1.1                          A bill for an act 
  1.2             relating to education; providing for technical 
  1.3             amendments in kindergarten through grade 12 
  1.4             provisions; amending Minnesota Statutes 1998, sections 
  1.5             13.46, subdivision 2; 120B.05; 122A.61, subdivision 1; 
  1.6             123A.05, subdivision 2; 123B.53, subdivisions 4 and 5; 
  1.7             123B.57, subdivision 4; 123B.64, subdivision 3; 
  1.8             124D.135, subdivision 3; 124D.20, subdivision 5; 
  1.9             124D.22, subdivision 3; 124D.68, subdivision 9; 
  1.10            124D.69, subdivision 1; 125A.50, subdivisions 2 and 5; 
  1.11            125A.75, subdivision 8; 125A.76, subdivision 5; 
  1.12            125A.79, subdivision 1; 126C.05, subdivision 3; 
  1.13            126C.10, subdivisions 10, 14, 19, and 21; 126C.12, 
  1.14            subdivision 4; 126C.15, subdivisions 1 and 2; 126C.17, 
  1.15            subdivision 6; 126C.22, subdivision 2; 126C.40, 
  1.16            subdivision 4; 126C.42, subdivisions 1 and 2; 126C.63, 
  1.17            subdivisions 5 and 8; 126C.69, subdivisions 2 and 9; 
  1.18            127A.44, subdivision 2; 127A.47, subdivision 7; and 
  1.19            127A.49, subdivisions 2 and 3; Laws 1997, First 
  1.20            Special Session chapter 4, article 1, section 61, 
  1.21            subdivisions 1, 2, 3, as amended, and 4; and article 
  1.22            2, section 51, subdivision 29, as amended; repealing 
  1.23            Minnesota Statutes 1998, sections 124D.67; 126C.05, 
  1.24            subdivision 4; and 126C.06. 
  1.25  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.26     Section 1.  Minnesota Statutes 1998, section 13.46, 
  1.27  subdivision 2, is amended to read: 
  1.28     Subd. 2.  [GENERAL.] (a) Unless the data is summary data or 
  1.29  a statute specifically provides a different classification, data 
  1.30  on individuals collected, maintained, used, or disseminated by 
  1.31  the welfare system is private data on individuals, and shall not 
  1.32  be disclosed except:  
  1.33     (1) according to section 13.05; 
  1.34     (2) according to court order; 
  1.35     (3) according to a statute specifically authorizing access 
  2.1   to the private data; 
  2.2      (4) to an agent of the welfare system, including a law 
  2.3   enforcement person, attorney, or investigator acting for it in 
  2.4   the investigation or prosecution of a criminal or civil 
  2.5   proceeding relating to the administration of a program; 
  2.6      (5) to personnel of the welfare system who require the data 
  2.7   to determine eligibility, amount of assistance, and the need to 
  2.8   provide services of additional programs to the individual; 
  2.9      (6) to administer federal funds or programs; 
  2.10     (7) between personnel of the welfare system working in the 
  2.11  same program; 
  2.12     (8) the amounts of cash public assistance and relief paid 
  2.13  to welfare recipients in this state, including their names, 
  2.14  social security numbers, income, addresses, and other data as 
  2.15  required, upon request by the department of revenue to 
  2.16  administer the property tax refund law, supplemental housing 
  2.17  allowance, early refund of refundable tax credits, and the 
  2.18  income tax.  "Refundable tax credits" means the dependent care 
  2.19  credit under section 290.067, the Minnesota working family 
  2.20  credit under section 290.0671, the property tax refund under 
  2.21  section 290A.04, and, if the required federal waiver or waivers 
  2.22  are granted, the federal earned income tax credit under section 
  2.23  32 of the Internal Revenue Code; 
  2.24     (9) between the department of human services and the 
  2.25  Minnesota department of economic security for the purpose of 
  2.26  monitoring the eligibility of the data subject for reemployment 
  2.27  insurance, for any employment or training program administered, 
  2.28  supervised, or certified by that agency, for the purpose of 
  2.29  administering any rehabilitation program, whether alone or in 
  2.30  conjunction with the welfare system, or to monitor and evaluate 
  2.31  the statewide Minnesota family investment program by exchanging 
  2.32  data on recipients and former recipients of food stamps, cash 
  2.33  assistance under chapter 256, 256D, 256J, or 256K, child care 
  2.34  assistance under chapter 119B, or medical programs under chapter 
  2.35  256B, 256D, or 256L; 
  2.36     (10) to appropriate parties in connection with an emergency 
  3.1   if knowledge of the information is necessary to protect the 
  3.2   health or safety of the individual or other individuals or 
  3.3   persons; 
  3.4      (11) data maintained by residential programs as defined in 
  3.5   section 245A.02 may be disclosed to the protection and advocacy 
  3.6   system established in this state according to Part C of Public 
  3.7   Law Number 98-527 to protect the legal and human rights of 
  3.8   persons with mental retardation or other related conditions who 
  3.9   live in residential facilities for these persons if the 
  3.10  protection and advocacy system receives a complaint by or on 
  3.11  behalf of that person and the person does not have a legal 
  3.12  guardian or the state or a designee of the state is the legal 
  3.13  guardian of the person; 
  3.14     (12) to the county medical examiner or the county coroner 
  3.15  for identifying or locating relatives or friends of a deceased 
  3.16  person; 
  3.17     (13) data on a child support obligor who makes payments to 
  3.18  the public agency may be disclosed to the higher education 
  3.19  services office to the extent necessary to determine eligibility 
  3.20  under section 136A.121, subdivision 2, clause (5); 
  3.21     (14) participant social security numbers and names 
  3.22  collected by the telephone assistance program may be disclosed 
  3.23  to the department of revenue to conduct an electronic data match 
  3.24  with the property tax refund database to determine eligibility 
  3.25  under section 237.70, subdivision 4a; 
  3.26     (15) the current address of a recipient of aid to families 
  3.27  with dependent children or Minnesota family investment 
  3.28  program-statewide may be disclosed to law enforcement officers 
  3.29  who provide the name of the recipient and notify the agency that:
  3.30     (i) the recipient: 
  3.31     (A) is a fugitive felon fleeing to avoid prosecution, or 
  3.32  custody or confinement after conviction, for a crime or attempt 
  3.33  to commit a crime that is a felony under the laws of the 
  3.34  jurisdiction from which the individual is fleeing; or 
  3.35     (B) is violating a condition of probation or parole imposed 
  3.36  under state or federal law; 
  4.1      (ii) the location or apprehension of the felon is within 
  4.2   the law enforcement officer's official duties; and 
  4.3      (iii)  the request is made in writing and in the proper 
  4.4   exercise of those duties; 
  4.5      (16) the current address of a recipient of general 
  4.6   assistance or general assistance medical care may be disclosed 
  4.7   to probation officers and corrections agents who are supervising 
  4.8   the recipient and to law enforcement officers who are 
  4.9   investigating the recipient in connection with a felony level 
  4.10  offense; 
  4.11     (17) information obtained from food stamp applicant or 
  4.12  recipient households may be disclosed to local, state, or 
  4.13  federal law enforcement officials, upon their written request, 
  4.14  for the purpose of investigating an alleged violation of the 
  4.15  Food Stamp Act, according to Code of Federal Regulations, title 
  4.16  7, section 272.1(c); 
  4.17     (18) the address, social security number, and, if 
  4.18  available, photograph of any member of a household receiving 
  4.19  food stamps shall be made available, on request, to a local, 
  4.20  state, or federal law enforcement officer if the officer 
  4.21  furnishes the agency with the name of the member and notifies 
  4.22  the agency that:  
  4.23     (i) the member: 
  4.24     (A) is fleeing to avoid prosecution, or custody or 
  4.25  confinement after conviction, for a crime or attempt to commit a 
  4.26  crime that is a felony in the jurisdiction the member is 
  4.27  fleeing; 
  4.28     (B) is violating a condition of probation or parole imposed 
  4.29  under state or federal law; or 
  4.30     (C) has information that is necessary for the officer to 
  4.31  conduct an official duty related to conduct described in subitem 
  4.32  (A) or (B); 
  4.33     (ii) locating or apprehending the member is within the 
  4.34  officer's official duties; and 
  4.35     (iii) the request is made in writing and in the proper 
  4.36  exercise of the officer's official duty; 
  5.1      (19) certain information regarding child support obligors 
  5.2   who are in arrears may be made public according to section 
  5.3   518.575; 
  5.4      (20) data on child support payments made by a child support 
  5.5   obligor and data on the distribution of those payments excluding 
  5.6   identifying information on obligees may be disclosed to all 
  5.7   obligees to whom the obligor owes support, and data on the 
  5.8   enforcement actions undertaken by the public authority, the 
  5.9   status of those actions, and data on the income of the obligor 
  5.10  or obligee may be disclosed to the other party; 
  5.11     (21) data in the work reporting system may be disclosed 
  5.12  under section 256.998, subdivision 7; 
  5.13     (22) to the department of children, families, and learning 
  5.14  for the purpose of matching department of children, families, 
  5.15  and learning student data with public assistance data to 
  5.16  determine students eligible for free and reduced price meals, 
  5.17  meal supplements, and free milk according to United States Code, 
  5.18  title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; ~~to~~ 
  5.19  ~~produce accurate numbers of students receiving aid to families~~ 
  5.20  ~~with dependent children or Minnesota family investment~~ 
  5.21  ~~program-statewide as required by section 126C.06;~~ to allocate 
  5.22  federal and state funds that are distributed based on income of 
  5.23  the student's family; and to verify receipt of energy assistance 
  5.24  for the telephone assistance plan; 
  5.25     (23) the current address and telephone number of program 
  5.26  recipients and emergency contacts may be released to the 
  5.27  commissioner of health or a local board of health as defined in 
  5.28  section 145A.02, subdivision 2, when the commissioner or local 
  5.29  board of health has reason to believe that a program recipient 
  5.30  is a disease case, carrier, suspect case, or at risk of illness, 
  5.31  and the data are necessary to locate the person; 
  5.32     (24) to other state agencies, statewide systems, and 
  5.33  political subdivisions of this state, including the attorney 
  5.34  general, and agencies of other states, interstate information 
  5.35  networks, federal agencies, and other entities as required by 
  5.36  federal regulation or law for the administration of the child 
  6.1   support enforcement program; 
  6.2      (25) to personnel of public assistance programs as defined 
  6.3   in section 256.741, for access to the child support system 
  6.4   database for the purpose of administration, including monitoring 
  6.5   and evaluation of those public assistance programs; or 
  6.6      (26) to monitor and evaluate the statewide Minnesota family 
  6.7   investment program by exchanging data between the departments of 
  6.8   human services and children, families, and learning, on 
  6.9   recipients and former recipients of food stamps, cash assistance 
  6.10  under chapter 256, 256D, 256J, or 256K, child care assistance 
  6.11  under chapter 119B, or medical programs under chapter 256B, 
  6.12  256D, or 256L.  
  6.13     (b) Information on persons who have been treated for drug 
  6.14  or alcohol abuse may only be disclosed according to the 
  6.15  requirements of Code of Federal Regulations, title 42, sections 
  6.16  2.1 to 2.67. 
  6.17     (c) Data provided to law enforcement agencies under 
  6.18  paragraph (a), clause (15), (16), (17), or (18), or paragraph 
  6.19  (b), are investigative data and are confidential or protected 
  6.20  nonpublic while the investigation is active.  The data are 
  6.21  private after the investigation becomes inactive under section 
  6.22  13.82, subdivision 5, paragraph (a) or (b). 
  6.23     (d) Mental health data shall be treated as provided in 
  6.24  subdivisions 7, 8, and 9, but is not subject to the access 
  6.25  provisions of subdivision 10, paragraph (b). 
  6.26     Sec. 2.  Minnesota Statutes 1998, section 120B.05, is 
  6.27  amended to read: 
  6.28     120B.05 [GRADUATION STANDARDS IMPLEMENTATION REVENUE.] 
  6.29     (a) A school district's graduation standards implementation 
  6.30  revenue is equal to $52 times its resident pupil units for 
  6.31  fiscal year 1999 plus $14 times its resident pupil units for 
  6.32  fiscal year 1999 if the district implements the graduation rule 
  6.33  under section 120B.03, subdivision 1, paragraph (b), and $43 per 
  6.34  pupil unit for all districts for fiscal year 2000 and later.  
  6.35  Graduation standards implementation revenue is reserved and must 
  6.36  be used according to paragraphs (b) and (c). 
  7.1      (b) For fiscal year 1999, revenue must be reserved for 
  7.2   programs according to clauses (1) to (3). 
  7.3      (1) At least $20 per resident pupil unit plus $14 per 
  7.4   resident pupil unit for a district that implements the 
  7.5   graduation rule under section 120B.03, subdivision 1, paragraph 
  7.6   (b), must be allocated to school sites in proportion to the 
  7.7   number of students enrolled at each school site weighted 
  7.8   according to section 126C.05, subdivision 1, and is reserved for 
  7.9   programs designed to enhance the implementation of the 
  7.10  graduation rule through intensive staff development and 
  7.11  decentralized decision making. 
  7.12     (2) At least $5 per resident pupil unit is reserved for 
  7.13  gifted and talented programs that are integrated with the 
  7.14  graduation rule.  This aid must supplement, not supplant, money 
  7.15  spent on gifted and talented programs authorized under Laws 
  7.16  1997, First Special Session chapter 4, article 5, section 24. 
  7.17     (3) Remaining aid under this paragraph must be used: 
  7.18     (i) for technology purposes including wiring, network 
  7.19  connections, and other technology-related infrastructure 
  7.20  improvements; purchase or lease of computer software and 
  7.21  hardware to be used in classrooms and for instructional 
  7.22  purposes; purchase or lease of interactive television network 
  7.23  equipment and network support; purchase or lease of computer 
  7.24  software and hardware designed to support special needs 
  7.25  programming and limited English proficiency programming; network 
  7.26  and technical support; and purchase of textbooks and other 
  7.27  instructional materials; or 
  7.28     (ii) to reduce class size. 
  7.29     (c) For fiscal year 2000 and later, revenue under 
  7.30  paragraphs (a) and (e) must be allocated to school sites in 
  7.31  proportion to the number of students enrolled at each school 
  7.32  site weighted according to section 126C.05, subdivision 1, and 
  7.33  reserved for programs designed to enhance the implementation of 
  7.34  the graduation rule through:  (1) staff development programs; 
  7.35  (2) technology purposes under paragraph (b), clause (3); (3) 
  7.36  gifted and talented programs; or (4) class size reduction 
  8.1   programs based at the school site.  Use of this revenue by sites 
  8.2   must be consistent with the district's graduation standards 
  8.3   implementation plan. 
  8.4      (d) To the extent possible, school districts shall make 
  8.5   opportunities for graduation standards implementation available 
  8.6   to teachers employed by intermediate school districts.  If the 
  8.7   commissioner determines that the supplemental appropriation made 
  8.8   for this subdivision under Laws 1998, chapter 398, article 1, 
  8.9   section 40, subdivision 2, is in excess of the amount needed for 
  8.10  this subdivision, the commissioner shall make equal payments of 
  8.11  one-third of the excess to each intermediate school district for 
  8.12  the purpose of paragraph (a). 
  8.13     (e) A district that qualifies for the referendum allowance 
  8.14  reduction under section 126C.17, subdivision 12, and whose 
  8.15  referendum allowance under section 126C.17, subdivision 1, as 
  8.16  adjusted under section 126C.17, subdivisions 2 and 12, does not 
  8.17  exceed the referendum allowance limit under section 126C.17, 
  8.18  subdivision 2, clause (2), shall receive a graduation standards 
  8.19  implementation equity adjustment.  In fiscal year 1999, the 
  8.20  equity adjustment aid is equal to $34 per resident pupil unit.  
  8.21  In fiscal year 2000 and thereafter, the equity adjustment is 
  8.22  equal to $25 per resident pupil unit. 
  8.23     Sec. 3.  Minnesota Statutes 1998, section 122A.61, 
  8.24  subdivision 1, is amended to read: 
  8.25     Subdivision 1.  [STAFF DEVELOPMENT REVENUE.] A district is 
  8.26  required to reserve an amount equal to at least one percent of 
  8.27  the basic revenue under section 126C.10, subdivision 2, for 
  8.28  in-service education for programs under section 120B.22, 
  8.29  subdivision 2, for staff development plans, including plans for 
  8.30  challenging instructional activities and experiences under 
  8.31  section 122A.60, and for curriculum development and programs, 
  8.32  other in-service education, teachers' workshops, teacher 
  8.33  conferences, the cost of substitute teachers staff development 
  8.34  purposes, and other related costs for staff development 
  8.35  efforts.  Districts may expend an additional amount of ~~basic~~ 
  8.36  unreserved revenue for staff development based on their 
  9.1   needs.  With the exception of amounts reserved for staff 
  9.2   development from revenues allocated directly to school sites, 
  9.3   the board must initially allocate 50 percent of the reserved 
  9.4   revenue to each school site in the district on a per teacher 
  9.5   basis, which must be retained by the school site until used.  
  9.6   The board may retain 25 percent to be used for district wide 
  9.7   staff development efforts.  The remaining 25 percent of the 
  9.8   revenue must be used to make grants to school sites that 
  9.9   demonstrate exemplary use of allocated staff development 
  9.10  revenue.  A grant may be used for any purpose authorized under 
  9.11  section 120B.22, subdivision 2, 122A.60, or for the costs of 
  9.12  curriculum development and programs, other in-service education, 
  9.13  teachers' workshops, teacher conferences, substitute teachers 
  9.14  for staff development purposes, and other staff development 
  9.15  efforts, and determined by the site decision-making team.  The 
  9.16  site decision-making team must demonstrate to the school board 
  9.17  the extent to which staff at the site have met the outcomes of 
  9.18  the program.  The board may withhold a portion of initial 
  9.19  allocation of revenue if the staff development outcomes are not 
  9.20  being met. 
  9.21     Sec. 4.  Minnesota Statutes 1998, section 123A.05, 
  9.22  subdivision 2, is amended to read: 
  9.23     Subd. 2.  [RESERVE REVENUE.] Each district that is a member 
  9.24  of an area learning center must reserve revenue in an amount 
  9.25  equal to at least 90 percent of the district average general 
  9.26  education revenue less ~~compensatory~~ basic skills revenue per 
  9.27  pupil unit times the number of pupil units attending an area 
  9.28  learning center program under this section.  The amount of 
  9.29  reserved revenue under this subdivision may only be spent on 
  9.30  program costs associated with the area learning center.  
  9.31  Compensatory revenue must be allocated according to section 
  9.32  126C.15, subdivision 2. 
  9.33     Sec. 5.  Minnesota Statutes 1998, section 123B.53, 
  9.34  subdivision 4, is amended to read: 
  9.35     Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] ~~(a)~~ For 
  9.36  fiscal years 1995 and later, the debt service equalization 
 10.1   revenue of a district equals the eligible debt service revenue 
 10.2   minus the amount raised by a levy of ~~ten~~ 12 percent times the 
 10.3   adjusted net tax capacity of the district. 
 10.4      ~~(b) For fiscal year 1993, debt service equalization revenue~~ 
 10.5   ~~equals one-third of the amount calculated in paragraph (a).~~ 
 10.6      ~~(c) For fiscal year 1994, debt service equalization revenue~~ 
 10.7   ~~equals two-thirds of the amount calculated in paragraph (a).~~ 
 10.8      Sec. 6.  Minnesota Statutes 1998, section 123B.53, 
 10.9   subdivision 5, is amended to read: 
 10.10     Subd. 5.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
 10.11  service equalization revenue, a district must levy an amount not 
 10.12  to exceed the district's debt service equalization revenue times 
 10.13  the lesser of one or the ratio of: 
 10.14     (1) the quotient derived by dividing the adjusted net tax 
 10.15  capacity of the district for the year before the year the levy 
 10.16  is certified by the resident pupil units in the district for the 
 10.17  school year ending in the year prior to the year the levy is 
 10.18  certified; to 
 10.19     (2) ~~$4,707.50~~ $3,956. 
 10.20     Sec. 7.  Minnesota Statutes 1998, section 123B.57, 
 10.21  subdivision 4, is amended to read: 
 10.22     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
 10.23  safety revenue, a district may levy an amount equal to the 
 10.24  district's health and safety revenue as defined in subdivision 3 
 10.25  multiplied by the lesser of one, or the ratio of the quotient 
 10.26  derived by dividing the adjusted net tax capacity of the 
 10.27  district for the year preceding the year the levy is certified 
 10.28  by the resident pupil units in the district for the school year 
 10.29  to which the levy is attributable, to ~~$4,707.50~~ $3,956. 
 10.30     Sec. 8.  Minnesota Statutes 1998, section 123B.64, 
 10.31  subdivision 3, is amended to read: 
 10.32     Subd. 3.  [LEVY.] To obtain historic building revenue, a 
 10.33  district may levy an amount, not to exceed the district's 
 10.34  revenue, equal to the district's revenue authority for that year 
 10.35  times the lesser of one or the ratio of the adjusted net tax 
 10.36  capacity divided by its resident pupil units for that school 
 11.1   year to ~~$10,000~~ $8,404. 
 11.2      Sec. 9.  Minnesota Statutes 1998, section 124D.135, 
 11.3   subdivision 3, is amended to read: 
 11.4      Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To 
 11.5   obtain early childhood family education revenue, a district may 
 11.6   levy an amount equal to the tax rate of ~~.45~~ .54 percent times 
 11.7   the adjusted tax capacity of the district for the year preceding 
 11.8   the year the levy is certified.  If the amount of the early 
 11.9   childhood family education levy would exceed the early childhood 
 11.10  family education revenue, the early childhood family education 
 11.11  levy must equal the early childhood family education revenue.  
 11.12     Sec. 10.  Minnesota Statutes 1998, section 124D.20, 
 11.13  subdivision 5, is amended to read: 
 11.14     Subd. 5.  [COMMUNITY EDUCATION LEVY.] To obtain community 
 11.15  education revenue, a district may levy the amount raised by a 
 11.16  tax rate of ~~.41~~ .49 percent times the adjusted net tax capacity 
 11.17  of the district.  If the amount of the community education levy 
 11.18  would exceed the community education revenue, the community 
 11.19  education levy shall be determined according to subdivision 6. 
 11.20     Sec. 11.  Minnesota Statutes 1998, section 124D.22, 
 11.21  subdivision 3, is amended to read: 
 11.22     Subd. 3.  [EXTENDED DAY LEVY.] To obtain extended day 
 11.23  revenue, a school district may levy an amount equal to the 
 11.24  district's extended day revenue as defined in subdivision 2 
 11.25  multiplied by the lesser of one, or the ratio of the quotient 
 11.26  derived by dividing the adjusted net tax capacity of the 
 11.27  district for the year before the year the levy is certified by 
 11.28  the resident pupil units in the district for the school year to 
 11.29  which the levy is attributable, to ~~$3,767~~ $3,166.  
 11.30     Sec. 12.  Minnesota Statutes 1998, section 124D.68, 
 11.31  subdivision 9, is amended to read: 
 11.32     Subd. 9.  [ENROLLMENT VERIFICATION.] (a) For a pupil 
 11.33  attending an eligible program full time under subdivision 3, 
 11.34  paragraph (d), the department must pay 90 percent of the 
 11.35  district's average general education revenue less ~~compensatory~~ 
 11.36  basic skills revenue to the eligible program and ten percent of 
 12.1   the district's average general education revenue 
 12.2   less ~~compensatory~~ basic skills revenue to the resident district 
 12.3   within 30 days after the eligible program verifies enrollment 
 12.4   using the form provided by the department.  For a pupil 
 12.5   attending an eligible program part time, revenue shall be 
 12.6   reduced proportionately, according to the amount of time the 
 12.7   pupil attends the program, and the payments to the eligible 
 12.8   program and the resident district shall be reduced accordingly.  
 12.9   A pupil for whom payment is made according to this section may 
 12.10  not be counted by any district for any purpose other than 
 12.11  computation of general education revenue.  If payment is made 
 12.12  for a pupil under this subdivision, a district shall not 
 12.13  reimburse a program under section 124D.69 for the same 
 12.14  pupil.  ~~Compensatory~~ Basic skills revenue shall be paid 
 12.15  according to section 126C.10, subdivision ~~3~~ 4. 
 12.16     (b) The department must pay up to 100 percent of the 
 12.17  revenue to the eligible program if there is an agreement to that 
 12.18  effect between the school district and the eligible program.  
 12.19     Sec. 13.  Minnesota Statutes 1998, section 124D.69, 
 12.20  subdivision 1, is amended to read: 
 12.21     Subdivision 1.  [AID.] If a pupil enrolls in an alternative 
 12.22  program, eligible under section 124D.68, subdivision 3, 
 12.23  paragraph (d), or subdivision 4, operated by a private 
 12.24  organization that has contracted with a school district to 
 12.25  provide educational services for eligible pupils under section 
 12.26  124D.68, subdivision 2, the district contracting with the 
 12.27  private organization must reimburse the provider an amount equal 
 12.28  to at least 90 percent of the district's average general 
 12.29  education less ~~compensatory~~ basic skills revenue per pupil unit 
 12.30  times the number of pupil units for pupils attending the 
 12.31  program.  Basic skills revenue shall be paid according to 
 12.32  section 126C.10, subdivision 4.  Compensatory revenue must be 
 12.33  allocated according to section 126C.15, subdivision 2.  For a 
 12.34  pupil attending the program part time, the revenue paid to the 
 12.35  program must be reduced proportionately, according to the amount 
 12.36  of time the pupil attends the program, and revenue paid to the 
 13.1   district shall be reduced accordingly.  Pupils for whom a 
 13.2   district provides reimbursement may not be counted by the 
 13.3   district for any purpose other than computation of general 
 13.4   education revenue.  If payment is made to a district or program 
 13.5   for a pupil under this section, the department must not make a 
 13.6   payment for the same pupil under section 124D.68, subdivision 9. 
 13.7      Sec. 14.  Minnesota Statutes 1998, section 125A.50, 
 13.8   subdivision 2, is amended to read: 
 13.9      Subd. 2.  [APPLICATION CONTENTS.] The application must set 
 13.10  forth: 
 13.11     (1) instructional services available to eligible pupils 
 13.12  under section ~~124D.67~~ 124D.66, subdivision ~~3~~ 2, and pupils with 
 13.13  a disability under section 125A.02; 
 13.14     (2) criteria to select pupils for the program and the 
 13.15  assessment procedures to determine eligibility; 
 13.16     (3) involvement in the program of parents of pupils in the 
 13.17  program, parent advocates, and community special education 
 13.18  advocates; 
 13.19     (4) accounting procedures to document that federal special 
 13.20  education money is used to supplement or increase the level of 
 13.21  special education instruction and related services provided with 
 13.22  state and local revenue, but in no case to supplant the state 
 13.23  and local revenue, and that districts are expending at least the 
 13.24  amount for special education instruction and related services 
 13.25  required by federal law; 
 13.26     (5) the role of regular and special education teachers in 
 13.27  planning and implementing the program; and 
 13.28     (6) other information requested by the commissioner.  
 13.29     Sec. 15.  Minnesota Statutes 1998, section 125A.50, 
 13.30  subdivision 5, is amended to read: 
 13.31     Subd. 5.  [ANNUAL REPORT.] Each year the district must 
 13.32  submit to the commissioner a report containing the information 
 13.33  described in subdivision 3 ~~and section 124D.67, subdivision 7~~.  
 13.34     Sec. 16.  Minnesota Statutes 1998, section 125A.75, 
 13.35  subdivision 8, is amended to read: 
 13.36     Subd. 8.  [LITIGATION AND HEARING COSTS.] (a) For fiscal 
 14.1   year 1999 and thereafter, the commissioner of children, 
 14.2   families, and learning, or the commissioner's designee, shall 
 14.3   use state funds to pay school districts for the administrative 
 14.4   costs of a due process hearing incurred under section 125A.09, 
 14.5   subdivisions 6, 10, and 11, including hearing officer fees, 
 14.6   court reporter fees, mileage costs, transcript costs, 
 14.7   independent evaluations ordered by the hearing officer, and 
 14.8   rental of hearing rooms, but not including district attorney 
 14.9   fees.  To receive state aid under this paragraph, a school 
 14.10  district shall submit to the commissioner ~~at the end of the~~ 
 14.11  ~~school year~~ by August 1 an itemized list of unreimbursed actual 
 14.12  costs for fees and other expenses under this paragraph incurred 
 14.13  after June 30, 1998, for hearings completed during the previous 
 14.14  fiscal year.  State funds used for aid to school districts under 
 14.15  this paragraph shall be based on the unreimbursed actual costs 
 14.16  and fees submitted by a district ~~from previous school years~~. 
 14.17     (b) For fiscal year 1999 and thereafter, a school district, 
 14.18  to the extent to which it prevails under United States Code, 
 14.19  title 20, section 1415(i)(3)(B)(D) and Rule 68 of the Federal 
 14.20  Rules of Civil Procedure, shall receive state aid equal to 50 
 14.21  percent of the total actual cost of attorney fees incurred after 
 14.22  a request for a due process hearing under section 125A.09, 
 14.23  subdivisions 6, 9, and 11, is served upon the parties.  A 
 14.24  district is eligible for reimbursement for attorney fees under 
 14.25  this paragraph only if: 
 14.26     (1) a court of competent jurisdiction determines that the 
 14.27  parent is not the prevailing party under United States Code, 
 14.28  title 20, section 1415(i)(3)(B)(D), or the parties stipulate 
 14.29  that the parent is not the prevailing party; 
 14.30     (2) the district has made a good faith effort to resolve 
 14.31  the dispute through mediation, but the obligation to mediate 
 14.32  does not compel the district to agree to a proposal or make a 
 14.33  concession; and 
 14.34     (3) the district made an offer of settlement under Rule 68 
 14.35  of the Federal Rules of Civil Procedure.  
 14.36     To receive aid, a school district that meets the criteria 
 15.1   of this paragraph shall submit to the commissioner ~~at the end of~~ 
 15.2   ~~the school year~~ by August 1 an itemized list of unreimbursed 
 15.3   actual attorney fees incurred after June 30, 1998, associated 
 15.4   with a due process hearing completed during the previous fiscal 
 15.5   year under section 125A.09, subdivisions 6, 9, and 11.  Aid 
 15.6   under this paragraph for each school district is based on 
 15.7   unreimbursed actual attorney fees submitted by the district ~~from~~ 
 15.8   ~~previous school years~~. 
 15.9      (c) For fiscal year 1999 and thereafter, a school district 
 15.10  is eligible to receive state aid for 50 percent of the total 
 15.11  actual cost of attorney fees it incurs after June 30, 1998, in 
 15.12  appealing to a court of competent jurisdiction the findings, 
 15.13  conclusions, and order of a due process hearing under section 
 15.14  125A.09, subdivisions 6, 9, and 11.  The district is eligible 
 15.15  for reimbursement under this paragraph only if the commissioner 
 15.16  authorizes the reimbursement after evaluating the merits of the 
 15.17  case.  In a case where the commissioner is a named party in the 
 15.18  litigation, the commissioner of the bureau of mediation services 
 15.19  shall make the determination regarding reimbursement.  The 
 15.20  commissioner's decision is final.  
 15.21     (d) The commissioner shall provide districts with a form on 
 15.22  which to annually report litigation costs under this section and 
 15.23  shall base aid estimates on ~~those~~ preliminary reports submitted 
 15.24  by the district during the current fiscal year. 
 15.25     Sec. 17.  Minnesota Statutes 1998, section 125A.76, 
 15.26  subdivision 5, is amended to read: 
 15.27     Subd. 5.  [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] (a) 
 15.28  A school district's special education revenue for fiscal year 
 15.29  1996 and later equals the state total special education revenue, 
 15.30  minus the amount determined under ~~paragraph~~ paragraphs (b) and 
 15.31  (c), times the ratio of the district's adjusted special 
 15.32  education base revenue to the state total adjusted special 
 15.33  education base revenue.  If the state board of education 
 15.34  modifies its rules for special education in a manner that 
 15.35  increases a district's special education obligations or service 
 15.36  requirements, the commissioner shall annually increase each 
 16.1   district's special education revenue by the amount necessary to 
 16.2   compensate for the increased service requirements.  The 
 16.3   additional revenue equals the cost in the current year 
 16.4   attributable to rule changes not reflected in the computation of 
 16.5   special education base revenue, multiplied by the appropriate 
 16.6   percentages from subdivision 2. 
 16.7      (b) Notwithstanding paragraph (a), if the special education 
 16.8   base revenue for a district equals zero, the special education 
 16.9   revenue equals the amount computed according to subdivision 2 
 16.10  using current year data. 
 16.11     (c) Notwithstanding paragraphs (a) and (b), if the special 
 16.12  education base revenue for a district is greater than zero, and 
 16.13  the base year amount for the district under subdivision 2, 
 16.14  paragraph (a), clause (7), equals zero, the special education 
 16.15  revenue equals the sum of the amount computed according to 
 16.16  paragraph (a), plus the amount computed according to subdivision 
 16.17  2, paragraph (a), clause (7), using current year data. 
 16.18     Sec. 18.  Minnesota Statutes 1998, section 125A.79, 
 16.19  subdivision 1, is amended to read: 
 16.20     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 16.21  section, the definitions in this subdivision apply. 
 16.22     (a) "Unreimbursed special education cost" means the sum of 
 16.23  the following: 
 16.24     (1) expenditures for teachers' salaries, contracted 
 16.25  services, supplies, equipment, and transportation services 
 16.26  eligible for revenue under section 125A.76; plus 
 16.27     (2) expenditures for tuition bills received under sections 
 16.28  125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
 16.29  under sections 125A.76, subdivision 2, and 124.3202, subdivision 
 16.30  1; minus 
 16.31     (3) revenue for teachers' salaries, contracted services, 
 16.32  supplies, and equipment under sections 124.3202 and 124A.76; 
 16.33  minus 
 16.34     (4) tuition receipts under sections 125A.03 to 125A.24 and 
 16.35  125A.65 for services eligible for revenue under sections 
 16.36  124.3202, subdivision 1, and 124A.76, subdivision 2. 
 17.1      (b) "General revenue" means for fiscal year 1996, the sum 
 17.2   of the general education revenue according to section 126C.10, 
 17.3   subdivision 1, as adjusted according to section 127A.47, 
 17.4   subdivision 7, plus the total referendum revenue according to 
 17.5   section 126C.17, subdivision 4.  For fiscal years 1997 and 
 17.6   later, "general revenue" means the sum of the general education 
 17.7   revenue according to section 126C.10, subdivision 1, as adjusted 
 17.8   according to section 127A.47, ~~subdivision~~ subdivisions 7 and 8, 
 17.9   plus the total referendum revenue minus transportation sparsity 
 17.10  revenue minus total operating capital revenue. 
 17.11     Sec. 19.  Minnesota Statutes 1998, section 126C.05, 
 17.12  subdivision 3, is amended to read: 
 17.13     Subd. 3.  [COMPENSATION REVENUE PUPIL UNITS.] Compensation 
 17.14  revenue pupil units for fiscal year 1998 and thereafter must be 
 17.15  computed according to this subdivision.  
 17.16     (a) The compensation revenue concentration percentage for 
 17.17  each building in a district equals the product of 100 times the 
 17.18  ratio of:  
 17.19     (1) the sum of the number of pupils enrolled in the 
 17.20  building eligible to receive free lunch plus one-half of the 
 17.21  pupils eligible to receive reduced priced lunch on October 1 of 
 17.22  the previous fiscal year; to 
 17.23     (2) the number of pupils enrolled in the building on 
 17.24  October 1 of the previous fiscal year. 
 17.25     (b) The compensation revenue pupil weighting factor for a 
 17.26  building equals the lesser of one or the quotient obtained by 
 17.27  dividing the building's compensation revenue concentration 
 17.28  percentage by 80.0.  
 17.29     (c) The compensation revenue pupil units for a building 
 17.30  equals the product of:  
 17.31     (1) the sum of the number of pupils enrolled in the 
 17.32  building eligible to receive free lunch and one-half of the 
 17.33  pupils eligible to receive reduced priced lunch on October 1 of 
 17.34  the previous fiscal year; times 
 17.35     (2) the compensation revenue pupil weighting factor for the 
 17.36  building; times 
 18.1      (3) .60. 
 18.2      (d) Notwithstanding paragraphs (a) to (c), for charter 
 18.3   schools and contracted alternative programs in the first year of 
 18.4   operation, compensation revenue pupil units shall be computed 
 18.5   using data for the current fiscal year.  If the charter school 
 18.6   or contracted alternative program begins operation after October 
 18.7   1, compensatory revenue pupil units shall be computed based on 
 18.8   pupils enrolled on an alternate date determined by the 
 18.9   commissioner, and the compensation revenue pupil units shall be 
 18.10  prorated based on the ratio of the number of days of student 
 18.11  instruction to 170 days. 
 18.12     (e) The percentages in this subdivision must be based on 
 18.13  the count of individual pupils and not on a building average or 
 18.14  minimum. 
 18.15     Sec. 20.  Minnesota Statutes 1998, section 126C.10, 
 18.16  subdivision 10, is amended to read: 
 18.17     Subd. 10.  [SUPPLEMENTAL LEVY.] To obtain supplemental 
 18.18  revenue, a district may levy an amount not more than the product 
 18.19  of its supplemental revenue for the school year times the lesser 
 18.20  of one or the ratio of its adjusted net tax capacity per 
 18.21  resident pupil unit to ~~$10,000~~ $8,404. 
 18.22     Sec. 21.  Minnesota Statutes 1998, section 126C.10, 
 18.23  subdivision 14, is amended to read: 
 18.24     Subd. 14.  [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total 
 18.25  operating capital revenue may be used only for the following 
 18.26  purposes: 
 18.27     (1) to acquire land for school purposes; 
 18.28     (2) to acquire or construct buildings for school purposes; 
 18.29     (3) to rent or lease buildings, including the costs of 
 18.30  building repair or improvement that are part of a lease 
 18.31  agreement; 
 18.32     (4) to improve and repair school sites and buildings, and 
 18.33  equip or reequip school buildings with permanent attached 
 18.34  fixtures; 
 18.35     (5) for a surplus school building that is used 
 18.36  substantially for a public nonschool purpose; 
 19.1      (6) to eliminate barriers or increase access to school 
 19.2   buildings by individuals with a disability; 
 19.3      (7) to bring school buildings into compliance with the 
 19.4   Uniform Fire Code adopted according to chapter 299F; 
 19.5      (8) to remove asbestos from school buildings, encapsulate 
 19.6   asbestos, or make asbestos-related repairs; 
 19.7      (9) to clean up and dispose of polychlorinated biphenyls 
 19.8   found in school buildings; 
 19.9      (10) to clean up, remove, dispose of, and make repairs 
 19.10  related to storing heating fuel or transportation fuels such as 
 19.11  alcohol, gasoline, fuel oil, and special fuel, as defined in 
 19.12  section 296A.01; 
 19.13     (11) for energy audits for school buildings and to modify 
 19.14  buildings if the audit indicates the cost of the modification 
 19.15  can be recovered within ten years; 
 19.16     (12) to improve buildings that are leased according to 
 19.17  section 123B.51, subdivision 4; 
 19.18     (13) to pay special assessments levied against school 
 19.19  property but not to pay assessments for service charges; 
 19.20     (14) to pay principal and interest on state loans for 
 19.21  energy conservation according to section 216C.37 or loans made 
 19.22  under the Northeast Minnesota Economic Protection Trust Fund Act 
 19.23  according to sections 298.292 to 298.298; 
 19.24     (15) to purchase or lease interactive telecommunications 
 19.25  equipment; 
 19.26     (16) by board resolution, to transfer money into the debt 
 19.27  redemption fund to:  (i) pay the amounts needed to meet, when 
 19.28  due, principal and interest payments on certain obligations 
 19.29  issued according to chapter 475; or (ii) pay principal and 
 19.30  interest on debt service loans or capital loans according to 
 19.31  section 126C.70; 
 19.32     (17) to pay ~~capital expenditure equipment-related~~ operating 
 19.33  capital-related assessments of any entity formed under a 
 19.34  cooperative agreement between two or more districts; 
 19.35     (18) to purchase or lease computers and related materials, 
 19.36  copying machines, telecommunications equipment, and other 
 20.1   noninstructional equipment; 
 20.2      (19) to purchase or lease assistive technology or equipment 
 20.3   for instructional programs; 
 20.4      (20) to purchase textbooks; 
 20.5      (21) to purchase new and replacement library books; 
 20.6      (22) to purchase vehicles; 
 20.7      (23) to purchase or lease telecommunications equipment, 
 20.8   computers, and related equipment for integrated information 
 20.9   management systems for: 
 20.10     (i) managing and reporting learner outcome information for 
 20.11  all students under a results-oriented graduation rule; 
 20.12     (ii) managing student assessment, services, and achievement 
 20.13  information required for students with individual education 
 20.14  plans; and 
 20.15     (iii) other classroom information management needs; and 
 20.16     (24) to pay personnel costs directly related to the 
 20.17  acquisition, operation, and maintenance of telecommunications 
 20.18  systems, computers, related equipment, and network and 
 20.19  applications software. 
 20.20     Sec. 22.  Minnesota Statutes 1998, section 126C.10, 
 20.21  subdivision 19, is amended to read: 
 20.22     Subd. 19.  [TRANSITION ALLOWANCE.] (a) A district's 
 20.23  transportation transition allowance for fiscal year 1998 and 
 20.24  later equals the result of the following: 
 20.25     (1) if the result in subdivision 18, paragraph (a), clause 
 20.26  (iii), for fiscal year 1998 is less than the fiscal year 1996 
 20.27  base allowance, the transportation transition allowance equals 
 20.28  the fiscal year 1996 base allowance minus the result in 
 20.29  subdivision 18, paragraph (a), clause (iii); or 
 20.30     (2) if the result in subdivision 18, paragraph (a), clause 
 20.31  (iii), for fiscal year 1998 and later is greater than or equal 
 20.32  to the fiscal year 1996 base allowance, the transportation 
 20.33  transition allowance equals zero. 
 20.34     (b) A district's compensatory transition allowance equals 
 20.35  the greater of zero or the difference between:  
 20.36     (1) the amount of compensatory revenue the district would 
 21.1   have received under Minnesota Statutes 1996, section 124A.22, 
 21.2   subdivision 3, for fiscal year 1998 computed using a basic 
 21.3   formula allowance of $3,281; and 
 21.4      (2) the amount the district receives under subdivision 3; 
 21.5   divided by 
 21.6      (3) the district's actual pupil units for fiscal year 1998. 
 21.7      (c) A district's cooperation transition allowance for 
 21.8   fiscal year 2001 and later equals the greater of zero or the 
 21.9   difference between:  
 21.10     (1) $25,000; and 
 21.11     (2) $67 times the district's resident pupil units for 
 21.12  fiscal year 2001 divided by; 
 21.13     (3) the district's resident pupil units for fiscal year 
 21.14  2001. 
 21.15     (d) A district's transition allowance for fiscal ~~year~~ years 
 21.16  1999 and 2000 is equal to the sum of its transportation 
 21.17  transition allowance and its compensatory transition allowance.  
 21.18  A district's transition allowance for fiscal year ~~2000~~ 2001 and 
 21.19  thereafter is equal to the sum of its transportation transition 
 21.20  allowance, its compensatory transition allowance, and its 
 21.21  cooperation transition allowance. 
 21.22     Sec. 23.  Minnesota Statutes 1998, section 126C.10, 
 21.23  subdivision 21, is amended to read: 
 21.24     Subd. 21.  [TRANSITION LEVY ADJUSTMENT.] A district's 
 21.25  general education levy shall be adjusted by an amount equal to 
 21.26  the district's transition revenue times the lesser of 1 or the 
 21.27  ratio of its adjusted net tax capacity per resident pupil unit 
 21.28  to ~~$10,000~~ $8,404. 
 21.29     Sec. 24.  Minnesota Statutes 1998, section 126C.12, 
 21.30  subdivision 4, is amended to read: 
 21.31     Subd. 4.  [REVENUE USE.] (a) Revenue must be used according 
 21.32  to either paragraph (b) or (c). 
 21.33     (b) Revenue must be used to reduce and maintain the 
 21.34  district's instructor to learner ratios in kindergarten through 
 21.35  grade 6 to a level of 1 to 17 on average.  The district must 
 21.36  prioritize the use of the revenue to attain this level initially 
 22.1   in kindergarten and grade 1 and then through the subsequent 
 22.2   grades as revenue is available.  
 22.3      (c) The revenue may be used to prepare and use an 
 22.4   individualized learning plan for each learner.  A district must 
 22.5   not increase the district wide instructor-to-learner ratios in 
 22.6   other grades as a result of reducing instructor-to-learner 
 22.7   ratios in kindergarten through grade 6.  Revenue may not be used 
 22.8   to provide instructor preparation time or to provide the 
 22.9   district's share of revenue required under section ~~124D.67~~ 
 22.10  126C.10, subdivision 4, clause (4).  A district may use a 
 22.11  portion of the revenue reserved under this section to employ up 
 22.12  to the same number of full-time equivalent education assistants 
 22.13  or aides as the district employed during the 1992-1993 school 
 22.14  year under Minnesota Statutes 1992, section 124.331, subdivision 
 22.15  2. 
 22.16     Sec. 25.  Minnesota Statutes 1998, section 126C.15, 
 22.17  subdivision 1, is amended to read: 
 22.18     Subdivision 1.  [USE OF THE REVENUE.] The ~~compensatory~~ 
 22.19  ~~education~~ basic skills revenue under section 126C.10, 
 22.20  subdivision ~~3~~ 4, and the portion of the transition revenue 
 22.21  adjustment under section 126C.10, subdivision 20, attributable 
 22.22  to the compensatory transition allowance under section 126C.10, 
 22.23  subdivision 19, paragraph (b), must be used to meet the 
 22.24  educational needs of pupils who enroll under-prepared to learn 
 22.25  and whose progress toward meeting state or local content or 
 22.26  performance standards is below the level that is appropriate for 
 22.27  learners of their age.  Any of the following may be provided to 
 22.28  meet these learners' needs: 
 22.29     (1) direct instructional services under the assurance of 
 22.30  mastery program according to section 124D.66; 
 22.31     (2) remedial instruction in reading, language arts, 
 22.32  mathematics, other content areas, or study skills to improve the 
 22.33  achievement level of these learners; 
 22.34     (3) additional teachers and teacher aides to provide more 
 22.35  individualized instruction to these learners through individual 
 22.36  tutoring, lower instructor-to-learner ratios, or team teaching; 
 23.1      (4) a longer school day or week during the regular school 
 23.2   year or through a summer program that may be offered directly by 
 23.3   the site or under a performance-based contract with a 
 23.4   community-based organization; 
 23.5      (5) comprehensive and ongoing staff development consistent 
 23.6   with district and site plans according to section 122A.60, for 
 23.7   teachers, teacher aides, principals, and other personnel to 
 23.8   improve their ability to identify the needs of these learners 
 23.9   and provide appropriate remediation, intervention, 
 23.10  accommodations, or modifications; 
 23.11     (6) instructional materials and technology appropriate for 
 23.12  meeting the individual needs of these learners; 
 23.13     (7) programs to reduce truancy, encourage completion of 
 23.14  high school, enhance self-concept, provide health services, 
 23.15  provide nutrition services, provide a safe and secure learning 
 23.16  environment, provide coordination for pupils receiving services 
 23.17  from other governmental agencies, provide psychological services 
 23.18  to determine the level of social, emotional, cognitive, and 
 23.19  intellectual development, and provide counseling services, 
 23.20  guidance services, and social work services; 
 23.21     (8) bilingual programs, bicultural programs, and programs 
 23.22  for learners of limited English proficiency; 
 23.23     (9) all day kindergarten; 
 23.24     (10) extended school day and extended school year programs; 
 23.25     (11) substantial parent involvement in developing and 
 23.26  implementing remedial education or intervention plans for a 
 23.27  learner, including learning contracts between the school, the 
 23.28  learner, and the parent that establish achievement goals and 
 23.29  responsibilities of the learner and the learner's parent or 
 23.30  guardian; and 
 23.31     (12) other methods to increase achievement, as needed.  
 23.32     Sec. 26.  Minnesota Statutes 1998, section 126C.15, 
 23.33  subdivision 2, is amended to read: 
 23.34     Subd. 2.  [BUILDING ALLOCATION.] (a) A district must 
 23.35  allocate its compensatory revenue to each school building in the 
 23.36  district where the children who have generated the revenue are 
 24.1   served. 
 24.2      (b) Notwithstanding paragraph (a), for fiscal years 1999 
 24.3   and 2000, upon approval by the commissioner, a district may 
 24.4   allocate up to five percent of the amount of compensatory 
 24.5   revenue that the district would have received under Minnesota 
 24.6   Statutes 1996, section ~~126C.10~~ 124A.22, subdivision 3, for 
 24.7   fiscal year 1998, computed using a basic formula allowance of 
 24.8   $3,581, to school sites according to a plan adopted by the 
 24.9   school board. 
 24.10     (c) For the purposes of this section and section 126C.05, 
 24.11  subdivision 3, "building" means education site as defined in 
 24.12  section 123B.04, subdivision 1. 
 24.13     (d) If the pupil is served at a site other than one owned 
 24.14  and operated by the district, the revenue shall be paid to the 
 24.15  district and used for services for pupils who generate the 
 24.16  revenue. 
 24.17     Sec. 27.  Minnesota Statutes 1998, section 126C.17, 
 24.18  subdivision 6, is amended to read: 
 24.19     Subd. 6.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
 24.20  year 1999 and thereafter, a district's referendum equalization 
 24.21  levy for a referendum levied against the referendum market value 
 24.22  of all taxable property as defined in section 126C.01, 
 24.23  subdivision 3, equals the district's referendum equalization 
 24.24  revenue times the lesser of one or the ratio of the district's 
 24.25  referendum market value per resident pupil unit to $476,000. 
 24.26     (b) For fiscal year 1999 and thereafter, a district's 
 24.27  referendum equalization levy for a referendum levied against the 
 24.28  net tax capacity of all taxable property equals the district's 
 24.29  referendum equalization revenue times the lesser of one or the 
 24.30  ratio of the district's adjusted net tax capacity per resident 
 24.31  pupil unit to ~~$10,000~~ $8,404. 
 24.32     Sec. 28.  Minnesota Statutes 1998, section 126C.22, 
 24.33  subdivision 2, is amended to read: 
 24.34     Subd. 2.  [DISTRICT COOPERATION LEVY.] To receive district 
 24.35  cooperation revenue, a district may levy an amount equal to the 
 24.36  district's cooperation revenue multiplied by the lesser of one, 
 25.1   or the ratio of the quotient derived by dividing the adjusted 
 25.2   net tax capacity of the district for the year preceding the year 
 25.3   the levy is certified by the resident pupil units in the 
 25.4   district for the school year to which the levy is attributable 
 25.5   to ~~$3,500~~ $2,942. 
 25.6      Sec. 29.  Minnesota Statutes 1998, section 126C.40, 
 25.7   subdivision 4, is amended to read: 
 25.8      Subd. 4.  [INTERACTIVE TELEVISION.] (a) A district with its 
 25.9   central administrative office located within economic 
 25.10  development region one, two, three, four, five, six, seven, 
 25.11  eight, nine, and ten may apply to the commissioner for ITV 
 25.12  revenue up to the greater of ~~.5~~ .6 percent of the adjusted net 
 25.13  tax capacity of the district or $25,000.  Eligible interactive 
 25.14  television expenditures include the construction, maintenance, 
 25.15  and lease costs of an interactive television system for 
 25.16  instructional purposes.  An eligible school district that has 
 25.17  completed the construction of its interactive television system 
 25.18  may also purchase computer hardware and software used primarily 
 25.19  for instructional purposes and access to the Internet provided 
 25.20  that its total expenditures for interactive television 
 25.21  maintenance and lease costs and for computer hardware and 
 25.22  software under this subdivision do not exceed its interactive 
 25.23  television revenue for fiscal year 1998.  The approval by the 
 25.24  commissioner and the application procedures set forth in 
 25.25  subdivision 1 shall apply to the revenue in this subdivision.  
 25.26  In granting the approval, the commissioner shall consider 
 25.27  whether the district is maximizing efficiency through peak use 
 25.28  and off-peak use pricing structures. 
 25.29     (b) To obtain ITV revenue, a district may levy an amount 
 25.30  not to exceed the district's ITV revenue times the lesser of one 
 25.31  or the ratio of: 
 25.32     (1) the quotient derived by dividing the adjusted net tax 
 25.33  capacity of the district for the year before the year the levy 
 25.34  is certified by the resident pupil units in the district for the 
 25.35  year to which the levy is attributable; to 
 25.36     (2) ~~$10,000~~ $8,404.  
 26.1      (c) A district's ITV aid is the difference between its ITV 
 26.2   revenue and the ITV levy. 
 26.3      (d) The revenue in the first year after reorganization for 
 26.4   a district that has reorganized under sections 123A.35 to 
 26.5   123A.41, 123A.46, or 123A.48 shall be the greater of: 
 26.6      (1) the revenue computed for the reorganized district under 
 26.7   paragraph (a), or 
 26.8      (2)(i) for two districts that reorganized, 75 percent of 
 26.9   the revenue computed as if the districts involved in the 
 26.10  reorganization were separate, or 
 26.11     (ii) for three or more districts that reorganized, 50 
 26.12  percent of the revenue computed as if the districts involved in 
 26.13  the reorganization were separate. 
 26.14     (e) The revenue in paragraph (d) is increased by the 
 26.15  difference between the initial revenue and ITV lease costs for 
 26.16  leases that had been entered into by the preexisting districts 
 26.17  on the effective date of the consolidation or combination and 
 26.18  with a term not exceeding ten years.  This increased revenue is 
 26.19  only available for the remaining term of the lease.  However, in 
 26.20  no case shall the revenue exceed the amount available had the 
 26.21  preexisting districts received revenue separately. 
 26.22     (f) Effective for fiscal year 2000, the revenue under this 
 26.23  section shall be 75 percent of the amount determined in 
 26.24  paragraph (a); for fiscal year 2001, 50 percent of the amount in 
 26.25  paragraph (a); and for fiscal year 2002, 25 percent of the 
 26.26  amount in paragraph (a). 
 26.27     (g) This ~~section~~ subdivision expires effective for revenue 
 26.28  for fiscal year 2003~~, or when leases in existence on the~~ 
 26.29  ~~effective date of Laws 1997, First Special Session chapter 4,~~ 
 26.30  ~~expire~~.  
 26.31     Sec. 30.  Minnesota Statutes 1998, section 126C.42, 
 26.32  subdivision 1, is amended to read: 
 26.33     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
 26.34  each year in which so required by this subdivision, a district 
 26.35  must make an additional levy to eliminate its statutory 
 26.36  operating debt, determined as of June 30, 1977, and certified 
 27.1   and adjusted by the commissioner.  This levy shall not be made 
 27.2   in more than 30 successive years and each year before it is 
 27.3   made, it must be approved by the commissioner and the approval 
 27.4   shall specify its amount.  This levy shall be an amount which is 
 27.5   equal to the amount raised by a levy of a net tax rate of ~~1.66~~ 
 27.6   1.98 percent times the adjusted net tax capacity of the district 
 27.7   for the preceding year for taxes payable in ~~1991~~ 2000 and 
 27.8   thereafter; provided that in the last year in which the district 
 27.9   is required to make this levy, it must levy an amount not to 
 27.10  exceed the amount raised by a levy of a net tax rate of ~~1.66~~ 
 27.11  1.98 percent times the adjusted net tax capacity of the district 
 27.12  for the preceding year for taxes payable in ~~1991~~ 2000 and 
 27.13  thereafter.  When the sum of the cumulative levies made pursuant 
 27.14  to this subdivision and transfers made according to section 
 27.15  123B.79, subdivision 6, equals an amount equal to the statutory 
 27.16  operating debt of the district, the levy shall be discontinued. 
 27.17     (b) The district must establish a special account in the 
 27.18  general fund which shall be designated "appropriated fund 
 27.19  balance reserve account for purposes of reducing statutory 
 27.20  operating debt" on its books and records.  This account shall 
 27.21  reflect the levy authorized pursuant to this subdivision.  The 
 27.22  proceeds of this levy must be used only for cash flow 
 27.23  requirements and must not be used to supplement district 
 27.24  revenues or income for the purposes of increasing the district's 
 27.25  expenditures or budgets. 
 27.26     (c) Any district which is required to levy pursuant to this 
 27.27  subdivision must certify the maximum levy allowable under 
 27.28  section 126C.13, subdivision 2, in that same year. 
 27.29     (d) Each district shall make permanent fund balance 
 27.30  transfers so that the total statutory operating debt of the 
 27.31  district is reflected in the general fund as of June 30, 1977. 
 27.32     Sec. 31.  Minnesota Statutes 1998, section 126C.42, 
 27.33  subdivision 2, is amended to read: 
 27.34     Subd. 2.  [1983 OPERATING DEBT.] (1) Each year, a district 
 27.35  may make an additional levy to eliminate a deficit in the net 
 27.36  unappropriated operating funds of the district, determined as of 
 28.1   June 30, 1983, and certified and adjusted by the commissioner.  
 28.2   This levy may in each year be an amount not to exceed the amount 
 28.3   raised by a levy of a net tax rate of ~~1.85~~ 2.2 percent times the 
 28.4   adjusted net tax capacity for taxes payable in 1991 and 
 28.5   thereafter of the district for the preceding year as determined 
 28.6   by the commissioner.  However, the total amount of this levy for 
 28.7   all years it is made must not exceed the lesser of (a) the 
 28.8   amount of the deficit in the net unappropriated operating funds 
 28.9   of the district as of June 30, 1983, or (b) the amount of the 
 28.10  aid reduction, according to Laws 1981, Third Special Session 
 28.11  chapter 2, article 2, section 2, but excluding clauses (l), (m), 
 28.12  (n), (o), and (p), and Laws 1982, Third Special Session chapter 
 28.13  1, article 3, section 6, to the district in fiscal year 1983.  
 28.14  When the cumulative levies made pursuant to this subdivision 
 28.15  equal the total amount permitted by this subdivision, the levy 
 28.16  must be discontinued.  
 28.17     (2) The proceeds of this levy must be used only for cash 
 28.18  flow requirements and must not be used to supplement district 
 28.19  revenues or income for the purposes of increasing the district's 
 28.20  expenditures or budgets.  
 28.21     (3) A district that levies pursuant to this subdivision 
 28.22  must certify the maximum levy allowable under section 126C.13, 
 28.23  subdivision 2, in that same year. 
 28.24     Sec. 32.  Minnesota Statutes 1998, section 126C.63, 
 28.25  subdivision 5, is amended to read: 
 28.26     Subd. 5.  [LEVY.] "Levy" means a district's net debt 
 28.27  service levy after the reduction of debt service equalization 
 28.28  aid under section 123B.53, subdivision 6.  For taxes payable in 
 28.29  1994 and later, each district's maximum effort debt service levy 
 28.30  for purposes of subdivision 8, must be reduced by an equal 
 28.31  number of percentage points if the commissioner determines that 
 28.32  the levy reduction will not result in a statewide property tax 
 28.33  as would be required under Minnesota Statutes 1992, section 
 28.34  124.46, subdivision 3.  A district's levy that is adjusted under 
 28.35  this section must not be reduced below ~~18.74~~ 22.3 percent of the 
 28.36  district's adjusted net tax capacity. 
 29.1      Sec. 33.  Minnesota Statutes 1998, section 126C.63, 
 29.2   subdivision 8, is amended to read: 
 29.3      Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] "Maximum 
 29.4   effort debt service levy" means the lesser of: 
 29.5      (1) a levy in whichever of the following amounts is 
 29.6   applicable: 
 29.7      (a) in any district receiving a debt service loan for a 
 29.8   debt service levy payable in 1991 and thereafter, or granted a 
 29.9   capital loan after January 1, 1990, a levy in a total dollar 
 29.10  amount computed at a rate of ~~20~~ 24 percent of adjusted net tax 
 29.11  capacity for taxes payable in 1991 and thereafter; 
 29.12     (b) in any district granted a debt service loan after July 
 29.13  31, 1981, or granted a capital loan which is approved after July 
 29.14  31, 1981, a levy in a total dollar amount computed as a ~~tax rate~~ 
 29.15  ~~of 13.08 percent on the adjusted gross tax capacity for taxes~~ 
 29.16  ~~payable in 1990 or a~~ tax rate of ~~18.42~~ 21.92 percent on the 
 29.17  adjusted net tax capacity for taxes payable in 1991 and 
 29.18  thereafter; 
 29.19     ~~(c) in any district granted a debt service loan before~~ 
 29.20  ~~August 1, 1981, or granted a capital loan which was approved~~ 
 29.21  ~~before August 1, 1981, a levy in a total dollar amount computed~~ 
 29.22  ~~as a tax rate of 12.26 percent on the adjusted gross tax~~ 
 29.23  ~~capacity for taxes payable in 1990 or a tax rate of 17.17~~ 
 29.24  ~~percent on the adjusted net tax capacity for taxes payable in~~ 
 29.25  ~~1991 and thereafter, until and unless the district receives an~~ 
 29.26  ~~additional loan;~~ or 
 29.27     (2) a levy ~~in whichever of the following amounts is~~ 
 29.28  ~~applicable:~~ 
 29.29     ~~(a) in any district which received a debt service or~~ 
 29.30  ~~capital loan from the state before January 1, 1965, a levy in a~~ 
 29.31  ~~total dollar amount computed as 4.10 mills on the market value~~ 
 29.32  ~~in each year, unless the district applies or has applied for an~~ 
 29.33  ~~additional loan subsequent to January 1, 1965, or issues or has~~ 
 29.34  ~~issued bonds on the public market, other than bonds refunding~~ 
 29.35  ~~state loans, subsequent to January 1, 1967;~~ 
 29.36     ~~(b) in any district granted a debt service or capital loan~~ 
 30.1   ~~between January 1, 1965, and July 1, 1969, a levy in a total~~ 
 30.2   ~~dollar amount computed as 5-1/2 mills on the market value in~~ 
 30.3   ~~each year, until and unless the district receives an additional~~ 
 30.4   ~~loan;~~ 
 30.5      ~~(c) in any district granted a debt service or capital loan~~ 
 30.6   ~~between July 1, 1969, and July 1, 1975, a levy in a total dollar~~ 
 30.7   ~~amount computed as 6.3 mills on market value in each year until~~ 
 30.8   ~~and unless the district has received an additional loan;~~ 
 30.9      ~~(d)~~ in any district for which a capital loan was approved 
 30.10  prior to August 1, 1981, a levy in a total dollar amount equal 
 30.11  to the sum of the amount of the required debt service levy and 
 30.12  an amount which when levied annually will in the opinion of the 
 30.13  commissioner be sufficient to retire the remaining interest and 
 30.14  principal on any outstanding loans from the state within 30 
 30.15  years of the original date when the capital loan was granted.  
 30.16     The board in any district affected by the provisions of 
 30.17  clause (2)~~(d)~~ may elect instead to determine the amount of its 
 30.18  levy according to the provisions of clause (1).  If a district's 
 30.19  capital loan is not paid within 30 years because it elects to 
 30.20  determine the amount of its levy according to the provisions of 
 30.21  clause (2)~~(d)~~, the liability of the district for the amount of 
 30.22  the difference between the amount it levied under clause (2)~~(d)~~ 
 30.23  and the amount it would have levied under clause (1), and for 
 30.24  interest on the amount of that difference, must not be satisfied 
 30.25  and discharged pursuant to Minnesota Statutes 1988, or an 
 30.26  earlier edition of Minnesota Statutes if applicable, section 
 30.27  124.43, subdivision 4. 
 30.28     Sec. 34.  Minnesota Statutes 1998, section 126C.69, 
 30.29  subdivision 2, is amended to read: 
 30.30     Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 
 30.31  1, ~~1992~~ 1999, a district is not eligible for a capital loan 
 30.32  unless the district's estimated net debt tax rate as computed by 
 30.33  the commissioner after debt service equalization aid would be 
 30.34  more than ~~20~~ 24 percent of adjusted net tax capacity.  The 
 30.35  estimate must assume a 20-year maturity schedule for new debt. 
 30.36     Sec. 35.  Minnesota Statutes 1998, section 126C.69, 
 31.1   subdivision 9, is amended to read: 
 31.2      Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
 31.3   recommended for approval for a district exceeding an amount 
 31.4   computed as follows: 
 31.5      (1) the amount requested by the district under subdivision 
 31.6   6; 
 31.7      (2) plus the aggregate principal amount of general 
 31.8   obligation bonds of the district outstanding on June 30 of the 
 31.9   year following the year the application was received, not 
 31.10  exceeding the limitation on net debt of the district in section 
 31.11  475.53, subdivision 4, or ~~305~~ 363 percent of its adjusted net 
 31.12  tax capacity as most recently determined, whichever is less; 
 31.13     (3) less the maximum net debt permissible for the district 
 31.14  on December 1 of the year the application is received, under the 
 31.15  limitation in section 475.53, subdivision 4, or ~~305~~ 363 percent 
 31.16  of its adjusted net tax capacity as most recently determined, 
 31.17  whichever is less; 
 31.18     (4) less any amount by which the amount voted exceeds the 
 31.19  total cost of the facilities for which the loan is granted.  
 31.20     (b) The loan may be approved in an amount computed as 
 31.21  provided in paragraph (a), clauses (1) to (3), subject to later 
 31.22  reduction according to paragraph (a), clause (4). 
 31.23     Sec. 36.  Minnesota Statutes 1998, section 127A.44, 
 31.24  subdivision 2, is amended to read: 
 31.25     Subd. 2.  [ADJUSTMENT TO AIDS.] (a) The amount specified in 
 31.26  subdivision 1 shall be used to adjust the following state aids 
 31.27  and credits in the order listed: 
 31.28     (1) general education aid authorized in section 126C.13; 
 31.29     (2) secondary vocational aid authorized in section 
 31.30  124D.453; 
 31.31     (3) special education aid authorized in sections 125A.75 
 31.32  and 125A.76; 
 31.33     (4) school-to-work program aid for children with a 
 31.34  disability authorized in section 124D.454; 
 31.35     (5) ~~aid for pupils of limited English proficiency~~ 
 31.36  ~~authorized in section 124D.65;~~ 
 32.1      ~~(6)~~ transportation aid authorized in section 123B.92; 
 32.2      ~~(7)~~ (6) community education programs aid authorized in 
 32.3   section 124D.20; 
 32.4      ~~(8)~~ (7) adult education aid authorized in section 124D.52; 
 32.5      ~~(9)~~ (8) early childhood family education aid authorized in 
 32.6   section 124D.135; 
 32.7      ~~(10)~~ (9) capital expenditure aid authorized in section 
 32.8   123B.57; 
 32.9      ~~(11)~~ (10) school district cooperation aid authorized in 
 32.10  section 126C.22; 
 32.11     ~~(12) assurance of mastery aid according to section 124D.67;~~ 
 32.12     ~~(13)~~ (11) homestead and agricultural credit aid, disparity 
 32.13  credit and aid, and changes to credits for prior year 
 32.14  adjustments according to section 273.1398, subdivisions 2, 3, 4, 
 32.15  and 7; 
 32.16     ~~(14)~~ (12) attached machinery aid authorized in section 
 32.17  273.138, subdivision 3; 
 32.18     ~~(15) alternative delivery aid authorized in section~~ 
 32.19  ~~125A.78;~~ 
 32.20     ~~(16) special education equalization aid authorized in~~ 
 32.21  ~~section 125A.77;~~ 
 32.22     ~~(17)~~ (13) special education excess cost aid authorized in 
 32.23  section 125A.79; and 
 32.24     ~~(18)~~ (14) learning readiness aid authorized in section 
 32.25  124D.16~~; and~~ 
 32.26     ~~(19) cooperation combination aid authorized in section~~ 
 32.27  ~~123A.39, subdivision 3~~. 
 32.28     (b) The commissioner shall schedule the timing of the 
 32.29  adjustments to state aids and credits specified in subdivision 
 32.30  1, as close to the end of the fiscal year as possible. 
 32.31     Sec. 37.  Minnesota Statutes 1998, section 127A.47, 
 32.32  subdivision 7, is amended to read: 
 32.33     Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
 32.34  education aid for districts must be adjusted for each pupil 
 32.35  attending a nonresident district under sections 123A.05 to 
 32.36  123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
 33.1   adjustments must be made according to this subdivision. 
 33.2      (a) General education aid paid to a resident district must 
 33.3   be reduced by an amount equal to the general education revenue 
 33.4   exclusive of basic skills revenue attributable to the pupil in 
 33.5   the resident district. 
 33.6      (b) General education aid paid to a district serving a 
 33.7   pupil in programs listed in this subdivision must be increased 
 33.8   by an amount equal to the general education revenue exclusive of 
 33.9   basic skills revenue attributable to the pupil in the 
 33.10  nonresident district.  
 33.11     (c) If the amount of the reduction to be made from the 
 33.12  general education aid of the resident district is greater than 
 33.13  the amount of general education aid otherwise due the district, 
 33.14  the excess reduction must be made from other state aids due the 
 33.15  district. 
 33.16     (d) The district of residence must pay tuition to a 
 33.17  district or an area learning center, operated according to 
 33.18  paragraph (e), providing special instruction and services to a 
 33.19  pupil with a disability, as defined in section 125A.02, or a 
 33.20  pupil, as defined in section 125A.51, who is enrolled in a 
 33.21  program listed in this subdivision.  The tuition must be equal 
 33.22  to (1) the actual cost of providing special instruction and 
 33.23  services to the pupil, including a proportionate amount for debt 
 33.24  service and for capital expenditure facilities and equipment, 
 33.25  and debt service but not including any amount for 
 33.26  transportation, minus (2) the amount of general education 
 33.27  ~~aid~~ revenue and special education aid but not including any 
 33.28  amount for transportation, attributable to that pupil, that is 
 33.29  received by the district providing special instruction and 
 33.30  services. 
 33.31     (e) An area learning center operated by a service 
 33.32  cooperative, intermediate district, education district, or a 
 33.33  joint powers cooperative may elect through the action of the 
 33.34  constituent boards to charge tuition for pupils rather than to 
 33.35  calculate general education aid adjustments under paragraph (a), 
 33.36  (b), or (c).  The tuition must be equal to the greater of the 
 34.1   average general education revenue per pupil unit attributable to 
 34.2   the pupil, or the actual cost of providing the instruction, 
 34.3   excluding transportation costs, if the pupil meets the 
 34.4   requirements of section 125A.02 or 125A.51. 
 34.5      Sec. 38.  Minnesota Statutes 1998, section 127A.49, 
 34.6   subdivision 2, is amended to read: 
 34.7      Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
 34.8   sections 270.07, 375.192, or otherwise, the net tax capacity of 
 34.9   any district for any taxable year is changed after the taxes for 
 34.10  that year have been spread by the county auditor and the local 
 34.11  tax rate as determined by the county auditor based upon the 
 34.12  original net tax capacity is applied upon the changed net tax 
 34.13  capacities, the county auditor shall, prior to February 1 of 
 34.14  each year, certify to the commissioner of children, families, 
 34.15  and learning the amount of any resulting net revenue loss that 
 34.16  accrued to the district during the preceding year.  Each year, 
 34.17  the commissioner shall pay an abatement adjustment to the 
 34.18  district in an amount calculated according to the provisions of 
 34.19  this subdivision.  This amount shall be deducted from the amount 
 34.20  of the levy authorized by section 126C.46.  The amount of the 
 34.21  abatement adjustment must be the product of:  
 34.22     (1) the net revenue loss as certified by the county 
 34.23  auditor, times 
 34.24     (2) the ratio of:  
 34.25     (i) the sum of the amounts of the district's certified levy 
 34.26  in the preceding year according to the following:  
 34.27     (A) section 126C.13 if the district received general 
 34.28  education aid according to that section for the second preceding 
 34.29  year; 
 34.30     (B) ~~section 124.226, subdivisions 1 and 4, if the district~~ 
 34.31  ~~received transportation aid according to section 123B.92 for the~~ 
 34.32  ~~second preceding year;~~ 
 34.33     ~~(C) section 124.243, if the district received capital~~ 
 34.34  ~~expenditure facilities aid according to that section for the~~ 
 34.35  ~~second preceding year;~~ 
 34.36     ~~(D) section 124.244, if the district received capital~~ 
 35.1   ~~expenditure equipment aid according to that section for the~~ 
 35.2   ~~second preceding year;~~ 
 35.3      ~~(E)~~ section 123B.57, if the district received health and 
 35.4   safety aid according to that section for the second preceding 
 35.5   year; 
 35.6      ~~(F)~~ (C) sections 124D.20, 124D.21, and 124D.56, if the 
 35.7   district received aid for community education programs according 
 35.8   to any of those sections for the second preceding year; 
 35.9      ~~(G)~~ (D) section 124D.135, subdivision 3, if the district 
 35.10  received early childhood family education aid according to 
 35.11  section 124D.135 for the second preceding year; and 
 35.12     ~~(H) section 125A.77, subdivision 3, if the district~~ 
 35.13  ~~received special education levy equalization aid according to~~ 
 35.14  ~~that section for the second preceding year;~~ 
 35.15     ~~(I)~~ (E) section 126C.17, subdivision 6, if the district 
 35.16  received referendum equalization aid according to that section 
 35.17  for the second preceding year; ~~and~~ 
 35.18     ~~(J) section 124A.22, subdivision 4a, if the district~~ 
 35.19  ~~received training and experience aid according to that section~~ 
 35.20  ~~for the second preceding year;~~ to 
 35.21     (ii) the total amount of the district's certified levy in 
 35.22  the preceding ~~October~~ December, plus or minus auditor's 
 35.23  adjustments. 
 35.24     Sec. 39.  Minnesota Statutes 1998, section 127A.49, 
 35.25  subdivision 3, is amended to read: 
 35.26     Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
 35.27  tax increment is made to a district pursuant to section 469.176, 
 35.28  subdivision 2, or upon decertification of a tax increment 
 35.29  district, the school district's aid and levy limitations must be 
 35.30  adjusted for the fiscal year in which the excess tax increment 
 35.31  is paid under the provisions of this subdivision. 
 35.32     (b) An amount must be subtracted from the district's aid 
 35.33  for the current fiscal year equal to the product of: 
 35.34     (1) the amount of the payment of excess tax increment to 
 35.35  the district, times 
 35.36     (2) the ratio of: 
 36.1      (i) the sum of the amounts of the district's certified levy 
 36.2   for the fiscal year in which the excess tax increment is paid 
 36.3   according to the following: 
 36.4      (A) section 126C.13, if the district received general 
 36.5   education aid according to that section for the second preceding 
 36.6   year; 
 36.7      (B) ~~section 124.226, subdivisions 1 and 4, if the district~~ 
 36.8   ~~received transportation aid according to section 123B.92 for the~~ 
 36.9   ~~second preceding year;~~ 
 36.10     ~~(C) section 124.243, if the district received capital~~ 
 36.11  ~~expenditure facilities aid according to that section for the~~ 
 36.12  ~~second preceding year;~~ 
 36.13     ~~(D) section 124.244, if the district received capital~~ 
 36.14  ~~expenditure equipment aid according to that section for the~~ 
 36.15  ~~second preceding year;~~ 
 36.16     ~~(E)~~ section 123B.57, if the district received health and 
 36.17  safety aid according to that section for the second preceding 
 36.18  year; 
 36.19     ~~(F)~~ (C) sections 124D.20, 124D.21, and 124D.56, if the 
 36.20  district received aid for community education programs according 
 36.21  to any of those sections for the second preceding year; 
 36.22     ~~(G)~~ (D) section 124D.135, subdivision 3, if the district 
 36.23  received early childhood family education aid according to 
 36.24  section 124D.135 for the second preceding year; and 
 36.25     ~~(H) section 125A.77, subdivision 3, if the district~~ 
 36.26  ~~received special education levy equalization aid according to~~ 
 36.27  ~~that section for the second preceding year;~~ 
 36.28     ~~(I)~~ (E) section 126C.17, subdivision 6, if the district 
 36.29  received referendum equalization aid according to that section 
 36.30  for the second preceding year; ~~and~~ 
 36.31     ~~(J) section 124A.22, subdivision 4a, if the district~~ 
 36.32  ~~received training and experience aid according to that section~~ 
 36.33  ~~for the second preceding year;~~ to 
 36.34     (ii) the total amount of the district's certified levy for 
 36.35  the fiscal year, plus or minus auditor's adjustments. 
 36.36     (c) An amount must be subtracted from the school district's 
 37.1   levy limitation for the next levy certified equal to the 
 37.2   difference between: 
 37.3      (1) the amount of the distribution of excess increment; and 
 37.4      (2) the amount subtracted from aid pursuant to clause (a). 
 37.5      If the aid and levy reductions required by this subdivision 
 37.6   cannot be made to the aid for the fiscal year specified or to 
 37.7   the levy specified, the reductions must be made from aid for 
 37.8   subsequent fiscal years, and from subsequent levies.  The school 
 37.9   district must use the payment of excess tax increment to replace 
 37.10  the aid and levy revenue reduced under this subdivision. 
 37.11     (d) This subdivision applies only to the total amount of 
 37.12  excess increments received by a district for a calendar year 
 37.13  that exceeds $25,000. 
 37.14     Sec. 40.  Laws 1997, First Special Session chapter 4, 
 37.15  article 1, section 61, subdivision 1, is amended to read: 
 37.16     Subdivision 1.  [REVENUE CONVERSION.] For taxes payable in 
 37.17  1998 and 1999, the commissioner of children, families, and 
 37.18  learning shall adjust each school district's revenue authority 
 37.19  that is established as a rate times net tax capacity or adjusted 
 37.20  net tax capacity under Minnesota Statutes, chapters ~~124 and 124A~~ 
 37.21  120B, 122A, 123A, 123B, 124D, 125A, 126C, and 127A, by 
 37.22  multiplying each revenue amount by the ratio of the statewide 
 37.23  tax capacity as calculated using the class rates in effect for 
 37.24  assessment year 1996 to the statewide tax capacity using the 
 37.25  class rates for that assessment year.  Tax rates for referendum 
 37.26  revenues according to Minnesota Statutes, section 126C.17, and 
 37.27  operating debt levies according to Minnesota Statutes, section 
 37.28  126C.42, established for an individual district under this 
 37.29  subdivision for taxes payable in 1999 shall remain in effect for 
 37.30  later years for which the revenue is authorized to be computed 
 37.31  as a rate times net tax capacity or adjusted net tax capacity. 
 37.32     Sec. 41.  Laws 1997, First Special Session chapter 4, 
 37.33  article 1, section 61, subdivision 2, is amended to read: 
 37.34     Subd. 2.  [TAX RATE ADJUSTMENT.] For taxes payable in 1998 
 37.35  and 1999, the commissioner shall adjust each tax rate 
 37.36  established under Minnesota Statutes, chapters ~~124 and 124A~~ 
 38.1   120B, 122A, 123A, 123B, 124D, 125A, 126C, and 127A, by 
 38.2   multiplying the rate by the ratio of the statewide tax capacity 
 38.3   as calculated using the class rates in effect for assessment 
 38.4   year 1996 to the statewide tax capacity using the class rates 
 38.5   for that assessment year. 
 38.6      Sec. 42.  Laws 1997, First Special Session chapter 4, 
 38.7   article 1, section 61, subdivision 3, as amended by Laws 1998, 
 38.8   chapter 398, article 1, section 41, is amended to read: 
 38.9      Subd. 3.  [EQUALIZING FACTORS.] For taxes payable in 1998 
 38.10  and 1999, the commissioner shall adjust each equalizing factor 
 38.11  established using adjusted net tax capacity per actual pupil 
 38.12  unit under Minnesota Statutes, chapters ~~124 and 124A~~ 120B, 122A, 
 38.13  123A, 123B, 124D, 125A, 126C, and 127A, by dividing the 
 38.14  equalizing factor by the ratio of the statewide tax capacity as 
 38.15  calculated using the class rates in effect for assessment year 
 38.16  1996 to the statewide tax capacity using the class rates for 
 38.17  that assessment year. 
 38.18     Sec. 43.  Laws 1997, First Special Session chapter 4, 
 38.19  article 1, section 61, subdivision 4, is amended to read: 
 38.20     Subd. 4.  [QUALIFYING RATE.] For taxes payable in 1998 and 
 38.21  1999, the commissioner shall adjust the qualifying rate under 
 38.22  Minnesota Statutes, section 124.95, subdivision 3, by 
 38.23  multiplying the qualifying rate times the ratio of the statewide 
 38.24  tax capacity, as calculated using the class rates in effect for 
 38.25  assessment year 1996, to the statewide tax capacity using the 
 38.26  class rates for that assessment year. 
 38.27     Sec. 44.  Laws 1997, First Special Session chapter 4, 
 38.28  article 2, section 51, subdivision 29, as amended by Laws 1998, 
 38.29  chapter 398, article 2, section 52, is amended to read: 
 38.30     Subd. 29.  [FIRST GRADE PREPAREDNESS.] (a) For grants for 
 38.31  the first grade preparedness program under Minnesota Statutes, 
 38.32  section 124.2613, and for school sites that have provided a 
 38.33  full-day kindergarten option for kindergarten students enrolled 
 38.34  in fiscal years 1996 and 1997: 
 38.35       $5,000,000     .....     1998 
 38.36       $6,500,000    .....     1999 
 39.1      (b) $4,200,000 in fiscal year 1998 must be distributed 
 39.2   according to Minnesota Statutes, section 124.2613, subdivision 
 39.3   3, and $4,200,000 in fiscal year 1999 must be distributed 
 39.4   according to Minnesota Statutes, section 124D.081, subdivision 3.
 39.5      (c) $800,000 in fiscal year 1998 must be divided equally 
 39.6   among the four geographic regions defined in Minnesota Statutes, 
 39.7   section 124.2613, subdivision 3, and $800,000 in fiscal year 
 39.8   1999 must be divided equally among the four geographic regions 
 39.9   defined in Minnesota Statutes, section 124D.081, subdivision 3, 
 39.10  and must first be used to provide funding for school sites that 
 39.11  offered an optional full-day kindergarten program during the 
 39.12  1996-1997 school year, but did not receive funding for fiscal 
 39.13  year 1997 under Minnesota Statutes, section 124.2613.  To be a 
 39.14  qualified site, licensed teachers must have taught the optional 
 39.15  full-day kindergarten classes.  A district that charged a fee 
 39.16  for students participating in an optional full-day program is 
 39.17  eligible to receive the grant to provide full-day kindergarten 
 39.18  for all students as required by Minnesota Statutes, section 
 39.19  ~~124.2613~~ 124D.08, subdivision 4.  Districts with eligible sites 
 39.20  must apply to the commissioner of children, families, and 
 39.21  learning for a grant. 
 39.22     ~~(c) This appropriation must first be used to fund programs~~ 
 39.23  ~~operating during the 1996-1997 school year under paragraph (b)~~ 
 39.24  ~~and Minnesota Statutes, section 124.2613.~~  Any remaining funds 
 39.25  may be used to expand the number of sites providing first grade 
 39.26  preparedness programs according to Minnesota Statutes, section 
 39.27  124D.081, subdivision 3. 
 39.28     (d) $1,500,000 in fiscal year 1999 shall be divided equally 
 39.29  among the four geographic regions defined in Minnesota Statutes, 
 39.30  section 124D.081, subdivision 3, and must first be used to 
 39.31  eliminate aid proration for sites qualifying under paragraphs 
 39.32  (b) and (c).  Any remaining funds may be used to expand the 
 39.33  number of sites providing first grade preparedness programs 
 39.34  according to Minnesota Statutes, section 124.2613, subdivision 3.
 39.35     Sec. 45.  [REPEALER.] 
 39.36     Minnesota Statutes 1998, sections 124D.67; 126C.05, 
 40.1   subdivision 4; and 126C.06, are repealed.