1.1                          A bill for an act 
  1.2             relating to education; providing for the department of 
  1.3             children, families, and learning administrative 
  1.4             amendment and repeal of certain statutory provisions 
  1.5             relating to kindergarten through grade 12; amending 
  1.6             Minnesota Statutes 2002, sections 12.21, subdivision 
  1.7             3; 120A.05, subdivision 9; 122A.63, subdivision 3; 
  1.8             123A.06, subdivision 3; 123A.18, subdivision 2; 
  1.9             123A.73, subdivisions 3, 4, 5; 123B.51, subdivisions 
  1.10            3, 4; 123B.57, subdivision 4; 123B.63, subdivisions 1, 
  1.11            2, 3, 4; 123B.91, subdivision 1; 123B.92, subdivisions 
  1.12            1, 3; 124D.09, subdivisions 9, 10, 16; 124D.11, 
  1.13            subdivisions 1, 2; 124D.135, subdivision 8; 124D.16, 
  1.14            subdivision 6; 124D.19, subdivision 3; 124D.20, 
  1.15            subdivision 5; 124D.22, subdivision 3; 124D.454, 
  1.16            subdivisions 2, 8, 10, by adding a subdivision; 
  1.17            124D.65, subdivision 5; 124D.86, subdivisions 1a, 3, 
  1.18            6; 125A.21, subdivision 2; 126C.10, subdivision 6; 
  1.19            126C.15, subdivision 1; 126C.17, subdivisions 7a, 9; 
  1.20            126C.21, subdivision 3; 126C.42, subdivision 1; 
  1.21            126C.48, subdivision 3; 126C.63, subdivisions 5, 8; 
  1.22            126C.69, subdivisions 2, 9; 127A.47, subdivisions 7, 
  1.23            8; 127A.49, subdivisions 2, 3; 128D.11, subdivision 8; 
  1.24            169.26, subdivision 3; 169.973, subdivision 1; 178.02, 
  1.25            subdivision 1; 273.138, subdivision 6; 298.28, 
  1.26            subdivision 4; 475.61, subdivision 4; Laws 1965, 
  1.27            chapter 705, as amended; repealing Minnesota Statutes 
  1.28            2002, sections 123A.73, subdivisions 7, 10, 11; 
  1.29            123B.81, subdivision 6; 124D.65, subdivision 4; 
  1.30            124D.84, subdivision 2; 125A.023, subdivision 5; 
  1.31            125A.47; 125B.11; 126C.01, subdivision 4; 126C.14; 
  1.32            127A.41, subdivision 6; Laws 2001, First Special 
  1.33            Session chapter 6, article 5, section 12, as amended; 
  1.34            Minnesota Rules, parts 3500.0600; 3520.0400; 
  1.35            3520.1400; 3520.3300; 3530.1500; 3530.2700; 3530.4400; 
  1.36            3530.4500; 3530.4700; 3545.2100; 3545.2200; 3545.2400; 
  1.37            3545.2500; 3545.2600; 3545.3008; 3545.3010; 3545.3018; 
  1.38            3545.3020; 3550.0100. 
  1.39  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.40     Section 1.  Minnesota Statutes 2002, section 12.21, 
  1.41  subdivision 3, is amended to read: 
  1.42     Subd. 3.  [SPECIFIC AUTHORITY.] In performing duties under 
  2.1   this chapter and to effect its policy and purpose, the governor 
  2.2   may: 
  2.3      (1) make, amend, and rescind the necessary orders and rules 
  2.4   to carry out the provisions of this chapter and section 216C.15 
  2.5   within the limits of the authority conferred by this section, 
  2.6   with due consideration of the plans of the federal government 
  2.7   and without complying with sections 14.001 to 14.69, but no 
  2.8   order or rule has the effect of law except as provided by 
  2.9   section 12.32; 
  2.10     (2) ensure that a comprehensive emergency operations plan 
  2.11  and emergency management program for this state are developed 
  2.12  and maintained, and are integrated into and coordinated with the 
  2.13  emergency plans of the federal government and of other states to 
  2.14  the fullest possible extent; 
  2.15     (3) in accordance with the emergency operations plan and 
  2.16  the emergency management program of this state, procure 
  2.17  supplies, equipment, and facilities; institute training programs 
  2.18  and public information programs; and take all other preparatory 
  2.19  steps, including the partial or full activation of emergency 
  2.20  management organizations in advance of actual disaster to ensure 
  2.21  the furnishing of adequately trained and equipped forces of 
  2.22  emergency management personnel in time of need; 
  2.23     (4) make studies and surveys of the industries, resources, 
  2.24  and facilities in this state as may be necessary to ascertain 
  2.25  the capabilities of the state for emergency management and to 
  2.26  plan for the most efficient emergency use of those industries, 
  2.27  resources, and facilities; 
  2.28     (5) on behalf of this state, enter into mutual aid 
  2.29  arrangements or cooperative agreements with other states, tribal 
  2.30  authorities, and Canadian provinces, and coordinate mutual aid 
  2.31  plans between political subdivisions of this state; 
  2.32     (6) delegate administrative authority vested in the 
  2.33  governor under this chapter, except the power to make rules, and 
  2.34  provide for the subdelegation of that authority; 
  2.35     (7) cooperate with the president and the heads of the armed 
  2.36  forces, the emergency management agency of the United States and 
  3.1   other appropriate federal officers and agencies, and with the 
  3.2   officers and agencies of other states in matters pertaining to 
  3.3   the emergency management of the state and nation, including the 
  3.4   direction or control of: 
  3.5      (i) emergency preparedness drills and exercises; 
  3.6      (ii) warnings and signals for drills or actual emergencies 
  3.7   and the mechanical devices to be used in connection with them; 
  3.8      (iii) shutting off water mains, gas mains, electric power 
  3.9   connections and the suspension of all other utility services; 
  3.10     (iv) the conduct of persons in the state, including 
  3.11  entrance or exit from any stricken or threatened public place, 
  3.12  occupancy of facilities, and the movement and cessation of 
  3.13  movement of pedestrians, vehicular traffic, and all forms of 
  3.14  private and public transportation during, prior, and subsequent 
  3.15  to drills or actual emergencies; 
  3.16     (v) public meetings or gatherings; and 
  3.17     (vi) the evacuation, reception, and sheltering of persons; 
  3.18     (8) contribute to a political subdivision, within the 
  3.19  limits of the appropriation for that purpose, not more than 25 
  3.20  percent of the cost of acquiring organizational equipment that 
  3.21  meets standards established by the governor; 
  3.22     (9) formulate and execute, with the approval of the 
  3.23  executive council, plans and rules for the control of traffic in 
  3.24  order to provide for the rapid and safe movement over public 
  3.25  highways and streets of troops, vehicles of a military nature, 
  3.26  and materials for national defense and war or for use in any war 
  3.27  industry, for the conservation of critical materials, or for 
  3.28  emergency management purposes; coordinate the activities of the 
  3.29  departments or agencies of the state and its political 
  3.30  subdivisions concerned directly or indirectly with public 
  3.31  highways and streets, in a manner that will best effectuate 
  3.32  those plans; 
  3.33     (10) alter or adjust by executive order, without complying 
  3.34  with sections 14.01 to 14.69, the working hours, work days and 
  3.35  work week of, and annual and sick leave provisions and payroll 
  3.36  laws regarding all state employees in the executive branch as 
  4.1   the governor deems necessary to minimize the impact of the 
  4.2   disaster or emergency, conforming the alterations or adjustments 
  4.3   to existing state laws, rules, and collective bargaining 
  4.4   agreements to the extent practicable; 
  4.5      (11) authorize the commissioner of children, families, and 
  4.6   learning to alter school schedules, curtail school activities, 
  4.7   or order schools closed without affecting state aid to schools, 
  4.8   as defined in section 120A.05, subdivisions 9, 11, 13, and 17, 
  4.9   and including charter schools under section 124D.10, and 
  4.10  elementary schools enrolling prekindergarten pupils in district 
  4.11  programs; and 
  4.12     (12) transfer the direction, personnel, or functions of 
  4.13  state agencies to perform or facilitate response and recovery 
  4.14  programs. 
  4.15     Sec. 2.  Minnesota Statutes 2002, section 120A.05, 
  4.16  subdivision 9, is amended to read: 
  4.17     Subd. 9.  [ELEMENTARY SCHOOL.] "Elementary school" means 
  4.18  any school with building, equipment, courses of study, class 
  4.19  schedules, enrollment of pupils ordinarily in prekindergarten 
  4.20  through grade 6 or any portion thereof, and staff meeting the 
  4.21  standards established by the commissioner. 
  4.22     The commissioner of children, families, and learning shall 
  4.23  not close a school or deny any state aids to a district for its 
  4.24  elementary schools because of enrollment limitations classified 
  4.25  in accordance with the provisions of this subdivision. 
  4.26     Sec. 3.  Minnesota Statutes 2002, section 122A.63, 
  4.27  subdivision 3, is amended to read: 
  4.28     Subd. 3.  [REVIEW AND COMMENT.] The commissioner must 
  4.29  submit the joint application to the Minnesota American Indian 
  4.30  scholarship education committee for review and comment. 
  4.31     Sec. 4.  Minnesota Statutes 2002, section 123A.06, 
  4.32  subdivision 3, is amended to read: 
  4.33     Subd. 3.  [HOURS OF INSTRUCTION EXEMPTION.] Notwithstanding 
  4.34  any law to the contrary, the center programs must be available 
  4.35  throughout the entire year.  Pupils in a center may receive 
  4.36  instruction for more than or less than the daily number of hours 
  5.1   required by the rules of the commissioner of children, families, 
  5.2   and learning.  However, a pupil must receive instruction each 
  5.3   year for at least the total number of instructional hours 
  5.4   required by statutes and rules.  A center may petition the state 
  5.5   board under Minnesota Rules, part 3500.1000, for exemption from 
  5.6   other rules.  
  5.7      Sec. 5.  Minnesota Statutes 2002, section 123A.18, 
  5.8   subdivision 2, is amended to read: 
  5.9      Subd. 2.  [EXTENDED YEAR INSTRUCTION.] The agreement may 
  5.10  provide opportunities for pupils to receive instruction 
  5.11  throughout the entire year and for teachers to coordinate 
  5.12  educational opportunities and provide instruction throughout the 
  5.13  entire year.  Pupils may receive instruction for more than or 
  5.14  less than the daily number of hours required by the rules of the 
  5.15  commissioner of children, families, and learning.  However, the 
  5.16  pupil must receive instruction each year for at least the total 
  5.17  number of instructional hours required by statutes and rules.  A 
  5.18  teacher who is employed for the extended year may develop, in 
  5.19  consultation with pupils and parents, individual educational 
  5.20  programs for not more than 125 pupils.  
  5.21     Sec. 6.  Minnesota Statutes 2002, section 123A.73, 
  5.22  subdivision 3, is amended to read: 
  5.23     Subd. 3.  [VOLUNTARY DISSOLUTION; REFERENDUM REVENUE.] As 
  5.24  of the effective date of the voluntary dissolution of a district 
  5.25  and its attachment to one or more existing districts pursuant to 
  5.26  section 123A.46, the authorization for all referendum revenues 
  5.27  previously approved by the voters of all affected districts for 
  5.28  those districts pursuant to section 126C.17, subdivision 9, or 
  5.29  its predecessor provision, is canceled.  However, if all of the 
  5.30  territory of any independent district is included in the 
  5.31  enlarged district, and if the adjusted net tax capacity of 
  5.32  taxable property in that territory comprises 90 percent or more 
  5.33  of the adjusted net tax capacity of all taxable property in an 
  5.34  enlarged district, the enlarged district's referendum revenue 
  5.35  shall be determined as follows: 
  5.36     If the referendum revenue previously approved in the 
  6.1   preexisting district is authorized as a tax rate, the referendum 
  6.2   revenue in the enlarged district is the tax rate times the net 
  6.3   tax capacity of the enlarged district.  If referendum revenue 
  6.4   previously approved in the preexisting district is authorized as 
  6.5   revenue per resident pupil unit, The referendum revenue shall be 
  6.6   the revenue per resident marginal cost pupil unit times the 
  6.7   number of resident marginal cost pupil units in the enlarged 
  6.8   district.  If referendum revenue in the preexisting district is 
  6.9   authorized both as a tax rate and as revenue per resident pupil 
  6.10  unit, the referendum revenue in the enlarged district shall be 
  6.11  the sum of both plus any referendum revenue in the preexisting 
  6.12  district authorized as a dollar amount.  Any new referendum 
  6.13  revenue shall be authorized only after approval is granted by 
  6.14  the voters of the entire enlarged district in an election 
  6.15  pursuant to section 126C.17, subdivision 9. 
  6.16     Sec. 7.  Minnesota Statutes 2002, section 123A.73, 
  6.17  subdivision 4, is amended to read: 
  6.18     Subd. 4.  [CONSOLIDATION; MAXIMUM AUTHORIZED REFERENDUM 
  6.19  REVENUES.] As of the effective date of a consolidation pursuant 
  6.20  to section 123A.48, if the plan for consolidation so provides, 
  6.21  or if the plan for consolidation makes no provision concerning 
  6.22  referendum revenues, the authorization for all referendum 
  6.23  revenues previously approved by the voters of all affected 
  6.24  districts for those districts pursuant to section 126C.17, 
  6.25  subdivision 9, or its predecessor provision shall be 
  6.26  recalculated as provided in this subdivision.  The referendum 
  6.27  revenue authorization for the newly created district shall be 
  6.28  the net tax capacity rate revenue per resident marginal cost 
  6.29  pupil unit that would raise an amount equal to the combined 
  6.30  dollar amount of the referendum revenues authorized by each of 
  6.31  the component districts for the year preceding the 
  6.32  consolidation, unless the referendum revenue authorization of 
  6.33  the newly created district is subsequently modified pursuant to 
  6.34  section 126C.17, subdivision 9.  If the referendum revenue 
  6.35  authorizations for each of the component districts were limited 
  6.36  to a specified number of years, The referendum revenue 
  7.1   authorization for the newly created district shall continue for 
  7.2   a period of time equal to the longest period authorized for any 
  7.3   component district.  If the referendum revenue authorization of 
  7.4   any component district is not limited to a specified number of 
  7.5   years, the referendum revenue authorization for the newly 
  7.6   created district shall not be limited to a specified number of 
  7.7   years.  
  7.8      Sec. 8.  Minnesota Statutes 2002, section 123A.73, 
  7.9   subdivision 5, is amended to read: 
  7.10     Subd. 5.  [ALTERNATIVE METHOD.] As of the effective date of 
  7.11  a consolidation pursuant to section 123A.48, if the plan for 
  7.12  consolidation so provides, the authorization for all referendum 
  7.13  revenues previously approved by the voters of all affected 
  7.14  districts for those districts pursuant to section 126C.17, 
  7.15  subdivision 9, or its predecessor provision shall be combined as 
  7.16  provided in this subdivision.  The referendum revenue 
  7.17  authorization for the newly created district may be any 
  7.18  allowance per resident marginal cost pupil unit provided in the 
  7.19  plan for consolidation, but may not exceed the allowance per 
  7.20  resident marginal cost pupil unit that would raise an amount 
  7.21  equal to the combined dollar amount of the referendum revenues 
  7.22  authorized by each of the component districts for the year 
  7.23  preceding the consolidation.  If the referendum revenue 
  7.24  authorizations for each of the component districts were limited 
  7.25  to a specified number of years, The referendum revenue 
  7.26  authorization for the newly created district shall continue for 
  7.27  a period of time equal to the longest period authorized for any 
  7.28  component district.  If the referendum revenue authorization of 
  7.29  any component district is not limited to a specified number of 
  7.30  years, the referendum revenue authorization for the newly 
  7.31  created district shall not be limited to a specified number of 
  7.32  years.  The referendum revenue authorization for the newly 
  7.33  created district may be modified pursuant to section 126C.17, 
  7.34  subdivision 9. 
  7.35     Sec. 9.  Minnesota Statutes 2002, section 123B.51, 
  7.36  subdivision 3, is amended to read: 
  8.1      Subd. 3.  [LEASE ROOMS OR BUILDINGS REAL PROPERTY.] When 
  8.2   necessary, the board may lease rooms or buildings real property 
  8.3   for school purposes. 
  8.4      Sec. 10.  Minnesota Statutes 2002, section 123B.51, 
  8.5   subdivision 4, is amended to read: 
  8.6      Subd. 4.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
  8.7   lease to any person, business, or organization a schoolhouse 
  8.8   real property that is not needed for school purposes, or part of 
  8.9   a schoolhouse the property that is not needed for school 
  8.10  purposes if the board determines that leasing part of a 
  8.11  schoolhouse the property does not interfere with the educational 
  8.12  programs taking place in the rest of the building on the 
  8.13  property.  The board may charge and collect reasonable 
  8.14  consideration for the lease and may determine the terms and 
  8.15  conditions of the lease. 
  8.16     (b) In districts with outstanding bonds, the net proceeds 
  8.17  of the lease must be first deposited in the debt retirement fund 
  8.18  of the district in an amount sufficient to meet when due that 
  8.19  percentage of the principal and interest payments for 
  8.20  outstanding bonds that is ascribable to the payment of expenses 
  8.21  necessary and incidental to the construction or purchase of the 
  8.22  particular building or property that is leased.  Any remaining 
  8.23  net proceeds in these districts may be deposited in either the 
  8.24  debt redemption fund or operating capital expenditure 
  8.25  fund account.  All net proceeds of the lease in districts 
  8.26  without outstanding bonds shall be deposited in the operating 
  8.27  capital expenditure fund account of the district. 
  8.28     (c) The board may make capital improvements, including 
  8.29  fixtures, to a schoolhouse or a portion thereof to the real 
  8.30  property, not exceeding in cost the replacement value of 
  8.31  the schoolhouse property, to facilitate its rental, and the 
  8.32  lease of an the improved schoolhouse property, or part of it, 
  8.33  shall provide for rentals which will recover the cost of the 
  8.34  improvements over the initial term of the lease.  
  8.35  Notwithstanding paragraph (b), the portion of the rentals 
  8.36  representing the cost of the improvements shall be deposited in 
  9.1   the operating capital expenditure fund account of the district 
  9.2   and the balance of the rentals shall be used as provided in 
  9.3   paragraph (b).  
  9.4      Sec. 11.  Minnesota Statutes 2002, section 123B.57, 
  9.5   subdivision 4, is amended to read: 
  9.6      Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
  9.7   safety revenue, a district may levy an amount equal to the 
  9.8   district's health and safety revenue as defined in subdivision 3 
  9.9   multiplied by the lesser of one, or the ratio of the quotient 
  9.10  derived by dividing the adjusted net tax capacity of the 
  9.11  district for the year preceding the year the levy is certified 
  9.12  by the adjusted marginal cost pupil units in the district for 
  9.13  the school year to which the levy is attributable, 
  9.14  to $3,956 $2,935. 
  9.15     Sec. 12.  Minnesota Statutes 2002, section 123B.63, 
  9.16  subdivision 1, is amended to read: 
  9.17     Subdivision 1.  [CREATION OF A DOWN PAYMENT CAPITAL PROJECT 
  9.18  REFERENDUM ACCOUNT.] A district may create a down payment 
  9.19  capital project referendum account as a separate account in 
  9.20  its general fund or its building construction fund.  All 
  9.21  proceeds from the down payment capital project levy must be 
  9.22  deposited in the capital expenditure fund and transferred to 
  9.23  this account project referendum account in its general fund.  
  9.24  The portion of the proceeds to be used for building construction 
  9.25  must be transferred to the capital project referendum account in 
  9.26  its building construction fund.  Interest income attributable to 
  9.27  the down payment capital project referendum account must be 
  9.28  credited to the account. 
  9.29     Sec. 13.  Minnesota Statutes 2002, section 123B.63, 
  9.30  subdivision 2, is amended to read: 
  9.31     Subd. 2.  [USES OF THE ACCOUNT.] Money in the down payment 
  9.32  capital project referendum account must be used as a down 
  9.33  payment for the future costs of acquisition and betterment for a 
  9.34  project that has been reviewed under section 123B.71 and has 
  9.35  been approved according to subdivision 3. 
  9.36     Sec. 14.  Minnesota Statutes 2002, section 123B.63, 
 10.1   subdivision 3, is amended to read: 
 10.2      Subd. 3.  [FACILITIES DOWN PAYMENT CAPITAL PROJECT LEVY 
 10.3   REFERENDUM.] A district may levy the local tax rate approved by 
 10.4   a majority of the electors voting on the question to provide 
 10.5   funds for a down payment for an approved project.  The election 
 10.6   must take place no more than five years before the estimated 
 10.7   date of commencement of the project.  The referendum must be 
 10.8   held on a date set by the board.  A referendum for a project not 
 10.9   receiving a positive review and comment by the commissioner 
 10.10  under section 123B.71 must be approved by at least 60 percent of 
 10.11  the voters at the election.  The referendum may be called by the 
 10.12  school board and may be held: 
 10.13     (1) separately, before an election for the issuance of 
 10.14  obligations for the project under chapter 475; or 
 10.15     (2) in conjunction with an election for the issuance of 
 10.16  obligations for the project under chapter 475; or 
 10.17     (3) notwithstanding section 475.59, as a conjunctive 
 10.18  question authorizing both the down payment capital project levy 
 10.19  and the issuance of obligations for the project under chapter 
 10.20  475.  Any obligations authorized for a project may be issued 
 10.21  within five years of the date of the election. 
 10.22     The ballot must provide a general description of the 
 10.23  proposed project, state the estimated total cost of the project, 
 10.24  state whether the project has received a positive or negative 
 10.25  review and comment from the commissioner, state the maximum 
 10.26  amount of the down payment capital project levy as a percentage 
 10.27  of net tax capacity, state the amount that will be raised by 
 10.28  that local tax rate in the first year it is to be levied, and 
 10.29  state the maximum number of years that the levy authorization 
 10.30  will apply. 
 10.31     The ballot must contain a textual portion with the 
 10.32  information required in this section and a question stating 
 10.33  substantially the following: 
 10.34     "Shall the down payment capital project levy proposed by 
 10.35  the board of .......... School District No. .......... be 
 10.36  approved?" 
 11.1      If approved, the amount provided by the approved local tax 
 11.2   rate applied to the net tax capacity for the year preceding the 
 11.3   year the levy is certified may be certified for the number of 
 11.4   years approved. 
 11.5      In the event a conjunctive question proposes to authorize 
 11.6   both the down payment capital project levy and the issuance of 
 11.7   obligations for the project, appropriate language authorizing 
 11.8   the issuance of obligations must also be included in the 
 11.9   question.  
 11.10     The district must notify the commissioner of the results of 
 11.11  the referendum. 
 11.12     Sec. 15.  Minnesota Statutes 2002, section 123B.63, 
 11.13  subdivision 4, is amended to read: 
 11.14     Subd. 4.  [EXCESS BUILDING CONSTRUCTION FUND LEVY 
 11.15  PROCEEDS.] Any funds remaining in the down payment capital 
 11.16  project referendum account that are not applied to the payment 
 11.17  of the costs of the approved project before its final completion 
 11.18  must be transferred to the district's debt redemption fund.  
 11.19     Sec. 16.  Minnesota Statutes 2002, section 123B.91, 
 11.20  subdivision 1, is amended to read: 
 11.21     Subdivision 1.  [COMPREHENSIVE POLICY.] (a) Each district 
 11.22  shall develop and implement maintain a comprehensive, written 
 11.23  policy governing pupil transportation safety, including 
 11.24  transportation of nonpublic school students, when applicable.  
 11.25  The policy, at minimum, must contain: 
 11.26     (1) provisions for appropriate student bus safety training 
 11.27  under section 123B.90; 
 11.28     (2) rules governing student conduct on school buses and in 
 11.29  school bus loading and unloading areas; 
 11.30     (3) a statement of parent or guardian responsibilities 
 11.31  relating to school bus safety; 
 11.32     (4) provisions for notifying students and parents or 
 11.33  guardians of their responsibilities and the rules, including the 
 11.34  district's seat belt policy, if applicable; 
 11.35     (5) an intradistrict system for reporting school bus 
 11.36  accidents or misconduct and a system for dealing with local law 
 12.1   enforcement officials in cases of criminal conduct on a school 
 12.2   bus; 
 12.3      (6) a discipline policy to address violations of school bus 
 12.4   safety rules, including procedures for revoking a student's bus 
 12.5   riding privileges in cases of serious or repeated misconduct; 
 12.6      (7) a system for integrating school bus misconduct records 
 12.7   with other discipline records; 
 12.8      (8) a statement of bus driver duties; 
 12.9      (9) where applicable, provisions governing bus monitor 
 12.10  qualifications, training, and duties; 
 12.11     (10) rules governing the use and maintenance of type III 
 12.12  vehicles, drivers of type III vehicles, qualifications to drive 
 12.13  a type III vehicle, qualifications for a type III vehicle, and 
 12.14  the circumstances under which a student may be transported in a 
 12.15  type III vehicle; 
 12.16     (11) operating rules and procedures; 
 12.17     (12) provisions for annual bus driver in-service training 
 12.18  and evaluation; 
 12.19     (13) emergency procedures; 
 12.20     (14) a system for maintaining and inspecting equipment; 
 12.21     (15) requirements of the school district, if any, that 
 12.22  exceed state law minimum requirements for school bus operations; 
 12.23  and 
 12.24     (16) requirements for basic first aid training, which must 
 12.25  include the Heimlich maneuver and procedures for dealing with 
 12.26  obstructed airways, shock, bleeding, and seizures. 
 12.27     (b) Districts are encouraged to use the model policy 
 12.28  developed by the Minnesota school boards association, the 
 12.29  department of public safety, and the department of children, 
 12.30  families, and learning, as well as the current edition of the 
 12.31  "National Standards for School Transportation," in developing 
 12.32  safety policies.  Each district shall review its policy annually 
 12.33  to ensure that it conforms to law. 
 12.34     Sec. 17.  Minnesota Statutes 2002, section 123B.92, 
 12.35  subdivision 1, is amended to read: 
 12.36     Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 13.1   and section 125A.76, the terms defined in this subdivision have 
 13.2   the meanings given to them. 
 13.3      (a) "Actual expenditure per pupil transported in the 
 13.4   regular and excess transportation categories" means the quotient 
 13.5   obtained by dividing: 
 13.6      (1) the sum of: 
 13.7      (i) all expenditures for transportation in the regular 
 13.8   category, as defined in paragraph (b), clause (1), and the 
 13.9   excess category, as defined in paragraph (b), clause (2), plus 
 13.10     (ii) an amount equal to one year's depreciation on the 
 13.11  district's school bus fleet and mobile units computed on a 
 13.12  straight line basis at the rate of 15 percent per year for 
 13.13  districts operating a program under section 124D.128 for grades 
 13.14  1 to 12 for all students in the district and 12-1/2 percent per 
 13.15  year for other districts of the cost of the fleet, plus 
 13.16     (iii) an amount equal to one year's depreciation on the 
 13.17  district's type three school buses, as defined in section 
 13.18  169.01, subdivision 6, clause (5), which must be used a majority 
 13.19  of the time for pupil transportation purposes, computed on a 
 13.20  straight line basis at the rate of 20 percent per year of the 
 13.21  cost of the type three school buses by: 
 13.22     (2) the number of pupils eligible for transportation in the 
 13.23  regular category, as defined in paragraph (b), clause (1), and 
 13.24  the excess category, as defined in paragraph (b), clause (2).  
 13.25     (b) "Transportation category" means a category of 
 13.26  transportation service provided to pupils as follows:  
 13.27     (1) Regular transportation is:  
 13.28     (i) transportation to and from school during the regular 
 13.29  school year for resident elementary pupils residing one mile or 
 13.30  more from the public or nonpublic school they attend, and 
 13.31  resident secondary pupils residing two miles or more from the 
 13.32  public or nonpublic school they attend, excluding desegregation 
 13.33  transportation and noon kindergarten transportation; but with 
 13.34  respect to transportation of pupils to and from nonpublic 
 13.35  schools, only to the extent permitted by sections 123B.84 to 
 13.36  123B.87; 
 14.1      (ii) transportation of resident pupils to and from language 
 14.2   immersion programs; 
 14.3      (iii) transportation of a pupil who is a custodial parent 
 14.4   and that pupil's child between the pupil's home and the child 
 14.5   care provider and between the provider and the school, if the 
 14.6   home and provider are within the attendance area of the school; 
 14.7   and 
 14.8      (iv) transportation to and from or board and lodging in 
 14.9   another district, of resident pupils of a district without a 
 14.10  secondary school; and 
 14.11     (v) transportation to and from school during the regular 
 14.12  school year required under subdivision 3 for nonresident 
 14.13  elementary pupils when the distance from the attendance area 
 14.14  border to the public school is one mile or more, and for 
 14.15  nonresident secondary pupils when the distance from the 
 14.16  attendance area border to the public school is two miles or 
 14.17  more, excluding desegregation transportation and noon 
 14.18  kindergarten transportation. 
 14.19     For the purposes of this paragraph, a district may 
 14.20  designate a licensed day care facility, respite care facility, 
 14.21  the residence of a relative, or the residence of a person chosen 
 14.22  by the pupil's parent or guardian as the home of a pupil for 
 14.23  part or all of the day, if requested by the pupil's parent or 
 14.24  guardian, and if that facility or residence is within the 
 14.25  attendance area of the school the pupil attends. 
 14.26     (2) Excess transportation is: 
 14.27     (i) transportation to and from school during the regular 
 14.28  school year for resident secondary pupils residing at least one 
 14.29  mile but less than two miles from the public or nonpublic school 
 14.30  they attend, and transportation to and from school for resident 
 14.31  pupils residing less than one mile from school who are 
 14.32  transported because of extraordinary traffic, drug, or crime 
 14.33  hazards; and 
 14.34     (ii) transportation to and from school during the regular 
 14.35  school year required under subdivision 3 for nonresident 
 14.36  secondary pupils when the distance from the attendance area 
 15.1   border to the school is at least one mile but less than two 
 15.2   miles from the public school they attend, and for nonresident 
 15.3   pupils when the distance from the attendance area border to the 
 15.4   school is less than one mile from the school and who are 
 15.5   transported because of extraordinary traffic, drug, or crime 
 15.6   hazards. 
 15.7      (3) Desegregation transportation is transportation within 
 15.8   and outside of the district during the regular school year of 
 15.9   pupils to and from schools located outside their normal 
 15.10  attendance areas under a plan for desegregation mandated by the 
 15.11  commissioner or under court order.  
 15.12     (4) "Transportation services for pupils with disabilities" 
 15.13  is: 
 15.14     (i) transportation of pupils with disabilities who cannot 
 15.15  be transported on a regular school bus between home or a respite 
 15.16  care facility and school; 
 15.17     (ii) necessary transportation of pupils with disabilities 
 15.18  from home or from school to other buildings, including centers 
 15.19  such as developmental achievement centers, hospitals, and 
 15.20  treatment centers where special instruction or services required 
 15.21  by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65 
 15.22  are provided, within or outside the district where services are 
 15.23  provided; 
 15.24     (iii) necessary transportation for resident pupils with 
 15.25  disabilities required by sections 125A.12, and 125A.26 to 
 15.26  125A.48; 
 15.27     (iv) board and lodging for pupils with disabilities in a 
 15.28  district maintaining special classes; 
 15.29     (v) transportation from one educational facility to another 
 15.30  within the district for resident pupils enrolled on a 
 15.31  shared-time basis in educational programs, and necessary 
 15.32  transportation required by sections 125A.18, and 125A.26 to 
 15.33  125A.48, for resident pupils with disabilities who are provided 
 15.34  special instruction and services on a shared-time basis; 
 15.35     (vi) transportation for resident pupils with disabilities 
 15.36  to and from board and lodging facilities when the pupil is 
 16.1   boarded and lodged for educational purposes; and 
 16.2      (vii) services described in clauses (i) to (vi), when 
 16.3   provided for pupils with disabilities in conjunction with a 
 16.4   summer instructional program that relates to the pupil's 
 16.5   individual education plan or in conjunction with a learning year 
 16.6   program established under section 124D.128. 
 16.7      (5) "Nonpublic nonregular transportation" is: 
 16.8      (i) transportation from one educational facility to another 
 16.9   within the district for resident pupils enrolled on a 
 16.10  shared-time basis in educational programs, excluding 
 16.11  transportation for nonpublic pupils with disabilities under 
 16.12  clause (4); 
 16.13     (ii) transportation within district boundaries between a 
 16.14  nonpublic school and a public school or a neutral site for 
 16.15  nonpublic school pupils who are provided pupil support services 
 16.16  pursuant to section 123B.44; and 
 16.17     (iii) late transportation home from school or between 
 16.18  schools within a district for nonpublic school pupils involved 
 16.19  in after-school activities. 
 16.20     (c) "Mobile unit" means a vehicle or trailer designed to 
 16.21  provide facilities for educational programs and services, 
 16.22  including diagnostic testing, guidance and counseling services, 
 16.23  and health services.  A mobile unit located off nonpublic school 
 16.24  premises is a neutral site as defined in section 123B.41, 
 16.25  subdivision 13. 
 16.26     Sec. 18.  Minnesota Statutes 2002, section 123B.92, 
 16.27  subdivision 3, is amended to read: 
 16.28     Subd. 3.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
 16.29  that enrolls nonresident pupils in programs under sections 
 16.30  124D.03, 124D.06, 124D.07, 124D.08, 123A.05 to 123A.08, and 
 16.31  124D.68, must provide authorized transportation to the pupil 
 16.32  within the attendance area for the school that the pupil attends 
 16.33  at the same level of service that is provided to resident pupils 
 16.34  within the attendance area.  The resident district need not 
 16.35  provide or pay for transportation between the pupil's residence 
 16.36  and the district's border. 
 17.1      Sec. 19.  Minnesota Statutes 2002, section 124D.09, 
 17.2   subdivision 9, is amended to read: 
 17.3      Subd. 9.  [ENROLLMENT PRIORITY.] A post-secondary 
 17.4   institution shall give priority to its post-secondary students 
 17.5   when enrolling 11th and 12th grade pupils in its courses.  A 
 17.6   post-secondary institution may provide information about its 
 17.7   programs to a secondary school or to a pupil or parent, but it 
 17.8   may not advertise or otherwise recruit or solicit the 
 17.9   participation on financial grounds, of secondary pupils to 
 17.10  enroll in its programs on financial grounds.  An institution 
 17.11  must not enroll secondary pupils, for post-secondary enrollment 
 17.12  options purposes, in remedial, developmental, or other courses 
 17.13  that are not college level.  Once a pupil has been enrolled in a 
 17.14  post-secondary course under this section, the pupil shall not be 
 17.15  displaced by another student.  
 17.16     Sec. 20.  Minnesota Statutes 2002, section 124D.09, 
 17.17  subdivision 10, is amended to read: 
 17.18     Subd. 10.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
 17.19  pupil, according to subdivision 4 5, may enroll in a 
 17.20  nonsectarian course taught by a secondary teacher or a 
 17.21  post-secondary faculty member and offered at a secondary school, 
 17.22  or another location, according to an agreement between a public 
 17.23  school board and the governing body of an eligible public 
 17.24  post-secondary system or an eligible private post-secondary 
 17.25  institution, as defined in subdivision 3.  All provisions of 
 17.26  this section shall apply to a pupil, public school board, 
 17.27  district, and the governing body of a post-secondary 
 17.28  institution, except as otherwise provided.  
 17.29     Sec. 21.  Minnesota Statutes 2002, section 124D.09, 
 17.30  subdivision 16, is amended to read: 
 17.31     Subd. 16.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
 17.32  ACCORDING TO AGREEMENTS.] (a) The agreement between a board and 
 17.33  the governing body of a public post-secondary system or private 
 17.34  post-secondary institution shall set forth the payment amounts 
 17.35  and arrangements, if any, from the board to the post-secondary 
 17.36  institution.  No payments shall be made by the department 
 18.1   according to subdivision 14 13 or 15.  For the purpose of 
 18.2   computing state aids for a district, a pupil enrolled according 
 18.3   to subdivision 10 shall be counted in the average daily 
 18.4   membership of the district as though the pupil were enrolled in 
 18.5   a secondary course that is not offered in connection with an 
 18.6   agreement.  Nothing in this subdivision shall be construed to 
 18.7   prohibit a public post-secondary system or private 
 18.8   post-secondary institution from receiving additional state 
 18.9   funding that may be available under any other law.  
 18.10     (b) If a course is provided under subdivision 10, offered 
 18.11  at a secondary school, and taught by a secondary teacher, the 
 18.12  post-secondary system or institution must not require a payment 
 18.13  from the school board that exceeds the cost to the 
 18.14  post-secondary institution that is directly attributable to 
 18.15  providing that course.  
 18.16     Sec. 22.  Minnesota Statutes 2002, section 124D.11, 
 18.17  subdivision 1, is amended to read: 
 18.18     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
 18.19  education revenue must be paid to a charter school as though it 
 18.20  were a district.  The general education revenue for each 
 18.21  adjusted marginal cost pupil unit is the state average general 
 18.22  education revenue per pupil unit, plus the referendum 
 18.23  equalization aid allowance in the pupil's district of residence, 
 18.24  minus an amount equal to the product of the formula allowance 
 18.25  according to section 126C.10, subdivision 2, times .0485, 
 18.26  calculated without basic skills revenue, and transportation 
 18.27  sparsity revenue, and the transportation portion of the 
 18.28  transition revenue adjustment, plus basic skills revenue as 
 18.29  though the school were a school district. 
 18.30     (b) Notwithstanding paragraph (a), for charter schools in 
 18.31  the first year of operation, general education revenue shall be 
 18.32  computed using the number of adjusted pupil units in the current 
 18.33  fiscal year.  
 18.34     Sec. 23.  Minnesota Statutes 2002, section 124D.11, 
 18.35  subdivision 2, is amended to read: 
 18.36     Subd. 2.  [TRANSPORTATION REVENUE.] Transportation revenue 
 19.1   must be paid to a charter school that provides transportation 
 19.2   services according to section 124D.10, subdivision 16, according 
 19.3   to this subdivision.  Transportation aid shall equal 
 19.4   transportation revenue.  
 19.5      In addition to the revenue under subdivision 1, a charter 
 19.6   school providing transportation services must receive general 
 19.7   education aid for each pupil unit equal to the sum of an amount 
 19.8   equal to the product of the formula allowance according to 
 19.9   section 126C.10, subdivision 2, times .0485, plus the 
 19.10  transportation sparsity allowance for the school district in 
 19.11  which the charter school is located, plus the transportation 
 19.12  transition allowance for the district in which the charter 
 19.13  school is located.  
 19.14     Sec. 24.  Minnesota Statutes 2002, section 124D.135, 
 19.15  subdivision 8, is amended to read: 
 19.16     Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
 19.17  the average balance, during the most recent three-year period in 
 19.18  a district's early childhood family education reserve account on 
 19.19  June 30 of each year, adjusted for any prior reductions under 
 19.20  this subdivision, must not be greater than 25 percent of the sum 
 19.21  of the district's maximum early childhood family education 
 19.22  annual revenue under subdivision 1, excluding adjustments under 
 19.23  this subdivision, plus any fees, grants, or other revenue 
 19.24  received by the district for early childhood family education 
 19.25  programs for the prior year. 
 19.26     (b) If a district's adjusted average early childhood family 
 19.27  education reserve over the three-year period is in excess of 25 
 19.28  percent of the prior year annual revenue the limit under 
 19.29  paragraph (a), the district's early childhood family education 
 19.30  state aid and levy authority for the current school year must be 
 19.31  reduced by the lesser of the current year revenue under 
 19.32  subdivision 1 or the excess reserve amount.  The aid reduction 
 19.33  equals the product of the lesser of the excess reserve amount or 
 19.34  the current year revenue under subdivision 1 times the ratio of 
 19.35  the district's aid for the prior current year under subdivision 
 19.36  4 to the district's revenue for the prior current year under 
 20.1   subdivision 1.  The levy reduction equals the excess reserve 
 20.2   amount minus the aid reduction.  For purposes of this 
 20.3   subdivision, if a district does not levy the entire amount 
 20.4   permitted under subdivision 3, the revenue under subdivision 1 
 20.5   must be reduced in proportion to the actual amount levied.  The 
 20.6   commissioner must reallocate aid and levy reduced under this 
 20.7   subdivision to other eligible early childhood family education 
 20.8   programs in proportion to each district's revenue for the prior 
 20.9   current year under subdivision 1.  
 20.10     (b) (c) Notwithstanding paragraph (a), for fiscal year 
 20.11  2003, the excess reserve amount shall be computed using the 
 20.12  balance in a district's early childhood family education reserve 
 20.13  account on June 30, 2002.  For fiscal year 2004, the excess 
 20.14  reserve amount shall be computed using the adjusted average 
 20.15  balance in a district's early childhood family education reserve 
 20.16  account on June 30, 2002, and June 30, 2003. 
 20.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 20.18  fiscal year 2003. 
 20.19     Sec. 25.  Minnesota Statutes 2002, section 124D.16, 
 20.20  subdivision 6, is amended to read: 
 20.21     Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
 20.22  the average balance, during the most recent three-year period, 
 20.23  in a district's school readiness reserve account on June 30 of 
 20.24  each year, adjusted for any prior reductions under this 
 20.25  subdivision, must not be greater than 25 percent of the 
 20.26  district's school readiness annual revenue for the prior year 
 20.27  excluding adjustments under this subdivision.  
 20.28     (b) If a district's adjusted average school readiness 
 20.29  reserve over the three-year period is in excess of 25 percent of 
 20.30  the prior year annual revenue the limit under paragraph (a), the 
 20.31  district's current year school readiness state aid must be 
 20.32  reduced by the lesser of the excess reserve amount or the 
 20.33  current year aid.  The commissioner must reallocate aid reduced 
 20.34  under this subdivision to other eligible school readiness 
 20.35  programs in proportion to each district's aid for the prior 
 20.36  current year under subdivision 2.  
 21.1      (b) (c) Notwithstanding paragraph (a), for fiscal year 
 21.2   2003, the excess reserve amount shall be computed using the 
 21.3   balance in a district's school readiness reserve account on June 
 21.4   30, 2002.  For fiscal year 2004, the excess reserve amount shall 
 21.5   be computed using the adjusted average balance in a district's 
 21.6   school readiness reserve account on June 30, 2002, and June 30, 
 21.7   2003. 
 21.8      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 21.9   fiscal year 2003. 
 21.10     Sec. 26.  Minnesota Statutes 2002, section 124D.19, 
 21.11  subdivision 3, is amended to read: 
 21.12     Subd. 3.  [COMMUNITY EDUCATION DIRECTOR.] (a) Except as 
 21.13  provided under paragraphs (b) and (c), each board shall employ a 
 21.14  licensed community education director.  The board shall submit 
 21.15  the name of the person who is serving as director of community 
 21.16  education under this section on the district's annual community 
 21.17  education report to the commissioner. 
 21.18     (b) A board may apply to the commissioner Minnesota board 
 21.19  of school administrators under Minnesota Rules, part 3512.3500, 
 21.20  subpart 9, for authority to use an individual who is not 
 21.21  licensed as a community education director. 
 21.22     (c) A board of a district with a total population of 2,000 
 21.23  or less may identify an employee who holds a valid Minnesota 
 21.24  principal or superintendent license under Minnesota Rules, 
 21.25  chapter 3512, to serve as director of community education.  To 
 21.26  be eligible for an exception under this paragraph, the board 
 21.27  shall certify in writing to the commissioner that the district 
 21.28  has not placed a licensed director of community education on 
 21.29  unrequested leave. 
 21.30     Sec. 27.  Minnesota Statutes 2002, section 124D.20, 
 21.31  subdivision 5, is amended to read: 
 21.32     Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
 21.33  community education revenue, a district operating a youth 
 21.34  after-school enrichment program under section 124D.19, 
 21.35  subdivision 12, may levy the amount raised by a maximum tax rate 
 21.36  of .7431 1.0017 percent times the adjusted net tax capacity of 
 22.1   the district.  To obtain total community education revenue, a 
 22.2   district not operating a youth after-school enrichment program 
 22.3   may levy the amount raised by a maximum tax rate of .4795 .6463 
 22.4   percent times the adjusted net tax capacity of the district.  If 
 22.5   the amount of the total community education levy would exceed 
 22.6   the total community education revenue, the total community 
 22.7   education levy shall be determined according to subdivision 6. 
 22.8      Sec. 28.  Minnesota Statutes 2002, section 124D.22, 
 22.9   subdivision 3, is amended to read: 
 22.10     Subd. 3.  [SCHOOL-AGE CARE LEVY.] To obtain school-age care 
 22.11  revenue, a school district may levy an amount equal to the 
 22.12  district's school-age care revenue as defined in subdivision 2 
 22.13  multiplied by the lesser of one, or the ratio of the quotient 
 22.14  derived by dividing the adjusted net tax capacity of the 
 22.15  district for the year before the year the levy is certified by 
 22.16  the resident pupil units in the district for the school year to 
 22.17  which the levy is attributable, to $3,280 $2,433.  
 22.18     Sec. 29.  Minnesota Statutes 2002, section 124D.454, 
 22.19  subdivision 2, is amended to read: 
 22.20     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
 22.21  the definitions in this subdivision apply. 
 22.22     (a) "Base year" for fiscal year 1996 means fiscal year 1995.
 22.23  Base year for later fiscal years means the second fiscal year 
 22.24  preceding the fiscal year for which aid will be paid. 
 22.25     (b) "Basic revenue" has the meaning given it in section 
 22.26  126C.10, subdivision 2.  For the purposes of computing basic 
 22.27  revenue pursuant to this section, each child with a disability 
 22.28  shall be counted as prescribed in section 126C.05, subdivision 1.
 22.29     (c) "Average daily membership" has the meaning given it in 
 22.30  section 126C.05. 
 22.31     (d) "Program growth factor" means 1.00 for fiscal year 1998 
 22.32  and later. 
 22.33     (e) "Aid percentage factor" means 60 percent for fiscal 
 22.34  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 22.35  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 22.36  percent for fiscal year 2000 and later. 
 23.1      Sec. 30.  Minnesota Statutes 2002, section 124D.454, 
 23.2   subdivision 8, is amended to read: 
 23.3      Subd. 8.  [USE OF AID.] The aid provided under this section 
 23.4   shall be paid only for services rendered or for the costs which 
 23.5   are incurred according to this section for transition programs 
 23.6   for children with a disability which are approved by the 
 23.7   commissioner of children, families, and learning and operated in 
 23.8   accordance with rules promulgated by the commissioner.  These 
 23.9   rules shall be subject to the restrictions provided in section 
 23.10  124D.453, subdivision 6 12.  The procedure for application for 
 23.11  approval of these programs shall be as provided in section 
 23.12  125A.75, subdivisions 4 and 6, and the application review 
 23.13  process shall be conducted by the office division of lifework 
 23.14  development federal programs in the department. 
 23.15     Sec. 31.  Minnesota Statutes 2002, section 124D.454, 
 23.16  subdivision 10, is amended to read: 
 23.17     Subd. 10.  [EXCLUSION.] A district shall not receive aid 
 23.18  pursuant to section 124D.453 or 125A.76 for salaries, supplies, 
 23.19  travel or equipment for which the district receives aid pursuant 
 23.20  to this section. 
 23.21     Sec. 32.  Minnesota Statutes 2002, section 124D.454, is 
 23.22  amended by adding a subdivision to read: 
 23.23     Subd. 12.  [COMPLIANCE WITH RULES.] Aid must be paid under 
 23.24  this section only for services rendered or for costs incurred in 
 23.25  career and technical education programs approved by the 
 23.26  commissioner and operated in accordance with rules promulgated 
 23.27  by the commissioner.  This aid shall be paid only for services 
 23.28  rendered and for costs incurred by essential, licensed personnel 
 23.29  who meet the requirements for licensure pursuant to the rules of 
 23.30  the Minnesota board of teaching.  Licensed personnel means 
 23.31  persons holding a valid career and technical license issued by 
 23.32  the commissioner.  If an average of five or fewer secondary 
 23.33  full-time equivalent students are enrolled per teacher in an 
 23.34  approved post-secondary program at intermediate district No. 
 23.35  287, 916, or 917, licensed personnel means persons holding a 
 23.36  valid vocational license issued by the commissioner or the board 
 24.1   of trustees of the Minnesota state colleges and universities.  
 24.2   Notwithstanding section 127A.42, the commissioner may modify or 
 24.3   withdraw the program or aid approval and withhold aid under this 
 24.4   section without proceeding under section 127A.42 at any time.  
 24.5   To do so, the commissioner must determine that the program does 
 24.6   not comply with rules of the department of children, families, 
 24.7   and learning or that any facts concerning the program or its 
 24.8   budget differ from the facts in the district's approved 
 24.9   application. 
 24.10     Sec. 33.  Minnesota Statutes 2002, section 124D.65, 
 24.11  subdivision 5, is amended to read: 
 24.12     Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
 24.13  district's limited English proficiency programs revenue for 
 24.14  fiscal year 2000 equals the state total limited English 
 24.15  proficiency programs revenue, minus the amount determined under 
 24.16  paragraph (b), times the ratio of the district's adjusted 
 24.17  limited English proficiency programs base revenue to the state 
 24.18  total adjusted limited English proficiency programs base revenue.
 24.19     (b) Notwithstanding paragraph (a), if the limited English 
 24.20  proficiency programs base revenue for a district equals zero, 
 24.21  the limited English proficiency programs revenue equals the sum 
 24.22  of the following amounts, computed using current year data: 
 24.23     (1) 68 percent of the salary of one full-time equivalent 
 24.24  teacher for each 40 pupils of limited English proficiency 
 24.25  enrolled, or 68 percent of the salary of one-half of a full-time 
 24.26  teacher in a district with 20 or fewer pupils of limited English 
 24.27  proficiency enrolled; and 
 24.28     (2) for supplies and equipment purchased or rented for use 
 24.29  in the instruction of pupils of limited English proficiency an 
 24.30  amount equal to 47 percent of the sum actually spent by the 
 24.31  district but not to exceed an average of $47 in any one school 
 24.32  year for each pupil of limited English proficiency receiving 
 24.33  instruction. 
 24.34     (c) A district's limited English proficiency programs 
 24.35  revenue for fiscal year 2001 and later equals the product of 
 24.36  $584 times the greater of 20 or the number of adjusted marginal 
 25.1   cost pupils of limited English proficiency enrolled in the 
 25.2   district during the current fiscal year. 
 25.3      (d) (b) A pupil ceases to generate state limited English 
 25.4   proficiency aid in the school year following the school year in 
 25.5   which the pupil attains the state cutoff score on a 
 25.6   commissioner-provided assessment that measures the pupil's 
 25.7   emerging academic English. 
 25.8      Sec. 34.  Minnesota Statutes 2002, section 124D.86, 
 25.9   subdivision 1a, is amended to read: 
 25.10     Subd. 1a.  [BUDGET APPROVAL PROCESS.] Each year before a 
 25.11  district receives any revenue under subdivision 3, clause 
 25.12  (3), (4), or (5), the district must submit to the department of 
 25.13  children, families, and learning, for its review and approval a 
 25.14  budget detailing the costs of the desegregation/integration plan 
 25.15  filed under Minnesota Rules, parts 3535.0100 to 3535.0180.  
 25.16  Notwithstanding chapter 14, the department may develop criteria 
 25.17  for budget approval.  The department shall consult with the 
 25.18  desegregation advisory board in developing these criteria.  The 
 25.19  criteria developed by the department should address, at a 
 25.20  minimum, the following: 
 25.21     (1) budget items cannot be approved unless they are part of 
 25.22  any overall desegregation plan approved by the district for 
 25.23  isolated sites or by the multidistrict collaboration council and 
 25.24  participation individual members; 
 25.25     (2) the budget must indicate how revenue expenditures will 
 25.26  be used specifically to support increased opportunities for 
 25.27  interracial contact; 
 25.28     (3) components of the budget to be considered by the 
 25.29  department, including staffing, curriculum, transportation, 
 25.30  facilities, materials, and equipment and reasonable planning 
 25.31  costs, as determined by the department; and 
 25.32     (4) if plans are proposed to enhance existing programs, the 
 25.33  total budget being appropriated to the program must be included, 
 25.34  indicating what part is to be funded using integration revenue 
 25.35  and what part is to be funded using other revenues.  
 25.36     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 26.1   for revenue for fiscal year 2002 and later. 
 26.2      Sec. 35.  Minnesota Statutes 2002, section 124D.86, 
 26.3   subdivision 3, is amended to read: 
 26.4      Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 26.5   the following amounts: 
 26.6      (1) for independent school district No. 709, Duluth, $207 
 26.7   times the adjusted pupil units for the school year; 
 26.8      (2) for independent school district No. 625, St. Paul, $446 
 26.9   times the adjusted pupil units for the school year; 
 26.10     (3) for special school district No. 1, Minneapolis, the sum 
 26.11  of $446 times the adjusted pupil units for the school year and 
 26.12  an additional $35 times the adjusted pupil units for the school 
 26.13  year that is provided entirely through a local levy; 
 26.14     (4) for a district not listed in clause (1), (2), or (3), 
 26.15  that must implement a plan under Minnesota Rules, parts 
 26.16  3535.0100 to 3535.0180, where the district's enrollment of 
 26.17  protected students, as defined under Minnesota Rules, part 
 26.18  3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 26.19  of implementing the plan during the fiscal year minus the aid 
 26.20  received under subdivision 6, or (ii) $130 times the adjusted 
 26.21  pupil units for the school year; 
 26.22     (5) for a district not listed in clause (1), (2), (3), or 
 26.23  (4), that is required to implement a plan according to the 
 26.24  requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
 26.25  the lesser of 
 26.26     (i) the actual cost of implementing the plan during the 
 26.27  fiscal year minus the aid received under subdivision 6, or 
 26.28     (ii) $93 times the adjusted pupil units for the school year.
 26.29     Any money received by districts in clauses (1) to (4) and 
 26.30  (2) which exceeds the amount received in fiscal year 2000 shall 
 26.31  be subject to the budget requirements in subdivision 1a; and 
 26.32     (6) for a member district of a multidistrict integration 
 26.33  collaborative that files a plan with the commissioner, but is 
 26.34  not contiguous to a racially isolated district, integration 
 26.35  revenue equals the amount defined in clause (5). 
 26.36     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 27.1   for fiscal year 2002 and later. 
 27.2      Sec. 36.  Minnesota Statutes 2002, section 124D.86, 
 27.3   subdivision 6, is amended to read: 
 27.4      Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
 27.5   integration aid under subdivision 5 must be adjusted for each 
 27.6   pupil residing in a district eligible for integration revenue 
 27.7   under subdivision 3, clause (1), or (2), or (3), and attending a 
 27.8   nonresident district under sections 123A.05 to 123A.08, 124D.03, 
 27.9   124D.06, 124D.07, and 124D.08, that is not eligible for 
 27.10  integration revenue under subdivision 3, clause (1), or (2), or 
 27.11  (3), and has implemented a plan under Minnesota Rules, parts 
 27.12  3535.0100 to 3535.0180, if the enrollment of the pupil in the 
 27.13  nonresident district contributes to desegregation or integration 
 27.14  purposes.  The adjustments must be made according to this 
 27.15  subdivision.  
 27.16     (b) Aid paid to a district serving nonresidents must be 
 27.17  increased by an amount equal to the revenue per pupil unit of 
 27.18  the resident district under subdivision 3, clause 
 27.19  (1), or (2), or (3), minus the revenue attributable to the pupil 
 27.20  in the nonresident district under subdivision 3, 
 27.21  clause (3), (4), or (5), for the time the pupil is enrolled in 
 27.22  the nonresident district.  
 27.23     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 27.24  for fiscal year 2002 and later. 
 27.25     Sec. 37.  Minnesota Statutes 2002, section 125A.21, 
 27.26  subdivision 2, is amended to read: 
 27.27     Subd. 2.  [THIRD PARTY REIMBURSEMENT.] (a) Beginning July 
 27.28  1, 2000, districts shall seek reimbursement from insurers and 
 27.29  similar third parties for the cost of services provided by the 
 27.30  district whenever the services provided by the district are 
 27.31  otherwise covered by the child's health coverage.  Districts 
 27.32  shall request, but may not require, the child's family to 
 27.33  provide information about the child's health coverage when a 
 27.34  child with a disability begins to receive services from the 
 27.35  district of a type that may be reimbursable, and shall request, 
 27.36  but may not require, updated information after that as needed.  
 28.1      (b) For children enrolled in medical assistance under 
 28.2   chapter 256B or MinnesotaCare under chapter 256L who have no 
 28.3   other health coverage, a district shall provide an initial 
 28.4   written notice to the enrolled child's parent or legal 
 28.5   representative of its intent to seek reimbursement from medical 
 28.6   assistance or MinnesotaCare for the individual education plan 
 28.7   health-related services provided by the district. 
 28.8      (c) The district shall give the parent or legal 
 28.9   representative annual written notice of: 
 28.10     (1) the district's intent to seek reimbursement from 
 28.11  medical assistance or MinnesotaCare for individual education 
 28.12  plan health-related services provided by the district; 
 28.13     (2) the right of the parent or legal representative to 
 28.14  request a copy of all records concerning individual education 
 28.15  plan health-related services disclosed by the district to any 
 28.16  third party; and 
 28.17     (3) the right of the parent or legal representative to 
 28.18  withdraw consent for disclosure of a child's records at any time 
 28.19  without consequence. 
 28.20  The written notice shall be provided as part of the written 
 28.21  notice required by Code of Federal Regulations, title 34, 
 28.22  section 300.503 300.504. 
 28.23     (d) In order to access the private health care coverage of 
 28.24  a child who is covered by private health care coverage in whole 
 28.25  or in part, a district must: 
 28.26     (1) obtain annual written informed consent from the parent 
 28.27  or legal representative, in compliance with subdivision 5; and 
 28.28     (2) inform the parent or legal representative that a 
 28.29  refusal to permit the district or state Medicaid agency to 
 28.30  access their private health care coverage does not relieve the 
 28.31  district of its responsibility to provide all services necessary 
 28.32  to provide free and appropriate public education at no cost to 
 28.33  the parent or legal representative. 
 28.34     (e) If the commissioner of human services obtains federal 
 28.35  approval to exempt covered individual education plan 
 28.36  health-related services from the requirement that private health 
 29.1   care coverage refuse payment before medical assistance may be 
 29.2   billed, paragraphs (b), (c), and (d) shall also apply to 
 29.3   students with a combination of private health care coverage and 
 29.4   health care coverage through medical assistance or MinnesotaCare.
 29.5      (f) In the event that Congress or any federal agency or the 
 29.6   Minnesota legislature or any state agency establishes lifetime 
 29.7   limits, limits for any health care services, cost-sharing 
 29.8   provisions, or otherwise provides that individual education plan 
 29.9   health-related services impact benefits for persons enrolled in 
 29.10  medical assistance or MinnesotaCare, the amendments to this 
 29.11  subdivision adopted in 2002 are repealed on the effective date 
 29.12  of any federal or state law or regulation that imposes the 
 29.13  limits.  In that event, districts must obtain informed consent 
 29.14  consistent with this subdivision as it existed prior to the 2002 
 29.15  amendments and subdivision 5, before seeking reimbursement for 
 29.16  children enrolled in medical assistance under chapter 256B or 
 29.17  MinnesotaCare under chapter 256L who have no other health care 
 29.18  coverage. 
 29.19     Sec. 38.  Minnesota Statutes 2002, section 126C.10, 
 29.20  subdivision 6, is amended to read: 
 29.21     Subd. 6.  [DEFINITIONS.] The definitions in this 
 29.22  subdivision apply only to subdivisions 7 and 8.  
 29.23     (a) "High school" means a secondary school that has pupils 
 29.24  enrolled in at least the 10th, 11th, and 12th grades.  If there 
 29.25  is no secondary school in the district that has pupils enrolled 
 29.26  in at least the 10th, 11th, and 12th grades, and the school is 
 29.27  at least 19 miles from the next nearest school, the commissioner 
 29.28  must designate one school in the district as a high school for 
 29.29  the purposes of this section. 
 29.30     (b) "Secondary average daily membership" means, for a 
 29.31  district that has only one high school, the average daily 
 29.32  membership of pupils served in grades 7 through 12.  For a 
 29.33  district that has more than one high school, "secondary average 
 29.34  daily membership" for each high school means the product of the 
 29.35  average daily membership of pupils served in grades 7 through 12 
 29.36  in the high school, times the ratio of six to the number of 
 30.1   grades in the high school. 
 30.2      (c) "Attendance area" means the total surface area of the 
 30.3   district, in square miles, divided by the number of high schools 
 30.4   in the district.  For a district that does not operate a high 
 30.5   school and is less than 19 miles from the nearest operating high 
 30.6   school, the attendance area equals zero. 
 30.7      (d) "Isolation index" for a high school means the square 
 30.8   root of 55 percent of the attendance area plus the distance in 
 30.9   miles, according to the usually traveled routes, between the 
 30.10  high school and the nearest high school.  For a district in 
 30.11  which there is located land defined in section 84A.01, 84A.20, 
 30.12  or 84A.31, the distance in miles is the sum of: 
 30.13     (1) the square root of one-half of the attendance area; and 
 30.14     (2) the distance from the border of the district to the 
 30.15  nearest high school. 
 30.16     (e) "Qualifying high school" means a high school that has 
 30.17  an isolation index greater than 23 and that has secondary 
 30.18  average daily membership of less than 400.  
 30.19     (f) "Qualifying elementary school" means an elementary 
 30.20  school that is located 19 miles or more from the nearest 
 30.21  elementary school or from the nearest elementary school within 
 30.22  the district and, in either case, has an elementary average 
 30.23  daily membership of an average of 20 or fewer per grade. 
 30.24     (g) "Elementary average daily membership" means, for a 
 30.25  district that has only one elementary school, the average daily 
 30.26  membership of pupils served in kindergarten through grade 6.  
 30.27  For a district that has more than one elementary school, 
 30.28  "average daily membership" for each school means the average 
 30.29  daily membership of pupils served in kindergarten through grade 
 30.30  6 multiplied by the ratio of seven to the number of grades in 
 30.31  the elementary school.  
 30.32     Sec. 39.  Minnesota Statutes 2002, section 126C.15, 
 30.33  subdivision 1, is amended to read: 
 30.34     Subdivision 1.  [USE OF THE REVENUE.] The basic skills 
 30.35  revenue under section 126C.10, subdivision 4, and the portion of 
 30.36  the transition revenue adjustment under section 126C.10, 
 31.1   subdivision 20, attributable to the compensatory transition 
 31.2   allowance under section 126C.10, subdivision 19, paragraph (b), 
 31.3   must be reserved and used to meet the educational needs of 
 31.4   pupils who enroll under-prepared to learn and whose progress 
 31.5   toward meeting state or local content or performance standards 
 31.6   is below the level that is appropriate for learners of their 
 31.7   age.  Any of the following may be provided to meet these 
 31.8   learners' needs: 
 31.9      (1) direct instructional services under the assurance of 
 31.10  mastery program according to section 124D.66; 
 31.11     (2) remedial instruction in reading, language arts, 
 31.12  mathematics, other content areas, or study skills to improve the 
 31.13  achievement level of these learners; 
 31.14     (3) additional teachers and teacher aides to provide more 
 31.15  individualized instruction to these learners through individual 
 31.16  tutoring, lower instructor-to-learner ratios, or team teaching; 
 31.17     (4) a longer school day or week during the regular school 
 31.18  year or through a summer program that may be offered directly by 
 31.19  the site or under a performance-based contract with a 
 31.20  community-based organization; 
 31.21     (5) comprehensive and ongoing staff development consistent 
 31.22  with district and site plans according to section 122A.60, for 
 31.23  teachers, teacher aides, principals, and other personnel to 
 31.24  improve their ability to identify the needs of these learners 
 31.25  and provide appropriate remediation, intervention, 
 31.26  accommodations, or modifications; 
 31.27     (6) instructional materials and technology appropriate for 
 31.28  meeting the individual needs of these learners; 
 31.29     (7) programs to reduce truancy, encourage completion of 
 31.30  high school, enhance self-concept, provide health services, 
 31.31  provide nutrition services, provide a safe and secure learning 
 31.32  environment, provide coordination for pupils receiving services 
 31.33  from other governmental agencies, provide psychological services 
 31.34  to determine the level of social, emotional, cognitive, and 
 31.35  intellectual development, and provide counseling services, 
 31.36  guidance services, and social work services; 
 32.1      (8) bilingual programs, bicultural programs, and programs 
 32.2   for learners of limited English proficiency; 
 32.3      (9) all day kindergarten; 
 32.4      (10) extended school day and extended school year programs; 
 32.5   and 
 32.6      (11) substantial parent involvement in developing and 
 32.7   implementing remedial education or intervention plans for a 
 32.8   learner, including learning contracts between the school, the 
 32.9   learner, and the parent that establish achievement goals and 
 32.10  responsibilities of the learner and the learner's parent or 
 32.11  guardian. 
 32.12     Sec. 40.  Minnesota Statutes 2002, section 126C.17, 
 32.13  subdivision 7a, is amended to read: 
 32.14     Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
 32.15  school district that had a referendum allowance for fiscal year 
 32.16  2002 exceeding $415, for each separately authorized referendum 
 32.17  levy, the commissioner of revenue, in consultation with the 
 32.18  commissioner of children, families, and learning, shall certify 
 32.19  the amount of the referendum levy in taxes payable year 2001 
 32.20  attributable to the portion of the referendum allowance 
 32.21  exceeding $415 levied against property classified as class 2, 
 32.22  noncommercial 4c(1), or 4c(4), under section 273.13, excluding 
 32.23  the portion of the tax paid by the portion of class 2a property 
 32.24  consisting of the house, garage, and surrounding one acre of 
 32.25  land.  The resulting amount must be used to reduce the 
 32.26  district's referendum levy amount otherwise determined, and must 
 32.27  be paid to the district each year that the referendum authority 
 32.28  remains in effect.  The aid payable under this subdivision must 
 32.29  be subtracted from the district's referendum equalization aid 
 32.30  under subdivision 7.  The referendum equalization aid after the 
 32.31  subtraction must not be less than zero. 
 32.32     For the purposes of this subdivision, the referendum levy 
 32.33  with the latest year of expiration is assumed to be at the 
 32.34  highest level of equalization, and the referendum levy with the 
 32.35  earliest year of expiration is assumed to be at the lowest level 
 32.36  of equalization. 
 33.1      Sec. 41.  Minnesota Statutes 2002, section 126C.17, 
 33.2   subdivision 9, is amended to read: 
 33.3      Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 33.4   by section 126C.10, subdivision 1, may be increased in the 
 33.5   amount approved by the voters of the district at a referendum 
 33.6   called for the purpose.  The referendum may be called by the 
 33.7   board or shall be called by the board upon written petition of 
 33.8   qualified voters of the district.  The referendum must be 
 33.9   conducted one or two calendar years before the increased levy 
 33.10  authority, if approved, first becomes payable.  Only one 
 33.11  election to approve an increase may be held in a calendar year.  
 33.12  Unless the referendum is conducted by mail under paragraph (g), 
 33.13  the referendum must be held on the first Tuesday after the first 
 33.14  Monday in November.  The ballot must state the maximum amount of 
 33.15  the increased revenue per resident marginal cost pupil unit, the 
 33.16  estimated referendum tax rate as a percentage of referendum 
 33.17  market value in the first year it is to be levied, and that the 
 33.18  revenue must be used to finance school operations.  The ballot 
 33.19  may state a schedule, determined by the board, of increased 
 33.20  revenue per resident marginal cost pupil unit that differs from 
 33.21  year to year over the number of years for which the increased 
 33.22  revenue is authorized.  If the ballot contains a schedule 
 33.23  showing different amounts, it must also indicate the estimated 
 33.24  referendum tax rate as a percent of referendum market value for 
 33.25  the amount specified for the first year and for the maximum 
 33.26  amount specified in the schedule.  The ballot may state that 
 33.27  existing referendum levy authority is expiring.  In this case, 
 33.28  the ballot may also compare the proposed levy authority to the 
 33.29  existing expiring levy authority, and express the proposed 
 33.30  increase as the amount, if any, over the expiring referendum 
 33.31  levy authority.  The ballot must designate the specific number 
 33.32  of years, not to exceed ten, for which the referendum 
 33.33  authorization applies.  The notice required under section 275.60 
 33.34  may be modified to read, in cases of renewing existing levies: 
 33.35     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 33.36     FOR A PROPERTY TAX INCREASE." 
 34.1      The ballot may contain a textual portion with the 
 34.2   information required in this subdivision and a question stating 
 34.3   substantially the following:  
 34.4      "Shall the increase in the revenue proposed by (petition 
 34.5   to) the board of ........., School District No. .., be approved?"
 34.6      If approved, an amount equal to the approved revenue per 
 34.7   resident marginal cost pupil unit times the resident marginal 
 34.8   cost pupil units for the school year beginning in the year after 
 34.9   the levy is certified shall be authorized for certification for 
 34.10  the number of years approved, if applicable, or until revoked or 
 34.11  reduced by the voters of the district at a subsequent referendum.
 34.12     (b) The board must prepare and deliver by first class mail 
 34.13  at least 15 days but no more than 30 days before the day of the 
 34.14  referendum to each taxpayer a notice of the referendum and the 
 34.15  proposed revenue increase.  The board need not mail more than 
 34.16  one notice to any taxpayer.  For the purpose of giving mailed 
 34.17  notice under this subdivision, owners must be those shown to be 
 34.18  owners on the records of the county auditor or, in any county 
 34.19  where tax statements are mailed by the county treasurer, on the 
 34.20  records of the county treasurer.  Every property owner whose 
 34.21  name does not appear on the records of the county auditor or the 
 34.22  county treasurer is deemed to have waived this mailed notice 
 34.23  unless the owner has requested in writing that the county 
 34.24  auditor or county treasurer, as the case may be, include the 
 34.25  name on the records for this purpose.  The notice must project 
 34.26  the anticipated amount of tax increase in annual dollars and 
 34.27  annual percentage for typical residential homesteads, 
 34.28  agricultural homesteads, apartments, and commercial-industrial 
 34.29  property within the school district. 
 34.30     The notice for a referendum may state that an existing 
 34.31  referendum levy is expiring and project the anticipated amount 
 34.32  of increase over the existing referendum levy in the first year, 
 34.33  if any, in annual dollars and annual percentage for typical 
 34.34  residential homesteads, agricultural homesteads, apartments, and 
 34.35  commercial-industrial property within the district. 
 34.36     The notice must include the following statement:  "Passage 
 35.1   of this referendum will result in an increase in your property 
 35.2   taxes."  However, in cases of renewing existing levies, the 
 35.3   notice may include the following statement:  "Passage of this 
 35.4   referendum may result in an increase in your property taxes." 
 35.5      (c) A referendum on the question of revoking or reducing 
 35.6   the increased revenue amount authorized pursuant to paragraph 
 35.7   (a) may be called by the board and shall be called by the board 
 35.8   upon the written petition of qualified voters of the district.  
 35.9   A referendum to revoke or reduce the levy revenue amount must be 
 35.10  based upon the dollar amount, local tax rate, or state the 
 35.11  amount per resident marginal cost pupil unit, that was stated to 
 35.12  be the basis for the initial authorization by which the 
 35.13  authority is to be reduced.  Revenue authority approved by the 
 35.14  voters of the district pursuant to paragraph (a) must 
 35.15  be received available to the school district at least once 
 35.16  before it is subject to a referendum on its revocation or 
 35.17  reduction for subsequent years.  Only one revocation or 
 35.18  reduction referendum may be held to revoke or reduce referendum 
 35.19  revenue for any specific year and for years thereafter. 
 35.20     (d) A petition authorized by paragraph (a) or (c) is 
 35.21  effective if signed by a number of qualified voters in excess of 
 35.22  15 percent of the registered voters of the district on the day 
 35.23  the petition is filed with the board.  A referendum invoked by 
 35.24  petition must be held on the date specified in paragraph (a). 
 35.25     (e) The approval of 50 percent plus one of those voting on 
 35.26  the question is required to pass a referendum authorized by this 
 35.27  subdivision. 
 35.28     (f) At least 15 days before the day of the referendum, the 
 35.29  district must submit a copy of the notice required under 
 35.30  paragraph (b) to the commissioner and to the county auditor of 
 35.31  each county in which the district is located.  Within 15 days 
 35.32  after the results of the referendum have been certified by the 
 35.33  board, or in the case of a recount, the certification of the 
 35.34  results of the recount by the canvassing board, the district 
 35.35  must notify the commissioner of the results of the referendum. 
 35.36     Sec. 42.  Minnesota Statutes 2002, section 126C.21, 
 36.1   subdivision 3, is amended to read: 
 36.2      Subd. 3.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
 36.3   amount of money apportioned to a district for that year pursuant 
 36.4   to section 127A.34, subdivision 2, excluding any district where 
 36.5   the general education levy is determined according to section 
 36.6   126C.13, subdivision 3, must be deducted from the general 
 36.7   education aid earned by that district for the same year or from 
 36.8   aid earned from other state sources.  
 36.9      Sec. 43.  Minnesota Statutes 2002, section 126C.42, 
 36.10  subdivision 1, is amended to read: 
 36.11     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
 36.12  each year in which so required by this subdivision, a district 
 36.13  must make an additional levy to eliminate its statutory 
 36.14  operating debt, determined as of June 30, 1977, and certified 
 36.15  and adjusted by the commissioner.  This levy shall not be made 
 36.16  in more than 30 successive years and each year before it is 
 36.17  made, it must be approved by the commissioner and the approval 
 36.18  shall specify its amount.  This levy shall be an amount which is 
 36.19  equal to the amount raised by a levy of a net tax rate of 1.98 
 36.20  2.67 percent times the adjusted net tax capacity of the district 
 36.21  for the preceding year for taxes payable in 2000 2002 and 
 36.22  thereafter; provided that in the last year in which the district 
 36.23  is required to make this levy, it must levy an amount not to 
 36.24  exceed the amount raised by a levy of a net tax rate of 1.98 
 36.25  2.67 percent times the adjusted net tax capacity of the district 
 36.26  for the preceding year for taxes payable in 2000 2002 and 
 36.27  thereafter.  When the sum of the cumulative levies made pursuant 
 36.28  to this subdivision and transfers made according to section 
 36.29  123B.79, subdivision 6, equals an amount equal to the statutory 
 36.30  operating debt of the district, the levy shall be discontinued. 
 36.31     (b) The district must establish a special account in the 
 36.32  general fund which shall be designated "appropriated fund 
 36.33  balance reserve account for purposes of reducing statutory 
 36.34  operating debt" on its books and records.  This account shall 
 36.35  reflect the levy authorized pursuant to this subdivision.  The 
 36.36  proceeds of this levy must be used only for cash flow 
 37.1   requirements and must not be used to supplement district 
 37.2   revenues or income for the purposes of increasing the district's 
 37.3   expenditures or budgets. 
 37.4      (c) Any district which is required to levy pursuant to this 
 37.5   subdivision must certify the maximum levy allowable under 
 37.6   section 126C.13, subdivision 2, in that same year. 
 37.7      (d) Each district shall make permanent fund balance 
 37.8   transfers so that the total statutory operating debt of the 
 37.9   district is reflected in the general fund as of June 30, 1977. 
 37.10     Sec. 44.  Minnesota Statutes 2002, section 126C.48, 
 37.11  subdivision 3, is amended to read: 
 37.12     Subd. 3.  [ADJUSTMENTS.] If any district levy is found to 
 37.13  be excessive as a result of a decision of the tax court or a 
 37.14  redetermination by the commissioner of revenue under section 
 37.15  127A.48, subdivisions 7 to 16, or for any other reason, the 
 37.16  amount of the excess shall be deducted from the levy certified 
 37.17  in the next year for the same purpose.  If no levy is certified 
 37.18  in the next year for the same purpose or if the amount certified 
 37.19  is less than the amount of the excess, the excess must be 
 37.20  deducted from that levy and the general fund levy certified 
 37.21  pursuant to section 126C.13, subdivision 2 chapters 122A, 123A, 
 37.22  123B, 124D, and 126C.  If the amount of any aid would have been 
 37.23  increased in a prior year as a result of a decision of the tax 
 37.24  court or a redetermination by the commissioner of revenue, the 
 37.25  amount of the increase shall be added to the amount of current 
 37.26  aid for the same purposes. 
 37.27     Sec. 45.  Minnesota Statutes 2002, section 126C.63, 
 37.28  subdivision 5, is amended to read: 
 37.29     Subd. 5.  [LEVY.] "Levy" means a district's net debt 
 37.30  service levy after the reduction of debt service equalization 
 37.31  aid under section 123B.53, subdivision 6.  For taxes payable in 
 37.32  1994 2003 and later, each district's maximum effort debt service 
 37.33  levy for purposes of subdivision 8, must be reduced by an equal 
 37.34  number of percentage points if the commissioner of finance 
 37.35  determines that the levy reduction will not result in 
 37.36  a statewide property tax payment from the general fund in the 
 38.1   state treasury according to section 16A.641, as would be 
 38.2   required under Minnesota Statutes 1992, section 124.46 126C.72, 
 38.3   subdivision 3.  A district's levy that is adjusted under this 
 38.4   section must not be reduced below 22.3 30.1 percent of the 
 38.5   district's adjusted net tax capacity. 
 38.6      Sec. 46.  Minnesota Statutes 2002, section 126C.63, 
 38.7   subdivision 8, is amended to read: 
 38.8      Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] (a) "Maximum 
 38.9   effort debt service levy" means the lesser of: 
 38.10     (1) a levy in whichever of the following amounts is 
 38.11  applicable: 
 38.12     (a) (i) in any district receiving a debt service loan for a 
 38.13  debt service levy payable in 2002 and thereafter, or granted a 
 38.14  capital loan after January 1, 2001 2002, a levy in total dollar 
 38.15  amount computed at a rate of 30 40 percent of adjusted net tax 
 38.16  capacity for taxes payable in 2002 and thereafter; 
 38.17     (b) (ii) in any district receiving a debt service loan for 
 38.18  a debt service levy payable in 1991 and thereafter 2001 or 
 38.19  earlier, or granted a capital loan after before January 1 
 38.20  2, 1990 2001, a levy in a total dollar amount computed at a rate 
 38.21  of 24 32 percent of adjusted net tax capacity for taxes payable 
 38.22  in 1991 2002 and thereafter; 
 38.23     (c) in any district granted a debt service loan after July 
 38.24  31, 1981, or granted a capital loan which is approved after July 
 38.25  31, 1981, a levy in a total dollar amount computed as a tax rate 
 38.26  of 21.92 percent on the adjusted net tax capacity for taxes 
 38.27  payable in 1991 and thereafter; or 
 38.28     (2) a levy in any district for which a capital loan was 
 38.29  approved prior to August 1, 1981, a levy in a total dollar 
 38.30  amount equal to the sum of the amount of the required debt 
 38.31  service levy and an amount which when levied annually will in 
 38.32  the opinion of the commissioner be sufficient to retire the 
 38.33  remaining interest and principal on any outstanding loans from 
 38.34  the state within 30 years of the original date when the capital 
 38.35  loan was granted.  
 38.36     (b) The board in any district affected by the provisions of 
 39.1   paragraph (a), clause (2), may elect instead to determine the 
 39.2   amount of its levy according to the provisions of paragraph (a), 
 39.3   clause (1).  If a district's capital loan is not paid within 30 
 39.4   years because it elects to determine the amount of its levy 
 39.5   according to the provisions of paragraph (a), clause (2), the 
 39.6   liability of the district for the amount of the difference 
 39.7   between the amount it levied under paragraph (a), clause (2), 
 39.8   and the amount it would have levied under paragraph (a), clause 
 39.9   (1), and for interest on the amount of that difference, must not 
 39.10  be satisfied and discharged pursuant to Minnesota Statutes 1988, 
 39.11  or an earlier edition of Minnesota Statutes if applicable, 
 39.12  section 124.43, subdivision 4. 
 39.13     Sec. 47.  Minnesota Statutes 2002, section 126C.69, 
 39.14  subdivision 2, is amended to read: 
 39.15     Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
 39.16  1999, a district is not eligible for a capital loan unless the 
 39.17  district's estimated net debt tax rate as computed by the 
 39.18  commissioner after debt service equalization aid would be more 
 39.19  than 30 40 percent of adjusted net tax capacity.  The estimate 
 39.20  must assume a 20-year maturity schedule for new debt. 
 39.21     Sec. 48.  Minnesota Statutes 2002, section 126C.69, 
 39.22  subdivision 9, is amended to read: 
 39.23     Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
 39.24  recommended for approval for a district exceeding an amount 
 39.25  computed as follows: 
 39.26     (1) the amount requested by the district under subdivision 
 39.27  6; 
 39.28     (2) plus the aggregate principal amount of general 
 39.29  obligation bonds of the district outstanding on June 30 of the 
 39.30  year following the year the application was received, not 
 39.31  exceeding the limitation on net debt of the district in section 
 39.32  475.53, subdivision 4, or 450 607 percent of its adjusted net 
 39.33  tax capacity as most recently determined, whichever is less; 
 39.34     (3) less the maximum net debt permissible for the district 
 39.35  on December 1 of the year the application is received, under the 
 39.36  limitation in section 475.53, subdivision 4, or 450 607 percent 
 40.1   of its adjusted net tax capacity as most recently determined, 
 40.2   whichever is less; 
 40.3      (4) less any amount by which the amount voted exceeds the 
 40.4   total cost of the facilities for which the loan is granted.  
 40.5      (b) The loan may be approved in an amount computed as 
 40.6   provided in paragraph (a), clauses (1) to (3), subject to later 
 40.7   reduction according to paragraph (a), clause (4). 
 40.8      Sec. 49.  Minnesota Statutes 2002, section 127A.47, 
 40.9   subdivision 7, is amended to read: 
 40.10     Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
 40.11  education aid for districts must be adjusted for each pupil 
 40.12  attending a nonresident district under sections 123A.05 to 
 40.13  123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
 40.14  adjustments must be made according to this subdivision. 
 40.15     (a) General education aid paid to a resident district must 
 40.16  be reduced by an amount equal to the referendum equalization aid 
 40.17  attributable to the pupil in the resident district. 
 40.18     (b) General education aid paid to a district serving a 
 40.19  pupil in programs listed in this subdivision must be increased 
 40.20  by an amount equal to the referendum equalization aid 
 40.21  attributable to the pupil in the nonresident district.  
 40.22     (c) If the amount of the reduction to be made from the 
 40.23  general education aid of the resident district is greater than 
 40.24  the amount of general education aid otherwise due the district, 
 40.25  the excess reduction must be made from other state aids due the 
 40.26  district. 
 40.27     (d) The district of residence must pay tuition to a 
 40.28  district or an area learning center, operated according to 
 40.29  paragraph (e), providing special instruction and services to a 
 40.30  pupil with a disability, as defined in section 125A.02, or a 
 40.31  pupil, as defined in section 125A.51, who is enrolled in a 
 40.32  program listed in this subdivision.  The tuition must be equal 
 40.33  to (1) the actual cost of providing special instruction and 
 40.34  services to the pupil, including a proportionate amount for debt 
 40.35  service and for capital expenditure facilities and equipment, 
 40.36  and debt service but not including any amount for 
 41.1   transportation, minus (2) the amount of general education 
 41.2   revenue and special education aid but not including any amount 
 41.3   for transportation, attributable to that pupil, that is received 
 41.4   by the district providing special instruction and services. 
 41.5      (e) An area learning center operated by a service 
 41.6   cooperative, intermediate district, education district, or a 
 41.7   joint powers cooperative may elect through the action of the 
 41.8   constituent boards to charge the resident district tuition for 
 41.9   pupils rather than to calculate general education aid 
 41.10  adjustments under paragraph (a), (b), or (c).  The tuition must 
 41.11  be equal to the greater of the average general education revenue 
 41.12  per pupil unit attributable to the pupil, or the actual cost of 
 41.13  providing the instruction, excluding transportation costs, if 
 41.14  the pupil meets the requirements of section 125A.02 or 
 41.15  125A.51 have the general education revenue paid to a fiscal 
 41.16  agent school district.  Except as provided in paragraph (d), the 
 41.17  district of residence must pay tuition equal to at least 90 
 41.18  percent of the district average general education revenue per 
 41.19  pupil unit minus an amount equal to the product of the formula 
 41.20  allowance according to section 126C.10, subdivision 2, times 
 41.21  .0485, calculated without basic skills revenue and 
 41.22  transportation sparsity revenue, times the number of pupil units 
 41.23  for pupils attending the area learning center, plus the amount 
 41.24  of compensatory revenue generated by pupils attending the area 
 41.25  learning center. 
 41.26     Sec. 50.  Minnesota Statutes 2002, section 127A.47, 
 41.27  subdivision 8, is amended to read: 
 41.28     Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
 41.29  for districts must be adjusted for each pupil attending a 
 41.30  charter school under section 124D.10.  The adjustments must be 
 41.31  made according to this subdivision. 
 41.32     (b) General education aid paid to a district in which a 
 41.33  charter school not providing transportation according to section 
 41.34  124D.10, subdivision 16, is located must be increased by an 
 41.35  amount equal to the product of:  (1) the sum of an amount equal 
 41.36  to the product of the formula allowance according to section 
 42.1   126C.10, subdivision 2, times .0485, plus the transportation 
 42.2   sparsity allowance for the district, plus the transportation 
 42.3   transition allowance for the district; times (2) the pupil units 
 42.4   attributable to the pupil.  
 42.5      Sec. 51.  Minnesota Statutes 2002, section 127A.49, 
 42.6   subdivision 2, is amended to read: 
 42.7      Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
 42.8   sections 270.07, 375.192, or otherwise, the net tax capacity of 
 42.9   any district for any taxable year is changed after the taxes for 
 42.10  that year have been spread by the county auditor and the local 
 42.11  tax rate as determined by the county auditor based upon the 
 42.12  original net tax capacity is applied upon the changed net tax 
 42.13  capacities, the county auditor shall, prior to February 1 of 
 42.14  each year, certify to the commissioner of children, families, 
 42.15  and learning the amount of any resulting net revenue loss that 
 42.16  accrued to the district during the preceding year.  Each year, 
 42.17  the commissioner shall pay an abatement adjustment to the 
 42.18  district in an amount calculated according to the provisions of 
 42.19  this subdivision.  This amount shall be deducted from the amount 
 42.20  of the levy authorized by section 126C.46.  The amount of the 
 42.21  abatement adjustment must be the product of:  
 42.22     (1) the net revenue loss as certified by the county 
 42.23  auditor, times 
 42.24     (2) the ratio of:  
 42.25     (i) the sum of the amounts of the district's certified levy 
 42.26  in the preceding year according to the following:  
 42.27     (A) section 126C.13 if the district received general 
 42.28  education aid according to that section for the second preceding 
 42.29  year; 
 42.30     (B) section 123B.57, if the district received health and 
 42.31  safety aid according to that section for the second preceding 
 42.32  year; 
 42.33     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
 42.34  the district received aid for community education programs 
 42.35  according to any of those sections that section for the second 
 42.36  preceding year; 
 43.1      (D) (C) section 124D.135, subdivision 3, if the district 
 43.2   received early childhood family education aid according to 
 43.3   section 124D.135 for the second preceding year; and 
 43.4      (E) (D) section 126C.17, subdivision 6, if the district 
 43.5   received referendum equalization aid according to that section 
 43.6   for the second preceding year; to 
 43.7      (ii) the total amount of the district's certified levy in 
 43.8   the preceding December, plus or minus auditor's adjustments. 
 43.9      Sec. 52.  Minnesota Statutes 2002, section 127A.49, 
 43.10  subdivision 3, is amended to read: 
 43.11     Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
 43.12  tax increment is made to a district pursuant to section 469.176, 
 43.13  subdivision 2, or upon decertification of a tax increment 
 43.14  district, the school district's aid and levy limitations must be 
 43.15  adjusted for the fiscal year in which the excess tax increment 
 43.16  is paid under the provisions of this subdivision. 
 43.17     (b) An amount must be subtracted from the district's aid 
 43.18  for the current fiscal year equal to the product of: 
 43.19     (1) the amount of the payment of excess tax increment to 
 43.20  the district, times 
 43.21     (2) the ratio of: 
 43.22     (i) the sum of the amounts of the district's certified levy 
 43.23  for the fiscal year in which the excess tax increment is paid 
 43.24  according to the following: 
 43.25     (A) section 126C.13, if the district received general 
 43.26  education aid according to that section for the second preceding 
 43.27  year; 
 43.28     (B) section 123B.57, if the district received health and 
 43.29  safety aid according to that section for the second preceding 
 43.30  year; 
 43.31     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
 43.32  the district received aid for community education programs 
 43.33  according to any of those sections that section for the second 
 43.34  preceding year; 
 43.35     (D) (C) section 124D.135, subdivision 3, if the district 
 43.36  received early childhood family education aid according to 
 44.1   section 124D.135 for the second preceding year; and 
 44.2      (E) (D) section 126C.17, subdivision 6, if the district 
 44.3   received referendum equalization aid according to that section 
 44.4   for the second preceding year; to 
 44.5      (ii) the total amount of the district's certified levy for 
 44.6   the fiscal year, plus or minus auditor's adjustments. 
 44.7      (c) An amount must be subtracted from the school district's 
 44.8   levy limitation for the next levy certified equal to the 
 44.9   difference between: 
 44.10     (1) the amount of the distribution of excess increment; and 
 44.11     (2) the amount subtracted from aid pursuant to clause (a). 
 44.12     If the aid and levy reductions required by this subdivision 
 44.13  cannot be made to the aid for the fiscal year specified or to 
 44.14  the levy specified, the reductions must be made from aid for 
 44.15  subsequent fiscal years, and from subsequent levies.  The school 
 44.16  district must use the payment of excess tax increment to replace 
 44.17  the aid and levy revenue reduced under this subdivision. 
 44.18     (d) This subdivision applies only to the total amount of 
 44.19  excess increments received by a district for a calendar year 
 44.20  that exceeds $25,000. 
 44.21     Sec. 53.  Minnesota Statutes 2002, section 128D.11, 
 44.22  subdivision 8, is amended to read: 
 44.23     Subd. 8.  [NET DEBT LIMIT.] The school district shall not 
 44.24  be subject to a net debt in excess of 102 144 percent of the net 
 44.25  tax capacity of all taxable property therein. 
 44.26     Sec. 54.  Minnesota Statutes 2002, section 169.26, 
 44.27  subdivision 3, is amended to read: 
 44.28     Subd. 3.  [DRIVER TRAINING.] All driver education courses 
 44.29  approved by the commissioner of children, families, and learning 
 44.30  and the commissioner of public safety must include instruction 
 44.31  on railroad-highway grade crossing safety.  The commissioner of 
 44.32  children, families, and learning and the commissioner of public 
 44.33  safety shall by rule establish minimum standards of course 
 44.34  content relating to operation of vehicles at railroad-highway 
 44.35  grade crossings.  
 44.36     Sec. 55.  Minnesota Statutes 2002, section 169.973, 
 45.1   subdivision 1, is amended to read: 
 45.2      Subdivision 1.  [COMMISSIONER'S AUTHORITY; RULES; 
 45.3   CURRICULUM.] The commissioner of public safety shall supervise 
 45.4   the administration and conduct of driver improvement clinics and 
 45.5   youth-oriented driver improvement clinics.  The commissioner of 
 45.6   public safety shall promulgate rules setting forth standards for 
 45.7   the curriculum and mode of instruction of driver improvement 
 45.8   clinics and youth-oriented driver improvement clinics and such 
 45.9   other matters as the commissioner of public safety considers 
 45.10  necessary for the proper administration of such clinics.  In the 
 45.11  preparation of such standards the commissioner of public safety 
 45.12  shall consult with the commissioner of children, families, and 
 45.13  learning and state associations of judges.  A driver improvement 
 45.14  clinic established under sections 169.971 to 169.973 and 171.20, 
 45.15  subdivision 3, shall conform to the standards promulgated by the 
 45.16  commissioner of public safety.  The course of study at a driver 
 45.17  improvement clinic and youth-oriented driver improvement clinic 
 45.18  may not exceed a cumulative total of nine hours with no single 
 45.19  class session lasting more than three hours.  The course of 
 45.20  study at a driver improvement clinic and youth-oriented driver 
 45.21  improvement clinic shall include instruction in railroad 
 45.22  crossing safety. 
 45.23     Sec. 56.  Minnesota Statutes 2002, section 178.02, 
 45.24  subdivision 1, is amended to read: 
 45.25     Subdivision 1.  [MEMBERS.] The commissioner of labor and 
 45.26  industry, hereinafter called the commissioner, shall appoint an 
 45.27  apprenticeship advisory council, hereinafter referred to as the 
 45.28  council, composed of three representatives each from employer 
 45.29  and employee organizations, and two representatives of the 
 45.30  general public.  The assistant commissioner director of 
 45.31  children, families, and learning responsible for vocational 
 45.32  career and technical education or designee shall be an ex 
 45.33  officio member of the council and shall serve in an advisory 
 45.34  capacity only.  
 45.35     Sec. 57.  Minnesota Statutes 2002, section 273.138, 
 45.36  subdivision 6, is amended to read: 
 46.1      Subd. 6.  The amount of aid calculated for a school 
 46.2   district pursuant to subdivision 3, clauses (2), (3), (4), and 
 46.3   (5) shall be deducted from the school district's general fund 
 46.4   levy limitation established pursuant to section 126C.13 chapters 
 46.5   122A, 123A, 123B, 124D, and 126C in determining the amount of 
 46.6   taxes the school district may levy for general and special 
 46.7   purposes. 
 46.8      Sec. 58.  Minnesota Statutes 2002, section 298.28, 
 46.9   subdivision 4, is amended to read: 
 46.10     Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
 46.11  ton plus the increase provided in paragraph (d) must be 
 46.12  allocated to qualifying school districts to be distributed, 
 46.13  based upon the certification of the commissioner of revenue, 
 46.14  under paragraphs (b) and (c), except as otherwise provided in 
 46.15  paragraph (f). 
 46.16     (b) 3.43 cents per taxable ton must be distributed to the 
 46.17  school districts in which the lands from which taconite was 
 46.18  mined or quarried were located or within which the concentrate 
 46.19  was produced.  The distribution must be based on the 
 46.20  apportionment formula prescribed in subdivision 2. 
 46.21     (c)(i) 13.72 cents per taxable ton, less any amount 
 46.22  distributed under paragraph (e), shall be distributed to a group 
 46.23  of school districts comprised of those school districts in which 
 46.24  the taconite was mined or quarried or the concentrate produced 
 46.25  or in which there is a qualifying municipality as defined by 
 46.26  section 273.134, paragraph (b), in direct proportion to school 
 46.27  district indexes as follows:  for each school district, its 
 46.28  pupil units determined under section 126C.05 for the prior 
 46.29  school year shall be multiplied by the ratio of the average 
 46.30  adjusted net tax capacity per pupil unit for school districts 
 46.31  receiving aid under this clause as calculated pursuant to 
 46.32  chapters 122A, 126C, and 127A for the school year ending prior 
 46.33  to distribution to the adjusted net tax capacity per pupil unit 
 46.34  of the district.  Each district shall receive that portion of 
 46.35  the distribution which its index bears to the sum of the indices 
 46.36  for all school districts that receive the distributions.  
 47.1      (ii) Notwithstanding clause (i), each school district that 
 47.2   receives a distribution under sections 298.018; 298.23 to 
 47.3   298.28, exclusive of any amount received under this clause; 
 47.4   298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
 47.5   imposing a tax on severed mineral values after reduction for any 
 47.6   portion distributed to cities and towns under section 126C.48, 
 47.7   subdivision 8, paragraph (5), that is less than the amount of 
 47.8   its levy reduction under section 126C.48, subdivision 8, for the 
 47.9   second year prior to the year of the distribution shall receive 
 47.10  a distribution equal to the difference; the amount necessary to 
 47.11  make this payment shall be derived from proportionate reductions 
 47.12  in the initial distribution to other school districts under 
 47.13  clause (i).  
 47.14     (d) Any school district described in paragraph (c) where a 
 47.15  levy increase pursuant to section 126C.17, subdivision 9, was 
 47.16  authorized by referendum for taxes payable in 2001, shall 
 47.17  receive a distribution from a fund that receives a distribution 
 47.18  in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
 47.19  year thereafter, the increase over the amount established for 
 47.20  the prior year shall be determined according to the increase in 
 47.21  the implicit price deflator as provided in section 298.24, 
 47.22  subdivision 1.  Each district shall receive $175 times the pupil 
 47.23  units identified in section 126C.05, subdivision 1, enrolled in 
 47.24  the second previous year or the 1983-1984 school year, whichever 
 47.25  is greater, less the product of 1.8 percent times the district's 
 47.26  taxable net tax capacity in the second previous year. 
 47.27     If the total amount provided by paragraph (d) is 
 47.28  insufficient to make the payments herein required then the 
 47.29  entitlement of $175 per pupil unit shall be reduced uniformly so 
 47.30  as not to exceed the funds available.  Any amounts received by a 
 47.31  qualifying school district in any fiscal year pursuant to 
 47.32  paragraph (d) shall not be applied to reduce general education 
 47.33  aid which the district receives pursuant to section 126C.13 or 
 47.34  the permissible levies of the district.  Any amount remaining 
 47.35  after the payments provided in this paragraph shall be paid to 
 47.36  the commissioner of iron range resources and rehabilitation who 
 48.1   shall deposit the same in the taconite environmental protection 
 48.2   fund and the northeast Minnesota economic protection trust fund 
 48.3   as provided in subdivision 11. 
 48.4      Each district receiving money according to this paragraph 
 48.5   shall reserve the lesser of the amount received under this 
 48.6   paragraph or $25 times the number of pupil units served in the 
 48.7   district.  It may use the money for early childhood programs or 
 48.8   for outcome-based learning programs that enhance the academic 
 48.9   quality of the district's curriculum.  The outcome-based 
 48.10  learning programs must be approved by the commissioner of 
 48.11  children, families, and learning. 
 48.12     (e) There shall be distributed to any school district the 
 48.13  amount which the school district was entitled to receive under 
 48.14  section 298.32 in 1975. 
 48.15     (f) Effective for the distribution in 2003 only, five 
 48.16  percent of the distributions to school districts under 
 48.17  paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
 48.18  subdivision 11; and section 298.225, shall be distributed to the 
 48.19  general fund.  The remainder less any portion distributed to 
 48.20  cities and towns under section 126C.48, subdivision 8, paragraph 
 48.21  (5), shall be distributed to the northeast Minnesota economic 
 48.22  protection trust fund created in section 298.292.  Fifty percent 
 48.23  of the amount distributed to the northeast Minnesota economic 
 48.24  protection trust fund shall be made available for expenditure 
 48.25  under section 298.293 as governed by section 298.296.  Effective 
 48.26  in 2003 only, 100 percent of the distributions to school 
 48.27  districts under section 477A.15 less any portion distributed to 
 48.28  cities and towns under section 126C.48, subdivision 8, paragraph 
 48.29  (5), shall be distributed to the general fund. 
 48.30     Sec. 59.  Minnesota Statutes 2002, section 475.61, 
 48.31  subdivision 4, is amended to read: 
 48.32     Subd. 4.  [SURPLUS FUNDS.] (a) All such taxes shall be 
 48.33  collected and remitted to the municipality by the county 
 48.34  treasurer as other taxes are collected and remitted, and shall 
 48.35  be used only for payment of the obligations on account of which 
 48.36  levied or to repay advances from other funds used for such 
 49.1   payments, except that any surplus remaining in the debt service 
 49.2   fund when the obligations and interest thereon are paid may be 
 49.3   appropriated to any other general purpose by the municipality.  
 49.4   However, the amount of any surplus remaining in the debt service 
 49.5   fund of a school district when the obligations and interest 
 49.6   thereon are paid shall be used to reduce the general education 
 49.7   fund levy authorized pursuant to section 126C.13 chapters 122A, 
 49.8   123A, 123B, 124D, and 126C and the state aids authorized 
 49.9   pursuant to chapters 122A, 123A, 123B, 124D, 125A, 126C, and 
 49.10  127A. 
 49.11     (b) The reduction to state aids equals the lesser of (1) 
 49.12  the amount of the surplus times the ratio of the district's debt 
 49.13  service equalization aid to the district's debt service 
 49.14  equalization revenue for the last year that the district 
 49.15  qualified for debt service equalization aid; or (2) the 
 49.16  district's cumulative amount of debt service equalization aid.  
 49.17     (c) The reduction to the general education fund levy equals 
 49.18  the total amount of the surplus minus the reduction to state 
 49.19  aids. 
 49.20     Sec. 60.  Laws 1965, chapter 705, as amended by Laws 1975, 
 49.21  chapter 261, section 4; Laws 1980, chapter 609, article 6, 
 49.22  section 37; and Laws 1989, chapter 329, article 13, section 18, 
 49.23  is amended to read: 
 49.24     Sec. 6.  [ST. PAUL SEVERANCE LEVY.] The school board of 
 49.25  independent school district No. 625, St. Paul, for the purpose 
 49.26  of providing moneys for the payment of its severance pay 
 49.27  obligations under a plan approved by resolution of the district, 
 49.28  in addition to all other powers possessed by the school district 
 49.29  and in addition to and in excess of any existing limitation upon 
 49.30  the amount it is otherwise authorized by law to levy as taxes, 
 49.31  is authorized to levy taxes annually not exceeding in any one 
 49.32  year an amount equal to a gross tax capacity rate of .17 percent 
 49.33  for taxes payable in 1990 or a net tax capacity rate of .21 .34 
 49.34  percent for taxes payable in 1991 2002 and thereafter upon all 
 49.35  taxable property within the school district which taxes as 
 49.36  levied shall be spread upon the tax rolls, and all corrections 
 50.1   thereof shall be held by the school district, and allocated 
 50.2   therefor to be disbursed and expended by the school district in 
 50.3   payment of any public school severance pay obligations and for 
 50.4   no other purpose.  Disbursements and expenditures previously 
 50.5   authorized on behalf of the school district for payment of 
 50.6   severance pay obligations shall not be deemed to constitute any 
 50.7   part of the cost of the operation and maintenance of the school 
 50.8   district within the meaning of any statutory limitation of any 
 50.9   school district expenditures.  
 50.10     The amount of such severance pay allowable or to become 
 50.11  payable in respect of any such employment or to any such 
 50.12  employee shall not exceed the amount permitted by Minnesota 
 50.13  Statutes, Section 465.72.  
 50.14     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 50.15  for taxes payable in 2002 and thereafter. 
 50.16     Sec. 61.  [REVISOR INSTRUCTION.] 
 50.17     (a) In the next and subsequent editions of Minnesota 
 50.18  Statutes, the revisor shall change all references to the 
 50.19  "commissioner of children, families, and learning" to the 
 50.20  "commissioner of public safety" in Minnesota Statutes, sections 
 50.21  123B.88, subdivision 9; 168.102; 169.441, subdivision 5; and 
 50.22  171.321, subdivision 4c; and "Part H" to "Part C" in Minnesota 
 50.23  Statutes, sections 125A.27, subdivisions 7 and 8; 125A.32; 
 50.24  125A.35; 125A.37; 125A.39; 125A.44; and 125A.45. 
 50.25     (b) In the next and subsequent editions of Minnesota 
 50.26  Statutes, the revisor shall codify section 62 as Minnesota 
 50.27  Statutes, section 126C.42, subdivision 5. 
 50.28     Sec. 62.  [REPEALER.] 
 50.29     (a) Minnesota Statutes 2002, sections 123A.73, subdivisions 
 50.30  7, 10, and 11; 123B.81, subdivision 6; 124D.65, subdivision 4; 
 50.31  124D.84, subdivision 2; 125A.023, subdivision 5; 125A.47; 
 50.32  125B.11; 126C.01, subdivision 4; and 127A.41, subdivision 6, are 
 50.33  repealed.  
 50.34     (b) Minnesota Statutes 2002, section 126C.14, is repealed 
 50.35  effective for revenue for fiscal year 2003. 
 50.36     (c) Laws 2001, First Special Session chapter 6, article 5, 
 51.1   section 12, as amended by Laws 2002, chapter 377, article 12, 
 51.2   section 15, is repealed. 
 51.3      (d) Minnesota Rules, parts 3500.0600; 3520.0400; 3520.1400; 
 51.4   3520.3300; 3530.1500; 3530.2700; 3530.4400; 3530.4500; 
 51.5   3530.4700; 3545.2100; 3545.2200; 3545.2400; 3545.2500; 
 51.6   3545.2600; 3545.3008; 3545.3010; 3545.3018; 3545.3020; and 
 51.7   3550.0100, are repealed.