2006 Minnesota Statutes

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.
(d) The current year aid payment percentage equals 90.
    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 and state-paid tax credits 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.
History: 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; 2006 c 263 art 1 s 16; art 4 s 4