2002 Minnesota Statutes

     123B.81 Statutory operating debt. 

    Subdivision 1.    Operating debt.  The "operating debt" 
 of a school district means the net negative undesignated fund 
 balance in all school district funds, other than capital 
 expenditure, building construction, debt service, and trust and 
 agency, calculated as of June 30 of each year in accordance with 
 the uniform financial accounting and reporting standards for 
 Minnesota school districts. 

    Subd. 2.    Statutory operating debt.  If the amount of 
 the operating debt is more than 2-1/2 percent of the most recent 
 fiscal year's expenditure amount for the funds considered under 
 subdivision 1, the net negative undesignated fund balance is 
 defined as "statutory operating debt" for the purposes of this 
 section and sections 123B.83 and 126C.42, subdivision 1. 

    Subd. 3.    Debt verification.  The commissioner shall 
 establish a uniform auditing or other verification procedure for 
 districts to determine whether a statutory operating debt exists 
 in any Minnesota school district as of June 30, 1977.  This 
 procedure must identify all interfund transfers made during 
 fiscal year 1977 from a fund included in computing statutory 
 operating debt to a fund not included in computing statutory 
 operating debt.  The standards for this uniform auditing or 
 verification procedure must be promulgated by the state board 
 pursuant to chapter 14.  If a district applies to the 
 commissioner for a statutory operating debt verification or if 
 the unaudited financial statement for the school year ending 
 June 30, 1977 reveals that a statutory operating debt might 
 exist, the commissioner shall require a verification of the 
 amount of the statutory operating debt which actually does exist.

    Subd. 4.    Debt elimination.  If an audit or other 
 verification procedure conducted pursuant to subdivision 3 
 determines that a statutory operating debt exists, a district 
 must follow the procedures set forth in section 126C.42, 
 subdivision 1, to eliminate this statutory operating debt. 

    Subd. 5.    Certification of debt.  The commissioner 
 shall certify the amount of statutory operating debt for each 
 district.  Prior to June 30, 1979, the commissioner may, on the 
 basis of corrected figures, adjust the total amount of statutory 
 operating debt certified for any district. 

    Subd. 6.    Report.  On January 15, 1998, the 
 commissioner shall report to the legislature on the districts 
 for which the levy allowable under section 126C.42, subdivision 
 1, has been insufficient to eliminate the statutory operating 
 debt of the district, determined as of June 30, 1977. 

    Subd. 7.    Applicability.  This section and the 
 provisions of section 126C.42, subdivision 1, are applicable 
 only to common, independent, and special school districts and 
 districts formed pursuant to Laws 1967, chapter 822, as amended, 
 and Laws 1969, chapters 775 and 1060, as amended.  This section 
 and the provisions of section 126C.42, subdivision 1, do not 
 apply to independent school district No. 625. 

    Subd. 8.    Plan disclosure.  Any district eligible to 
 receive any amounts pursuant to section 126C.42, subdivision 1, 
 must disclose its statutory operating debt retirement plan by 
 footnote to the audited financial statement. 

    HIST: 1976 c 271 s 32; 1977 c 447 art 7 s 9-12; 1980 c 609 art 
 7 s 7; 1982 c 424 s 130; 1986 c 444; 1987 c 398 art 7 s 42; 1991 
 c 130 s 37; 1992 c 499 art 12 s 29; 1Sp1995 c 3 art 16 s 13; 
 1996 c 412 art 13 s 6; 1998 c 397 art 6 s 29-35,124; art 11 s 3