1.1 	A bill for an act
1.2 	relating to education finance; reestablishing categorical funding for pupil 
1.3 	transportation costs; amending Minnesota Statutes 2004, section 123B.92, by 
1.4 	adding subdivisions; Minnesota Statutes 2005 Supplement, section 123B.92, 
1.5 	subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 
1.6 	123B.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2005 Supplement, section 123B.92, subdivision 1, is 
1.9 	amended to read:
1.10 		Subdivision 1.Definitions. For purposes of this section and section 125A.76, the 
1.11 	terms defined in this subdivision have the meanings given to them.
1.12 	(a) "Actual expenditure per pupil transported in the regular and excess transportation 
1.13 	categories" means the quotient obtained by dividing:
1.14 	(1) the sum of:
1.15 	(i) all expenditures for transportation in the regular category, as defined in paragraph 
1.16 	(b), clause (1), and the excess category, as defined in paragraph (b), clause (2), plus
1.17 	(ii) an amount equal to one year's depreciation on the district's school bus fleet 
1.18 	and mobile units computed on a straight line basis at the rate of 15 percent per year for 
1.19 	districts operating a program under section 124D.128 for grades 1 to 12 for all students in 
1.20 	the district and 12-1/2 percent per year for other districts of the cost of the fleet, plus
1.21 	(iii) an amount equal to one year's depreciation on the district's type three school 
1.22 	buses, as defined in section 169.01, subdivision 6, clause (5), which must be used a 
1.23 	majority of the time for pupil transportation purposes, computed on a straight line basis at 
1.24 	the rate of 20 percent per year of the cost of the type three school buses by:
2.1 	(2) the number of pupils eligible for transportation in the regular category, as defined 
2.2 	in paragraph (b), clause (1), and the excess category, as defined in paragraph (b), clause (2).
2.3 	(b) "Transportation category" means a category of transportation service provided to 
2.4 	pupils as follows:
2.5 	(1) Regular transportation is:
2.6 	(i) transportation to and from school during the regular school year for resident 
2.7 	elementary pupils residing one mile or more from the public or nonpublic school they 
2.8 	attend, and resident secondary pupils residing two miles or more from the public 
2.9 	or nonpublic school they attend, excluding desegregation transportation and noon 
2.10 	kindergarten transportation; but with respect to transportation of pupils to and from 
2.11 	nonpublic schools, only to the extent permitted by sections 123B.84 to 123B.87;
2.12 	(ii) transportation of resident pupils to and from language immersion programs;
2.13 	(iii) transportation of a pupil who is a custodial parent and that pupil's child between 
2.14 	the pupil's home and the child care provider and between the provider and the school, if 
2.15 	the home and provider are within the attendance area of the school;
2.16 	(iv) transportation to and from or board and lodging in another district, of resident 
2.17 	pupils of a district without a secondary school; and
2.18 	(v) transportation to and from school during the regular school year required under 
2.19 	subdivision 3 for nonresident elementary pupils when the distance from the attendance 
2.20 	area border to the public school is one mile or more, and for nonresident secondary pupils 
2.21 	when the distance from the attendance area border to the public school is two miles or 
2.22 	more, excluding desegregation transportation and noon kindergarten transportation.
2.23 	For the purposes of this paragraph, a district may designate a licensed day care 
2.24 	facility, respite care facility, the residence of a relative, or the residence of a person chosen 
2.25 	by the pupil's parent or guardian as the home of a pupil for part or all of the day, if 
2.26 	requested by the pupil's parent or guardian, and if that facility or residence is within the 
2.27 	attendance area of the school the pupil attends.
2.28 	(2) Excess transportation is:
2.29 	(i) transportation to and from school during the regular school year for resident 
2.30 	secondary pupils residing at least one mile but less than two miles from the public or 
2.31 	nonpublic school they attend, and transportation to and from school for resident pupils 
2.32 	residing less than one mile from school who are transported because of extraordinary 
2.33 	traffic, drug, or crime hazards; and
2.34 	(ii) transportation to and from school during the regular school year required under 
2.35 	subdivision 3 for nonresident secondary pupils when the distance from the attendance area 
2.36 	border to the school is at least one mile but less than two miles from the public school 
3.1 	they attend, and for nonresident pupils when the distance from the attendance area border 
3.2 	to the school is less than one mile from the school and who are transported because of 
3.3 	extraordinary traffic, drug, or crime hazards.
3.4 	(3) Desegregation transportation is transportation within and outside of the district 
3.5 	during the regular school year of pupils to and from schools located outside their normal 
3.6 	attendance areas under a plan for desegregation mandated by the commissioner or under 
3.7 	court order.
3.8 	(4) "Transportation services for pupils with disabilities" is:
3.9 	(i) transportation of pupils with disabilities who cannot be transported on a regular 
3.10 	school bus between home or a respite care facility and school;
3.11 	(ii) necessary transportation of pupils with disabilities from home or from school to 
3.12 	other buildings, including centers such as developmental achievement centers, hospitals, 
3.13 	and treatment centers where special instruction or services required by sections 125A.03
3.14 	to 125A.24, 125A.26 to 125A.48, and 125A.65 are provided, within or outside the district 
3.15 	where services are provided;
3.16 	(iii) necessary transportation for resident pupils with disabilities required by sections 
3.17 	125A.12, and 125A.26 to 125A.48;
3.18 	(iv) board and lodging for pupils with disabilities in a district maintaining special 
3.19 	classes;
3.20 	(v) transportation from one educational facility to another within the district for 
3.21 	resident pupils enrolled on a shared-time basis in educational programs, and necessary 
3.22 	transportation required by sections 125A.18, and 125A.26 to 125A.48, for resident pupils 
3.23 	with disabilities who are provided special instruction and services on a shared-time basis 
3.24 	or if resident pupils are not transported, the costs of necessary travel between public 
3.25 	and private schools or neutral instructional sites by essential personnel employed by the 
3.26 	district's program for children with a disability;
3.27 	(vi) transportation for resident pupils with disabilities to and from board and lodging 
3.28 	facilities when the pupil is boarded and lodged for educational purposes; and
3.29 	(vii) services described in clauses (i) to (vi), when provided for pupils with 
3.30 	disabilities in conjunction with a summer instructional program that relates to the pupil's 
3.31 	individual education plan or in conjunction with a learning year program established 
3.32 	under section 124D.128.
3.33 	For purposes of computing special education base revenue under section 125A.76, 
3.34 	subdivision 2, the cost of providing transportation for children with disabilities includes 
3.35 	(A) the additional cost of transporting a homeless student from a temporary nonshelter 
3.36 	home in another district to the school of origin, or a formerly homeless student from a 
4.1 	permanent home in another district to the school of origin but only through the end of the 
4.2 	academic year; and (B) depreciation on district-owned school buses purchased after July 1, 
4.3 	2005, and used primarily for transportation of pupils with disabilities, calculated according 
4.4 	to paragraph (a), clauses (ii) and (iii). Depreciation costs included in the disabled 
4.5 	transportation category must be excluded in calculating the actual expenditure per pupil 
4.6 	transported in the regular and excess transportation categories according to paragraph (a).
4.7 	(5) "Nonpublic nonregular transportation" is:
4.8 	(i) transportation from one educational facility to another within the district for 
4.9 	resident pupils enrolled on a shared-time basis in educational programs, excluding 
4.10 	transportation for nonpublic pupils with disabilities under clause (4);
4.11 	(ii) transportation within district boundaries between a nonpublic school and a 
4.12 	public school or a neutral site for nonpublic school pupils who are provided pupil support 
4.13 	services pursuant to section 123B.44; and
4.14 	(iii) late transportation home from school or between schools within a district for 
4.15 	nonpublic school pupils involved in after-school activities.
4.16 	(6) "Nonregular transportation" for public school pupils is:
4.17 	(i) transportation from one educational facility to another within the district, 
4.18 	excluding transportation for pupils with disabilities under clause (4);
4.19 	(ii) late transportation home from school or between schools within a district for 
4.20 	pupils involved in after-school activities.
4.21 	(c) "Mobile unit" means a vehicle or trailer designed to provide facilities for 
4.22 	educational programs and services, including diagnostic testing, guidance and counseling 
4.23 	services, and health services. A mobile unit located off nonpublic school premises is a 
4.24 	neutral site as defined in section 123B.41, subdivision 13.
4.25 	(d) "FTE" means a full time equivalent pupil who is transported by a school district 
4.26 	under any of the categories authorized in paragraph (b).
4.27 	(e) "Current year" means the school year for which aid will be paid.
4.28 	(f) "Base year" means the second school year preceding the school year for which 
4.29 	aid will be paid.
4.30 	(g) "Base cost" means the ratio of:
4.31 	(1) the sum of the authorized cost in the base year for regular transportation plus the 
4.32 	actual cost in the base year for excess transportation as defined in paragraph (b);
4.33 	(2) to the sum of the number of weighted FTE's in the regular and excess categories 
4.34 	in the base year.
4.35 	(h) "Pupil weighting factor" for the excess transportation category for a school 
4.36 	district means the lesser of one, or the result of the following computation:
5.1 	(1) Divide the square mile area of the school district by the number of FTE's in the 
5.2 	regular and excess categories in the base year.
5.3 	(2) Raise the result in clause (1) to the one-fifth power.
5.4 	(3) Divide four-tenths by the result in clause (2).
5.5 	The pupil weighting factor for the regular transportation category is one.
5.6 	(i) "Weighted FTE's" means the number of FTE's in each transportation category 
5.7 	multiplied by the pupil weighting factor for that category.
5.8 	(j) "Sparsity index" for a school district means the greater of .005 or the ratio of the 
5.9 	square mile area of the school district to the sum of the number of weighted FTE's by the 
5.10 	district in the regular and excess categories in the base year.
5.11 	(k) "Density index" for a school district means the greater of one or the result 
5.12 	obtained by subtracting the product of the district's sparsity index times 20 from two.
5.13 	(l) "Contract transportation index" for a school district means the greater of one or 
5.14 	the result of the following computation:
5.15 	(1) Multiply the district's sparsity index by 20.
5.16 	(2) Select the lesser of one or the result in clause (1).
5.17 	(3) Multiply the district's percentage of regular FTE's in the current year using 
5.18 	vehicles that are not owned by the school district by the result in clause (2).
5.19 	(m) "Adjusted predicted base cost" means the predicted base cost as computed in 
5.20 	subdivision 3a as adjusted under subdivision 1b.
5.21 	(n) "Regular transportation allowance" means the adjusted predicted base cost, 
5.22 	inflated and adjusted under subdivision 1c.

5.23 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

5.24 	Sec. 2. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
5.25 	to read:
5.26 		Subd. 1a.Predicted base cost. (a) A district's predicted base cost equals the result 
5.27 	of the following computation:
5.28 	(b) Multiply the transportation formula allowance by the district's sparsity index 
5.29 	raised to the one-fourth power.  The transportation formula allowance is $800 for the 
5.30 	2005-2006 base year.
5.31 	(c) Multiply the result in paragraph (b) by the district's density index raised to 
5.32 	the one-half power.
5.33 	(d) Multiply the result in paragraph (c) by the district's contract transportation index 
5.34 	raised to the one-twentieth power.

6.1 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

6.2 	Sec. 3. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
6.3 	to read:
6.4 		Subd. 1b.Base year softening formula. Each district's predicted base cost 
6.5 	determined according to subdivision 1a must be adjusted as provided in this subdivision to 
6.6 	determine the district's adjusted predicted base cost for that year. The adjusted predicted 
6.7 	base cost equals 50 percent of the district's base cost plus 50 percent of the district's 
6.8 	predicted base cost, but the adjusted predicted base cost cannot be less than 80 percent, 
6.9 	nor more than 105 percent, of the base cost.

6.10 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

6.11 	Sec. 4. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
6.12 	to read:
6.13 		Subd. 1c.Inflation factors. (a) The adjusted predicted base cost determined for 
6.14 	a district under subdivision 1b for the base year must be increased by six percent to 
6.15 	determine the district's regular transportation allowance for the current school year.
6.16 	(b) The nonregular transportation inflation factor is six percent.

6.17 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

6.18 	Sec. 5. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
6.19 	to read:
6.20 		Subd. 1d.Transportation revenue. (a) Transportation revenue for each district 
6.21 	equals the sum of the district's regular, nonregular, and excess transportation revenue less 
6.22 	its transportation sparsity revenue for that year under section 126C.10.
6.23 	(b) The regular transportation revenue for each district equals the district's regular 
6.24 	transportation allowance according to subdivision 1c times the sum of the number of 
6.25 	FTE's by the district in the regular, desegregation, and disabled categories in the current 
6.26 	school year.
6.27 	(c) The nonregular transportation revenue for each district equals the lesser of the 
6.28 	district's actual cost in the current school year for nonregular transportation services or the 
6.29 	product of the district's actual cost in the base year for nonregular transportation services 
6.30 	as defined for the current year in subdivision 1, times the ratio of the district's average 
6.31 	daily membership for the current year to the district's average daily membership for the 
6.32 	base year, times the nonregular transportation inflation factor for the current year, minus 
7.1 	the amount of regular transportation revenue attributable to FTE's in the desegregation and 
7.2 	disabled categories in the current school year, plus the excess nonregular transportation 
7.3 	revenue for the current year. 
7.4 	(d) The district's excess nonregular transportation revenue equals an amount equal 
7.5 	to 80 percent of the difference between:
7.6 	(1) the district's actual cost in the current year for nonregular transportation services 
7.7 	as defined for the current year in subdivision 1; and
7.8 	(2) the product of the district's actual cost in the base year for nonregular 
7.9 	transportation services as defined for the current year in subdivision 1, times the 
7.10 	nonregular transportation inflation factor for the current year, times the ratio of the 
7.11 	district's average daily membership for the current year to the district's average daily 
7.12 	membership for the base year.

7.13 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

7.14 	Sec. 6. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
7.15 	to read:
7.16 		Subd. 1e.Transportation aid. A district's transportation aid equals its 
7.17 	transportation revenue less its contracted services aid reduction computed under 
7.18 	subdivision 1f. 

7.19 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

7.20 	Sec. 7. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
7.21 	to read:
7.22 		Subd. 1f.Contracted services aid reduction. (a) Each year, a district's 
7.23 	transportation aid shall be reduced according to the provisions of this subdivision, if the 
7.24 	district contracted for some or all of the transportation services provided in the regular 
7.25 	category.
7.26 	(b) The Department of  Education shall determine the subtraction by computing 
7.27 	the district's regular transportation revenue, excluding revenue based on the district's 
7.28 	minimum regular transportation allowance under two circumstances, once including the 
7.29 	factor specified in subdivision 1a, paragraph (d), and once excluding the factor. The 
7.30 	aid subtraction equals the difference between the district's revenue computed under the 
7.31 	two circumstances.

7.32 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

8.1 	Sec. 8. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
8.2 	to read:
8.3 		Subd. 1g.Depreciation. Any school district that owns school buses or mobile 
8.4 	units shall transfer annually from the undesignated fund balance account in its general 
8.5 	fund to the reserved fund balance account for bus purchases in its general fund at least an 
8.6 	amount equal to 12.5 percent per year of the original cost of each type one or type two bus 
8.7 	or mobile unit until the original cost of each type one or type two bus or mobile unit is 
8.8 	fully amortized, plus 20 percent of the original cost of each type three bus included in 
8.9 	the district's authorized cost under the provisions of subdivision 1, paragraph (b), clause 
8.10 	(4), until the original cost of each type three bus is fully amortized, plus 33-1/3 percent of 
8.11 	the cost to the district as of July 1 of each year for school bus reconditioning done by the 
8.12 	Department of Corrections until the cost of the reconditioning is fully amortized.

8.13 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

8.14 	Sec. 9. Minnesota Statutes 2004, section 123B.92, is amended by adding a subdivision 
8.15 	to read:
8.16 		Subd. 1h.Bus purchase account. Any school district that owns school buses 
8.17 	or mobile units must establish a reserved fund balance account for bus purchases in its 
8.18 	general fund.

8.19 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.

8.20 	Sec. 10. [123B.925] TRANSPORTATION LEVIES.
8.21 		Subdivision 1.Bus purchases. A school district may levy the amount necessary to 
8.22 	eliminate any projected deficit in the reserved fund balance account for bus purchases in 
8.23 	its general fund as of June 30 of the school year beginning in the calendar year following 
8.24 	the calendar year the levy is certified.
8.25 		Subd. 2.Contracted services. A school district may levy an amount equal to the 
8.26 	aid subtraction computed according to section 123B.92, subdivision 1g, for the school 
8.27 	year beginning in the year the levy is certified.
8.28 		Subd. 3.Late activity buses. (a) A school district may levy an amount equal to 
8.29 	the lesser of:
8.30 	(1) the actual cost of late transportation home from school, between schools within a 
8.31 	district, or between schools for pupils involved in after-school activities for the school 
8.32 	year beginning in the year the levy is certified; or
9.1 	(2) two percent of the sum of the district's regular transportation revenue and the 
9.2 	district's nonregular transportation revenue for that school year.
9.3 	(b) A district that levies under this section must provide late transportation from 
9.4 	school for students participating in any academic-related activities provided by the district 
9.5 	if transportation is provided for students participating in athletic activities.

9.6 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2008.