1.1                          A bill for an act 
  1.2             relating to education; providing for school finance 
  1.3             simplification, clarification, and equity; amending 
  1.4             Minnesota Statutes 2000, sections 126C.05, 
  1.5             subdivisions 1, 15, 16; 126C.10, subdivisions 1, 2; 
  1.6             126C.13; 126C.14; Laws 1992, chapter 499, article 7, 
  1.7             section 32, as amended; repealing Minnesota Statutes 
  1.8             2000, sections 122A.61; 124D.081; 124D.65; 124D.86; 
  1.9             126C.01, subdivision 9; 126C.05, subdivisions 3, 17; 
  1.10            126C.10, subdivisions 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 
  1.11            13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 
  1.12            27, 28; 126C.11; 126C.12; 126C.125; 126C.15; 126C.22; 
  1.13            126C.31; 126C.34; Laws 1992, chapter 499, article 7, 
  1.14            sections 4, 5, 6, 7, 8. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 2000, section 126C.05, 
  1.17  subdivision 1, is amended to read: 
  1.18     Subdivision 1.  [PUPIL UNIT.] Pupil units for each 
  1.19  Minnesota resident pupil in average daily membership enrolled in 
  1.20  the district of residence, in another district under sections 
  1.21  123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or 
  1.22  124D.68; in a charter school under section 124D.10; or for whom 
  1.23  the resident district pays tuition under section 123A.18, 
  1.24  123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, 
  1.25  subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 
  1.26  125A.65, shall be counted according to this subdivision.  
  1.27     (a) A prekindergarten pupil with a disability who is 
  1.28  enrolled in a program approved by the commissioner and has an 
  1.29  individual education plan is counted as the ratio of the number 
  1.30  of hours of assessment and education service to 825 times 1.25 
  2.1   with a minimum of 0.28, but not more than 1.25. 
  2.2      (b) A prekindergarten pupil who is assessed but determined 
  2.3   not to be handicapped is counted as the ratio of the number of 
  2.4   hours of assessment service to 825 times 1.25.  
  2.5      (c) A kindergarten pupil with a disability who is enrolled 
  2.6   in a program approved by the commissioner is counted as the 
  2.7   ratio of the number of hours of assessment and education 
  2.8   services required in the fiscal year by the pupil's individual 
  2.9   education program plan to 875, but not more than one. 
  2.10     (d) ~~A kindergarten pupil who is not included in paragraph~~ 
  2.11  ~~(c) is counted as .557 of a pupil unit for fiscal year 2000 and~~ 
  2.12  ~~thereafter.~~ 
  2.13     ~~(e)~~ A pupil who is in any of ~~grades 1 to 3~~ kindergarten to 
  2.14  grade 12 is counted as ~~1.115~~ one pupil ~~units~~ unit for fiscal 
  2.15  year ~~2000~~ 2003 and thereafter. 
  2.16     ~~(f) A pupil who is any of grades 4 to 6 is counted as 1.06~~ 
  2.17  ~~pupil units for fiscal year 1995 and thereafter.~~ 
  2.18     ~~(g) A pupil who is in any of grades 7 to 12 is counted as~~ 
  2.19  ~~1.3 pupil units.~~  
  2.20     ~~(h)~~ (e) A pupil who is in the post-secondary enrollment 
  2.21  options program is counted as ~~1.3~~ one pupil ~~units~~ unit.  
  2.22     Sec. 2.  Minnesota Statutes 2000, section 126C.05, 
  2.23  subdivision 15, is amended to read: 
  2.24     Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
  2.25  enrolled in a learning year program under section 124D.128, an 
  2.26  area learning center under sections 123A.05 and 123A.06, an 
  2.27  alternative program approved by the commissioner, or a contract 
  2.28  alternative program under section 124D.68, subdivision 3, 
  2.29  paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
  2.30  school year for a secondary student, more than 935 hours in a 
  2.31  school year for an elementary student, or more than 425 hours in 
  2.32  a school year for a kindergarten student without a disability, 
  2.33  that pupil may be counted as more than one pupil in average 
  2.34  daily membership.  The amount in excess of one pupil must be 
  2.35  determined by the ratio of the number of hours of instruction 
  2.36  provided to that pupil in excess of:  (i) the greater of 1,020 
  3.1   hours or the number of hours required for a full-time secondary 
  3.2   pupil in the district to 1,020 for a secondary pupil; (ii) the 
  3.3   greater of 935 hours or the number of hours required for a 
  3.4   full-time elementary pupil in the district to 935 for an 
  3.5   elementary pupil in grades 1 through 6; and (iii) the greater of 
  3.6   425 hours or the number of hours required for a full-time 
  3.7   kindergarten student without a disability in the district to 425 
  3.8   for a kindergarten student without a disability.  Hours that 
  3.9   occur after the close of the instructional year in June shall be 
  3.10  attributable to the following fiscal year.  A kindergarten 
  3.11  student must not be counted as more than 1.2 pupils in average 
  3.12  daily membership under this subdivision. 
  3.13     (b)(i) To receive general education revenue for a pupil in 
  3.14  an alternative program that has an independent study component, 
  3.15  a district must meet the requirements in this paragraph.  The 
  3.16  district must develop, with the pupil, a continual learning plan 
  3.17  for the pupil.  A district must allow a minor pupil's parent or 
  3.18  guardian to participate in developing the plan, if the parent or 
  3.19  guardian wants to participate.  The plan must identify the 
  3.20  learning experiences and expected outcomes needed for 
  3.21  satisfactory credit for the year and for graduation.  The plan 
  3.22  must be updated each year.  Each school district that has a 
  3.23  state-approved public alternative program must reserve revenue 
  3.24  in an amount equal to at least 90 percent of the district 
  3.25  average general education revenue per pupil unit ~~less~~ 
  3.26  ~~compensatory revenue per pupil unit~~ times the number of pupil 
  3.27  units generated by students attending a state-approved public 
  3.28  alternative program.  The amount of reserved revenue available 
  3.29  under this subdivision may only be spent for program costs 
  3.30  associated with the state-approved public alternative program.  
  3.31  ~~Compensatory revenue must be allocated according to section~~ 
  3.32  ~~126C.15, subdivision 2.~~ 
  3.33     (ii) General education revenue for a pupil in an approved 
  3.34  alternative program without an independent study component must 
  3.35  be prorated for a pupil participating for less than a full year, 
  3.36  or its equivalent.  Each school district that has a 
  4.1   state-approved public alternative program must reserve revenue 
  4.2   in an amount equal to at least 90 percent of the district 
  4.3   average general education revenue per pupil unit ~~less~~ 
  4.4   ~~compensatory revenue per pupil unit~~ times the number of pupil 
  4.5   units generated by students attending a state-approved public 
  4.6   alternative program.  The amount of reserved revenue available 
  4.7   under this subdivision may only be spent for program costs 
  4.8   associated with the state-approved public alternative program.  
  4.9   ~~Compensatory revenue must be allocated according to section~~ 
  4.10  ~~126C.15, subdivision 2.~~  
  4.11     (iii) General education revenue for a pupil in an approved 
  4.12  alternative program that has an independent study component must 
  4.13  be paid for each hour of teacher contact time and each hour of 
  4.14  independent study time completed toward a credit or graduation 
  4.15  standards necessary for graduation.  Average daily membership 
  4.16  for a pupil shall equal the number of hours of teacher contact 
  4.17  time and independent study time divided by 1,020. 
  4.18     (iv) For an alternative program having an independent study 
  4.19  component, the commissioner shall require a description of the 
  4.20  courses in the program, the kinds of independent study involved, 
  4.21  the expected learning outcomes of the courses, and the means of 
  4.22  measuring student performance against the expected outcomes.  
  4.23     Sec. 3.  Minnesota Statutes 2000, section 126C.05, 
  4.24  subdivision 16, is amended to read: 
  4.25     Subd. 16.  [FREE AND REDUCED PRICED LUNCHES.] The 
  4.26  commissioner shall determine the number of children eligible to 
  4.27  receive either a free or reduced priced lunch on October 1 each 
  4.28  year.  ~~Children enrolled in a building on October 1 and~~ 
  4.29  ~~determined to be eligible to receive free or reduced price lunch~~ 
  4.30  ~~by January 15 of the following year shall be counted as eligible~~ 
  4.31  ~~on October 1 for purposes of subdivision 3.~~  The commissioner 
  4.32  may use federal definitions for these purposes and may adjust 
  4.33  these definitions as appropriate.  The commissioner may adopt 
  4.34  reporting guidelines to assure accuracy of data counts and 
  4.35  eligibility.  Districts shall use any guidelines adopted by the 
  4.36  commissioner. 
  5.1      Sec. 4.  Minnesota Statutes 2000, section 126C.10, 
  5.2   subdivision 1, is amended to read: 
  5.3      Subdivision 1.  [GENERAL EDUCATION REVENUE.] For fiscal 
  5.4   year ~~2000~~ 2003 and thereafter, the general education revenue for 
  5.5   each district equals ~~the sum of~~ the district's basic revenue~~,~~ 
  5.6   ~~basic skills revenue, training and experience revenue, secondary~~ 
  5.7   ~~sparsity revenue, elementary sparsity revenue, transportation~~ 
  5.8   ~~sparsity revenue, total operating capital revenue, equity~~ 
  5.9   ~~revenue, referendum offset adjustment, transition revenue, and~~ 
  5.10  ~~supplemental revenue~~. 
  5.11     Sec. 5.  Minnesota Statutes 2000, section 126C.10, 
  5.12  subdivision 2, is amended to read: 
  5.13     Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
  5.14  district equals the formula allowance times the adjusted 
  5.15  marginal cost pupil units for the school year.  ~~The formula~~ 
  5.16  ~~allowance for fiscal year 1998 is $3,581.  The formula allowance~~ 
  5.17  ~~for fiscal year 1999 is $3,530.  The formula allowance for~~ 
  5.18  ~~fiscal year 2000 is $3,740.~~  The formula allowance for fiscal 
  5.19  year ~~2001~~ 2003 and subsequent fiscal years is ~~$3,964~~ $........ 
  5.20     Sec. 6.  Minnesota Statutes 2000, section 126C.13, is 
  5.21  amended to read: 
  5.22     126C.13 [GENERAL EDUCATION LEVY AND AID.] 
  5.23     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
  5.24  commissioner must establish the general education tax rate by 
  5.25  July 1 of each year for levies payable in the following year.  
  5.26  The general education tax capacity rate must be a rate, rounded 
  5.27  up to the nearest hundredth of a percent, that, when applied to 
  5.28  the adjusted net tax capacity for all districts, raises the 
  5.29  amount specified in this subdivision.  The general education tax 
  5.30  rate must be the rate that raises ~~$1,330,000,000~~ $....... for 
  5.31  fiscal year ~~2001~~ 2003, and later fiscal years.  The general 
  5.32  education tax rate may not be changed due to changes or 
  5.33  corrections made to a district's adjusted net tax capacity after 
  5.34  the tax rate has been established.  
  5.35     Subd. 2.  [GENERAL EDUCATION LEVY.] To obtain general 
  5.36  education revenue, ~~excluding transition revenue and supplemental~~ 
  6.1   ~~revenue,~~ a district may levy an amount not to exceed the general 
  6.2   education tax rate times the adjusted net tax capacity of the 
  6.3   district for the preceding year.  If the amount of the general 
  6.4   education levy would exceed the general education revenue, 
  6.5   ~~excluding transition revenue and supplemental revenue,~~ the 
  6.6   general education levy must be determined according to 
  6.7   subdivision 3.  
  6.8      Subd. 3.  [GENERAL EDUCATION LEVY; DISTRICTS OFF THE 
  6.9   FORMULA.] If the amount of the general education levy for a 
  6.10  district exceeds the district's general education revenue, 
  6.11  ~~excluding transition revenue and supplemental revenue,~~ the 
  6.12  amount of the general education levy must be limited to the 
  6.13  following: 
  6.14     (1) the district's general education revenue~~, excluding~~ 
  6.15  ~~transition revenue and supplemental revenue~~; plus 
  6.16     (2) the amount of the aid reduction for the same school 
  6.17  year according to section 126C.14; minus 
  6.18     (3) payments made for the same school year according to 
  6.19  section 126C.21, subdivision 3. 
  6.20     For purposes of statutory cross-reference, a levy made 
  6.21  according to this subdivision shall be construed to be the levy 
  6.22  made according to subdivision 2. 
  6.23     Subd. 4.  [GENERAL EDUCATION AID.] A district's general 
  6.24  education aid is the sum of the following amounts:  
  6.25     (1) the product of (i) the difference between the general 
  6.26  education revenue~~, excluding transition revenue and supplemental~~ 
  6.27  ~~revenue,~~ and the general education levy, times (ii) the ratio of 
  6.28  the actual amount levied to the permitted levy; 
  6.29     (2) ~~transition aid according to section 126C.10,~~ 
  6.30  ~~subdivision 22;~~ 
  6.31     ~~(3) supplemental aid according to section 127A.49;~~ 
  6.32     ~~(4)~~ shared time aid according to section 126C.01, 
  6.33  subdivision 7; and 
  6.34     ~~(5)~~ (3) referendum aid according to section 126C.17. 
  6.35     Subd. 5.  [USES OF REVENUE.] ~~Except as provided in sections~~ 
  6.36  ~~126C.10, subdivision 14; 126C.12; and 126C.15,~~ General education 
  7.1   revenue may be used during the regular school year and the 
  7.2   summer for general and special school purposes. 
  7.3      Sec. 7.  Minnesota Statutes 2000, section 126C.14, is 
  7.4   amended to read: 
  7.5      126C.14 [GENERAL EDUCATION LEVY EQUITY.] 
  7.6      If a district's general education levy is determined 
  7.7   according to section 126C.13, subdivision 3, an amount must be 
  7.8   deducted from state aid authorized in this chapter and chapters 
  7.9   120B, 122A, 123A, 123B, 124D, 125A, and 127A, receivable for the 
  7.10  same school year, and from other state payments receivable for 
  7.11  the same school year authorized in chapter 273.  The aid in 
  7.12  section 124D.111 must not be reduced. 
  7.13     The amount of the deduction equals the difference between: 
  7.14     (1) the general education tax rate, according to section 
  7.15  126C.13, times the district's adjusted net tax capacity used to 
  7.16  determine the general education aid for the same school year; 
  7.17  and 
  7.18     (2) the district's general education revenue~~, excluding~~ 
  7.19  ~~transition revenue and supplemental revenue,~~ for the same school 
  7.20  year, according to section 126C.10. 
  7.21     Sec. 8.  Laws 1992, chapter 499, article 7, section 32, as 
  7.22  amended by Laws 2000, chapter 489, article 2, section 29, is 
  7.23  amended to read: 
  7.24     Sec. 32.  [EFFECTIVE DATE.] 
  7.25     Sections 1, 9, 14, 18, 19, 20, 21, 22, 23, and 30 are 
  7.26  effective the day following final enactment.  ~~Sections 4 to 8~~ 
  7.27  ~~are effective for revenue for fiscal year 2002.~~ 
  7.28     Sec. 9.  [REPEALER.] 
  7.29     Minnesota Statutes 2000, sections 122A.61; 124D.081; 
  7.30  124D.65; 124D.86; 126C.01, subdivision 9; 126C.05, subdivisions 
  7.31  3 and 17; 126C.10, subdivisions 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 
  7.32  13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and 28; 
  7.33  126C.11; 126C.12; 126C.125; 126C.15; 126C.22; 126C.31; and 
  7.34  126C.34; and Laws 1992, chapter 499, article 7, sections 4, 5, 
  7.35  6, 7, and 8, are repealed. 
  7.36     Sec. 10.  [EFFECTIVE DATE.] 
  8.1      Sections 1 to 9 are effective for revenue for fiscal year 
  8.2   2003.