2005 Minnesota Statutes

CHAPTER 127A. State administration of education

     127A.01 Definitions.  

    For the purpose of this chapter, the terms defined in 
 section 120A.05 have the same meaning.  

    HIST: Ex1959 c 71 art 2 s 1; 1998 c 397 art 4 s 51; art 11 s 3 

COMMISSIONER DUTIES

     127A.05 Commissioner of education. 

    Subdivision 1.    Appointment and duties.  The 
 department shall be under the administrative control of the 
 commissioner of education which office is established.  The 
 governor shall appoint the commissioner under the provisions of 
 section 15.06.  

    The commissioner shall be a person who possesses 
 educational attainment and breadth of experience in the 
 administration of public education and of the finances 
 pertaining thereto commensurate with the spirit and intent of 
 this code.  Notwithstanding any other law to the contrary, the 
 commissioner may appoint two deputy commissioners who shall 
 serve in the unclassified service.  The commissioner shall also 
 appoint other employees as may be necessary for the organization 
 of the department.  The commissioner shall perform such duties 
 as the law and rules may provide and be held responsible for the 
 efficient administration and discipline of the department.  The 
 commissioner is charged with the execution of powers and duties 
 to promote public education in the state and to safeguard the 
 finances pertaining thereto. 

    Subd. 2.    Review of state laws and rules.  The 
 commissioner shall review all education-related mandates in 
 state law or rule once every four years to determine which 
 mandates fail to adequately promote public education in the 
 state.  The commissioner shall report the findings of the review 
 to the education committees of the legislature by February 1 in 
 the year following the completion of the review. 

    Subd. 3.    General supervision over public schools and 
 educational agencies.  The commissioner of education shall 
 adopt goals for and exercise general supervision over public 
 schools and public educational agencies in the state, classify 
 and standardize public elementary and secondary schools, and 
 prepare for them outlines and suggested courses of study.  The 
 commissioner shall develop a plan to attain the adopted goals.  
 The commissioner may recognize educational accrediting agencies 
 for the sole purposes of sections 120A.22, 120A.24, and 120A.26. 

    Subd. 4.    Administrative rules.  The commissioner may 
 adopt new rules or amend any existing rules only under specific 
 authority and consistent with the requirements of chapter 14.  
 The commissioner may repeal any existing rules adopted by the 
 commissioner.  The commissioner may grant a variance to rules 
 adopted by the commissioner upon application by a school 
 district for purposes of implementing experimental programs in 
 learning or school management.  This subdivision shall not 
 prohibit the commissioner from making technical changes or 
 corrections to rules adopted by the commissioner. 

    Subd. 5.    Evening schools.  The commissioner shall 
 exercise general supervision over the public evening schools, 
 adult education programs, and summer programs. 

    Subd. 6.    Survey of districts.  The commissioner of 
 education shall survey the state's school districts and teacher 
 preparation programs and report to the education committees of 
 the legislature by January 15 of each odd-numbered year on the 
 status of teacher early retirement patterns, the teacher 
 shortage, and the substitute teacher shortage, including 
 patterns and shortages in subject areas and regions of the 
 state.  The report must also include how districts are making 
 progress in hiring teachers and substitutes in the areas of 
 shortage and a five-year projection of teacher demand for each 
 district. 

    HIST: Ex1959 c 71 art 2 s 16; 1969 c 1129 art 8 s 16; 1977 c 
 305 s 41; 1978 c 764 s 8; 1983 c 150 s 1; 1992 c 499 art 8 s 1; 
 1993 c 224 art 9 s 16,17; 1Sp1995 c 3 art 16 s 13; 1998 c 397 
 art 4 s 51; art 11 s 3; 1998 c 398 art 6 s 4-12; 1999 c 241 art 
 9 s 30,31; 2000 c 489 art 6 s 26; art 10 s 15; 2003 c 130 s 
 10-12; 1Sp2003 c 9 art 12 s 15 

     127A.06 Recommendations; budget. 

    The commissioner of education shall recommend to the 
 governor and legislature such modification and unification of 
 laws relating to the state system of education as shall make 
 those laws more readily understood and more effective in 
 execution.  The commissioner of education shall prepare a 
 biennial education budget which shall be submitted to the 
 governor and legislature, such budget to contain a complete 
 statement of finances pertaining to the maintenance of the state 
 department and to the distribution of state aid.  

    HIST: Ex1959 c 71 art 2 s 14; 1991 c 265 art 11 s 2; 1993 c 
 224 art 12 s 7; 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 51; 
 1998 c 398 art 6 s 2; 2003 c 130 s 12 

     127A.07 Shared service agreements. 

    The commissioner may make a shared service agreement with 
 another public agency.  The agreement must be of mutual benefit 
 to the state, the department, and the other agency.  The term of 
 the agreement must not be more than three years.  The 
 commissioner and the other agency need not consult the 
 Legislative Advisory Commission before making the agreement.  

    Charges by the department and the other agency must be on 
 an actual cost basis, and the receipts are dedicated to the 
 operation of the department or agency receiving them and are 
 appropriated for that purpose. 

    HIST: 1Sp1985 c 12 art 7 s 6; 1998 c 397 art 4 s 51 

     127A.08 Conference and workshop fee receipts; receipts 
  and payments from public and nonprofit private agencies. 

    Subdivision 1.    Conference and workshop fees.  The 
 commissioner may establish procedures to set and collect fees to 
 defray costs of conferences and workshops conducted by the 
 department.  The commissioner may keep accounts as necessary 
 within the state's accounting system for the deposit of the 
 conference and workshop fee receipts.  

    Subd. 2.    Appropriation.  The receipts collected under 
 subdivision 1 are appropriated for payment of expenses relating 
 to the workshops and conferences.  

    Subd. 3.    Carry-over authority.  Unobligated balances 
 under subdivision 1 may be carried over as follows:  

    (1) when expenditures for which the receipts have been 
 designated occur in the following fiscal year; or 

    (2) to allow retention of minor balances in accounts for 
 conferences that are scheduled annually.  

    Subd. 4.    Receipts and reimbursements.  The 
 commissioner may accept receipts and payments from public and 
 nonprofit private agencies for related costs for partnership or 
 cooperative endeavors involving education activities that are 
 for the mutual benefit of the state, the department, and the 
 other agency.  The commissioner may keep accounts as necessary 
 within the state's accounting system.  The receipts must be 
 deposited in the special revenue fund. 

    HIST: 1991 c 265 art 9 s 14; 1998 c 397 art 4 s 51 

     127A.09 Federal aid for education. 

    Subdivision 1.    Acceptance.  The commissioner may 
 accept and administer federal funds when such funds become 
 available that further public education and are consistent with 
 state policy and the mission of the department.  Acceptance of 
 the money is subject to department of finance policy and 
 procedure regarding federal funds. 

    Subd. 2.    State plans.  If the granting federal agency 
 requires a state plan addressing policy for expenditure, the 
 commissioner shall adopt a state plan in conformity with state 
 and federal regulations and guidelines prior to commissioner 
 acceptance. 

    Subd. 3.    Depository.  The commissioner of finance is 
 the custodian of all money received from the United States on 
 account of the acceptance and shall disburse the money on 
 requisitioning of the commissioner through the state payment 
 system for purposes consistent with the respective acts of 
 Congress and federal grant. 

    HIST: 1993 c 224 art 11 s 1; 1998 c 397 art 4 s 51; 1998 c 398 
 art 5 s 55; 2003 c 112 art 2 s 50 

     127A.095 Implementation of No Child Left Behind Act. 

    Subdivision 1.    Continued implementation.  The 
 Department of Education shall continue to implement the federal 
 No Child Left Behind Act, Public Law 107-110, without 
 interruption. 

    Subd. 2.    No Child Left Behind review.  (a) The 
 legislature intends to require the Department of Education to 
 conduct a comprehensive review of the consolidated state plan 
 the state submitted to the federal Department of Education to 
 implement the No Child Left Behind Act.  The Minnesota 
 Department of Education shall seek waivers under paragraph (b).  
 If the Department of Education is unable to obtain waivers under 
 paragraph (b), it should recommend in its report under paragraph 
 (b) whether the state should opt out of the No Child Left Behind 
 Act. 

    (b) The commissioner, by January 15, 2007, shall report to 
 the house of representatives and senate committees having 
 jurisdiction over kindergarten through grade 12 education policy 
 and finance whether the department has received approval from 
 the federal Department of Education to: 

    (1) allow the state to develop a plan for determining 
 adequate yearly progress that uses multiple measures of student 
 achievement that include value-added measurement of student 
 achievement in addition to standardized test results to evaluate 
 school and student performance; 

    (2) exclude from sanctions a school that is classified as 
 not having made adequate yearly progress due solely to different 
 subgroups testing below proficient levels for at least two 
 consecutive years; 

    (3) allow the state to average three years of data for the 
 purposes of identifying a school for improvement; 

    (4) allow the state to use No Child Left Behind Act money 
 to provide supplemental education services only in the academic 
 subject area that causes a school to miss adequate yearly 
 progress; 

    (5) exclude from sanctions schools that have not made 
 adequate yearly progress due solely to a subgroup of students 
 with disabilities not testing at a proficient level; 

    (6) identify a school as not making adequate yearly 
 progress only after the school has missed the adequate yearly 
 progress targets in the same subject and subgroup for two 
 consecutive years; 

    (7) limit the score of a student within multiple subgroups 
 to the smallest subgroup in which that student is included when 
 calculating adequate yearly progress; 

    (8) determine when to hold schools accountable for 
 including a student with limited English proficiency in adequate 
 yearly progress calculations; and 

    (9) use a fully computer-adaptive test for purposes of 
 compliance with the No Child Left Behind Act.  

    Subd. 3.    Department of Finance certification.  If the 
 federal Department of Education does not transmit to the 
 commissioner of education its approval of the conditions in 
 subdivision 2, paragraph (b), the commissioner of finance shall 
 certify and report to the legislature annually beginning January 
 1, 2008, the amount of federal revenue, if any, that the federal 
 government may withhold as a result of a potential state 
 decision to discontinue implementation of the No Child Left 
 Behind Act.  The report shall also specify the intended purpose 
 of the federal revenue and the amount of revenue that the 
 federal government may withhold from the state, each school 
 district, and each charter school in each fiscal year. 

    HIST: 1Sp2005 c 5 art 2 s 72 

     127A.10 State officials and school board members to be 
  disinterested; penalty. 

    If the commissioner of education, an assistant or any 
 employee connected with the commissioner's office, or any member 
 of any school board shall accept or receive any money, gift or 
 any property, or favor from any person, firm, or corporation 
 offering for sale any textbooks, or any agent thereof, or from 
 any person in any way interested in the sale of textbooks, the 
 person accepting or receiving it is guilty of a gross 
 misdemeanor.  

    HIST: Ex1959 c 71 art 8 s 23; 1984 c 628 art 3 s 11; 1986 c 
 444; 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 51; 2003 c 130 
 s 12; 2004 c 228 art 1 s 72; 2005 c 10 art 3 s 6 

     127A.11 Monitor medical assistance services for disabled 
  students. 

    The commissioner of education, in cooperation with the 
 commissioner of human services, shall monitor the costs of 
 health-related, special education services provided by public 
 schools. 

    HIST: 1999 c 245 art 4 s 6; 2003 c 130 s 12 

     127A.12 Commissioner membership in certain organizations.

    The commissioner may become a member of the Council of 
 Chief State School Officers, an association of state departments 
 of education, and pay membership dues and contribute to the 
 association for services rendered to the state department on the 
 basis of actual and necessary expenses incurred by the council 
 in preparing these services.  

    HIST: Ex1959 c 71 art 2 s 4; 1961 c 556 s 1; 1971 c 679 s 1; 
 1998 c 397 art 4 s 51; 1998 c 398 art 5 s 55 

     127A.13 Contracts with federal government. 

    Subdivision 1.    Rules governing.  The commissioner 
 shall prescribe rules under which contracts, agreements, or 
 arrangements may be made with agencies of the federal government 
 for funds, services, commodities, or equipment to be made 
 available to the public tax-supported schools, school systems 
 and educational institutions under the supervision or control of 
 the commissioner. 

    Subd. 2.    Rules prescribed by commissioner.  All 
 contracts, agreements or arrangements made by public 
 tax-supported schools, school systems or educational 
 institutions under the supervision or control of the 
 commissioner involving funds, services, commodities, or 
 equipment which may be provided by agencies of the federal 
 government shall be entered into in accordance with rules 
 prescribed by the commissioner and in no other manner.  

    HIST: Ex1959 c 71 art 2 s 5; 1985 c 248 s 70; 1998 c 397 art 4 
 s 51; 1998 c 398 art 5 s 55 

     127A.14 Commissioner purchase of annuity for employees. 

    Subdivision 1.    Purchase of annuity contract; allocation 
 of portion of employee compensation.  At the request of an 
 employee, the commissioner of education may negotiate and 
 purchase an individual annuity contract from a company licensed 
 to do business in the state of Minnesota for an employee for 
 retirement or other purposes and may allocate a portion of the 
 compensation otherwise payable to the employee as salary for the 
 purpose of paying the entire premium due or to become due under 
 such contract.  The allocation shall be made in a manner which 
 will qualify the annuity premiums, or a portion thereof, for the 
 benefit afforded under section 403(b) of the current federal 
 Internal Revenue Code or any equivalent provision of subsequent 
 federal income tax law. The employee shall own such contract and 
 the employee's rights thereunder shall be nonforfeitable except 
 for failure to pay premiums. 

    Subd. 2.    Annuity account; appropriation.  All 
 amounts so allocated shall be deposited in an annuity account 
 which is hereby established in the state treasury.  There is 
 annually appropriated from the annuity account in the state 
 treasury to the commissioner of education all moneys deposited 
 therein for the payment of annuity premiums when due or for 
 other application in accordance with the salary agreement 
 entered into between the employee and the commissioner of 
 education.  The moneys in the annuity account in the state 
 treasury are not subject to the budget, allotment, and 
 incumbrance system provided for in chapter 16A and any act 
 amendatory thereof. 

    HIST: 1969 c 751 s 1; 1977 c 410 s 12; 1986 c 444; 1998 c 397 
 art 4 s 51; 1998 c 398 art 5 s 55; 2003 c 130 s 12 

DEPARTMENT DUTIES; ASSISTING DISTRICTS

     127A.15 Library information services. 

    Subdivision 1.    Providing library information.  The 
 department may provide library information services it considers 
 appropriate and necessary to any state agency, governmental 
 unit, nonprofit organization, or private entity.  The department 
 may collect reasonable fees not to exceed its actual costs for 
 providing the information services.  The department may also 
 accept money from any public or private source to defray the 
 cost of providing the information services.  

    Subd. 2.    Appropriation.  The fees charged and money 
 accepted by the department under subdivision 1 shall be 
 deposited in the state treasury and credited to a special 
 account.  Money in the account is appropriated to the department 
 to defray the costs of providing the information services. 

    HIST: (3018) 1921 c 397 s 4; 1983 c 314 art 11 s 22; 1986 c 
 471 s 1; 1998 c 397 art 4 s 51 

  127A.16 Repealed, 1998 c 398 art 6 s 38 

     127A.17 Uniform systems of records and of accounting; 
  commissioner. 

    The commissioner of education shall prepare a uniform 
 system of records for public schools and require reports from 
 superintendents and principals of schools, teachers, school 
 officers, and the chief officers of public and other educational 
 institutions to give such facts as it may deem of public value.  
 All reports required of school districts by the commissioner 
 shall be in conformance with the uniform financial accounting 
 and reporting system.  With the cooperation of the state 
 auditor, the commissioner shall establish and carry into effect 
 a uniform system of accounting by public school officers and 
 shall have authority to supervise and examine the accounts and 
 other records of all public schools. 

    HIST: Ex1959 c 71 art 2 s 16; 1969 c 1129 art 8 s 16; 1977 c 
 305 s 41; 1978 c 764 s 8; 1983 c 150 s 1; 1992 c 499 art 8 s 1; 
 1993 c 224 art 9 s 16,17; 1Sp1995 c 3 art 16 s 13; 1998 c 397 
 art 4 s 51; 1998 c 398 art 6 s 4-12; 2003 c 130 s 12 

     127A.18 Management assistance to school districts. 

    The department shall provide management assistance if 
 requested by a district.  The assistance may include:  

    (1) developing data and assumptions for the district to use 
 in setting priorities and goals and in considering management 
 and organizational alternatives; and 

    (2) analyzing and assessing alternative methods of 
 organization and management, including opportunities for 
 coordination and cooperation with other districts, and assessing 
 the relative costs and benefits of the alternatives. 

    HIST: 1Sp1985 c 12 art 8 s 4; 1998 c 397 art 4 s 51 

     127A.19 Financial management assistance and training to 
  school districts and school sites. 

    The Department of Education shall make available to school 
 districts and individual school sites assistance and training in 
 financial management.  The assistance and training shall be in 
 at least the following areas: 

    (1) provision of an updated uniform financial and reporting 
 system manual in both hard copy and computerized form which will 
 be applicable to both the school district and to a school site 
 under site-based management; 

    (2) regularly scheduled training and assistance in 
 accounting and financial operations, and special assistance as 
 requested; 

    (3) long-term financial planning, including that involved 
 with district reorganization; 

    (4) district and school level expenditure and revenue 
 budgeting and other fiscal and organizational requirements, 
 including that under site-based management; 

    (5) assistance with school, district, and regional capital 
 budget planning; and 

    (6) the development of a model reporting system for school 
 sites for resource use and outcome achievement.  The model shall 
 include characteristics about the student population, staffing 
 levels, and achievement results attributable to the 
 instructional and organizational structure of the school site. 

    HIST: 1993 c 224 art 7 s 5; 1Sp1995 c 3 art 16 s 13; 1998 c 
 397 art 4 s 51; 2003 c 130 s 12 

PERMANENT SCHOOL FUND

     127A.30 Permanent School Fund Advisory Committee. 

    A state Permanent School Fund Advisory Committee is 
 established to advise the Department of Natural Resources on the 
 management of permanent school fund land, which is held in trust 
 for the school districts of the state.  The advisory committee 
 must consist of the following persons or their designees:  the 
 chairs of the education committees of the legislature, the 
 chairs of the senate Committee on Finance and house Committee on 
 Ways and Means, the commissioner of education, one 
 superintendent from a nonmetropolitan district, and one 
 superintendent from a metropolitan area district.  The school 
 district superintendents shall be appointed by the commissioner 
 of education.  

    The advisory committee shall review the policies of the 
 Department of Natural Resources and current statutes on 
 management of school trust fund lands at least semiannually and 
 shall recommend necessary changes in statutes, policy, and 
 implementation in order to ensure provident utilization of the 
 permanent school fund lands.  

    HIST: 1982 c 548 art 4 s 2; 1986 c 444; 1993 c 4 s 16; 1Sp1995 
 c 3 art 16 s 13; 1998 c 397 art 4 s 5,51; art 11 s 3; 1998 c 398 
 art 6 s 22; 2003 c 130 s 12 

     127A.31 Goal of the permanent school fund. 

    The legislature intends that it is the goal of the 
 permanent school fund to secure the maximum long-term economic 
 return from the school trust lands consistent with the fiduciary 
 responsibilities imposed by the trust relationship established 
 in the Minnesota Constitution, with sound natural resource 
 conservation and management principles, and with other specific 
 policy provided in state law. 

    HIST: 1985 c 116 s 2; 1998 c 397 art 4 s 51 

     127A.32 School endowment fund; designation. 

    For the purpose of aid to public schools, a school 
 endowment fund is established.  

    The school endowment fund shall consist of the income from 
 the permanent school fund.  The commissioner may accept for and 
 on behalf of the permanent school fund a donation of cash, 
 marketable securities, or other personal property.  A noncash 
 donation, other than a donation of marketable securities, must 
 be disposed of for cash as soon as the commissioner can obtain 
 fair market value for the donation.  Marketable securities may 
 be disposed of at the discretion of the State Board of 
 Investment consistent with sections 11A.16 and 11A.24.  A cash 
 donation and the cash receipts from a donation disposed of for 
 cash must be credited immediately to the permanent school fund.  
 Earnings from marketable securities are earnings of the 
 permanent school fund. 

    HIST: Ex1959 c 71 art 5 s 8; 1969 c 399 s 13; 1989 c 51 s 2; 
 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 6,51 

     127A.33 School endowment fund; apportionment. 

    The commissioner shall apportion the school endowment fund 
 semiannually on the first Monday in March and September in each 
 year, to districts whose schools have been in session at least 
 nine months.  The apportionment shall be in proportion to the 
 number of pupils in average daily membership during the 
 preceding year.  The apportionment shall not be paid to a 
 district for pupils for whom tuition is received by the district.

    HIST: Ex1959 c 71 art 5 s 9; Ex1971 c 31 art 20 s 15; 1978 c 
 706 s 29; 1Sp1985 c 12 art 1 s 3; 1993 c 224 art 13 s 31; 1996 c 
 412 art 1 s 5; 1998 c 397 art 4 s 7,51 

     127A.34 County auditor and commissioner duties. 

    Subdivision 1.    Copy to commissioner of finance; 
 appropriation.  The commissioner shall furnish a copy of the 
 apportionment of the school endowment fund to the commissioner 
 of finance, who thereupon shall draw warrants on the state 
 treasury, payable to the several districts, for the amount due 
 each district.  There is hereby annually appropriated from the 
 school endowment fund the amount of such apportionments. 

    Subd. 2.    Apportionments to districts.  The county 
 auditor each year shall apportion to the districts within the 
 county the amount received from power line taxes under section 
 273.42, liquor licenses, fines, estrays, and other sources 
 belonging to the general fund.  The apportionments must be made 
 in proportion to each district's net tax capacity within the 
 county in the prior year.  The apportionments must be made and 
 amounts distributed to the districts at the times provided for 
 the settlement and distribution of real and personal property 
 taxes under sections 276.09, 276.11, and 276.111, except that 
 all of the power line taxes apportioned to a district from the 
 county school fund must be included in the first half 
 distribution of property taxes to the district.  No district 
 shall receive any part of the money received from liquor 
 licenses unless all sums paid for such licenses in such district 
 are apportioned to the county school fund.  

    Subd. 3.    Report to commissioner of education.  The county 
 auditor, on the first Wednesday 
 after such apportionment, shall report to the commissioner on 
 the amount apportioned, the sources from which such money was 
 received, and the net tax capacity of each district in the 
 county. 

    HIST: Ex1959 c 71 art 5 s 10; 1969 c 16 s 1,2; Ex1971 c 31 art 
 20 s 16; 1973 c 492 s 14; 1Sp1985 c 12 art 1 s 4; 1986 c 444; 
 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 20; 1990 c 562 art 10 
 s 1; 1990 c 604 art 3 s 3; 1993 c 224 art 13 s 32; 1998 c 397 
 art 4 s 8,9,51 

STATE AID PAYMENT AND ADJUSTMENT

     127A.40 Manner of payment of state aids. 

    It shall be the duty of the commissioner to deliver to the 
 commissioner of finance a certificate for each district entitled 
 to receive state aid under the provisions of this chapter.  Upon 
 the receipt of such certificate, it shall be the duty of the 
 commissioner of finance to draw a warrant in favor of the 
 district for the amount shown by each certificate to be due to 
 the district.  The commissioner of finance shall transmit such 
 warrants to the district together with a copy of the certificate 
 prepared by the commissioner. 

    HIST: Ex1959 c 71 art 5 s 12; 1965 c 537 s 1; 1969 c 16 s 3; 
 1969 c 399 s 14; 1973 c 492 s 14; 1978 c 616 s 7; 1986 c 444; 
 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 10,51; 2003 c 112 
 art 2 s 20 

     127A.41 Distribution of school aids; appropriation. 

    Subdivision 1.    Commissioner duties.  The commissioner 
 shall supervise distribution of school aids and grants in 
 accordance with law.  The commissioner may make rules consistent 
 with law for the distribution to enable districts to perform 
 efficiently the services required by law and further education 
 in the state, including reasonable requirements for the reports 
 and accounts to it as will assure accurate and lawful 
 apportionment of aids.  State and federal aids and discretionary 
 or entitlement grants distributed by the commissioner shall not 
 be subject to the contract approval procedures of the 
 commissioner of administration or to chapter 16A, 16B, or 16C.  
 The commissioner shall adopt internal procedures for 
 administration and monitoring of aids and grants. 

    Subd. 2.    Errors in distribution.  On determining that 
 the amount of state aid distributed to a school district is in 
 error, the commissioner is authorized to adjust the amount of 
 aid consistent with this subdivision.  On determining that the 
 amount of aid is in excess of the school district's entitlement, 
 the commissioner is authorized to recover the amount of the 
 excess by any appropriate means.  Notwithstanding the fiscal 
 years designated by the appropriation, the excess may be 
 recovered by reducing future aid payments to the district.  
 Notwithstanding any law to the contrary, if the aid reduced is 
 not of the same type as that overpaid, the district must adjust 
 all necessary financial accounts to properly reflect all 
 revenues earned in accordance with the uniform financial 
 accounting and reporting standards pursuant to sections 123B.75 
 to 123B.83.  Notwithstanding the fiscal years designated by the 
 appropriation, on determining that the amount of an aid paid is 
 less than the school district's entitlement, the commissioner is 
 authorized to increase such aid from the current appropriation. 

    Subd. 3.    Audits.  The commissioner shall establish 
 procedures for conducting and shall conduct audits of district 
 records and files for the purpose of verifying district pupil 
 counts, levy limitations, and aid entitlements.  The 
 commissioner shall establish procedures for selecting and shall 
 select districts to be audited.  Disparities, if any, between 
 pupil counts, levy limitations, or aid entitlements determined 
 by audit of district records and files and data reported by 
 districts in reports, claims and other documents shall be 
 reviewed by the commissioner who shall order increases or 
 decreases accordingly.  Whenever possible, the commissioner 
 shall audit at least 25 districts each year pursuant to this 
 subdivision. 

    Subd. 4.    Less than 25 districts audited.  If the 
 commissioner audits fewer than 25 districts in a fiscal year 
 pursuant to subdivision 3, the commissioner shall report the 
 reasons for the number audited to the following legislative 
 committees:  house education, house appropriations, senate 
 education, and senate finance. 

    Subd. 5.    District appeal of aid reduction; inspection 
 of district schools and accounts and records.  Public schools 
 shall at all times be open to the inspection of the 
 commissioner.  The accounts and records of any district must be 
 open to inspection by the state auditor, or the commissioner for 
 the purpose of audits conducted under this section.  Each 
 district shall keep for a minimum of three years at least the 
 following:  (1) identification of the annual session days held, 
 together with a record of the length of each session day, (2) a 
 record of each pupil's daily attendance, with entrance and 
 withdrawal dates, and (3) identification of the to-and-from 
 school transportation category for each pupil as defined in 
 section 123B.92, subdivision 1. 

    Subd. 6. Repealed, 1Sp2003 c 9 art 5 s 37 

    Subd. 7.    Schedule adjustments.  (a) It is the 
 intention of the legislature to encourage efficient and 
 effective use of staff and facilities by districts.  Districts 
 are encouraged to consider both cost and energy saving measures. 

    (b) Any district operating a program pursuant to sections 
 124D.12 to 124D.127, 124D.128, or 124D.25 to 124D.29, or 
 operating a commissioner-designated area learning center program 
 under section 123A.09, or that otherwise receives the approval 
 of the commissioner to operate its instructional program to 
 avoid an aid reduction in any year, may adjust the annual school 
 schedule for that program throughout the calendar year.  

    Subd. 8.    Appropriation transfers.  (a) If a direct 
 appropriation from the general fund to the department for any 
 education aid or grant authorized in this chapter and chapters 
 122A, 123A, 123B, 124D, 125A, 126C, and 134, excluding 
 appropriations under sections 124D.135, 124D.16, 124D.20, 
 124D.22, 124D.52, 124D.531, 124D.55, and 124D.56, exceeds the 
 amount required, the commissioner may transfer the excess to any 
 education aid or grant appropriation that is insufficient.  
 However, section 126C.20 applies to a deficiency in the direct 
 appropriation for general education aid.  Excess appropriations 
 must be allocated proportionately among aids or grants that have 
 insufficient appropriations.  The commissioner of finance shall 
 make the necessary transfers among appropriations according to 
 the determinations of the commissioner.  If the amount of the 
 direct appropriation for the aid or grant plus the amount 
 transferred according to this subdivision is insufficient, the 
 commissioner shall prorate the available amount among eligible 
 districts.  The state is not obligated for any additional 
 amounts. 

    (b) Transfers for aids paid under section 127A.45, 
 subdivisions 12, paragraph (a), 12a, paragraph (a), and 13, 
 shall be made during the fiscal year after the fiscal year of 
 the entitlement.  Transfers for aids paid under section 127A.45, 
 subdivisions 11, 12, paragraph (b), and 12a, paragraph (b), 
 shall be made during the fiscal year of the appropriation. 

    Subd. 9.    Appropriation transfers for community 
 education programs.  If a direct appropriation from the 
 general fund to the Department of Education for an education aid 
 or grant authorized under section 124D.135, 124D.16, 124D.20, 
 124D.22, 124D.52, 124D.531, 124D.55, or 124D.56 exceeds the 
 amount required, the commissioner of education may transfer the 
 excess to any education aid or grant appropriation that is 
 insufficiently funded under these sections.  Excess 
 appropriations shall be allocated proportionately among aids or 
 grants that have insufficient appropriations.  The commissioner 
 of finance shall make the necessary transfers among 
 appropriations according to the determinations of the 
 commissioner of education.  If the amount of the direct 
 appropriation for the aid or grant plus the amount transferred 
 according to this subdivision is insufficient, the commissioner 
 shall prorate the available amount among eligible districts.  
 The state is not obligated for any additional amounts. 

    Subd. 10.    Health and safety aid transfer.  The 
 commissioner, with the approval of the commissioner of finance, 
 annually may transfer an amount from the appropriation for 
 health and safety aid to the appropriation for debt service aid 
 for the same fiscal year.  The amount of the transfer equals the 
 amount necessary to fund any shortage in the debt service aid 
 appropriation created by a data correction that occurs between 
 November 1 and June 30 of the preceding fiscal year. 

    HIST: 1961 c 562 s 14; 1969 c 399 s 15,16; 1973 c 492 s 7; 
 1975 c 432 s 20; 1977 c 447 art 1 s 3; art 2 s 1; 1979 c 334 art 
 6 s 19; 1981 c 358 art 7 s 23-26; 1982 c 548 art 7 s 4; 1983 c 
 314 art 7 s 22; 1Sp1985 c 12 art 7 s 18; art 10 s 2; 1986 c 444; 
 1987 c 384 art 2 s 1; 1987 c 398 art 7 s 24; 1988 c 486 s 20; 
 1991 c 130 s 8; 1991 c 265 art 11 s 8; 1993 c 224 art 13 s 
 33,34; art 14 s 16; 1994 c 465 art 2 s 1; 1Sp1995 c 3 art 5 s 1; 
 art 16 s 13; 1998 c 386 art 2 s 39; 1998 c 397 art 4 s 11-17,51; 
 art 11 s 3; 1998 c 398 art 1 s 4,5; 1999 c 241 art 9 s 32; 2000 
 c 254 s 47; 2000 c 489 art 10 s 16,17; 1Sp2001 c 6 art 1 s 39; 
 art 5 s 4; art 8 s 5; 2003 c 130 s 12; 2004 c 294 art 5 s 15; 
 1Sp2005 c 5 art 11 s 4 

     127A.42 Reduction of aid for violation of law. 

    Subdivision 1.    State aids.  The amount of state aids 
 to which a district is entitled shall be the amount computed 
 according to statutes.  The annual state aid certificate made by 
 the commissioner to the commissioner of finance shall show the 
 amount of any reductions made. 

    Subd. 2.    Violations of law.  The commissioner may 
 reduce or withhold the district's state aid for any school year 
 whenever the board of the district authorizes or permits 
 violations of law within the district by: 

    (1) employing a teacher who does not hold a valid teaching 
 license or permit in a public school; 

    (2) noncompliance with a mandatory rule of general 
 application promulgated by the commissioner in accordance with 
 statute, unless special circumstances make enforcement 
 inequitable, impose an extraordinary hardship on the district, 
 or the rule is contrary to the district's best interests; 

    (3) the district's continued performance of a contract made 
 for the rental of rooms or buildings for school purposes or for 
 the rental of any facility owned or operated by or under the 
 direction of any private organization, if the contract has been 
 disapproved, the time for review of the determination of 
 disapproval has expired, and no proceeding for review is 
 pending; 

    (4) any practice which is a violation of sections 1 and 2 
 of article 13 of the Constitution of the state of Minnesota; 

    (5) failure to reasonably provide for a resident pupil's 
 school attendance under Minnesota Statutes; 

    (6) noncompliance with state laws prohibiting 
 discrimination because of race, color, creed, religion, national 
 origin, sex, age, marital status, status with regard to public 
 assistance or disability, as defined in sections 363A.08 to 
 363A.19 and 363A.28, subdivision 10; or 

    (7) using funds contrary to the statutory purpose of the 
 funds. 

 The reduction or withholding must be made in the amount and upon 
 the procedure provided in this section.  

    Subd. 3.    Assurance of compliance.  (a) After 
 consultation with the commissioner of human rights, the 
 commissioner of education shall adopt rules in conformance with 
 chapter 14.  The rules must direct districts to file with the 
 commissioner of education assurances of compliance with state 
 and federal laws prohibiting discrimination.  The assurances 
 must be provided in a form and manner prescribed by the 
 commissioner.  

    (b) If it appears that one or more violations of the 
 Minnesota Human Rights Act are occurring in a district, the 
 commissioner of human rights shall notify the commissioner of 
 the violations, and the commissioner of education may then 
 proceed pursuant to subdivision 4. 

    Subd. 4.    Notice to board.  When it appears that a 
 violation is occurring in a district, the commissioner shall 
 notify the board of that district in writing.  The notice must 
 specify the violations, set a reasonable time within which the 
 district must correct the specified violations, describe the 
 correction required, and advise that if the correction is not 
 made within the time allowed, special state aids to the district 
 will be reduced or withheld.  The time allowed for correction 
 may be extended by the commissioner if there is reasonable 
 ground therefor.  

    Subd. 5.    Dispute violations; hearing.  The board to 
 which such notice is given may, by a majority vote of the whole 
 board, decide to dispute that the specified violation exists or 
 that the time allowed is reasonable or the correction specified 
 is correct, or that the commissioner may reduce or withhold aids.
 The board must give the commissioner written notice of the 
 decision.  If the commissioner, after further investigation as 
 the commissioner deems necessary, adheres to the previous 
 notice, the commissioner shall notify the school board of its 
 decision.  If the commissioner, after further investigation as 
 the commissioner deems necessary, adheres to the previous 
 notice, the board shall be entitled to a hearing by the 
 commissioner under this subdivision and notwithstanding chapter 
 14.  The commissioner must set a hearing time and place and the 
 board of the district must be given notice by mail.  The 
 hearings must be designed to give a full and fair hearing and 
 permit interested parties an opportunity to produce evidence 
 relating to the issues involved.  A stenographic record must be 
 made of all testimony given and other proceedings during the 
 hearing.  If practicable, rules governing admission of evidence 
 in courts shall apply to the hearing.  The final decision of the 
 commissioner must be in writing and the controlling facts upon 
 which the decision is made must be stated in sufficient detail 
 to apprise the parties and the reviewing court of the basis and 
 reason for the decision.  The decision must be confined to 
 whether any of the specified violations existed at the date of 
 the commissioner's first notice, whether the violations were 
 corrected within the time permitted, whether the violations 
 require withholding or reduction of the state aids under this 
 section, and in what amount.  

    Subd. 6.    Violation; aid reduction or withholding.  
 The commissioner shall not reduce state aids payable to the 
 district if the violation specified is corrected within the time 
 permitted, or if the commissioner on being notified of the 
 district board's decision to dispute decides the violation does 
 not exist, or if the commissioner decides after hearing no 
 violation specified in the commissioner's notice existed at the 
 time of the notice, or that the violations were corrected within 
 the time permitted.  Otherwise state aids payable to the 
 district for the year in which the violation occurred may be 
 reduced or withheld as follows:  The total amount of state aids 
 to which the district may be entitled shall be reduced in the 
 proportion that the period during which a specified violation 
 continued, computed from the last day of the time permitted for 
 correction, bears to the total number of days school is held in 
 the district during the year in which a violation exists, 
 multiplied by up to 60 percent of the basic revenue, as defined 
 in section 126C.10, subdivision 2, of the district for that year.

    Subd. 7.    Reduction in aids payable.  Reductions in 
 aid under this section and sections 127A.41 and 127A.43 must be 
 from general education aid.  If there is not sufficient general 
 education aid remaining to be paid for the school year in which 
 the violation occurred, the reduction shall be from other aids 
 that are payable to the district for that year.  If there is not 
 a sufficient amount of state aids remaining payable to the 
 district for the school year in which the violation occurred to 
 permit the full amount of reduction required, that part of the 
 required reduction not taken from that school year's aids will 
 be taken from the state aids payable to the district for the 
 next school year, and the reduction will be made from the 
 various aids payable for the next year. 

    Subd. 8. Repealed, 1999 c 241 art 9 s 54 

    Subd. 8a.    Appeal.  A final decision of the 
 commissioner under this section may be appealed in accordance 
 with section 480A.06, subdivision 3. 

    Subd. 9.    Notice to district.  Any notice given to the 
 board of a district will be deemed given when a copy thereof is 
 mailed, registered, to the superintendent of the district, if 
 there is a superintendent, and to the clerk of the board of the 
 district.  If it is shown that neither the superintendent nor 
 the clerk in fact received such notice in the ordinary course of 
 mail, then the time for correction will be accordingly extended 
 by the commissioner so that a reasonable time will be allowed 
 from actual receipt of notice for correction.  If notice is sent 
 by the commissioner with respect to a violation which is 
 continued by the district in a succeeding year, no separate 
 notice for that violation for the succeeding year will be 
 required.  Proceedings initiated by such notice shall include 
 any continuing violation notwithstanding that a part thereof 
 occurs in a year different from the year in which it started.  
 The commissioner may require reasonable proof of the time that a 
 violation ceased for the determination of the amount of aids to 
 be reduced or withheld.  Costs and disbursements of the review 
 by the Court of Appeals, exclusive of those incurred in the 
 administrative proceedings, may be taxed against the losing 
 party and in the event taxed against the state must be paid from 
 the appropriations made to the department for the payment of 
 state aids. 

    HIST: Ex1959 c 71 art 5 s 15; 1963 c 203 s 1; 1965 c 51 s 18; 
 1973 c 492 s 14; 1975 c 59 s 3; 1975 c 162 s 29; 1975 c 173 s 
 1-3; 1976 c 2 s 61,172; 1978 c 706 s 30; 1978 c 764 s 38,39; 
 1982 c 424 s 130; 1983 c 247 s 58; 1983 c 314 art 7 s 23; 1985 c 
 248 s 70; 1986 c 444; 1988 c 486 s 21,22; 1Sp1995 c 3 art 16 s 
 13; 1998 c 397 art 4 s 18-24,51; art 11 s 3; 1998 c 398 art 5 s 
 55; 1999 c 241 art 9 s 33,34; 2000 c 489 art 3 s 15; 1Sp2001 c 6 
 art 5 s 5; 2003 c 130 s 12 

     127A.43 District employment of unlicensed teachers; aid 
  reduction. 

    When a district employs one or more teachers who do not 
 hold a valid teaching license, state aid shall be withheld in 
 the proportion that the number of such teachers is to the total 
 number of teachers employed by the district, multiplied by 60 
 percent of the basic revenue, as defined in section 126C.10, 
 subdivision 2, of the district for the year in which the 
 employment occurred. 

    HIST: Ex1959 c 71 art 5 s 19; 1969 c 379 s 1; 1974 c 326 s 12; 
 1975 c 321 s 2; 1977 c 447 art 1 s 7; 1978 c 764 s 44; 1979 c 
 162 s 1; 1979 c 334 art 1 s 6; 1980 c 609 art 1 s 5; 1982 c 548 
 art 4 s 9,10; 1983 c 314 art 7 s 24; art 9 s 12; 1984 c 463 art 
 1 s 2; 1Sp1985 c 12 art 7 s 19; art 8 s 17; 1988 c 486 s 28-30; 
 1989 c 329 art 1 s 2,3; 1990 c 426 art 2 s 1; 1990 c 562 art 3 s 
 2; 1991 c 130 s 37; 1991 c 265 art 7 s 10-12; 1992 c 464 art 1 s 
 20; 1992 c 499 art 4 s 5; art 12 s 10; 1993 c 224 art 1 s 3; art 
 7 s 8; art 9 s 30; art 12 s 18; 1994 c 647 art 9 s 8,9; 1Sp1995 
 c 3 art 16 s 13; 1998 c 397 art 7 s 30,164; art 11 s 3 

  127A.44 Repealed, 1Sp2001 c 6 art 1 s 55 subd 1 

     127A.441 Aid reduction; levy revenue recognition change. 

    Each year, the state aids payable to any school district 
 for that fiscal year that are recognized as revenue in the 
 school district's general and community service funds shall be 
 adjusted by an amount equal to (1) the amount the district 
 recognized as revenue for the prior fiscal year pursuant to 
 section 123B.75, subdivision 5, paragraph (b) or (c), minus (2) 
 the amount the district recognized as revenue for the current 
 fiscal year pursuant to section 123B.75, subdivision 5, 
 paragraph (c).  For purposes of making the aid adjustments under 
 this section, the amount the district recognizes as revenue for 
 either the prior fiscal year or the current fiscal year pursuant 
 to section 123B.75, subdivision 5, paragraph (b) or (c), shall 
 not include any amount levied pursuant to section 124D.86, 
 subdivision 4, for school districts receiving revenue under 
 sections 124D.86, subdivision 3, clauses (1), (2), and (3); 
 126C.41, subdivisions 1, 2, and 3, paragraphs (b), (c), and (d); 
 126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 6.  
 Payment from the permanent school fund shall not be adjusted 
 pursuant to this section.  The school district shall be notified 
 of the amount of the adjustment made to each payment pursuant to 
 this section. 

    HIST: 1Sp2003 c 9 art 5 s 11 

     127A.45 Payment of aids and credits to school districts. 

    Subdivision 1.    Applicability.  This section applies 
 to all aids or credits paid by the commissioner from the general 
 fund to 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 127A.33, apportionments by the county 
 auditor pursuant to section 127A.34, subdivision 2, and payments 
 to school districts by the commissioner of revenue pursuant to 
 chapter 298.  

    (b) The term "cumulative amount guaranteed" means the 
 product of 

    (1) the cumulative disbursement percentage shown in 
 subdivision 3; times 

    (2) the sum of 

    (i) the current year aid payment percentage of the 
 estimated aid and credit entitlements paid according to 
 subdivision 13; plus 

    (ii) 100 percent of the entitlements paid according to 
 subdivisions 11 and 12; plus 

    (iii) the other district receipts.  

    (c) The term "payment date" means the date on which state 
 payments to 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 preceding business day.  The commissioner 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.  (a) For 
 fiscal year 2004 and later, the commissioner shall pay to a 
 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:                                    5.5     
 Payment 2    July 30:                                    8.0     
 Payment 3    August 15:                                 17.5     
 Payment 4    August 30:                                 20.0     
 Payment 5    September 15:                              22.5     
 Payment 6    September 30:                              25.0     
 Payment 7    October 15:                                27.0
 Payment 8    October 30:                                30.0
 Payment 9    November 15:                               32.5
 Payment 10   November 30:                               36.5
 Payment 11   December 15:                               42.0
 Payment 12   December 30:                               45.0
 Payment 13   January 15:                                50.0
 Payment 14   January 30:                                54.0
 Payment 15   February 15:                               58.0
 Payment 16   February 28:                               63.0
 Payment 17   March 15:                                  68.0
 Payment 18   March 30:                                  74.0
 Payment 19   April 15:                                  78.0
 Payment 20   April 30:                                  85.0
 Payment 21   May 15:                                    90.0
 Payment 22   May 30:                                    95.0
 Payment 23   June 20:                                  100.0

    (b) In addition to the amounts paid under paragraph (a), 
 for fiscal year 2004, the commissioner shall pay to a district 
 on the dates indicated an amount computed as follows: 

 Payment 3    August 15:  the final adjustment for the
              prior fiscal year for the state paid
              property tax credits established in 
              section 273.1392 

 Payment 4    August 30:  one-third of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits 

 Payment 6    September 30:  one-third of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits

 Payment 8    October 30:  one-third of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits

    (c) In addition to the amounts paid under paragraph (a), 
 for fiscal year 2005 and later, the commissioner shall pay to a 
 district on the dates indicated an amount computed as follows: 

 Payment 3    August 15:  the final adjustment for the
              prior fiscal year for the state paid
              property tax credits established in
              section 273.1392

 Payment 4    August 30:  30 percent of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits

 Payment 6    September 30:  40 percent of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits

 Payment 8    October 30:  30 percent of the final adjustment
              for the prior fiscal year for all aid
              entitlements except state paid property
              tax credits

    Subd. 4.    Appeal.  (a) 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: 

    (1) there is an emergency; or 

    (2) there are serious cash flow problems in the district 
 that cannot be resolved by issuing warrants or other forms of 
 indebtedness; or 

    (3) the district is facing a serious cash flow problem 
 because of an abatement that exceeds $100 times the resident 
 pupil units of the district.  

    (b) The commissioner shall establish a process and criteria 
 for districts to appeal the payment dates and percentages 
 established in subdivision 3.  

    Subd. 5. Repealed, 1999 c 241 art 6 s 15 

    Subd. 6.    Cash flow waiver.  For any district 
 exceeding its expenditure limitations under section 123B.83, and 
 if requested by the district, the commissioner of education, 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. 7.    Payment limit.  Subdivision 3 does not 
 authorize the commissioner 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 13; 

    (b) its actual aid payments according to subdivisions 11 
 and 12; and 

    (c) the final adjustment payment for the prior year.  

    Subd. 7a.    Advance final payment.  (a) Notwithstanding 
 subdivisions 3 and 7, a school district or a charter school 
 exceeding its expenditure limitations under section 123B.83 as 
 of June 30 of the prior fiscal year may receive a portion of its 
 final payment for the current fiscal year on June 20, if 
 requested by the district.  The amount paid under this 
 subdivision must not exceed the lesser of: 

    (1) seven percent of the district or charter school's 
 general education aid for the current fiscal year; or 

    (2) the amount by which the district or charter school's 
 net negative unreserved general fund balance as of June 30 of 
 the prior fiscal year exceeds 2.5 percent of the district or 
 charter school's expenditures for that fiscal year. 

    (b) The state total advance final payment under this 
 subdivision for any year must not exceed $12,000,000.  If the 
 amount requested exceeds $12,000,000, the advance final payment 
 for each eligible district must be reduced proportionately. 

    Subd. 8.    Commissioner's assumptions.  For purposes of 
 determining the amount of state general fund cash to be paid to 
 districts pursuant to subdivision 3, the commissioner shall:  

    (1) 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: 

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

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

    (2) assume that the payments to 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: 

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

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

    (iii) 100 percent within ten business days of the November 
 15 due date; and 

    (3) assume that the payments to school districts by county 
 auditors pursuant to section 127A.34, subdivision 2, are made at 
 the end of the months indicated in that subdivision.  

    Subd. 9.    Final adjustment payment.  (a) For all aids 
 and credits paid according to subdivision 13, the final 
 adjustment payment must include the amounts necessary to pay the 
 district's full aid entitlement for the prior year based on 
 actual data.  This payment must be used to correct all estimates 
 used for the payment schedule in subdivision 3.  The payment 
 must 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 must be made when actual data are available.  

    (b) Notwithstanding paragraph (a) and subdivision 3, for a 
 charter school that ceases operation before the end of a school 
 year, a final adjustment payment for aid programs funded with an 
 open appropriation may be made after audit of the prior fiscal 
 year and current fiscal year pupil counts. 

    Subd. 10.    Payments to school nonoperating funds.  
 Each fiscal year state general fund payments for a district 
 nonoperating fund must be made at the current year aid payment 
 percentage 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 must be paid prior to October 
 31 of the following school year.  The commissioner may make 
 advance payments of debt service equalization 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. 11.    Payment percentage for reimbursement aids.  
 One hundred percent of the aid for the previous fiscal year must 
 be paid in the current year for the following aids:  
 telecommunications/Internet access equity and according to 
 section 125B.26, special education special pupil aid according 
 to section 125A.75, subdivision 3, aid for litigation costs 
 according to section 125A.75, subdivision 8, aid for 
 court-placed special education expenses according to section 
 125A.79, subdivision 4, and aid for special education 
 out-of-state tuition according to section 125A.79, subdivision 
 8, and shared time aid according to section 126C.01, subdivision 
 7. 

    Subd. 12.    Payment percentage for certain aids.  (a) 
 One hundred percent of the aid for the current fiscal year must 
 be paid for the following aids:  reimbursement for enrollment 
 options transportation, according to sections 124D.03, 
 subdivision 8, 124D.09, subdivision 22, and 124D.10; school 
 lunch aid, according to section 124D.111; and hearing impaired 
 support services aid, according to section 124D.57. 

    (b) One hundred percent of the aid for the current fiscal 
 year, based on enrollment in the previous year, must be paid for 
 the first grade preparedness program according to section 
 124D.081. 

    Subd. 12a.    Forward shifted aid payments.  (a) 
 Nineteen percent of the state aid in fiscal year 1999, and 31 
 percent of the state aid in fiscal years 2000 and later received 
 under section 124D.86 must be paid by the state to the recipient 
 school district on July 15 of that year.  The recipient school 
 district must recognize this aid in the same fiscal year as the 
 levy is recognized. 

    (b) One hundred percent of the state aid in fiscal years 
 2003 and later received under section 124D.87 must be paid by 
 the state to the recipient school district on August 30 of that 
 year.  The recipient school district must recognize this aid in 
 the previous fiscal year. 

    Subd. 13.    Aid payment percentage.  Except as provided 
 in subdivisions 11, 12, 12a, and 14, each fiscal year, all 
 education aids and credits in this chapter and chapters 120A, 
 120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
 section 273.1392, shall be paid at the current year aid payment 
 percentage of the estimated entitlement during the fiscal year 
 of the entitlement.  For the purposes of this subdivision, a 
 district's estimated entitlement for special education excess 
 cost aid under section 125A.79 for fiscal year 2005 equals 70 
 percent of the district's entitlement for the second prior 
 fiscal year.  For the purposes of this subdivision, a district's 
 estimated entitlement for special education excess cost aid 
 under section 125A.79 for fiscal year 2006 and later equals 74.0 
 percent of the district's entitlement for the current fiscal 
 year.  The final adjustment payment, according to subdivision 9, 
 must be the amount of the actual entitlement, after adjustment 
 for actual data, minus the payments made during the fiscal year 
 of the entitlement. 

    Subd. 14.    Nonpublic aids.  The state shall pay aid 
 according to sections 123B.40 to 123B.48 for pupils attending 
 nonpublic schools as follows: 

    (1) an advance payment by November 30 equal to the current 
 year aid payment percentage 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 
 123B.92 by October 31. 

    Subd. 14a.    State nutrition programs.  Notwithstanding 
 subdivision 3, the state shall pay 100 percent of the aid for 
 the current year according to sections 124D.111, 124D.1158, and 
 124D.118 based on submitted monthly vouchers showing meals and 
 milk served.  

    Subd. 15.    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 districts as provided in this section.  In 
 the event the account balance in any appropriation from the 
 general fund to the department for education aids or credits is 
 insufficient to make the next scheduled payment or payments, the 
 commissioner 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 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.  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 districts as provided in this section.  For any fiscal year, 
 the appropriation authorized in this subdivision must 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) 
 must 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. 16.    Payments to third parties.  Notwithstanding 
 subdivision 3, the current year aid payment percentage of the 
 amounts under section 123A.26, subdivision 3, shall be paid in 
 equal installments on August 30, December 30, and March 30, with 
 a final adjustment payment on October 30 of the next fiscal year 
 of the remaining amount. 

    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; 1998 c 397 art 4 
 s 27-37,51; art 11 s 3; 1998 c 398 art 1 s 9; 1999 c 241 art 2 s 
 49,50; art 6 s 10-12; 2000 c 254 s 48; 2000 c 489 art 2 s 25; 
 1Sp2001 c 6 art 2 s 58; art 5 s 6-8; 2002 c 374 art 1 s 2-9; 
 2003 c 130 s 12; 1Sp2003 c 9 art 5 s 14-21; art 12 s 16; 1Sp2003 
 c 18 art 5 s 2; 2004 c 228 art 3 s 2; 1Sp2005 c 5 art 1 s 40; 
 art 3 s 13; art 5 s 5-8; art 11 s 5 

     127A.46 Change in payment of aids and credits. 

    If the commissioner of finance determines that 
 modifications in the payment schedule would reduce the need for 
 state short-term borrowing, the commissioner shall modify 
 payments to districts according to this section.  The 
 modifications must begin no sooner than September 1 of each 
 fiscal year, and must remain in effect until no later than May 
 30 of that same fiscal year.  In calculating the payment to a 
 district pursuant to section 127A.45, subdivision 3, the 
 commissioner may subtract the sum specified in that subdivision, 
 plus an additional amount no greater than the following: 

    (1) the net cash balance in each of the district's 
 operating funds on June 30 of the preceding fiscal year; minus 

    (2) the product of $150 times the number of resident pupil 
 units in the preceding fiscal year; minus 

    (3) the amount of payments made by the county treasurer 
 during the preceding fiscal year, pursuant to section 276.11, 
 which is considered revenue for the current school year.  
 However, no additional amount shall be subtracted if the total 
 of the net unappropriated fund balances in the district's four 
 operating funds on June 30 of the preceding fiscal year, is less 
 than the product of $350 times the number of resident pupil 
 units in the preceding fiscal year.  The net cash balance must 
 include all cash and investments, less certificates of 
 indebtedness outstanding, and orders not paid for want of funds. 

    A district may appeal the payment schedule established by 
 this section according to the procedures established in section 
 127A.45, subdivision 4. 

    HIST: 1Sp1986 c 1 art 5 s 9; 1987 c 398 art 6 s 17; 1994 c 587 
 art 7 s 3; 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 38,51; 
 art 11 s 3 

     127A.47 Payments to resident and nonresident districts. 

    Subdivision 1.    Aid to serving district.  (a) Unless 
 otherwise specifically provided by law, general education aid 
 must be paid according to this subdivision.  

    (b) Except as provided in paragraph (c), general education 
 aid must be paid to the serving district.  

    (c) If the resident district pays tuition for a pupil under 
 section 123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 
 123B.88, subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 
 125A.51, or 125A.65, general education aid, excluding basic 
 skills revenue under section 126C.10, subdivision 4, must be 
 paid to the resident district. 

    Subd. 2.    Reporting; revenue for homeless.  For all 
 school purposes, unless otherwise specifically provided by law, 
 a homeless pupil is a resident of the school district that 
 enrolls the pupil. 

    Subd. 3.    Revenue for children of divorced or legally 
 separated parents or parents residing separately.  (a) In 
 those instances when the divorced or legally separated parents 
 or parents residing separately share joint physical custody of 
 the child and the divorced or legally separated parents or 
 parents residing separately reside in different school 
 districts, for all school purposes, unless otherwise 
 specifically provided by law, the child must be considered a 
 resident of the school district, as indicated by the child's 
 parents.  

    (b) When the child of divorced or legally separated parents 
 or parents residing separately under paragraph (a) resides with 
 each parent on alternate weeks, the parents shall be responsible 
 for the transportation of the child to the border of the 
 resident school district during those weeks when the child 
 resides in the nonresident school district. 

    Subd. 4.    District without schools.  Except as 
 otherwise provided in law, any district not maintaining 
 classified elementary or secondary schools must pay the tuition 
 required in order to enable resident pupils to attend school in 
 another district when necessary, and must receive general 
 education aid on the same basis as other districts.  The aid 
 must be computed as if the pupils were enrolled in the district 
 of residence.  

    Subd. 5.    Notification of resident district.  A 
 district educating a pupil who is a resident of another district 
 must notify the district of residence within 60 days of the date 
 the pupil is determined by the district to be a nonresident, but 
 not later than August 1 following the end of the school year in 
 which the pupil is educated.  If the district of residence does 
 not receive a notification from the providing district pursuant 
 to this subdivision, it is not liable to that district for any 
 tuition billing received after August 1 of the next school year. 

    Subd. 6.    State agency and court placements.  If a 
 state agency or a court of the state desires to place a child in 
 a district that is not the child's district of residence or to 
 place a pupil who is a parent under section 120A.22, subdivision 
 3, in a school district which is not the school district in 
 which the pupil's biological or adoptive parent or designated 
 guardian resides, that agency or court must, before placement, 
 allow the district of residence an opportunity to participate in 
 the placement decision and notify the district of residence, the 
 district of attendance and the commissioner of the placement 
 decision.  When a state agency or court determines that an 
 immediate emergency placement is necessary and that time does 
 not permit district participation in the placement decision or 
 notice to the districts and the commissioner of the placement 
 decision before the placement, the agency or court may make the 
 decision and placement without that participation or prior 
 notice.  The agency or court must notify the district of 
 residence, the district of attendance and the commissioner of an 
 emergency placement within 15 days of the placement.  

    Subd. 7.    Alternative attendance programs.  The 
 general education aid and special education aid for districts 
 must be adjusted for each pupil attending a nonresident district 
 under sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, 
 and 124D.68.  The adjustments must be made according to this 
 subdivision. 

    (a) General education aid paid to a resident district must 
 be reduced by an amount equal to the referendum equalization aid 
 attributable to the pupil in the resident district. 

    (b) General education aid paid to a district serving a 
 pupil in programs listed in this subdivision must be increased 
 by an amount equal to the referendum equalization aid 
 attributable to the pupil in the nonresident district.  

    (c) If the amount of the reduction to be made from the 
 general education aid of the resident district is greater than 
 the amount of general education aid otherwise due the district, 
 the excess reduction must be made from other state aids due the 
 district. 

    (d) For fiscal year 2006, the district of residence must 
 pay tuition to a district or an area learning center, operated 
 according to paragraph (f), providing special instruction and 
 services to a pupil with a disability, as defined in section 
 125A.02, or a pupil, as defined in section 125A.51, who is 
 enrolled in a program listed in this subdivision.  The tuition 
 must be equal to (1) the actual cost of providing special 
 instruction and services to the pupil, including a proportionate 
 amount for special transportation and unreimbursed building 
 lease and debt service costs for facilities used primarily for 
 special education, minus (2) if the pupil receives special 
 instruction and services outside the regular classroom for more 
 than 60 percent of the school day, the amount of general 
 education revenue and referendum aid attributable to that pupil 
 for the portion of time the pupil receives special instruction 
 and services outside of the regular classroom, excluding 
 portions attributable to district and school administration, 
 district support services, operations and maintenance, capital 
 expenditures, and pupil transportation, minus (3) special 
 education aid attributable to that pupil, that is received by 
 the district providing special instruction and services.  For 
 purposes of this paragraph, general education revenue and 
 referendum aid attributable to a pupil must be calculated using 
 the serving district's average general education revenue and 
 referendum aid per adjusted pupil unit. 

    (e) For fiscal year 2007 and later, special education aid 
 paid to a resident district must be reduced by an amount equal 
 to (1) the actual cost of providing special instruction and 
 services, including special transportation and unreimbursed 
 building lease and debt service costs for facilities used 
 primarily for special education, for a pupil with a disability, 
 as defined in section 125A.02, or a pupil, as defined in section 
 125A.51, who is enrolled in a program listed in this 
 subdivision, minus (2) if the pupil receives special instruction 
 and services outside the regular classroom for more than 60 
 percent of the school day, the amount of general education 
 revenue and referendum aid attributable to that pupil for the 
 portion of time the pupil receives special instruction and 
 services outside of the regular classroom, excluding portions 
 attributable to district and school administration, district 
 support services, operations and maintenance, capital 
 expenditures, and pupil transportation, minus (3) special 
 education aid attributable to that pupil, that is received by 
 the district providing special instruction and services.  For 
 purposes of this paragraph, general education revenue and 
 referendum aid attributable to a pupil must be calculated using 
 the serving district's average general education revenue and 
 referendum aid per adjusted pupil unit.  Special education aid 
 paid to the district or cooperative providing special 
 instruction and services for the pupil, or to the fiscal agent 
 district for a cooperative, must be increased by the amount of 
 the reduction in the aid paid to the resident district.  If the 
 resident district's special education aid is insufficient to 
 make the full adjustment, the remaining adjustment shall be made 
 to other state aids due to the district. 

    (f) An area learning center operated by a service 
 cooperative, intermediate district, education district, or a 
 joint powers cooperative may elect through the action of the 
 constituent boards to charge the resident district tuition for 
 pupils rather than to have the general education revenue paid to 
 a fiscal agent school district.  Except as provided in paragraph 
 (d) or (e), the district of residence must pay tuition equal to 
 at least 90 percent of the district average general education 
 revenue per pupil unit minus an amount equal to the product of 
 the formula allowance according to section 126C.10, subdivision 
 2, times .0485, calculated without basic skills revenue and 
 transportation sparsity revenue, times the number of pupil units 
 for pupils attending the area learning center, plus the amount 
 of compensatory revenue generated by pupils attending the area 
 learning center. 

    Subd. 8.    Charter schools.  (a) The general education 
 aid for districts must be adjusted for each pupil attending a 
 charter school under section 124D.10.  The adjustments must be 
 made according to this subdivision. 

    (b) General education aid paid to a district in which a 
 charter school not providing transportation according to section 
 124D.10, subdivision 16, is located must be increased by an 
 amount equal to the sum of: 

    (1) the product of:  (i) the sum of an amount equal to the 
 product of the formula allowance according to section 126C.10, 
 subdivision 2, times .0485, plus the transportation sparsity 
 allowance for the district; times (ii) the adjusted marginal 
 cost pupil units attributable to the pupil; plus 

    (2) the product of $223 and the extended time marginal cost 
 pupil units attributable to the pupil.  

    HIST: 1981 c 358 art 1 s 28; 1982 c 548 art 1 s 11; 1983 c 314 
 art 1 s 22; 1987 c 398 art 8 s 10; 1988 c 486 s 56,57; 1988 c 
 718 art 7 s 32,33; 1989 c 329 art 7 s 5; 1990 c 562 art 3 s 7; 
 1991 c 130 s 21; 1991 c 199 art 2 s 12; 1991 c 265 art 3 s 38; 
 1993 c 224 art 3 s 29; 1Sp1995 c 3 art 16 s 13; 1996 c 305 art 1 
 s 138; 1996 c 412 art 1 s 22; 1997 c 7 art 1 s 65; 1998 c 397 
 art 4 s 50,51; art 11 s 3; 1998 c 398 art 1 s 26,27; art 2 s 
 30-32; 1999 c 241 art 1 s 48-50; art 2 s 51; 1Sp2003 c 9 art 5 s 
 22,23; 2004 c 294 art 1 s 8; 1Sp2005 c 5 art 2 s 73; art 3 s 14 

     127A.48 Adjustment of net tax capacity. 

    Subdivision 1.    Computation.  The Department of 
 Revenue must annually conduct an assessment/sales ratio study of 
 the taxable property in each school district in accordance with 
 the procedures in subdivisions 2 and 3.  Based upon the results 
 of this assessment/sales ratio study, the Department of Revenue 
 must determine an aggregate equalized net tax capacity for the 
 various classes of taxable property in each district, which tax 
 capacity shall be designated as the adjusted net tax capacity.  
 The adjusted net tax capacities shall be determined using the 
 net tax capacity percentages in effect for the assessment year 
 following the assessment year of the study.  The Department of 
 Revenue must make whatever estimates are necessary to account 
 for changes in the classification system.  The Department of 
 Revenue may incur the expense necessary to make the 
 determinations.  The commissioner of revenue may reimburse any 
 county or governmental official for requested services performed 
 in ascertaining the adjusted net tax capacity.  On or before 
 March 15 annually, the Department of Revenue shall file with the 
 chair of the Tax Committee of the house of representatives and 
 the chair of the Committee on Taxes and Tax laws of the senate a 
 report of adjusted net tax capacities.  On or before June 15 
 annually, the Department of Revenue shall file its final report 
 on the adjusted net tax capacities established by the previous 
 year's assessments and the current year's net tax capacity 
 percentages with the commissioner of education and each county 
 auditor for those districts for which the auditor has the 
 responsibility for determination of local tax rates.  A copy of 
 the report so filed shall be mailed to the clerk of each 
 district involved and to the county assessor or supervisor of 
 assessments of the county or counties in which each district is 
 located. 

    Subd. 2.    Methodology.  In making its annual 
 assessment/sales ratio studies, the Department of Revenue must 
 use a methodology consistent with the most recent Standard on 
 Assessment Ratio Studies published by the assessment standards 
 committee of the International Association of Assessing 
 Officers.  The commissioner of revenue shall supplement this 
 general methodology with specific procedures necessary for 
 execution of the study in accordance with other Minnesota laws 
 impacting the assessment/sales ratio study.  The commissioner 
 shall document these specific procedures in writing and shall 
 publish the procedures in the State Register, but these 
 procedures will not be considered "rules" pursuant to the 
 Minnesota Administrative Procedure Act.  For purposes of this 
 section, sections 270.12, subdivision 2, clause (8), and 278.05, 
 subdivision 4, the commissioner of revenue shall exclude from 
 the assessment/sales ratio study the sale of any nonagricultural 
 property which does not contain an improvement, if (1) the 
 statutory basis on which the property's taxable value as most 
 recently assessed is less than market value as defined in 
 section 273.11, or (2) the property has undergone significant 
 physical change or a change of use since the most recent 
 assessment.  

    Subd. 3.    Agricultural lands.  For purposes of 
 determining the adjusted net tax capacity of agricultural lands 
 for the calculation of adjusted net tax capacities, the market 
 value of agricultural lands must be the price for which the 
 property would sell in an arm's-length transaction. 

    Subd. 4.    Forced sales.  The commissioner of revenue 
 may include forced sales in the assessment/sales ratio studies 
 if it is determined by the commissioner of revenue that these 
 forced sales indicate true market value. 

    Subd. 5.    Stipulated values and abatements.  The 
 estimated market value to be used in calculating sales ratios 
 must be the value established by the assessor before any 
 stipulations resulting from appeals by property owners and 
 before any abatement unless the abatement was granted for the 
 purpose of correcting mere clerical errors. 

    Subd. 6.    Sales of industrial property.  Separate 
 sales ratios must be calculated for commercial property and for 
 industrial property.  These two classes shall be combined only 
 in jurisdictions in which there is not an adequate sample of 
 sales in each class. 

    Subd. 7.    Adjusted net tax capacity; growth limit.  In 
 the calculation of adjusted net tax capacities for 1987 and each 
 year thereafter, the commissioner of revenue shall not increase 
 the adjusted net tax capacity of taxable property for any 
 district over the adjusted net tax capacity established and 
 filed with the commissioner for the immediately preceding year 
 by more than the greater of (1) 19 percent of the certified 
 adjusted net tax capacity established and filed with the 
 commissioner of education for the year immediately preceding, or 
 (2) 40 percent of the difference between the district's total 
 adjusted net tax capacity for the current year calculated 
 without the application of this subdivision and the district's 
 certified adjusted net tax capacity established and filed with 
 the commissioner for the immediately preceding year.  

    Subd. 8.    Decrease in iron ore net tax capacity.  If 
 in any year the net tax capacity of iron ore property, as 
 defined in section 273.13, subdivision 31, in any district is 
 less than the net tax capacity of such property in the preceding 
 year, the commissioner of revenue shall redetermine for all 
 purposes the adjusted net tax capacity of the preceding year 
 taking into account only the decrease in net tax capacity of 
 iron ore property as defined in section 273.13, subdivision 31.  
 If subdivision 7, clause (1), is applicable to the district, the 
 decrease in iron ore property shall be applied to the adjusted 
 net tax capacity as limited therein.  In all other respects, the 
 provisions of clause (1) shall apply.  

    Subd. 9.    Captured tax capacity adjustment.  In 
 calculating adjusted net tax capacity, the commissioner of 
 revenue shall increase the adjusted net tax capacity of a 
 district containing a tax increment financing district for which 
 an election is made under section 469.1782, subdivision 1, 
 clause (1).  The amount of the increase equals the captured net 
 tax capacity of the tax increment financing district in the year 
 preceding the first taxes payable year in which the special law 
 permits collection beyond that permitted by the general law 
 duration limit that otherwise would apply.  The addition applies 
 beginning for aid and levy for the first taxes payable year in 
 which the special law permits collection of increment beyond 
 that permitted by the general law duration limit that otherwise 
 would apply.  The addition continues to apply for each taxes 
 payable year the district remains in effect.  

    Subd. 10.    Adjusted net tax capacity; appeals.  If a 
 district, within 30 days after receipt of a copy of a report 
 filed with the commissioner made pursuant to subdivisions 1 to 6 
 or 8, is of the opinion that the commissioner of revenue has 
 made an error in the determination of the district's market 
 value, it may appeal from the report or portion thereof relating 
 to the district to the commissioner of revenue for a review and 
 determination of the matters contained in the appeal.  The 
 commissioner of revenue shall advise the district of the 
 determination within 30 days.  If the district wishes to appeal 
 the determination of the commissioner of revenue, it must file a 
 notice of appeal with the Tax Court, as provided in subdivisions 
 11 to 16 within ten days of the notice of determination from the 
 commissioner of revenue. 

    Subd. 11.    Notice of appeal.  The district must file 
 with the court administrator of the Tax Court a notice of appeal 
 from the determination of the commissioner of revenue fixing the 
 market value of the district, and such notice must show the 
 basis of the alleged error.  A copy of the notice of appeal must 
 be served upon the commissioner of revenue, and proof of service 
 must be filed with the court administrator. 

    Subd. 12.    Hearing.  Upon receipt of the notice of 
 appeal the Tax Court must review the notice of appeal and 
 determine whether it appears from the allegations and proofs 
 therein contained that an error has been made in the 
 determination by the commissioner of revenue of the market value 
 of the property in the school district.  If the court finds it 
 probable that such an error has been made, it must notice the 
 matter for hearing; otherwise, it must dismiss the appeal and 
 notify the parties thereof.  Hearings must be set and held in 
 the same manner as other hearings of the Tax Court are set and 
 heard, except that an appeal filed under subdivision 10 must 
 take precedence over other appeals pending before the court.  
 The attorney general shall represent the commissioner of revenue.
 The Administrative Procedure Act, sections 14.09 to 14.28, 
 14.38, 14.44 to 14.45, and 14.57 to 14.69, shall apply to 
 hearings insofar as it is applicable.  

    Subd. 13.    Tax Court determination.  The Tax Court 
 shall hear, consider, and determine such appeal, de novo upon 
 the issues made by the notice of appeal, if a hearing has been 
 granted thereon.  At the conclusion of the hearing, the court 
 must:  (1) file findings of fact, or (2) refer the issues to the 
 commissioner of revenue with instructions and recommendations 
 for a determination and correction of the market value of the 
 appealing district.  The decision of the Tax Court, if it 
 decides the matter de novo, shall have the same force and effect 
 as a determination by the commissioner of revenue in the first 
 instance under this section, and the commissioner of revenue 
 must be notified thereof.  If the matter is rereferred to the 
 commissioner of revenue, a redetermination by the commissioner 
 of revenue in accordance with the recommendations of the Tax 
 Court must likewise have the same force and effect as a 
 determination by it in the first instance under this section. 

    Subd. 14.    Hearing examiner.  In addition to the 
 powers and duties of the Tax Court as prescribed by chapter 271, 
 any hearing ordered pursuant to this section may be heard by a 
 hearing examiner in lieu of one or more judges of the Tax 
 Court.  If a hearing is conducted by a hearing examiner, such 
 hearing examiner shall exercise the same powers conferred by law 
 upon one or more judges of the Tax Court.  The hearing examiner 
 shall report to the court.  The court is authorized to make 
 findings of fact based on the report of the hearing examiner in 
 the same manner as is required by these provisions when the 
 hearing is conducted by the court.  The Tax Court may employ 
 hearing examiners upon such terms and conditions as it shall 
 prescribe.  A hearing examiner so appointed shall be in the 
 unclassified service of the state.  

    Subd. 15.    Limitation of appeals.  A decision of the 
 Tax Court pursuant to the terms hereof shall be final and shall 
 not be subject to review by any court, except upon certiorari to 
 the Supreme Court. 

    Subd. 16.    Aids pending appeals.  During the pendency 
 of any appeal from the commissioner of revenue evaluation, state 
 aids to the appealing district must be paid on the basis of the 
 evaluation subject to adjustment upon final determination of the 
 appeal. 

    HIST: Ex1971 c 31 art 20 s 3; 1973 c 582 s 3; 1973 c 683 s 
 5-10,27; 1974 c 521 s 22,23; 1975 c 432 s 25-33; 1976 c 134 s 
 78; 1976 c 239 s 35; 1976 c 271 s 44-46; 1977 c 307 s 29; 1977 c 
 423 art 3 s 1,2; art 4 s 1; 1977 c 447 art 1 s 8-15,17; 1978 c 
 706 s 32; 1978 c 733 s 20,21; 1978 c 764 s 46-51; 1978 c 767 s 
 1; 1979 c 334 art 1 s 7-11; art 3 s 4,5; 1980 c 429 s 1; 1980 c 
 443 s 1; 1980 c 509 s 33; 1980 c 607 art 4 s 1; art 7 s 8; 1980 
 c 609 art 1 s 7; 1981 c 358 art 1 s 18,19,48; 1982 c 424 s 130; 
 1984 c 502 art 11 s 1; 1Sp1985 c 14 art 3 s 1; art 4 s 18; 1986 
 c 444; 1Sp1986 c 1 art 4 s 9; 1Sp1986 c 3 art 1 s 82; 1987 c 268 
 art 6 s 3; art 7 s 3-10; 1987 c 384 art 2 s 1; 1988 c 719 art 5 
 s 2,84; 1989 c 329 art 13 s 1; art 13 s 20; 1Sp1989 c 1 art 2 s 
 11; art 9 s 1; 1992 c 511 art 2 s 5; 1992 c 556 s 1; 1993 c 224 
 art 1 s 4; 1994 c 416 art 1 s 4; 1995 c 233 art 2 s 56; 1995 c 
 264 art 5 s 1; 1Sp1995 c 3 art 16 s 13; 1998 c 397 art 4 s 
 39-47,51; art 11 s 3; 2003 c 130 s 12 

     127A.49 Aid adjustments. 

    Subdivision 1.    Omissions.  No adjustments to any aid 
 payments made pursuant to this chapter or chapters 120B, 122A, 
 123A, 123B, 124D, 125A, and 126C resulting from omissions in 
 district reports, except those adjustments determined by the 
 legislative auditor, shall be made for any school year after 
 December 30 of the next school year, unless otherwise 
 specifically provided by law. 

    Subd. 2.    Abatements.  Whenever by virtue of chapter 
 278, sections 270C.86, 375.192, or otherwise, the net tax 
 capacity of any district for any taxable year is changed after 
 the taxes for that year have been spread by the county auditor 
 and the local tax rate as determined by the county auditor based 
 upon the original net tax capacity is applied upon the changed 
 net tax capacities, the county auditor shall, prior to February 
 1 of each year, certify to the commissioner of education the 
 amount of any resulting net revenue loss that accrued to the 
 district during the preceding year.  Each year, the commissioner 
 shall pay an abatement adjustment to the district in an amount 
 calculated according to the provisions of this subdivision.  
 This amount shall be deducted from the amount of the levy 
 authorized by section 126C.46.  The amount of the abatement 
 adjustment must be the product of:  

    (1) the net revenue loss as certified by the county 
 auditor, times 

    (2) the ratio of:  

    (i) the sum of the amounts of the district's certified levy 
 in the third preceding year according to the following:  

    (A) section 123B.57, if the district received health and 
 safety aid according to that section for the second preceding 
 year; 

    (B) section 124D.20, if the district received aid for 
 community education programs according to that section for the 
 second preceding year; 

    (C) section 124D.135, subdivision 3, if the district 
 received early childhood family education aid according to 
 section 124D.135 for the second preceding year; and 

    (D) section 126C.17, subdivision 6, if the district 
 received referendum equalization aid according to that section 
 for the second preceding year; to 

    (ii) the total amount of the district's certified levy in 
 the third preceding December, plus or minus auditor's 
 adjustments. 

    Subd. 3.    Excess tax increment.  (a) If a return of 
 excess tax increment is made to a district pursuant to sections 
 469.176, subdivision 2, and 469.177, subdivision 9, or upon 
 decertification of a tax increment district, the school 
 district's aid and levy limitations must be adjusted for the 
 fiscal year in which the excess tax increment is paid under the 
 provisions of this subdivision. 

    (b) An amount must be subtracted from the district's aid 
 for the current fiscal year equal to the product of: 

    (1) the amount of the payment of excess tax increment to 
 the district, times 

    (2) the ratio of: 

    (i) the sum of the amounts of the district's certified levy 
 for the fiscal year in which the excess tax increment is paid 
 according to the following: 

    (A) section 123B.57, if the district received health and 
 safety aid according to that section for the second preceding 
 year; 

    (B) section 124D.20, if the district received aid for 
 community education programs according to that section for the 
 second preceding year; 

    (C) section 124D.135, subdivision 3, if the district 
 received early childhood family education aid according to 
 section 124D.135 for the second preceding year; and 

    (D) section 126C.17, subdivision 6, if the district 
 received referendum equalization aid according to that section 
 for the second preceding year; to 

    (ii) the total amount of the district's certified levy for 
 the fiscal year, plus or minus auditor's adjustments. 

    (c) An amount must be subtracted from the school district's 
 levy limitation for the next levy certified equal to the 
 difference between: 

    (1) the amount of the distribution of excess increment; and 

    (2) the amount subtracted from aid pursuant to clause (a). 

    If the aid and levy reductions required by this subdivision 
 cannot be made to the aid for the fiscal year specified or to 
 the levy specified, the reductions must be made from aid for 
 subsequent fiscal years, and from subsequent levies.  The school 
 district must use the payment of excess tax increment to replace 
 the aid and levy revenue reduced under this subdivision. 

    (d) This subdivision applies only to the total amount of 
 excess increments received by a district for a calendar year 
 that exceeds $25,000. 

    HIST: 1977 c 447 art 6 s 2; 1978 c 764 s 54; 1980 c 609 art 4 
 s 7; 1981 c 358 art 1 s 30; 1983 c 314 art 1 s 22; art 6 s 11; 
 1984 c 463 art 6 s 1; art 7 s 12; 1986 c 465 art 2 s 1; 1987 c 
 291 s 202; 1988 c 718 art 6 s 7,8; 1988 c 719 art 5 s 84; 1989 c 
 222 s 12,13; 1989 c 329 art 13 s 20; 1Sp1989 c 1 art 2 s 11; 
 1991 c 130 s 16,17,37; 1992 c 499 art 12 s 11,12,29; 1994 c 465 
 art 2 s 1; 1994 c 647 art 8 s 5; 1Sp1995 c 3 art 8 s 2,3; art 16 
 s 13; 1998 c 397 art 4 s 48,51; art 11 s 3; 1999 c 241 art 1 s 
 51,52; 1Sp2003 c 9 art 5 s 24,25; 1Sp2005 c 5 art 1 s 41,42 

     127A.50 Aid adjustments due to changes in employer 
  retirement contribution rates. 

    Subdivision 1.    Aid adjustment.  Beginning in fiscal 
 year 1998 and each year thereafter, the commissioner of 
 education shall adjust state aid payments to school operating 
 funds for Independent School District No. 625, Independent 
 School District No. 709, and Special School District No. 1 by 
 the net amount of clauses (1) and (2) and for all other 
 districts, including charter schools, but excluding any 
 education organizations that are prohibited from receiving 
 direct state aids under section 123A.26 or 125A.75, subdivision 
 7, by the net amount of clauses (1), (2), and (3): 

    (1) a decrease equal to each district's share of the fiscal 
 year 1997 adjustment effected under Minnesota Statutes 1996, 
 section 124.2139; 

    (2) an increase equal to one percent of the salaries paid 
 to members of the general plan of the Public Employees 
 Retirement Association in fiscal year 1997, multiplied by 0.35 
 for fiscal year 1998 and 0.70 each year thereafter; 

    (3) a decrease equal to 2.34 percent of the salaries paid 
 to members of the Teachers Retirement Association in fiscal year 
 1997.  

    Subd. 2.    Appropriation.  The amounts necessary to pay 
 any positive net adjustments under this section to any school 
 district are appropriated annually from the general fund to the 
 commissioner of education.  

    Subd. 3.    Limits on adjustments and potential 
 reductions.  Increases to any school districts under 
 subdivision 1, clause (2), and decreases under subdivision 1, 
 clauses (1) and (3), are limited to the fiscal year 1999 
 amounts.  The commissioner of education may permanently reduce 
 the adjustments to school districts under subdivision 1, clauses 
 (1) and (2), in the same manner as prescribed for nonschool 
 jurisdictions under section 273.1385, subdivision 2.  The 
 commissioner may, from time to time, require that the most 
 recent fiscal year payroll information be certified by the 
 executive director of the Teachers Retirement Association.  For 
 any school district where the newly certified Teachers 
 Retirement Association payroll is significantly lower than the 
 fiscal 1997 amount as determined by the commissioner, the 
 commissioner shall recalculate the lower reduction under 
 subdivision 1, clause (3), and shall permanently reduce the 
 adjustment amount in subsequent years. 

    Subd. 4.    Effect of reorganizations.  The commissioner 
 of education shall reapportion the aid adjustments to school 
 districts under this section to account for significant changes 
 in boundaries or consolidations, as determined by the 
 commissioner.  If a school district is dissolved, or a school 
 district function thereof is assumed by either the state or a 
 nonpublic organization, adjustments for all or the appropriate 
 fraction of the total payroll under this section must terminate. 

    Subd. 5.    Adjustment termination.  All adjustments 
 under this section terminate on June 30, 2020. 

    HIST: 1997 c 233 art 1 s 14; 1998 c 397 art 4 s 51; art 11 s 
 3; 1Sp2001 c 6 art 1 s 40; 2003 c 130 s 12 

     127A.51 Statewide average revenue. 

    By October 1 of each year the commissioner must estimate 
 the statewide average adjusted general revenue per adjusted 
 marginal cost pupil unit and the disparity in adjusted general 
 revenue among pupils and districts by computing the ratio of the 
 95th percentile to the fifth percentile of adjusted general 
 revenue.  The commissioner must provide that information to all 
 districts. 

    If the disparity in adjusted general revenue as measured by 
 the ratio of the 95th percentile to the fifth percentile 
 increases in any year, the commissioner shall recommend to the 
 legislature options for change in the general education formula 
 that will limit the disparity in adjusted general revenue to no 
 more than the disparity for the previous school year.  The 
 commissioner must submit the recommended options to the 
 education committees of the legislature by January 15. 

    For purposes of this section and section 126C.10, adjusted 
 general revenue means: 

    (1) for fiscal year 2002, the sum of basic revenue under 
 section 126C.10, subdivision 2; supplemental revenue under 
 section 126C.10, subdivisions 9 and 12; transition revenue under 
 section 126C.10, subdivision 20; referendum revenue under 
 section 126C.17; and equity revenue under section 126C.10, 
 subdivisions 24a and 24b; and 

    (2) for fiscal year 2003 and later, the sum of basic 
 revenue under section 126C.10, subdivision 2; referendum revenue 
 under section 126C.17; and equity revenue under section 126C.10, 
 subdivisions 24a and 24b. 

    HIST: 1987 c 398 art 1 s 24; 1988 c 486 s 69; 1991 c 265 art 1 
 s 26; 1998 c 397 art 7 s 158,164; art 11 s 3; 1998 c 398 art 1 s 
 38; 1999 c 241 art 1 s 53; 2000 c 489 art 2 s 26; 1Sp2001 c 6 
 art 1 s 41 

    127A.60 Subdivision 1. Repealed, 1998 c 398 art 5 
 s 56 

    Subd. 2. Repealed, 1998 c 398 art 5 s 56; 1999 c 
 241 art 9 s 54 

    Subd. 3. Repealed, 1998 c 398 art 5 s 56; 1999 c 
 241 art 9 s 54 

    Subd. 4. Repealed, 1998 c 398 art 5 s 56; 1999 c 
 241 art 9 s 54 

  127A.61 Repealed, 1999 c 241 art 9 s 54 

    127A.62 Subdivision 1.  Renumbered 127A.12 

    Subd. 2. Repealed, 1999 c 241 art 9 s 54 

  127A.63 Renumbered 127A.13 

  127A.64 Repealed, 1999 c 241 art 9 s 54 

    127A.66 Subdivision 1. Repealed, 1998 c 398 art 6 
 s 38; 1999 c 241 art 9 s 54 

    Subd. 2. Repealed, 1998 c 398 art 6 s 38 

    Subd. 3. Repealed, 1998 c 398 art 6 s 38 

  127A.67 Renumbered 127A.14 

COMPACT FOR EDUCATION

     127A.80 Compact. 

    The Compact for Education is hereby entered into and 
 enacted into law with all jurisdictions legally joining therein, 
 in the form substantially as follows: 

                      COMPACT FOR EDUCATION 
                            ARTICLE I 
                        Purpose and Policy 

    (A) It is the purpose of this compact to: 

    (1) Establish and maintain close cooperation and 
 understanding among executive, legislative, professional 
 educational and lay leadership on a nationwide basis at the 
 state and local levels. 

    (2) Provide a forum for the discussion, development, 
 crystalization and recommendation of public policy alternatives 
 in the field of education. 

    (3) Provide a clearinghouse of information on matters 
 relating to educational problems and how they are being met in 
 different places throughout the nation, so that the executive 
 and legislative branches of state government and of local 
 communities may have ready access to the experience and record 
 of the entire country, and so that both lay and professional 
 groups in the field of education may have additional avenues for 
 the sharing of experience and the interchange of ideas in the 
 formation of public policy in education. 

    (4) Facilitate the improvement of state and local 
 educational systems so that all of them will be able to meet 
 adequate and desirable goals in a society which requires 
 continuous qualitative and quantitative advance in educational 
 opportunities, methods and facilities.  

    (B) It is the policy of this compact to encourage and 
 promote local and state initiative in the development, 
 maintenance, improvement and administration of educational 
 systems and institutions in a manner which will accord with the 
 needs and advantages of diversity among localities and states.  

    (C) The party states recognize that each of them has an 
 interest in the quality and quantity of education furnished in 
 each of the other states, as well as in the excellence of its 
 own educational systems and institutions, because of the highly 
 mobile character of individuals within the nation, and because 
 the products and services contributing to the health, welfare 
 and economic advancement of each state are supplied in 
 significant part by persons educated in other states.  

                            ARTICLE II 
                          State Defined 

    As used in this compact, "state" means a state, territory 
 or possession of the United States, the District of Columbia, or 
 the Commonwealth of Puerto Rico.  

                           ARTICLE III 
                          The Commission 

    (A) The education commission of the states, hereinafter 
 called "the commission," is hereby established.  The commission 
 shall consist of seven members representing each party state.  
 One of such members shall be the governor; two shall be members 
 of the state legislature selected by its respective houses and 
 serving in such manner as the legislature may determine; and 
 four shall be appointed by and serve at the pleasure of the 
 governor, unless the laws of the state otherwise provide.  If 
 the laws of a state prevent legislators from serving on the 
 commission, six members shall be appointed and serve at the 
 pleasure of the governor, unless the laws of the state otherwise 
 provide.  In addition to any other principles or requirements 
 which a state may establish for the appointment and service of 
 its members of the commission, the guiding principle for the 
 composition of the membership on the commission from each party 
 state shall be that the members representing such state shall, 
 by virtue of their training, experience, knowledge or 
 affiliations be in a position collectively to reflect broadly 
 the interests of the state government, higher education, the 
 state education system, local education, lay and professional, 
 public and nonpublic educational leadership.  Of those 
 appointees, one shall be the head of a state agency or 
 institution, designated by the governor, having responsibility 
 for one or more programs of public education.  In addition to 
 the members of the commission representing the party states, 
 there may be not to exceed ten nonvoting commissioners selected 
 by the steering committee for terms of one year.  Such 
 commissioners shall represent leading national organizations of 
 professional educators or persons concerned with educational 
 administration.  

    (B) The members of the commission shall be entitled to one 
 vote each on the commission.  No action of the commission shall 
 be binding unless taken at a meeting at which a majority of the 
 total number of votes on the commission are cast in favor 
 thereof.  Action of the commission shall be only at a meeting at 
 which a majority of the commissioners are present.  The 
 commission shall meet at least once a year.  In its bylaws, and 
 subject to such directions and limitations as may be contained 
 therein, the commission may delegate the exercise of any of its 
 powers to the steering committee or the executive director, 
 except for the power to approve budgets or requests for 
 appropriations, the power to make policy recommendations 
 pursuant to article IV and adoption of the annual report 
 pursuant to article III (J).  

    (C) The commission shall have a seal.  

    (D) The commission shall elect annually, from among its 
 members, a chairman, who shall be a governor, a vice chairman 
 and a treasurer.  The commission shall provide for the 
 appointment of an executive director.  Such executive director 
 shall serve at the pleasure of the commission, and together with 
 the treasurer and such other personnel as the commission may 
 deem appropriate shall be bonded in such amount as the 
 commission shall determine.  The executive director shall be 
 secretary.  

    (E) Irrespective of the civil service, personnel or other 
 merit system laws of any of the party states, the executive 
 director subject to the approval of the steering committee shall 
 appoint, remove or discharge such personnel as may be necessary 
 for the performance of the functions of the commission, and 
 shall fix the duties and compensation of such personnel.  The 
 commission in its bylaws shall provide for the personnel 
 policies and programs of the commission.  

    (F) The commission may borrow, accept or contract for the 
 services of personnel from any party jurisdiction, the United 
 States, or any subdivision or agency of the aforementioned 
 governments, or from any agency of two or more of the party 
 jurisdictions or their subdivisions.  

    (G) The commission may accept for any of its purposes and 
 functions under this compact any and all donations, and grants 
 of money, equipment, supplies, materials and services, 
 conditional or otherwise, from any state, the United States, or 
 any other governmental agency, or from any person, firm, 
 association, foundation, or corporation, and may receive, 
 utilize and dispose of the same.  Any donation or grant accepted 
 by the commission pursuant to this paragraph or services 
 borrowed pursuant to paragraph (F) of this article shall be 
 reported in the annual report of the commission.  Such report 
 shall include the nature, amount and conditions, if any, of the 
 donation, grant, or services borrowed, and the identity of the 
 donor or lender.  

    (H) The commission may establish and maintain such 
 facilities as may be necessary for the transacting of its 
 business.  The commission may acquire, hold, and convey real and 
 personal property and any interest therein.  

    (I) The commission shall adopt bylaws for the conduct of 
 its business and shall have the power to amend and rescind these 
 bylaws. The commission shall publish its bylaws in convenient 
 form and shall file a copy thereof and a copy of any amendment 
 thereto, with the appropriate agency or officer in each of the 
 party states.  

    (J) The commission annually shall make to the governor and 
 legislature of each party state a report covering the activities 
 of the commission for the preceding year.  The commission may 
 make such additional reports as it may deem desirable.  

                            ARTICLE IV 
                              Powers 

    In addition to authority conferred on the commission by 
 other provisions of the compact, the commission shall have 
 authority to: 

    (1) Collect, correlate, analyze and interpret information 
 and data concerning educational needs and resources.  

    (2) Encourage and foster research in all aspects of 
 education, but with special reference to the desirable scope of 
 instruction, organization, administration, and instructional 
 methods and standards employed or suitable for employment in 
 public educational systems.  

    (3) Develop proposals for adequate financing of education 
 as a whole and at each of its many levels.  

    (4) Conduct or participate in research of the types 
 referred to in this article in any instance where the commission 
 finds that such research is necessary for the advancement of the 
 purposes and policies of this compact, utilizing fully the 
 resources of national associations, regional compact 
 organizations for higher education, and other agencies and 
 institutions, both public and private.  

    (5) Formulate suggested policies and plans for the 
 improvement of public education as a whole, or for any segment 
 thereof, and make recommendations with respect thereto available 
 to the appropriate governmental units, agencies and public 
 officials.  

    (6) Do such other things as may be necessary or incidental 
 to the administration of any of its authority or functions 
 pursuant to this compact.  

                            ARTICLE V 
               Cooperation with Federal Government 

    (A) If the laws of the United States specifically so 
 provide, or if administrative provision is made therefor within 
 the federal government, the United States may be represented on 
 the commission by not to exceed ten representatives.  Any such 
 representative or representatives of the United States shall be 
 appointed and serve in such manner as may be provided by or 
 pursuant to federal law, and may be drawn from any one or more 
 branches of the federal government, but no such representative 
 shall have a vote on the commission.  

    (B) The commission may provide information and make 
 recommendations to any executive or legislative agency or 
 officer of the federal government concerning the common 
 educational policies of the states, and may advise with any such 
 agencies or officers concerning any matter of mutual interest.  

                            ARTICLE VI 
                            Committees 

    (A) To assist in the expeditious conduct of its business 
 when the full commission is not meeting, the commission shall 
 elect a steering committee of 32 members which, subject to the 
 provisions of this compact and consistent with the policies of 
 the commission, shall be constituted and function as provided in 
 the bylaws of the commission.  One-fourth of the voting 
 membership of the steering committee shall consist of governors, 
 one-fourth shall consist of legislators, and the remainder shall 
 consist of other members of the commission.  A federal 
 representative on the commission may serve with the steering 
 committee, but without vote.  The voting members of the steering 
 committee shall serve for terms of two years, except that 
 members elected to the first steering committee of the 
 commission shall be elected as follows:  16 for one year and 16 
 for two years.  The chairman, vice chairman, and treasurer of 
 the commission shall be members of the steering committee and, 
 anything in this paragraph to the contrary notwithstanding, 
 shall serve during their continuance in these offices.  
 Vacancies in the steering committee shall not affect its 
 authority to act, but the commission at its next regularly 
 ensuing meeting following the occurrence of any vacancy shall 
 fill it for the unexpired term.  No person shall serve more than 
 two terms as a member of the steering committee; provided that 
 service for a partial term of one year or less shall not be 
 counted toward the two term limitation.  

    (B) The commission may establish advisory and technical 
 committees composed of state, local, and federal officials, and 
 private persons to advise it with respect to any one or more of 
 its functions.  Any advisory or technical committee may, on 
 request of the states concerned, be established to consider any 
 matter of special concern to two or more of the party states.  

    (C) The commission may establish such additional committees 
 as its bylaws may provide.  

                           ARTICLE VII 
                             Finance 

    (A) The commission shall advise the governor or designated 
 officer or officers of each party state of its budget and 
 estimated expenditures for such period as may be required by the 
 laws of that party state.  Each of the commission's budgets of 
 estimated expenditures shall contain specific recommendations of 
 the amount or amounts to be appropriated by each of the party 
 states.  

    (B) The total amount of appropriation requests under any 
 budget shall be apportioned among the party states.  In making 
 such apportionment, the commission shall devise and employ a 
 formula which takes equitable account of the populations and per 
 capita income levels of the party states.  

    (C) The commission shall not pledge the credit of any party 
 states.  The commission may meet any of its obligations in whole 
 or in part with funds available to it pursuant to article III 
 (G) of this compact, provided that the commission takes specific 
 action setting aside such funds prior to incurring an obligation 
 to be met in whole or in part in such manner.  Except where the 
 commission makes use of funds available to it pursuant to 
 article III (G) thereof, the commission shall not incur any 
 obligation prior to the allotment of funds by the party states 
 adequate to meet the same.  

    (D) The commission shall keep accurate accounts of all 
 receipts and disbursements.  The receipts and disbursements of 
 the commission shall be subject to the audit and accounting 
 procedures established by its bylaws.  However, all receipts and 
 disbursements of funds handled by the commission shall be 
 audited yearly by a qualified public accountant, and the report 
 of the audit shall be included in and become part of the annual 
 reports of the commission.  

    (E) The accounts of the commission shall be open at any 
 reasonable time for inspection by duly constituted officers of 
 the party states and by any persons authorized by the commission.

    (F) Nothing contained herein shall be construed to prevent 
 commission compliance with laws relating to audit or inspection 
 of accounts by or on behalf of any government contributing to 
 the support of the commission.  

                           ARTICLE VIII 
                         Eligible Parties 
                    Entry Into and Withdrawal 

    (A) This compact shall have as eligible parties all states, 
 territories, and possessions of the United States, the District 
 of Columbia, and the Commonwealth of Puerto Rico.  In respect of 
 any such jurisdiction not having a governor, the term 
 "governor," as used in this compact, shall mean the closest 
 equivalent official of such jurisdiction.  

    (B) Any state or other eligible jurisdiction may enter into 
 this compact and it shall become binding thereon when it has 
 adopted the same:  Provided that in order to enter into initial 
 effect, adoption by at least ten eligible party jurisdictions 
 shall be required.  

    (C) Adoption of the compact may be either by enactment 
 thereof or by adherence thereto by the governor; provided that 
 in the absence of enactment, adherence by the governor shall be 
 sufficient to make his state a party only until December 31, 
 1967.  During any period when a state is participating in this 
 compact through gubernatorial action, the governor shall appoint 
 those persons who, in addition to himself, shall serve as the 
 members of the commission from his state, and shall provide to 
 the commission an equitable share of the financial support of 
 the commission from any source available to him.  

    (D) Except for a withdrawal effect on December 31, 1967 in 
 accordance with paragraph (C) of this article, any party state 
 may withdraw from this compact by enacting a statute repealing 
 the same, but no such withdrawal shall take effect until one 
 year after the governor of the withdrawing state has given 
 notice in writing of the withdrawal to the governors of all 
 other party states.  No withdrawal shall affect any liability 
 already incurred by or chargeable to a party state prior to the 
 time of such withdrawal.  

                            ARTICLE IX 
                  Construction and Severability 

    This compact shall be liberally construed so as to 
 effectuate the purposes thereof.  The provisions of this compact 
 shall be severable and if any phrase, clause, sentence or 
 provision of this compact is declared to be contrary to the 
 constitution of any state or of the United States, or the 
 application thereof to any government, agency, person or 
 circumstance is held invalid, the validity of the remainder of 
 this compact and the applicability thereof to any government, 
 agency, person or circumstance shall not be affected thereby.  
 If this contract shall be held contrary to the constitution of 
 any state participating therein, the compact shall remain in 
 full force and effect as to the state affected as to all 
 severable matters.  

    HIST: 1967 c 394 s 1; 1998 c 397 art 4 s 51 

     127A.81 Education Commission. 

    Subdivision 1.    Appointment of members.  Legislative 
 members of the Education Commission established in section 
 127A.80, article III (A), are appointed as follows:  One member 
 of the house of representatives appointed by the speaker of the 
 house for a term coinciding with the term of office of the 
 member; one member of the senate appointed by the Committee on 
 Committees for a two-year term.  Members of the Education 
 Commission appointed by the governor are appointed for a term 
 which coincides with the term of the appointing governor.  
 Members appointed from the legislature and members appointed by 
 the governor serve until their successors are appointed and 
 qualified.  

    Subd. 2.    Vacancies.  Vacancies are filled by the 
 appointing power.  If the legislature is not in session, 
 vacancies are filled as follows:  A vacancy in the office held 
 by a house member is filled by the last speaker of the house, or 
 if the speaker be not available, by the last chair of the house 
 Rules Committee; a vacancy in the office held by a senate member 
 is filled by the last senate Committee on Committees or other 
 appointing authority designated by the senate rules in case of a 
 senate vacancy.  

    Subd. 3.    Expenses.  Members of the Education 
 Commission serve without compensation for such service but are 
 entitled to be paid their necessary expenses in carrying out 
 their duties.  

    HIST: 1967 c 394 s 2; 1983 c 305 s 18; 1986 c 444; 1998 c 397 
 art 4 s 51; art 11 s 3