1.1                          A bill for an act 
  1.2             relating to education finance; providing 100 percent 
  1.3             state funding for special education revenue; 
  1.4             appropriating money; amending Minnesota Statutes 2000, 
  1.5             sections 125A.76, subdivisions 1, 2, and 4; and 
  1.6             125A.79, subdivisions 1 and 2; repealing Minnesota 
  1.7             Statutes 2000, section 125A.79, subdivisions 5, 6, and 
  1.8             7.  
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 125A.76, 
  1.11  subdivision 1, is amended to read: 
  1.12     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  1.13  section, the definitions in this subdivision apply. 
  1.14     (a) "Base year" for fiscal year 1998 and later fiscal years 
  1.15  means the second fiscal year preceding the fiscal year for which 
  1.16  aid will be paid. 
  1.17     (b) "Basic revenue" has the meaning given it in section 
  1.18  126C.10, subdivision 2.  For the purposes of computing basic 
  1.19  revenue pursuant to this section, each child with a disability 
  1.20  shall be counted as prescribed in section 126C.05, subdivision 1.
  1.21     (c) "Essential personnel" means teachers, related services, 
  1.22  and support services staff providing direct services to students.
  1.23     (d) "Average daily membership" has the meaning given it in 
  1.24  section 126C.05. 
  1.25     (e) "Program growth factor" means 1.08 for fiscal year 
  1.26  2002, and 1.047 the statewide ratio of the special education 
  1.27  costs for the previous fiscal year to the statewide special 
  2.1   education costs for the second previous fiscal year for fiscal 
  2.2   year 2003 and later. 
  2.3      Sec. 2.  Minnesota Statutes 2000, section 125A.76, 
  2.4   subdivision 2, is amended to read: 
  2.5      Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] (a) The special 
  2.6   education base revenue equals the sum of the following amounts 
  2.7   computed using base year data: 
  2.8      (1) 68 100 percent of the salary of each essential person 
  2.9   employed in the district's program for children with a 
  2.10  disability during the fiscal year, not including the share of 
  2.11  salaries for personnel providing health-related services counted 
  2.12  in clause (8), whether the person is employed by one or more 
  2.13  districts or a Minnesota correctional facility operating on a 
  2.14  fee-for-service basis; 
  2.15     (2) for the Minnesota state academy for the deaf or the 
  2.16  Minnesota state academy for the blind, 68 100 percent of the 
  2.17  salary of each instructional aide assigned to a child attending 
  2.18  the academy, if that aide is required by the child's individual 
  2.19  education plan; 
  2.20     (3) for special instruction and services provided to any 
  2.21  pupil by contracting with public, private, or voluntary agencies 
  2.22  other than school districts, in place of special instruction and 
  2.23  services provided by the district, 52 percent of the difference 
  2.24  between the amount of the contract and the basic revenue of the 
  2.25  district for that pupil for the fraction of the school day the 
  2.26  pupil receives services under the contract; 
  2.27     (4) for special instruction and services provided to any 
  2.28  pupil by contracting for services with public, private, or 
  2.29  voluntary agencies other than school districts, that are 
  2.30  supplementary to a full educational program provided by the 
  2.31  school district, 52 percent of the amount of the contract for 
  2.32  that pupil; 
  2.33     (5) for supplies and equipment purchased or rented for use 
  2.34  in the instruction of children with a disability, not including 
  2.35  the portion of the expenses for supplies and equipment used to 
  2.36  provide health-related services counted in clause (8), an amount 
  3.1   equal to 47 percent of the sum actually expended by the 
  3.2   district, or a Minnesota correctional facility operating on a 
  3.3   fee-for-service basis, but not to exceed an average of $47 in 
  3.4   any one school year for each child with a disability receiving 
  3.5   instruction; 
  3.6      (6) for fiscal years 1997 and later, special education base 
  3.7   revenue shall include amounts under clauses (1) to (5) for 
  3.8   special education summer programs provided during the base year 
  3.9   for that fiscal year; and 
  3.10     (7) for fiscal years 1999 and later, the cost of providing 
  3.11  transportation services for children with disabilities under 
  3.12  section 123B.92, subdivision 1, paragraph (b), clause (4). 
  3.13     The department shall establish procedures through the 
  3.14  uniform financial accounting and reporting system to identify 
  3.15  and track all revenues generated from third-party billings as 
  3.16  special education revenue at the school district level; include 
  3.17  revenue generated from third-party billings as special education 
  3.18  revenue in the annual cross-subsidy report; and exclude 
  3.19  third-party revenue from calculation of excess cost aid to the 
  3.20  districts. 
  3.21     (b) If requested by a school district operating a special 
  3.22  education program during the base year for less than the full 
  3.23  fiscal year, or a school district in which is located a 
  3.24  Minnesota correctional facility operating on a fee-for-service 
  3.25  basis for less than the full fiscal year, the commissioner may 
  3.26  adjust the base revenue to reflect the expenditures that would 
  3.27  have occurred during the base year had the program been operated 
  3.28  for the full fiscal year. 
  3.29     (c) Notwithstanding paragraphs (a) and (b), the portion of 
  3.30  a school district's base revenue attributable to a Minnesota 
  3.31  correctional facility operating on a fee-for-service basis 
  3.32  during the facility's first year of operating on a 
  3.33  fee-for-service basis shall be computed using current year data. 
  3.34     Sec. 3.  Minnesota Statutes 2000, section 125A.76, 
  3.35  subdivision 4, is amended to read: 
  3.36     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
  4.1   total special education aid for fiscal year 2000 equals 
  4.2   $463,000,000.  The state total special education aid for fiscal 
  4.3   year 2001 equals $474,000,000.  The state total special 
  4.4   education aid for fiscal year 2002 equals $697,000,000.  The 
  4.5   state total special education aid for later fiscal years equals: 
  4.6      (1) the state total special education aid for the preceding 
  4.7   fiscal year; times 
  4.8      (2) the program growth factor; times 
  4.9      (3) the ratio of the state total average daily membership 
  4.10  for the current fiscal year to the state total average daily 
  4.11  membership for the preceding fiscal year. 
  4.12     Sec. 4.  Minnesota Statutes 2000, section 125A.79, 
  4.13  subdivision 1, is amended to read: 
  4.14     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  4.15  section, the definitions in this subdivision apply. 
  4.16     (a) "Unreimbursed special education cost" means the sum of 
  4.17  the following: 
  4.18     (1) expenditures for teachers' salaries, contracted 
  4.19  services, supplies, equipment, and transportation services 
  4.20  eligible for revenue under section 125A.76; plus 
  4.21     (2) expenditures for tuition bills received under sections 
  4.22  125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
  4.23  under section 125A.76, subdivision 2; minus 
  4.24     (3) revenue for teachers' salaries, contracted services, 
  4.25  supplies, and equipment under section 125A.76; minus 
  4.26     (4) tuition receipts under sections 125A.03 to 125A.24 and 
  4.27  125A.65 for services eligible for revenue under section 125A.76, 
  4.28  subdivision 2. 
  4.29     (b) "General revenue" means for fiscal year 1996, the sum 
  4.30  of the general education revenue according to section 126C.10, 
  4.31  subdivision 1, as adjusted according to section 127A.47, 
  4.32  subdivision 7, plus the total referendum revenue according to 
  4.33  section 126C.17, subdivision 4.  For fiscal years 1997 and 
  4.34  later, "general revenue" means the sum of the general education 
  4.35  revenue according to section 126C.10, subdivision 1, as adjusted 
  4.36  according to section 127A.47, subdivisions 7 and 8, plus the 
  5.1   total referendum revenue minus transportation sparsity revenue 
  5.2   minus total operating capital revenue.  
  5.3      (c) "Average daily membership" has the meaning given it in 
  5.4   section 126C.05. 
  5.5      (d) "Program growth factor" means 1.044 for fiscal year 
  5.6   2002 and 1.02 for fiscal year 2003 and later. 
  5.7      Sec. 5.  Minnesota Statutes 2000, section 125A.79, 
  5.8   subdivision 2, is amended to read: 
  5.9      Subd. 2.  [EXCESS COST AID, FISCAL YEARS 2000 AND 2001.] 
  5.10  For fiscal years 2000 and 2001, A district's special education 
  5.11  excess cost aid equals the greatest of: 
  5.12     (a) 75 100 percent of the difference between (1) the 
  5.13  district's unreimbursed special education cost and (2) 4.36 
  5.14  percent of the district's general revenue; 
  5.15     (b) 70 percent of the difference between (1) the increase 
  5.16  in the district's unreimbursed special education cost between 
  5.17  the base year as defined in section 125A.76, subdivision 1, and 
  5.18  the current year and (2) 1.6 percent of the district's general 
  5.19  revenue; or 
  5.20     (c) zero. 
  5.21     Sec. 6.  [REPEALER.] 
  5.22     Minnesota Statutes 2000, section 125A.79, subdivisions 5, 
  5.23  6, and 7, are repealed.