1.1 	A bill for an act
1.2 	relating to education finance; creating a funding
1.3 	mechanism for rewarding excellent education results;
1.4 	appropriating money; amending Minnesota Statutes 2004,
1.5 	section 126C.10, subdivision 1, by adding a
1.6 	subdivision.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 126C.10,
1.9 	subdivision 1, is amended to read:
1.10 		Subdivision 1.General education revenue. (a) For fiscal
1.11 	year 2003, the general education revenue for each district
1.12 	equals the sum of the district's basic revenue, basic skills
1.13 	revenue, training and experience revenue, secondary sparsity
1.14 	revenue, elementary sparsity revenue, transportation sparsity
1.15 	revenue, total operating capital revenue, and equity revenue.
1.16 	(b) For fiscal year 2004 and later,The general education
1.17 	revenue for each district equals the sum of the district's basic
1.18 	revenue, extended time revenue, education excellence revenue,
1.19 	basic skills revenue, training and experience revenue, secondary
1.20 	sparsity revenue, elementary sparsity revenue, transportation
1.21 	sparsity revenue, total operating capital revenue, equity
1.22 	revenue, and transition revenue.
1.23 	
EFFECTIVE DATE. This section is effective for revenue for
1.24 	fiscal year 2007.

1.25 	Sec. 2. Minnesota Statutes 2004, section 126C.10, is
1.26 	amended by adding a subdivision to read:
2.1 		Subd. 2b.Education excellence revenue. (a) Beginning in
2.2 	fiscal year 2007, a school district is eligible for education
2.3 	excellence revenue based on the school district's performance on
2.4 	the following six standards:
2.5 	(1) graduation rate;
2.6 	(2) attendance rate;
2.7 	(3) achievement of educational standards;
2.8 	(4) adequate yearly progress;
2.9 	(5) school safety; and 
2.10 	(6) publication of a school report card.
2.11 	The commissioner of education must establish minimum
2.12 	qualifying benchmarks for each of the six standards listed in
2.13 	this paragraph.  A school district that meets or exceeds the
2.14 	benchmarks established by the commissioner for that school
2.15 	district is eligible for educational excellence revenue for each
2.16 	standard that is met.
2.17 	(b) Total revenue in the education excellence account
2.18 	equals $10,000,000.
2.19 	(c) Each year, the commissioner shall determine the
2.20 	education excellence revenue allowance.  The allowance is equal
2.21 	to the total amount of revenue deposited in the account under
2.22 	paragraph (b) divided by the sum of the product of the number of
2.23 	adjusted marginal cost pupil units in each school district and
2.24 	the number of standards under paragraph (a) that have been met
2.25 	or exceeded for each school district for the previous school
2.26 	year for all school districts.
2.27 	(d) The revenue in the education excellence account is
2.28 	annually appropriated for the purpose of paying educational
2.29 	excellence revenue to school districts.
2.30 	(e) A school district's education excellence allowance
2.31 	equals the product of the education excellence allowance, the
2.32 	district's adjusted marginal cost pupil units for that year, and
2.33 	the number of standards that have been met or exceeded for the
2.34 	previous school year.
2.35 	
EFFECTIVE DATE. This section is effective for revenue for
2.36 	fiscal year 2007.