1.1                          A bill for an act 
  1.2             relating to education finance; authorizing a school 
  1.3             board to transfer excess revenue in the debt 
  1.4             redemption fund to the operating capital account in 
  1.5             the general fund; amending Minnesota Statutes 2000, 
  1.6             sections 123B.79, subdivision 1, by adding a 
  1.7             subdivision; 475.61, subdivision 3.  
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 123B.79, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [LIMITATIONS.] Except as provided in this 
  1.12  subdivision, sections 123B.51, 123B.80, 475.61, and 475.65, a 
  1.13  district may not permanently transfer money from (1) an 
  1.14  operating fund to a nonoperating fund; (2) a nonoperating fund 
  1.15  to another nonoperating fund; or (3) a nonoperating fund to an 
  1.16  operating fund except as allowed under subdivision 9.  Permanent 
  1.17  transfers may be made from any fund to any other fund to correct 
  1.18  for prior fiscal years' errors discovered after the books have 
  1.19  been closed for that year.  Permanent transfers may be made from 
  1.20  the general fund to any other operating funds according to 
  1.21  section 121A.19 or if the resources of the other fund are not 
  1.22  adequate to finance approved expenditures from that other fund.  
  1.23  Permanent transfers may also be made from the general fund to 
  1.24  eliminate deficits in another fund when that other fund is being 
  1.25  discontinued.  When a district discontinues operation of a 
  1.26  district-owned bus fleet or a substantial portion of a fleet, 
  2.1   the balance shall cancel to the district's general fund.  
  2.2      Sec. 2.  Minnesota Statutes 2000, section 123B.79, is 
  2.3   amended by adding a subdivision to read: 
  2.4      Subd. 9.  [DEBT SERVICE EXCESS.] A district may certify an 
  2.5   excess in the debt redemption fund according to section 475.61, 
  2.6   subdivision 3.  On June 30 of each year, a district may transfer 
  2.7   any certified excess in its debt redemption fund to the 
  2.8   operating capital account in the general fund.  Prior to 
  2.9   transferring any excess in the debt redemption fund, a school 
  2.10  board must hold a hearing on its proposal to transfer the 
  2.11  excess, and at that hearing the board must adopt a written 
  2.12  resolution stating the amount of the transfer.  The adopted 
  2.13  resolution must be submitted to the department of children, 
  2.14  families, and learning within 30 days of its adoption. 
  2.15     Sec. 3.  Minnesota Statutes 2000, section 475.61, 
  2.16  subdivision 3, is amended to read: 
  2.17     Subd. 3.  [IRREVOCABILITY.] (a) Tax levies so made and 
  2.18  filed shall be irrevocable, except as provided in this 
  2.19  subdivision. 
  2.20     (b) In each year when there is on hand any excess amount in 
  2.21  the debt redemption fund of a school district at the time the 
  2.22  district makes its property tax levies, the amount of the excess 
  2.23  shall be certified by the school board to the commissioner.  The 
  2.24  commissioner shall report the amount of the excess to the county 
  2.25  auditor and the auditor shall reduce the tax levy otherwise to 
  2.26  be included in the rolls next prepared by the amount certified.  
  2.27  The commissioner shall prescribe the form and calculation to be 
  2.28  used in computing the excess amount.  A school district with an 
  2.29  excess in the debt redemption fund must dispose of the surplus 
  2.30  according to paragraph (c), (d), or (e).  
  2.31     (c) A school board may transfer the certified excess from 
  2.32  the debt redemption fund to the operating capital account in the 
  2.33  general fund according to section 123B.79, subdivision 9.  
  2.34     (d) For a school board that does not make a transfer under 
  2.35  section 123B.79, subdivision 9, the commissioner shall report 
  2.36  the amount of the excess to the county auditor and the auditor 
  3.1   shall reduce the tax levy otherwise to be included in the rolls 
  3.2   next prepared by the amount certified unless the school board 
  3.3   has requested to retain the excess under paragraph (e).  
  3.4      (e) The school board may, with the approval of the 
  3.5   commissioner, retain the excess amount if it is necessary to 
  3.6   ensure the prompt and full payment of the obligations and any 
  3.7   call premium on the obligations, or will be used for redemption 
  3.8   of the obligations in accordance with their terms.  The school 
  3.9   board may, with the approval of the commissioner, specify a tax 
  3.10  levy in a higher amount if necessary because of anticipated tax 
  3.11  delinquency or for cash flow needs to meet the required payments 
  3.12  from the debt redemption fund.  
  3.13     (f) If the governing body, including the governing body of 
  3.14  a school district, in any year makes an irrevocable 
  3.15  appropriation to the debt service fund of money actually on hand 
  3.16  or if there is on hand any excess amount in the debt service 
  3.17  fund, the recording officer may certify to the county auditor 
  3.18  the fact and amount thereof and the auditor shall reduce by the 
  3.19  amount so certified the amount otherwise to be included in the 
  3.20  rolls next thereafter prepared.