1.1                          A bill for an act 
  1.2             relating to education finance; modifying the adult 
  1.3             basic education formula; amending Minnesota Statutes 
  1.4             2003 Supplement, sections 124D.52, subdivision 3; 
  1.5             124D.531, subdivisions 1, 4.  
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.8   124D.52, subdivision 3, is amended to read: 
  1.9      Subd. 3.  [ACCOUNTS; REVENUE; AID.] (a) Each district, 
  1.10  group of districts, or private nonprofit organization providing 
  1.11  adult basic education programs must establish and maintain a 
  1.12  reserve account within the community service fund for the 
  1.13  receipt and disbursement of all funds related to these 
  1.14  programs.  All revenue received pursuant to this section must be 
  1.15  utilized solely for the purposes of adult basic education 
  1.16  programs.  State aid must not equal more than 100 percent of the 
  1.17  unreimbursed expenses of providing these programs, excluding 
  1.18  in-kind costs.  
  1.19     (b) For purposes of paragraph (a), an adult basic education 
  1.20  program may include as valid expenditures for the previous 
  1.21  fiscal year program spending that occurs from July 1 to 
  1.22  September 30 of the following year.  Program spending may only 
  1.23  be counted for one fiscal year. 
  1.24     (c) Notwithstanding section 123A.26 or any other law to the 
  1.25  contrary, an adult basic education consortium providing an 
  2.1   approved adult basic education program may be its own fiscal 
  2.2   agent and is eligible to receive state-aid payments directly 
  2.3   from the commissioner. 
  2.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  2.5   following final enactment. 
  2.6      Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  2.7   124D.531, subdivision 1, is amended to read: 
  2.8      Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
  2.9   (a) The state total adult basic education aid for fiscal year 
  2.10  2004 equals $34,388,000.  The state total adult basic education 
  2.11  aid for fiscal year 2005 and later is $36,509,000 plus any 
  2.12  amount that is not paid for during the previous fiscal year, as 
  2.13  a result of adjustments under subdivision 4, paragraph (a), or 
  2.14  section 123B.52, subdivision 3.  Beginning in fiscal year 2002, 
  2.15  two percent of the state total adult basic education aid must be 
  2.16  set aside for adult basic education supplemental service grants 
  2.17  under section 124D.522.  
  2.18     (b) The state total adult basic education aid, excluding 
  2.19  basic population aid, equals the difference between the amount 
  2.20  computed in paragraph (a), and the state total basic population 
  2.21  aid under subdivision 2. 
  2.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  2.23  following final enactment and applies for revenue distributions 
  2.24  for fiscal year 2005. 
  2.25     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  2.26  124D.531, subdivision 4, is amended to read: 
  2.27     Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
  2.28  Notwithstanding subdivisions 2 and 3, the total adult basic 
  2.29  education aid for a program per prior year contact hour must not 
  2.30  exceed $21 per prior year contact hour computed under 
  2.31  subdivision 3, clause (2). 
  2.32     (b) For fiscal year 2004, the aid for a program under 
  2.33  subdivision 3, clause (2), adjusted for changes in program 
  2.34  membership, must not exceed the aid for that program under 
  2.35  subdivision 3, clause (2), for fiscal year 2003 by more than the 
  2.36  greater of eight percent or $10,000. 
  3.1      (c) For fiscal year 2005, the aid for a program under 
  3.2   subdivision 3, clause (2), adjusted for changes in program 
  3.3   membership, must not exceed the sum of the aid for that program 
  3.4   under subdivision 3, clause (2), and Laws 2003, First Special 
  3.5   Session chapter 9, article 9, section 8, paragraph (a), for the 
  3.6   preceding fiscal year by more than the greater of eight percent 
  3.7   or $10,000.  
  3.8      (d) For fiscal year 2006 and later, the aid for a program 
  3.9   under subdivision 3, clause (2), adjusted for changes in program 
  3.10  membership, must not exceed the aid for that program under 
  3.11  subdivision 3, clause (2), for the first preceding fiscal year 
  3.12  by more than the greater of eight percent or $10,000. 
  3.13     (e) Adult basic education aid is payable to a program for 
  3.14  unreimbursed costs occurring in the program year as defined in 
  3.15  section 124D.52, subdivision 3. 
  3.16     (f) Any adult basic education aid that is not paid to a 
  3.17  program because of the program aid limitation under paragraph 
  3.18  (a) must be added to the state total adult basic education aid 
  3.19  for the next fiscal year under subdivision 1.  Any adult basic 
  3.20  education aid that is not paid to a program because of the 
  3.21  program aid limitations under paragraph (b), (c), or (d) must be 
  3.22  reallocated among programs by adjusting the rate per contact 
  3.23  hour under subdivision 3, clause (2).  
  3.24     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  3.25  following final enactment and applies for revenue distributions 
  3.26  for fiscal year 2005.