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Minnesota Legislature

Office of the Revisor of Statutes

Chapter 126C

Section 126C.10

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126C.10 GENERAL EDUCATION REVENUE.
    Subdivision 1. General education revenue. For fiscal year 2006 and later, the general
education revenue for each district equals the sum of the district's basic revenue, extended time
revenue, gifted and talented revenue, basic skills revenue, training and experience revenue,
secondary sparsity revenue, elementary sparsity revenue, transportation sparsity revenue,
total operating capital revenue, equity revenue, alternative teacher compensation revenue, and
transition revenue.
    Subd. 2. Basic revenue. The basic revenue for each district equals the formula allowance
times the adjusted marginal cost pupil units for the school year. The formula allowance for fiscal
year 2005 is $4,601. The formula allowance for fiscal year 2006 is $4,783. The formula allowance
for fiscal year 2007 and subsequent years is $4,974.
    Subd. 2a. Extended time revenue. (a) A school district's extended time revenue is equal
to the product of $4,601 and the sum of the adjusted marginal cost pupil units of the district for
each pupil in average daily membership in excess of 1.0 and less than 1.2 according to section
126C.05, subdivision 8.
(b) A school district's extended time revenue may be used for extended day programs,
extended week programs, summer school, and other programming authorized under the learning
year program.
    Subd. 2b. Gifted and talented revenue. Gifted and talented revenue for each district equals
$4 times the district's adjusted marginal cost pupil units for fiscal year 2006 and $9 for fiscal year
2007 and later. A school district must reserve gifted and talented revenue and, consistent with
section 120B.15, must spend the revenue only to:
(1) identify gifted and talented students;
(2) provide education programs for gifted and talented students; or
(3) provide staff development to prepare teachers to best meet the unique needs of gifted
and talented students.
    Subd. 3. Compensatory education revenue. (a) The compensatory education revenue for
each building in the district equals the formula allowance minus $415 times the compensation
revenue pupil units computed according to section 126C.05, subdivision 3. Revenue shall be paid
to the district and must be allocated according to section 126C.15, subdivision 2.
(b) When the district contracting with an alternative program under section 124D.69 changes
prior to the start of a school year, the compensatory revenue generated by pupils attending the
program shall be paid to the district contracting with the alternative program for the current
school year, and shall not be paid to the district contracting with the alternative program for
the prior school year.
(c) When the fiscal agent district for an area learning center changes prior to the start of a
school year, the compensatory revenue shall be paid to the fiscal agent district for the current
school year, and shall not be paid to the fiscal agent district for the prior school year.
    Subd. 4. Basic skills revenue. A school district's basic skills revenue equals the sum of:
(1) compensatory revenue under subdivision 3; plus
(2) limited English proficiency revenue under section 124D.65, subdivision 5; plus
(3) $250 times the limited English proficiency pupil units under section 126C.05, subdivision
17
.
    Subd. 5. Training and experience revenue. The training and experience revenue for each
district equals the greater of zero or the result of the following computation:
(1) subtract .8 from the training and experience index;
(2) multiply the result in clause (1) by the product of $660 times the adjusted marginal
cost pupil units for the school year.
    Subd. 6. Definitions. The definitions in this subdivision apply only to subdivisions 7 and 8.
(a) "High school" means a public secondary school, except a charter school under section
124D.10, that has pupils enrolled in at least the 10th, 11th, and 12th grades. If there is no
high school in the district and the school is at least 19 miles from the next nearest school, the
commissioner must designate one school in the district as a high school for the purposes of
this section.
(b) "Secondary average daily membership" means, for a district that has only one high
school, the average daily membership of pupils served in grades 7 through 12. For a district that
has more than one high school, "secondary average daily membership" for each high school
means the product of the average daily membership of pupils served in grades 7 through 12 in the
high school, times the ratio of six to the number of grades in the high school.
(c) "Attendance area" means the total surface area of the district, in square miles, divided by
the number of high schools in the district. For a district that does not operate a high school and is
less than 19 miles from the nearest operating high school, the attendance area equals zero.
(d) "Isolation index" for a high school means the square root of 55 percent of the attendance
area plus the distance in miles, according to the usually traveled routes, between the high school
and the nearest high school. For a district in which there is located land defined in section 84A.01,
84A.20, or 84A.31, the distance in miles is the sum of:
(1) the square root of one-half of the attendance area; and
(2) the distance from the border of the district to the nearest high school.
(e) "Qualifying high school" means a high school that has an isolation index greater than 23
and that has secondary average daily membership of less than 400.
(f) "Qualifying elementary school" means a public elementary school, except a charter
school under section 124D.10, that is located 19 miles or more from the nearest elementary school
or from the nearest elementary school within the district and, in either case, has an elementary
average daily membership of an average of 20 or fewer per grade.
(g) "Elementary average daily membership" means, for a district that has only one
elementary school, the average daily membership of pupils served in kindergarten through grade
6. For a district that has more than one elementary school, "average daily membership" for each
school means the average daily membership of pupils served in kindergarten through grade 6
multiplied by the ratio of seven to the number of grades in the elementary school.
    Subd. 7. Secondary sparsity revenue. (a) A district's secondary sparsity revenue for a
school year equals the sum of the results of the following calculation for each qualifying high
school in the district:
(1) the formula allowance for the school year, multiplied by
(2) the secondary average daily membership of pupils served in the high school, multiplied by
(3) the quotient obtained by dividing 400 minus the secondary average daily membership by
400 plus the secondary daily membership, multiplied by
(4) the lesser of 1.5 or the quotient obtained by dividing the isolation index minus 23 by ten.
(b) A newly formed district that is the result of districts combining under the cooperation and
combination program or consolidating under section 123A.48 must receive secondary sparsity
revenue equal to the greater of: (1) the amount calculated under paragraph (a) for the combined
district; or (2) the sum of the amounts of secondary sparsity revenue the former districts had in
the year prior to consolidation, increased for any subsequent changes in the secondary sparsity
formula.
    Subd. 8. Elementary sparsity revenue. A district's elementary sparsity revenue equals the
sum of the following amounts for each qualifying elementary school in the district:
(1) the formula allowance for the year, multiplied by
(2) the elementary average daily membership of pupils served in the school, multiplied by
(3) the quotient obtained by dividing 140 minus the elementary average daily membership
by 140 plus the average daily membership.
    Subd. 9.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 10.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 11.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 12.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a); 1Sp2001 c 6 art 1 s 55 subd 1]
    Subd. 13. Total operating capital revenue. (a) Total operating capital revenue for a district
equals the amount determined under paragraph (b) or (c), plus $73 times the adjusted marginal
cost pupil units for the school year. The revenue must be placed in a reserved account in the
general fund and may only be used according to subdivision 14.
(b) Capital revenue for a district equals $100 times the district's maintenance cost index
times its adjusted marginal cost pupil units for the school year.
(c) The revenue for a district that operates a program under section 124D.128, is increased
by an amount equal to $30 times the number of marginal cost pupil units served at the site where
the program is implemented.
    Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal year 2007
and later, a district may levy an amount not more than the product of its operating capital revenue
for the fiscal year times the lesser of one or the ratio of its adjusted net tax capacity per adjusted
marginal cost pupil unit to the operating capital equalizing factor. The operating capital equalizing
factor equals $22,222 for fiscal year 2006, and $10,700 for fiscal year 2007 and later.
    Subd. 13b. Operating capital aid. A district's operating capital aid equals its operating
capital revenue minus its operating capital levy times the ratio of the actual amount levied to the
permitted levy.
    Subd. 14. Uses of total operating capital revenue. Total operating capital revenue may be
used only for the following purposes:
(1) to acquire land for school purposes;
(2) to acquire or construct buildings for school purposes;
(3) to rent or lease buildings, including the costs of building repair or improvement that are
part of a lease agreement;
(4) to improve and repair school sites and buildings, and equip or reequip school buildings
with permanent attached fixtures, including library media centers;
(5) for a surplus school building that is used substantially for a public nonschool purpose;
(6) to eliminate barriers or increase access to school buildings by individuals with a disability;
(7) to bring school buildings into compliance with the State Fire Code adopted according
to chapter 299F;
(8) to remove asbestos from school buildings, encapsulate asbestos, or make asbestos-related
repairs;
(9) to clean up and dispose of polychlorinated biphenyls found in school buildings;
(10) to clean up, remove, dispose of, and make repairs related to storing heating fuel or
transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined in section
296A.01;
(11) for energy audits for school buildings and to modify buildings if the audit indicates the
cost of the modification can be recovered within ten years;
(12) to improve buildings that are leased according to section 123B.51, subdivision 4;
(13) to pay special assessments levied against school property but not to pay assessments
for service charges;
(14) to pay principal and interest on state loans for energy conservation according to section
216C.37 or loans made under the Douglas J. Johnson Economic Protection Trust Fund Act
according to sections 298.292 to 298.298;
(15) to purchase or lease interactive telecommunications equipment;
(16) by board resolution, to transfer money into the debt redemption fund to: (i) pay the
amounts needed to meet, when due, principal and interest payments on certain obligations issued
according to chapter 475; or (ii) pay principal and interest on debt service loans or capital loans
according to section 126C.70;
(17) to pay operating capital-related assessments of any entity formed under a cooperative
agreement between two or more districts;
(18) to purchase or lease computers and related materials, copying machines,
telecommunications equipment, and other noninstructional equipment;
(19) to purchase or lease assistive technology or equipment for instructional programs;
(20) to purchase textbooks;
(21) to purchase new and replacement library media resources or technology;
(22) to purchase vehicles;
(23) to purchase or lease telecommunications equipment, computers, and related equipment
for integrated information management systems for:
(i) managing and reporting learner outcome information for all students under a
results-oriented graduation rule;
(ii) managing student assessment, services, and achievement information required for
students with individual education plans; and
(iii) other classroom information management needs; and
(24) to pay personnel costs directly related to the acquisition, operation, and maintenance
of telecommunications systems, computers, related equipment, and network and applications
software.
    Subd. 15. Uses of revenue. Except as otherwise prohibited by law, a district may spend
general fund money for capital purposes.
    Subd. 16. Maintenance cost index. (a) A district's maintenance cost index is equal to the
ratio of:
(1) the total weighted square footage for all eligible district-owned facilities; and
(2) the total unweighted square footage of these facilities.
(b) The department shall determine a district's maintenance cost index annually. Eligible
district-owned facilities must include only instructional or administrative square footage owned
by the district. The commissioner may adjust the age of a building or addition for major
renovation projects.
(c) The square footage weighting factor for each original building or addition equals the
lesser of:
(1) one plus the ratio of the age in years to 100; or
(2) 1.5.
(d) The weighted square footage for each original building or addition equals the product of
the unweighted square footage times the square footage weighting factor.
    Subd. 17. Transportation sparsity definitions. The definitions in this subdivision apply
to subdivisions 18 and 19.
(a) "Sparsity index" for a district means the greater of .2 or the ratio of the square mile area
of the district to the resident pupil units of the district.
(b) "Density index" for a district means the ratio of the square mile area of the district to the
resident pupil units of the district. However, the density index for a district cannot be greater than
.2 or less than .005.
    Subd. 18. Transportation sparsity revenue allowance. (a) A district's transportation
sparsity allowance equals the greater of zero or the result of the following computation:
(i) Multiply the formula allowance according to subdivision 2, by .1469.
(ii) Multiply the result in clause (i) by the district's sparsity index raised to the 26/100 power.
(iii) Multiply the result in clause (ii) by the district's density index raised to the 13/100 power.
(iv) Multiply the formula allowance according to subdivision 2, by .0485.
(v) Subtract the result in clause (iv) from the result in clause (iii).
(b) Transportation sparsity revenue is equal to the transportation sparsity allowance times the
adjusted marginal cost pupil units.
    Subd. 19.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 20.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 21.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 22.[Repealed, 1Sp2001 c 5 art 2 s 30 para (a)]
    Subd. 23.[Repealed, 1Sp2001 c 6 art 1 s 55 subd 1]
    Subd. 24. Equity revenue. (a) A school district qualifies for equity revenue if:
(1) the school district's adjusted marginal cost pupil unit amount of basic revenue,
supplemental revenue, transition revenue, and referendum revenue is less than the value of the
school district at or immediately above the 95th percentile of school districts in its equity region
for those revenue categories; and
(2) the school district's administrative offices are not located in a city of the first class on
July 1, 1999.
(b) Equity revenue for a qualifying district that receives referendum revenue under section
126C.17, subdivision 4, equals the product of (1) the district's adjusted marginal cost pupil units
for that year; times (2) the sum of (i) $13, plus (ii) $75, times the school district's equity index
computed under subdivision 27.
(c) Equity revenue for a qualifying district that does not receive referendum revenue under
section 126C.17, subdivision 4, equals the product of the district's adjusted marginal cost pupil
units for that year times $13.
(d) A school district's equity revenue is increased by the greater of zero or an amount equal
to the district's resident marginal cost pupil units times the difference between ten percent of the
statewide average amount of referendum revenue per resident marginal cost pupil unit for that
year and the district's referendum revenue per resident marginal cost pupil unit. A school district's
revenue under this paragraph must not exceed $100,000 for that year.
(e) A school district's equity revenue for a school district located in the metro equity region
equals the amount computed in paragraphs (b), (c), and (d) multiplied by 1.25.
(f) For fiscal year 2007 and later, notwithstanding paragraph (a), clause (2), a school district
that has per pupil referendum revenue below the 95th percentile qualifies for additional equity
revenue equal to $46 times its adjusted marginal cost pupil unit.
(g) A district that does not qualify for revenue under paragraph (f) qualifies for equity
revenue equal to one-half of the per pupil allowance in paragraph (f) times its adjusted marginal
cost pupil units.
    Subd. 25. Regional equity gap. The regional equity gap equals the difference between the
value of the school district at or immediately above the fifth percentile of adjusted general revenue
per adjusted marginal cost pupil unit and the value of the school district at or immediately above
the 95th percentile of adjusted general revenue per adjusted marginal cost pupil unit.
    Subd. 26. District equity gap. A district's equity gap equals the greater of zero or the
difference between the district's adjusted general revenue and the value of the school district
at or immediately above the regional 95th percentile of adjusted general revenue per adjusted
marginal cost pupil unit.
    Subd. 27. District equity index. A district's equity index equals the ratio of the sum of the
district equity gap amount to the regional equity gap amount.
    Subd. 28. Equity region. For the purposes of computing equity revenue under subdivision
24, a district whose administrative offices on July 1, 1999, is located in Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, or Washington County is part of the metro equity region. Districts
whose administrative offices on July 1, 1999, are not located in Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington County are part of the rural equity region.
    Subd. 29. Equity levy. To obtain equity revenue for fiscal year 2005 and later, a district may
levy an amount not more than the product of its equity revenue for the fiscal year times the lesser
of one or the ratio of its referendum market value per resident marginal cost pupil unit to $476,000.
    Subd. 30. Equity aid. A district's equity aid equals its equity revenue minus its equity levy
times the ratio of the actual amount levied to the permitted levy.
    Subd. 31. Transition revenue. (a) A district's transition allowance equals the greater of
zero or the product of the ratio of the number of adjusted marginal cost pupil units the district
would have counted for fiscal year 2004 under Minnesota Statutes 2002 to the district's adjusted
marginal cost pupil units for fiscal year 2004, times the difference between: (1) the lesser of the
district's general education revenue per adjusted marginal cost pupil unit for fiscal year 2003 or
the amount of general education revenue the district would have received per adjusted marginal
cost pupil unit for fiscal year 2004 according to Minnesota Statutes 2002, and (2) the district's
general education revenue for fiscal year 2004 excluding transition revenue divided by the number
of adjusted marginal cost pupil units the district would have counted for fiscal year 2004 under
Minnesota Statutes 2002.
(b) A district's transition revenue for fiscal year 2006 and later equals the sum of the product
of the district's transition allowance times the district's adjusted marginal cost pupil units plus the
district's transition for prekindergarten revenue under subdivision 31a.
    Subd. 31a. Transition for prekindergarten revenue. For fiscal year 2007 and later, a school
district's transition for prekindergarten revenue equals the sum of (1) the amount of referendum
revenue under section 126C.17 and general education revenue, excluding transition revenue, for
fiscal year 2004 attributable to pupils four or five years of age on September 1, 2003, enrolled
in a prekindergarten program implemented by the district before July 1, 2003, and reported as
kindergarten pupils under section 126C.05, subdivision 1, for fiscal year 2004, plus (2) the amount
of compensatory education revenue under subdivision 3 for fiscal year 2005 attributable to pupils
four years of age on September 1, 2003, enrolled in a prekindergarten program implemented by
the district before July 1, 2003, and reported as kindergarten pupils under section 126C.05,
subdivision 1, for fiscal year 2004 multiplied by .04.
    Subd. 31b. Uses of transition for prekindergarten revenue. A school district that receives
revenue under subdivision 31a must reserve that revenue for prekindergarten programs serving
students who turn age four by September 1 and who will enter kindergarten the following year.
    Subd. 32. Transition levy. To obtain transition revenue for fiscal year 2005 and later, a
district may levy an amount not more than the product of its transition revenue for the fiscal
year times the lesser of one or the ratio of its referendum market value per resident marginal
cost pupil unit to $476,000.
    Subd. 33. Transition aid. (a) For fiscal year 2004, a district's transition aid equals its
transition revenue.
(b) For fiscal year 2005 and later, a district's transition aid equals its transition revenue minus
its transition levy times the ratio of the actual amount levied to the permitted levy.
    Subd. 34. Basic alternative teacher compensation aid. (a) For fiscal year 2006, the basic
alternative teacher compensation aid for a school district or an intermediate school district
with a plan approved under section 122A.414, subdivision 2b, equals the alternative teacher
compensation revenue under section 122A.415, subdivision 1. The basic alternative teacher
compensation aid for a charter school with an approved plan under section 122A.414, subdivision
2b
, equals $260 times the number of pupils enrolled in the school on October 1 of the previous
school year, or on October 1 of the current fiscal year for a charter school in the first year of
operation.
(b) For fiscal year 2007 and later, the basic alternative teacher compensation aid for a school
district with a plan approved under section 122A.414, subdivision 2b, equals 73.1 percent of the
alternative teacher compensation revenue under section 122A.415, subdivision 1. The basic
alternative teacher compensation aid for an intermediate school district or charter school with a
plan approved under section 122A.414, subdivisions 2a and 2b, if the recipient is a charter school,
equals $260 times the number of pupils enrolled in the school on October 1 of the previous
fiscal year, or on October 1 of the current fiscal year for a charter school in the first year of
operation, times the ratio of the sum of the alternative teacher compensation aid and alternative
teacher compensation levy for all participating school districts to the maximum alternative teacher
compensation revenue for those districts under section 122A.415, subdivision 1.
(c) Notwithstanding paragraphs (a) and (b) and section 122A.415, subdivision 1, the state
total basic alternative teacher compensation aid entitlement must not exceed $19,329,000 for
fiscal year 2006 and $75,636,000 for fiscal year 2007 and later. The commissioner must limit
the amount of alternative teacher compensation aid approved under section 122A.415 so as
not to exceed these limits.
    Subd. 35. Alternative teacher compensation levy. For fiscal year 2007 and later,
the alternative teacher compensation levy for a district receiving basic alternative teacher
compensation aid equals the product of (1) the difference between the district's alternative teacher
compensation revenue and the district's basic alternative teacher compensation aid times (2) the
lesser of one or the ratio of the district's adjusted net tax capacity per adjusted pupil unit to $5,913.
    Subd. 36. Alternative teacher compensation aid. (a) For fiscal year 2007 and later, a
district's alternative teacher compensation equalization aid equals the district's alternative teacher
compensation revenue minus the district's basic alternative teacher compensation aid minus the
district's alternative teacher compensation levy. If a district does not levy the entire amount
permitted, the alternative teacher compensation equalization aid must be reduced in proportion to
the actual amount levied.
(b) A district's alternative teacher compensation aid equals the sum of the district's
basic alternative teacher compensation aid and the district's alternative teacher compensation
equalization aid.
History: 1987 c 398 art 1 s 11; 1988 c 486 s 58-60; 1988 c 718 art 1 s 1-3; 1989 c 329 art 1
s 5-12; 1990 c 375 s 3; 1990 c 562 art 8 s 28; 1991 c 130 s 37; 1991 c 265 art 1 s 12-19; 1992 c
499 art 6 s 20; art 7 s 31; art 12 s 13,14,29; 1993 c 224 art 1 s 12-17; 1993 c 374 s 2; 1994 c 647
art 1 s 21-24; 1995 c 212 art 4 s 64; 1Sp1995 c 3 art 1 s 25-44; art 13 s 7; art 16 s 13; 1996 c 412
art 1 s 23-25; art 9 s 6; 1997 c 1 s 4; 1997 c 2 s 6; 1Sp1997 c 4 art 1 s 36-45; art 4 s 22,23; 1998
c 299 s 30; 1998 c 397 art 7 s 145-151,164; art 11 s 3; art 12 s 3-5; 1998 c 398 art 1 s 28-31,39;
art 4 s 8; 1Sp1998 c 3 s 17; 1999 c 241 art 1 s 13-34,54; 2000 c 254 s 37; 2000 c 464 art 3 s
3,4; 2000 c 489 art 2 s 15-20,28; art 5 s 9; 1Sp2001 c 5 art 2 s 9,10; art 3 s 82; 1Sp2001 c 6 art
1 s 15-21,42,55 subd 2; 2002 c 374 art 4 s 6; 2002 c 377 art 8 s 18; 2002 c 379 art 1 s 46,47;
1Sp2003 c 9 art 1 s 20-32; art 12 s 14; 1Sp2003 c 23 s 12,21; 2004 c 294 art 1 s 7; 2005 c 136 art
9 s 14; 1Sp2005 c 5 art 1 s 16-25; 2006 c 263 art 1 s 9-12; art 7 s 5