1.1                          A bill for an act 
  1.2             relating to education finance; increasing special 
  1.3             education revenue; broadening funding for the first 
  1.4             grade preparedness program; increasing funding for 
  1.5             English language learners; fully funding 
  1.6             transportation services for nonpublic and charter 
  1.7             school pupils; modifying a hearing request; making 
  1.8             permanent the five percent reallocation of 
  1.9             compensatory revenue; authorizing the sale of bonds by 
  1.10            the St. Paul school district; appropriating money; 
  1.11            amending Minnesota Statutes 2000, sections 122A.41, 
  1.12            subdivisions 7, 13, and by adding a subdivision; 
  1.13            123B.92, subdivision 9, and by adding a subdivision; 
  1.14            124D.081, subdivision 3; 124D.11, subdivision 5; 
  1.15            124D.65, subdivision 5; 125A.75, by adding a 
  1.16            subdivision; 125A.76, subdivisions 2, 3, and 4; 
  1.17            125A.79, subdivision 2; 126C.10, subdivision 24; 
  1.18            126C.15, subdivision 2; and 127A.48, subdivision 1; 
  1.19            proposing coding for new law in Minnesota Statutes, 
  1.20            chapter 126C; repealing Minnesota Statutes 2000, 
  1.21            section 125A.79, subdivisions 5, 6, and 7. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23     Section 1.  Minnesota Statutes 2000, section 122A.41, is 
  1.24  amended by adding a subdivision to read: 
  1.25     Subd. 5a.  [PROBATIONARY PERIOD FOR PRINCIPALS HIRED 
  1.26  INTERNALLY.] A board and the exclusive representative of the 
  1.27  school principals in the district may negotiate a plan for a 
  1.28  probationary period of up to two school years for licensed 
  1.29  teachers employed by the board who are subsequently employed by 
  1.30  the board as a licensed school principal. 
  1.31     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
  1.32  2001-2002 school year and following. 
  1.33     Sec. 2.  Minnesota Statutes 2000, section 122A.41, 
  2.1   subdivision 7, is amended to read: 
  2.2      Subd. 7.  [HEARING OF CHARGES AGAINST TEACHER.] The charges 
  2.3   against a teacher must be in writing and signed by the person 
  2.4   making the same and then filed with the secretary or clerk of 
  2.5   the school board having charge of the school in which the 
  2.6   teacher is employed.  Before the school board~~, before~~ 
  2.7   ~~discharging or demoting~~ discharges or demotes a teacher, ~~must~~ 
  2.8   ~~then accord the teacher against whom charges have been filed a~~ 
  2.9   ~~full hearing and give to the teacher at least ten days' notice~~ 
  2.10  ~~in writing of the time and place of such hearing.  The notice~~ 
  2.11  ~~may be served personally or sent by certified mail addressed to~~ 
  2.12  ~~the teacher at the teacher's last known post office address.~~ the 
  2.13  board must notify the teacher in writing and state in reasonable 
  2.14  detail its grounds for the proposed discharge or demotion, 
  2.15  together with a statement that the teacher may request in 
  2.16  writing within ten days after receiving the notice a hearing 
  2.17  before the board.  The board may have the notice served 
  2.18  personally or may send it by certified mail addressed to the 
  2.19  teacher at the teacher's last known post office address.  The 
  2.20  teacher, under subdivision 13, also may elect a hearing before 
  2.21  an arbitrator instead of the school board.  Within ten days 
  2.22  after receiving the notice the teacher may request in writing a 
  2.23  hearing before the board or an arbitrator and it shall be 
  2.24  granted.  The teacher must be given reasonable notice of the 
  2.25  time and place of the hearing before final action is taken.  A 
  2.26  teacher who fails to request a hearing within ten days is 
  2.27  considered to acquiesce in the board's action.  If the charge is 
  2.28  made by a person not connected with the school system the charge 
  2.29  may be disregarded by the school board.  If the grounds are 
  2.30  those specified in subdivision 6, clause (1), (2), (3), or (4), 
  2.31  the notice must also state a teacher may request arbitration 
  2.32  under subdivision 13.  At the hearing, the school board or 
  2.33  arbitrator shall hear all evidence that may be adduced in 
  2.34  support of the charges and for the teacher's defense to the 
  2.35  charges.  Either party has the right to have a written record of 
  2.36  the hearing at the expense of the board and to have witnesses 
  3.1   subpoenaed and all witnesses so subpoenaed must be examined 
  3.2   under oath.  Any member of the school board conducting such a 
  3.3   hearing has authority to issue subpoenas and to administer oaths 
  3.4   to witnesses. 
  3.5      <b>[EFFECTIVE DATE.]</b> This section is effective for the 
  3.6   2002-2003 school year and following. 
  3.7      Sec. 3.  Minnesota Statutes 2000, section 122A.41, 
  3.8   subdivision 13, is amended to read: 
  3.9      Subd. 13.  [HEARING AND DETERMINATION BY ARBITRATOR.] A 
  3.10  teacher against whom charges have been filed alleging any cause 
  3.11  for discharge or demotion specified in subdivision 6, clause 
  3.12  (1), (2), (3), or (4), may elect a hearing before an arbitrator 
  3.13  instead of the school board.  The hearing is governed by this 
  3.14  subdivision.  
  3.15     (a) The teacher must make a written request for a hearing 
  3.16  before an arbitrator within ten days after receiving a written 
  3.17  notice of the filing of charges required by subdivision 7.  
  3.18  Failure to request a hearing before an arbitrator during this 
  3.19  period is considered acquiescence to ~~a hearing before~~ the 
  3.20  ~~board~~ board's action. 
  3.21     (b) If the teacher and the school board are unable to 
  3.22  mutually agree on an arbitrator, the board must request from the 
  3.23  bureau of mediation services a list of five persons to serve as 
  3.24  an arbitrator.  If the teacher and the school board are unable 
  3.25  to mutually agree on an arbitrator from the list provided, the 
  3.26  parties shall alternately strike names from the list until the 
  3.27  name of one arbitrator remains.  The person remaining after the 
  3.28  striking procedure must be the arbitrator.  If the parties are 
  3.29  unable to agree on who shall strike the first name, the question 
  3.30  must be decided by a flip of a coin.  The teacher and the board 
  3.31  must share equally the costs and fees of the arbitrator. 
  3.32     (c) The arbitrator shall determine, by a preponderance of 
  3.33  the evidence, whether the causes specified in subdivision 6, 
  3.34  clause (1), (2), (3), or (4), exist to support the proposed 
  3.35  discharge or demotion.  A lesser penalty than discharge or 
  3.36  demotion may be imposed by the arbitrator only to the extent 
  4.1   that either party proposes such lesser penalty in the 
  4.2   proceeding.  In making the determination, the arbitration 
  4.3   proceeding is governed by sections 572.11 to 572.17 and by the 
  4.4   collective bargaining agreement applicable to the teacher. 
  4.5      (d) An arbitration hearing conducted under this subdivision 
  4.6   is a meeting for preliminary consideration of allegations or 
  4.7   charges within the meaning of section 13D.05, subdivision 3, 
  4.8   paragraph (a), and must be closed, unless the teacher requests 
  4.9   it to be open. 
  4.10     (e) The arbitrator's decision is final and binding on the 
  4.11  parties, subject to sections 572.18 to 572.26.  
  4.12     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
  4.13  2002-2003 school year and following. 
  4.14     Sec. 4.  Minnesota Statutes 2000, section 123B.92, 
  4.15  subdivision 9, is amended to read: 
  4.16     Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
  4.17  district's nonpublic pupil transportation aid for the ~~1996-1997~~ 
  4.18  2001-2002 and later school years for transportation services for 
  4.19  nonpublic school pupils according to sections 123B.88, 123B.84 
  4.20  to 123B.86, and this section, equals the sum of the amounts 
  4.21  computed in paragraphs (b) and (c).  This aid does not limit the 
  4.22  obligation to transport pupils under sections 123B.84 to 123B.87.
  4.23     (b) For regular and excess transportation according to 
  4.24  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
  4.25  equal to the product of: 
  4.26     (1) the district's actual expenditure per nonpublic pupil 
  4.27  transported in the regular and excess transportation categories 
  4.28  during the second preceding school year; times 
  4.29     (2) the number of nonpublic school pupils residing in the 
  4.30  district who receive regular or excess transportation service or 
  4.31  reimbursement for the current school year; times 
  4.32     (3) the ratio of the formula allowance pursuant to section 
  4.33  126C.10, subdivision 2, for the current school year to the 
  4.34  formula allowance pursuant to section 126C.10, subdivision 2, 
  4.35  for the second preceding school year. 
  4.36     (c) For nonpublic nonregular transportation according to 
  5.1   subdivision 1, paragraph (b), clause (5), an amount equal to the 
  5.2   product of: 
  5.3      (1) the district's actual expenditure for nonpublic 
  5.4   nonregular transportation during the second preceding school 
  5.5   year; times 
  5.6      (2) the ratio of the formula allowance pursuant to section 
  5.7   126C.10, subdivision 2, for the current school year to the 
  5.8   formula allowance pursuant to section 126C.10, subdivision 2, 
  5.9   for the second preceding school year. 
  5.10     ~~(d) Notwithstanding the amount of the formula allowance for~~ 
  5.11  ~~fiscal years 2000, 2001, and 2002 in section 126C.10,~~ 
  5.12  ~~subdivision 2, the commissioner shall use the amount of the~~ 
  5.13  ~~formula allowance for the current year plus $87 in determining~~ 
  5.14  ~~the nonpublic pupil transportation revenue in paragraphs (b) and~~ 
  5.15  ~~(c) for fiscal year 2000, and the amount of the formula~~ 
  5.16  ~~allowance less $110 in determining the nonpublic pupil~~ 
  5.17  ~~transportation revenue in paragraphs (b) and (c) for fiscal~~ 
  5.18  ~~years 2001 and 2002.~~ 
  5.19     Sec. 5.  Minnesota Statutes 2000, section 123B.92, is 
  5.20  amended by adding a subdivision to read: 
  5.21     Subd. 11.  [CHARTER SCHOOL TRANSPORTATION AID.] (a) A 
  5.22  school district required to transport charter school students is 
  5.23  eligible for charter school transportation aid for 2001-2002 and 
  5.24  later school years equal to the sum of the amounts computed in 
  5.25  paragraphs (b) and (c). 
  5.26     (b) For regular and excess transportation according to 
  5.27  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
  5.28  equal to the product of: 
  5.29     (1) the district's actual expenditure per charter school 
  5.30  pupil transported in the regular and excess transportation 
  5.31  categories during the second preceding school year; times 
  5.32     (2) the number of charter school pupils residing in the 
  5.33  district who receive regular or excess transportation service or 
  5.34  reimbursement for the current school year; times 
  5.35     (3) the ratio of the formula allowance under section 
  5.36  126C.10, subdivision 2, for the current school year to the 
  6.1   formula allowance under section 126C.10, subdivision 2, for the 
  6.2   second preceding school year. 
  6.3      (c) For charter school nonregular transportation according 
  6.4   to subdivision 1, paragraph (b), clause (5), an amount equal to 
  6.5   the product of: 
  6.6      (1) the district's actual expenditure for charter school 
  6.7   nonregular transportation during the second preceding school 
  6.8   year; times 
  6.9      (2) the ratio of the formula allowance under section 
  6.10  126C.10, subdivision 2, for the current school year to the 
  6.11  formula allowance under section 126C.10, subdivision 2, for the 
  6.12  second preceding school year. 
  6.13     Sec. 6.  Minnesota Statutes 2000, section 124D.081, 
  6.14  subdivision 3, is amended to read: 
  6.15     Subd. 3.  [QUALIFYING SCHOOL SITE.] (a) The commissioner 
  6.16  shall rank all school sites with kindergarten programs that do 
  6.17  not exclusively serve students under sections 125A.03 to 
  6.18  125A.24, and 125A.65.  The ranking must be from highest to 
  6.19  lowest based on the site's free and reduced lunch count as a 
  6.20  percent of the fall enrollment using the preceding October 1 
  6.21  enrollment data.  ~~Once a school site is calculated to be~~ 
  6.22  ~~eligible, it remains eligible for the duration of the pilot~~ 
  6.23  ~~program, unless the site's ranking falls below the state average~~ 
  6.24  ~~for elementary schools.~~  For each school site, the percentage 
  6.25  used to calculate the ranking must be the greater of (1) the 
  6.26  percent of the fall kindergarten enrollment receiving free and 
  6.27  reduced lunch, or (2) the percent of the total fall enrollment 
  6.28  receiving free and reduced lunch.  ~~The list of ranked sites must~~ 
  6.29  ~~be separated into the following geographic areas:  Minneapolis~~ 
  6.30  ~~district, St. Paul district, suburban Twin Cities districts in~~ 
  6.31  ~~the seven-county metropolitan area, and school districts in~~ 
  6.32  ~~greater Minnesota.~~ 
  6.33     (b) The commissioner shall establish a process and 
  6.34  timelines to qualify school sites for the next school year.  
  6.35  ~~School sites must be qualified in each geographic area from the~~ 
  6.36  ~~list of ranked sites until the estimated revenue available for~~ 
  7.1   ~~this program has been allocated.  The total estimated revenue~~ 
  7.2   ~~must be distributed to qualified school sites in each geographic~~ 
  7.3   ~~area as follows:  25 percent for Minneapolis sites, 25 percent~~ 
  7.4   ~~for St. Paul sites, 25 percent for suburban Twin Cities sites,~~ 
  7.5   ~~and 25 percent for greater Minnesota.~~  A school site qualifies 
  7.6   for funding if the site's percentage is greater than the 
  7.7   statewide average percentage.  
  7.8      Sec. 7.  Minnesota Statutes 2000, section 124D.11, 
  7.9   subdivision 5, is amended to read: 
  7.10     Subd. 5.  [SPECIAL EDUCATION AID.] Except as provided in 
  7.11  subdivision 2, special education aid must be paid to a charter 
  7.12  school according to section 125A.76, as though it were a school 
  7.13  district.  ~~The charter school may charge tuition to the district~~ 
  7.14  ~~of residence as provided in section 125A.11.  The charter school~~ 
  7.15  ~~shall allocate its special education levy equalization revenue~~ 
  7.16  ~~to the resident districts of the pupils attending the charter~~ 
  7.17  ~~school.  The districts of residence shall levy as though they~~ 
  7.18  ~~were participating in a cooperative, as provided in section~~ 
  7.19  ~~125A.77, subdivision 3.~~  Any unreimbursed special education 
  7.20  costs may be charged to the state and shall be paid by the 
  7.21  state.  The tuition rate charged to the state for any 
  7.22  unreimbursed costs for any child with a disability equals the 
  7.23  actual costs of providing special instruction and services to 
  7.24  the child including a proportionate amount for capital outlay 
  7.25  but not including any amount for transportation, minus the 
  7.26  amount of special education aid received by the charter school 
  7.27  on behalf of that child.  
  7.28     Sec. 8.  Minnesota Statutes 2000, section 124D.65, 
  7.29  subdivision 5, is amended to read: 
  7.30     Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] ~~(a) A school~~ 
  7.31  ~~district's limited English proficiency programs revenue for~~ 
  7.32  ~~fiscal year 2000 equals the state total limited English~~ 
  7.33  ~~proficiency programs revenue, minus the amount determined under~~ 
  7.34  ~~paragraph (b), times the ratio of the district's adjusted~~ 
  7.35  ~~limited English proficiency programs base revenue to the state~~ 
  7.36  ~~total adjusted limited English proficiency programs base revenue.~~
  8.1      ~~(b) Notwithstanding paragraph (a), if the limited English~~ 
  8.2   ~~proficiency programs base revenue for a district equals zero,~~ 
  8.3   ~~the limited English proficiency programs revenue equals the sum~~ 
  8.4   ~~of the following amounts, computed using current year data:~~ 
  8.5      ~~(1) 68 percent of the salary of one full-time equivalent~~ 
  8.6   ~~teacher for each 40 pupils of limited English proficiency~~ 
  8.7   ~~enrolled, or 68 percent of the salary of one-half of a full-time~~ 
  8.8   ~~teacher in a district with 20 or fewer pupils of limited English~~ 
  8.9   ~~proficiency enrolled; and~~ 
  8.10     ~~(2) for supplies and equipment purchased or rented for use~~ 
  8.11  ~~in the instruction of pupils of limited English proficiency an~~ 
  8.12  ~~amount equal to 47 percent of the sum actually spent by the~~ 
  8.13  ~~district but not to exceed an average of $47 in any one school~~ 
  8.14  ~~year for each pupil of limited English proficiency receiving~~ 
  8.15  ~~instruction.~~ 
  8.16     ~~(c)~~ A district's limited English proficiency programs 
  8.17  revenue for fiscal year ~~2001~~ 2002 and later equals the product 
  8.18  of ~~$584~~ $750 times the greater of 20 or the number of adjusted 
  8.19  marginal cost pupils of limited English proficiency enrolled in 
  8.20  the district during the current fiscal year. 
  8.21     Sec. 9.  Minnesota Statutes 2000, section 125A.75, is 
  8.22  amended by adding a subdivision to read: 
  8.23     Subd. 9.  [RESIDENTIAL TREATMENT AID.] (a) For fiscal year 
  8.24  2002 and later, the commissioner of children, families, and 
  8.25  learning must pay aid to school districts for the unreimbursed 
  8.26  tuition costs for a child with a disability placed for care and 
  8.27  treatment. 
  8.28     (b) To receive state aid under this subdivision, a school 
  8.29  district must submit to the commissioner by October 1 an 
  8.30  itemized list of unreimbursed costs for the services provided to 
  8.31  a child with disability placed for care and treatment for the 
  8.32  previous school year.  
  8.33     (c) A student with a disability placed in the following 
  8.34  public or private facilities by someone other than the district 
  8.35  is considered to be placed for care and treatment: 
  8.36     (1) chemical dependency and other substance abuse treatment 
  9.1   centers; 
  9.2      (2) shelter care facilities; 
  9.3      (3) correctional facilities; 
  9.4      (4) residential treatment centers; 
  9.5      (5) mental health programs; and 
  9.6      (6) detention facilities. 
  9.7      Sec. 10.  Minnesota Statutes 2000, section 125A.76, 
  9.8   subdivision 2, is amended to read: 
  9.9      Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] (a) The special 
  9.10  education base revenue equals the sum of the following amounts 
  9.11  computed using base year data: 
  9.12     (1) ~~68~~ 90 percent of the salary of each essential person 
  9.13  employed in the district's program for children with a 
  9.14  disability during the fiscal year, not including the share of 
  9.15  salaries for personnel providing health-related services counted 
  9.16  in clause (8), whether the person is employed by one or more 
  9.17  districts or a Minnesota correctional facility operating on a 
  9.18  fee-for-service basis; 
  9.19     (2) for the Minnesota state academy for the deaf or the 
  9.20  Minnesota state academy for the blind, ~~68~~ 90 percent of the 
  9.21  salary of each instructional aide assigned to a child attending 
  9.22  the academy, if that aide is required by the child's individual 
  9.23  education plan; 
  9.24     (3) for special instruction and services provided to any 
  9.25  pupil by contracting with public, private, or voluntary agencies 
  9.26  other than school districts, in place of special instruction and 
  9.27  services provided by the district, 52 percent of the difference 
  9.28  between the amount of the contract and the basic revenue of the 
  9.29  district for that pupil for the fraction of the school day the 
  9.30  pupil receives services under the contract; 
  9.31     (4) for special instruction and services provided to any 
  9.32  pupil by contracting for services with public, private, or 
  9.33  voluntary agencies other than school districts, that are 
  9.34  supplementary to a full educational program provided by the 
  9.35  school district, 52 percent of the amount of the contract for 
  9.36  that pupil; 
 10.1      (5) for supplies and equipment purchased or rented for use 
 10.2   in the instruction of children with a disability, not including 
 10.3   the portion of the expenses for supplies and equipment used to 
 10.4   provide health-related services counted in clause (8), an amount 
 10.5   equal to 47 percent of the sum actually expended by the 
 10.6   district, or a Minnesota correctional facility operating on a 
 10.7   fee-for-service basis, but not to exceed an average of $47 in 
 10.8   any one school year for each child with a disability receiving 
 10.9   instruction; 
 10.10     (6) for fiscal years 1997 and later, special education base 
 10.11  revenue shall include amounts under clauses (1) to (5) for 
 10.12  special education summer programs provided during the base year 
 10.13  for that fiscal year; and 
 10.14     (7) for fiscal years 1999 and later, the cost of providing 
 10.15  transportation services for children with disabilities under 
 10.16  section 123B.92, subdivision 1, paragraph (b), clause (4). 
 10.17     The department shall establish procedures through the 
 10.18  uniform financial accounting and reporting system to identify 
 10.19  and track all revenues generated from third-party billings as 
 10.20  special education revenue at the school district level; include 
 10.21  revenue generated from third-party billings as special education 
 10.22  revenue in the annual cross-subsidy report; and exclude 
 10.23  third-party revenue from calculation of excess cost aid to the 
 10.24  districts. 
 10.25     (b) If requested by a school district operating a special 
 10.26  education program during the base year for less than the full 
 10.27  fiscal year, or a school district in which is located a 
 10.28  Minnesota correctional facility operating on a fee-for-service 
 10.29  basis for less than the full fiscal year, the commissioner may 
 10.30  adjust the base revenue to reflect the expenditures that would 
 10.31  have occurred during the base year had the program been operated 
 10.32  for the full fiscal year. 
 10.33     (c) Notwithstanding paragraphs (a) and (b), the portion of 
 10.34  a school district's base revenue attributable to a Minnesota 
 10.35  correctional facility operating on a fee-for-service basis 
 10.36  during the facility's first year of operating on a 
 11.1   fee-for-service basis shall be computed using current year data. 
 11.2      Sec. 11.  Minnesota Statutes 2000, section 125A.76, 
 11.3   subdivision 3, is amended to read: 
 11.4      Subd. 3.  [ADJUSTED SPECIAL EDUCATION BASE REVENUE.] For 
 11.5   fiscal year ~~1997~~ 2002 and later, a district's adjusted special 
 11.6   education base revenue equals the district's special education 
 11.7   base revenue times the ratio of the district's ~~average daily~~ 
 11.8   ~~membership~~ number of students included in the district's 
 11.9   unduplicated count of special education students as of December 
 11.10  1 for the current school year to the district's ~~average daily~~ 
 11.11  ~~membership~~ number of students included in the district's 
 11.12  unduplicated count of special education students as of December 
 11.13  1 for the base year.  
 11.14     Sec. 12.  Minnesota Statutes 2000, section 125A.76, 
 11.15  subdivision 4, is amended to read: 
 11.16     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] ~~The state~~ 
 11.17  ~~total special education aid for fiscal year 2000 equals~~ 
 11.18  ~~$463,000,000.~~  The state total special education aid for fiscal 
 11.19  year 2001 equals $474,000,000.  The state total special 
 11.20  education aid for fiscal year 2002 equals $627,000,000.  The 
 11.21  state total special education aid for later fiscal years equals: 
 11.22     (1) the state total special education aid for the preceding 
 11.23  fiscal year; times 
 11.24     (2) the program growth factor; times 
 11.25     (3) the ratio of the state total average daily membership 
 11.26  for the current fiscal year to the state total average daily 
 11.27  membership for the preceding fiscal year. 
 11.28     Sec. 13.  Minnesota Statutes 2000, section 125A.79, 
 11.29  subdivision 2, is amended to read: 
 11.30     Subd. 2.  [EXCESS COST AID, FISCAL YEARS ~~2000 AND 2001~~ 2002 
 11.31  AND LATER.] For fiscal years ~~2000 and 2001~~ 2002 and later, a 
 11.32  district's special education excess cost aid equals the greatest 
 11.33  of: 
 11.34     (a) 75 percent of the difference between (1) the district's 
 11.35  unreimbursed special education cost and (2) ~~4.36~~ 2.3 percent of 
 11.36  the district's general education revenue under section 126C.10; 
 12.1      (b) 70 percent of the difference between (1) the increase 
 12.2   in the district's unreimbursed special education cost between 
 12.3   the base year as defined in section 125A.76, subdivision 1, and 
 12.4   the current year and (2) 1.6 percent of the district's general 
 12.5   education revenue under section 126C.10; or 
 12.6      (c) zero. 
 12.7      Sec. 14.  Minnesota Statutes 2000, section 126C.10, 
 12.8   subdivision 24, is amended to read: 
 12.9      Subd. 24.  [EQUITY REVENUE.] (a) A school district 
 12.10  qualifies for equity revenue if the school district's adjusted 
 12.11  marginal cost pupil unit amount of basic revenue, supplemental 
 12.12  revenue, transition revenue, and referendum revenue is less than 
 12.13  the value of the school district at or immediately above the 
 12.14  90th percentile of school districts in its equity region for 
 12.15  those revenue categories ~~and the school district's~~ 
 12.16  ~~administrative offices are not located in a city of the first~~ 
 12.17  ~~class on July 1, 1999~~. 
 12.18     (b) Equity revenue for a qualifying district that receives 
 12.19  referendum revenue under section 126C.17, subdivision 4, equals 
 12.20  the product of (1) the district's adjusted marginal cost pupil 
 12.21  units for that year; times (2) the sum of (i) $10, plus (ii) 
 12.22  $30, times the school district's equity index computed under 
 12.23  subdivision 27. 
 12.24     (c) Equity revenue for a qualifying district that does not 
 12.25  receive referendum revenue under section 126C.17, subdivision 4, 
 12.26  equals the product of the district's adjusted marginal cost 
 12.27  pupil units for that year times $10. 
 12.28     Sec. 15.  Minnesota Statutes 2000, section 126C.15, 
 12.29  subdivision 2, is amended to read: 
 12.30     Subd. 2.  [BUILDING ALLOCATION.] (a) A district must 
 12.31  allocate its compensatory revenue to each school building in the 
 12.32  district where the children who have generated the revenue are 
 12.33  served. 
 12.34     (b) Notwithstanding paragraph (a), ~~for fiscal years 1999,~~ 
 12.35  ~~2000, and 2001,~~ upon approval by the commissioner, a district 
 12.36  may allocate up to five percent of the amount of compensatory 
 13.1   revenue that the district ~~would have~~ received ~~under Minnesota~~ 
 13.2   ~~Statutes 1996, section 124A.22, subdivision 3, for fiscal year~~ 
 13.3   ~~1998, computed using a basic formula allowance of $3,581~~ during 
 13.4   the previous fiscal year to school sites according to a plan 
 13.5   adopted by the school board. 
 13.6      (c) For the purposes of this section and section 126C.05, 
 13.7   subdivision 3, "building" means education site as defined in 
 13.8   section 123B.04, subdivision 1. 
 13.9      (d) If the pupil is served at a site other than one owned 
 13.10  and operated by the district, the revenue shall be paid to the 
 13.11  district and used for services for pupils who generate the 
 13.12  revenue. 
 13.13     Sec. 16.  [126C.415] [SEVERANCE AND EARLY RETIREMENT 
 13.14  COSTS.] 
 13.15     Subdivision 1.  [REVENUE.] A school district is eligible 
 13.16  for revenue for severance and early retirement costs of up to 
 13.17  the district's actual annual costs for these purposes.  
 13.18     Subd. 2.  [EQUALIZED REVENUE.] A district's equalized 
 13.19  revenue for severance and early retirement costs equals the 
 13.20  lesser of the district's annual costs for these purposes or $100 
 13.21  times the district's adjusted marginal cost pupil units for that 
 13.22  year.  
 13.23     Subd. 3.  [EQUALIZED LEVY.] A district's equalized levy for 
 13.24  severance and early retirement costs equals the district's 
 13.25  severance and early retirement cost equalized revenue times the 
 13.26  lesser of one or the ratio of the quotient derived by dividing 
 13.27  the adjusted net tax capacity of the district for the year 
 13.28  before the year the levy is certified by the adjusted marginal 
 13.29  cost pupil units for the school year for which the levy is 
 13.30  attributable to $10,000. 
 13.31     Subd. 4.  [AID.] A school district's severance and early 
 13.32  retirement cost aid equals the difference between its severance 
 13.33  and early retirement cost equalized revenue and its severance 
 13.34  and early retirement cost levy.  If the district does not levy 
 13.35  the entire amount permitted, the district's aid must be reduced 
 13.36  in proportion to the actual amount levied.  
 14.1      Subd. 5.  [UNEQUALIZED LEVY.] A district may levy for any 
 14.2   difference between its severance and early retirement cost 
 14.3   revenue under subdivision 1 and its equalized revenue under 
 14.4   subdivision 2.  
 14.5      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 14.6   fiscal years 2003 and later. 
 14.7      Sec. 17.  Minnesota Statutes 2000, section 127A.48, 
 14.8   subdivision 1, is amended to read: 
 14.9      Subdivision 1.  [COMPUTATION.] The department of revenue 
 14.10  must annually conduct an assessment/sales ratio study of the 
 14.11  taxable property in each school district in accordance with the 
 14.12  procedures in subdivisions 2 and 3.  Based upon the results 
 14.13  of ~~this~~ these assessment/sales ratio ~~study~~ studies for the three 
 14.14  most recent years, the department of revenue must determine an 
 14.15  aggregate equalized net tax capacity for the various classes of 
 14.16  taxable property in each district, which tax capacity shall be 
 14.17  designated as the adjusted net tax capacity.  The adjusted net 
 14.18  tax capacities shall be determined using the net tax capacity 
 14.19  percentages in effect for the assessment year following the 
 14.20  assessment year of the study.  The department of revenue must 
 14.21  make whatever estimates are necessary to account for changes in 
 14.22  the classification system.  The department of revenue may incur 
 14.23  the expense necessary to make the determinations.  The 
 14.24  commissioner of revenue may reimburse any county or governmental 
 14.25  official for requested services performed in ascertaining the 
 14.26  adjusted net tax capacity.  On or before March 15 annually, the 
 14.27  department of revenue shall file with the chair of the tax 
 14.28  committee of the house of representatives and the chair of the 
 14.29  committee on taxes and tax laws of the senate a report of 
 14.30  adjusted net tax capacities.  On or before June 15 annually, the 
 14.31  department of revenue shall file its final report on the 
 14.32  adjusted net tax capacities established by the previous year's 
 14.33  assessments and the current year's net tax capacity percentages 
 14.34  with the commissioner of children, families, and learning and 
 14.35  each county auditor for those districts for which the auditor 
 14.36  has the responsibility for determination of local tax rates.  A 
 15.1   copy of the report so filed shall be mailed to the clerk of each 
 15.2   district involved and to the county assessor or supervisor of 
 15.3   assessments of the county or counties in which each district is 
 15.4   located. 
 15.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 15.6   following final enactment for taxes payable in 2002 and later.  
 15.7      Sec. 18.  [BONDING AUTHORIZATION.] 
 15.8      To provide funds for the acquisition or betterment of 
 15.9   school facilities, independent school district No. 625, St. 
 15.10  Paul, may by two-thirds majority vote of all the members of the 
 15.11  board of directors issue general obligation bonds in one or more 
 15.12  series in calendar years 2003 to 2008, both inclusive, as 
 15.13  provided in this section.  The aggregate principal amount of any 
 15.14  bonds issued under this section for each calendar year must not 
 15.15  exceed $15,000,000.  Issuance of the bonds is not subject to 
 15.16  Minnesota Statutes, section 475.58 or 475.59.  The bonds must 
 15.17  otherwise be issued as provided in Minnesota Statutes, chapter 
 15.18  475.  The authority to issue bonds under this section is in 
 15.19  addition to any bonding authority authorized by Minnesota 
 15.20  Statutes, chapter 123B, or other law.  The amount of bonding 
 15.21  authority authorized under this section must be disregarded in 
 15.22  calculating the bonding limit of Minnesota Statutes, chapter 
 15.23  123B, or any other law other than Minnesota Statutes, section 
 15.24  475.53, subdivision 4. 
 15.25     Sec. 19.  [TAX LEVY FOR DEBT SERVICE.] 
 15.26     To pay the principal of and interest on bonds issued under 
 15.27  section 18, independent school district No. 625, St. Paul, must 
 15.28  levy a tax annually in an amount sufficient under Minnesota 
 15.29  Statutes, section 475.61, subdivisions 1 and 3, to pay the 
 15.30  principal of and interest on the bonds.  The tax authorized 
 15.31  under this section is in addition to the taxes authorized to be 
 15.32  levied under Minnesota Statutes, chapter 123B, 124D, or 126C, or 
 15.33  other law. 
 15.34     Sec. 20.  [APPROPRIATIONS.] 
 15.35     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 15.36  LEARNING.] The sums indicated in this section are appropriated 
 16.1   from the general fund to the department of children, families, 
 16.2   and learning for the fiscal years designated. 
 16.3      Subd. 2.  [INTEGRATION PROGRAMS.] For minority fellowship 
 16.4   grants according to Laws 1994, chapter 647, article 8, section 
 16.5   29; minority teacher incentives according to Minnesota Statutes, 
 16.6   section 122A.65; teachers of color grants according to Minnesota 
 16.7   Statutes, section 122A.64; and cultural exchange grants 
 16.8   according to Minnesota Statutes, section 124D.89: 
 16.9        $1,500,000     .....     2002 
 16.10       $1,500,000     .....     2003 
 16.11     Any balance in the first year does not cancel but is 
 16.12  available in the second year. 
 16.13     In awarding teacher of color grants, priority must be given 
 16.14  to districts that have students who are currently in the process 
 16.15  of completing their academic program. 
 16.16     Subd. 3.  [FIRST-GRADE PREPAREDNESS GRANTS.] For grants for 
 16.17  the first-grade preparedness program under Minnesota Statutes, 
 16.18  section 124D.081: 
 16.19       $.,...,...     .....     2002 
 16.20       $.,...,...     .....     2003 
 16.21     Subd. 4.  [NONPUBLIC PUPIL TRANSPORTATION AID.] For 
 16.22  nonpublic pupil transportation aid under section 123B.92, 
 16.23  subdivision 9: 
 16.24       $.,...,...     .....     2002 
 16.25       $.,...,...     .....     2003 
 16.26     Subd. 5.  [CHARTER SCHOOL TRANSPORTATION AID.] For charter 
 16.27  school transportation aid under section 123B.92, subdivision 11: 
 16.28       $.,...,...     .....     2002 
 16.29       $.,...,...     .....     2003 
 16.30     Subd. 6.  [CHARTER SCHOOL SPECIAL EDUCATION AID.] For 
 16.31  unreimbursed special education aid to charter schools under 
 16.32  section 124D.11, subdivision 5:  
 16.33       $.,...,...     .....     2002 
 16.34       $.,...,...     .....     2003 
 16.35     Subd. 7.  [SPECIAL EDUCATION AID FOR CARE AND 
 16.36  TREATMENT.] For unreimbursed special education aid for students 
 17.1   placed for care and treatment: 
 17.2        $.,...,...     .....     2002 
 17.3        $.,...,...     .....     2003 
 17.4      Sec. 21.  [REPEALER.] 
 17.5      Minnesota Statutes 2000, section 125A.79, subdivisions 5, 
 17.6   6, and 7, are repealed.