1.1 	A bill for an act
1.2 	relating to education finance; creating a supplemental
1.3 	compensatory revenue calculation; amending Minnesota
1.4 	Statutes 2004, section 126C.10, subdivision 3, by
1.5 	adding a subdivision.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 126C.10,
1.8 	subdivision 3, is amended to read:
1.9 		Subd. 3.Compensatory education revenue.  (a) The
1.10 	compensatory education revenue for each building in the district
1.11 	equals the sum of:  (1) the formula allowance minus $415 times
1.12 	the compensation revenue pupil units computed according to
1.13 	section 126C.05, subdivision 3; and (2) the supplemental
1.14 	compensatory revenue under subdivision 3a.  Revenue shall be
1.15 	paid to the district and must be allocated according to section
1.16 	126C.15, subdivision 2.
1.17 	(b) When the district contracting with an alternative
1.18 	program under section 124D.69 changes prior to the start of a
1.19 	school year, the compensatory revenue generated by pupils
1.20 	attending the program shall be paid to the district contracting
1.21 	with the alternative program for the current school year, and
1.22 	shall not be paid to the district contracting with the
1.23 	alternative program for the prior school year.
1.24 	(c) When the fiscal agent district for an area learning
1.25 	center changes prior to the start of a school year, the
2.1 	compensatory revenue shall be paid to the fiscal agent district
2.2 	for the current school year, and shall not be paid to the fiscal
2.3 	agent district for the prior school year.
2.4 	
EFFECTIVE DATE. This section is effective for revenue for
2.5 	fiscal year 2006.

2.6 	Sec. 2. Minnesota Statutes 2004, section 126C.10, is
2.7 	amended by adding a subdivision to read:
2.8 		Subd. 3a.Supplemental compensatory revenue. (a) A
2.9 	school building eligible for compensatory revenue under
2.10 	subdivision 3 qualifies for supplementary compensatory revenue
2.11 	if:  (1) the school site is at least 80 percent larger than the
2.12 	state average site size; (2) the site is located within the
2.13 	boundaries of a school district where the October 1 enrollment
2.14 	of the previous school year is greater than 1.5 percent of the
2.15 	statewide total enrollment for that school year; and (3) the
2.16 	site's free and reduced lunch concentration for the previous
2.17 	school year was less than .5.
2.18 	(b) A school site that meets the conditions of paragraph
2.19 	(a) is eligible for supplementary compensatory revenue equal to
2.20 	the product of:  (1) the sum of its free lunch pupils and .5
2.21 	times its reduced lunch pupils; (2) the site's free and reduced
2.22 	lunch concentration index; (3) .5; and (4) the formula allowance
2.23 	for that year minus $415.
2.24 	
EFFECTIVE DATE. This section is effective for revenue for
2.25 	fiscal year 2006.