and shall must be included in the notice of final action of the 
        board.  If the determination is not disputed by the teacher 
        before June 1 or the final date required for action by the 
        board, the teacher shall be deemed to acquiesce in the board's 
        determination.  
           Sec. 88.  Minnesota Statutes 1996, section 123.35, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [LIMITATION ON PARTICIPATION AND FINANCIAL 
        SUPPORT.] (a) No school A district shall must not be required by 
        any type of formal or informal agreement except an agreement to 
        provide building space according to paragraph (f), including a 
        joint powers agreement, or membership in any cooperative unit 
        defined in section 123.35, subdivision 19b, paragraph (d), to 
        participate in or provide financial support for the purposes of 
        the agreement for a time period in excess of one fiscal year, or 
        the time period set forth in this subdivision.  Any agreement, 
        part of an agreement, or other type of requirement to the 
        contrary is void. 
           (b) This subdivision shall not affect the continued 
        liability of a school district for its share of bonded 
        indebtedness or other debt incurred as a result of any agreement 
        before July 1, 1993.  The school district is liable only until 
        the obligation or debt is discharged and only according to the 
        payment schedule in effect on July 1, 1993, except that the 
        payment schedule may be altered for the purpose of restructuring 
        debt or refunding bonds outstanding on July 1, 1993, if the 
        annual payments of the school district are not increased and if 
        the total obligation of the school district for its share of 
        outstanding bonds or other debt is not increased. 
           (c) To cease participating in or providing financial 
        support for any of the services or activities relating to the 
        agreement or to terminate participation in the agreement, the 
        school board shall must adopt a resolution and notify other 
        parties to the agreement of its decision on or before February 1 
        of any year.  The cessation or withdrawal shall be effective 
        June 30 of the same year except that for a member of an 
        education district organized under sections 122.91 to 122.95 or 
        an intermediate district organized under chapter 136D, cessation 
        or withdrawal shall be effective June 30 of the following fiscal 
        year.  At the option of the school board, cessation or 
        withdrawal may be effective June 30 of the following fiscal year 
        for a district participating in any type of agreement.  
           (d) Before issuing bonds or incurring other debt, the 
        governing body responsible for implementing the agreement shall 
        must adopt a resolution proposing to issue bonds or incur other 
        debt and the proposed financial effect of the bonds or other 
        debt upon each participating district.  The resolution shall 
        must be adopted within a time sufficient to allow the school 
        board to adopt a resolution within the time permitted by this 
        paragraph and to comply with the statutory deadlines set forth 
        in sections 122.895, 125.12, and 125.17.  The governing body 
        responsible for implementing the agreement shall notify each 
        participating school board of the contents of the resolution.  
        Within 120 days of receiving the resolution of the governing 
        body, the school board of the participating district shall adopt 
        a resolution stating: 
           (1) its concurrence with issuing bonds or incurring other 
        debt; 
           (2) its intention to cease participating in or providing 
        financial support for the service or activity related to the 
        bonds or other debt; or 
           (3) its intention to terminate participation in the 
        agreement. 
           A school board adopting a resolution according to clause 
        (1) is liable for its share of bonded indebtedness or other debt 
        as proposed by the governing body implementing the agreement.  A 
        school board adopting a resolution according to clause (2) is 
        not liable for the bonded indebtedness or other debt, as 
        proposed by the governing body, related to the services or 
        activities in which the district ceases participating or 
        providing financial support.  A school board adopting a 
        resolution according to clause (3) is not liable for the bonded 
        indebtedness or other debt proposed by the governing body 
        implementing the agreement. 
           (e) After July 1, 1993, a district is liable according to 
        paragraph (d) for its share of bonded indebtedness or other debt 
        incurred by the governing body implementing the agreement to the 
        extent that the bonds or other debt are directly related to the 
        services or activities in which the district participates or for 
        which the district provides financial support.  The district has 
        continued liability only until the obligation or debt is 
        discharged and only according to the payment schedule in effect 
        at the time the governing body implementing the agreement 
        provides notice to the school board, except that the payment 
        schedule may be altered for the purpose of refunding the 
        outstanding bonds or restructuring other debt if the annual 
        payments of the district are not increased and if the total 
        obligation of the district for the outstanding bonds or other 
        debt is not increased. 
           (f) A school district that is a member of a cooperative 
        unit as defined in subdivision 19b, paragraph (d), may obligate 
        itself to participate in and provide financial support for an 
        agreement with a cooperative unit to provide school building 
        space for a term not to exceed two years with an option on the 
        part of the district to renew for an additional two years.  
           Sec. 89.  Minnesota Statutes 1996, 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 
        section 123.35, 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 children, 
        families, and learning 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 must 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) 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. 90.  Minnesota Statutes 1996, section 123.35, 
        subdivision 21, is amended to read: 
           Subd. 21.  [APPEAL TO COMMISSIONER.] If a cooperative unit 
        as defined in subdivision 19b, paragraph (d), denies membership 
        in the unit to a school district, the school district may appeal 
        to the commissioner of children, families, and learning.  The 
        commissioner may require the cooperative unit to grant the 
        district membership.  
           Sec. 91.  Minnesota Statutes 1996, 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 must not enter 
        into the agreement until the question has been submitted to the 
        voters of the district at a special election.  This election 
        shall must 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. 92.  Minnesota Statutes 1996, section 123.351, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GOVERNING BOARD.] (a) The center shall must 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 boards.  Each participating school district 
        shall must have at least one member on the center board.  The 
        center board shall must choose an administrative officer to 
        administer center 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 center 
        board shall must 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 must be 
        filled by the appropriate school board within 90 days.  A person 
        appointed to the center board shall qualify as a center 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 must be at a 
        time mutually agreed upon by center board members.  At this 
        meeting, the center board shall must choose its officers and 
        conduct any other necessary organizational business. Thereafter 
        the center board shall must meet on the first of July 1 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 must 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. 93.  Minnesota Statutes 1996, 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 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 must 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 center 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 must be offered as 
        a component of the comprehensive curriculum offered by each of 
        the participating school districts.  Graduation shall must 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. 94.  Minnesota Statutes 1996, 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 A participating school district or member 
        shall must not 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 must 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. 95.  Minnesota Statutes 1996, section 123.351, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ADDITION AND WITHDRAWAL OF DISTRICTS.] Upon 
        approval by majority vote of a school board and of the center 
        board, an adjoining school district may become a member in the 
        center and be governed by the provisions of this section and the 
        agreement in effect. 
           Any participating district may withdraw from the center and 
        from the agreement in effect by a majority vote of the full 
        board membership of the participating school district desiring 
        withdrawal and upon compliance with provisions in the agreement 
        establishing the center.  Upon receipt of the withdrawal 
        resolution reciting the necessary facts, the center board shall 
        must file a certified copy with the county auditors of the 
        counties affected.  The withdrawal shall become effective at the 
        end of the next following school year but the withdrawal shall 
        not affect the continued liability of the withdrawing district 
        for bonded indebtedness it incurred prior to the effective 
        withdrawal date.  
           Sec. 96.  Minnesota Statutes 1996, section 123.351, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [DISSOLUTION.] The boards of each participating 
        district may agree to dissolve a center effective at the end of 
        any school year or at an earlier time as they may mutually 
        agree.  A dissolution shall must be accomplished in accordance 
        with any applicable provisions of the agreement establishing the 
        center.  Upon receipt of the dissolution resolutions from the 
        boards of the participating districts, the center board shall 
        file a certified copy with the county auditors of the counties 
        affected.  The dissolution shall must not affect the continuing 
        liability of the previously participating districts for bonded 
        indebtedness incurred prior to the dissolution, or for other 
        continuing obligations, including reemployment insurance.  
           Sec. 97.  Minnesota Statutes 1996, section 123.582, 
        subdivision 2, is amended to read: 
           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 must 
        provide those programs and services which are determined, 
        pursuant to subdivision 7, to be priority needs of the 
        particular region and shall must assist in meeting special needs 
        which arise from fundamental constraints upon individual members.
           Sec. 98.  Minnesota Statutes 1996, section 124.2725, 
        subdivision 15, is amended to read: 
           Subd. 15.  [RETIREMENT AND SEVERANCE LEVY.] A cooperating 
        or combined district that levied under Minnesota Statutes 1996, 
        section 124.2725, 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. 99.  Minnesota Statutes 1996, section 124.511, is 
        amended to read: 
           124.511 [SURPLUS COUNTY SCHOOL TAX FUNDS; DISTRIBUTION.] 
           When, by reason of reorganization of districts, there is a 
        surplus in the county treasury to the credit of the county 
        school tax fund on account of an excessive tax levy 
        heretofore already made, and when there is no need therefor, for 
        the surplus, shall be paid by the county treasurer shall pay the 
        surplus to the reorganized district upon the order of the county 
        board.  
           Sec. 100.  Minnesota Statutes 1996, 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, a SC, 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. 101.  Minnesota Statutes 1997 Supplement, section 
        124C.45, subdivision 1a, is amended to read: 
           Subd. 1a.  [RESERVE REVENUE.] Each school district that is 
        a member of an area learning center must reserve revenue in an 
        amount equal to at least 90 percent of the district average 
        general education revenue less compensatory revenue unit times 
        the number of pupil units attending an area learning center 
        program under this section.  The amount of reserved revenue 
        under this subdivision may only be spent on program costs 
        associated with the area learning center.  Compensatory revenue 
        must be allocated according to section 124A.28, subdivision 1a.  
           Sec. 102.  Minnesota Statutes 1996, section 124C.49, is 
        amended to read: 
           124C.49 [DESIGNATION AS CENTER.] 
           The commissioner of children, families, and learning, in 
        cooperation with the state board of education, shall establish a 
        process for state designation and approval of area learning 
        centers that meet the provisions of sections 124C.45 to 
        124C.48.  Any process for designating and approving an area 
        learning center must emphasize the importance of having the area 
        learning center serve students who have dropped out of school, 
        are homeless, are eligible to receive free or reduced priced 
        lunch, have been suspended or expelled, have been declared 
        truant or are pregnant or parents. 
           Sec. 103.  [REPEALER.] 
           Minnesota Statutes 1996, sections 122.532, subdivision 1; 
        and 122.541, subdivision 3, are repealed. 
           Sec. 104.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             122.01                         122A.01
             122.02                         122A.02
             122.03                         122A.03
             122.21                         122A.05
             122.22, subd. 1                122A.06, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 4                         subd. 4
                     subd. 5                         subd. 5
                     subd. 6                         subd. 6
                     subd. 7                         subd. 7
                     subd. 7a                        subd. 8
                     subd. 8                         subd. 9
                     subd. 9                         subd. 10
                     subd. 11                        subd. 11
                     subd. 13                        subd. 12
                     subd. 14                        subd. 13
                     subd. 18                        subd. 14
                     subd. 20                        subd. 15
                     subd. 21                        subd. 16
             122.23, subd. 1                122A.10, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 2b                        subd. 4
                     subd. 3                         subd. 5
                     subd. 4                         subd. 6
                     subd. 5                         subd. 7
                     subd. 6                         subd. 8
                     subd. 7                         subd. 9
                     subd. 8                         subd. 10
                     subd. 9                         subd. 11
                     subd. 10                        subd. 12
                     subd. 11                        subd. 13
                     subd. 12                        subd. 14
                     subd. 13                        subd. 15
                     subd. 14                        subd. 16
                     subd. 15                        subd. 17
                     subd. 16                        subd. 18
                     subd. 16c                       subd. 19
                     subd. 18                        subd. 20
                     subd. 18a                       subd. 21
                     subd. 19                        subd. 22
                     subd. 20                        subd. 23
             127.25                         122A.11
             122.535                        122A.12
             122.541, subd. 1               122A.14, subd. 1
                      subd. 2                        subd. 2
                      subd. 4                        subd. 3
                      subd. 5                        subd. 4
                      subd. 6                        subd. 5
                      subd. 7                        subd. 6
             122.895, subd. 1               122A.15, subd. 1
                      subd. 2                        subd. 2
                      subd. 2a                       subd. 3
                      subd. 3                        subd. 4
                      subd. 4                        subd. 5
                      subd. 5                        subd. 6
                      subd. 6                        subd. 7
                      subd. 7                        subd. 8
                      subd. 8                        subd. 9
                      subd. 9                        subd. 10
                      subd. 10                       subd. 11
             122.241                        122A.17
             122.242                        122A.18
             122.243                        122A.19
             122.244                        122A.20
             122.245, subd. 1               122A.21, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 4
             124.2725, subd. 15             122A.21, subd. 3
             122.246                        122A.22
             122.247, subd. 1               122.23, subd. 1
                      subd. 2                       subd. 2
                      subd. 2a                      subd. 3
                      subd. 3                       subd. 4
             122.248                        122A.24
             122.25                         122A.26
             122.32                         122A.30
             122.34                         122A.31
             122.355                        122A.32
             122.41                         122A.34
             122.43                         122A.35
             122.44                         122A.36
             122.45, subd. 1                122A.37, subd. 1
                     subd. 2                         subd. 2
                     subd. 3a                        subd. 3
             122.46                         122A.38
             122.47                         122A.39
             122.48                         122A.40
             122.51                         122A.41
             122.531, subd. 1               122A.43, subd. 1
                      subd. 1a                       subd. 2
                      subd. 2                        subd. 3
                      subd. 2a                       subd. 4
                      subd. 2b                       subd. 5
                      subd. 2c                       subd. 6
                      subd. 2d                       subd. 7
                      subd. 4                        subd. 8
                      subd. 4a                       subd. 9
                      subd. 5a                       subd. 10
                      subd. 6                        subd. 11
                      subd. 9                        subd. 12
             122.5311                       122A.44
             122.532, subd. 2               122A.45, subd. 1
                      subd. 3                        subd. 2
                      subd. 3a                       subd. 3
                      subd. 4                        subd. 4
             122.533                        122A.46
             124.511                        122A.47
             121.155                        122A.48
             122.539                        122A.49
             122.91, subd. 1                122A.50, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 3                         subd. 4
                     subd. 3a                        subd. 5
                     subd. 4                         subd. 6
                     subd. 6                         subd. 7
             122.92                         122A.51
             122.93, subd. 1                122A.52, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 4                         subd. 4
                     subd. 5                         subd. 5
                     subd. 6                         subd. 6
                     subd. 8                         subd. 7
             122.94, subd. 1                122A.53, subd. 1
                     subd. 4                         subd. 2
                     subd. 5                         subd. 3
             122.95, subd. 1                122A.54, subd. 1
                     subd. 1a                        subd. 2
                     subd. 2                         subd. 3
                     subd. 3                         subd. 4
                     subd. 4                         subd. 5
             123.582                        122A.56
             123.351, subd. 1               122A.57, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 4                        subd. 4
                      subd. 5                        subd. 5
                      subd. 6                        subd. 6
                      subd. 7                        subd. 7
                      subd. 8                        subd. 8
                      subd. 8a                       subd. 9
                      subd. 9                        subd. 10
                      subd. 10                       subd. 11
             123.35, subd. 19b              122A.58, subd. 1
                      subd. 21                       subd. 2
             122.98                         122A.59
             124.193                        122A.60
             124C.45, subd. 1               122A.65, subd. 1
                      subd. 1a                       subd. 2
                      subd. 2                        subd. 3
                      subd. 3                        subd. 4
             124C.46                        122A.66
             124C.47                        122A.67
             124C.48                        122A.68
             124C.49                        122A.69
                                   ARTICLE 6
                                  CHAPTER 123A 
                     POWERS AND DUTIES OF SCHOOL DISTRICTS 
           Section 1.  Minnesota Statutes 1996, section 120.59, is 
        amended to read: 
           120.59 [PURPOSE OF FLEXIBLE LEARNING YEAR PROGRAMS.] 
           The purpose of Sections 120.59 to 120.67 is to authorize 
        districts to evaluate, plan and employ the use of flexible 
        learning year programs.  It is anticipated that the open 
        selection of the type of flexible learning year operation from a 
        variety of alternatives will allow each district which seeks 
        seeking to utilize this concept to suitably fulfill the 
        educational needs of its pupils.  These alternatives shall must 
        include, but not be limited to, various 45-15 plans, 
        four-quarter plans, quinmester plans, extended learning year 
        plans, flexible all-year plans, and four-day week plans.  
           Sec. 2.  Minnesota Statutes 1996, section 120.60, is 
        amended to read: 
           120.60 [DEFINITION OF FLEXIBLE LEARNING YEAR.] 
           "Flexible learning year program" means any district plan 
        approved by the state board of education which that utilizes 
        buildings and facilities during the entire year and/or which or 
        that provides forms of optional scheduling of pupils and 
        personnel during the learning year in elementary and secondary 
        schools or residential facilities for children with a disability.
           Sec. 3.  Minnesota Statutes 1996, section 120.61, is 
        amended to read: 
           120.61 [ESTABLISHMENT OF FLEXIBLE LEARNING YEAR PROGRAM.] 
           The board of any district, with the approval of the state 
        board of education, may establish and operate a flexible 
        learning year program in one or more of the day or residential 
        facilities for children with a disability within the district.  
           Sec. 4.  Minnesota Statutes 1996, section 120.62, is 
        amended to read: 
           120.62 [DIVISION OF CHILDREN INTO GROUPS.] 
           The board of any district operating a flexible learning 
        year program in one or more of the facilities within the 
        district shall must divide the students of each selected 
        facility into as many groups as necessary to accommodate this 
        program.  Students of the same family shall must be placed in 
        the same group unless one or more of these students is enrolled 
        in a special education class or unless the parent or guardian of 
        these students requests that the students be placed in different 
        groups.  No board shall may discriminate on the basis of race, 
        color, creed, religion, marital status, status with regard to 
        public assistance, sex, or national origin when assigning pupils 
        to attendance groups pursuant to this section.  
           Sec. 5.  Minnesota Statutes 1996, section 120.63, is 
        amended to read: 
           120.63 [PUBLIC HEARING BEFORE IMPLEMENTATION.] 
           Prior to Before implementing a flexible learning year 
        program in any facility of the district, the board shall must 
        negotiate with the teachers, principals, assistant principals, 
        supervisory personnel and employees to the extent required by 
        the public employment labor relations act, and shall must 
        consult with the parents of pupils who would be affected by the 
        change, and with the community at large.  These procedures shall 
        must include at least three informational meetings for which the 
        board has given published notice to the teachers and employees 
        and to the parents of pupils affected.  
           Sec. 6.  Minnesota Statutes 1996, section 120.64, is 
        amended to read: 
           120.64 [ASSIGNMENT OF TEACHERS.] 
           Subdivision 1.  [IMPLEMENTING PROGRAM.] In districts where 
        a flexible learning year program is implemented in fewer than 
        all of the facilities maintained by the district, the board of 
        the district shall must make every reasonable effort to assign 
        qualified teachers who prefer a traditional schedule to 
        facilities of the same level retaining a traditional schedule. 
           Subd. 2.  [TEACHER SCHEDULE.] A full-time teacher currently 
        employed by a district which that converts to a flexible 
        learning year program shall may not, without the teacher's 
        written consent, be required to teach under this program (1) 
        more or less than the number of scheduled days or their 
        equivalent the facilities of the district were maintained during 
        the year preceding implementation of the flexible learning year 
        program; (2) in a period of the calendar year substantially 
        different from the period in which the teacher taught during the 
        year preceding implementation of the flexible learning year 
        program. 
           Subd. 3.  [CONTRACT RIGHTS; PROGRAM ADOPTION.] In no event 
        shall may a teacher's continuing contract rights to a position 
        held the year preceding implementation of a flexible learning 
        year program or teaching experience earned during a probationary 
        period the year preceding implementation be lost or impaired 
        upon adoption of a flexible learning year program.  If the year 
        of teaching preceding implementation was the end of a 
        probationary period, the continuing contract right to a full 
        year's contract which normally would be acquired for the next 
        succeeding learning year shall must be acquired in the year of 
        adoption of the flexible program. 
           Subd. 4.  [CONTRACT FOR LEARNING YEAR.] Any district 
        operating a flexible learning year program shall must enter into 
        one contract governing the entire learning year with each 
        teacher employed in a flexible program.  If individual teachers 
        contract to teach less than a period of 175 days during a 
        learning year, each 175 days of employment accrued during any 
        five-year period after the adoption of a flexible learning year 
        program shall must be deemed consecutive and shall 
        constitute constitutes a full year's employment for purposes of 
        establishing and retaining continuing contract rights to a full 
        learning year position pursuant to sections 125.12, subdivisions 
        3 and 4, and 125.17, subdivisions 2 and 3.  A teacher who has 
        not been discharged or advised of a refusal to renew the 
        teacher's contract by the applicable date, as specified in 
        section 125.12 or 125.17, in the year in which the teacher will 
        complete the requisite number of days for securing a continuing 
        contract shall must have a continuing full learning year 
        contract with the district. 
           Subd. 5.  [CONTRACT RIGHTS; TERMINATION OF PROGRAM.] 
        Continuing contract rights established pursuant to this 
        section shall must not be impaired or lost by the termination of 
        a flexible learning year program. 
           Sec. 7.  Minnesota Statutes 1996, section 120.66, is 
        amended to read: 
           120.66 [POWERS AND DUTIES OF THE STATE BOARD.] 
           Subdivision 1.  [POWERS AND DUTIES.] The state board of 
        education shall must: 
           (1) promulgate rules necessary to the operation of sections 
        120.59 to 120.67; 
           (2) cooperate with and provide supervision of flexible 
        learning year programs to determine compliance with the 
        provisions of sections 120.59 to 120.67, the state board 
        standards and qualifications, and the proposed program as 
        submitted and approved; 
           (3) provide any necessary adjustments of (a) attendance and 
        membership computations and (b) the dates and percentages of 
        apportionment of state aids; and 
           (4) consistent with the definition of "average daily 
        membership" in section 124.17, subdivision 2, furnish the board 
        of a district implementing a flexible learning year program with 
        a formula for computing average daily membership.  This formula 
        shall must be computed so that tax levies to be made by the 
        district, state aids to be received by the district, and any and 
        all other formulas based upon average daily membership are not 
        affected solely as a result of adopting this plan of instruction.
           Subd. 2.  [LIMITATIONS.] Sections 120.59 to 120.67 shall 
        may not be construed to authorize the state board to require the 
        establishment of a flexible learning year program in any 
        district in which the board has not voted to establish, 
        maintain, and operate such a program. 
           Sec. 8.  Minnesota Statutes 1996, section 121.585, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATE BOARD DESIGNATION.] An area learning 
        center designated by the state must be a site.  To be 
        designated, a district or center must demonstrate to the 
        commissioner of children, families, and learning that it will: 
           (1) provide a program of instruction that permits pupils to 
        receive instruction throughout the entire year; and 
           (2) maintain a record system that, for purposes of section 
        124.17, permits identification of membership attributable to 
        pupils participating in the program.  The record system and 
        identification must ensure that the program will not have the 
        effect of increasing the total number of pupil units 
        attributable to an individual pupil as a result of a learning 
        year program. 
           Sec. 9.  Minnesota Statutes 1996, section 121.585, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CONTRACTS.] A district may contract with a 
        licensed employee to provide services in a learning year program 
        that are in addition to the services provided according to the 
        master contract of employment for teachers or an equivalent 
        contract for licensed employees who are not teachers.  These 
        additional services and compensation, if any, for the services 
        shall must not become a part of the employee's continuing 
        contract rights under section 125.12 or 125.17.  
           Sec. 10.  Minnesota Statutes 1996, section 121.585, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REVENUE COMPUTATION AND REPORTING.] Aid and levy 
        revenue computations shall must be based on the total number of 
        hours of education programs for pupils in average daily 
        membership for each fiscal year.  For purposes of section 
        124.17, average daily membership shall be computed by dividing 
        the total number of hours of participation for the fiscal year 
        by the minimum number of hours for a year determined for the 
        appropriate grade level.  Hours of participation that occur 
        after the close of the regular instructional year and before 
        July 1 shall must be attributed to the following fiscal year.  
        Thirty hours may be used for teacher workshops, staff 
        development, or parent-teacher conferences.  As part of each 
        pilot program, the department of children, families, and 
        learning and each district must report and evaluate the changes 
        needed to adjust the dates of the fiscal year for aid and levy 
        computation and fiscal year reporting.  For revenue computation 
        purposes, the learning year program shall generate revenue based 
        on the formulas for the fiscal year in which the services are 
        provided. 
           State aid and levy revenue computation for the learning 
        year programs begins July 1, 1988, for fiscal year 1989. 
           Sec. 11.  Minnesota Statutes 1996, section 121.904, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] School District revenues shall 
        must be recognized and reported on the district books of account 
        in accordance with this section.  
           Sec. 12.  Minnesota Statutes 1996, section 121.904, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICABILITY TO PERIOD AND FUND.] Except as 
        provided in this section, revenues shall must be recorded in a 
        manner which clearly indicates that they are applicable to a 
        specific accounting period and fund.  
           Sec. 13.  Minnesota Statutes 1996, section 121.904, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RECEIVABLE.] Receivables shall must be recorded 
        in a manner which clearly reflects the amounts of money due to a 
        particular fund from public and private sources at the date of 
        each accounting statement. 
           Sec. 14.  Minnesota Statutes 1997 Supplement, section 
        121.904, subdivision 4a, is amended to read: 
           Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
        settlement revenue" means the current, delinquent, and 
        manufactured home property tax receipts collected by the county 
        and distributed to the school district, including distributions 
        made pursuant to section 279.37, subdivision 7, and excluding 
        the amount levied pursuant to section 124.914, subdivision 1. 
           (b) In June of each year, the school district shall must 
        recognize as revenue, in the fund for which the levy was made, 
        the lesser of:  
           (1) the May, June, and July school district tax settlement 
        revenue received in that calendar year; or 
           (2) the sum of the state aids and credits enumerated in 
        section 124.155, subdivision 2, which are for the fiscal year 
        payable in that fiscal year plus an amount equal to the levy 
        recognized as revenue in June of the prior year plus 31 percent 
        of the amount of the levy certified in the prior calendar year 
        according to section 124A.03, subdivision 2; or 
           (3)(i) 7.0 percent of the lesser of the amount of the 
        general education levy certified in the prior calendar year 
        according to section 124A.23, subdivision 2, or the difference 
        between the amount of the total general fund levy certified in 
        the prior calendar year and the sum of the amounts certified in 
        the prior calendar year according to sections 124A.03, 
        subdivision 2; 124.315, subdivision 4; 124.912, subdivisions 1, 
        paragraph (2), 2, and 3; 124.916, subdivisions 1, 2, and 3, 
        paragraphs (4), (5), and (6); and 124.918, subdivision 6; plus 
           (ii) 31 percent of the referendum levy certified in the 
        prior calendar year according to section 124A.03, subdivision 2; 
        plus 
           (iii) the entire amount of the levy certified in the prior 
        calendar year according to sections 124.315, subdivision 4; 
        124.912, subdivisions 1, paragraph (2), 2, and 3; 124.916, 
        subdivisions 1, 2, and 3, paragraphs (4), (5), and (6); and 
        124.918, subdivision 6. 
           (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 
        must 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. 15.  Minnesota Statutes 1996, section 121.904, 
        subdivision 4c, is amended to read: 
           Subd. 4c.  [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 same 
        calendar year the appropriation is made.  
           (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 must 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 children, families, and learning the amount 
        available to reduce the levy recognition percent computed under 
        this subdivision by January 5 of each year.  The commissioner of 
        children, families, and learning must notify school districts of 
        a change in the levy recognition percent by January 15 of the 
        same month. 
           (d) 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 children, families, and 
        learning 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 from the 
        prior fiscal year, a special adjustment payment shall must be 
        made to each school district with an operating referendum levy 
        that received an aid reduction when the levy recognition percent 
        was last increased.  The special adjustment payment shall must 
        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 children, 
        families, and learning 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.  
           (e) The commissioner of finance shall transfer from the 
        general fund to the education aids appropriations specified by 
        the commissioner of children, families, and learning, 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. 16.  Minnesota Statutes 1996, section 121.904, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DEVIATIONS FOOTNOTED.] Deviations from the 
        principles set forth in this section shall must be evaluated and 
        explained in footnotes to audited financial statements. 
           Sec. 17.  Minnesota Statutes 1996, section 121.906, is 
        amended to read: 
           121.906 [EXPENDITURES; REPORTING.] 
           Subdivision 1.  [RECOGNITION.] School District expenditures 
        shall must be recognized and reported on the district books of 
        account in accordance with this section. 
           There shall be Fiscal year-end recognition of expenditures 
        and the related offsetting liabilities must be recorded in each 
        fund in accordance with the uniform financial accounting and 
        reporting standards for Minnesota school districts.  
        Encumbrances outstanding at the end of the fiscal year do not 
        constitute expenditures or liabilities.  
           Deviations from the principles set forth in this 
        subdivision shall must be evaluated and explained in footnotes 
        to audited financial statements. 
           Subd. 2.  [ACCOUNTING.] Expenditures for any legal purpose 
        of the school district not accounted for elsewhere shall must be 
        accounted for in the general fund. 
           Sec. 18.  Minnesota Statutes 1996, section 121.908, is 
        amended to read: 
           121.908 [ACCOUNTING, BUDGETING AND REPORTING REQUIREMENT.] 
           Subdivision 1.  [UNIFORM FINANCIAL ACCOUNTING AND REPORTING 
        STANDARDS.] Each Minnesota school district shall must adopt the 
        uniform financial accounting and reporting standards for 
        Minnesota school districts provided for in guidelines adopted by 
        the department of children, families, and learning.  
           Subd. 2.  [AUDITED FINANCIAL STATEMENT.] Each district 
        shall must submit to the commissioner by August 15 of each year 
        an unaudited financial statement for the preceding fiscal year.  
        This statement shall must be submitted on forms prescribed by 
        the commissioner.  
           Subd. 3.  [STATEMENT FOR COMPARISON AND CORRECTION.] By 
        December 31 of the calendar year of the submission of the 
        unaudited financial statement, the district shall must provide 
        to the commissioner and state auditor an audited financial 
        statement prepared in a form which will allow comparison with 
        and correction of material differences in the unaudited 
        statement.  The audited financial statement must also provide a 
        statement of assurance pertaining to uniform financial 
        accounting and reporting standards compliance.  
           Subd. 3a.  [BUDGET APPROVAL.] Prior to July 1 of each year, 
        the school board of each district shall must approve and adopt 
        its revenue and expenditure budgets for the next school year.  
        The budget document so adopted shall must be considered an 
        expenditure-authorizing or appropriations document.  No funds 
        shall be expended by any board or district for any purpose in 
        any school year prior to the adoption of the budget document 
        which authorizes that expenditure, or prior to an amendment to 
        the budget document by the board to authorize the expenditure.  
        Expenditures of funds in violation of this subdivision shall be 
        considered unlawful expenditures.  
           Subd. 5.  [JOINT POWERS AGREEMENTS; SC'S, EDUCATION 
        DISTRICTS.] All governmental units formed by joint powers 
        agreements entered into by districts pursuant to section 120.17, 
        120.1701, 123.351, 471.59, or any other law and all service 
        cooperatives and education districts shall be are subject to the 
        provisions of this section.  
           Subd. 6.  [BENEFITS.] A school district providing early 
        retirement incentive payments under section 125.611, severance 
        pay under section 465.72, or health insurance benefits to 
        retired employees under section 471.61, must account for the 
        payments according to uniform financial accounting and reporting 
        standards. 
           Sec. 19.  Minnesota Statutes 1996, section 121.911, is 
        amended to read: 
           121.911 [CASH FLOW; SCHOOL DISTRICT REVENUES; BORROWING FOR 
        CURRENT OPERATING COSTS; CAPITAL EXPENDITURE DEFICITS.] 
           Subdivision 1.  [STATE AIDS PAYMENT.] The commissioner of 
        finance shall remit all payments of state aids to school 
        districts in conformance with the dates provided by law or, when 
        not so provided, with a schedule of aid payments to be 
        established by the commissioner of children, families, and 
        learning in consultation with other affected state agencies. 
           Subd. 2.  [TAXES.] The auditors or finance officers of 
        Minnesota counties shall remit all payments of taxes to 
        the school districts in conformance with the provisions of 
        section 276.11.  School Districts which have need for tax 
        remittance advances may secure them from the counties by making 
        formal requests in conformance with section 276.11. 
           Subd. 3.  [TAX AND AID ANTICIPATION CERTIFICATES.] 
        Minnesota school districts may issue tax and aid anticipation 
        certificates in conformance with the provisions of sections 
        124.71 to 124.76, with the additional provision that the 
        proceeds of such borrowing or any other method of borrowing 
        shall be recorded as liabilities of funds for which the taxes 
        were levied, or for which the aids are receivable.  Nothing in 
        this subdivision shall provide provides authority for borrowing 
        against the tax levies and aids of one school district fund for 
        the purpose of increasing the available cash balance of another 
        fund. 
           Subd. 4.  [BORROWING FOR OUTSTANDING BONDS.] Unless 
        otherwise provided by law, no a district shall must not, for the 
        purpose of increasing the available cash balance of another 
        fund, borrow or transfer funds from the building construction 
        fund, debt redemption fund, trust and agency fund, or from any 
        sinking fund for outstanding bonds issued for any purpose.  
        However, if the contemplated use for which funds were originally 
        placed in the building construction fund or a sinking fund is 
        afterwards abandoned or if a balance remains after the use is 
        accomplished, a district may devote these funds as provided in 
        section 475.65.  For the purpose of insuring fund integrity, on 
        determining that a district is in violation of this subdivision 
        or section 121.904, the commissioner shall require that such 
        district maintain separate bank accounts for building 
        construction funds, debt redemption funds, trust and agency 
        funds, and sinking funds for outstanding bonds.  Nothing in this 
        subdivision shall be construed to prohibit the use of common 
        bank accounts for other funds unless prohibited by law. 
           Subd. 5.  [DEFICIT FOR CAPITAL PROJECTS.] Upon approval by 
        the commissioner of children, families, and learning, a district 
        may incur a deficit in the reserve for operating capital account 
        for a period not to exceed three years to provide money for 
        capital projects.  The commissioner shall approve a description 
        of the project and a financial plan to recover the deficit shall 
        be approved by the commissioner prior to the initiation of the 
        project.  
           Sec. 20.  Minnesota Statutes 1997 Supplement, section 
        121.912, subdivision 1, is amended to read: 
           Subdivision 1.  [LIMITATIONS.] Except as provided in this 
        subdivision, sections 121.9121, 123.36, 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, the balance shall cancel to 
        the district's general fund.  
           Sec. 21.  Minnesota Statutes 1996, section 121.912, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TECHNICAL COLLEGES.] Money shall must not be 
        transferred from the post-secondary general fund to any other 
        operating or nonoperating fund.  
           Sec. 22.  Minnesota Statutes 1996, section 121.912, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [TRA AND FICA TRANSFER.] (a) Notwithstanding 
        subdivision 1, a district 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 must 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. 23.  Minnesota Statutes 1996, section 121.912, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITION.] As used in this section, "operating 
        fund" and "nonoperating fund" shall have the meanings specified 
        in the uniform financial accounting and reporting standards for 
        Minnesota school districts.  Any transfer for a period in excess 
        of one year shall be deemed to be a permanent transfer.  
           Sec. 24.  Minnesota Statutes 1996, section 121.912, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFICITS; EXCEPTION.] For the purposes of this 
        section, a permanent transfer includes creating a deficit in a 
        nonoperating fund for a period past the end of the current 
        fiscal year which is covered by moneys in an operating fund.  
        However, a deficit in the capital expenditure fund pursuant to 
        section 121.911, subdivision 5, shall does not constitute a 
        permanent transfer. 
           Sec. 25.  Minnesota Statutes 1996, section 121.912, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ACCOUNT TRANSFER FOR CERTAIN SEVERANCE PAY.] A 
        school district may maintain in a designated for certain 
        severance pay account not more than 50 percent of the amount 
        necessary to meet the obligations for the portion of severance 
        pay that constitutes compensation for accumulated sick leave to 
        be used for payment of premiums for group insurance provided for 
        former employees by the district.  The amount necessary shall 
        must be calculated according to standards established by the 
        advisory council on uniform financial accounting and reporting 
        standards.  
           Sec. 26.  Minnesota Statutes 1996, section 121.912, 
        subdivision 6, is amended to read:  
           Subd. 6.  [ACCOUNT TRANSFER FOR REORGANIZING DISTRICTS.] 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 for up to one year prior to the 
        effective date of combination or consolidation and during the 
        year following the effective date of reorganization. 
           Sec. 27.  Minnesota Statutes 1996, section 121.9121, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] A board requesting authority to 
        transfer money shall must apply to the commissioner and provide 
        information requested.  The application shall must indicate the 
        law or rule prohibiting the desired transfer.  It shall The 
        application must be signed by the superintendent and approved by 
        the school board.  
           Sec. 28.  Minnesota Statutes 1996, section 121.9121, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPROVAL STANDARD.] The commissioner may approve 
        a request only when an event has occurred in a district that 
        could not have been foreseen by the district.  The event shall 
        must relate directly to the fund or account involved and to the 
        amount to be transferred. 
           Sec. 29.  Minnesota Statutes 1996, section 121.914, 
        subdivision 2, is amended to read: 
           Subd. 2.  [STATUTORY OPERATING DEBT.] If the amount of the 
        operating debt is more than 2-1/2 percent of the most recent 
        fiscal year's expenditure amount for the funds considered under 
        subdivision 1, the net negative undesignated fund balance shall 
        be is defined as "statutory operating debt" for the purposes of 
        this section and sections 121.917 and 124.914, subdivision 1. 
           Sec. 30.  Minnesota Statutes 1996, section 121.914, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEBT VERIFICATION.] The commissioner shall 
        establish a uniform auditing or other verification procedure for 
        school districts to determine whether a statutory operating debt 
        exists in any Minnesota school district as of June 30, 1977.  
        This procedure shall also must identify all interfund transfers 
        made during fiscal year 1977 from a fund included in computing 
        statutory operating debt to a fund not included in computing 
        statutory operating debt.  The standards for this uniform 
        auditing or verification procedure shall must be promulgated by 
        the state board pursuant to chapter 14.  If a school district 
        applies to the commissioner for a statutory operating debt 
        verification or if the unaudited financial statement for the 
        school year ending June 30, 1977 reveals that a statutory 
        operating debt might exist, the commissioner shall require a 
        verification of the amount of the statutory operating debt which 
        actually does exist. 
           Sec. 31.  Minnesota Statutes 1996, section 121.914, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DEBT ELIMINATION.] If an audit or other 
        verification procedure conducted pursuant to subdivision 3 
        determines that a statutory operating debt exists, a 
        district shall must follow the procedures set forth in section 
        124.914, subdivision 1, to eliminate this statutory operating 
        debt. 
           Sec. 32.  Minnesota Statutes 1996, section 121.914, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CERTIFICATION OF DEBT.] The commissioner of 
        children, families, and learning shall certify the amount of 
        statutory operating debt for each school district.  Prior to 
        June 30, 1979, the commissioner may, on the basis of corrected 
        figures, adjust the total amount of statutory operating debt 
        certified for any district. 
           Sec. 33.  Minnesota Statutes 1996, section 121.914, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REPORT.] On January 15, 1998, the commissioner 
        of children, families, and learning shall report to the 
        legislature on the districts for which the levy allowable under 
        section 124.914, subdivision 1, has been insufficient to 
        eliminate the statutory operating debt of the district, 
        determined as of June 30, 1977. 
           Sec. 34.  Minnesota Statutes 1996, section 121.914, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPLICABILITY.] This section and the provisions 
        of section 124.914, subdivision 1, shall be are applicable only 
        to common, independent, and special school districts and 
        districts formed pursuant to Laws 1967, chapter 822, as amended, 
        and Laws 1969, chapters 775 and 1060, as amended.  This section 
        and the provisions of section 124.914, subdivision 1, shall do 
        not apply to independent school district No. 625. 
           Sec. 35.  Minnesota Statutes 1996, section 121.914, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PLAN DISCLOSURE.] Any district eligible to 
        receive any amounts pursuant to section 124.914, subdivision 
        1, shall must disclose its statutory operating debt retirement 
        plan by footnote to the audited financial statement. 
           Sec. 36.  Minnesota Statutes 1996, section 121.917, is 
        amended to read: 
           121.917 [EXPENDITURE LIMITATIONS.] 
           Subdivision 1.  [REDUCE STATUTORY OPERATING DEBT.] (a) 
        Beginning in fiscal year 1978 and in each year thereafter, a 
        district which had statutory operating debt on June 30, 1977 
        pursuant to section 121.914 shall must limit its expenditures in 
        each fiscal year so that the amount of its statutory operating 
        debt calculated at the end of that fiscal year is not greater 
        than the amount of the district's statutory operating debt as of 
        June 30, 1977, as certified and adjusted by the commissioner, 
        increased by an amount equal to 2-1/2 percent of that district's 
        operating expenditures for the fiscal year for which the 
        statutory operating debt calculation is being made. 
           (b) When a district is no longer required to levy pursuant 
        to section 124.914, subdivision 1, subdivision 2 shall be is 
        applicable. 
           Subd. 2.  [UNDESIGNATED FUND BALANCES.] Beginning in fiscal 
        year 1978 and each year thereafter, any district not subject to 
        the provisions of subdivision 1 shall must limit its 
        expenditures so that its undesignated fund balances shall do not 
        constitute statutory operating debt as defined in section 
        121.914. 
           Subd. 3.  [FAILURE TO LIMIT EXPENDITURES.] If a school 
        district does not limit its expenditures in accordance with this 
        section, the commissioner may so notify the appropriate 
        committees of the legislature by no later than January 1 of the 
        year following the end of that fiscal year. 
           Subd. 4.  [SPECIAL OPERATING PLAN.] (1) If the net negative 
        unappropriated operating fund balance as defined in section 
        124A.02, subdivision 25, calculated in accordance with the 
        uniform financial accounting and reporting standards for 
        Minnesota school districts, as of June 30 each year, is more 
        than 2-1/2 percent of the year's expenditure amount, the 
        district shall must, prior to January 31 of the next fiscal 
        year, submit a special operating plan to reduce the district's 
        deficit expenditures to the commissioner of children, families, 
        and learning for approval.  The commissioner may also require 
        the district to provide evidence that the district meets and 
        will continue to meet all of the curriculum requirements of the 
        state board. 
           Notwithstanding any other law to the contrary, a district 
        submitting a special operating plan to the commissioner under 
        this clause which is disapproved by the commissioner shall must 
        not receive any aid pursuant to chapters 124 and 124A until a 
        special operating plan of the district is so approved. 
           (2) A district shall must receive aids pending the approval 
        of its special operating plan under clause (1).  A district 
        which complies with its approved operating plan shall must 
        receive aids as long as the district continues to comply with 
        the approved operating plan. 
           Sec. 37.  Minnesota Statutes 1996, section 123.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ANNUAL MEETING.] The annual meeting of all 
        common districts shall must be held on the last Tuesday in June, 
        at 8:00 p.m., unless a different hour has been fixed at the 
        preceding annual meeting, upon ten days' posted.  The clerk 
        shall give notice given by the clerk, and of the meeting, 
        specifying the matters to come before such meeting; but.  
        Failure of the clerk to give such notice, or to specify the 
        business to be transacted thereat, shall not affect the validity 
        of any business, except the raising of money to build or 
        purchase a school house, the authorizing of an issue of bonds, 
        the fixing of a school house site, or the organization as an 
        independent district.  At the annual meeting in a common 
        district five legal voters shall constitute a quorum.  The chair 
        and clerk of the board shall officiate in their respective 
        capacities at all meetings of the electors of the district.  In 
        the event of the absence of the chair or clerk, the voters shall 
        elect a chair or clerk pro tem.  The voters shall have the power 
        in an annual meeting to repeal and modify their proceedings.  
        The polls at all meetings shall be open at least one hour. 
           Sec. 38.  Minnesota Statutes 1996, section 123.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELECTIONS.] The annual meeting shall must have 
        power to elect, by ballot, officers of the district.  In all 
        elections or vote by ballot, the clerk shall record the names of 
        all voters participating therein and the chair shall appoint two 
        electors who.  The electors, with the assistance of the clerk, 
        shall supervise the balloting and canvass the votes.  If any 
        candidates receive an equal number of votes for an office, the 
        board shall resolve the tie by lot.  
           Sec. 39.  Minnesota Statutes 1996, section 123.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CANDIDATES FOR OFFICE.] Any person desiring to 
        be a candidate for a district office at the annual meeting of 
        the district shall file with the clerk of the district an 
        application to be placed on the ballot for such office, or.  Any 
        five voters of the district may file such an application for or 
        on behalf of any qualified voter in the district that they 
        desire shall to be such a candidate.  The application 
        Applications shall be filed not less than 12 days before the 
        annual school district meeting.  The clerk of the district, in 
        the notice of annual meeting, shall state the names of the 
        candidates for whom applications have been filed, failure to do 
        so shall not affect the validity of the election thereafter 
        held.  At the annual meeting of common districts, nomination of 
        candidates for offices may be made from the floor by any 
        qualified voter.  
           Sec. 40.  Minnesota Statutes 1996, section 123.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BALLOTS.] The clerk shall prepare, at the 
        expense of the district, necessary ballots for the election of 
        officers placing thereon the names of the proposed candidates 
        for such office with a blank space after such names, such.  The 
        ballots shall be marked as official ballots, and the ballots so 
        prepared by the clerk of the district shall be used to the 
        exclusion of all other ballots at such annual meeting or 
        election in the election of officers of the district. 
           Sec. 41.  Minnesota Statutes 1996, section 123.11, 
        subdivision 7, is amended to read: 
           Subd. 7.  [SPECIAL MEETING.] Upon the filing of a petition 
        therefor, executed by five eligible voters, as defined in 
        Minnesota election law, of the common district, specifying the 
        business to be acted upon, or upon the adoption of a proper 
        resolution so specifying, signed by a majority of the members of 
        the board, the clerk shall forthwith call a special meeting of 
        the district upon.  The clerk shall give ten days' posted notice 
        and one week's published notice if there be a newspaper printed 
        in the district and specify in the notice the business named in 
        the request or resolution and the time and place of the 
        meeting.  If there be is no clerk in the district or if the 
        clerk fails for three days after receiving a request or 
        resolution to give notice of a meeting, it may be called by like 
        notice by five eligible voters, as defined in Minnesota election 
        law, of the district.  No business except that named in the 
        notice shall be transacted at the meeting.  If there are not 
        five eligible voters, as defined in Minnesota election law, or 
        if there is not a board therein, the county auditor may call a 
        special meeting by giving notice thereof as provided in this 
        section.  The voters at a special meeting have power to repeal 
        or modify their proceedings. 
           Sec. 42.  Minnesota Statutes 1996, section 123.12, is 
        amended to read: 
           123.12 [BOARDS OF COMMON SCHOOL DISTRICTS.] 
           Subdivision 1.  [SCHOOL BOARD.] The care, management and 
        control of a common district is vested in a board of three 
        members to be known as the school board.  The term of office of 
        a member shall be three years, and until a successor qualifies. 
        The board of each common district shall must consist of a chair, 
        a treasurer, and a clerk.  The board may by resolution establish 
        a time and place for regular meeting and no notice of such 
        meeting need be sent to any members of the board.  
           Subd. 2.  [FINANCES.] The board shall must submit to the 
        annual meeting an estimate of the expenses of the district for 
        the coming year for a school term as determined by the board and 
        for such other specified purposes as the board may deem proper.  
        If such the annual meeting shall fail fails to vote a sufficient 
        tax to maintain the district for such time, the board shall must 
        levy such tax pursuant to and within the limitations of sections 
        124.226, 124.2716, 124.91, 124.912, 124.914, 124.916, and 
        124.918; but no board shall expend any money or incur any 
        liability for any purpose beyond the sum appropriated by vote of 
        the district for such purpose, or levied by the board pursuant 
        to this subdivision, or on hand and applicable thereto. 
           Subd. 9.  [SCHOOL VISITS.] The board shall must visit each 
        school at least once every three months. 
           Subd. 14.  [OFFICIAL NEWSPAPER.] At its first meeting 
        following July 1 each year, the board shall must designate, by 
        resolution, as the official newspaper of the district, some 
        legal newspaper of general circulation within the district, and 
        contract with such newspaper for its publications.  If there is 
        more than one such newspaper, the board shall let such must 
        enter a contract to with the lowest responsible bidder at the 
        earliest practicable date.  All notices and proceedings required 
        by law to be published by the board shall must be published in 
        the official newspaper so designated.  The fees for such 
        publication shall must not exceed the fees for publication of 
        legal notices as prescribed by Minnesota Statutes. 
           Sec. 43.  Minnesota Statutes 1996, section 123.13, is 
        amended to read: 
           123.13 [OFFICERS OF COMMON SCHOOL DISTRICTS.] 
           Subd. 2.  [TREASURER.] The treasurer shall receive and be 
        responsible for all money in the district and disburse the same 
        on orders signed by the clerk and countersigned by the chair or 
        other vouchers authorized by law; provided, that,.  In the event 
        that the chair has been continuously absent from the district 
        for a period of 30 days or more, the treasurer may pay orders 
        without the signature of the chair.  Each order shall must state 
        the fund on which it is drawn, the name of the payee, and the 
        nature of the claim for which such order is issued and shall 
        must be so drawn that when signed by the treasurer in an 
        appropriate place, it becomes a check on the school district 
        depository.  The treasurer shall keep an account of each fund, 
        and of all receipts and disbursements showing the sources of all 
        receipts and the nature and purpose of disbursements.  The 
        treasurer shall deposit the funds of the district in the 
        official depository in accordance with the provisions of law.  
           Sec. 44.  Minnesota Statutes 1996, section 123.15, is 
        amended to read: 
           123.15 [SCHOOLHOUSES AND SITES, COMMON SCHOOL DISTRICTS.] 
           Subdivision 1.  [ACQUISITION OF SITES.] When authorized by 
        the voters at a regular meeting or at a special meeting called 
        for that purpose, the board may acquire necessary sites for 
        school houses, or enlargements or additions to existing school 
        house sites, by lease, purchase, or condemnation under the right 
        of eminent domain; lease, erect or purchase garages for 
        district-owned school buses; and sell or exchange school houses 
        or sites and execute deeds of conveyances thereof. It may 
        acquire by lease, purchase, or condemnation under eminent domain 
        suitable tracts of land either within in or without outside of 
        the district for the purpose of instruction, experimentation, 
        and demonstration in agriculture.  In any city, a school site, 
        when practicable, shall must contain at least one block, and, 
        if. Outside of any city, a school site must contain at least two 
        acres; and when.  If any school house site shall 
        contain contains less than such the required amount the board 
        may, without a vote of the electors, acquire other land adjacent 
        to or near such site to make, with such site, all or part 
        of such the required amount.  When If property is taken by 
        eminent domain by authority of this subdivision, when needed by 
        the district for such purpose, the fact that the property so 
        needed has been was acquired by the owner under the power of 
        eminent domain, or is already devoted to public use, shall not 
        prevent its acquisition by the district. 
           Subd. 2.  [SITE DESIGNATION.] The annual meeting or 
        election shall have power to designate a site for a school house 
        and provide for building or otherwise placing a school house 
        thereon, when proper notice has been given; but.  A site on 
        which a with an existing school house stands or where a school 
        house is begun being built shall not be changed except by vote 
        therefor, of three-fifths of the voters of the district voting 
        on the question. 
           Subd. 3.  [TEACHER DWELLING.] When authorized by a 
        two-thirds majority of all the electors voting at an annual or 
        special meeting, the board may erect, purchase, or acquire a 
        dwelling house for the use of its teachers; provided that.  The 
        proposition shall be submitted only at a meeting or election,.  
        The notice of which stated the meeting shall state that such the 
        proposition would shall be considered or submitted thereat. 
           Sec. 45.  Minnesota Statutes 1996, section 123.33, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCHOOL BOARD.] The care, management, and 
        control of independent districts shall be is vested in a board 
        of directors, to be known as the school board.  The term of 
        office of a member shall be four years and until a successor 
        qualifies.  The membership of the school board shall consist of 
        six elected directors together with such ex officio member as 
        may be provided by law.  But The board may submit to the 
        electors at any school election the question whether the board 
        shall consist of seven members and.  If a majority of those 
        voting on the proposition favor a seven-member board, a seventh 
        member shall be elected at the next election of directors for a 
        four-year term and thereafter the board shall consist of seven 
        members. 
           Those districts with a seven-member board may submit to the 
        electors at any school election at least 150 days before the 
        next election of three members of the board the question whether 
        the board shall consist of six members.  If a majority of those 
        voting on the proposition favor a six-member board instead of a 
        seven-member board, two members instead of three members shall 
        be elected at the next election of the board of directors and 
        thereafter the board shall consist of six members.  
           Sec. 46.  Minnesota Statutes 1996, section 123.33, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SCHOOL BOARD VACANCY.] A vacancy in any board 
        occurs when a member (a) dies, or (b) resigns, or (c) ceases to 
        be a resident of the district, or (d) is unable to serve on such 
        board and attend its meetings for not less than 90 days because 
        of illness or prolonged absence from the district.  
           Sec. 47.  Minnesota Statutes 1996, section 123.33, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [SCHOOL BOARD MEMBER TRAINING.] A member 
        must shall receive training in school finance and management 
        developed in consultation with the Minnesota school boards 
        association and consistent with section 121.919.  The school 
        boards association shall must make available to each newly 
        elected school board member training in school finance and 
        management consistent with section 121.919 within 180 days of 
        that member taking office.  The program shall be developed in 
        consultation with the department of children, families, and 
        learning and appropriate representatives of higher education.  
           Sec. 48.  Minnesota Statutes 1996, section 123.33, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ILL OR ABSENT MEMBER.] A vacancy caused by a 
        member being unable to serve on such board and attend its 
        meetings for not less than 90 days because of illness or 
        prolonged absence from the district, may, after the board has by 
        resolution declared such vacancy to exist, be filled by the 
        board at any regular or special meeting thereof for the 
        remainder of the unexpired term, or until such ill or absent 
        member is again able to resume duties as a member of such board, 
        whichever date is earliest.  When such the ill or absent member 
        is again able to resume duties as a member of the board, the 
        board shall must by resolution so determine and declare such 
        person to be again a member of the board, and the member 
        appointed by the board to be no longer a member thereof. 
           Sec. 49.  Minnesota Statutes 1996, section 123.33, 
        subdivision 4, is amended to read: 
           Subd. 4.  [VACANCY; APPOINTMENT.] Any other vacancy in a 
        board shall must be filled by board appointment at a regular or 
        special meeting.  The appointment shall be evidenced by a 
        resolution entered in the minutes and shall continue until an 
        election is held under this subdivision.  All elections to fill 
        vacancies shall be for the unexpired term.  If the vacancy 
        occurs before the first day to file affidavits of candidacy for 
        the next school district general election and more than two 
        years remain in the unexpired term, a special election shall be 
        held in conjunction with the school district general election.  
        The appointed person shall serve until the qualification of the 
        successor elected to fill the unexpired part of the term at that 
        special election.  If the vacancy occurs on or after the first 
        day to file affidavits of candidacy for the school district 
        general election, or when less than two years remain in the 
        unexpired term, there shall be no special election to fill the 
        vacancy and the appointed person shall serve the remainder of 
        the unexpired term and until a successor is elected and 
        qualifies at the school district election. 
           Sec. 50.  Minnesota Statutes 1996, section 123.33, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RULES.] The board shall make, and when deemed 
        advisable, change or repeal rules relating to the organization 
        and management of the board and the duties of its officers. 
           Sec. 51.  Minnesota Statutes 1996, section 123.33, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DUTIES.] The board shall must superintend and 
        manage the schools of the district; adopt rules for their 
        organization, government, and instruction; keep registers; and 
        prescribe textbooks and courses of study.  The board may enter 
        into an agreement with a post-secondary institution for 
        secondary or post-secondary nonsectarian courses to be taught at 
        a secondary school, nonsectarian post-secondary institution, or 
        another location. 
           Sec. 52.  Minnesota Statutes 1996, section 123.33, 
        subdivision 11, is amended to read: 
           Subd. 11.  [PUBLISHING OF PROCEEDINGS.] The board shall 
        must cause its official proceedings to be published once in the 
        official newspaper of the district.  Such publication shall be 
        made within 30 days of the meeting at which such proceedings 
        occurred.  If the board determines that publication of a summary 
        of the proceedings would adequately inform the public of the 
        substance of the proceedings, the board may direct that only a 
        summary be published, conforming to the requirements of section 
        331A.01, subdivision 10.  
           Sec. 53.  Minnesota Statutes 1996, section 123.33, 
        subdivision 11a, is amended to read: 
           Subd. 11a.  [MAILING OF PROCEEDINGS.] If a school board of 
        a district that has no newspaper with its known office of issue 
        or a secondary office located within the boundaries of the 
        district and no newspaper that is distributed to more than 
        one-third of the residences in the district determines that 
        mailing a summary of its proceedings would be more economical 
        than publication of the proceedings and that it would adequately 
        inform the public, it may mail a summary of its proceedings to 
        each residence in the district that can be identified as a 
        homestead from the property tax records and to each other 
        residence in the district that the board can identify.  The 
        county shall must make the property tax records available to the 
        board for this purpose.  The board shall must keep a copy of the 
        summary of the proceedings as part of its records.  The decision 
        of a school board to mail summaries, rather than publish the 
        proceedings under this subdivision shall be presumed valid, 
        subject to challenge by a court action. 
           Sec. 54.  Minnesota Statutes 1996, section 123.335, is 
        amended to read: 
           123.335 [IMPREST CASH FUNDS.] 
           Subdivision 1.  [IMPREST FUND.] The board may establish one 
        or more imprest funds for the payment in cash of any proper 
        claim against the district which it is impractical to pay in any 
        other manner, except that no claim for salary or personal 
        expenses of a district officer or employee shall be paid from 
        such funds.  The board shall must appoint a custodian of each 
        such fund who shall be responsible for its safekeeping and 
        disbursement according to law.  Money for the operation of such 
        fund shall be secured by a transfer from the general fund.  A 
        claim itemizing all the various demands for which disbursements 
        have been made from the fund shall must be presented to the 
        board at the next board meeting after the disbursements have 
        been made.  The board shall must act upon it as in the case of 
        other claims and an order shall be issued to the custodian for 
        the amount allowed.  The custodian shall use the proceeds of the 
        order to replenish the fund; and.  If the board fails to approve 
        the claim in full for any sufficient reason, the custodian shall 
        be personally responsible for the difference. 
           Subd. 2.  [ADVANCES.] The board may authorize an imprest 
        fund for the purpose of advancing money to officers or employees 
        to pay the actual and necessary expenses of such officer or 
        employee in attending meetings outside of the district.  The 
        board shall must appoint a custodian of such fund who shall be 
        responsible for its safekeeping and disbursement according to 
        law.  At the first regular meeting of the board after such 
        meeting, the custodian shall submit an itemized claim for the 
        actual and necessary expenses incurred and paid.  The 
        board shall must act upon it as in the case of other claims and 
        an order shall be issued to the custodian for the amount 
        allowed.  The custodian shall use the proceeds of the order to 
        repay the amount advanced from the fund and make final 
        settlement with the officer or employee.  As an alternative the 
        board may authorize travel advances if control is maintained by 
        use of a travel advance account, the balance of which is 
        supported by names of employees to whom money has been advanced. 
           Sec. 55.  Minnesota Statutes 1996, section 123.34, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [OFFICER SELECTION.] Within ten days after 
        the election of the first board in independent districts and 
        annually thereafter on July 1, or as soon thereafter as 
        practicable, the board shall must meet and organize by selecting 
        a chair, clerk, and a treasurer, who shall hold their offices 
        for one year and until their successors are selected and 
        qualify. The persons who perform the duties of the clerk and 
        treasurer need not be members of the board and the board by 
        resolution may combine the duties of the offices of clerk and 
        treasurer in a single person in the office of business affairs.  
        They may appoint a superintendent who shall be ex officio a 
        member of the board, but not entitled to vote therein.  In 
        districts in which board members are elected at the general 
        election in November, the annual meeting of the board shall must 
        be held on the first Monday of January or as soon thereafter as 
        practicable. 
           Sec. 56.  Minnesota Statutes 1996, section 123.34, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHAIR.] The chair when present shall preside at 
        all meetings of the board, countersign all orders upon the 
        treasurer for claims allowed by the board, represent the 
        district in all actions and perform all the duties usually 
        incumbent on such officer.  In case of absence, inability, or 
        refusal of the clerk to draw orders for the payment of money 
        authorized by a vote of the majority of the board to be paid, 
        the orders may be drawn by the chair, and paid by the 
        treasurer,.  A statement thereof of the orders drawn, with a 
        copy of such orders, being shall be delivered to the clerk by 
        the treasurer, or the office of the clerk may be declared vacant 
        by the chair and treasurer and filled by appointment. 
           Sec. 57.  Minnesota Statutes 1996, section 123.34, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PERFORMANCE BOND.] When the duty devolves upon 
        any person employed by a board to receive money and pay it over 
        to the treasurer of the district, the district shall must 
        require a bond from such person and pay all premiums therefor.  
        The amount of each bond shall be fixed by the board and the bond 
        approved by it.  The bond shall must be not less than $500 
        conditioned for the faithful performance of the duty and shall 
        be filed with the clerk.  In lieu of individual bonds, the 
        district may prescribe and keep in effect a schedule or position 
        insurance policy or blanket bond in such aggregate amount as the 
        district determines, insuring the fidelity of such persons in 
        the amount of not less than $500 for each such person.  
           Sec. 58.  Minnesota Statutes 1996, section 123.34, 
        subdivision 8, is amended to read: 
           Subd. 8.  [CLERK RECORDS.] The clerk shall keep a record of 
        all meetings of the district and the board in books provided by 
        the district for that purpose.  The clerk shall, within three 
        days after an election, notify all persons elected of their 
        election.  On or before By August 15 of each year the clerk 
        shall file with the board a report of the revenues, expenditures 
        and balances in each fund for the preceding fiscal year.  The 
        report together with vouchers and supporting documents shall 
        subsequently be examined by a public accountant or the state 
        auditor, either of whom shall be paid by the school district, as 
        provided in section 121.908, subdivision 3.  The board shall by 
        resolution approve the report or require a further or amended 
        report.  On or before By August 15 of each year, the clerk shall 
        make and transmit to the commissioner certified reports, showing:
           (1) The condition and value of school property; 
           (2) The revenues and expenditures in detail, and such other 
        financial information required by law, rule, or as may be called 
        for by the commissioner; 
           (3) The length of school term and the enrollment and 
        attendance by grades; and 
           (4) Such other items of information as may be called for by 
        the commissioner. 
           The clerk shall enter in the clerk's record book copies of 
        all reports and of the teachers' term reports, as they appear in 
        the registers, and of the proceedings of any meeting as 
        furnished by the clerk pro tem, and keep an itemized account of 
        all the expenses of the district.  The clerk shall furnish to 
        the auditor of the proper county, on or before by October 10 of 
        each year, an attested copy of the clerk's record, showing the 
        amount of money voted by the district or the board for school 
        purposes; draw and sign all orders upon the treasurer for the 
        payment of money for bills allowed by the board for salaries of 
        officers and for teachers' wages and all claims, to be 
        countersigned by the chair.  Such orders shall must state the 
        consideration, payee, and the fund and the clerk shall take a 
        receipt therefor.  Teachers' wages shall have preference in the 
        order in which they become due, and no money applicable for 
        teachers' wages shall be used for any other purpose, nor shall 
        teachers' wages be paid from any fund except that raised or 
        apportioned for that purpose.  
           Sec. 59.  Minnesota Statutes 1996, section 123.34, 
        subdivision 9, is amended to read: 
           Subd. 9.  [SUPERINTENDENT.] All districts maintaining a 
        classified secondary school shall must employ a superintendent 
        who shall be an ex officio nonvoting member of the school board. 
        The authority for selection and employment of a superintendent 
        shall must be vested in the school board in all cases.  An 
        individual employed by a school board as a superintendent shall 
        have an initial employment contract for a period of time no 
        longer than three years from the date of employment.  Any 
        subsequent employment contract must not exceed a period of three 
        years.  A school board, at its discretion, may or may not renew 
        an employment contract.  A school board shall must not, by 
        action or inaction, extend the duration of an existing 
        employment contract.  Beginning 365 days prior to the expiration 
        date of an existing employment contract, a school board may 
        negotiate and enter into a subsequent employment contract to 
        take effect upon the expiration of the existing contract.  A 
        subsequent contract shall must be contingent upon the employee 
        completing the terms of an existing contract.  If a contract 
        between a school board and a superintendent is terminated prior 
        to the date specified in the contract, the school board may not 
        enter into another superintendent contract with that same 
        individual that has a term that extends beyond the date 
        specified in the terminated contract.  A school board may 
        terminate a superintendent during the term of an employment 
        contract for any of the grounds specified in section 125.12, 
        subdivision 6 or 8.  A superintendent shall not rely upon an 
        employment contract with a school board to assert any other 
        continuing contract rights in the position of superintendent 
        under section 125.12.  Notwithstanding the provisions of 
        sections 122.532, 122.541, 125.12, subdivision 6a or 6b, or any 
        other law to the contrary, no individual shall have a right to 
        employment as a superintendent based on order of employment in 
        any district.  If two or more school districts enter into an 
        agreement for the purchase or sharing of the services of a 
        superintendent, the contracting districts have the absolute 
        right to select one of the individuals employed to serve as 
        superintendent in one of the contracting districts and no 
        individual has a right to employment as the superintendent to 
        provide all or part of the services based on order of employment 
        in a contracting district. The superintendent of a district 
        shall perform the following:  
           (1) visit and supervise the schools in the district, report 
        and make recommendations about their condition when advisable or 
        on request by the board; 
           (2) recommend to the board employment and dismissal of 
        teachers; 
           (3) superintend school grading practices and examinations 
        for promotions; 
           (4) make reports required by the commissioner of children, 
        families, and learning; and 
           (5) perform other duties prescribed by the board.  
           Sec. 60.  Minnesota Statutes 1996, section 123.34, 
        subdivision 9a, is amended 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. 61.  Minnesota Statutes 1996, section 123.34, 
        subdivision 10, is amended to read: 
           Subd. 10.  [PRINCIPALS.] Each public school building, as 
        defined by section 120.05, subdivision 2, clauses (1), (2), and 
        (3), in an independent school district may be under the 
        supervision of a principal who is assigned to that 
        responsibility by the board of education in that school district 
        upon the recommendation of the superintendent of schools of that 
        school district.  If pupils in kindergarten through grade 12 
        attend school in one building, one principal may supervise the 
        building. 
           Each principal assigned the responsibility for the 
        supervision of a school building shall hold a valid license in 
        the assigned position of supervision and administration as 
        established by the rules of the state board of education. 
           The principal shall provide administrative, supervisory, 
        and instructional leadership services, under the supervision of 
        the superintendent of schools of the school district and in 
        accordance with the policies, rules, and regulations of the 
        board of education, for the planning, management, operation, and 
        evaluation of the education program of the building or buildings 
        to which the principal is assigned. 
           Sec. 62.  Minnesota Statutes 1996, section 123.35, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BOARD AUTHORITY.] The board shall must 
        have the general charge of the business of the district, the 
        school houses, and of the interests of the schools thereof.  The 
        board's authority to conduct the business of the district 
        includes implied powers in addition to any specific powers 
        granted by the legislature.  
           Sec. 63.  Minnesota Statutes 1996, section 123.35, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FACILITIES FOR SCHOOL-AGE CHILDREN.] It shall be 
        is the duty and the function of the district to furnish school 
        facilities to every child of school age residing in any part of 
        the district.  The board may establish and organize and alter 
        and discontinue such grades or schools as it may deem advisable 
        and assign to each school and grade a proper number of pupils.  
        The board shall provide free textbooks for the pupils of the 
        district.  
           Sec. 64.  Minnesota Statutes 1996, section 123.35, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LEVY.] The board shall must provide by levy of 
        tax necessary funds for the conduct of schools, the payment of 
        indebtedness, and all proper expenses of the district. 
           Sec. 65.  Minnesota Statutes 1996, section 123.35, 
        subdivision 9b, is amended to read: 
           Subd. 9b.  [SERVICES FOR INDIAN STUDENTS.] School districts 
        may enter into agreements with Indian tribal governments for 
        purposes of providing educational services for students.  Such 
        agreements may allow for the use of any resources available to 
        either party and must give students the option to enroll in 
        the school district at their election. 
           Sec. 66.  Minnesota Statutes 1996, section 123.35, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ANNUITY CONTRACT; PAYROLL ALLOCATION.] At the 
        request of an employee and as part of the employee's 
        compensation arrangement, the board may purchase an individual 
        annuity contract for an employee for retirement or other 
        purposes and may make payroll allocations in accordance with 
        such arrangement for the purpose of paying the entire premium 
        due and to become due under such contract.  The allocation shall 
        must be made in a manner which will qualify the annuity 
        premiums, (or a portion thereof), for the benefit afforded under 
        section 403(b) of the current Federal Internal Revenue Code or 
        any equivalent provision of subsequent federal income tax law.  
        The employee shall own such contract and the employee's 
        rights thereunder under the contract shall be nonforfeitable 
        except for failure to pay premiums.  Section 125.12 shall not be 
        applicable hereto and the board shall have no liability 
        thereunder because of its purchase of any individual annuity 
        contracts.  This statute shall be applied in a nondiscriminatory 
        manner to employees of the school district.  
           Sec. 67.  Minnesota Statutes 1996, section 123.35, 
        subdivision 15, is amended to read: 
           Subd. 15.  [PAYMENT OF CLAIMS.] When payment of a claim 
        cannot be deferred until the next board meeting without loss to 
        the district of a discount privilege, or when payment of a claim 
        cannot be deferred until the next board meeting because of 
        contract terms, purchase order terms, or a vendor's standard 
        terms which are part of the contract, the claim may be paid 
        prior to board approval, providing that the board: 
           (a) Has delegated authority to the clerk or a designated 
        business administrator to make a payment prior to board approval 
        and 
           (b) Requires that payment made prior to board approval be 
        acted upon at the next board meeting. 
           Payment prior to board approval shall must not affect the 
        right of the district or a taxpayer to challenge the validity of 
        a claim. 
           Sec. 68.  Minnesota Statutes 1996, section 123.35, 
        subdivision 20, is amended to read: 
           Subd. 20.  [LEGAL COUNSEL; REIMBURSEMENT.] If reimbursement 
        is requested by a school district employee, the board may, after 
        consulting with its legal counsel, reimburse the employee for 
        any costs and reasonable attorney fees incurred by the person to 
        defend criminal charges brought against the person arising out 
        of the performance of duties for the school district.  A board 
        member who is a witness or an alleged victim in the case may not 
        vote on the reimbursement.  If a quorum of the board is 
        disqualified from voting on the reimbursement, the reimbursement 
        shall must be approved by a judge of the district court. 
           Sec. 69.  Minnesota Statutes 1996, section 123.36, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SITES.] According to section 124.91, 
        subdivision 1, or 465.71, when funds are available therefor, the 
        board may locate and acquire necessary sites of schoolhouses or 
        enlargements, or additions to existing schoolhouse sites by 
        lease, purchase or condemnation under the right of eminent 
        domain; it may erect schoolhouses thereon on the sites; it may 
        erect or purchase garages for district-owned school buses.  When 
        property is taken by eminent domain by authority of this 
        subdivision when needed by the school district for such 
        purposes, the fact that the property so needed has been acquired 
        by the owner under the power of eminent domain or is already 
        devoted to public use, shall not prevent its acquisition by 
        the school district.  The board may sell or exchange 
        schoolhouses or sites, and execute deeds of conveyance thereof.  
           Sec. 70.  Minnesota Statutes 1996, section 123.36, 
        subdivision 5, is amended to read: 
           Subd. 5.  [USE OF SCHOOL HOUSES.] The board may authorize 
        the use of any schoolhouses in the district for divine worship, 
        Sunday schools, public meetings, elections, post-secondary 
        instruction, and other community purposes that, in its judgment, 
        will not interfere with their use for school purposes.  Before 
        permitting any of these uses, the board may require a cash or 
        corporate surety bond in a reasonable amount conditioned for the 
        proper use of the schoolhouse, payment of all rent, and repair 
        of all damage occasioned caused by the use.  It may determine a 
        reasonable charge for using the schoolhouse. 
           It may authorize the use of any schoolhouses or buildings 
        owned or leased by the district for primaries, elections, 
        registrations, and related activities if the board determines 
        that the use will not interfere with school purposes.  It may 
        impose reasonable regulations and conditions upon the use as may 
        seem necessary and proper. 
           Sec. 71.  Minnesota Statutes 1996, section 123.36, 
        subdivision 10, is amended to read: 
           Subd. 10.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
        lease to any person, business, or organization a schoolhouse 
        that is not needed for school purposes, or part of a schoolhouse 
        that is not needed for school purposes if the board determines 
        that leasing part of a schoolhouse does not interfere with the 
        educational programs taking place in the rest of the building. 
        The board may charge and collect reasonable consideration for 
        the lease and may determine the terms and conditions of the 
        lease. 
           (b) In districts with outstanding bonds, the net proceeds 
        of the lease shall must be first deposited in the debt 
        retirement fund of the district in an amount sufficient to meet 
        when due that percentage of the principal and interest payments 
        for outstanding bonds that is ascribable to the payment of 
        expenses necessary and incidental to the construction or 
        purchase of the particular building or property that is leased.  
        Any remaining net proceeds in these districts may be deposited 
        in either the debt redemption fund or capital expenditure fund.  
        All net proceeds of the lease in districts without outstanding 
        bonds shall be deposited in the capital expenditure fund of the 
        district. 
           (c) The board may make capital improvements, including 
        fixtures, to a schoolhouse or a portion thereof, not exceeding 
        in cost the replacement value of the schoolhouse, to facilitate 
        its rental, and the lease of an improved schoolhouse, or part of 
        it, shall provide for rentals which will recover the cost of the 
        improvements over the initial term of the lease.  
        Notwithstanding clause paragraph (b), the portion of the rentals 
        representing the cost of the improvements shall be deposited in 
        the capital expenditure fund of the district and the balance of 
        the rentals shall be used as provided in clause paragraph (b).  
           Sec. 72.  Minnesota Statutes 1996, section 123.36, 
        subdivision 11, is amended to read: 
           Subd. 11.  [SCHOOLHOUSE CLOSING.] The board may close a 
        schoolhouse only after a public hearing on the question of the 
        necessity and practicability of the proposed closing.  Published 
        notice of the hearing shall be given for two weeks in the 
        official newspaper of the district.  The time and place of the 
        meeting, the description and location of the schoolhouse, and a 
        statement of the reasons for the closing shall must be specified 
        in the notice.  Parties requesting to give testimony for and 
        against the proposal shall be heard by the board before it makes 
        a final decision to close or not to close the schoolhouse.  
           Sec. 73.  Minnesota Statutes 1996, section 123.36, 
        subdivision 13, is amended to read: 
           Subd. 13.  [PROCEEDS OF SALE OR EXCHANGE.] (a) Proceeds of 
        the sale or exchange of school buildings or real property of the 
        school district shall must be used as provided in this 
        subdivision. 
           (a) (b) In districts with outstanding bonds, the proceeds 
        of the sale or exchange shall first be deposited in the debt 
        retirement fund of the district in an amount sufficient to meet 
        when due that percentage of the principal and interest payments 
        for outstanding bonds which is ascribable to the payment of 
        expenses necessary and incidental to the construction or 
        purchase of the particular building or property which is sold.  
           (b) (c) After satisfying the requirements of paragraph 
        (a) (b), a district with outstanding bonds may deposit proceeds 
        of the sale or exchange in its capital expenditure fund if the 
        amount deposited is used for the following:  
           (1) for expenditures for the cleanup of polychlorinated 
        biphenyls, if the method for cleanup is approved by the 
        department of children, families, and learning; 
           (2) for capital expenditures for the betterment, as defined 
        in section 475.51, subdivision 8, of district-owned school 
        buildings; or 
           (3) to replace the building or property sold.  
           (c) (d) In a district with outstanding bonds, the amount of 
        the proceeds of the sale or exchange remaining after the 
        application of paragraphs (a) and (b) (b) and (c), which is 
        sufficient to meet when due that percentage of the principal and 
        interest payments for the district's outstanding bonds which is 
        not governed by paragraph (a) (b), shall be deposited in the 
        debt retirement fund.  
           (d) (e) Any proceeds of the sale or exchange remaining in 
        districts with outstanding bonds after the application of 
        paragraphs (a), (b), and (c) (b), (c), and (d), and all proceeds 
        of the sale or exchange in districts without outstanding bonds 
        shall be deposited in the capital expenditure fund of the 
        district. 
           (e) (f) Notwithstanding paragraphs (b) and (c) (c) and (d), 
        a district with outstanding bonds may deposit in its capital 
        expenditure fund and use for any lawful capital expenditure 
        without the reduction of any levy limitation the same percentage 
        of the proceeds of the sale or exchange of a building or 
        property as the percentage of the initial cost of purchasing or 
        constructing the building or property which was paid using 
        revenue from the capital expenditure fund.  
           Sec. 74.  Minnesota Statutes 1996, section 123.36, 
        subdivision 14, is amended to read: 
           Subd. 14.  [ASBESTOS REMOVAL AND POLYCHLORINATED BIPHENYLS 
        CLEANUP.] Notwithstanding any law to the contrary, school 
        districts may, without an election, enter into contracts 
        extending beyond the end of the fiscal year to pay the costs of 
        removal or encapsulation of asbestos or cleanup of 
        polychlorinated biphenyls found in school buildings or on school 
        property.  
           Sec. 75.  Minnesota Statutes 1996, section 123.37, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONTRACTS.] No A contract for work or 
        labor, or for the purchase of furniture, fixtures, or other 
        property, except books registered under the copyright laws, or 
        for the construction or repair of school houses, the estimated 
        cost or value of which shall exceed that specified in section 
        471.345, subdivision 3, shall must not be made by the school 
        board without first advertising for bids or proposals by two 
        weeks' published notice in the official newspaper.  This 
        notice shall must state the time and place of receiving bids and 
        contain a brief description of the subject matter. 
           Additional publication in the official newspaper or 
        elsewhere may be made as the board shall deem necessary. 
           After taking into consideration conformity with the 
        specifications, terms of delivery, and other conditions imposed 
        in the call for bids, every such contract shall must be awarded 
        to the lowest responsible bidder, be duly executed in writing, 
        and be otherwise conditioned as required by law.  The person to 
        whom the contract is awarded shall give a sufficient bond to the 
        board for its faithful performance.  Notwithstanding section 
        574.26 or any other law to the contrary, on a contract limited 
        to the purchase of a finished tangible product, a school board 
        may require, at its discretion, a performance bond of a 
        contractor in the amount the board considers necessary.  A 
        record shall must be kept of all bids, with names of bidders and 
        amount of bids, and with the successful bid indicated thereon.  
        A bid containing an alteration or erasure of any price contained 
        in the bid which is used in determining the lowest responsible 
        bid shall must be rejected unless the alteration or erasure is 
        corrected as herein provided in this section.  An alteration or 
        erasure may be crossed out and the correction thereof printed in 
        ink or typewritten adjacent thereto and initialed in ink by the 
        person signing the bid.  In the case of identical low bids from 
        two or more bidders, the board may, at its discretion, utilize 
        negotiated procurement methods with the tied low bidders for 
        that particular transaction, so long as the price paid does not 
        exceed the low tied bid price.  In the case where only a single 
        bid is received, the board may, at its discretion, negotiate a 
        mutually agreeable contract with the bidder so long as the price 
        paid does not exceed the original bid.  If no satisfactory bid 
        is received, the board may readvertise.  Standard requirement 
        price contracts established for supplies or services to be 
        purchased by the district shall must be established by 
        competitive bids.  Such standard requirement price contracts may 
        contain escalation clauses and may provide for a negotiated 
        price increase or decrease based upon a demonstrable 
        industrywide or regional increase or decrease in the vendor's 
        costs.  Either party to the contract may request that the other 
        party demonstrate such increase or decrease.  The term of such 
        contracts shall must not exceed two years with an option on the 
        part of the district to renew for an additional two years.  
        Provided that in the case of Contracts for the purchase of 
        perishable food items, except milk for school lunches and 
        vocational training programs a contract of, in any amount may be 
        made by direct negotiation by obtaining two or more written 
        quotations for the purchase or sale, when possible, without 
        advertising for bids or otherwise complying with the 
        requirements of this section or section 471.345, subdivision 3.  
        All quotations obtained shall be kept on file for a period of at 
        least one year after receipt thereof. 
           Every contract made without compliance with the provisions 
        of this section shall be void.  Provided, that Except in the 
        case of the destruction of buildings or injury thereto, where 
        the public interest would suffer by delay, contracts for repairs 
        may be made without advertising for bids.  
           Sec. 76.  Minnesota Statutes 1996, section 123.37, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CONTRACT WITHIN BUDGETED AMOUNTS.] The board 
        may authorize its superintendent or business manager to lease, 
        purchase, and contract for goods and services within the budget 
        as approved by the board, provided that.  Any transaction in an 
        amount exceeding the minimum amount for which bids are required 
        must first be specifically authorized by the board and must 
        fulfill all other applicable requirements in subdivision 1.  
           Sec. 77.  Minnesota Statutes 1996, section 123.37, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [TRANSPORTATION; FUEL.] Notwithstanding the 
        provisions of subdivision 1 or section 471.345, a contract for 
        the transportation of school children, or a contract for the 
        purchase of petroleum heating fuel or fuel for vehicles may be 
        made by direct negotiation, by obtaining two or more written 
        quotations for the service when possible, or upon sealed bids.  
        At least 30 days before awarding a directly negotiated contract, 
        the school district shall must, by published notice, request 
        quotations for the service to be provided.  All quotations 
        obtained shall must be kept on file for a period of at least one 
        year after receipt thereof.  If a contract is made by direct 
        negotiation, all quotations shall must be public information.  
        If a contract is made upon sealed bids, the procedure for 
        advertising and awarding bids shall conform to the provisions of 
        subdivision 1 except as otherwise provided in this subdivision. 
           Notwithstanding the provisions of subdivision 1 or section 
        574.26, a performance bond shall must be required of a 
        contractor on a contract for the transportation of school 
        children only when and in the amount deemed necessary by and at 
        the discretion of the school board.  Such a performance bond 
        must be in the amount determined by the board. 
           Sec. 78.  Minnesota Statutes 1996, section 123.38, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACTIVITIES OUTSIDE DISTRICT LIMITS.] 
        Whenever it shall appear appears to be beneficial and for the 
        best interest of the district and the pupils of the district to 
        carry on any school sport activities or educational activities 
        connected with their studies outside of the territorial limits 
        of the school district, the board may authorize such activities 
        to be conducted under such rules and regulations as the board 
        deems sufficient.  The district may pay all necessary costs 
        therefor including transportation from the school district funds 
        available. 
           Sec. 79.  Minnesota Statutes 1996, section 123.38, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COCURRICULAR ACTIVITIES AUTHORIZATION.] The 
        board shall must take charge of and control all cocurricular 
        school activities of the teachers and children of the public 
        schools in that district held in the school building or school 
        grounds or under the supervision or direction of the school 
        board and to that end.  The board must adopt rules and 
        regulations for the conduct of these cocurricular activities in 
        which the schools of the district or any class or pupils therein 
        may participate.  All money received on account of such 
        activities shall must be turned over to the school district 
        treasurer, who shall keep the same in the general fund, to be 
        disbursed for expenses and salaries connected with the 
        activities, or otherwise, by the board upon properly allowed 
        itemized claims. 
           No cocurricular activity shall be participated in by the 
        Teachers or pupils in the public schools of such district must 
        not participate in cocurricular activities, nor shall the school 
        name or any allied name be used in connection therewith, except 
        by consent and direction of the board.  
           Sec. 80.  Minnesota Statutes 1996, section 123.38, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [COCURRICULAR ACTIVITIES.] Cocurricular 
        activities shall mean means school sponsored and directed 
        activities designed to provide opportunities for pupils to 
        participate, on an individual or group basis, in school and 
        public events for the improvement of skills.  Cocurricular 
        activities are not offered for school credit, cannot be counted 
        toward graduation and have one or more of the following 
        characteristics: 
           (a) They are conducted at regular and uniform times during 
        school hours, or at times established by school authorities; 
           (b) Although not offered for credit, they are directed or 
        supervised by instructional staff in a learning environment 
        similar to that found in courses offered for credit; 
           (c) They are partially funded by public moneys for general 
        instructional purposes under direction and control of the board. 
           Sec. 81.  Minnesota Statutes 1996, section 123.38, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [BOARD CONTROL OF EXTRACURRICULAR ACTIVITIES.] 
        (a) The board may take charge of and control all extracurricular 
        activities of the teachers and children of the public schools in 
        the district.  Extracurricular activities shall mean means all 
        direct and personal services for public school pupils for their 
        enjoyment that are managed and operated under the guidance of an 
        adult or staff member.  
           (b) Extracurricular activities have all of the following 
        characteristics: 
           (1) they are not offered for school credit nor required for 
        graduation; 
           (2) they are generally conducted outside school hours, or 
        if partly during school hours, at times agreed by the 
        participants, and approved by school authorities; 
           (3) the content of the activities is determined primarily 
        by the pupil participants under the guidance of a staff member 
        or other adult. 
           (c) If the board does not take charge of and control 
        extracurricular activities, these activities shall be 
        self-sustaining with all expenses, except direct salary costs 
        and indirect costs of the use of school facilities, met by dues, 
        admissions, or other student fundraising events.  The general 
        fund shall must reflect only those salaries directly related to 
        and readily identified with the activity and paid by public 
        funds.  Other revenues and expenditures for extra curricular 
        activities must be recorded according to the "Manual of 
        Instruction for Uniform Student Activities Accounting for 
        Minnesota School Districts and Area Vocational-Technical 
        Colleges."  Extracurricular activities not under board control 
        must have an annual financial audit and must also be audited 
        annually for compliance with this section. 
           (d) If the board takes charge of and controls 
        extracurricular activities, any or all costs of these activities 
        may be provided from school revenues and all revenues and 
        expenditures for these activities shall be recorded in the same 
        manner as other revenues and expenditures of the district.  
           (e) If the board takes charge of and controls 
        extracurricular activities, no such activity shall be 
        participated in by the teachers or pupils in the district must 
        not participate in such activity, nor shall the school name or 
        any allied name be used in connection therewith, except by 
        consent and direction of the board. 
           Sec. 82.  Minnesota Statutes 1996, section 123.38, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INSURANCE.] The board may enter into a contract 
        providing for the payment of cash benefits or the rendering or 
        payment of hospital and medical benefits, or both to school 
        children injured while participating in activities of the 
        school, such.  The contract to entered into by the board may 
        make the payment of such benefits or the rendering thereof the 
        direct and sole obligation of the association or company 
        entering into such contract with the district. 
           If the board deems it advisable, it may authorize employees 
        to collect fees from the pupils enrolled in said school who are 
        to be or are covered by such contract, and to make payment of 
        the premium or other charge for such contract or protection.  
        The payment of such premium or other charge may be made from 
        funds received from the federal government or from the state or 
        any governmental subdivision thereof, or from funds derived by a 
        tax levy or the issuance of bonds. 
           The child's payment of any fees, premium or other charge by 
        such child shall not thereby make the district liable for any 
        injuries incurred from such school activities. 
           The state board of education may purchase medical insurance 
        coverage for the benefit of students of the Minnesota state 
        academy for the deaf or the Minnesota state academy for the 
        blind in the same manner and with the same effect as a school 
        district board may do for its students under this subdivision.  
           Sec. 83.  Minnesota Statutes 1996, section 123.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY TO TRANSPORT PUPILS.] The board 
        may provide for the transportation of pupils to and from school 
        and for any other purpose.  The board may also provide for the 
        transportation of pupils to schools in other districts for 
        grades and departments not maintained in the district, including 
        high school, at the expense of the district, when funds are 
        available therefor and if agreeable to the district to which it 
        is proposed to transport the pupils, for the whole or a part of 
        the school year, as it may deem advisable, and subject to its 
        rules.  In any school district, the board shall must 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.  The 
        district may provide for the transportation of or through the 
        boarding and rooming of the pupils who may be more economically 
        and conveniently provided for by that means.  The board shall 
        must 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 must 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. 84.  Minnesota Statutes 1996, section 123.39, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRANSPORTATION SERVICES CONTRACTS.] The board 
        may contract for the furnishing of authorized transportation 
        under rules established by the commissioner of children, 
        families, and learning, and may purchase gasoline and furnish 
        same to a contract carrier for use in the performance of a 
        contract with the school district for transportation of school 
        children to and from school. 
           Sec. 85.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8, is amended to read: 
           Subd. 8.  [AUTHORITY TO RENT BUSES.] The board may rent a 
        bus owned by the school district excluding a motor-coach bus to 
        any person for any lawful purpose.  Bus rental shall must not 
        interfere with the transportation of pupils by the district.  A 
        lessee may use and operate the bus without payment of a motor 
        vehicle tax.  The lessee is liable for any claims for injuries 
        and damages arising out of the use and operation of a bus leased 
        from the district.  Except as provided in subdivision 9a, the 
        lessee shall procure insurance at the lessee's expense 
        protecting the board and the district against claims for 
        injuries and damages arising out of the use and operation of the 
        bus.  
           Sec. 86.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [NONPUPIL TRANSPORTATION; INSURANCE.] 
        Notwithstanding the provisions of section 221.021, any public 
        school district or school bus contractor providing 
        transportation services to a school district on a regular basis 
        in this state may operate school buses, excluding motor coach 
        buses, for the purpose of providing transportation to nonpupils 
        of the school district attending school events, as defined in 
        section 123.38, subdivision 2a or 2b, provided that no carrier 
        having a charter carrier permit has its principal office and 
        place of business or bus garage within 12 miles of the principal 
        office of the school district.  School District owned buses and 
        the operators thereof shall otherwise comply with the provisions 
        of this section and the rules of the state board of education 
        and shall be insured in at least the amounts stated in section 
        466.04, subdivision 1.  In all cases the total cost of providing 
        such services, as determined by sound accounting procedures, 
        shall be paid by charges made against those using the buses.  
           Sec. 87.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8b, is amended to read: 
           Subd. 8b.  [TRANSPORTATION OF ANY PERSON.] School Districts 
        may use school district owned or contractor operated school 
        buses to provide transportation along regular school bus routes 
        on a space available basis for any person, provided that this.  
        Such use of a bus does must not interfere with the 
        transportation of pupils to and from school or other authorized 
        transportation of pupils.  In all cases, the total additional 
        cost of providing these services, as determined by sound 
        accounting procedures, shall must be paid by charges made 
        against those using these services or some third-party payor.  
        In no case shall the additional cost of this transportation be 
        paid by the school district. 
           The provisions of section 65B.47, subdivision 4, shall be 
        applicable to any person being transported pursuant to this 
        subdivision.  
           Sec. 88.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8c, is amended to read: 
           Subd. 8c.  [PART-TIME SECONDARY STUDENTS.] School Districts 
        may provide bus transportation along regular school bus routes 
        on a space available basis for part-time students enrolled in 
        secondary classes pursuant to section 123.35, subdivisions 8a, 
        8b and 8c, provided that this.  Such use of a bus does must not 
        interfere with the transportation of pupils to and from school 
        or other authorized transportation of pupils.  The total 
        additional cost of providing these services, as determined by 
        sound accounting procedures, shall be paid by charges made 
        against those using the services or some third-party payor.  
           Sec. 89.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8d, is amended to read: 
           Subd. 8d.  [EARLY CHILDHOOD FAMILY EDUCATION PARTICIPANTS.] 
        School Districts may provide bus transportation along regular 
        school bus routes when space is available for participants in 
        early childhood family education programs and learning readiness 
        programs if these services do not result in an increase in the 
        district's expenditures for transportation.  The costs allocated 
        to these services, as determined by generally accepted 
        accounting principles, shall be considered part of the 
        authorized cost for regular transportation for the purposes of 
        section 124.225.  
           Sec. 90.  Minnesota Statutes 1996, section 123.39, 
        subdivision 8e, is amended to read: 
           Subd. 8e.  [AREA LEARNING CENTER PUPILS.] School Districts 
        may provide bus transportation along school bus routes 
        established to provide nonregular transportation as defined in 
        section 124.225, subdivision 1, paragraph (e)(2)(ii), when space 
        is available, for pupils attending programs at an area learning 
        center.  The transportation is only permitted between schools 
        and if it does not increase the district's expenditures for 
        transportation.  The cost of these services shall be considered 
        part of the authorized cost for nonregular transportation for 
        the purpose of section 124.225. 
           Sec. 91.  Minnesota Statutes 1996, section 123.39, 
        subdivision 9a, is amended to read: 
           Subd. 9a.  [INSURANCE; INDEMNITY.] If a school board has 
        obtained insurance pursuant to subdivision 9 or section 466.06, 
        it may also obtain and pay for insurance coverage to indemnify a 
        lessee and to protect the board and the district, in any amount 
        not exceeding the limits of coverage provided for the insurance 
        obtained pursuant to subdivision 9 or section 466.06 against 
        claims for injuries and damages arising out of the use and 
        operation of a district-owned bus while it is leased or rented 
        to the lessee pursuant to subdivision 8.  The rental charge 
        shall include the cost of this additional insurance coverage.  
        The procurement of this additional insurance coverage 
        constitutes a waiver of the defense of governmental immunity to 
        the extent of the additional coverage but has no effect on the 
        liability of the board, the school district, or its employees 
        beyond the coverage so provided. 
           Sec. 92.  Minnesota Statutes 1996, section 123.39, 
        subdivision 11, is amended to read: 
           Subd. 11.  [INSURANCE; SCHOOL SAFETY PATROL.] The board may 
        provide and pay the premiums for insurance against injuries 
        resulting to its pupils while assigned to and acting on a school 
        safety patrol, which.  Such insurance may provide for the 
        payment of either cash benefits to such injured pupil or for the 
        payment of hospital and medical benefits to or for such injured 
        pupil, or both.  Nothing herein shall be construed to in any way 
        make the district liable for such injuries.  
           Sec. 93.  Minnesota Statutes 1996, section 123.39, 
        subdivision 12, is amended to read: 
           Subd. 12.  [SNOW REMOVAL.] The board may enter into 
        contracts for the removal of snow from roads used for regular 
        bus routes transporting pupils to and from school either within 
        or without outside the district. 
           Sec. 94.  Minnesota Statutes 1996, section 123.39, 
        subdivision 13, is amended to read: 
           Subd. 13.  [HANDICAPPED PERSON TRANSPORT TO DEVELOPMENTAL 
        ACHIEVEMENT CENTER.] The board shall must contract with any 
        licensed developmental achievement center attended by a resident 
        handicapped person who fulfills the eligibility requirements of 
        section 252.23, subdivision 1, to transport the resident 
        handicapped person to the developmental achievement center in 
        return for payment by the center of the cost of the 
        transportation, if transportation by the board is in the best 
        interest of the handicapped person and is not unreasonably 
        burdensome to the district and if a less expensive, reasonable, 
        alternative means of transporting the handicapped person does 
        not exist.  If the board and the developmental achievement 
        center are unable to agree to a contract, either the board or 
        the center may appeal to the commissioner of children, families, 
        and learning to resolve the conflict.  All decisions of the 
        commissioner shall be final and binding upon the board and the 
        center. 
           Sec. 95.  Minnesota Statutes 1996, section 123.39, 
        subdivision 14, is amended to read: 
           Subd. 14.  [CUSTODIAL PARENT TRANSPORTATION.] The board may 
        provide transportation for a pupil who is a custodial parent and 
        that pupil's child between the pupil's home and a child care 
        provider and between the provider and the school.  The 
        board shall must establish criteria for transportation it 
        provides according to this subdivision.  
           Sec. 96.  Minnesota Statutes 1996, section 123.39, 
        subdivision 15, is amended to read: 
           Subd. 15.  [PUPIL TRANSPORT ON STAFF DEVELOPMENT DAYS.] A 
        school district may provide bus transportation between home and 
        school for pupils on days devoted to parent-teacher conferences, 
        teacher's workshops, or other staff development opportunities.  
        If approved by the commissioner as part of a program of 
        educational improvement, the cost of providing this 
        transportation, as determined by generally accepted accounting 
        principles, must be considered part of the authorized cost for 
        regular transportation for the purposes of section 124.225.  The 
        commissioner shall approve inclusion of these costs in the 
        regular transportation category only if the total number of 
        instructional hours in the school year divided by the total 
        number of days for which transportation is provided equals or 
        exceeds the number of instructional hours per day prescribed in 
        the rules of the state board. 
           Sec. 97.  Minnesota Statutes 1996, section 123.39, 
        subdivision 16, is amended to read: 
           Subd. 16.  [POST-SECONDARY ENROLLMENT OPTIONS PUPILS.] 
        School Districts may provide bus transportation along school bus 
        routes established to provide nonregular transportation as 
        defined in section 124.225, subdivision 1, paragraph (c), clause 
        (2), when space is available, for pupils attending programs at a 
        post-secondary institution under the post-secondary enrollment 
        options program.  The transportation is permitted only if it 
        does not increase the district's expenditures for 
        transportation.  Fees collected for this service under section 
        120.73, subdivision 1, paragraph (m), shall be subtracted from 
        the authorized cost for nonregular transportation for the 
        purpose of section 124.225. 
           Sec. 98.  Minnesota Statutes 1996, section 123.40, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PAYMENT OF JUST CLAIMS.] The board shall 
        must provide for the payment of all just claims against the 
        district in cases provided by law.  
           Sec. 99.  Minnesota Statutes 1996, section 123.40, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROSECUTE AND DEFEND ACTIONS.] In all proper 
        cases, the board shall must prosecute and defend actions by or 
        against the district. 
           Sec. 100.  Minnesota Statutes 1996, section 123.40, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REMOVAL OF UNAUTHORIZED VEHICLES.] The board may 
        authorize a representative to move unauthorized vehicles parked 
        on school district property, or require the driver or other 
        person in charge of the vehicle to move the same off school 
        district property.  
           When such representative finds such a vehicle unattended 
        upon school district premises, such representative is hereby 
        authorized to provide for the removal of such vehicle and remove 
        the same to the nearest convenient garage or other place of 
        safety off of school district property.  Such vehicle shall be 
        moved at the expense of the owner or operator. 
           Sec. 101.  Minnesota Statutes 1996, section 123.41, is 
        amended to read: 
           123.41 [LIABILITY INSURANCE,; OFFICERS AND EMPLOYEES.] 
           The governing body of any independent school district may 
        procure insurance against liability of the school district or of 
        its officers and employees for damages resulting from wrongful 
        acts and omissions of the school district and its officers and 
        employees, whether the acts or omissions relate to governmental 
        or proprietary functions of the school district.  Insofar as 
        this insurance relates to governmental functions of the school 
        district, the policy of insurance shall contain a provision 
        under which requiring the insurance company agrees to waive the 
        defense of governmental immunity up to the limits of the policy 
        unless the school district consents to the assertion of that 
        defense.  
           Sec. 102.  Minnesota Statutes 1996, section 123.63, is 
        amended to read: 
           123.63 [EMINENT DOMAIN.] 
           In any municipal corporation or district in this state 
        where the governing body or board has the right, power, and 
        authority to purchase sites for school buildings without 
        authorization by the voters at a regular or special meeting or 
        election called for that purpose, such governing body or school 
        board shall have the right, power, and authority to condemn 
        lands under the right of eminent domain for sites and grounds 
        for public school buildings and.  The governing body or board 
        shall exercise such power and authority shall be exercised under 
        and pursuant to the terms and provisions of chapter 117.  Any 
        such corporation or school district shall have the right, upon 
        the filing of the award of the commissioners provided for in 
        chapter 117, and upon giving the notice therein required of the 
        filing of such award, to enter upon and appropriate the lands so 
        condemned without giving of any bond, but.  In case of such 
        entry and appropriation, such corporation or school district 
        shall be bound absolutely to pay all damages awarded, either by 
        the commissioners or by the court upon appeal therefrom, 
        together with all costs and expenses adjudged against it therein 
        within the time specified in chapter 117.  In case any such 
        corporation or school district shall appeal from the award of 
        commissioners appointed pursuant to any such condemnation 
        proceedings, such corporation or school district shall not be 
        required to give or file any appeal bond therein.  
           Sec. 103.  Minnesota Statutes 1996, section 123.64, is 
        amended to read: 
           123.64 [AGRICULTURAL EDUCATION.] 
           The board of In any district in which instruction in 
        agriculture is afforded, the board is authorized and empowered 
        to purchase or otherwise acquire by condemnation proceedings as 
        provided for acquiring schoolhouse sites in the name and in 
        behalf of such district, a suitable tract of land either within 
        or without outside of the limits of such district to be used for 
        the purpose of instruction, experimentation, and demonstration 
        in agriculture.  The provisions of this section shall apply as 
        well to districts organized under special acts as under the 
        general laws, notwithstanding any provisions or restrictions in 
        the laws under which the same districts are organized.  
           Sec. 104.  Minnesota Statutes 1996, section 123.66, is 
        amended to read: 
           123.66 [RECORDS AS EVIDENCE.] 
           The records of all districts and boards and all transcripts 
        thereof, or any part thereof, certified by the clerk or other 
        officer having custody thereof of the records or transcripts, 
        shall be prima facie evidence of the facts therein stated and in 
        the records or transcripts.  All records, books, and papers of 
        such the district or board shall be subject to the inspection of 
        any voter of the district. 
           Sec. 105.  Minnesota Statutes 1996, section 123.681, is 
        amended to read: 
           123.681 [SALE AT AUCTION.] 
           Notwithstanding sections 123.37, subdivision 1, 471.345 or 
        any other law, the board of a school district or of a 
        cooperative center for vocational education may, in lieu of 
        advertising for bids, sell at public auction to the highest 
        responsible bidder a building constructed or to be constructed 
        by a secondary or post-secondary school student or class as a 
        school assignment.  A board shall publish notice of a sale at 
        least two weeks before the sale in the official newspaper of the 
        district, or in the case of a cooperative center, in the 
        official newspapers of each of the member districts, and may, at 
        its discretion, publish additional notice in the official paper 
        or elsewhere.  A building may be withdrawn from sale prior to 
        the completion of the sale unless the auction has been announced 
        to be without reserve.  If the sale is made at public auction, a 
        duly licensed auctioneer shall must be retained to conduct the 
        sale.  The auctioneer shall be paid from the proceeds of the 
        sale or from any funds available to the board which are not 
        otherwise restricted or encumbered. 
           Sec. 106.  Minnesota Statutes 1996, section 123.71, is 
        amended to read: 
           123.71 [PUBLICATION OF FINANCIAL INFORMATION.] 
           Subdivision 1.  [BUDGETS.] By October 1, every school board 
        shall, no later than October 1, must publish revenue and 
        expenditure budgets for the current year and the actual 
        revenues, expenditures, fund balances for the prior year and 
        projected fund balances for the current year in a form 
        prescribed by the commissioner.  The forms prescribed shall must 
        be designed so that year to year comparisons of revenue, 
        expenditures and fund balances can be made.  These budgets, 
        reports of revenue, expenditures and fund balances shall must be 
        published in a qualified newspaper of general circulation in the 
        district. 
           Subd. 2.  [DEBT SUMMARY.] It shall The board must also 
        publish at the same time a summary of bonds outstanding, paid, 
        and sold; a summary of orders not paid for want of funds; 
        certificates of indebtedness for the year ending June 30; the 
        statutory operating debt of the district as defined and 
        certified pursuant to section 121.914; and the balance amount of 
        the reserved fund balance reserve account for purposes of 
        statutory operating debt reduction established pursuant to 
        sections 124.226, 124.2716, 124.91, 124.912, 124.914, 124.916, 
        and 124.918.  
           Subd. 3.  [BUDGET INSPECTION.] A statement shall must be 
        included in the publication that the complete budget in detail 
        may be inspected by any resident of the district upon request to 
        the chief school administrator. 
           Subd. 4.  [COST PER PUPIL.] It shall The board must also 
        publish at the same time the average cost per pupil in average 
        daily membership educated in that district in the preceding 
        year.  This computation shall must be made exclusive of debt 
        service or capital outlay costs. 
           Sec. 107.  Minnesota Statutes 1996, section 123.72, is 
        amended to read: 
           123.72 [MEDICAL INSURANCE PREMIUMS FOR RETIRED.] 
           The school board of any independent school district may 
        expend funds to pay premiums on hospitalization and major 
        medical insurance coverage for officers and employees who retire 
        prior to age 65.  
           Sec. 108.  Minnesota Statutes 1996, section 123.75, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORITY.] Each school district may develop a 
        fingerprinting program for pupils and children who reside in the 
        district.  The principal or chief administrative officer of a 
        nonpublic school may develop a fingerprinting program for pupils 
        of the school.  If developed, the program must be developed in 
        conjunction with law enforcement agencies having jurisdiction 
        within the school district or the place where the nonpublic 
        school is located.  The law enforcement agencies must cooperate 
        fully with the school district or the nonpublic school in the 
        development of its fingerprinting program. 
           Sec. 109.  Minnesota Statutes 1996, section 123.75, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LIMITATIONS AND PROCEDURES.] If developed, the 
        fingerprinting program may be developed only for the purpose of 
        assisting in the location and identification of missing 
        children, and must be operated according to the following 
        procedures: 
           (a) No child may be required to participate in the program. 
           (b) Before a child may participate in the program, the 
        child's parents, guardian, legal custodian, or other person 
        responsible for the child must authorize the child's 
        participation by signing a form developed by the school district 
        or the principal or chief administrative officer of the 
        nonpublic school. 
           (c) Fingerprinting of children must be done by law 
        enforcement personnel on fingerprint cards provided to the 
        school district or nonpublic school by the commissioner of 
        public safety or on fingerprint cards acquired elsewhere. 
           (d) The school must give the fingerprint card to the 
        child's parents, guardian, legal custodian, or other person 
        responsible for the child.  No copy of the fingerprint card may 
        be retained by the law enforcement agency, school, or school 
        district. 
           (e) The child's name, sex, hair and eye color, height, 
        weight, and date and place of birth must be written on the 
        fingerprint card. 
           School Districts and nonpublic schools that develop 
        fingerprinting programs under this section shall offer them on a 
        periodic basis, and shall notify parents, guardians, legal 
        custodians, and residents of the district or communities served 
        by the school of the program and its purpose.  Notification may 
        be made by means of memoranda, letters, newspaper articles, or 
        other reasonable means. 
           Sec. 110.  Minnesota Statutes 1996, section 123.75, 
        subdivision 5, is amended to read: 
           Subd. 5.  [OTHER FINGERPRINTING PROGRAMS UNAFFECTED.] This 
        section does not apply to fingerprinting programs for children 
        that are provided by private organizations other than nonpublic 
        schools, or governmental entities other than school districts. 
           Sec. 111.  Minnesota Statutes 1996, section 123.751, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FLAG RECORD UPON CERTAIN NOTIFICATION.] 
        A school district shall must flag the record of a pupil who is 
        currently or was previously enrolled in the district if a law 
        enforcement agency notifies the district of the pupil's 
        disappearance.  The flag must be made so that, if a copy of or 
        information regarding the pupil's record is requested, the 
        district is aware that the record is that of a missing pupil. 
           Sec. 112.  Minnesota Statutes 1996, section 123.751, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISTRICT NOTIFICATION WHEN RECORDS ARE 
        REQUESTED.] When the district provides a copy of the pupil's 
        record or other information concerning the pupil whose record is 
        flagged, the district shall must notify the law enforcement 
        agency that notified the district of the pupil's disappearance 
        of every inquiry concerning the record.  The district shall must 
        also provide a copy to the law enforcement agency of a written 
        request for information concerning the record. 
           Sec. 113.  Minnesota Statutes 1996, section 123.751, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RECORDS UPON SCHOOL DISTRICT TRANSFER.] When a 
        pupil transfers from one district to another, the receiving 
        district shall attempt to obtain, within 30 days of the pupil's 
        enrollment, the pupil's record from the district from which the 
        pupil has transferred.  If the pupil's parent, custodian, or 
        guardian provides a copy of the pupil's record from the district 
        from which the pupil has transferred, the receiving district 
        shall must request, within 30 days of the pupil's enrollment, 
        written verification of the pupil's record by contacting the 
        district named on the transferring pupil's record.  Information 
        received by a school district indicating that the transferring 
        pupil is a missing child must be reported by the district to the 
        department of public safety. 
           Sec. 114.  Minnesota Statutes 1996, 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.  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.  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.  The 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. 115.  Minnesota Statutes 1996, section 124.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TITLE TO BE HELD BY DISTRICT.] The district must 
        hold title to lands or interests so acquired shall be held by 
        the district.  The district must sell each tract or portion 
        shall be sold by the district as soon as there may be realized 
        the fair value as determined by such board.  Any such sale may 
        be authorized by resolution of the board, and may be made for 
        cash, or for part cash and the deferred balance secured by 
        contract for deed or purchase money mortgage, on such terms as 
        the board approves.  Conveyances, contracts, or other 
        instruments evidencing any sale shall be executed by the chair 
        and the clerk of the board.  Lands so acquired and held for 
        resale shall be deemed public lands used for exclusively public 
        purposes and as such shall be exempt from taxation.  
           Sec. 116.  Minnesota Statutes 1996, section 124.63, is 
        amended to read: 
           124.63 [NATIONAL FOREST LAND FUNDS, HANDLING AND 
        DISPOSITION.] 
           Any A county board may place the money, or any part 
        thereof, received by such county from the federal government for 
        and on account of any national forest lands situated therein in 
        the county into a special fund to be disbursed and paid over to 
        any district now or hereafter maintaining and operating any 
        school wholly or partly within an area now or hereafter 
        constituting a part of any auxiliary or state forest.  Such 
        action shall be taken by The board by must adopt a resolution 
        duly adopted by it, which to take such action.  The resolution 
        shall must specify the terms and conditions under which this the 
        money shall be so paid over and disbursed to any district.  
           Sec. 117.  Minnesota Statutes 1996, section 126.12, is 
        amended to read: 
           126.12 [SCHOOL CALENDAR.] 
           Subdivision 1.  Except for learning programs during summer, 
        flexible learning year programs authorized under sections 120.59 
        to 120.67, and learning year programs under section 121.585, a 
        school district shall must not commence an elementary or 
        secondary school year prior to Labor Day.  Days which are 
        devoted to teachers' workshops may be held before Labor Day.  
        Districts that enter into cooperative agreements are encouraged 
        to adopt similar school calendars. 
           Sec. 118.  Minnesota Statutes 1996, section 126.13, is 
        amended to read: 
           126.13 [CONDUCT OF SCHOOL ON CERTAIN HOLIDAYS.] 
           The governing body of any district may contract with any of 
        the teachers thereof of the district for the conduct of schools, 
        and may conduct schools, on either, or any, of the following 
        holidays, provided that a clause to this effect is inserted in 
        the teacher's contract:  Martin Luther King's birthday, 
        Lincoln's and Washington's birthdays, Columbus Day and Veterans' 
        Day, provided that.  On Martin Luther King's birthday, 
        Washington's birthday, Lincoln's birthday, and Veterans' Day at 
        least one hour of the school program must be devoted to a 
        patriotic observance of the day.  
           Sec. 119.  Minnesota Statutes 1996, section 126.69, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM GOALS.] The department of 
        children, families, and learning, in consultation with the state 
        curriculum advisory committee, must develop guidelines and model 
        plans for parental involvement programs that will: 
           (1) engage the interests and talents of parents or 
        guardians in recognizing and meeting the emotional, 
        intellectual, and physical needs of their school-age children; 
           (2) promote healthy self-concepts among parents or 
        guardians and other family members; 
           (3) offer parents or guardians a chance to share and learn 
        about educational skills, techniques, and ideas; 
           (4) provide creative learning experiences for parents or 
        guardians and their school-age children, including involvement 
        from parents or guardians of color; 
           (5) encourage parents to actively participate in their 
        district's curriculum advisory committee under section 126.666 
        in order to assist the school board in improving children's 
        education programs; and 
           (6) encourage parents to help in promoting school 
        desegregation/integration. 
           Sec. 120.  Minnesota Statutes 1996, section 127.02, is 
        amended to read: 
           127.02 [ACTIONS BY DISTRICTS.] 
           Any school board may prosecute actions in the name of the 
        district in the following cases: 
           (1) On a contract made with the district, or with the board 
        in its official capacity; 
           (2) To enforce a liability, or a duty enjoined by law, in 
        its favor or in favor of the district; 
           (3) To recover a penalty or forfeiture given by law to it 
        or to the district; or 
           (4) To recover damages for an injury to the rights or 
        property of the district.  
           Sec. 121.  Minnesota Statutes 1996, section 127.03, is 
        amended to read: 
           127.03 [ACTIONS AGAINST DISTRICTS AND TEACHERS.] 
           Subdivision 1. (a) An action may be brought against any 
        school district, either upon a contract made with the district 
        or its board, in its official capacity and within the scope of 
        its authority, or for an injury to the rights of the plaintiff 
        arising from some act or omission of such board, whether.  The 
        action may be brought against the district even if the members 
        of the board making the contract, or guilty of the act or 
        omission complained of, be still are no longer in office or not. 
           Subd. 2. (b) Upon written request of the teacher involved, 
        any school district, however organized, shall must provide legal 
        counsel for any school teacher against whom claim is made or 
        action is brought for recovery of damages in any tort action 
        involving physical injury to any person or property or for 
        wrongful death arising out of or in connection with the 
        employment of such teacher with such school the district.  The 
        choice of such legal counsel shall be made only after 
        consultation with the teacher.  Provision of counsel under 
        this subdivision paragraph shall not be construed to render 
        the school district liable for its torts, except as otherwise 
        provided by law; or for reimbursement of costs of counsel 
        provided to the teacher pursuant to the contract obligation of 
        another or otherwise than under this subdivision paragraph; or 
        for payment of any judgments or any other costs or disbursements 
        in connection therewith with a judgment where the judgment, cost 
        or disbursement is against the teacher and not against the 
        school district. 
           Subd. 3.  [IMMUNITY FROM CIVIL LIABILITY.] (c) It is a 
        defense to a civil action for damages against a school official, 
        as defined in section 609.2231, subdivision 5, to prove that the 
        force used by the official was reasonable, was in the exercise 
        of lawful authority, and was necessary under the circumstances 
        to restrain the pupil or to prevent bodily harm or death to 
        another. 
           Sec. 122.  Minnesota Statutes 1996, section 127.04, is 
        amended to read: 
           127.04 [JUDGMENT PAID BY TREASURER.] 
           Except as hereinafter provided in this section, no 
        execution shall issue upon any judgment against a school 
        district for the recovery of money.  Unless the same be judgment 
        is stayed by appeal, the treasurer shall pay such judgment, upon 
        presentation of a certified copy thereof of the judgment, 
        if there is the district has sufficient money of the district 
        not otherwise appropriated.  A treasurer who fails to do so pay 
        the judgment shall be personally liable for the amount, unless 
        the collection be afterwards is stayed afterwards.  
           Sec. 123.  [REPEALER.] 
           Minnesota Statutes 1996, section 123.35, subdivision 10, is 
        repealed. 
           Sec. 124.  [INSTRUCTION TO REVISOR.] 
           The revisor of statutes shall renumber each section of 
        Minnesota Statutes listed in column A with the number listed in 
        column B.  The revisor shall also make necessary cross-reference 
        changes consistent with the renumbering. 
              Column A                        Column B 
             123.01                         123A.01
             123.66                         123A.03
             123.11                         123A.05
             123.12, subd. 1                123A.06, subd. 1
                     subd. 2                         subd. 2
                     subd. 9                         subd. 3
                     subd. 14                        subd. 4
             123.13, subd. 2                123A.07
             123.15                         123A.08
             123.21                         123A.09
             123.33, subd. 1                123A.13, subd. 1
                     subd. 2                         subd. 3
                     subd. 2a                        subd. 2
                     subd. 3                         subd. 4
                     subd. 4                         subd. 5
                     subd. 5                         subd. 6
                     subd. 6                         subd. 7
                     subd. 7                         subd. 8
                     subd. 8                         subd. 9
                     subd. 11                        subd. 10
                     subd. 11a                       subd. 11
                     subd. 12                        subd. 12
             123.71                         123A.14
             123.335                        123A.15
             124.06                         123A.16
             124.07                         123A.17
             123.34, subd. 1                123A.18, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 3
                     subd. 4                         subd. 4
                     subd. 5                         subd. 5
                     subd. 7                         subd. 6
                     subd. 8                         subd. 7
                     subd. 9                         subd. 8
                     subd. 9a                        subd. 9
                     subd. 10                        subd. 10
             123.35, subd. 1                123A.19, subd. 1
                     subd. 2                         subd. 2
                     subd. 3                         subd. 7
                     subd. 4                         subd. 8
                     subd. 6                         subd. 14
                     subd. 7                         subd. 9
                     subd. 9a                        subd. 10
                     subd. 9b                        subd. 11
                     subd. 11                        subd. 13
                     subd. 12                        subd. 15
                     subd. 15                        subd. 18
                     subd. 18                        subd. 12
                     subd. 19a                       subd. 3
                     subd. 19c                       subd. 4
                     subd. 20                        subd. 20
             123.72                         123A.19, subd. 16
             123.40, subd. 1                123A.19, subd. 17
                     subd. 2                         subd. 19
                     subd. 3                         subd. 6
                     subd. 8                         subd. 5
             123.41                         123A.20
             120.1045, subd. 1              123A.22, subd. 1
                       subd. 2                       subd. 2
                       subd. 4                       subd. 3
             123.36, subd. 1                123A.25, subd. 1
                     subd. 5                         subd. 2
                     subd. 7                         subd. 3
                     subd. 10                        subd. 4
                     subd. 11                        subd. 5
                     subd. 13                        subd. 6
                     subd. 14                        subd. 7
                     subd. 15                        subd. 8
             123.37, subd. 1                123A.27, subd. 1
                     subd. 1a                        subd. 2
                     subd. 1b                        subd. 3
                     subd. 2                         subd. 4
             123.681                        123A.29
             123.38, subd. 1                123A.31, subd. 1
                     subd. 2                         subd. 2
                     subd. 2a                        subd. 3
                     subd. 2b                        subd. 4
                     subd. 3                         subd. 5
                     subd. 4                         subd. 6
             123.39, subd. 1                123A.33, subd. 1
                     subd. 2                         subd. 2
                     subd. 4                         subd. 3
                     subd. 5                         subd. 4
                     subd. 6                         subd. 5
                     subd. 7                         subd. 6
                     subd. 8                         subd. 7
                     subd. 8a                        subd. 8
                     subd. 8b                        subd. 9
                     subd. 8c                        subd. 10
                     subd. 8d                        subd. 11
                     subd. 8e                        subd. 12
                     subd. 9                         subd. 13
                     subd. 9a                        subd. 14
                     subd. 10                        subd. 15
                     subd. 11                        subd. 16
                     subd. 12                        subd. 17
                     subd. 13                        subd. 18
                     subd. 14                        subd. 19
                     subd. 15                        subd. 20
                     subd. 16                        subd. 21
             127.02                         123A.35
             127.03                         123A.36
             127.04                         123A.37
             127.06                         123A.38
             126.12                         123A.41
             120.1015                       123A.42
             126.13                         123A.43
             120.59                         123A.45
             120.60                         123A.46
             120.61                         123A.47
             120.62                         123A.48
             120.63                         123A.49
             120.64                         123A.50
             120.66                         123A.51
             120.67                         123A.52
             121.585, subd. 1               123A.53, subd. 1
                      subd. 2                        subd. 2
                      subd. 4                        subd. 3
                      subd. 5                        subd. 4
                      subd. 6                        subd. 5
                      subd. 7                        subd. 6
                      subd. 8                        subd. 7
             123.951                        123A.55
             124C.77                        123A.57
             126.69                         123A.60
             126.699                        123A.61
             123.97                         123A.63
             123.972                        123A.64
             123.51                         123A.70
             123.62                         123A.72
             123.63                         123A.73
             123.64                         123A.74
             124.63                         123A.75
             123.75                         123A.80
             123.751                        123A.81
             121.904, subd. 1               123A.85, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 4                        subd. 4
                      subd. 4a                       subd. 5
                      subd. 4c                       subd. 6
                      subd. 11                       subd. 7
                      subd. 12                       subd. 8
                      subd. 13                       subd. 9
                      subd. 14                       subd. 10
             121.906                        123A.86 
             121.908, subd. 1               123A.87, subd. 1
                      subd. 2                        subd. 2
                      subd. 3                        subd. 3
                      subd. 3a                       subd. 4
                      subd. 5                        subd. 5
                      subd. 6                        subd. 6
             121.911                        123A.90
             121.912, subd. 1               123A.91, subd. 1
                      subd. 1a                       subd. 2
                      subd. 1b                       subd. 3
                      subd. 2                        subd. 4
                      subd. 3                        subd. 5
                      subd. 4                        subd. 6
                      subd. 5                        subd. 7
                      subd. 6                        subd. 8
             121.9121, subd. 1              123A.92, subd. 1
                       subd. 2                       subd. 2
                       subd. 4                       subd. 3
             121.914                        123A.93
             121.915                        123A.94
             121.917                        123A.95
                                   ARTICLE 7 
                                  CHAPTER 124D 
                            BASIC EDUCATION FUNDING 
           Section 1.  Minnesota Statutes 1996, section 123.76, is 
        amended to read: 
           123.76 [POLICY.] 
           In districts where the state provides aids for 
        transportation it is in the public interest to provide equality 
        of treatment in transporting school children of the state who 
        are required to attend elementary and secondary schools pursuant 
        to chapter 120, so that the health, welfare and safety of such 
        the children, while using the public highways of the state, 
        shall be protected.  
           School children attending any schools, complying with 
        section 120.101, are therefore entitled to the same rights and 
        privileges relating to transportation.  
           Sec. 2.  Minnesota Statutes 1996, section 123.78, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [NONPUBLIC SCHOOL STUDENTS.] (a) The school 
        board of any local district shall must provide school bus 
        transportation to the district boundary for school children 
        residing in the district at least the same distance from a 
        nonpublic school actually attended in another district as public 
        school pupils are transported in the transporting district,.  
        Such transportation must be provided whether or not there is 
        another nonpublic school within the transporting district, if 
        the transportation is to schools maintaining grades or 
        departments not maintained in the district or if the attendance 
        of such children at school can more safely, economically, or 
        conveniently be provided for by such means.  
           (b) The school board of any local district may provide 
        school bus transportation to a nonpublic school in another 
        district for school children residing in the district and 
        attending that school, whether or not there is another nonpublic 
        school within the transporting district, if the transportation 
        is to schools maintaining grades or departments not maintained 
        in the district or if the attendance of such children at school 
        can more safely, economically, or conveniently be provided for 
        by such means.  If the board transports children to a nonpublic 
        school located in another district, the nonpublic school shall 
        must pay the cost of such transportation provided outside the 
        district boundaries. 
           Sec. 3.  Minnesota Statutes 1996, section 123.78, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BOARD CONTROL.] When transportation is provided, 
        the scheduling of routes, 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. 
           Sec. 4.  Minnesota Statutes 1996, section 123.79, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE AID.] Such State aids as are made 
        available or appropriated shall be for the equal benefit of all 
        school children, and be disbursed in such manner as determined 
        by the board. 
           Sec. 5.  Minnesota Statutes 1996, section 123.799, as 
        amended by Laws 1997, First Special Session chapter 4, article 
        12, section 2, is amended to read: 
           123.799 [STUDENT TRANSPORTATION SAFETY.] 
           Subdivision 1.  [RESERVED REVENUE USE.] A district shall 
        must use the student transportation safety reserved revenue 
        under section 124.225, subdivision 7f, for providing student 
        transportation safety programs to enhance student conduct and 
        safety on the bus or when boarding and exiting the bus.  A 
        district's student transportation policy must specify the 
        student transportation safety activities to be carried out under 
        this section.  A district's student transportation safety 
        reserved revenue may only be used for the following purposes: 
           (1) to provide paid adult bus monitors, including training 
        and salary costs; 
           (2) to provide a volunteer bus monitor program, including 
        training costs and the cost of a program coordinator; 
           (3) to purchase or lease optional external public address 
        systems or video recording cameras for use on buses; 
           (4) to purchase new or retrofit existing school buses with 
        seatbelts or other occupant restraint systems after consultation 
        with and approval by the commissioner of public safety; and 
           (5) other activities or equipment that have been approved 
        by the commissioner of public safety. 
           Subd. 2.  [REPORTING.] Districts shall must annually report 
        expenditures from the student transportation safety reserved 
        revenue to the commissioner of children, families, and learning, 
        who shall provide the information to the school bus safety 
        advisory committee. 
           Sec. 6.  Minnesota Statutes 1997 Supplement, section 
        123.7991, subdivision 2, is amended to read: 
           Subd. 2.  [STUDENT TRAINING.] (a) Each school district 
        shall must provide public school pupils enrolled in grades 
        kindergarten through 10 with age-appropriate school bus safety 
        training.  The training shall must be results-oriented and shall 
        consist of both classroom instruction and practical training 
        using a school bus.  Upon completing the training, a student 
        shall be able to demonstrate knowledge and understanding of at 
        least the following competencies and concepts: 
           (1) transportation by school bus is a privilege and not a 
        right; 
           (2) district policies for student conduct and school bus 
        safety; 
           (3) appropriate conduct while on the school bus; 
           (4) the danger zones surrounding a school bus; 
           (5) procedures for safely boarding and leaving a school 
        bus; 
           (6) procedures for safe street or road crossing; and 
           (7) school bus evacuation and other emergency procedures. 
           (b) Each nonpublic school located within the district shall 
        must 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) 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 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 four weeks of the first day of attendance.  The pupil 
        transportation safety director in each district must certify to 
        the commissioner of children, families, and learning annually 
        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. 
           (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. 
           (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, 
        for students enrolled in grades kindergarten through 5. 
           (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 1996, section 123.7991, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner of 
        children, families, and learning 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 1996, section 123.801, is 
        amended to read: 
           123.801 [BUS TRANSPORTATION A PRIVILEGE NOT A RIGHT.] 
           Transportation by school bus is a privilege not a right for 
        an eligible student.  A student's eligibility to ride a school 
        bus may be revoked for a violation of school bus safety or 
        conduct policies, or for violation of any other law governing 
        student conduct on a school bus, pursuant to a written school 
        district discipline policy.  Revocation of a student's bus 
        riding privilege is not an exclusion, expulsion, or suspension 
        under the pupil fair dismissal act of 1974.  Revocation 
        procedures for a student who is an individual with a disability 
        under the Individuals with Disabilities Education Act, United 
        States Code, title 20, section 1400 et seq., section 504 of the 
        Rehabilitation Act of 1973, United States Code, title 29, 
        section 794, and the Americans with Disabilities Act, Public Law 
        Number 101-336, are governed by these provisions. 
           Sec. 9.  Minnesota Statutes 1996, section 123.805, is 
        amended to read: 
           123.805 [SCHOOL DISTRICT BUS SAFETY RESPONSIBILITIES.] 
           Subdivision 1.  [COMPREHENSIVE POLICY.] Each school 
        district shall must 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; 
           (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 
        must include the Heimlich maneuver and procedures for dealing 
        with obstructed airways, shock, bleeding, and seizures. 
           School Districts are encouraged to use the model policy 
        developed by the Minnesota school boards association, the 
        department of public safety, and the department of children, 
        families, and learning, as well as the current edition of the 
        "National Standards for School Buses and Operations" published 
        by the National Safety Council, in developing safety policies.  
        Each district shall submit a copy of its policy under this 
        subdivision to the school bus safety advisory committee no later 
        than August 1, 1994.  Each district shall review its policy 
        annually and make appropriate amendments, which must be 
        submitted to the school bus safety advisory committee within one 
        month of approval by the school board. 
           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 1996, section 123.932, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [TEXTBOOK.] "Textbook" means any book or book 
        substitute which a pupil uses as a text or text substitute in a 
        particular class or program in the school regularly attended and 
        a copy of which is expected to be available for the individual 
        use of each pupil in this class or program, which book or book 
        substitute or text or text substitute.  The term shall be 
        limited to books, workbooks, or manuals, whether bound or in 
        loose-leaf form, intended for use as a principal source of study 
        material for a given class or a group of students.  The term 
        includes only such secular, neutral and nonideological textbooks 
        as are available, used by, or of benefit to Minnesota public 
        school pupils. 
           Sec. 11.  Minnesota Statutes 1996, section 123.933, is 
        amended to read: 
           123.933 [TEXTBOOKS,; INDIVIDUAL INSTRUCTION OR COOPERATIVE 
        LEARNING MATERIAL,; STANDARD TESTS.] 
           Subdivision 1.  [PROVISION.] The state board of education 
        shall promulgate rules under the provisions of chapter 14 
        requiring that in each school year, based upon formal requests 
        by or on behalf of nonpublic school pupils in a nonpublic 
        school, the local districts or intermediary service areas shall 
        must purchase or otherwise acquire textbooks, individualized 
        instructional or cooperative learning materials, and 
        standardized tests and loan or provide them for use by children 
        enrolled in that nonpublic school.  These textbooks, 
        individualized instructional or cooperative learning materials, 
        and standardized tests shall must be loaned or provided free to 
        the children for the school year for which requested.  The loan 
        or provision of the textbooks, individualized instructional or 
        cooperative learning materials, and standardized tests shall be 
        subject to rules prescribed by the state board of education. 
           Subd. 2.  [TITLE.] The title to textbooks, individualized 
        instructional or cooperative learning materials, and 
        standardized testing materials shall must remain in the 
        servicing school district or intermediary service area, and 
        possession or custody may be granted or charged to 
        administrators of the nonpublic school attended by the nonpublic 
        school pupil or pupils to whom the textbooks, individualized 
        instructional or cooperative learning materials, or standardized 
        tests are loaned or provided. 
           Subd. 3.  [COST; LIMITATION.] (a) The cost per pupil of the 
        textbooks, individualized instructional or cooperative learning 
        materials, and standardized tests provided for in this section 
        for each school year shall must not exceed the statewide average 
        expenditure per pupil, adjusted pursuant to clause (b), by the 
        Minnesota public elementary and secondary schools for textbooks, 
        individualized instructional materials and standardized tests as 
        computed and established by the department of children, 
        families, and learning by March 1 of the preceding school year 
        from the most recent public school year data then available. 
           (b) The cost computed in clause (a) shall be increased by 
        an inflation adjustment equal to the percent of increase in the 
        formula allowance, pursuant to section 124A.22, subdivision 2, 
        from the second preceding school year to the current school year.
           (c) The commissioner shall allot to the school districts or 
        intermediary service areas the total cost for each school year 
        of providing or loaning the textbooks, individualized 
        instructional or cooperative learning materials, and 
        standardized tests for the pupils in each nonpublic school.  The 
        allotment shall not exceed the product of the statewide average 
        expenditure per pupil, according to clause (a), adjusted 
        pursuant to clause (b), multiplied by the number of nonpublic 
        school pupils who make requests pursuant to this section and who 
        are enrolled as of September 15 of the current school year. 
           Sec. 12.  Minnesota Statutes 1996, section 123.935, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROVIDED SERVICES.] The state board of 
        education shall promulgate rules under the provisions of chapter 
        14 requiring each school district or other intermediary service 
        area:  (a) to provide each year upon formal request by a 
        specific date by or on behalf of a nonpublic school pupil 
        enrolled in a nonpublic school located in that district or area, 
        the same specific health services as are provided for public 
        school pupils by the district where the nonpublic school is 
        located; and (b) to provide each year upon formal request by a 
        specific date by or on behalf of a nonpublic school secondary 
        pupil enrolled in a nonpublic school located in that district or 
        area, the same specific guidance and counseling services as are 
        provided for public school secondary pupils by the district 
        where the nonpublic school is located.  The district where the 
        nonpublic school is located shall must provide the necessary 
        transportation within the district boundaries between the 
        nonpublic school and a public school or neutral site for 
        nonpublic school pupils who are provided pupil support services 
        pursuant to this section.  Each request for pupil support 
        services shall must set forth the guidance and counseling or 
        health services requested by or on behalf of all eligible 
        nonpublic school pupils enrolled in a given nonpublic school.  
        No district or intermediary service area shall must not expend 
        an amount for these pupil support services which exceeds the 
        amount allotted to it under this section. 
           Sec. 13.  Minnesota Statutes 1996, section 123.935, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LOCATION OF SERVICES.] Health services may be 
        provided to nonpublic school pupils pursuant to this section at 
        a public school, a neutral site, the nonpublic school or any 
        other suitable location.  Guidance and counseling services may 
        be provided to nonpublic school pupils pursuant to this section 
        only at a public school or a neutral site.  District or 
        intermediary service area personnel and representatives of the 
        nonpublic school pupils receiving pupil support services shall 
        must hold an annual consultation regarding the type of services, 
        provider of services, and the location of the provision of these 
        services.  The district board or intermediary service area 
        governing board shall must make the final decision on the 
        location of the provision of these services. 
           Sec. 14.  Minnesota Statutes 1996, section 123.935, 
        subdivision 4, is amended to read: 
           Subd. 4.  [HEALTH SERVICES; ALLOTMENT.] Each school year 
        the commissioner shall allot to the school districts or other 
        intermediary service areas for the provision of health services 
        pursuant to this section the actual cost of the services 
        provided for the pupils in each respective nonpublic school for 
        that school year, but not to.  The allotment must not exceed the 
        average expenditure per public school pupil for these services 
        by those Minnesota public elementary and secondary schools which 
        provide health services to public school pupils, multiplied by 
        the number of pupils in that particular nonpublic school who 
        request these health services and who are enrolled as of 
        September 15 of the current school year. 
           Sec. 15.  Minnesota Statutes 1996, section 123.935, 
        subdivision 5, is amended to read: 
           Subd. 5.  [GUIDANCE AND COUNSELING SERVICES; ALLOTMENT.] 
        Each school year the commissioner shall allot to the school 
        districts or intermediary service areas for the provision of 
        guidance and counseling services pursuant to this section the 
        actual cost of the services provided for the pupils in each 
        respective nonpublic school for that school year.  The allotment 
        for guidance and counseling services for the secondary pupils in 
        each nonpublic school shall must not exceed the average 
        expenditure per public school secondary pupil for these services 
        by those Minnesota public schools which provide these services 
        to their secondary pupils, multiplied by the number of secondary 
        pupils in that particular nonpublic school who request these 
        services and who are enrolled as of September 15 of the current 
        school year. 
           Sec. 16.  Minnesota Statutes 1996, section 123.935, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMPUTATION OF MAXIMUM ALLOTMENTS.] For purposes 
        of computing maximum allotments for each school year pursuant to 
        this section, the average public school expenditure per pupil 
        for health services and the average public school expenditure 
        per secondary pupil for guidance and counseling services shall 
        be computed and established by the department of children, 
        families, and learning by March 1 of the preceding school year 
        from the most recent public school year data then available. 
           Sec. 17.  Minnesota Statutes 1996, section 123.936, is 
        amended to read: 
           123.936 [PAYMENTS FOR CONTRACTUAL OBLIGATIONS.] 
           In every event The commissioner shall make such payments to 
        school districts or intermediary service areas pursuant to 
        sections 123.931 to 123.937 as are needed to meet contractual 
        obligations incurred for the provision of benefits to nonpublic 
        school students pursuant to section 123.933 or 123.935. 
           Sec. 18.  Minnesota Statutes 1996, section 123.9361, is 
        amended to read: 
           123.9361 [ADMINISTRATIVE COSTS.] 
           Each year, a school district or intermediary service area 
        may claim and receive from the department of children, families, 
        and learning an additional sum for the administration of 
        sections 123.933 and 123.935, equal to five percent of the 
        district's or area's allocation for that year pursuant to those 
        sections.  
           Sec. 19.  Minnesota Statutes 1996, section 123.9362, is 
        amended to read: 
           123.9362 [NOTICE TO DISTRICTS; PRORATION.] 
           In the event If the appropriation for nonpublic educational 
        aid under sections 123.931 to 123.947 is not sufficient to meet 
        the required payments in any fiscal year, the department of 
        children, families, and learning must notify the school 
        districts at the earliest possible date of the need to prorate 
        the appropriation among the districts.  
           Sec. 20.  Minnesota Statutes 1996, section 123.947, is 
        amended to read: 
           123.947 [USE OF INDIVIDUALIZED INSTRUCTIONAL MATERIALS.] 
           (a) The commissioner shall assure that textbooks and 
        individualized instructional materials loaned to nonpublic 
        school pupils are secular, neutral, nonideological and that they 
        are incapable of diversion for religious use.  
           (b) Textbooks and individualized instructional materials 
        shall must not be used in religious courses, devotional 
        exercises, religious training or any other religious activity.  
           (c) Textbooks and individualized instructional materials 
        shall must be loaned only to individual pupils upon the request 
        of a parent or guardian or the pupil on a form designated for 
        this use by the commissioner.  The request forms shall provide 
        for verification by the parent or guardian or pupil that the 
        requested textbooks and individualized instructional materials 
        are for the use of the individual pupil in connection with a 
        program of instruction in the pupil's elementary or secondary 
        school.  
           (d) The servicing school district or the intermediary 
        service area shall must take adequate measures to ensure an 
        accurate and periodic inventory of all textbooks and 
        individualized instructional materials loaned to elementary and 
        secondary school pupils attending nonpublic schools.  The state 
        board of education shall promulgate rules under the provisions 
        of chapter 14 to terminate the eligibility of any nonpublic 
        school pupil if the commissioner determines, after notice and 
        opportunity for hearing, that the textbooks or individualized 
        instructional materials have been used in a manner contrary to 
        the provisions of section 123.932, subdivision 1e, 123.933, or 
        this section or any rules promulgated by the state board of 
        education. 
           (e) Nothing contained in section 123.932, subdivision 1e, 
        123.933, or this section shall be construed to authorize the 
        making of any payments to a nonpublic school or its faculty, 
        staff or administrators for religious worship or instruction or 
        for any other purpose.  
           Sec. 21.  Minnesota Statutes 1997 Supplement, section 
        124.17, subdivision 1, is amended to read: 
           Subdivision 1.  [PUPIL UNIT.] Pupil units for each 
        Minnesota resident pupil in average daily membership enrolled in 
        the district of residence, in another district under sections 
        120.062, 120.075, 120.0751, 120.0752, 124C.45 to 124C.48, or 
        126.22; in a charter school under section 120.064; or for whom 
        the resident district pays tuition under section 120.0621, 
        120.08, 120.17, 120.181, 122.535, 122.541, 122.94, 123.351, 
        123.39, subdivision 4, 124.18, or 124.491, shall be counted 
        according to this subdivision.  
           (a) A prekindergarten pupil with a disability who is 
        enrolled in a program approved by the commissioner and has an 
        individual education plan is counted as the ratio of the number 
        of hours of assessment and education service to 825 with a 
        minimum of 0.28, but not more than one. 
           (b) 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 825.  
           (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. 
           (d) A kindergarten pupil who is not included in paragraph 
        (c) is counted as .53 of a pupil unit for fiscal year 1995 and 
        thereafter. 
           (e) A pupil who is in any of grades 1 to 6 is counted as 
        1.06 pupil units for fiscal year 1995 and thereafter. 
           (f) A pupil who is in any of grades 7 to 12 is counted as 
        1.3 pupil units.  
           (g) A pupil who is in the post-secondary enrollment options 
        program is counted as 1.3 pupil units.  
           Sec. 22.  Minnesota Statutes 1996, section 124.17, 
        subdivision 1f, is amended to read: 
           Subd. 1f.  [FUND BALANCE ADJUSTED PUPIL UNITS.] Fund 
        balance Adjusted 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 for a district means the sum of: 
           (1) the number of resident pupil units in average daily 
        membership, including, according to subdivision 1g, plus 
           (2) shared time pupil units, according to section 124A.02, 
        subdivision 20, plus 
           (1) (3) pupil units according to subdivision 1 for 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 (4) pupil units according to subdivision 
        1 for 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. 23.  Minnesota Statutes 1996, section 124.17, is 
        amended by adding a subdivision to read: 
           Subd. 1g.  [RESIDENT PUPIL UNITS.] Resident pupil units for 
        a district means the number of pupil units according to 
        subdivision 1 residing in the district. 
           Sec. 24.  Minnesota Statutes 1996, section 124.17, is 
        amended by adding a subdivision to read: 
           Subd. 1h.  [PUPIL UNITS SERVED.] Pupil units served for a 
        district means the number of pupil units according to 
        subdivision 1 enrolled in the district. 
           Sec. 25.  Minnesota Statutes 1996, section 124.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AVERAGE DAILY MEMBERSHIP.] Membership for pupils 
        in grades kindergarten through 12 and for prekindergarten pupils 
        with disabilities shall mean the number of pupils on the current 
        roll of the school, counted from the date of entry until 
        withdrawal.  The date of withdrawal shall mean the day the pupil 
        permanently leaves the school or the date it is officially known 
        that the pupil has left or has been legally excused.  However, a 
        pupil, regardless of age, who has been absent from school for 15 
        consecutive school days during the regular school year or for 
        five consecutive school days during summer school or 
        intersession classes of flexible school year programs without 
        receiving instruction in the home or hospital shall be dropped 
        from the roll and classified as withdrawn.  Nothing in this 
        section shall be construed as waiving the compulsory attendance 
        provisions cited in section 120.101.  Average daily membership 
        shall equal equals the sum for all pupils of the number of days 
        of the school year each pupil is enrolled in the district's 
        schools divided by the number of days the schools are in 
        session.  Days of summer school or intersession classes of 
        flexible school year programs shall are only be included in the 
        computation of membership for pupils with a disability 
        appropriately served at level 4, 5, or 6 of the continuum of 
        placement model described in Minnesota Rules, part 3525.0200. 
           Sec. 26.  Minnesota Statutes 1996, section 124.17, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [TRANSITIONAL YEAR PUPILS.] Notwithstanding 
        subdivision 2, pupils granted transitional year status shall 
        continue to be counted as members on the current roll of the 
        school for the remainder of the school year.  For purposes of 
        computing average daily membership, transitional year 
        pupils shall must be considered to be enrolled every day school 
        is in session for the remainder of the school year. 
           Sec. 27.  Minnesota Statutes 1996, section 124.17, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [NATIONAL GUARD PUPILS.] Notwithstanding 
        subdivision 2, pupils enrolled in the Minnesota National Guard 
        program shall be construed to be in attendance, for purposes of 
        computing average daily membership, during any period of the 
        regular school year, but not to include summer school, during 
        which the pupil is attending military active duty training 
        pursuant to that program.  During that period of military active 
        duty training, the pupil shall earn all aid for the district of 
        residence or attendance which would be otherwise earned by the 
        pupil's presence. 
           Sec. 28.  Minnesota Statutes 1997 Supplement, section 
        124.17, subdivision 4, is amended to read: 
           Subd. 4.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
        enrolled in a learning year program under section 121.585, an 
        area learning center under sections 124C.45 and 124C.46, or an 
        alternative program approved by the commissioner, for more than 
        1,020 hours in a school year for a secondary student, more than 
        935 hours in a school year for an elementary student, or more 
        than 425 hours in a school year for a kindergarten student 
        without a disability, that pupil may be counted as more than one 
        pupil in average daily membership.  The amount in excess of one 
        pupil must be determined by the ratio of the number of hours of 
        instruction provided to that pupil in excess of:  (i) the 
        greater of 1,020 hours or the number of hours required for a 
        full-time secondary pupil in the district to 1,020 for a 
        secondary pupil; (ii) the greater of 935 hours or the number of 
        hours required for a full-time elementary pupil in the district 
        to 935 for an elementary pupil in grades 1 through 6; and (iii) 
        the greater of 425 hours or the number of hours required for a 
        full-time kindergarten student without a disability in the 
        district to 425 for a kindergarten student without a 
        disability.  Hours that occur after the close of the 
        instructional year in June shall be attributable to the 
        following fiscal year.  A kindergarten student must not be 
        counted as more than 1.2 pupils in average daily membership 
        under this subdivision. 
           (b)(i) To receive general education revenue for a pupil in 
        an alternative program that has an independent study component, 
        a school district must meet the requirements in this paragraph.  
        The school district must develop, with the pupil, a continual 
        learning plan for the pupil.  A district must allow a minor 
        pupil's parent or guardian to participate in developing the 
        plan, if the parent or guardian wants to participate.  The plan 
        must identify the learning experiences and expected outcomes 
        needed for satisfactory credit for the year and for graduation.  
        The plan must be updated each year.  Each school district that 
        has a state-approved public alternative program must reserve 
        revenue in an amount equal to at least 90 percent of the 
        district average general education revenue per pupil unit less 
        compensatory revenue per pupil unit times the number of pupil 
        units generated by students attending a state-approved public 
        alternative program.  The amount of reserved revenue available 
        under this subdivision may only be spent for program costs 
        associated with the state-approved public alternative program.  
        Compensatory revenue must be allocated according to section 
        124A.28, subdivision 1a. 
           (ii) General education revenue for a pupil in an approved 
        alternative program without an independent study component must 
        be prorated for a pupil participating for less than a full year, 
        or its equivalent.  Each school district that has a 
        state-approved public alternative program must reserve revenue 
        in an amount equal to at least 90 percent of the district 
        average general education revenue per pupil unit less 
        compensatory revenue per pupil unit times the number of pupil 
        units generated by students attending a state-approved public 
        alternative program.  The amount of reserved revenue available 
        under this subdivision may only be spent for program costs 
        associated with the state-approved public alternative program.  
        Compensatory revenue must be allocated according to section 
        124A.28, subdivision 1a.  
           (iii) General education revenue for a pupil in an approved 
        alternative program that has an independent study component must 
        be paid for each hour of teacher contact time and each hour of 
        independent study time completed toward a credit or graduation 
        standards necessary for graduation.  Average daily membership 
        for a pupil shall equal the number of hours of teacher contact 
        time and independent study time divided by 1,020. 
           (iv) For an alternative program having an independent study 
        component, the commissioner shall require a description of the 
        courses in the program, the kinds of independent study involved, 
        the expected learning outcomes of the courses, and the means of 
        measuring student performance against the expected outcomes. 
           Sec. 29.  Minnesota Statutes 1996, section 124.175, is 
        amended to read: 
           124.175 [AFDC PUPIL COUNT; CERTIFICATION.] 
           Each year by March 1, the department of human services 
        shall certify to the department of children, families, and 
        learning, for each school district, the number of pupils from 
        families receiving aid to families with dependent children who 
        were enrolled in a public school on October 1 of the preceding 
        year.  
           Sec. 30.  Minnesota Statutes 1996, section 124.19, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHEDULE ADJUSTMENTS.] (a) It is the intention 
        of the legislature to encourage efficient and effective use of 
        staff and facilities by school districts.  School Districts are 
        encouraged to consider both cost and energy saving measures.  
           (b) Notwithstanding the provisions of subdivision 1 or 4, 
        Any district operating a program pursuant to sections 120.59 to 
        120.67, 121.585 or 125.701 to 125.705, or operating a 
        commissioner-designated area learning center program under 
        section 124C.49, or that otherwise receives the approval of the 
        commissioner to operate its instructional program to avoid an 
        aid reduction in any year, may adjust the annual school schedule 
        for that program throughout the calendar year.  
           Sec. 31.  Minnesota Statutes 1996, section 124.225, 
        subdivision 7f, is amended to read: 
           Subd. 7f.  [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A 
        district shall must reserve an amount equal to the greater of 
        $500 or $1.50 times the number of fund balance pupil units, for 
        that school year to provide student transportation safety 
        programs under section 123.799.  This revenue may only be used 
        if the district complies with the reporting requirements of 
        section 123.7991, 123.805, 169.452, 169.4582, or 171.321, 
        subdivision 5. 
           Sec. 32.  Minnesota Statutes 1996, 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 must provide authorized transportation to the 
        pupil within the attendance area for the school that the pupil 
        attends.  The resident district need not provide or pay for 
        transportation between the pupil's residence and the district's 
        border. 
           Sec. 33.  Minnesota Statutes 1996, section 124.225, 
        subdivision 8m, is amended to read: 
           Subd. 8m.  [TRANSPORTATION SAFETY AID.] A district's 
        transportation safety aid equals the district's reserved revenue 
        for transportation safety under subdivision 7f for that school 
        year.  Failure of a school district to comply with the reporting 
        requirements of section 123.7991, 123.805, 169.452, 169.4582, or 
        171.321, subdivision 5, may result in a withholding of that 
        district's transportation safety aid for that school year. 
           Sec. 34.  Minnesota Statutes 1996, section 124.225, 
        subdivision 9, is amended to read:  
           Subd. 9.  [DISTRICT REPORTS.] Each district shall must 
        report data to the department as required by the department to 
        account for transportation expenditures.  
           Sec. 35.  Minnesota Statutes 1996, section 124.239, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOND AUTHORIZATION.] A school district, upon 
        approval of its school board and the commissioner, may issue 
        general obligation bonds under this section to finance approved 
        facilities plans.  Chapter 475, except sections 475.58 and 
        475.59, must be complied with.  The district may levy under 
        subdivision 5 for the debt service revenue.  The authority to 
        issue bonds under this section is in addition to any bonding 
        authority authorized by this chapter, or other law.  The amount 
        of bonding authority authorized under this section must be 
        disregarded in calculating the bonding or net debt limits of 
        this chapter, or any other law other than section 475.53, 
        subdivision 4. 
           Sec. 36.  Minnesota Statutes 1996, section 124.242, is 
        amended to read: 
           124.242 [BUILDING BONDS FOR CALAMITIES.] 
           Subdivision 1.  [BONDS.] When a building owned by a school 
        district is substantially damaged by an act of God or other 
        means beyond the control of the district, the district may issue 
        general obligation bonds without an election to provide money 
        immediately to carry out its adopted health and safety program.  
        Each year the district must pledge an attributable share of its 
        health and safety revenue to the repayment of principal and 
        interest on the bonds.  The pledged revenue shall must be 
        transferred to the debt redemption fund of the district.  The 
        district shall must submit to the department of children, 
        families, and learning the repayment schedule for any bonds 
        issued under this section.  The district shall must deposit in 
        the debt redemption fund all proceeds received for specific 
        costs for which the bonds were issued, including but not limited 
        to:  
           (1) insurance proceeds; 
           (2) restitution proceeds; and 
           (3) proceeds of litigation or settlement of a lawsuit. 
           Before bonds are issued, the district must submit a 
        combined application to the commissioner of children, families, 
        and learning for health and safety revenue, according to section 
        124.83, and requesting review and comment, according to section 
        121.15, subdivisions 6, 7, 8, and 9.  The commissioner shall 
        complete all procedures concerning the combined application 
        within 20 days of receiving the application.  The publication 
        provisions of section 121.15, subdivision 9, do not apply to 
        bonds issued under this section.  
           Subd. 2.  [HEALTH AND SAFETY REVENUE.] For any fiscal year 
        where the total amount of health and safety revenue is limited, 
        the commissioner of children, families, and learning shall must 
        award highest priority to health and safety revenue pledged to 
        repay building bonds issued under subdivision 1. 
           Sec. 37.  Minnesota Statutes 1997 Supplement, section 
        124.2445, is amended to read: 
           124.2445 [PURCHASE OF CERTAIN EQUIPMENT.] 
           The board of a school district may issue general obligation 
        certificates of indebtedness or capital notes subject to the 
        school district debt limits to purchase:  (a) vehicles, 
        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; and (b) 
        computer hardware and software, without regard to its expected 
        useful life, whether bundled with machinery or equipment or 
        unbundled, together with application development services and 
        training related to the use of the computer.  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.  The 
        sum of the tax levies under this section and section 124.2455 
        for each year must not exceed the amount of the district's total 
        operating capital revenue for the year the initial debt service 
        levies are certified.  The district's general education levy for 
        each year must be reduced by the sum of (1) 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, and (2) any excess amount in the 
        debt redemption fund used to retire certificates or notes issued 
        after April 1, 1997, other than amounts used to pay capitalized 
        interest.  A district using an excess amount in the debt 
        redemption fund to retire the certificates or notes shall report 
        the amount used for this purpose to the commissioner by July 15 
        of the following fiscal year.  A district having an outstanding 
        capital loan under section 124.431 or an outstanding debt 
        service loan under section 124.42 must not use an excess amount 
        in the debt redemption fund to retire the certificates or notes. 
           Sec. 38.  Minnesota Statutes 1997 Supplement, 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 124A.22, subdivision 11, total operating 
        capital 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 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.  A tax levy 
        must be made for the payment of principal and interest on the 
        bonds in accordance with section 475.61.  The sum of the tax 
        levies under this section and section 124.2455 for each year 
        must not exceed the amount of the district's total operating 
        capital revenue for the year the initial debt service levies are 
        certified.  The district's general education levy for each year 
        must be reduced by the sum of (1) the amount of the tax levies 
        for debt service certified for each year for payment of the 
        principal and interest on the bonds, and (2) any excess amount 
        in the debt redemption fund used to retire bonds issued after 
        April 1, 1997, other than amounts used to pay capitalized 
        interest.  A district using an excess amount in the debt 
        redemption fund to retire the bonds shall report the amount used 
        for this purpose to the commissioner by July 15 of the following 
        fiscal year.  A district having an outstanding capital loan 
        under section 124.431 or an outstanding debt service loan under 
        section 124.42 must not use an excess amount in the debt 
        redemption fund to retire the bonds. 
           (e) Notwithstanding paragraph (d), bonds issued by a 
        district within the first five years following voter approval of 
        a combination according to section 122.243, subdivision 2, must 
        be paid off within 20 years of issuance.  All the other 
        provisions and limitation of paragraph (d) apply. 
           Sec. 39.  Minnesota Statutes 1996, 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 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 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 must not be included 
        in the determination of the reduction under section 124A.26, 
        subdivision 1.  
           Sec. 40.  Minnesota Statutes 1996, 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 
        children, families, and learning shall must 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. 41.  Minnesota Statutes 1996, section 124.2726, 
        subdivision 4, is amended to read: 
           Subd. 4.  [NEW DISTRICTS.] If a district consolidates with 
        another district that has received aid under section 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 must be counted for aid 
        purposes under subdivision 2.  If two or more districts 
        consolidate and 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 must be used to determine aid under subdivision 2.
           Sec. 42.  Minnesota Statutes 1996, section 124.2727, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PRORATION.] (a) If the total appropriation 
        available for district cooperation 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 children, families, and learning shall must 
        reduce each district's district cooperation revenue according to 
        the calculations in paragraphs (b) to (d). 
           (b) If there is insufficient district cooperation aid 
        available, the department must recompute the district 
        cooperation revenue by proportionally reducing the formula 
        allowance and the revenue minimum to the levels that result in 
        an aid entitlement, adjusted by the percentage in section 
        124.195, subdivision 10, equal to the amount available.  The 
        levy amounts must not be recomputed. 
           (c) A district's proration aid reduction is equal to the 
        lesser of zero, or the difference of the existing aid 
        calculation minus the aid amount computed for the district under 
        paragraph (b). 
           (d) If a district's proration aid reduction is less than 
        its revenue reduction, its district cooperation levy authority 
        for the following year must be reduced by the amount of the 
        difference between its revenue reduction and its aid reduction. 
           Sec. 43.  Minnesota Statutes 1996, section 124.35, is 
        amended to read: 
           124.35 [LOANS TO DISTRESSED DISTRICTS.] 
           Financial aid to distressed districts shall be is governed 
        by the provisions of the maximum effort school aid law.  
           Sec. 44.  Minnesota Statutes 1996, section 124.37, is 
        amended to read: 
           124.37 [POLICY AND PURPOSE.] 
           The rates of increase in school population in Minnesota and 
        population shifts and economic changes in recent years, and 
        anticipated in future years, have required and will require 
        large expenditures for performing the duty of the state and its 
        subdivisions to provide a general and uniform system of public 
        schools.  The state policy has been to require these school 
        costs to be borne primarily by the local subdivisions.  In most 
        instances the local subdivisions have been, and will be, able to 
        provide the required funds by local taxation as supplemented by 
        the aids usually given to all school districts from state income 
        tax and other state aids.  There are, however, exceptional cases 
        due to local conditions not found in most other districts where, 
        either temporarily or over a considerable period of years, the 
        costs will exceed the maximum which the local taxpayers can be 
        reasonably expected to bear.  In some districts having bonds of 
        several issues outstanding, debt service tax levy requirements 
        are excessive for some years because of heavy bond principal 
        payments accumulating in some of the years due to overlapping or 
        short term issues.  The policy and purpose of sections 124.36 to 
        124.46 is to utilize the credit of the state, to a limited 
        degree, to relieve those school districts, but only those, where 
        the maximum effort by the district is inadequate to provide the 
        necessary money.  It is also the purpose of sections 124.36 to 
        124.46 to promote efficient use of school buildings.  To that 
        end, a district that receives a maximum effort loan is 
        encouraged to design and use its facility to integrate social 
        services and library services. 
           Sec. 45.  Minnesota Statutes 1996, section 124.38, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] As used in sections 124.38 to 
        124.46, the terms defined in this section shall have 
        the following meanings: given them. 
           Sec. 46.  Minnesota Statutes 1996, section 124.38, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [LEVY.] "Levy" means a district's net debt 
        service levy after the reduction of debt service equalization 
        aid under section 124.95, subdivision 5.  For taxes payable in 
        1994 and later, each district's maximum effort debt service levy 
        for purposes of subdivision 7, shall must be reduced by an equal 
        number of percentage points if the commissioner determines that 
        the levy reduction will not result in a statewide property tax 
        as would be required under Minnesota Statutes 1992, section 
        124.46, subdivision 3.  A district's levy that is adjusted under 
        this section shall must not be reduced below 18.74 percent of 
        the district's adjusted net tax capacity. 
           Sec. 47.  Minnesota Statutes 1996, section 124.38, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] "Maximum 
        effort debt service levy" means the lesser of: 
           (1) a levy in whichever of the following amounts is 
        applicable: 
           (a) in any school district receiving a debt service loan 
        for a debt service levy payable in 1991 and thereafter, or 
        granted a capital loan after January 1, 1990, a levy in a total 
        dollar amount computed at a rate of 20 percent of adjusted net 
        tax capacity for taxes payable in 1991 and thereafter; 
           (b) in any school district granted a debt service loan 
        after July 31, 1981, or granted a capital loan which is approved 
        after July 31, 1981, a levy in a total dollar amount computed as 
        a tax rate of 13.08 percent on the adjusted gross tax capacity 
        for taxes payable in 1990 or a tax rate of 18.42 percent on the 
        adjusted net tax capacity for taxes payable in 1991 and 
        thereafter; 
           (c) in any school district granted a debt service loan 
        before August 1, 1981, or granted a capital loan which was 
        approved before August 1, 1981, a levy in a total dollar amount 
        computed as a tax rate of 12.26 percent on the adjusted gross 
        tax capacity for taxes payable in 1990 or a tax rate of 17.17 
        percent on the adjusted net tax capacity for taxes payable in 
        1991 and thereafter, until and unless the district receives an 
        additional loan; or 
           (2) a levy in whichever of the following amounts is 
        applicable: 
           (a) in any school district which received a debt service or 
        capital loan from the state before January 1, 1965, a levy in a 
        total dollar amount computed as 4.10 mills on the market value 
        in each year, unless the district applies or has applied for an 
        additional loan subsequent to January 1, 1965, or issues or has 
        issued bonds on the public market, other than bonds refunding 
        state loans, subsequent to January 1, 1967; 
           (b) in any school district granted a debt service or 
        capital loan between January 1, 1965, and July 1, 1969, a levy 
        in a total dollar amount computed as 5-1/2 mills on the market 
        value in each year, until and unless the district receives an 
        additional loan; 
           (c) in any school district granted a debt service or 
        capital loan between July 1, 1969, and July 1, 1975, a levy in a 
        total dollar amount computed as 6.3 mills on market value in 
        each year until and unless the district has received an 
        additional loan; 
           (d) in any school district for which a capital loan was 
        approved prior to August 1, 1981, a levy in a total dollar 
        amount equal to the sum of the amount of the required debt 
        service levy and an amount which when levied annually will in 
        the opinion of the commissioner be sufficient to retire the 
        remaining interest and principal on any outstanding loans from 
        the state within 30 years of the original date when the capital 
        loan was granted; provided, that.  The school board in any 
        district affected by the provisions of clause (2)(d) may elect 
        instead to determine the amount of its levy according to the 
        provisions of clause (1); provided further that.  If a 
        district's capital loan is not paid within 30 years because it 
        elects to determine the amount of its levy according to the 
        provisions of clause (2)(d), the liability of the district for 
        the amount of the difference between the amount it levied under 
        clause (2)(d) and the amount it would have levied under clause 
        (1), and for interest on the amount of that difference, shall 
        must not be satisfied and discharged pursuant to Minnesota 
        Statutes 1988, or an earlier edition of Minnesota Statutes if 
        applicable, section 124.43, subdivision 4. 
           Sec. 48.  Minnesota Statutes 1996, section 124.381, is 
        amended to read: 
           124.381 [NET DEBT,; DETERMINATION.] 
           In computing "net debt" and in determining whether any 
        school a district is eligible for a state loan, no state loans 
        to any such school the district shall not be considered, 
        notwithstanding the provisions of any other general or special 
        law.  
           Sec. 49.  Minnesota Statutes 1996, section 124.39, is 
        amended to read: 
           124.39 [FUND ESTABLISHED; DIVISION INTO ACCOUNTS.] 
           Subdivision 1.  [MAXIMUM EFFORT SCHOOL LOAN FUND.] There 
        shall be maintained in the state treasury A "maximum effort 
        school loan fund" for administration of moneys to be received 
        and disbursed as authorized and required by sections 124.36 to 
        124.46, which must be maintained in the state treasury.  The 
        fund shall must be divided into three accounts for the purposes 
        specified in subdivisions 2, 3, 4, and 5.  
           Subd. 2.  [DEBT SERVICE LOAN ACCOUNT.] There shall be A 
        debt service loan account, must be maintained out of which loans 
        under section 124.42 shall must be made.  All money appropriated 
        to the fund by section 124.40 shall be paid into this account 
        initially.  
           Subd. 3.  [CAPITAL LOAN ACCOUNT.] There shall be A capital 
        loan account, must be maintained out of which loans under 
        section 124.431 shall must be made.  There shall be transferred 
        to it from the debt service loan account On November 1 of each 
        year all moneys therein in excess of those required for in the 
        debt service loan account in excess of those for debt service 
        loans then agreed to be made must be transferred to the capital 
        loan account.  There shall be transferred from it to the debt 
        ser