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    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
(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
(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.
History: 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

Official Publication of the State of Minnesota
Revisor of Statutes