1997 Minnesota Statutes

     124.195 Payment of aids and credits to school districts. 

    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.

    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. 

    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

    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. 

    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

    Subd. 3c.    Cash flow waiver.  For any district 
 exceeding its expenditure limitations under section 121.917, and 
 if requested by the district, the commissioner of children, 
 families, and learning, in consultation with the commissioner of 
 finance, and a school district may negotiate a cash flow payment 
 schedule under subdivision 3 corresponding to the district's 
 cash flow needs so as to minimize the district's short-term 
 borrowing needs. 

    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.  

    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) 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) 50 percent within seven business days of each due date; 
 and 

    (2) 100 percent within 14 business days of each due date; 

    (b) 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) 50 percent within seven business days of the October 15 
 due date; 

    (2) 100 percent within 14 business days of the October 15 
 due date; and 

    (3) 100 percent within ten business days of the November 15 
 due date. 

    (c) 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. 

    Subd. 6.    Final adjustment payment.  For all aids and 
 credits paid according to subdivision 10, the final adjustment 
 payment shall include the amounts necessary to pay the 
 district's full aid entitlement for the prior year based on 
 actual data.  This payment shall be used to correct all 
 estimates used for the payment schedule in subdivision 3.  The 
 payment shall 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 be made when actual data are 
 available. 

    Subd. 7.    Payments to school nonoperating funds.  Each 
 fiscal year state general fund payments for a district 
 nonoperating fund shall 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 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. 

    Subd. 8.    Payment percentage for reimbursement aids.  
 One hundred percent of the special education special pupil aid 
 according to section 124.32, subdivision 6, for the previous 
 fiscal year must be paid in the current year. 

    Subd. 9.    Payment percentage for certain aids.  One 
 hundred percent of the aid for the current fiscal year must be 
 paid for the following aids:  reimbursement for transportation 
 to post-secondary institutions, according to section 123.3514, 
 subdivision 8; aid for the program for adults with disabilities, 
 according to section 124.2715, subdivision 2; school lunch aid, 
 according to section 124.646; hearing impaired support services 
 aid, according to section 121.201; Indian post-secondary 
 preparation grants according to section 124.481; integration 
 grants according to Laws 1989, chapter 329, article 8, section 
 14, subdivision 3; and debt service aid according to section 
 124.95, subdivision 5. 

    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, 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 be the amount of the actual entitlement, 
 after adjustment for actual data, minus the payments made during 
 the fiscal year of the entitlement. 

    Subd. 11.    Nonpublic aids.  The state shall pay aid 
 according to sections 123.931 to 123.947 for pupils attending 
 nonpublic schools as follows: 

    (1) an advance payment by November 30 equal to 90 percent 
 of the estimated entitlement for the current fiscal year; and 

    (2) a final payment by October 31 of the following fiscal 
 year, adjusted for actual data.  

    If a payment advance to meet cash flow needs is requested 
 by a district and approved by the commissioner, the state shall 
 pay nonpublic pupil transportation aid according to section 
 124.225 by October 31. 

    Subd. 12. Repealed, 1997 c 233 art 1 s 78 

    Subd. 13. Repealed, 1993 c 224 art 14 s 17 

    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 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 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. 

    Subd. 15.    Payments to third parties.  Notwithstanding 
 subdivision 3, 90 percent of the amounts under section 124.193, 
 subdivision 3, shall be paid in equal installments on August 30, 
 December 30, and March 30, with a ten percent final adjustment 
 payment on October 30 of the next fiscal year. 

    HIST: 1983 c 342 art 7 s 3; 1984 c 463 art 9 s 4-6; 1984 c 655 
 art 1 s 25; 1Sp1985 c 12 art 10 s 3-7; 1Sp1986 c 1 art 4 s 8; 
 art 5 s 6,7; art 9 s 3; 1987 c 268 art 9 s 4; 1987 c 384 art 2 s 
 29,30; 1987 c 398 art 6 s 2; art 7 s 25; 1988 c 486 s 31,32; 
 1989 c 329 art 8 s 2,3; 1990 c 562 art 1 s 2; art 3 s 13; art 6 
 s 20; art 8 s 26; 1990 c 604 art 3 s 4; 1991 c 130 s 10-14; 1991 
 c 199 art 2 s 9; 1991 c 265 art 2 s 3; art 5 s 5; 1992 c 499 art 
 1 s 7,8; 1993 c 224 art 6 s 8; art 7 s 9; art 8 s 1; art 14 s 9; 
 1994 c 465 art 2 s 12; 1994 c 647 art 1 s 7-10; 1Sp1995 c 3 art 
 1 s 12-14; art 16 s 13; 1996 c 412 art 1 s 9,10; 1997 c 231 art 
 9 s 3,4; 1Sp1997 c 4 art 1 s 15-18; art 3 s 12