The Chief Clerk proceeded to read the Journal of the preceding day. Pelowski moved that further reading of the Journal be suspended and that the Journal be approved as corrected by the Chief Clerk. The motion prevailed.

The following communications were received:

March 27, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Anderson:

It is my honor to inform you that I have received, approved, signed and deposited in the Office of the Secretary of State the following House Files:

H. F. No. 2841, relating to employment; modifying provisions regarding minimum wages; increasing penalties; modifying employer liability provisions; imposing a penalty; changing inclusions in earnings statement.

H. F. No. 2163, relating to motor carriers; prescribing conditions for granting medical waivers to truck drivers; exempting from federal hours of service regulation drivers transporting agricultural items during harvesting season; allowing electronic filing of financial responsibility forms; allowing protective agent to escort overweight vehicles.

H. F. No. 2385, relating to civil actions; establishing an evidentiary privilege for persons who preside at alternative dispute resolution.

Warmest regards,

Arne H. Carlson

Governor

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

I have the honor to inform you that the following enrolled Acts of the 1996 Session of the State Legislature have been received from the Office of the Governor and are deposited in the Office of the Secretary of State for preservation, pursuant to the State Constitution, Article IV, Section 23:

                                    Time and          

S.F.         H.F.   Session Laws    Date ApprovedDate Filed

No.           No.    Chapter No.             1996      1996

2342 377 11:15 a.m. March 27 March 27

2275 380 11:17 a.m. March 27 March 27

2471 382 11:27 a.m. March 27 March 27

1981 384 11:30 a.m. March 27 March 27

2503 385 11:32 a.m. March 27 March 27

2841 386 11:35 a.m. March 27 March 27

2163 387 11:35 a.m. March 27 March 27

2385 388 11:45 a.m. March 27 March 27

2857 390 10:58 a.m. March 27 March 27

Sincerely,

Joan Anderson Growe

Secretary of State

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 2816, A bill for an act relating to consumer privacy; regulating the use and dissemination of personally identifiable information on consumers of computer information services; amending Minnesota Statutes 1994, section 13.99, by adding a subdivision; proposing coding for new law as Minnesota Statutes, chapter 13D.

Patrick E. Flahaven, Secretary of the Senate

Kelley moved that the House refuse to concur in the Senate amendments to H. F. No. 2816, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendment the concurrence of the House is respectfully requested:

H. F. No. 374, A bill for an act relating to utilities; exempting large electric power generating plant from certificate of need proceeding when selected by the public utilities commission from a bidding process to select resources to meet the utility's projected energy demand; amending Minnesota Statutes 1994, section 216B.2422, subdivision 5.

Patrick E. Flahaven, Secretary of the Senate

Trimble moved that the House refuse to concur in the Senate amendments to H. F. No. 374, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2445.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to natural resources; clarifying status of game refuge designations; removing the residency requirement for youth hunting; permitting nonresident students to take big game; modifying provisions relating to short-term fishing licenses, special permits, commercial fishing, taking deer, moose licenses, blaze orange, trout and salmon stamps, and sturgeon and paddlefish; removing certain provisions relating to wild rice; requiring a review; amending Minnesota Statutes 1994, sections 97A.015, by adding a subdivision; 97A.401, subdivision 4; 97A.411,

subdivision 1; 97A.431, subdivision 2; 97A.451, by adding a subdivision; 97A.455; 97A.475, subdivisions 30, 31, 32, 33, 34, 35, 36, and 37; 97A.535, by adding a subdivision; 97B.021, subdivision 1; 97B.071; 97B.311; 97C.035, subdivision 3; 97C.305, subdivision 2; 97C.411; 97C.811, subdivision 6; 97C.815, subdivision 4; 97C.835 subdivisions 1 and 5; 97C.841; Minnesota Statutes 1995 Supplement, sections 14.387; and 97A.451, subdivision 3; Laws 1995, chapter 220, section 137; repealing Minnesota Statutes 1994, section 84.09; and Laws 1995, chapter 220, section 136.

March 22, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2445, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 2445 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1995 Supplement, section 14.386, is amended to read:

14.386 [PROCEDURE FOR ADOPTING EXEMPT RULES; DURATION.]

(a) A rule adopted, amended, or repealed by an agency, under a statute authorizing or requiring rules to be adopted but excluded from the rulemaking provisions of chapter 14 or from the definition of a rule, has the force and effect of law only if:

(1) the revisor of statutes approves the form of the rule by certificate;

(2) the office of administrative hearings approves the rule as to its legality within 14 days after the agency submits it for approval and files two copies of the rule with the revisor's certificate in the office of the secretary of state; and

(3) a copy is published by the agency in the State Register.

(b) A rule adopted under this section is effective for a period of two years from the date of publication of the rule in the State Register. The authority for the rule expires at the end of this two-year period.

(c) The chief administrative law judge shall adopt rules relating to the rule approval duties imposed by this section and section 14.388, including rules establishing standards for review.

(d) This section does not apply to rules adopted, amended, or repealed under section 14.388.

This section also does not apply to:

(1) rules implementing emergency powers pursuant to sections 12.31 to 12.37;

(2) rules of agencies directly in the legislative or judicial branches;

(3) rules of the regents of the University of Minnesota;

(4) rules of the department of military affairs;

(5) rules of the comprehensive health association provided in section 62E.10;

(6) rules of the tax court provided by section 271.06;

(7) rules concerning only the internal management of the agency or other agencies, and which do not directly affect the rights of or procedure available to the public;

(8) rules of the commissioner of corrections relating to the placement and supervision of inmates serving a supervised release term, the internal management of institutions under the commissioner's control, and rules adopted under section 609.105 governing the inmates of those institutions;

(9) rules relating to weight limitations on the use of highways when the substance of the rules is indicated to the public by means of signs;

(10) opinions of the attorney general;

(11) the systems architecture plan and long-range plan of the state education management information system provided by section 121.931;

(12) the data element dictionary and the annual data acquisition calendar of the department of children, families, and learning to the extent provided by section 121.932;

(13) the occupational safety and health standards provided in section 182.655;

(14) revenue notices and tax information bulletins of the commissioner of revenue;

(15) uniform conveyancing forms adopted by the commissioner of commerce under section 507.09;

(16) game and fish rules of the commissioner of natural resources adopted under section 84.027, subdivision 13, or sections 97A.0451 to 97A.0459; or

(17) experimental and special management waters designated by the commissioner of natural resources under sections 97C.001 and 97C.005; or

(18) game refuges designated by the commissioner of natural resources under section 97A.085.

Sec. 2. Minnesota Statutes 1995 Supplement, section 14.387, is amended to read:

14.387 [LEGAL STATUS OF EXISTING EXEMPT RULES.]

A rule adopted on or before May 26, 1995, and which was not adopted under sections 14.05 to 14.28 or their predecessor provisions, does not have the force and effect of law on and after July 1, 1997, and the authority for the rule expires on that date.

This section does not apply to:

(1) rules implementing emergency powers under sections 12.31 to 12.37;

(2) rules of agencies directly in the legislative or judicial branches;

(3) rules of the regents of the University of Minnesota;

(4) rules of the department of military affairs;

(5) rules of the comprehensive health association provided in section 62E.10;

(6) rules of the tax court provided by section 271.06;

(7) rules concerning only the internal management of the agency or other agencies, and which do not directly affect the rights of or procedure available to the public;

(8) rules of the commissioner of corrections relating to the placement and supervision of inmates serving a supervised release term, the internal management of institutions under the commissioner's control, and rules adopted under section 609.105 governing the inmates of those institutions;

(9) rules relating to weight limitations on the use of highways when the substance of the rules is indicated to the public by means of signs;

(10) opinions of the attorney general;

(11) the systems architecture plan and long-range plan of the state education management information system provided by section 121.931;

(12) the data element dictionary and the annual data acquisition calendar of the department of education to the extent provided by section 121.932;

(13) the occupational safety and health standards provided in section 182.655;

(14) revenue notices and tax information bulletins of the commissioner of revenue;

(15) uniform conveyancing forms adopted by the commissioner of commerce under section 507.09;

(16) game and fish rules of the commissioner of natural resources adopted under section 84.027, subdivision 13, or sections 97A.0451 to 97A.0459; or

(17) experimental and special management waters designated by the commissioner of natural resources under sections 97C.001 and 97C.005; or

(18) game refuges designated by the commissioner of natural resources under section 97A.085.

Sec. 3. Minnesota Statutes 1994, section 17.4982, subdivision 8, is amended to read:

Subd. 8. [CONTAINMENT FACILITY.] "Containment facility" means a licensed facility for salmonids or catfish that complies with clauses (1), (3), and (4), or clauses (2), (3), and (4):

(1) disinfects its effluent to the standards in section 17.4991 before the effluent is discharged to public waters;

(2) does not discharge to public waters or to waters of the state directly connected to public waters;

(3) raises aquatic life that is prohibited from being released into the wild and must be kept in a facility approved by the commissioner unless processed for food consumption only;

(4) contains aquatic life requiring a fish health inspection prior to transportation.

Sec. 4. Minnesota Statutes 1994, section 17.4982, is amended by adding a subdivision to read:

Subd. 8a. [EMERGENCY ENZOOTIC DISEASE AREA.] "Emergency enzootic disease area" means an enzootic disease area that harbors an emergency fish disease. Trout, salmon, or catfish species are from an emergency enzootic disease area only if the individual species in question can carry one or more of the emergency fish disease pathogens present.

Sec. 5. Minnesota Statutes 1994, section 17.4982, subdivision 10, is amended to read:

Subd. 10. [ENZOOTIC DISEASE AREA.] "Enzootic disease area" means a disease that is known to occur within an area with well-defined geographic boundaries which harbors one or more certifiable diseases pathogens.

Sec. 6. Minnesota Statutes 1994, section 17.4982, subdivision 17, is amended to read:

Subd. 17. [LOT.] "Lot" means a group of fish of the same species and age that originated from the same discrete spawning population and that always have shared a common water supply., or various age groups of adult brood stock of the same species may comprise the same lot if they that have shared the same containers for one brood cycle.

Sec. 7. Minnesota Statutes 1994, section 17.4982, subdivision 21, is amended to read:

Subd. 21. [STANDARD FACILITY.] "Standard facility" means a licensed facility with a continual or intermittent discharge of effluent to public waters that is not a quarantine or containment facility.

Sec. 8. Minnesota Statutes 1994, section 17.4984, subdivision 2, is amended to read:

Subd. 2. [LISTED WATERS.] (a) An aquatic farm license must list:

(1) the specific waters of the state that may be used in connection with the licensed aquatic farm and the species approved for each licensed water; and

(2) whether aeration requiring a permit is approved.

Additional waters may not be used until they are approved by the commissioner.

(b) The right to use waters licensed for private fish hatchery or aquatic farm purposes may be transferred between licensees with prior approval by the commissioner if requirements for species to be raised are met. Waters that are continually connected by a permanent watercourse to other waters must not be approved for aquatic farm use, except that connected waters that are isolated from other waters may be licensed as a single water body. Waters that are intermittently connected or may become connected with other waters may be denied, or screening or other measures may be required to prevent passage of aquatic life. Listed waters may be changed on approval by the area fisheries supervisor or the commissioner.

(c) The commissioner shall conduct an inspection of waters to be licensed prior to approving or denying initial licensing of the waters.

(d) Waters containing game fish of significant public value may be denied licensing unless the applicant can demonstrate exclusive riparian control.

(e) Waters containing game fish of significant public value may be denied licensing unless the game fish of significant public value are, at the commissioner's option, sold to the licensee, removed for other state use by the department of natural resources, or disposed of as provided in writing by the commissioner.

(f) Waters licensed under an aquatic farm license may be aerated during open water periods without a separate aeration permit.

Sec. 9. Minnesota Statutes 1994, section 17.4984, subdivision 7, is amended to read:

Subd. 7. [NONPUBLIC RECORDS.] (a) Licensees must keep complete, up-to-date, nonpublic records of the operation of the aquatic farm. The records must be kept remain available for at least three years.

(b) The records must be in English and include the following information:

(1) for each species acquired, the number and pounds of fish or eggs acquired, names and addresses of the sources from which acquired, and the dates of receipt;

(2) for each species sold or disposed of, the number and pounds of fish sold or disposed of, the names and addresses of the purchasers or persons to whom the conveyances are made, and the dates of sale; and

(3) for fish sperm or viable eggs, the amount acquired or sold, the names and addresses of the sources from which acquired, the purchasers to whom conveyed, and the dates of purchase or sale.

(c) On or before March 1 of each year, the licensee shall submit a complete annual report on a form furnished by the commissioner, covering the quantity of all species sold or purchased in the preceding licensed year.

(d) An aquatic farmer shall maintain records for reasonable inspection by the commissioner. Information on aquatic life production, harvest, and sales is nonpublic information.

Sec. 10. Minnesota Statutes 1994, section 17.4985, subdivision 2, is amended to read:

Subd. 2. [BILL OF LADING.] (a) A person may transport aquatic life except salmonids or catfish with A completed state-issued bill of lading is required for:

(1) intrastate transportation of aquatic life other than salmonids and catfish between licensed private fish hatcheries, aquatic farms, or aquarium facilities licensed for the same species and of the proper classification for the aquatic life being transported if the aquatic life is being transported into a watershed where it is not currently present, if walleyes

whose original source is south of marked state highway No. 210 are being transported to a facility north of marked state highway No. 210, or if the original source of the aquatic life is outside Minnesota and contiguous states; and

(2) stocking of waters other than public waters with aquatic life other than salmonids and catfish.

(b) When aquatic life is transported under paragraph (a), a copy of the bill of lading must be submitted to the regional fisheries manager at least 72 hours before the transportation.

(c) For transportation and stocking of waters that are not public waters:

(1) a bill of lading must be submitted to the regional fisheries manager 72 hours before transporting fish for stocking;

(2) a bill of lading must be submitted to the regional fisheries manager within five days after stocking if the waters to be stocked are confirmed by telecopy or telephone prior to stocking by the regional fisheries office not to be public waters; or

(3) a completed bill of lading may be submitted to the regional fisheries office by telecopy prior to transporting fish for stocking. Confirmation that the waters to be stocked are not public waters may be made by returning the bill of lading by telecopy or in writing, in which cases additional copies need not be submitted to the department of natural resources.

(d) Bill of lading forms may only be issued by the department of natural resources in St. Paul, and new bill of lading forms may not be issued until all previously issued forms have been returned.

Sec. 11. Minnesota Statutes 1994, section 17.4985, subdivision 3, is amended to read:

Subd. 3. [EXEMPTIONS FOR TRANSPORTATION PERMITS AND BILLS OF LADING.] (a) A state-issued bill of lading or transportation permit is not required by an aquatic farm licensee for importation, transportation, or export for the following:

(1) minnows taken under an aquatic farm license in this state and transported intrastate;

(2) aquarium or ornamental fish including goldfish and tropical, subtropical, and saltwater species that cannot survive in the waters of the state, which may be imported or transported if accompanied by shipping documents;

(3) fish or fish eggs that have been processed for use as food, bait, or other purposes unrelated to fish propagation;

(4) live fish from a licensed aquatic farm, which may be transported directly to an outlet for processing or for other food purposes if accompanied by shipping documents;

(5) fish being exported if accompanied by shipping documents;

(6) sucker eggs, sucker fry, or fathead minnows transported intrastate for bait propagation or feeding of cultural aquatic life;

(7) species of fish that are found within the state used in connection with public shows, exhibits, demonstrations, or fishing pools for periods not exceeding 14 days; or

(8) fish being transported through the state if accompanied by shipping documents; or

(9) intrastate transportation of aquatic life between or within licensed private fish hatcheries, aquatic farms, or aquarium facilities licensed for the same species and of the proper facility classification for the aquatic life being transported, except where required in subdivision 2 and except that salmonids and catfish may only be transferred or transported intrastate without a transportation permit if they had no record of bacterial kidney disease at the time they were imported into the state and if the most recent they have had a fish health inspection since importation within the preceding year that has shown no certifiable diseases to be present.

Aquatic life being transferred between licensed private fish hatcheries, aquatic farms, or aquarium facilities must be accompanied by shipping documents and salmonids and catfish being transferred or transported intrastate without a transportation permit must be accompanied by a copy of their most recent fish health inspection.

(b) Shipping documents required under paragraph (a) must show the place of origin, owner or consignee, destination, number, and species.

Sec. 12. Minnesota Statutes 1994, section 17.4986, is amended to read:

17.4986 [IMPORTATION OF AQUATIC LIFE.]

Subdivision 1. [IMPORTATION AND STOCKING RESTRICTIONS.] A person may not import fish into or stock fish in the state without first obtaining a transportation permit with a disease certification when required or a bill of lading from the commissioner, unless the person is exempted.

Subd. 2. [LICENSED FACILITIES.] (a) The commissioner shall issue transportation permits to import:

(1) indigenous and naturalized species except trout, salmon, and catfish from any source to a standard facility;

(2) trout, salmon, and catfish from a nonemergency enzootic disease area to a containment facility if the fish are certified within the previous year to be free of certifiable diseases, except that eggs with enteric redmouth, whirling disease, or furunculosis may be imported following treatment approved by the commissioner, and fish with bacterial kidney disease may be imported into areas where the disease has been previously introduced; and

(3) trout, salmon, and catfish from a facility in a nonemergency enzootic disease area with a disease-free history of three years or more to a standard facility, except that eggs with enteric redmouth, whirling disease, or furunculosis may be imported following treatment approved by the commissioner, and fish with bacterial kidney disease may be imported into areas where the disease has been previously introduced.

(b) If a source facility in a nonemergency enzootic disease area cannot demonstrate a history free from disease, aquatic life may only be imported into a quarantine facility.

Subd. 3. [EMERGENCY ENZOOTIC DISEASE AREA.] (a) Except as otherwise provided and except that eggs with enteric redmouth, whirling disease, or furunculosis may be imported following treatment approved by the commissioner, and fish with bacterial kidney disease may be imported into areas where the disease has been previously introduced, fish may be imported from emergency disease enzootic disease areas only as fertilized eggs under the following conditions:

(1) to be imported into a standard facility, fertilized eggs must have a disease-free history for at least five years;

(2) to be imported into a containment facility, fertilized eggs must have a disease-free history for at least three years; or

(3) to be imported into a quarantine facility, fertilized eggs may have a disease-free history of less than three years.

(b) A hatchery inspection must occur at least once a year and fish must have been tested for all certifiable diseases. Fish health inspections under this subdivision must comply with section 17.4982, subdivision 12.

Subd. 4. [DISEASE-FREE HISTORY.] Disease-free histories required under this section must include the results of a fish health inspection. When disease-free histories of more than one year are required for importing salmonids or catfish, the disease history must be of consecutive years that include the year previous to, or the year of, the transportation request.

Sec. 13. Minnesota Statutes 1994, section 17.4988, subdivision 2, is amended to read:

Subd. 2. [AQUATIC FARMING LICENSE.] (a) The annual fee for an aquatic farming license is $275.

(b) The aquatic farming license must may contain endorsements for the rights and privileges of the following licenses under the game and fish laws. The endorsement must be made upon payment of the license fee prescribed in section 97A.475 for the following licenses:

(1) minnow dealer license;

(2) minnow retailer license for sale of minnows as bait;

(3) minnow exporting license;

(4) minnow dealer helper license;

(5) aquatic farm vehicle endorsement, which includes a minnow dealer vehicle license, a minnow retailer vehicle license, an exporting minnow hauler vehicle license, and a fish vendor vehicle license;

(6) sucker egg taking license; and

(7) game fish packers license.

Sec. 14. Minnesota Statutes 1994, section 17.4988, subdivision 4, is amended to read:

Subd. 4. [AQUARIUM FACILITY.] (a) A person may not operate operating an a commercial aquarium facility without must have an a commercial aquarium facility license issued by the commissioner if the facility contains species of aquatic life that are for sale and that are present in waters of the state. The commissioner may require an aquarium facility license for aquarium facilities importing or holding species of aquatic life that are for sale and that are not present in Minnesota if those species can survive in waters of the state. The fee for an aquarium facility license is $15.

(b) Game fish transferred by an aquarium facility must be accompanied by a receipt containing the information required on a shipping document by section 17.4985, subdivision 3, paragraph (b).

Sec. 15. Minnesota Statutes 1994, section 17.4991, subdivision 3, is amended to read:

Subd. 3. [FISH HEALTH INSPECTION.] (a) An aquatic farm propagating trout, salmon, or catfish and having an effluent discharge from the aquatic farm into public waters must have an annual a fish health inspection conducted at least once every 12 months by a certified fish health inspector. Testing must be conducted according to approved laboratory methods.

(b) A health inspection fee must be charged based on each lot of fish sampled. The fee by check or money order payable to the department of natural resources must be prepaid or paid at the time a bill or notice is received from the commissioner that the inspection and processing of samples is completed.

(c) Upon receipt of payment and completion of inspection, the commissioner shall notify the operator and issue a fish health certificate. The certification must be made according to the Fish Health Blue Book by a person certified as a fish health inspector.

(d) All aquatic life in transit or held at transfer stations within the state may be inspected by the commissioner. This inspection may include the collection of stock for purposes of pathological analysis. Sample size necessary for analysis will follow guidelines listed in the Fish Health Blue Book.

(e) Salmonids and catfish must have a fish health inspection before being transported from a containment facility, unless the fish are being transported directly to an outlet for processing or other food purposes or unless the commissioner determines that an inspection is not needed. A fish health inspection conducted for this purpose need only be done on the lot or lots of fish that will be transported. The commissioner must conduct a fish health inspection requested for this purpose within five working days of receiving written notice. Salmonids and catfish may be immediately transported from a containment facility to another containment facility once a sample has been obtained for a health inspection or once the five-day notice period has expired.

Sec. 16. Minnesota Statutes 1994, section 17.4992, subdivision 2, is amended to read:

Subd. 2. [RESTRICTION ON THE SALE OF GAME FISH.] (a) Except as provided in paragraph (b), species of the family salmonidae or ictaluridae, except bullheads, must be free of certifiable diseases if sold for stocking or transfer to another aquatic farm, except that.

(b) The following exceptions apply to paragraph (a):

(1) Eggs with enteric redmouth, whirling disease, or furunculosis may be transferred between licensed facilities or stocked following treatment approved by the commissioner, and.

(2) Fish with bacterial kidney disease may be transferred between licensed facilities or stocked to in areas where the disease has been previously introduced.

(3) The commissioner may allow transfer between licensed facilities or stocking of fish with enteric redmouth or furunculosis when the commissioner determines that doing so would pose no threat to the state's aquatic resources.

Sec. 17. Minnesota Statutes 1994, section 17.4992, subdivision 3, is amended to read:

Subd. 3. [ACQUISITION OF FISH FOR BROOD STOCK.] Game fish brood stock may be sold to private fish hatcheries or aquatic farms by the state at fair wholesale market value. As a one-time purchase For brood stock development, up to 20 pair of adults of each species requested may be provided to a licensee once every three years, if available, by the state through normal operations.

Sec. 18. Minnesota Statutes 1994, section 17.4993, subdivision 1, is amended to read:

Subdivision 1. [TAKING FROM PUBLIC WATERS.] A licensee may take minnow sperm, minnow eggs, and live minnows from public waters for aquatic farm purposes under an aquatic farm license, except that sucker eggs and sperm may only be taken with a sucker egg license endorsement as provided by section 17.4994.

Sec. 19. [84.105] [WILD RICE SEASON.]

Ripe wild rice may be harvested from July 15 to September 30.

Sec. 20. Minnesota Statutes 1995 Supplement, section 84.788, subdivision 3, is amended to read:

Subd. 3. [APPLICATION; ISSUANCE; REPORTS.] (a) Application for registration or continued registration must be made to the commissioner or an authorized deputy registrar of motor vehicles on a form prescribed by the commissioner. The form must state the name and address of every owner of the off-highway motorcycle and must be signed by at least one owner.

(b) A person who purchases from a retail dealer an off-highway motorcycle that is intended to be operated on public lands or waters shall make application for registration to the dealer at the point of sale. The dealer shall issue a temporary ten-day registration permit to each purchaser who applies to the dealer for registration. The dealer shall submit the completed registration applications and fees to the deputy registrar at least once each week. No fee may be charged by a dealer to a purchaser for providing the temporary permit.

(c) Upon receipt of the application and the appropriate fee, the commissioner or deputy registrar shall issue to the applicant, or provide to the dealer, a 60-day temporary receipt and shall assign a registration number that must be affixed to the motorcycle in a manner prescribed by the commissioner. A dealer subject to paragraph (b) shall provide the registration materials and temporary receipt to the purchaser within the ten-day temporary permit period.

(d) The commissioner shall develop a registration system to register vehicles under this section. A deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of off-highway motorcycles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to ensure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements. A fee of $2 in addition to other fees prescribed by law is charged for each off-highway motorcycle registered by:

(1) a deputy registrar and must be deposited in the treasury of the jurisdiction where the deputy is appointed, or kept if the deputy is not a public official; or

(2) the commissioner and must be deposited in the state treasury and credited to the off-highway motorcycle account.

Sec. 21. Minnesota Statutes 1995 Supplement, section 84.922, subdivision 2, is amended to read:

Subd. 2. [APPLICATION, ISSUANCE, REPORTS.] (a) Application for registration or continued registration shall be made to the commissioner of natural resources, the commissioner of public safety or an authorized deputy registrar of motor vehicles on a form prescribed by the commissioner. The form must state the name and address of every owner of the vehicle and be signed by at least one owner.

(b) A person who purchases an all-terrain vehicle from a retail dealer shall make application for registration to the dealer at the point of sale. The dealer shall issue a temporary ten-day registration permit to each purchaser who applies to the dealer for registration. The dealer shall submit the completed registration application and fees to the deputy registrar at least once each week. No fee may be charged by a dealer to a purchaser for providing the temporary permit.

(c) Upon receipt of the application and the appropriate fee the commissioner or deputy registrar shall register the vehicle issue to the applicant, or provide to the dealer, a 60-day temporary receipt and shall assign a registration number that must be affixed to the vehicle in a manner prescribed by the commissioner. A dealer subject to paragraph (b) shall provide the registration materials and temporary receipt to the purchaser within the ten-day temporary permit period. The commissioner shall use the snowmobile registration system to register vehicles under this section.

(c) (d) Each deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of all-terrain vehicles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to assure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements.

(d) (e) A fee of $2 in addition to other fees prescribed by law shall be charged for each vehicle registered by:

(1) a deputy registrar and shall be deposited in the treasury of the jurisdiction where the deputy is appointed, or retained if the deputy is not a public official; or

(2) the commissioner and shall be deposited to the state treasury and credited to the all-terrain vehicle account in the natural resources fund.

Sec. 22. Minnesota Statutes 1994, section 97A.015, subdivision 20, is amended to read:

Subd. 20. [FIREARMS SAFETY CERTIFICATE.] "Firearms safety certificate" means the certificate issued under section 97B.015 or an equivalent certificate issued by another state or other evidence that meets with the requirements of section 97B.020.

Sec. 23. Minnesota Statutes 1994, section 97A.015, is amended by adding a subdivision to read:

Subd. 25a. [GUARDIAN.] "Guardian" means a legal guardian of a person under age 16, or a person 18 or older who has been authorized by the parent or legal guardian to supervise the person under age 16.

Sec. 24. Minnesota Statutes 1994, section 97A.401, subdivision 4, is amended to read:

Subd. 4. [TAKING WILD ANIMALS FROM GAME REFUGES, WILDLIFE MANAGEMENT, AND OTHER AREAS.] Special permits may be issued, with or without a fee, to take a wild animal from game refuges, wildlife management areas, state parks, controlled hunting zones, and other areas of the state that the commissioner may open for the taking of a wild animal during a special season or subject to special restrictions. In addition, an application fee may be charged for a special permit. Local units of government may charge an administrative fee in connection with special hunts under their jurisdiction. Fees to be collected shall be based upon the estimated cost of conducting the special season or administering the special restrictions.

Sec. 25. Minnesota Statutes 1994, section 97A.411, subdivision 1, is amended to read:

Subdivision 1. [LICENSE PERIOD.] (a) Except as provided in paragraph (b), a license is valid during the lawful time within the license year that the licensed activity may be performed. A license year begins on the first day of March and ends on the last day of February.

(b) A license issued under section 97A.475, subdivision 6, clause (5), or section 97A.475, subdivision 7, clause (2), (3), (5), or (6) is valid for the full license period even if this period extends into the next license year, provided that the license period selected by the licensee begins at the time of issuance.

Sec. 26. Minnesota Statutes 1995 Supplement, section 97A.451, subdivision 3, is amended to read:

Subd. 3. [PERSONS RESIDENTS UNDER AGE 16; SMALL GAME.] (a) A person resident under age 16 may not obtain a small game license but may take small game by firearms or bow and arrow without a license if the person is a resident is:

(1) age 14 or 15 and possesses a firearms safety certificate;

(2) age 13, possesses a firearms safety certificate, and is accompanied by a parent or guardian; or

(3) age 12 or under and is accompanied by a parent or guardian.

(b) A resident under age 16 may take small game by trapping without a small game license, but a resident 13 years of age or older must have a trapping license. A resident under age 13 may trap without a trapping license.

Sec. 27. Minnesota Statutes 1994, section 97A.451, is amended by adding a subdivision to read:

Subd. 3a. [NONRESIDENTS UNDER AGE 16; SMALL GAME.] (a) A nonresident under age 16 may obtain a small game license at the resident fee if the nonresident:

(1) possesses a firearms safety certificate; or

(2) if age 13 or under, is accompanied by a parent or guardian when purchasing the license.

(b) A nonresident age 13 or under must be accompanied by a parent or guardian to take small game.

Sec. 28. Minnesota Statutes 1994, section 97A.455, is amended to read:

97A.455 [NONRESIDENT STUDENTS; FISHING, SMALL GAME, AND DEER BIG GAME.]

(a) A nonresident that is a full-time student at an educational institution in the state and resides in the state during the school year may obtain a resident license to take fish or, small game, or big game, except moose, by providing proof of student status and residence as prescribed by the commissioner.

(b) A nonresident that is a full-time foreign exchange student at a high school in the state and resides with persons in the state may obtain a resident license to take deer by archery big game, except moose, by providing proof of foreign exchange student status as prescribed by the commissioner.

Sec. 29. Minnesota Statutes 1994, section 97A.475, subdivision 30, is amended to read:

Subd. 30. [COMMERCIAL NETTING OF FISH IN INLAND WATERS.] The fee for a license to net commercial fish in inland waters, to be issued to residents and nonresidents, is $70 plus:

(1) for each hoop net pocket, $1;

(2) for each 1,000 feet of seine, $16.50; and

(3) for each helper's apprentice license, $5.50 $25.

Sec. 30. Minnesota Statutes 1994, section 97A.475, subdivision 31, is amended to read:

Subd. 31. [COMMERCIAL NETTING OF FISH IN LAKE OF THE WOODS.] The fee for a license to commercially net fish in Lake of the Woods is:

(1) for each pound net or staked trap net, $49.50;

(2) for each fyke net, $11, plus $5 for each two-foot segment, or fraction, of the wings or lead in excess of four feet in height;

(3) for each 100 feet of gill net, $2.75;

(4) for each submerged trap net, $16.50; and

(5) for each helper's apprentice license, $16.50 $25.

Sec. 31. Minnesota Statutes 1994, section 97A.475, subdivision 32, is amended to read:

Subd. 32. [COMMERCIAL NETTING OF FISH IN RAINY LAKE.] The fee for a license to commercially net fish in Rainy Lake is:

(1) for each pound net, $49.50;

(2) for each 100 feet of gill net, $2.75; and

(3) for each helper's apprentice license, $16.50 $25.

Sec. 32. Minnesota Statutes 1994, section 97A.475, subdivision 33, is amended to read:

Subd. 33. [COMMERCIAL NETTING OF FISH IN NAMAKAN AND SAND POINT LAKES.] The fee for a license to commercially net fish in Namakan Lake and Sand Point Lake is:

(1) for each 100 feet of gill net, $1.75;

(2) for each pound, fyke, and submerged trap net, $16.50; and

(3) for each helper's apprentice license, $5.50 $25.

Sec. 33. Minnesota Statutes 1994, section 97A.475, subdivision 34, is amended to read:

Subd. 34. [COMMERCIAL SEINE AND SET LINES TO TAKE FISH IN THE MISSISSIPPI RIVER.] (a) The fee for a license to commercially seine rough fish in the Mississippi river from St. Anthony Falls to the St. Croix river junction is:

(1) for a seine not exceeding 500 feet, $27.50; or

(2) for a seine over 500 feet, $44, plus $2 for each 100 foot segment or fraction over 1,000 feet.

(b) The fee for each helper's apprentice license issued under paragraph (a) is $5.50 $25.

Sec. 34. Minnesota Statutes 1994, section 97A.475, subdivision 35, is amended to read:

Subd. 35. [COMMERCIAL SEINING OF FISH IN WISCONSIN BOUNDARY WATERS.] The fee for a license to commercially seine fish in the boundary waters between Wisconsin and Minnesota from Taylors Falls to the Iowa border is:

(1) for a seine not exceeding 500 feet, $27.50; or

(2) for a seine over 500 feet, $44, plus $2.50 for each 100 feet over 1,000 feet; and

(3) for each helper's apprentice license to be issued to residents and nonresidents, $5.50, $25.

Sec. 35. Minnesota Statutes 1994, section 97A.475, subdivision 36, is amended to read:

Subd. 36. [COMMERCIAL NETTING IN WISCONSIN BOUNDARY WATERS.] The fee for a license to commercially net in the boundary waters between Wisconsin and Minnesota from Lake St. Croix to the Iowa border is:

(1) for each gill net not exceeding 500 feet, $14.50;

(2) for each gill net over 500 feet, $27.50;

(3) for each fyke net and hoop net, $11;

(4) for each bait net, $1.75;

(5) for each turtle net, $1.75;

(6) for each set line identification tag, $14.50; and

(7) for each helper's apprentice license to be issued to residents and nonresidents, $5.50, $25.

Sec. 36. Minnesota Statutes 1994, section 97A.475, subdivision 37, is amended to read:

Subd. 37. [COMMERCIAL NETTING OF FISH IN LAKE SUPERIOR.] The fee for a license to commercially net fish in Lake Superior is:

(1) for each gill net, $77 plus $2 for each 1,000 feet over 1,000 feet;

(2) for a pound or trap net, $77 plus $2 for each additional pound or trap net; and

(3) for each helper's apprentice license, $5.50 $25.

Sec. 37. Minnesota Statutes 1994, section 97A.535, is amended by adding a subdivision to read:

Subd. 2a. [QUARTERING OF DEER ALLOWED.] A deer that has been tagged as required in subdivision 1 may be quartered at the site of the kill. The animal's head must remain attached to one of the quarters. The quarters must be presented together for registration under subdivision 2 and must remain together until the deer is processed for storage.

Sec. 38. Minnesota Statutes 1994, section 97B.021, subdivision 1, is amended to read:

Subdivision 1. [RESTRICTIONS.] (a) Except as provided in this subdivision, a person under the age of 16 may not possess a firearm, unless accompanied by a parent or guardian.

(b) A person under age 16 may possess a firearm without being accompanied by a parent or guardian:

(1) on land owned by, or occupied as the principal residence of, the person or the person's parent or guardian;

(2) while participating in an organized target shooting program with adult supervision;

(3) while the person is participating in a firearms safety program or traveling to and from class; or

(4) if the person is age 14 or 15 and has a firearms safety certificate.

(c) For purposes of this section a guardian is a legal guardian or a person age 18 or older that has been authorized by the parent or legal guardian to supervise the person under age 16.

Sec. 39. Minnesota Statutes 1994, section 97B.071, is amended to read:

97B.071 [BLAZE ORANGE REQUIREMENTS.]

(a) Except as provided in rules adopted under paragraph (b) (c), a person may not hunt or trap during the open season where deer may be taken by firearms under applicable laws and ordinances, unless the visible portion of the person's cap and outer clothing above the waist, excluding sleeves and gloves, is blaze orange. Blaze orange includes a camouflage pattern of at least 50 percent blaze orange within each foot square. This section does not apply to migratory waterfowl hunters on waters of this state or in a stationary shooting location.

(b) Except as provided in rules adopted under paragraph (c), and in addition to the requirement in paragraph (a), a person may not take small game other than turkey, migratory birds, raccoons, and predators, except when hunting with nontoxic shot, unless a visible portion of at least one article of the person's clothing above the waist is blaze orange.

(c) The commissioner may, by rule, prescribe an alternative color in cases where paragraph (a) or (b) would violate the Religious Freedom Restoration Act of 1993, Public Law Number 103-141.

(d) A violation of paragraph (b) shall not result in a penalty, but is punishable only by a safety warning.

Sec. 40. Minnesota Statutes 1994, section 97B.311, is amended to read:

97B.311 [DEER SEASONS AND RESTRICTIONS.]

(a) The commissioner may, by rule, prescribe restrictions and designate areas where deer may be taken, including hunter selection criteria for special hunts established under section 97A.401, subdivision 4. The commissioner may, by rule, prescribe the open seasons for deer within the following periods:

(1) taking with firearms, other than muzzle-loading firearms, between November 1 and December 15;

(2) taking with muzzle-loading firearms between September 1 and December 31; and

(3) taking by archery between September 1 and December 31.

(b) Notwithstanding paragraph (a), the commissioner may establish special seasons within designated areas between September 1 and January 15.

Sec. 41. Minnesota Statutes 1994, section 97C.035, subdivision 3, is amended to read:

Subd. 3. [TAKING OF FISH.] (a) The commissioner may, by rule, authorize residents to take fish:

(1) in any quantity;

(2) in any manner, except by use of seines, hoop nets, fyke nets, and explosives; and

(3) for personal use only, except rough fish may be sold.

(b) In an emergency The commissioner may authorize the taking of fish without publishing the rule if by posting notice is posted conspicuously along the shore of the waters and publishing a news release in a newspaper of general circulation in the area where the waters are located.

Sec. 42. Minnesota Statutes 1994, section 97C.203, is amended to read:

97C.203 [DISPOSAL OF STATE HATCHERY EGGS OR FRY.]

The commissioner shall dispose of game fish eggs and fry according to the following order of priorities:

(1) distribution of fish eggs and fry to state hatcheries to hatch fry or raise fingerlings for stocking waters of the state for recreational fishing; and

(2) transfer to other government agencies or private fish hatcheries in exchange for fish to be stocked in waters of the state for recreational fishing;

(3) sale of fish eggs and fry to private fish hatcheries or licensed aquatic farms at a price not less than the fair wholesale market value, established as the average price charged at the state's private hatcheries and contiguous states per volume rates; and

(4) transfer to other government agencies for fish management and research purposes.

Sec. 43. Minnesota Statutes 1994, section 97C.205, is amended to read:

97C.205 [RULES FOR TRANSPORTING AND STOCKING FISH.]

(a) The commissioner may adopt rules to regulate:

(1) the transportation of fish and fish eggs from one body of water to another; and

(2) the stocking of waters with fish or fish eggs.

(b) The commissioner shall prescribe rules designed to encourage local sporting organizations to propagate game fish by using rearing ponds. The rules must:

(1) prescribe methods to acquire brood stock for the ponds by seining public waters;

(2) allow the sporting organizations to own and use seines and other necessary equipment; and

(3) prescribe methods for stocking the fish in public waters that give priority to the needs of the community where the fish are reared and the desires of the organization operating the rearing pond.

(c) A person age 16 or under may, for purposes of display in a home aquarium, transport largemouth bass, smallmouth bass, yellow perch, rock bass, black crappie, white crappie, bluegill pumpkinseed, green sunfish, orange spotted sunfish, and black, yellow and brown bullheads taken by angling. No more than four of each species may be transported at any one time, and any individual fish can be no longer than ten inches in total length.

Sec. 44. Minnesota Statutes 1994, section 97C.305, subdivision 2, is amended to read:

Subd. 2. [EXCEPTION.] A trout and salmon stamp is not required to take fish by angling or to possess trout and salmon if:

(1) the person:

(i) possesses a license to take fish by angling for a period of 24 hours from the time of issuance under section 97A.475, subdivision 6, clause (5), or subdivision 7, clause (5);, and (2) the person

(ii) is taking fish by angling, or the trout or salmon were taken by the person, during the period the license is valid; or

(2) the person is taking fish, or the trout or salmon were taken by the person, as authorized under section 97C.035.

Sec. 45. Minnesota Statutes 1994, section 97C.411, is amended to read:

97C.411 [STURGEON AND PADDLEFISH.]

Lake sturgeon, shovelnose sturgeon, and paddlefish may not be taken, bought, sold, transported or possessed except as provided by rule of the commissioner. The commissioner may only allow the taking of these fish in waters that the state boundary passes through except that a rule that applies and in tributaries to the St. Croix river must also apply to its tributaries.

Sec. 46. Minnesota Statutes 1994, section 97C.811, subdivision 6, is amended to read:

Subd. 6. [LICENSE INVALIDATION.] (a) A license to take commercial fish is void upon:

(1) the licensee's death;

(2) sale of the commercial fishing business cessation of commercial fishing operations within an assigned area, except as provided by paragraph (c);

(3) removal of the commercial fishing business from the state;

(4) conviction of two or more violations of inland commercial fishing laws within a license period; or

(5) (4) failure to apply for a new or renewal license prior to June 15 of any year.

(b) A commercial inland fishing license is not subject to the license revocation provisions of section 97A.421. Commercial fishing rights and area assignments covered by a license that becomes void reverts to the commissioner for reassignment.

(c) A person possessing a valid inland commercial fishing license may apply to the commissioner for transfer of an assigned commercial fishing area to another person. Upon receipt of the application, the commissioner shall notify the applicant that the application for transfer has been received and shall determine if other people are interested in the assigned area by:

(1) notifying the inland commercial fish trade association in writing; and

(2) publishing notice in a newspaper of general circulation in the vicinity of the assigned area.

These notices must allow interested persons 30 days to notify the commissioner of their interest in the assigned area. Within 60 days after publishing notice, the commissioner shall review the qualifications of all interested persons and approve or deny the transfer based on the criteria in section 97C.815, subdivision 2. If the transfer is denied, the licensee may retain the license or request that it become void.

Sec. 47. Minnesota Statutes 1994, section 97C.815, subdivision 4, is amended to read:

Subd. 4. [INLAND COMMERCIAL FISHING TRADE ASSOCIATION; LICENSE PROBLEMS.] The commissioner shall consult with representatives of the inland commercial fishing trade association when disagreements arise in the areas of license issuance, problems with performance pursuant to the license, transfers of licenses, area assignments, and the entry of new commercial fishing operators into the inland commercial fishery.

Sec. 48. Minnesota Statutes 1994, section 97C.835, subdivision 1, is amended to read:

Subdivision 1. [COMMERCIAL FISHING LICENSE FOR LAKE SUPERIOR.] (a) A license to fish commercially in Lake Superior shall be issued only to a resident who possesses 5,000 feet of gill net of mesh sizes permitted in subdivisions 4 and 5 or two pound nets, has maximum of 50 residents. To qualify for licensing, a resident must have landed fish in the previous year with a value of at least $1,500, except for those state waters from Duluth to Silver Bay upon the discretion of the commissioner, and has must have engaged in commercial fishing for at least 50 30 days of the previous year. An applicant shall be issued a license without meeting these requirements if the applicant is 65 or more years of age and has held a license continuously since 1947. An applicant may be issued a license, at the discretion of the commissioner, if failure to meet these the requirements for the dollar value of fish landed or number of days fished resulted from illness or other mitigating circumstances, or the applicant has reached the age of 65 and has been licensed at least ten five of the previous 15 ten years. Persons receiving licenses under these provisions for applicants 65 years of age or more must be in attendance at the setting and lifting of nets. The commissioner may issue multiple licenses to individuals who meet these requirements and have held multiple licenses prior to 1978.

(b) A license may be issued to a resident who has not previously fished commercially on Lake Superior and has not been convicted of a game and fish law violation in the preceding three years, if the applicant:

(1) shows a bill of sale indicating the purchase of gear and facilities connected with an existing license;

(2) shows proof of inheritance of all the gear and facilities connected with an existing license; or

(3) has served at least two years as a helper an apprentice in a Minnesota Lake Superior licensed commercial fishing operation.

Sec. 49. Minnesota Statutes 1994, section 97C.835, subdivision 5, is amended to read:

Subd. 5. [GILL NETS; CISCOES.] Gill nets for taking ciscoes and chubs may not be less than 2-1/4 inch extension measure mesh and may not exceed 2-3/4 inch extension measure mesh except that smaller or larger mesh sizes may be used under a permit issued by the commissioner.

Sec. 50. Minnesota Statutes 1994, section 97C.841, is amended to read:

97C.841 [HELPER'S APPRENTICE LICENSE.]

A person assisting the holder of a master's license, in with a commercial fishing license may list one person as an apprentice on the license. A person acting as an apprentice for a commercial fishing licensee must have an apprentice license. The commercial fishing licensee or the apprentice listed on the license must be present at all commercial fishing operations including going to and from fishing locations, or in setting or lifting nets, or removing fish from nets, must have a helper's license, unless the person is the holder of a master's license. A person possessing an angling license may assist the holder of a master's or apprentice license in going to and from fishing locations, or in setting or lifting nets, or removing fish from nets.

A helper's An apprentice license is transferable from one helper to another by the holder of a master's license applying to the commissioner.

Sec. 51. Laws 1995, chapter 220, section 137, is amended to read:

Sec. 137. [PUBLIC INPUT; REPORT.]

The commissioner of natural resources shall seek public input and comment on sections section 135 and 136. By March 1, 1996, the commissioner shall report to the environment and natural resources committees of the legislature with a summary of the public comments received and any recommendations for legislation.

Sec. 52. Laws 1995, chapter 238, section 1, subdivision 2, is amended to read.

Subd. 2. [AUTHORIZATION.] Notwithstanding Minnesota Statutes, section 103F.215, the counties of Crow Wing, Hubbard, Cass, and Morrison may allow the sale or transfer, as a separate parcel, of a lot within shoreland, as defined in Minnesota Statutes, section 103F.205, subdivision 4, that:

(1) is located wholly within the Mississippi headwaters corridor, as identified in the plan, or is located anywhere within Crow Wing, Hubbard, Cass, or Morrison county;

(2) is one of a group of two or more contiguous lots that have been under the same common ownership since July 1, 1981; and

(3) does not meet the residential lot size requirements in the model standards and criteria adopted by the commissioner of natural resources under Minnesota Statutes, section 103F.211.

Sec. 53. [PUBLIC INPUT; REPORT.]

The commissioner of natural resources shall seek public input and comments on the allowance to take antlered deer in more than one zone, and whether the license issued under Minnesota Statutes, section 97A.475, subdivision 2, clause (9), shall be extended to archery and muzzle-loader hunters at no additional fee. The commissioner must deliver a report on the public input to the house and senate policy committees by March 1, 1997.

Sec. 54. [SALE OF STATE WILDLIFE LAND IN WASHINGTON COUNTY.]

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, and the public hearing requirement in Minnesota Statutes, section 97A.135, subdivision 2a, the commissioner of natural resources may sell land in a wildlife management area, described in this section, by private sale for a consideration not less than the appraised value, in accordance with the remaining provisions of Minnesota Statutes, chapter 94, and section 97A.135.

(b) The conveyance shall be in a form approved by the attorney general.

(c) The deed must contain a restrictive covenant that prohibits the placement or construction of additional buildings or structures, including corrals and animal shelters or pens, on the property conveyed in this section. The cost for constructing and maintaining any fencing on the property to be conveyed shall be the sole responsibility of the purchaser.

(d) The land that may be sold is in the Hardwood Creek wildlife management area in Washington County and is described as: the South 487 feet of the North 520 feet of the West 770 feet of the Northwest Quarter of the Southeast Quarter (NW 1/4 SE 1/4), Section Twenty-seven (27), Township Thirty-two (32) North, Range Twenty-one (21) West EXCEPT the North 440 feet of the West 650 feet of said NW 1/4 SE 1/4.

(e) The conveyance in this section will provide the adjacent landowner with a buffer between the landowner's buildings and public hunting activities on the adjacent wildlife area that surrounds the site and eliminate a problem with a portion of the landowner's barn that lies on the existing state property.

Sec. 55. [LAKE COUNTY LAND SALES RATIFIED.]

(a) Notwithstanding Minnesota Statutes, section 373.01, the conveyances by Lake county, Minnesota, of the following county fee lands are hereby ratified:

(1) one parcel of land sold October 29, 1993, by Lake county, Minnesota, to Darrel and Harriet Kempffer, being a five-acre county fee parcel of land described as the North One-half of the West One-half (N 1/2 of W 1/2) of the West One-half (W 1/2) of the Northwest Quarter of the Northwest Quarter (NW 1/4 of NW 1/4), Section Two (2), Township Fifty-two (52) North, Range Eleven (11) West, Lake county, Minnesota, constituting five acres;

(2) four parcels of land sold July 18, 1994, by Lake county, Minnesota, described as:

(i) Lot One (1), Five Mile Hill Plat, Lake county, Minnesota, sold to Diane Cullen;

(ii) Lot Four (4), Five Mile Hill Plat, Lake county, Minnesota, sold to Thomas Muehlburger;

(iii) Lot Seven (7), Five Mile Hill Plat, Lake county, Minnesota, sold to Thomas Muehlburger;

(iv) Lot Six (6), Five Mile Hill Plat, Lake county, Minnesota, sold to John McClellan;

(3) four parcels of land sold October 7, 1994, by Lake county, Knife River, Minnesota, described as:

(i) Lot One (1), Granite Point Plat, Lake county, Minnesota, sold to Tim Stoddart;

(ii) Lot Two (2), Granite Point Plat, Lake county, Minnesota, sold to Tim Stoddart;

(iii) Lot Three (3), Granite Point Plat, Lake county, Minnesota, sold to Lee Jensen;

(iv) Lot Four (4), Granite Point Plat, Lake county, Minnesota, sold to Lee Jensen; and

(4) a parcel of land sold July 21, 1995, by Lake county, Minnesota, described as:

The East Two Hundred Eight and 7/10 (E.208.7) feet of the West Eight Hundred Thirty-four and 8/10 (W.834.8) of the South Two Hundred Forty-two (S.242) feet of the South One-half (S 1/2) of the Northwest Quarter of the Southwest Quarter (NW 1/4 of SW 1/4), Section Five (5), Township Fifty-nine (59) North, Range Eight (8) West, Stony River Township, Lake county, sold to Dorothy Johnson.

(b) Through an error, the sales of the lands described in paragraph (a) were conducted using the procedure for public sales of tax-forfeited lands rather than the applicable public sale procedure in Minnesota Statutes, section 373.01.

Sec. 56. [PERSONAL FLOTATION DEVICE RULES; VIOLATIONS.]

A violation prior to May 1, 1997, of requirements added in the proposed rule published in the State Register, Volume 19, Number 45, pages 2207 to 2210, May 8, 1995, and subsequently adopted on October 2, 1995, shall not result in a penalty, but is punishable only by a safety warning.

Sec. 57. [REPEALER.]

Minnesota Statutes 1994, sections 84.09 and 84.14; and Laws 1995, chapter 220, section 136, are repealed.

Sec. 58. [INSTRUCTION TO REVISOR.]

In each section of Minnesota Statutes referred to in column A, the revisor of statutes shall delete the reference in column B and insert the reference in column C. The references in column C may be changed by the revisor to the section of Minnesota Statutes in which the bill sections are compiled.

Column AColumn BColumn C

84.4284.0984.091

97A.02584.0984.091

97A.06584.0984.091

Sec. 59. [EFFECTIVE DATE.]

Sections 52 and 56 are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to natural resources; clarifying status of game refuge designations; modifying provisions for aquatic farms; modifying provisions for recreational vehicles; removing the residency requirement for youth hunting; permitting nonresident students to take big game; defining terms; modifying provisions relating to short-term fishing licenses, special permits, commercial fishing, taking fish, taking deer, blaze orange, trout and salmon stamps, and sturgeon and paddlefish; modifying provisions for stocking fish; modifying provisions related to wild rice and disposal of state hatchery eggs or fry; requiring reports; ratifying certain conveyances of county fee lands; permitting the sale of certain state wildlife land; modifying certain provisions for shoreland transfers; modifying penalty provisions for personal flotation device violations; amending Minnesota Statutes 1994, sections 17.4982, subdivisions 8,

10, 17, 21, and by adding a subdivision; 17.4984, subdivisions 2 and 7; 17.4985, subdivisions 2 and 3; 17.4986; 17.4988, subdivisions 2 and 4; 17.4991, subdivision 3; 17.4992, subdivisions 2 and 3; 17.4993, subdivision 1; 97A.015, subdivision 20, and by adding a subdivision; 97A.401, subdivision 4; 97A.411, subdivision 1; 97A.451, by adding a subdivision; 97A.455; 97A.475, subdivisions 30, 31, 32, 33, 34, 35, 36, and 37; 97A.535, by adding a subdivision; 97B.021, subdivision 1; 97B.071; 97B.311; 97C.035, subdivision 3; 97C.203; 97C.205; 97C.305, subdivision 2; 97C.411; 97C.811, subdivision 6; 97C.815, subdivision 4; 97C.835, subdivisions 1 and 5; and 97C.841; Minnesota Statutes 1995 Supplement, sections 14.386; 14.387; 84.788, subdivision 3; 84.922, subdivision 2; and 97A.451, subdivision 3; Laws 1995, chapters 220, section 137; and 238, section 1, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 84; repealing Minnesota Statutes 1994, sections 84.09 and 84.14; Laws 1995, chapter 220, section 136."

We request adoption of this report and repassage of the bill.

Senate Conferees: Janet B. Johnson, Gene Merriam, Dennis R. Frederickson, Steven Morse and Pat Pariseau.

House Conferees: Bob Milbert, Betty McCollum, Tom Osthoff, Virgil J. Johnson and Mark Holsten.

Milbert moved that the report of the Conference Committee on S. F. No. 2445 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2445, A bill for an act relating to natural resources; clarifying status of game refuge designations; removing the residency requirement for youth hunting; permitting nonresident students to take big game; modifying provisions relating to short-term fishing licenses, special permits, commercial fishing, taking deer, moose licenses, blaze orange, trout and salmon stamps, and sturgeon and paddlefish; removing certain provisions relating to wild rice; requiring a review; amending Minnesota Statutes 1994, sections 97A.015, by adding a subdivision; 97A.401, subdivision 4; 97A.411, subdivision 1; 97A.431, subdivision 2; 97A.451, by adding a subdivision; 97A.455; 97A.475, subdivisions 30, 31, 32, 33, 34, 35, 36, and 37; 97A.535, by adding a subdivision; 97B.021, subdivision 1; 97B.071; 97B.311; 97C.035, subdivision 3; 97C.305, subdivision 2; 97C.411; 97C.811, subdivision 6; 97C.815, subdivision 4; 97C.835 subdivisions 1 and 5; 97C.841; Minnesota Statutes 1995 Supplement, sections 14.387; and 97A.451, subdivision 3; Laws 1995, chapter 220, section 137; repealing Minnesota Statutes 1994, section 84.09; and Laws 1995, chapter 220, section 136.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 133 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Ness         Skoglund
Anderson, B. Finseth      Knoblach     Olson, E.    Smith
Anderson, R. Frerichs     Koppendrayer Olson, M.    Stanek
Bakk         Garcia       Kraus        Onnen        Sviggum
Bertram      Girard       Krinkie      Opatz        Swenson, D.
Bettermann   Goodno       Larsen       Orenstein    Swenson, H.
Bishop       Greenfield   Leighton     Orfield      Sykora
Boudreau     Greiling     Leppik       Osskopp      Tomassoni
Bradley      Gunther      Lieder       Osthoff      Tompkins
Broecker     Haas         Lindner      Ostrom       Trimble
Brown        Hackbarth    Long         Otremba      Tuma
Carlson, L.  Harder       Lourey       Ozment       Tunheim
Carlson, S.  Hasskamp     Luther       Paulsen      Van Dellen
Carruthers   Hausman      Lynch        Pawlenty     Van Engen
Clark        Holsten      Macklin      Pellow       Vickerman
Commers      Huntley      Mahon        Pelowski     Wagenius
Cooper       Jaros        Mares        Perlt        Warkentin
Daggett      Jefferson    Mariani      Peterson     Weaver
Dauner       Jennings     Marko        Pugh         Wejcman
Davids       Johnson, A.  McCollum     Rest         Wenzel
Dawkins      Johnson, R.  McElroy      Rhodes       Winter
Dehler       Johnson, V.  McGuire      Rice         Wolf
Delmont      Kahn         Milbert      Rostberg     Worke
Dempsey      Kalis        Molnau       Rukavina     Workman
Dorn         Kelley       Mulder       Sarna        Sp.Anderson,I
Entenza      Kelso        Munger       Schumacher   
Erhardt      Kinkel       Murphy       Seagren      
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9058

Solberg                   

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 1997, A bill for an act relating to economic development; requiring some businesses with state or local financial assistance to pay at least a poverty level wage; requiring the commissioner of revenue to set goals for jobs and wages for new tax expenditures; amending Minnesota Statutes 1994, section 270.067, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 177; repealing Minnesota Statutes 1995 Supplement, section 116J.542.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Hottinger, Chandler and Mrs. Fishbach.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Clark moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 3 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1997. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1872.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to peace officer training; requiring peace officers to undergo training in community policing techniques; proposing coding for new law in Minnesota Statutes, chapter 626.

March 20, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1872, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendment and that S. F. No. 1872 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. [626.8455] [TRAINING IN COMMUNITY POLICING.]

Subdivision 1. [TRAINING COURSE.] The board, in consultation with the Minnesota institute of community policing, shall prepare a training course to instruct peace officers in the techniques of community policing. The course must include instruction on at least the following matters:

(1) techniques for expanding the training of peace officers to include problem-solving;

(2) techniques for organizing community members so that they are involved and trained in community policing activities;

(3) techniques for relating to diverse communities; and

(4) techniques for relating to physically or mentally impaired individuals.

The course also must include training on child development issues to enable officers to respond appropriately to perceived child protection situations. The board shall update the training course periodically as it deems appropriate.

Subd. 2. [PRESERVICE TRAINING REQUIREMENT.] An individual is not eligible to take the peace officer licensing examination after August 1, 1997, unless the individual has received the training described in subdivision 1.

Subd. 3. [INSTRUCTIONAL MATERIALS.] The board shall provide to chief law enforcement officers instructional materials patterned after the materials developed by the board under subdivision 1. These materials must meet board requirements for continuing education credit.

Sec. 2. [IN-SERVICE TRAINING PLAN.]

The board shall develop a plan for providing the training described in section 1, subdivision 1. The board shall develop this plan in conjunction with the Minnesota institute of community policing, the Minnesota chiefs of police association, the Minnesota sheriffs association, and the Minnesota police and peace officers association. The plan must recommend a schedule for implementing the training which takes into account the size and resources of the employing law enforcement agencies, an estimate of the costs associated with the training, and recommendations for funding the training. An individual who is licensed before August 1, 1997, shall receive training in accordance with the plan beginning January 1, 1998. The board shall report its plan to the house and senate committees with jurisdiction over criminal justice matters.

Sec. 3. [EFFECTIVE DATE.]

Sections 1 and 2 are effective the day following final enactment. Section 1, subdivision 2, applies to peace officer licensing examinations administered after July 31, 1997."

Delete the title and insert:

"A bill for an act relating to peace officer training; requiring peace officers to undergo training in community policing techniques; proposing coding for new law in Minnesota Statutes, chapter 626."

We request adoption of this report and repassage of the bill.

Senate Conferees: Linda Berglin, Randy C. Kelly and Warren Limmer.

House Conferees: Linda Wejcman, Karen Clark and Rich Stanek.

Wejcman moved that the report of the Conference Committee on S. F. No. 1872 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1872, A bill for an act relating to peace officer training; requiring peace officers to undergo training in community policing techniques; proposing coding for new law in Minnesota Statutes, chapter 626.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 124 yeas and 8 nays as follows:

Those who voted in the affirmative were:

Abrams       Entenza      Kelso        Olson, E.    Smith
Anderson, B. Erhardt      Kinkel       Onnen        Solberg
Anderson, R. Farrell      Knoblach     Opatz        Stanek
Bakk         Finseth      Kraus        Orenstein    Sviggum
Bertram      Frerichs     Larsen       Orfield      Swenson, D.
Bettermann   Garcia       Leighton     Osskopp      Swenson, H.
Bishop       Girard       Leppik       Osthoff      Sykora
Boudreau     Goodno       Lieder       Ostrom       Tomassoni
Bradley      Greenfield   Long         Otremba      Tompkins
Broecker     Greiling     Lourey       Ozment       Trimble
Brown        Gunther      Luther       Paulsen      Tuma
Carlson, L.  Haas         Lynch        Pawlenty     Tunheim
Carlson, S.  Hasskamp     Macklin      Pellow       Van Dellen
Carruthers   Hausman      Mahon        Pelowski     Van Engen
Clark        Holsten      Mares        Perlt        Vickerman
Commers      Huntley      Mariani      Peterson     Wagenius
Cooper       Jaros        Marko        Pugh         Warkentin
Daggett      Jefferson    McCollum     Rest         Weaver
Dauner       Jennings     McElroy      Rhodes       Wejcman
Davids       Johnson, A.  McGuire      Rostberg     Wenzel
Dawkins      Johnson, R.  Milbert      Rukavina     Wolf
Dehler       Johnson, V.  Mulder       Sarna        Worke
Delmont      Kahn         Munger       Schumacher   Workman
Dempsey      Kalis        Murphy       Seagren      Sp.Anderson,I
Dorn         Kelley       Ness         Skoglund     

Hackbarth    Knight       Krinkie      Molnau       
Harder       Koppendrayer Lindner      Olson, M.    

Mr. Speaker:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 2218, A bill for an act relating to state government; modifying performance report requirements; requiring that interagency bills be paid promptly; prohibiting state agencies from undertaking capital improvements without legislative authority; conforming certain leased space requirements to existing law; requiring that state agencies comply with certain information policy office requirements regarding information systems equipment and data collection; modifying revolving fund authority; increasing resource recovery goals; modifying collection requirements; amending Minnesota Statutes 1994, sections 16A.055, subdivision 1; 16A.124, subdivision 7, and by adding a subdivision; 16B.30; 16B.31, subdivision 6; 16B.41, by adding a subdivision; 16B.48, subdivision 2; and 115A.151; Minnesota Statutes 1995 Supplement, sections 15.91, subdivision 2; and 115A.15, subdivision 9.

The Senate has appointed as such committee:

Messrs. Metzen, Hottinger and Ms. Runbeck.

Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Carruthers moved that the House recess subject to the call of the Chair. The motion prevailed.

The House reconvened and was called to order by the Speaker.

The following Conference Committee Reports were received:

A bill for an act relating to education; prekindergarten through grade 12; providing for general education; transportation; special programs; community education; facilities; organization and cooperation; education excellence; other education programs and financing; education policy provisions; libraries; state agencies; technology; conforming amendments; budget reserve and cost management; appropriating money; amending Minnesota Statutes 1994, sections 120.06, subdivision 1; 120.08, subdivision 3; 120.101, by adding a subdivision; 120.17, subdivision 9; 120.1701, subdivision 10; 120.73, subdivision 1; 121.11, subdivision 15; 121.8355, subdivision 1; 121.906; 121.914, subdivision 1; 121.915; 122.32, subdivision 1; 122.535, subdivision 6; 122.895, subdivision 2; 123.35, subdivision 19a; 123.351, subdivision 10; 123.3514, subdivision 9; 123.37, subdivision 1a; 123.38, subdivisions 2 and 2b; 123.932, subdivisions 1b, 1c, 1e, and 11; 123.933, as amended; 123.935, subdivisions 2 and 7; 123.951; 124.09; 124.155, subdivision 1; 124.17, subdivision 1e, and by adding subdivisions; 124.19, subdivision 1; 124.195, subdivision 8; 124.239, subdivision 5, and by adding subdivisions; 124.2711, subdivision 6; 124.2713, subdivision 10; 124.273, by adding subdivisions; 124.311, subdivisions 2, 3, 5, and 7; 124.48, subdivision 3; 124.573, subdivisions 2e, 2f, and 3; 124.86, subdivision 1; 124.91, subdivision 1, and by adding a subdivision; 124.912, subdivision 6; 124.916, subdivision 4; 124A.02, subdivision 25; 124A.029, subdivision 4; 124A.03, subdivisions 2b, 3b, and by adding a subdivision; 124A.0311, subdivision 3; 124A.035, subdivision 4; 124A.036, by adding a subdivision; 124A.22, by adding a subdivision; 124A.26, subdivision 1; 125.05, subdivision 1a, and by adding a subdivision; 125.09, subdivision 4; 125.1385, subdivision 1; 125.185, subdivision 4; 125.60, subdivision 2; 125.611, subdivision 1; 126.151, subdivision 2; 127.29, subdivision 2; 134.34, by adding a subdivision; 136D.23, subdivision 1; 136D.83, subdivision 1; 144.4165; 169.4504, by adding a subdivision; and 256.736, subdivision 11; Minnesota Statutes 1995 Supplement, sections 13.46, subdivision 2; 43A.316, subdivision 2; 65B.132; 120.064, subdivision 9; 120.1045; 120.17, subdivisions 3a, 3b, and 6; 120.1701, subdivision 20; 120.181; 120.74, subdivision 1; 121.11, subdivision 7c; 121.15, subdivision 1; 121.904, subdivisions 4a and 4c; 121.911, subdivision 5; 121.917, subdivision 4; 121.935, subdivision 1a; 123.3514, subdivisions 6 and 6b; 124.155, subdivision 2; 124.17, subdivisions 1 and 1d; 124.195, subdivision 12; 124.223, subdivision 4; 124.225, subdivisions 8l, 14, 16, and 17; 124.227; 124.243, subdivision 2; 124.2445; 124.2455; 124.248, subdivisions 1, 1a, 2, and 3; 124.273, subdivisions 1c and 1d; 124.314, subdivision 2; 124.32, subdivision 12; 124.3201, subdivisions 1, 2, 3, and by adding subdivisions; 124.3202; 124.323, subdivisions 1 and 2; 124.574, subdivisions 2f and 2g; 124.71, subdivision 2; 124.912, subdivision 1; 124.961; 124A.0311, subdivision 2; 124A.22, subdivisions 2a, 10, and 13b; 124A.23, subdivision 4; 124C.74, subdivisions 2 and 3; 125.05, subdivision 1; 126.12, subdivision 2; 126.151, subdivision 1; 126.22, subdivisions 2 and 5; 126.70, subdivision 1; 134.46; 169.01, subdivision 6; 237.065; and 631.40, subdivision 1a; Laws 1993, chapter 224, article 1, section 34; article 12, sections 32, as amended; 39, as amended; and 41, as amended; Laws 1995, First Special Session chapter 3, article 1, sections 61; and 63; article 3, section 19, subdivision 15; article 4, section 29, subdivision 5; article 5, section 20, subdivisions 5 and 6; article 6, section 17, subdivisions 2, 4, and by adding subdivisions; article 8, sections 25, subdivision 2; and 27; article 11, sections 21, subdivision 2; 22; and 23; article 12, sections 8, subdivision 1; and 12, subdivision 7; article 14, section 5; and article 15, section 26, subdivisions 7 and 10; proposing coding for new law in Minnesota Statutes, chapters 120; 121; 123; 124; 124A; 124C; 125; 126; and 136D; repealing Minnesota Statutes 1994, sections 124A.03, subdivision 3b; 124B.02; 124B.10; 124B.20, subdivisions 2 and 3; and 136D.75; Minnesota Statutes 1995 Supplement, sections 120.1045, subdivision 3; 124B.01; 124B.03; and 124B.20, subdivision 1; Minnesota Rules, parts 8700.7700; 8700.7710; 8750.9000; 8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 8750.9600; and 8750.9700.

March 26, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2156, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2156 be further amended as follows:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1995 Supplement, section 13.46, subdivision 2, is amended to read:

Subd. 2. [GENERAL.] (a) Unless the data is summary data or a statute specifically provides a different classification, data on individuals collected, maintained, used, or disseminated by the welfare system is private data on individuals, and shall not be disclosed except:

(1) pursuant to section 13.05;

(2) pursuant to court order;

(3) pursuant to a statute specifically authorizing access to the private data;

(4) to an agent of the welfare system, including a law enforcement person, attorney, or investigator acting for it in the investigation or prosecution of a criminal or civil proceeding relating to the administration of a program;

(5) to personnel of the welfare system who require the data to determine eligibility, amount of assistance, and the need to provide services of additional programs to the individual;

(6) to administer federal funds or programs;

(7) between personnel of the welfare system working in the same program;

(8) the amounts of cash public assistance and relief paid to welfare recipients in this state, including their names, social security numbers, income, addresses, and other data as required, upon request by the department of revenue to administer the property tax refund law, supplemental housing allowance, early refund of refundable tax credits, and the income tax. "Refundable tax credits" means the dependent care credit under section 290.067, the Minnesota working family credit under section 290.0671, the property tax refund under section 290A.04, and, if the required federal waiver or waivers are granted, the federal earned income tax credit under section 32 of the Internal Revenue Code;

(9) to the Minnesota department of economic security for the purpose of monitoring the eligibility of the data subject for reemployment insurance, for any employment or training program administered, supervised, or certified by that agency, or for the purpose of administering any rehabilitation program, whether alone or in conjunction with the welfare system, and to verify receipt of energy assistance for the telephone assistance plan;

(10) to appropriate parties in connection with an emergency if knowledge of the information is necessary to protect the health or safety of the individual or other individuals or persons;

(11) data maintained by residential programs as defined in section 245A.02 may be disclosed to the protection and advocacy system established in this state pursuant to Part C of Public Law Number 98-527 to protect the legal and human rights of persons with mental retardation or other related conditions who live in residential facilities for these persons if the protection and advocacy system receives a complaint by or on behalf of that person and the person does not have a legal guardian or the state or a designee of the state is the legal guardian of the person;

(12) to the county medical examiner or the county coroner for identifying or locating relatives or friends of a deceased person;

(13) data on a child support obligor who makes payments to the public agency may be disclosed to the higher education services office to the extent necessary to determine eligibility under section 136A.121, subdivision 2, clause (5);

(14) participant social security numbers and names collected by the telephone assistance program may be disclosed to the department of revenue to conduct an electronic data match with the property tax refund database to determine eligibility under section 237.70, subdivision 4a;

(15) the current address of a recipient of aid to families with dependent children may be disclosed to law enforcement officers who provide the name and social security number of the recipient and satisfactorily demonstrate that: (i) the recipient is a fugitive felon, including the grounds for this determination; (ii) the location or apprehension of the felon is within the law enforcement officer's official duties; and (iii) the request is made in writing and in the proper exercise of those duties;

(16) the current address of a recipient of general assistance, work readiness, or general assistance medical care may be disclosed to probation officers and corrections agents who are supervising the recipient, and to law enforcement officers who are investigating the recipient in connection with a felony level offense;

(17) information obtained from food stamp applicant or recipient households may be disclosed to local, state, or federal law enforcement officials, upon their written request, for the purpose of investigating an alleged violation of the food stamp act, in accordance with Code of Federal Regulations, title 7, section 272.1(c);

(18) data on a child support obligor who is in arrears may be disclosed for purposes of publishing the data pursuant to section 518.575;

(19) data on child support payments made by a child support obligor may be disclosed to the obligee; or

(20) data in the work reporting system may be disclosed under section 256.998, subdivision 7.; or

(21) to the Minnesota department of children, families, and learning for the purpose of matching department of children, families, and learning student records to public assistance records to determine students eligible for free and reduced price meals, meal supplements, and free milk pursuant to United States Code, title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to produce accurate numbers of students receiving aid to families with dependent children as required by section 124.175; and to allocate federal and state resources that are distributed based on income of the student's family.

(b) Information on persons who have been treated for drug or alcohol abuse may only be disclosed in accordance with the requirements of Code of Federal Regulations, title 42, sections 2.1 to 2.67.

(c) Data provided to law enforcement agencies under paragraph (a), clause (15), (16), or (17), or paragraph (b), are investigative data and are confidential or protected nonpublic while the investigation is active. The data are private after the investigation becomes inactive under section 13.82, subdivision 5, paragraph (a) or (b).

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but is not subject to the access provisions of subdivision 10, paragraph (b).

Sec. 2. Minnesota Statutes 1994, section 121.906, is amended to read:

121.906 [EXPENDITURES; REPORTING.]

Subdivision 1. [RECOGNITION.] School district expenditures shall be recognized and reported on the district books of account in accordance with this section.

There shall be fiscal year-end recognition of expenditures and the related offsetting liabilities recorded in each fund in accordance with the uniform financial accounting and reporting standards for Minnesota school districts. Encumbrances outstanding at the end of the fiscal year do not constitute expenditures or liabilities.

Deviations from the principles set forth in this section subdivision shall be evaluated and explained in footnotes to audited financial statements.

Subd. 2. [ACCOUNTING.] Expenditures for any legal purpose of the school district not accounted for elsewhere shall be accounted for in the general fund.

Sec. 3. Minnesota Statutes 1995 Supplement, section 121.911, subdivision 5, is amended to read:

Subd. 5. [DEFICIT FOR CAPITAL PROJECTS.] Upon approval by the commissioner of children, families, and learning, a district may incur a deficit in the capital expenditure fund reserve for operating capital account for a period not to exceed three years to provide money for capital projects. A description of the project and a financial plan to recover the deficit shall be approved by the commissioner prior to the initiation of the project.

Sec. 4. Minnesota Statutes 1995 Supplement, section 121.917, subdivision 4, is amended to read:

Subd. 4. (1) If the net negative undesignated unappropriated operating fund balance in all the funds of a school district, other than statutory operating debt pursuant to section 121.914, capital expenditure, building construction, debt service, trust and agency, and post-secondary vocational technical education funds as defined in section 124A.02, subdivision 25, calculated in accordance with the uniform financial accounting and reporting standards for Minnesota school districts, as of June 30 each year, is more than 2-1/2 percent of the year's expenditure amount, the district shall, prior to September 15 January 31 of the next fiscal year, submit a special operating plan to reduce the district's deficit expenditures to the commissioner of children, families, and learning for approval. The commissioner may also require the district to provide evidence that the district meets and will continue to meet all of the curriculum requirements of the state board.

Notwithstanding any other law to the contrary, a district submitting a special operating plan to the commissioner under this clause which is disapproved by the commissioner shall not receive any aid pursuant to chapters 124 and 124A until a special operating plan of the district is so approved.

(2) A district shall receive aids pending the approval of its special operating plan under clause (1). A district which complies with its approved operating plan shall receive aids as long as the district continues to comply with the approved operating plan.

Sec. 5. Minnesota Statutes 1994, section 124.09, is amended to read:

124.09 [SCHOOL ENDOWMENT FUND, APPORTIONMENT.]

The school endowment fund shall be apportioned semiannually by the commissioner, on the first Monday in March and October September in each year, to districts whose schools have been in session at least nine months. The apportionment shall be in proportion to the number of pupils in average daily membership during the preceding year; provided, that apportionment shall not be paid to a district for pupils for whom tuition is received by the district.

Sec. 6. Minnesota Statutes 1995 Supplement, section 124.155, subdivision 2, is amended to read:

Subd. 2. [ADJUSTMENT TO AIDS.] (a) The amount specified in subdivision 1 shall be used to adjust the following state aids and credits in the order listed:

(1) general education aid authorized in sections 124A.23 and 124B.20;

(2) secondary vocational aid authorized in section 124.573;

(3) special education aid authorized in section sections 124.32, 124.3201, and 124.3202;

(4) secondary vocational aid for children with a disability authorized in section 124.574;

(5) aid for pupils of limited English proficiency authorized in section 124.273;

(6) transportation aid authorized in section 124.225;

(7) community education programs aid authorized in section 124.2713;

(8) adult education aid authorized in section 124.26;

(9) early childhood family education aid authorized in section 124.2711;

(10) capital expenditure aid authorized in sections 124.243, 124.244, and 124.83;

(11) school district cooperation aid authorized in section 124.2727;

(12) assurance of mastery aid according to section 124.311;

(13) homestead and agricultural credit aid, disparity credit and aid, and changes to credits for prior year adjustments according to section 273.1398, subdivisions 2, 3, 4, and 7;

(14) attached machinery aid authorized in section 273.138, subdivision 3;

(15) alternative delivery aid authorized in section 124.322;

(16) special education equalization aid authorized in section 124.321;

(17) special education excess cost aid authorized in section 124.323;

(18) learning readiness aid authorized in section 124.2615; and

(19) cooperation-combination aid authorized in section 124.2725; and

(20) district cooperation revenue aid authorized in section 124.2727.

(b) The commissioner of children, families, and learning shall schedule the timing of the adjustments to state aids and credits specified in subdivision 1, as close to the end of the fiscal year as possible.

Sec. 7. Minnesota Statutes 1994, section 124.17, subdivision 1e, is amended to read:

Subd. 1e. [AFDC PUPIL COUNTS.] AFDC pupil counts and average daily membership for subdivisions 1b and 1d shall be determined according to this subdivision:

(a) For districts where the number of pupils from families receiving aid to families with dependent children has increased over the preceding year for each of the two previous years, the number of pupils enrolled in the district from families receiving aid to families with dependent children shall be those counted on October 1 of the previous school year. The average daily membership used shall be from the previous school year.

(b) For districts that do not meet the requirement of paragraph (a), the number of pupils enrolled in the district from families receiving aid to families with dependent children shall be the average number of pupils on October 1 of the second previous school year and October 1 of the previous school year. The average daily membership used shall be the average number enrolled in the previous school year and the second previous school year.

(c) Notwithstanding paragraphs (a) and (b), for charter schools in the first three years of operation, the number of pupils enrolled from families receiving AFDC shall be those counted on October 1 of the current school year. The average daily membership used shall be from the current school year.

Sec. 8. Minnesota Statutes 1994, section 124.17, is amended by adding a subdivision to read:

Subd. 4. [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is enrolled in a learning year program according to section 121.585, an area learning center according to sections 124C.45 and 124C.46, or an alternative program approved by the commissioner, for more than 1,020 hours in a school year for a secondary student and for more than 935 hours in a school year for an elementary student, that pupil may be counted as more than one pupil in average daily membership. The amount in excess of one pupil must be determined by the ratio of the number of hours of instruction provided to that pupil in excess of 1,020 hours to 1,020 for a secondary pupil and of 935 hours to 935 for an elementary pupil. Hours that occur after the close of the instructional year in June shall be attributable to the following fiscal year.

(b)(i) To receive general education revenue for a pupil in an alternative program that has an independent study component, a school district must meet the requirements in this paragraph. The school district must develop with the pupil a continual learning plan for the pupil. A district must allow a minor pupil's parent or guardian to participate in developing the plan, if the parent or guardian wants to participate. The plan must identify the learning experiences and expected outcomes needed for satisfactory credit for the year and for graduation. The plan must be updated each year.

(ii) General education revenue for a pupil in an approved alternative program without an independent study component must be prorated for a pupil participating for less than a full year, or its equivalent.

(iii) General education revenue for a pupil in an approved alternative program that has an independent study component must be paid for each hour of teacher contact time and each hour of independent study time completed toward a credit necessary for graduation. Average daily membership for a pupil shall equal the number of hours of teacher contact time and independent study time divided by 1,020.

(iv) For an alternative program having an independent study component, the commissioner shall require a description of the courses in the program, the kinds of independent study involved, the expected learning outcomes of the courses, and the means of measuring student performance against the expected outcomes.

Sec. 9. Minnesota Statutes 1994, section 124.195, subdivision 8, is amended to read:

Subd. 8. [PAYMENT PERCENTAGE FOR REIMBURSEMENT AIDS.] One hundred percent of the aid for the last fiscal year must be paid for the following aids: special education special pupil aid according to section 124.32, subdivision 6; special education summer school aid, according to section 124.32, subdivision 10, for the previous fiscal year must be paid in the current year.

Sec. 10. Minnesota Statutes 1995 Supplement, section 124.195, subdivision 12, is amended to read:

Subd. 12. [AID ADJUSTMENT FOR TRA CONTRIBUTION RATE CHANGE.] (a) The department of children, families, and learning shall reduce general education aid or any other aid paid in a fiscal year directly to school districts, intermediate school districts, education districts, education cooperative service units, special education cooperatives, secondary vocational cooperatives, regional management information centers, or another. Any district or cooperative unit providing elementary or secondary education services that is prohibited from receiving direct state aids by section 124.193 or 124.32, subdivision 12, is exempt from this reduction. The reduction shall equal the following percent of salaries paid in a fiscal year by the entity to members of the teachers retirement association established in chapter 354. However, salaries paid to members of the association who are employed by a technical college shall be excluded from this calculation:

(1) in fiscal year 1991, 0.84 percent,

(2) in fiscal year 1992 and later years, the greater of

(i) zero, or

(ii) 4.48 percent less the additional employer contribution rate established under section 354.42, subdivision 5.

(b) In fiscal year 1991, this reduction is estimated to equal $14,260,000.

Sec. 11. [124.2613] [FIRST-GRADE PREPAREDNESS PROGRAM.]

Subdivision 1. [PURPOSE.] The purposes of the first-grade preparedness program are to ensure that every child has the opportunity before first grade to develop the skills and abilities necessary to read and succeed in school and to reduce the underlying causes that create a need for compensatory revenue.

Subd. 2. [QUALIFYING DISTRICT.] A school district may receive first-grade preparedness revenue for qualifying school sites if, consistent with subdivision 5, the school board approves a resolution requiring the district to provide services to all children located in a qualifying school site attendance area.

Subd. 3. [QUALIFYING SCHOOL SITE.] (a) The commissioner shall rank all school sites with kindergarten programs that do not exclusively serve students under section 120.17. The ranking must be from highest to lowest based on the site's free and reduced lunch count as a percent of the fall enrollment using the preceding October 1 enrollment data. For each school site, the percentage used to calculate the ranking must be the greater of (1) the percent of the fall kindergarten enrollment receiving free and reduced lunch, or (2) the percent of the total fall enrollment receiving free and reduced lunch. The list of ranked sites must be separated into the following geographic areas: Minneapolis district, St. Paul district, suburban Twin Cities districts in the seven-county metropolitan area, and school districts in greater Minnesota.

(b) The commissioner shall establish a process and timelines to qualify school sites for the next school year. School sites must be qualified in each geographic area from the list of ranked sites until the estimated revenue available for this program has been allocated. The total estimated revenue of $3,500,000 must be distributed to qualified school sites in each geographic area as follows: 25 percent for Minneapolis sites, 25 percent for St. Paul sites, 25 percent for suburban Twin Cities sites, and 25 percent for greater Minnesota.

Subd. 4. [PROGRAM.] A qualifying school site must develop its first-grade preparedness program in collaboration with other providers of school readiness and child development services. A school site must either offer a full-day kindergarten program to participating children who are five years of age or older for the full school day every day or a half-day program for participating children who are four years old. Full-day and half-day kindergarten program providers must ensure that the program they provide supplements existing school readiness and child development programs and complements the services provided with compensatory revenue. Where possible, individuals receiving assistance under a family assistance plan can meet the work activity requirement of the plan by participating in a first-grade preparedness program as a volunteer.

Subd. 5. [EXTENDED DAY REQUIREMENTS.] The board of a qualifying school district must develop and approve a plan to provide extended day services to serve as many children as possible. To accept children whose families participate in child care assistance programs under section 256H.03 or 256H.05, and to meet the requirements of section 245A.03, subdivision 2, the board must formally approve the first-grade preparedness program. All revenue received under subdivision 6 must be allocated to the qualifying school sites within the district.

Subd. 6. [PREPAREDNESS REVENUE.] (a) A qualifying school district is eligible for first-grade preparedness revenue equal to the basic formula allowance for that year times the number of pupil units calculated according to paragraph (b) in each qualifying school site. If the first-grade preparedness revenue is insufficient to fully fund the formula amounts, the commissioner shall prorate the revenue provided to each qualifying school site.

(b) A pupil enrolled in a half-day first-grade preparedness program under this section is counted as .53 pupil units. A pupil enrolled in a full-day first-grade preparedness program under this section is counted as a kindergarten pupil under section 124.17, subdivision 1, plus an additional .53 pupil units.

(c) This revenue must supplement and not replace compensatory revenue that the district uses for the same or similar purposes under chapter 124A.

Subd. 7. [EVALUATION.] The commissioner of children, families, and learning, in consultation with representatives of the state board of teaching, early childhood teachers, elementary school classroom teachers, and teacher educators, shall develop an evaluation for qualifying school sites to use in documenting results. The evaluation must use empirical and qualitative methods to gather information on the following: progress towards ensuring that every child entering the first grade has the knowledge and skills necessary to succeed in school; student readiness for first grade; an assessment of enrolling students by their teacher, and measures of parental satisfaction and parental involvement. The commissioner shall assist a school site with its evaluation at the request of the site.

Subd. 8. [EXPIRATION.] This section applies for fiscal years 1997, 1998, and 1999, and expires June 30, 1999.

Sec. 12. Minnesota Statutes 1995 Supplement, section 124.918, subdivision 2, is amended to read:

Subd. 2. [NOTICE TO COMMISSIONER; FORMS.] By September 30 October 7 of each year each district shall notify the commissioner of children, families, and learning of the proposed levies in compliance with the levy limitations of this chapter and chapters 124A, 124B, and 136D. By January 15 of each year each district shall notify the commissioner of children, families, and learning of the final levies certified. The commissioner of children, families, and learning shall prescribe the form of these notifications and may request any additional information necessary to compute certified levy amounts.

Sec. 13. Minnesota Statutes 1994, section 124A.02, subdivision 25, is amended to read:

Subd. 25. [NET UNAPPROPRIATED OPERATING FUND BALANCE.] "Net unappropriated operating fund balance" means the sum of the fund balances in the general, transportation, food service, and community service funds minus the balances reserved for statutory operating debt reduction, bus purchase, severance pay, taconite, reemployment insurance, maintenance levy reduction, operating capital, disabled access, health and safety, and encumbrances, computed as of June 30 each year.

Sec. 14. Minnesota Statutes 1994, section 124A.029, subdivision 4, is amended to read:

Subd. 4. [PER PUPIL REVENUE OPTION CONVERSION.] A district may, by school board resolution, request that the department convert the levy authority under section 124.912, subdivisions 2 and 3, or its current referendum revenue, excluding authority based on a dollar amount, authorized before July 1, 1993, to an allowance per pupil. The district must adopt a resolution and submit a copy of the resolution to the department by July 1, 1993. (a) The department shall convert a each district's referendum revenue authority for fiscal year 1995 2002 and later years to an allowance per pupil unit as follows: the revenue allowance equals the amount determined by dividing the district's maximum revenue under section 124A.03 or 124.912, subdivisions 2 and 3, for fiscal year 1994 2001 by the district's 1993-1994 2000-2001 actual pupil units. A district's maximum revenue for all later years for which the revenue is authorized equals the revenue allowance times the district's actual pupil units for that year. If a district has referendum authority under section 124A.03 and levy authority under section 124.912, subdivisions 2 and 3, and the district requests that each be converted, the department shall convert separate revenue allowances for each. However, if a district's referendum revenue is limited to a dollar amount, the maximum revenue under section 124A.03 must not exceed that dollar amount. If the referendum authority of a district is converted according to this subdivision, and the question on the referendum ballot did not provide for an expiration date, the authority shall expire according to section 124A.0311.

(b) The referendum allowance reduction shall be applied first to the authority with the earliest expiration date.

Sec. 15. Minnesota Statutes 1995 Supplement, section 124A.03, subdivision 2, is amended to read:

Subd. 2. [REFERENDUM REVENUE.] (a) The revenue authorized by section 124A.22, subdivision 1, may be increased in the amount approved by the voters of the district at a referendum called for the purpose. The referendum may be called by the school board or shall be called by the school board upon written petition of qualified voters of the district. The referendum shall be conducted one or two calendar years before the increased levy authority, if approved, first becomes payable. Only one election to approve an increase may be held in a calendar year. Unless the referendum is conducted by mail under paragraph (g), the referendum must be held on the first Tuesday after the first Monday in November. The ballot shall state the maximum amount of the increased revenue per actual pupil unit, the estimated referendum tax rate as a percentage of market value in the first year it is to be levied, and that the revenue shall be used to finance school operations. The ballot may state a schedule, determined by the board, of increased revenue per actual pupil units that differs from year to year over the number of years for which the increased revenue is authorized. If the ballot contains a schedule showing different amounts, it shall also indicate the estimated referendum tax rate as a percent of market value for the amount specified for the first year and for the maximum amount specified in the schedule. The ballot may state that existing referendum levy authority is expiring. In this case, the ballot may also compare the proposed levy authority to the existing expiring levy authority, and express the proposed increase as the amount, if any, over the expiring referendum levy authority. The ballot shall designate the specific number of years, not to exceed ten, for which the referendum authorization shall apply. The notice required under section 275.60 may be modified to read, in cases of renewing existing levies:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."

The ballot may contain a textual portion with the information required in this subdivision and a question stating substantially the following:

"Shall the increase in the revenue proposed by (petition to) the board of ........., School District No. .., be approved?"

If approved, an amount equal to the approved revenue per actual pupil unit times the actual pupil units for the school year beginning in the year after the levy is certified shall be authorized for certification for the number of years approved, if applicable, or until revoked or reduced by the voters of the district at a subsequent referendum.

(b) The school board shall prepare and deliver by first class mail at least 15 days but no more than 30 days prior to the day of the referendum to each taxpayer a notice of the referendum and the proposed revenue increase. The school board need not mail more than one notice to any taxpayer. For the purpose of giving mailed notice under this subdivision, owners shall be those shown to be owners on the records of the county auditor or, in any county where tax statements are mailed by the county treasurer, on the records of the county treasurer. Every property owner whose name does not appear on the records of the county auditor or the county treasurer shall be deemed to have waived this mailed notice unless the owner has requested in writing that the county auditor or county treasurer, as the case may be, include the name on the records for this purpose. The notice must project the anticipated amount of tax increase in annual dollars and annual percentage for typical residential homesteads, agricultural homesteads, apartments, and commercial-industrial property within the school district.

The notice for a referendum may state that an existing referendum levy is expiring and project the anticipated amount of increase over the existing referendum levy in the first year, if any, in annual dollars and annual percentage for typical residential homesteads, agricultural homesteads, apartments, and commercial-industrial property within the school district.

The notice must include the following statement: "Passage of this referendum will result in an increase in your property taxes." However, in cases of renewing existing levies, the notice may include the following statement: "Passage of this referendum may result in an increase in your property taxes."

(c) A referendum on the question of revoking or reducing the increased revenue amount authorized pursuant to paragraph (a) may be called by the school board and shall be called by the school board upon the written petition of qualified voters of the district. A referendum to revoke or reduce the levy amount must be based upon the dollar amount, local tax rate, or amount per actual pupil unit, that was stated to be the basis for the initial authorization. Revenue approved by the voters of the district pursuant to paragraph (a) must be received at least once before it is subject to a referendum on its revocation or reduction for subsequent years. Only one revocation or reduction referendum may be held to revoke or reduce referendum revenue for any specific year and for years thereafter.

(d) A petition authorized by paragraph (a) or (c) shall be effective if signed by a number of qualified voters in excess of 15 percent of the registered voters of the school district on the day the petition is filed with the school board. A referendum invoked by petition shall be held on the date specified in paragraph (a).

(e) The approval of 50 percent plus one of those voting on the question is required to pass a referendum authorized by this subdivision.

(f) At least 15 days prior to the day of the referendum, the district shall submit a copy of the notice required under paragraph (b) to the commissioner of children, families, and learning. Within 15 days after the results of the referendum have been certified by the school board, or in the case of a recount, the certification of the results of the recount by the canvassing board, the district shall notify the commissioner of children, families, and learning of the results of the referendum.

(g) Except for a referendum held under subdivision 2b, any referendum under this section held on a day other than the first Tuesday after the first Monday in November must be conducted by mail in accordance with section 204B.46. Notwithstanding paragraph (b) to the contrary, in the case of a referendum conducted by mail under this paragraph, the notice required by paragraph (b) shall be prepared and delivered by first class mail at least 20 days before the referendum.

Sec. 16. Minnesota Statutes 1994, section 124A.03, subdivision 2b, is amended to read:

Subd. 2b. [REFERENDUM DATE.] In addition to the referenda allowed in subdivision 2, clause (a), the commissioner may authorize a referendum for a different day.

(a) The commissioner may grant authority to a district to hold a referendum on a different day if the district is in statutory operating debt and has an approved plan or has received an extension from the department to file a plan to eliminate the statutory operating debt.

(b) The commissioner may grant authority for a district to hold a referendum on a different day if: (1) the district will conduct a bond election under chapter 475 on that same day; and (2) the proceeds of the referendum will provide only additional operating revenue necessitated by the facility for which bonding authority is sought. The commissioner may only grant authority under this paragraph if the district demonstrates to the commissioner's satisfaction that the district's ability to operate the new facility will be significantly affected if the operating referendum is not conducted until the November general election. Authority under this paragraph expires November 30, 1998.

(c) The commissioner must approve, deny, or modify each district's request for a referendum levy on a different day within 60 days of receiving the request from a district.

Sec. 17. Minnesota Statutes 1994, section 124A.03, subdivision 3b, is amended to read:

Subd. 3b. [FISCAL YEAR 1997 REFERENDUM ALLOWANCE REDUCTION.] For fiscal year 1997, a district's referendum allowance under subdivision 1c is reduced by the amounts calculated in paragraphs (a), (b), (c), and (d).

(a) The referendum allowance reduction equals the amount by which a district's supplemental revenue reduction exceeds the district's supplemental revenue allowance for fiscal year 1993.

(b) Notwithstanding paragraph (a), if a district's initial referendum allowance is less than ten percent of the formula allowance for that year, the reduction equals the lesser of (1) an amount equal to $100, or (2) the amount calculated in paragraph (a).

(c) Notwithstanding paragraph (a) or (b), a school district's referendum allowance reduction equals (1) an amount equal to $100, times (2) one minus the ratio of 20 percent of the formula allowance minus the district's initial referendum allowance limit to 20 percent of the formula allowance for that year if:

(i) the district's adjusted net tax capacity for assessment year 1992 per actual pupil unit for fiscal year 1995 is less than $3,000;

(ii) the district's net unappropriated operating fund balance as of June 30, 1993, divided by the actual pupil units for fiscal year 1995 is less than $200;

(iii) the district's supplemental revenue allowance for fiscal year 1993 is equal to zero; and

(iv) the district's initial referendum revenue authority for the current year divided by the district's net tax capacity for assessment year 1992 is greater than ten percent.

(d) Notwithstanding paragraph (a), (b), or (c), the referendum revenue reduction for a newly reorganized district is computed as follows:

(1) for a newly reorganized district created effective July 1, 1994, the referendum revenue reduction equals the lesser of the amount calculated for the combined district under paragraph (a), (b), or (c), or the sum of the amounts by which each of the reorganizing district's supplemental revenue reduction exceeds its respective supplemental revenue allowances calculated for the districts as if they were still in existence for fiscal year 1995; or

(2) for a newly reorganized district created after July 1, 1994, the referendum revenue reduction equals the lesser of the amount calculated for the combined district under paragraph (a), (b), or (c), or the sum of the amounts by which each of the reorganizing district's supplemental revenue reduction exceeds its respective supplemental revenue allowances calculated for the year preceding the year of reorganization.

Sec. 18. Minnesota Statutes 1994, section 124A.03, is amended by adding a subdivision to read:

Subd. 3c. [REFERENDUM ALLOWANCE REDUCTION.] For fiscal year 1998 and later, a district's referendum allowance for referendum authority under subdivision 1c is reduced as provided in this subdivision.

(a) For referendum revenue authority approved before June 1, 1996, and effective for fiscal year 1997, the reduction equals the amount of the reduction computed for fiscal year 1997 under subdivision 3b.

(b) For referendum revenue authority approved before June 1, 1996, and effective beginning in fiscal year 1998, the reduction equals the amount of the reduction computed for fiscal year 1998 under subdivision 3b.

(c) For referendum revenue authority approved after May 31, 1996, there is no reduction.

(d) For districts with more than one referendum authority, the reduction shall be computed separately for each authority. The reduction shall be applied first to authorities levied against tax capacity, and then to authorities levied against referendum market value. For districts with more than one authority levied against net tax capacity or against referendum market value, the referendum allowance reduction shall be applied first to the authority with the earliest expiration date.

(e) For a newly reorganized district created after July 1, 1996, the referendum revenue reduction equals the lesser of the amount calculated for the combined district, or the sum of the amounts by which each of the reorganizing district's supplemental revenue reduction exceeds its respective supplemental revenue allowances calculated for the year preceding the year of reorganization.

Sec. 19. Minnesota Statutes 1995 Supplement, section 124A.0311, subdivision 2, is amended to read:

Subd. 2. [CONVERSION TO MARKET VALUE.] (a) Prior to June 1, 1997, by June 1 of each year, a school board may, by resolution of a majority of its board, convert any remaining portion of its referendum authority under section 124A.03, subdivision 2, that is authorized to be levied against net tax capacity to referendum authority that is authorized to be levied against the referendum market value of all taxable property located within the school district. At the option of the school board, any remaining portion of its referendum authority may be converted in two or more parts at separate times. The referendum authority may be converted from net tax capacity to referendum market value according to a schedule adopted by resolution of the school board for years prior to taxes payable in 2001, provided that, for taxes payable in 2001 and later, the full amount of the referendum authority is levied against referendum market value. The board must notify the commissioner of children, families, and learning of the amount of referendum authority that has been converted from net tax capacity to referendum market value, if any, by June 15, of each year. The maximum length of a referendum converted under this paragraph is ten years.

(b) For referendum levy amounts converted between June 1, 1997, and June 1, 1998, all other conditions of this subdivision apply except that the maximum length of the referendum is limited to seven years.

(c) For referendum levy amounts converted between June 1, 1998, and June 1, 1999, all other conditions of this subdivision apply except that the maximum length of the referendum is limited to six years.

(d) For referendum levy amounts converted between June 1, 1999, and June 1, 2000, all other conditions of this subdivision apply except that the maximum length of the referendum is limited to five years.

Sec. 20. Minnesota Statutes 1994, section 124A.0311, subdivision 3, is amended to read:

Subd. 3. [ALTERNATIVE CONVERSION.] A school district that has a referendum that is levied against net tax capacity that expires before taxes payable in 1998 may convert its referendum authority according to this subdivision. In the payable year prior to the year of expiration, the school board may authorize a referendum under section 124A.03. Notwithstanding any other law to the contrary, the district may propose, and if approved by its electors, have its referendum authority reauthorized in part on tax capacity and in part on referendum market value according to a schedule adopted by resolution of the school board for years prior to taxes payable in 2001, provided that, for taxes payable in 2001 and later, the full amount of referendum authority is levied against referendum market value. If the full amount of the referendum is reauthorized on referendum market value prior to taxes payable in 1998, the referendum may extend for ten years. If the referendum becomes fully reauthorized on referendum market value for a later year, the referendum shall not extend for more than the maximum number of years allowed under subdivision 2.

Sec. 21. Minnesota Statutes 1994, section 124A.035, subdivision 4, is amended to read:

Subd. 4. [COUNTY APPORTIONMENT DEDUCTION.] Each year the amount of money apportioned to a school district for that year pursuant to section 124.10, subdivision 2, excluding any district where the general education levy is determined according to section 124A.23, subdivision 3, shall be deducted from the general education aid earned by that district for the same year or from aid earned from other state sources.

Sec. 22. Minnesota Statutes 1994, section 124A.036, is amended by adding a subdivision to read:

Subd. 6. [CHARTER SCHOOLS.] (a) The general education aid for districts must be adjusted for each pupil attending a charter school under section 120.064. The adjustments must be made according to this subdivision.

(b) General education aid paid to a resident district must be reduced by an amount equal to the general education revenue exclusive of compensatory revenue.

(c) General education aid paid to a district in which a charter school not providing transportation according to section 120.064, subdivision 15, is located shall be increased by an amount equal to the product of: (1) the sum of $170, plus the transportation sparsity allowance for the district, plus the transportation transition allowance for the district; times (2) the pupil units attributable to the pupil.

(d) If the amount of the reduction to be made from the general education aid of the resident district is greater than the amount of general education aid otherwise due the district, the excess reduction must be made from other state aids due the district.

Sec. 23. Minnesota Statutes 1995 Supplement, section 124A.22, subdivision 10, is amended to read:

Subd. 10. [TOTAL OPERATING CAPITAL REVENUE.] (a) For fiscal year 1997 and thereafter, total operating capital revenue for a district equals the amount determined under paragraph (b), (c), (d), (e), or (f), plus $68 times the actual pupil units for the school year. The revenue must be placed in a reserved account in the general fund and may only be used according to subdivision 11.

(b) For fiscal years 1996 and later, capital revenue for a district equals $100 times the district's maintenance cost index times its actual pupil units for the school year.

(c) For 1996 and later fiscal years, the previous formula revenue for a district equals $128 times its actual pupil units for fiscal year 1995.

(d) Notwithstanding paragraph (b), for fiscal year 1996, the revenue for each district equals 25 percent of the amount determined in paragraph (b) plus 75 percent of the previous formula revenue.

(e) Notwithstanding paragraph (b), for fiscal year 1997, the revenue for each district equals 50 percent of the amount determined in paragraph (b) plus 50 percent of the previous formula revenue.

(f) Notwithstanding paragraph (b), for fiscal year 1998, the revenue for each district equals 75 percent of the amount determined in paragraph (b) plus 25 percent of the previous formula revenue.

(g) The revenue in paragraph (b) for a district that operates a program under section 121.585, is increased by an amount equal to $15 times the number of actual pupil units at the site where the program is implemented.

Sec. 24. Minnesota Statutes 1994, section 124A.22, is amended by adding a subdivision to read:

Subd. 11a. [USES OF REVENUE.] Except as otherwise prohibited by law, a district may spend general fund money for capital purposes.

Sec. 25. Minnesota Statutes 1995 Supplement, section 124A.22, subdivision 13b, is amended to read:

Subd. 13b. [TRANSITION ALLOWANCE.] (a) A district's transportation transition allowance for fiscal year 1997 equals the result of the following computation:

(1) if the result in subdivision 13a, paragraph (a), clause (iii), for fiscal year 1997 is less than the fiscal year 1996 base allowance, the transportation transition allowance equals the fiscal year 1996 base allowance minus the result in section 124A.22, subdivision 13a, paragraph (a), clause (iii).

(2) if the result in subdivision 13a, paragraph (b), for fiscal year 1997 is greater than the fiscal year 1996 base allowance and less than 110 percent of the fiscal year 1996 base allowance, the transportation transition allowance equals zero.

(3) if the result in subdivision 13a, paragraph (b), for fiscal year 1997 is greater than 110 percent of the fiscal year 1996 base allowance, the transportation transition allowance equals 110 percent of the fiscal year 1996 base allowance minus the result in subdivision 13a, paragraph (a), clause (iii).

(b) A district's transportation transition allowance for fiscal year 1998 equals the result of the following:

(1) if the result in subdivision 13a, paragraph (a), clause (iii), for fiscal year 1998 is less than the fiscal year 1996 base allowance, the transportation transition allowance equals the fiscal year 1996 base allowance minus the result in subdivision 13a, paragraph (a), clause (iii); or

(2) if the result in subdivision 13a, paragraph (a), clause (iii), for fiscal year 1998 is greater than or equal to the fiscal year 1996 base allowance, the transportation transition allowance equals zero.

(c) For fiscal years 1997 and 1998, a district's training and experience transition allowance is equal to the training and experience revenue the district would have received under Minnesota Statutes 1994, section 124A.22, subdivision 4, divided by the actual pupil units for fiscal year 1997 minus $130. For fiscal year 1999 and later, a district's training and experience transition allowance equals zero.

If the training and experience transition allowance is less than zero, the reduction shall be determined according to the following schedule:

(i) for fiscal year 1997, the reduction is equal to .9 times the amount initially determined;

(ii) for fiscal year 1998, the reduction is equal to .75 times the amount initially determined;

(iii) for fiscal year 1999, the reduction is equal to .50 times the amount initially determined;

(iv) for fiscal year 2000, the reduction is equal to .25 times the amount initially determined; and

(v) for fiscal year 2001 and thereafter, the transition allowance shall not be less than zero.

(c) (d) A district's transition allowance for fiscal year 1997 and thereafter is equal to the sum of its transportation transition allowance and its training and experience transition allowance.

Sec. 26. Minnesota Statutes 1995 Supplement, section 124A.23, subdivision 4, is amended to read:

Subd. 4. [GENERAL EDUCATION AID.] A district's general education aid is the sum of the following amounts:

(1) the product of (i) the difference between the general education revenue, excluding transition revenue and supplemental revenue, and the general education levy, times (ii) the ratio of the actual amount levied to the permitted levy;

(2) transition aid according to section 124A.22, subdivision 13e;

(3) supplemental aid according to section 124.214, subdivision 2;

(4) shared time aid according to section 124A.02, subdivision 21; and

(5) referendum aid according to section 124A.03.

Sec. 27. Minnesota Statutes 1994, section 124A.28, subdivision 1, is amended to read:

Subdivision 1. [USE OF THE REVENUE.] The compensatory education revenue under section 124A.22, subdivision 3, may be used to provide eligible services to eligible pupils according to section 124.311, subdivisions 3 and 4. It also may must be used to meet the educational needs of pupils whose educational achievement is below the level that is appropriate for pupils of their age. These needs may be met by providing at least some of the following:

(1) direct instructional services under the assurance of mastery program according to section 124.311;

(2) remedial instruction in reading, language arts, and mathematics to improve the achievement level of these pupils;

(2) (3) additional teachers and teacher aides to provide more individualized instruction to these pupils;

(3) (4) summer programs that enable these pupils to improve their achievement or that reemphasize material taught during the regular school year;

(4) (5) in-service education for teachers, teacher aides, principals, and other personnel to improve their ability to recognize these pupils and provide appropriate responses to the pupils' needs;

(5) (6) for instructional material for these pupils including: textbooks, workbooks, periodicals, pamphlets, photographs, reproductions, filmstrips, prepared slides, prerecorded video programs, sound recordings, desk charts, games, study prints and pictures, desk maps, models, learning kits, blocks and cubes, flashcards, instructional computer software programs, pencils, pens, crayons, notebooks, duplicating fluids, and papers;

(6) (7) programs to reduce truancy, encourage completion of high school, enhance self-concept, provide health services, provide nutrition services, provide a safe and secure learning environment, provide coordination for pupils receiving services from other governmental agencies, provide psychological services to determine the level of social, emotional, cognitive, and intellectual development, and provide counseling services, guidance services, and social work services; and

(7) (8) bilingual programs, bicultural programs, and programs for pupils of limited English proficiency;

(9) all day kindergarten;

(10) extended school day and extended school year programs; and

(11) other methods to increase achievement, as needed.

Sec. 28. Laws 1993, chapter 224, article 1, section 34, subdivision 2, is amended to read:

Subd. 2. [AID ADJUSTMENT.] For fiscal year 1994 1996 only, the department of education children, families, and learning shall include in the general education aid calculation for independent school district No. 504, Slayton, or its successor district, and independent school district No. 918, Chandler-Lake Wilson, or its successor district, the sum of the amounts by which the district's general education aid was reduced for fiscal years 1992 and 1993 year 1994 under Minnesota Statutes, section 124A.26.

Sec. 29. Laws 1993, chapter 224, article 1, section 34, subdivision 3, is amended to read:

Subd. 3. [LEVY ADJUSTMENT.] For 1993 1996 taxes payable in 1994 1997 only, independent school district No. 504, Slayton, or its successor district, and independent school district No. 918, Chandler-Lake Wilson, or its successor district, may levy an amount not to exceed the sum of the levy reductions for fiscal years 1992 and 1993 year 1994 resulting from the general education revenue fund balance reduction under Minnesota Statutes, section 124A.26.

Sec. 30. Laws 1995, First Special Session chapter 3, article 1, section 63, subdivision 2, is amended to read:

Subd. 2. [REVENUE FOR FISCAL YEAR 1997.] Minnesota Statutes 1994, sections 121.912, subdivision 8; 124.243; 124.244; 124A.26; and 126.019, are repealed effective for revenue for fiscal year 1997.

Sec. 31. Laws 1995, First Special Session, chapter 3, article 15, section 25, is amended to read:

Sec. 25. [HOMESTEAD AND AGRICULTURAL CREDIT ADJUSTMENT.]

(a) For the computation of homestead and agricultural aid for taxes payable in 1996, the commissioner of revenue shall permanently reduce a school district's homestead and agricultural aid by an amount equal to the lesser of: (1) 25 percent of the amount of the district's homestead and agricultural aid for calendar year 1995; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

(b) Prior to For the computation of homestead and agricultural aid for taxes payable in 1997, the commissioner of revenue shall permanently reduce the school district's homestead and agricultural aid by an amount equal to the lesser of: (1) 50 25 percent of the amount of the district's homestead and agricultural aid for calendar year 1995; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

(c) Prior to For the computation of homestead and agricultural aid for taxes payable in 1998, the commissioner of revenue shall permanently reduce a school district's homestead and agricultural aid by an amount equal to the lesser of: (1) 75 25 percent of the amount of the district's homestead and agricultural aid for calendar year 1995; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

(d) Prior to For the computation of homestead and agricultural aid for taxes payable in 1999, the commissioner of revenue shall permanently reduce a school district's homestead and agricultural aid by an amount equal to the lesser of: (1) 25 percent of the amount of the district's homestead and agricultural aid for calendar year 1995; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

(e) Prior to For the computation of homestead and agricultural aid for taxes payable in 2000 and later years, the commissioner of revenue shall permanently reduce a school district's homestead and agricultural aid each year by an amount equal to the lesser of: (1) any remaining amount of the district's homestead and agricultural aid; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

Sec. 32. [TRANSPORTATION AND CAPITAL EXPENDITURE FUNDS; DISSOLUTION.]

Effective July 1, 1996, the transportation fund and the capital expenditure fund of each school district or other unit reporting under Minnesota Statutes, section 121.908, is dissolved. The June 30, 1996, balance of the unreserved transportation fund shall be transferred to the general fund unreserved balance. The June 30, 1996, balance of the reserved for bus purchase account shall be transferred to the general fund reserved for bus purchase account. The June 30, 1996, balance of the capital expenditure facilities account and capital expenditure equipment account shall be transferred to the general fund reserved for operating capital account. The June 30, 1996, balance of the reserved for health and safety account shall be transferred to the general fund reserved for health and safety account. The June 30, 1996, balance of the reserved for disabled accessibility account shall be transferred to the general fund reserved for disabled accessibility account. Effective July 1, 1996, all revenues and expenditures formerly accounted for in the capital expenditure fund and the transportation fund shall be accounted for in the general fund.

Sec. 33. [REFERENDUM AUTHORITY; PARK RAPIDS.]

Subdivision 1. [REVENUE.] Notwithstanding the reduction required by Minnesota Statutes, section 124A.03, subdivision 3b, the referendum revenue allowance for independent school district No. 309, Park Rapids, is $315 per pupil unit. This referendum authorization is available for the number of years specified on the district's referendum ballot held during June 1995.

Subd. 2. [LEVY RECLASSIFICATION.] Independent school district No. 309, Park Rapids, may reclassify as payable 1996 referendum levy other payable 1996 levies. The amount reclassified may not exceed the difference between the levy authority authorized in subdivision 1 and the amount of referendum levy certified by the district for taxes payable in 1996. Any reclassified levy is not subject to the market value requirement in Minnesota Statutes, section 124A.03, subdivision 2a.

Sec. 34. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT.] The sums indicated in this section are appropriated from the general fund to the department of children, families, and learning for the fiscal years designated.

Subd. 2. [FIRST-GRADE PREPAREDNESS PROGRAM.]

$3,500,000 ..... 1997

For grants for first-grade preparedness programs under section 11. These grants represent 100 percent of the appropriations entitlement for 1997.

Subd. 3. [PEQUOT LAKES.]

$ 79,000 ..... 1997

For a grant to independent school district No. 186, Pequot Lakes, for the purpose of reducing the district's 1996 payable 1997 property taxes. The commissioner must reduce the district's 1996 payable 1997 property taxes by this amount.

Sec. 35. [REPEALER.]

Laws 1993, chapter 224, article 1, section 34, subdivision 1, is repealed. Section 8 is repealed July 1, 1999.

Sec. 36. [EFFECTIVE DATE.]

Sections 1, 6, 7, 9, 10, 16, 20, 21, 28, 29, and 32 are effective the day following final enactment.

Section 4 is effective for fiscal year 1996 and thereafter.

Section 33 is effective for fiscal year 1997 and later years.

Section 1. Minnesota Statutes 1995 Supplement, section 120.17, subdivision 6, is amended to read:

Subd. 6. [PLACEMENT IN ANOTHER DISTRICT; RESPONSIBILITY.] The responsibility for special instruction and services for a child with a disability temporarily placed in another district for care and treatment shall be determined in the following manner:

(a) The school district of residence of a child shall be the district in which the child's parent resides, if living, or the child's guardian, or the district designated by the commissioner of children, families, and learning if neither parent nor guardian is living within the state.

(b) When a child is temporarily placed for care and treatment in a day program located in another district and the child continues to live within the district of residence during the care and treatment, the district of residence is responsible for providing transportation and an appropriate educational program for the child. The district may provide the educational program at a school within the district of residence, at the child's residence, or in the district in which the day treatment center is located by paying tuition to that district.

(c) When a child is temporarily placed in a residential program for care and treatment, the nonresident district in which the child is placed is responsible for providing an appropriate educational program for the child and necessary transportation within the district while the child is attending the educational program; and shall bill the district of the child's residence for the actual cost of providing the program, as outlined in subdivision 4, except that the board, lodging, and treatment costs incurred in behalf of a child with a disability placed outside of the school district of residence by the commissioner of human services or the commissioner of corrections or their agents, for reasons other than for making provision for the child's special educational needs shall not become the responsibility of either the district providing the instruction or the district of the child's residence.

(d) The district of residence shall pay tuition and other program costs, not including transportation costs, to the district providing the instruction and services. The district of residence may claim general education aid for the child as provided by law. Transportation costs shall be paid by the district responsible for providing the transportation and the state shall pay transportation aid to that district.

Sec. 2. Minnesota Statutes 1994, section 120.17, subdivision 9, is amended to read:

Subd. 9. [SPECIAL INSTRUCTION.] No resident of a district who is eligible for special instruction and services pursuant to this section shall be denied provision of this instruction and service on a shared time basis because of attendance at a nonpublic school defined in section 123.932, subdivision 3. If a resident pupil with a disability attends a nonpublic school located within the district of residence, the district shall provide necessary transportation for that pupil within the district between the nonpublic school and the educational facility where special instruction and services are provided on a shared time basis. If a resident pupil with a disability attends a nonpublic school located in a another district contiguous to the district of residence and if no agreement exists pursuant to section 124A.034, subdivision 1 or 1a, for the provision of special instruction and services on a shared time basis to that pupil by the district of attendance and where the special instruction and services are provided within the district of residence, the district of residence shall provide necessary transportation for that pupil between the boundary of the district of residence and the educational facility where the special instruction and services are provided within the district of residence. The district of residence may provide necessary transportation for that pupil between its boundary and the nonpublic school attended, but the nonpublic school shall pay the cost of transportation provided outside the district boundary.

Sec. 3. Minnesota Statutes 1995 Supplement, section 120.181, is amended to read:

120.181 [PLACEMENT OF NONHANDICAPPED CHILDREN WITHOUT DISABILITIES; EDUCATION AND TRANSPORTATION.]

The responsibility for providing instruction and transportation for a pupil without a disability who has a short-term or temporary physical or emotional illness or disability, as determined by the standards of the state board, and who is temporarily placed for care and treatment for that illness or disability, shall be determined as provided in this section.

(a) The school district of residence of the pupil shall be the district in which the pupil's parent or guardian resides or the district designated by the commissioner of children, families, and learning if neither parent nor guardian is living within the state.

(b) Prior to the placement of a pupil for care and treatment, the district of residence shall be notified and provided an opportunity to participate in the placement decision. When an immediate emergency placement is necessary and time does not permit resident district participation in the placement decision, the district in which the pupil is temporarily placed, if different from the district of residence, shall notify the district of residence of the emergency placement within 15 days of the placement.

(c) When a pupil without a disability is temporarily placed for care and treatment in a day program and the pupil continues to live within the district of residence during the care and treatment, the district of residence shall provide instruction and necessary transportation for the pupil. The district may provide the instruction at a school within the district of residence, at the pupil's residence, or in the case of a placement outside of the resident district, in the district in which the day treatment program is located by paying tuition to that district. The district of placement may contract with a facility to provide instruction by teachers licensed by the state board of teaching.

(d) When a pupil without a disability is temporarily placed in a residential program for care and treatment, the district in which the pupil is placed shall provide instruction for the pupil and necessary transportation within that district while the pupil is receiving instruction, and in the case of a placement outside of the district of residence, the nonresident district shall bill the district of residence for the actual cost of providing the instruction for the regular school year and for summer school, excluding transportation costs. When a pupil without a disability is temporarily placed in a residential program outside the district of residence, the administrator of the court placing the pupil shall send timely written notice of the placement to the district of residence. The district of placement may contract with a residential facility to provide instruction by teachers licensed by the state board of teaching.

(e) The district of residence shall include the pupil in its residence count of pupil units and pay tuition as provided in section 124.18 to the district providing the instruction. Transportation costs shall be paid by the district providing the transportation and the state shall pay transportation aid to that district. For purposes of computing state transportation aid, pupils governed by this subdivision shall be included in the handicapped disabled transportation category.

Sec. 4. Minnesota Statutes 1994, section 120.73, subdivision 1, is amended to read:

Subdivision 1. A school board is authorized to require payment of fees in the following areas:

(a) in any program where the resultant product, in excess of minimum requirements and at the pupil's option, becomes the personal property of the pupil;

(b) admission fees or charges for extra curricular activities, where attendance is optional;

(c) a security deposit for the return of materials, supplies, or equipment;

(d) personal physical education and athletic equipment and apparel, although any pupil may personally provide it if it meets reasonable requirements and standards relating to health and safety established by the school board;

(e) items of personal use or products which a student has an option to purchase such as student publications, class rings, annuals, and graduation announcements;

(f) fees specifically permitted by any other statute, including but not limited to section 171.04, subdivision 1, clause (1);

(g) field trips considered supplementary to a district educational program;

(h) any authorized voluntary student health and accident benefit plan;

(i) for the use of musical instruments owned or rented by the district, a reasonable rental fee not to exceed either the rental cost to the district or the annual depreciation plus the actual annual maintenance cost for each instrument;

(j) transportation of pupils to and from extra curricular activities conducted at locations other than school, where attendance is optional;

(k) transportation of pupils to and from school for which aid for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.223, subdivision 1, and for which levy for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.226, subdivision 5, if a district charging fees for transportation of pupils establishes guidelines for that transportation to ensure that no pupil is denied transportation solely because of inability to pay;

(l) motorcycle classroom education courses conducted outside of regular school hours; provided the charge shall not exceed the actual cost of these courses to the school district;

(m) transportation to and from post-secondary institutions for pupils enrolled under the post-secondary enrollment options program under section 123.39, subdivision 16. Fees collected for this service must be reasonable and shall be used to reduce the cost of operating the route. Families who qualify for mileage reimbursement under section 123.3514, subdivision 8, may use their state mileage reimbursement to pay this fee. If no fee is charged, districts shall allocate costs based on the number of pupils riding the route.

Sec. 5. Minnesota Statutes 1995 Supplement, section 120.74, subdivision 1, is amended to read:

Subdivision 1. (a) A school board is not authorized to charge fees in the following areas:

(1) textbooks, workbooks, art materials, laboratory supplies, towels;

(2) supplies necessary for participation in any instructional course except as authorized in sections 120.73 and 120.75;

(3) field trips which are required as a part of a basic education program or course;

(4) graduation caps, gowns, any specific form of dress necessary for any educational program, and diplomas;

(5) instructional costs for necessary school personnel employed in any course or educational program required for graduation;

(6) library books required to be utilized for any educational course or program;

(7) admission fees, dues, or fees for any activity the pupil is required to attend;

(8) any admission or examination cost for any required educational course or program;

(9) locker rentals;

(10) transportation of pupils (i) for which state transportation aid for fiscal year 1996 is authorized pursuant to Minnesota Statutes 1994, section 124.223 or (ii) for which a levy for fiscal year 1996 is authorized under Minnesota Statutes 1994, section 124.226, subdivision 5.

(b) Notwithstanding paragraph (a), clauses (1) and (6), a school board may charge fees for textbooks, workbooks, and library books, lost or destroyed by students. The board must annually notify parents or guardians and students about its policy to charge a fee under this paragraph.

Sec. 6. Minnesota Statutes 1994, section 123.39, subdivision 8b, is amended to read:

Subd. 8b. School districts may use school district owned or contractor operated school buses to provide transportation along regular school bus routes on a space available basis for senior citizens who are 62 years of age or older any person, provided that this use of a bus does not interfere with the transportation of pupils to and from school or other authorized transportation of pupils. In all cases, the total additional cost of providing these services, as determined by sound accounting procedures, shall be paid by charges made against those using these services or some third-party payor. In no case shall the additional cost of this transportation be paid by the school district.

The provisions of section 65B.47, subdivision 4, shall be applicable to senior citizens any person being transported pursuant to this subdivision.

Sec. 7. Minnesota Statutes 1995 Supplement, section 123.7991, subdivision 2, is amended to read:

Subd. 2. [STUDENT TRAINING.] (a) Each school district shall provide public school pupils enrolled in grades kindergarten through 10 with age-appropriate school bus safety training. The training shall be results-oriented and shall consist of both classroom instruction and practical training using a school bus. Upon completing the training, a student shall be able to demonstrate knowledge and understanding of at least the following competencies and concepts:

(1) transportation by school bus is a privilege and not a right;

(2) district policies for student conduct and school bus safety;

(3) appropriate conduct while on the school bus;

(4) the danger zones surrounding a school bus;

(5) procedures for safely boarding and leaving a school bus;

(6) procedures for safe street or road crossing; and

(7) school bus evacuation and other emergency procedures.

(b) Each nonpublic school located within the district shall provide all nonpublic school pupils enrolled in grades kindergarten through 10 who are transported by school bus at public expense and attend school within the district's boundaries with training as required in paragraph (a). The school district shall make a bus available for the practical training if the district transports the nonpublic students. Each nonpublic school shall provide the instruction.

(c) Student school bus safety training shall commence during school bus safety week. All students enrolled in grades kindergarten through 3 who are transported by school bus and are enrolled during the first or second week of school must demonstrate achievement of the school bus safety training competencies by the end of the third week of school. All students enrolled in grades 4 through 10 who are transported by school bus and are enrolled during the first or second week of school must demonstrate achievement of the competencies by the end of the sixth week of school. Students enrolled in grades kindergarten through 10 who enroll in a school after the second week of school and are transported by school bus shall undergo school bus safety training and demonstrate achievement of the school bus safety competencies within four weeks of the first day of attendance. The pupil transportation safety director in each district must certify to the commissioner of children, families, and learning annually that all students transported by school bus within the district have satisfactorily demonstrated knowledge and understanding of the school bus safety competencies according to this section or provide an explanation for a student's failure to demonstrate the competencies. The principal or other chief administrator of each nonpublic school must certify annually to the public transportation safety director of the district in which the school is located that all of the school's students transported by school bus at public expense have received training. A school district may deny transportation to a student who fails to demonstrate the competencies, unless the student is unable to achieve the competencies due to a disability, or to a student who attends a nonpublic school that fails to provide training as required by this subdivision.

(d) A school district and a nonpublic school with students transported by school bus at public expense must, to the extent possible, provide kindergarten pupils with bus safety training before the first day of school.

(e) A school district and a nonpublic school with students transported by school bus at public expense must also provide student safety education for bicycling and pedestrian safety, for students enrolled in grades kindergarten through 5.

(f) A school district and a nonpublic school with students transported by school bus at public expense must make reasonable accommodations for the school bus, bicycle, and pedestrian safety training of pupils known to speak English as a second language and pupils with disabilities.

Sec. 8. Minnesota Statutes 1995 Supplement, section 124.223, subdivision 4, is amended to read:

Subd. 4. [PUPILS WITH DISABILITIES.] School districts may shall provide transportation or board and lodging of a pupil with a disability when that pupil cannot be transported on a regular school bus, the conveying of pupils with a disability between home or a respite care facility and school and within the school plant, necessary

transportation of pupils with a disability from home or from school to other buildings, including centers such as developmental achievement centers, hospitals and treatment centers where special instruction or services required by sections 120.17 and 120.1701 are provided, within or outside the district where services are provided, and necessary transportation for resident pupils with a disability required by sections 120.17, subdivision 4a, and 120.1701. Transportation of pupils with a disability between home or a respite care facility and school shall not be subject to any distance requirement for children.

Sec. 9. Minnesota Statutes 1995 Supplement, section 124.225, subdivision 8l, is amended to read:

Subd. 8l. [ALTERNATIVE ATTENDANCE PROGRAMS.] A district that enrolls nonresident pupils in programs under sections 120.062, 120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22, may shall provide authorized transportation to the pupil within the attendance area for the school that the pupil attends. The resident district need not provide or pay for transportation between the pupil's residence and the district's border.

Sec. 10. Minnesota Statutes 1995 Supplement, section 124.225, subdivision 14, is amended to read:

Subd. 14. [SPECIAL PROGRAMS TRANSPORTATION REVENUE.] A district's special programs transportation revenue for the 1996-1997 and later school years equals the sum of:

(a) the district's actual cost in the base year for transportation services for children with disabilities under section 124.223, subdivisions 4, 5, 7, and 8, times the ratio of the district's average daily membership for the current school year to the district's average daily membership for the base year; plus

(b) the greater of zero or 80 percent of the difference between:

(1) the district's actual cost in the current year for transportation services for children with disabilities under section 124.223, subdivisions 4, 5, 7, and 8; and

(2) the amount computed in paragraph (a).

Sec. 11. Minnesota Statutes 1995 Supplement, section 124.225, subdivision 16, is amended to read:

Subd. 16. [NONPUBLIC PUPIL TRANSPORTATION REVENUE.] (a) A district's nonpublic pupil transportation revenue for the 1996-1997 and later school years for transportation services for nonpublic school pupils according to sections 123.39, 123.76 to 123.78, 124.223, and 124.226, equals the sum of the amounts computed in paragraphs (b) and (c). This revenue does not limit the obligation to transport pupils under sections 123.76 to 123.79.

(b) For regular and excess transportation according to section 124.225, subdivision 1, paragraph (c), clauses (1) and (3), an amount equal to the product of:

(1) the district's actual expenditure per pupil transported in the regular and excess transportation categories during the second preceding school year; times

(2) the number of nonpublic school pupils residing in the district who receive regular or excess transportation service or reimbursement for the current school year; times

(3) the ratio of the formula allowance pursuant to section 124A.22, subdivision 2, for the current school year to the formula allowance pursuant to section 124A.22, subdivision 2, for the second preceding school year.

(c) For nonregular transportation according to section 124.225, subdivision 1, paragraph (c), clause (2), excluding transportation services for children with disabilities under section 124.223, subdivisions 4, 5, 7, and 8, and late activity transportation according to section 124.226, subdivision 9, an amount equal to the product of:

(1) the district's actual expenditure for nonregular and late activity transportation for nonpublic school pupils during the second preceding school year; times

(2) the ratio of the formula allowance pursuant to section 124A.22, subdivision 2, for the current school year to the formula allowance pursuant to section 124A.22, subdivision 2, for the second preceding school year.

(d) Notwithstanding the amount of the formula allowance for fiscal years 1997 and 1998 in section 124A.22, subdivision 2, the commissioner shall use the amount of the formula allowance less $300 in determining the nonpublic pupil transportation revenue in paragraphs (b) and (c) for fiscal years 1997 and 1998.

Sec. 12. Minnesota Statutes 1995 Supplement, section 124.225, subdivision 17, is amended to read:

Subd. 17. [TARGETED NEEDS TRANSPORTATION AID.] (a) A district's targeted needs transportation aid is the difference between its targeted needs transportation revenue under subdivision 13 and its targeted needs transportation revenue levy under section 124.226, subdivision 10.

(b) If a district does not levy the entire amount permitted, aid must be reduced in proportion to the actual amount levied.

Sec. 13. Minnesota Statutes 1995 Supplement, section 124.227, is amended to read:

124.227 [INTERDISTRICT DESEGREGATION OR INTEGRATION TRANSPORTATION GRANTS.]

(a) A district that provides transportation of pupils between resident and nonresident districts to and from an interdistrict program for desegregation or integration purposes may apply to the commissioner of children, families, and learning for a grant to cover the additional costs of transportation.

(b) A district in the metropolitan area may apply to the commissioner for a grant to cover the costs of transporting pupils who are enrolled under section 120.062 if the enrollment of the student in the nonresident district contributes to desegregation or integration purposes. The commissioner must develop the form and manner of applications, the criteria to be used to determine when transportation is for desegregation or integration purposes, and the accounting procedure to be used to determine excess costs. In determining the grant amount, the commissioner must consider other revenue received by the district for transportation for desegregation or integration purposes.

(c) Grants may be awarded under paragraph (b) only if grants awarded under paragraph (a) have been fully funded.

Sec. 14. Minnesota Statutes 1995 Supplement, section 169.01, subdivision 6, is amended to read:

Subd. 6. [SCHOOL BUS.] "School bus" means a motor vehicle used to transport pupils to or from a school defined in section 120.101, or to or from school-related activities, by the school or a school district, or by someone under an agreement with the school or a school district. A school bus does not include a motor vehicle transporting children to or from school for which parents or guardians receive direct compensation from a school district, a motor coach operating under charter carrier authority, a transit bus providing services as defined in section 174.22, subdivision 7, or a vehicle otherwise qualifying as a type III vehicle under paragraph (5), when the vehicle is properly registered and insured and being driven by an employee or agent of a school district for nonscheduled transportation. A school bus may be type A, type B, type C, or type D, or type III as follows:

(1) A "type A school bus" is a conversion or body constructed upon a van-type compact truck or a front-section vehicle, with a gross vehicle weight rating of 10,000 pounds or less, designed for carrying more than ten persons.

(2) A "type B school bus" is a conversion or body constructed and installed upon a van or front-section vehicle chassis, or stripped chassis, with a gross vehicle weight rating of more than 10,000 pounds, designed for carrying more than ten persons. Part of the engine is beneath or behind the windshield and beside the driver's seat. The entrance door is behind the front wheels.

(3) A "type C school bus" is a body installed upon a flat back cowl chassis with a gross vehicle weight rating of more than 10,000 pounds, designated designed for carrying more than ten persons. All of the engine is in front of the windshield and the entrance door is behind the front wheels.

(4) A "type D school bus" is a body installed upon a chassis, with the engine mounted in the front, midship or rear, with a gross vehicle weight rating of more than 10,000 pounds, designed for carrying more than ten persons. The engine may be behind the windshield and beside the driver's seat; it may be at the rear of the bus, behind the rear wheels, or midship between the front and rear axles. The entrance door is ahead of the front wheels.

(5) Type III school buses and type III Head Start buses are restricted to passenger cars, station wagons, vans, and buses having a maximum manufacturer's rated seating capacity of ten people, including the driver, and a gross vehicle weight rating of 10,000 pounds or less. In this subdivision, "gross vehicle weight rating" means the value specified by the manufacturer as the loaded weight of a single vehicle. A "type III school bus" and "type III Head Start bus" must not be outwardly equipped and identified as a type A, B, C, or D school bus or type A, B, C, or D Head Start bus.

Sec. 15. Minnesota Statutes 1994, section 169.4504, is amended by adding a subdivision to read:

Subd. 5. [AISLE WIDTH.] All school buses equipped with a power lift shall provide at least a 12-inch aisle leading from wheelchair position to at least one emergency door and the lift area.

Sec. 16. Minnesota Statutes 1995 Supplement, section 631.40, subdivision 1a, is amended to read:

Subd. 1a. [CERTIFIED COPY OF DISQUALIFYING OFFENSE CONVICTIONS SENT TO PUBLIC SAFETY AND SCHOOL DISTRICTS.] When a person is convicted of committing a disqualifying offense, as defined in section 171.3215, subdivision 1, a gross misdemeanor, a fourth moving violation within a three-year period the previous three years, or a violation of section 169.121 or 169.129, or a similar statute or ordinance from another state, the court shall determine whether the offender is a school bus driver as defined in section 171.3215, subdivision 1, whether the offender possesses a school bus driver's endorsement on the offender's driver's license and in what school districts the offender drives a school bus. If the offender is a school bus driver or possesses a school bus driver's endorsement, the court administrator shall send a certified copy of the conviction to the department of public safety and to the school districts in which the offender drives a school bus within ten days after the conviction.

Sec. 17. Laws 1995, First Special Session chapter 3, article 2, section 53, is amended to read:

Sec. 53. [EFFECTIVE DATE.]

Sections 6 to 9 and 29 to 49 are effective the day following final enactment.

Section 12 is effective beginning with taxes payable in 1996 for fiscal year 1997.

Sec. 18. [APPROPRIATION.]

$150,000 is appropriated to the St. Paul school district to contract with the Metropolitan Council Transit Organization for a one-year pilot program during the 1996-1997 school year to transport students to and from Arlington High School. The MCTO and the St. Paul school district shall submit a joint preliminary report by March 1, 1997, to the chairs of the education committees of the senate and the house of representatives, the chair of the metropolitan and local government committee of the senate, and the chair of the local government and metropolitan affairs committee of the house of representatives. The MCTO may not charge the district any more than $150,000 for the school year.

Sec. 19. [EFFECTIVE DATE.]

Sections 8 to 13 are effective the day following final enactment.

Section 1. Minnesota Statutes 1995 Supplement, section 120.17, subdivision 3a, is amended to read:

Subd. 3a. [SCHOOL DISTRICT OBLIGATIONS.] Every district shall ensure that:

(1) all students with disabilities are provided the special instruction and services which are appropriate to their needs. Where the individual education plan team has determined appropriate goals and objectives based on the student's needs, including the extent to which the student can be included in the least restrictive environment, and where there are essentially equivalent and effective instruction, related services, or assistive technology devices available to meet the student's needs, cost to the school district may be among the factors considered by the team in choosing how to provide the appropriate services, instruction, or devices that are to be made part of the student's individual education plan. The student's needs and the special education instruction and services to be provided shall be agreed upon through the development of an individual education plan. The plan shall address the student's need to develop skills to live and work as independently as possible within the community. By grade 9 or age 14, the plan shall address the student's needs for transition from secondary services to post-secondary education and training, employment, community participation, recreation, and leisure and home living. The plan must include a statement of the needed transition services, including a statement of the interagency responsibilities or linkages or both before secondary services are concluded;

(2) children with a disability under age five and their families are provided special instruction and services appropriate to the child's level of functioning and needs;

(3) children with a disability and their parents or guardians are guaranteed procedural safeguards and the right to participate in decisions involving identification, assessment including assistive technology assessment, and educational placement of children with a disability;

(4) to the maximum extent appropriate, children with a disability, including those in public or private institutions or other care facilities, are educated with children who are not disabled, and that special classes, separate schooling, or other removal of children with a disability from the regular educational environment occurs only when and to the extent that the nature or severity of the disability is such that education in regular classes with the use of supplementary services cannot be achieved satisfactorily;

(5) in accordance with recognized professional standards, testing and evaluation materials, and procedures utilized for the purposes of classification and placement of children with a disability are selected and administered so as not to be racially or culturally discriminatory; and

(6) the rights of the child are protected when the parents or guardians are not known or not available, or the child is a ward of the state.

Sec. 2. Minnesota Statutes 1995 Supplement, section 120.17, subdivision 3b, is amended to read:

Subd. 3b. [PROCEDURES FOR DECISIONS.] Every district shall utilize at least the following procedures for decisions involving identification, assessment, and educational placement of children with a disability:

(a) Parents and guardians shall receive prior written notice of:

(1) any proposed formal educational assessment or proposed denial of a formal educational assessment of their child;

(2) a proposed placement of their child in, transfer from or to, or denial of placement in a special education program; or

(3) the proposed provision, addition, denial or removal of special education services for their child;

(b) The district shall not proceed with the initial formal assessment of a child, the initial placement of a child in a special education program, or the initial provision of special education services for a child without the prior written consent of the child's parent or guardian. The refusal of a parent or guardian to consent may be overridden by the decision in a hearing held pursuant to clause (e) at the district's initiative;

(c) Parents and guardians shall have an opportunity to meet with appropriate district staff in at least one conciliation conference, mediation, or other method of alternative dispute resolution that the parties agree to, if they object to any proposal of which they are notified pursuant to clause (a). The conciliation process or other form of alternative dispute resolution shall not be used to deny or delay a parent or guardian's right to a due process hearing. If the parent or guardian refuses efforts by the district to conciliate the dispute with the school district, the requirement of an opportunity for conciliation or other alternative dispute resolution shall be deemed to be satisfied. Notwithstanding other law, in any proceeding following a conciliation conference, the school district must not offer a conciliation conference memorandum into evidence, except for any portions that describe the district's final proposed offer of service. Otherwise, with respect to forms of dispute resolution, mediation, or conciliation, Minnesota Rule of Evidence 408 applies. The department of children, families, and learning may reimburse the districts or directly pay the costs of lay advocates, not to exceed $150 per dispute, used in conjunction with alternative dispute resolution.

(d) The commissioner shall establish a mediation process to assist parents, school districts, or other parties to resolve disputes arising out of the identification, assessment, or educational placement of children with a disability. The mediation process must be offered as an informal alternative to the due process hearing provided under clause (e), but must not be used to deny or postpone the opportunity of a parent or guardian to obtain a due process hearing.

(e) Parents, guardians, and the district shall have an opportunity to obtain an impartial due process hearing initiated and conducted by and in the school district responsible for assuring that an appropriate program is provided in accordance with state board rules, if the parent or guardian continues to object to:

(1) a proposed formal educational assessment or proposed denial of a formal educational assessment of their child;

(2) the proposed placement of their child in, or transfer of their child to a special education program;

(3) the proposed denial of placement of their child in a special education program or the transfer of their child from a special education program;

(4) the proposed provision or addition of special education services for their child; or

(5) the proposed denial or removal of special education services for their child.

Within five business days after the request for a hearing, or as directed by the hearing officer, the objecting party shall provide the other party with a brief written statement of particulars of the objection, the reasons for the objection, and the specific remedies sought. The other party shall provide the objecting party with a written response to the statement of objections within five business days of receipt of the statement.

The hearing shall take place before an impartial hearing officer mutually agreed to by the school board and the parent or guardian. If the school board and the parent or guardian are unable to agree on a Within four business days of the receipt of the request for the hearing, if the parties have not agreed on the hearing officer, the school board shall request the commissioner to appoint a hearing officer. The school board shall include with request the name of the person requesting the hearing, the name of the student, the attorneys involved, if any, and the date the hearing request was received. The hearing officer shall not be a school board member or employee of the school district where the child resides or of the child's school district of residence, an employee of any other public agency involved in the education or care of the child, or any person with a personal or professional interest which would conflict with the person's objectivity at the hearing. A person who otherwise qualifies as a hearing officer is not an employee of the district solely because the person is paid by the district to serve as a hearing officer. If the hearing officer requests an independent educational assessment of a child, the cost of the assessment shall be at district expense. The proceedings shall be recorded and preserved, at the expense of the school district, pending ultimate disposition of the action.

(f) The decision of the hearing officer pursuant to clause (e) shall be rendered not more than 45 calendar days from the date of the receipt of the request for the hearing, except that hearing officers are encouraged to accelerate the timeline to 30 days for children birth through two whose needs change rapidly and require quick resolution of complaints. A hearing officer may not grant specific extensions of time beyond the 45-day period at the request of either party unless requested by either party for good cause shown on the record. The decision of the hearing officer shall be binding on all parties unless appealed to the hearing review officer commissioner by the parent,; guardian, or the; school board of the district where the child resides pursuant to clause (g); and also in the case of children birth through two, by the county board.

The local decision shall:

(1) be in writing;

(2) state the controlling facts upon which the decision is made in sufficient detail to apprise the parties and the hearing review officer of the basis and reason for the decision; and

(3) state whether the special education program or special education services appropriate to the child's needs can be reasonably provided within the resources available to the responsible district or districts;

(4) state the amount and source of any additional district expenditure necessary to implement the decision; and

(5) be based on the standards set forth in subdivision 3a and the rules of the state board.

(g) Any local decision issued pursuant to clauses (e) and (f) may be appealed to the hearing review officer commissioner within 30 calendar days of receipt of that written decision, by the parent, guardian, or the school board of the district responsible for assuring that an appropriate program is provided in accordance with state board rules. The appealing party shall note the specific parts of the hearing decision being appealed.

If the decision is appealed, a written transcript of the hearing shall be made by the school district and shall be accessible provided by the district to the parties involved and the hearing review officer within five calendar days of the filing of the appeal. The hearing review officer shall conduct an appellate review and issue a final independent decision based on an impartial review of the local decision and the entire record within 30 calendar days after the

filing of the appeal. However, the hearing review officer shall seek additional evidence if necessary and may afford the parties an opportunity for written or oral argument; provided any hearing held to seek additional evidence shall be an impartial due process hearing but shall be deemed not to be a contested case hearing for purposes of chapter 14. The hearing review officer may grant specific extensions of time beyond the 30-day period at the request of any party for good cause shown on the record.

The final decision shall:

(1) be in writing;

(2) include findings and conclusions; and

(3) be based upon the standards set forth in subdivision 3a and in the rules of the state board.

(h) The decision of the hearing review officer shall be final unless appealed by the parent or guardian or school board to the Minnesota court of appeals or federal district court as provided by federal law. The State judicial review shall be in accordance with chapter 14.

(i) The commissioner of children, families, and learning shall select an individual who has the qualifications enumerated in this paragraph to serve as the hearing review officer:

(1) the individual must be knowledgeable and impartial;

(2) the individual must not have a personal interest in or specific involvement with the student who is a party to the hearing;

(3) the individual must not have been employed as an administrator by the district that is a party to the hearing;

(4) the individual must not have been involved in the selection of the administrators of the district that is a party to the hearing;

(5) the individual must not have a personal, economic, or professional interest in the outcome of the hearing other than the proper administration of the federal and state laws, rules, and policies;

(6) the individual must not have substantial involvement in the development of a state or local policy or procedures that are challenged in the appeal; and

(7) the individual is not a current employee or board member of a Minnesota public school district, education district, intermediate unit or regional education agency, the department of children, families, and learning, the state board of education, or a parent advocacy organization or group; and

(8) the individual is not a current employee or board member of a disability advocacy organization or group.

(j) In all appeals, the parent or guardian of the pupil with a disability or the district that is a party to the hearing may challenge the impartiality or competence of the proposed hearing review officer by applying to the hearing review officer.

(k) Pending the completion of proceedings pursuant to this subdivision, unless the district and the parent or guardian of the child agree otherwise, the child shall remain in the child's current educational placement and shall not be denied initial admission to school.

(l) The child's school district of residence, a resident district, and providing district shall receive notice of and may be a party to any hearings or appeals under this subdivision.

(m) A school district is not liable for harmless technical violations of this subdivision or rules implementing this subdivision if the school district can demonstrate on a case-by-case basis that the violations did not harm the student's educational progress or the parent or guardian's right to notice, participation, or due process.

(n) Within ten calendar days after appointment, the hearing officer shall schedule and hold a prehearing conference. At that conference, or later, the hearing officer may take any appropriate action that a court might take under Rule 16 of Minnesota Rules of Civil Procedure including, but not limited to, scheduling, jurisdiction, and listing witnesses including expert witnesses.

(o) A hearing officer or hearing review officer appointed under this subdivision shall be deemed to be an employee of the state under section 3.732 for the purposes of section 3.736 only.

(p) In order to be eligible for selection, hearing officers and hearing review officers shall participate in training and follow procedures as designated by the commissioner.

(q) The hearing officer may admit all evidence which possesses probative value, including hearsay, if it is the type of evidence on which reasonable, prudent persons are accustomed to rely in the conduct of their serious affairs. The hearing officer shall give effect to the rules of privilege recognized by law. Evidence which is incompetent, irrelevant, immaterial, or unduly repetitious shall be excluded.

Sec. 3. Minnesota Statutes 1994, section 120.17, is amended by adding a subdivision to read:

Subd. 19. [PARENT ADVISORY COMMITTEES.] Provisions of Minnesota Rules, part 3525.1100, regarding parent advisory committees shall apply to local school boards or cooperative boards carrying out the provisions of Minnesota Statutes, section 120.17.

Sec. 4. Minnesota Statutes 1994, section 120.1701, subdivision 10, is amended to read:

Subd. 10. [PAYMENT FOR SERVICES.] Core early intervention services shall be provided at public expense with no cost to parents. Parents shall be requested to assist in the cost of additional early intervention services by using third-party payment sources and applying for available resources. If a parent chooses not to access these resources, additional early intervention services may not be provided. Payment structures permitted under state law shall be used to pay for additional early intervention services. Parental financial responsibility shall be clearly defined in the individualized family service plan. A parent's inability to pay shall not prohibit a child from receiving needed early intervention services.

Sec. 5. Minnesota Statutes 1995 Supplement, section 120.1701, subdivision 20, is amended to read:

Subd. 20. [DUE PROCESS HEARINGS.] By July 1, 1994, the departments of children, families, and learning, health, and human services shall develop procedures for hearings. The procedures for due process hearings and appeals shall be the same as those in section 120.17, subdivision 3b. The responsibility for payment of costs and conducting due process hearings and appeals shall be allocated to the appropriate agency in accordance with section 120.1701, subdivisions 5, 13, and 16.

Sec. 6. [120.187] [DEFINITION.]

Subdivision 1. [APPLICABILITY.] For the purposes of sections 120.187 to 120.190, the following terms have the meanings given them.

Subd. 2. [ASSISTIVE TECHNOLOGY DEVICE.] "Assistive technology device" means any item, piece of equipment, software, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve functional capabilities of children with disabilities.

Sec. 7. [120.188] [PURCHASING GUIDELINES.]

Subdivision 1. [RIGHTS OF SCHOOL DISTRICTS TO PURCHASE SCHOOL-OWNED ASSISTIVE TECHNOLOGY.] (a) When a child with a disability exits a school district and enters a new school district, the child's new school district may purchase any assistive technology devices that the child's former school district has purchased on the child's behalf. The child's new school district must notify, in writing, the child's former school district of the intent to purchase the device. The child's new school district must complete a purchase agreement according to section 4. The child's former school district must respond, in writing, to the request to purchase within 30 days.

(b) School districts may decline to sell a device if they can demonstrate the technology is a general use device or can be modified for use by other students.

Subd. 2. [LIABILITY FOR USED EQUIPMENT.] The child's former school district shall not be liable for any nonconformities in the equipment after it is purchased by the child's new school district, or for injuries arising out of the use of the assistive technology device. This section does not foreclose the child's right to bring suit against the manufacturer, assistive device lessor, or assistive device dealer for nonconformities in or injuries arising out of the use of the assistive technology device.

Subd. 3. [THIRD-PARTY PAYORS.] Nothing contained in this section shall be construed as decreasing the obligation of an insurance company or other third-party payor to provide coverage for assistive technology.

Sec. 8. [120.189] [INTERAGENCY AGREEMENT TO PURCHASE USED ASSISTIVE TECHNOLOGY DEVICES.]

Subdivision 1. [OPTION TO PURCHASE BY DEPARTMENT OF ECONOMIC SECURITY.] (a) When a child with a disability transitions into a work environment or enrolls in a post-secondary course or program, the department of economic security may purchase any assistive technology device that the child's former school district purchased on the child's behalf.

(b) The department of economic security may purchase an assistive technology device initially purchased by a school district for a child who is currently a recipient of rehabilitation services and who needs the identical assistive technology device as stated on the recipient's individual written rehabilitation plan. The purchase may be made not more than three months prior to the child exiting the school district.

Subd. 2. [LIABILITY FOR USED EQUIPMENT.] The department of economic security and the department of children, families, and learning shall not be liable for any nonconformities in the equipment after it is purchased by the department of economic security, or for injuries arising out of the use of the assistive technology device. This section does not foreclose the child's right to bring suit against the manufacturer, assistive device lessor, or assistive device dealer for nonconformities in or injuries arising out of the use of the assistive technology device.

Subd. 3. [THIRD-PARTY PAYOR.] Nothing contained in this section shall be construed as decreasing the obligation of an insurance company or other third-party payor to provide coverage for assistive technology.

Sec. 9. [120.190] [PURCHASE AGREEMENT; PRICE FORMULA.]

The commissioner shall develop guidelines for the sale of used assistive technology including a purchase agreement, a formula for establishing the sale price, and other terms and conditions of the sale.

Sec. 10. Minnesota Statutes 1994, section 123.35, is amended by adding a subdivision to read:

Subd. 9b. [SERVICES FOR INDIAN STUDENTS.] School districts may enter into agreements with Indian tribal governments for purposes of providing educational services for students. Such agreements may allow for the use of any resources available to either party and must give students the option to enroll in the school district at their election.

Sec. 11. Minnesota Statutes 1995 Supplement, section 124.273, subdivision 1c, is amended to read:

Subd. 1c. [ADJUSTED LEP BASE REVENUE.] (a) A district's adjusted limited English proficiency programs base revenue for fiscal year 1996 and later equals the product of:

(1) the district's base revenue for limited English proficiency programs under this section and section 124.321, times

(2) the ratio of:

(i) the greater of 20 or the number of pupils of limited English proficiency enrolled in the district during the current fiscal year to

(ii) the greater of 20 or the number of pupils of limited English proficiency enrolled in the district during fiscal the base year 1995.

(b) For the purposes of this section, the base year for fiscal year 1996 is fiscal year 1995. The base year for later fiscal years is the second fiscal year preceding the fiscal year for which aid shall be paid. The current year is the fiscal year for which aid shall be paid.

(c) For the purposes of this section, a teacher includes nonlicensed personnel who provide direct instruction to students of limited English proficiency under the supervision of a licensed teacher.

Sec. 12. Minnesota Statutes 1995 Supplement, section 124.273, subdivision 1d, is amended to read:

Subd. 1d. [LEP BASE REVENUE.] (a) The limited English proficiency programs base revenue equals the sum of the following amounts, computed using fiscal base year 1995 data:

(1) 68 percent of the salaries paid limited English proficiency program teachers salary of one full-time equivalent teacher for each 40 pupils of limited English proficiency enrolled, or 68 percent of the salary of one-half of a full-time teacher in a district with 20 or fewer pupils of limited English proficiency enrolled; and

(2) for supplies and equipment purchased or rented for use in the instruction of pupils of limited English proficiency an amount equal to 47 percent of the sum actually spent by the district but not to exceed an average of $47 in any one school year for each pupil of limited English proficiency receiving instruction.

(b) For the purposes of this subdivision, a teacher includes nonlicensed personnel who provide direct instruction to students of limited English proficiency under the supervision of a licensed teacher.

Sec. 13. Minnesota Statutes 1994, section 124.273, is amended by adding a subdivision to read:

Subd. 1f. [STATE TOTAL LEP REVENUE.] (a) The state total limited English proficiency programs revenue for fiscal year 1996 equals $12,202,000. The state total limited English proficiency programs revenue for fiscal year 1997 equals $13,299,000.

(b) The state total limited English proficiency programs revenue for later fiscal years equals:

(1) the state total limited English proficiency programs revenue for the preceding fiscal year; times

(2) the program growth factor under section 124.3201, subdivision 1; times

(3) the ratio of the state total number of pupils with limited English proficiency for the current fiscal year to the state total number of pupils with limited English proficiency for the preceding fiscal year.

Sec. 14. Minnesota Statutes 1994, section 124.273, is amended by adding a subdivision to read:

Subd. 1g. [SCHOOL DISTRICT LEP REVENUE.] (a) A school district's limited English proficiency programs revenue for fiscal year 1996 and later equals the state total limited English proficiency programs revenue, minus the amount determined under paragraph (b), times the ratio of the district's adjusted limited English proficiency programs base revenue to the state total adjusted limited English proficiency programs base revenue.

(b) Notwithstanding paragraph (a), if the limited English proficiency programs base revenue for a district equals zero, the limited English proficiency programs revenue equals the sum of the following amounts, computed using current year data:

(1) 68 percent of the salary of one full-time equivalent teacher for each 40 pupils of limited English proficiency enrolled, or 68 percent of the salary of one-half of a full-time teacher in a district with 20 or fewer pupils of limited English proficiency enrolled; and

(2) for supplies and equipment purchased or rented for use in the instruction of pupils of limited English proficiency an amount equal to 47 percent of the sum actually spent by the district but not to exceed an average of $47 in any one school year for each pupil of limited English proficiency receiving instruction.

Sec. 15. Minnesota Statutes 1994, section 124.311, subdivision 1, is amended to read:

Subdivision 1. [INSTRUCTION IN REGULAR CLASSROOM.] A school district may receive assurance of mastery revenue to provide direct instructional services to eligible pupils in the pupils' regular classroom.

Sec. 16. Minnesota Statutes 1994, section 124.311, subdivision 4, is amended to read:

Subd. 4. [ELIGIBLE SERVICES.] Assurance of mastery revenue must be used to provide direct instructional services to an eligible pupil, or group of eligible pupils, under the following conditions:

(a) Instruction may be provided at one or more grade levels from kindergarten through grade 8. If an assessment of pupils' needs within a district demonstrates that the eligible pupils in grades kindergarten through 8 are being appropriately served, a district may serve eligible pupils in grades 9 through 12.

(b) Instruction must be provided in the usual and customary classroom of the eligible pupil.

(c) Instruction must be provided under the supervision of the eligible pupil's regular classroom teacher. Instruction may be provided by the eligible pupil's classroom teacher, by another teacher, by a team of teachers, or by an education assistant or aide. A special education teacher may provide instruction, but instruction that is provided under this section is not eligible for aid under section 124.32.

(d) (c) The instruction that is provided must differ from the initial instruction the pupil received in the regular classroom setting. The instruction may differ by presenting different curriculum than was initially presented in the regular classroom, or by presenting the same curriculum:

(1) at a different rate or in a different sequence than it was initially presented;

(2) using different teaching methods or techniques than were used initially; or

(3) using different instructional materials than were used initially.

Sec. 17. Minnesota Statutes 1994, section 124.311, subdivision 5, is amended to read:

Subd. 5. [REVENUE AMOUNT.] Assurance of mastery revenue is the sum of state and district money. The sum may equal up to $45 for fiscal year 1991 and thereafter times the number of actual fund balance pupil units in kindergarten through grade 8 in the district. The district shall determine the amount of money it will provide and the state shall provide an equal amount of money.

Sec. 18. Minnesota Statutes 1995 Supplement, section 124.314, subdivision 2, is amended to read:

Subd. 2. [LEVY.] For fiscal year 1997 1996 and thereafter, a school district's targeted needs levy equals the sum of its integration levy under section 124.912, subdivision 2, and that portion of its special education levy attributed to the limited English proficiency program.

Sec. 19. Minnesota Statutes 1995 Supplement, section 124.3201, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For the purposes of this section and sections 124.3202 and 124.321, the definitions in this subdivision apply.

(a) "Base year" for fiscal year 1996 and fiscal year 1997 means fiscal year 1995 the 1994 summer program and the 1994-1995 school year. Base year for later fiscal years means the second fiscal year preceding the fiscal year for which aid will be paid.

(b) "Basic revenue" has the meaning given it in section 124A.22, subdivision 2. For the purposes of computing basic revenue pursuant to this section, each child with a disability shall be counted as prescribed in section 124.17, subdivision 1.

(c) "Essential personnel" means teachers, related services, and support services staff providing direct services to students.

(d) "Average daily membership" has the meaning given it in section 124.17.

(e) "Program growth factor" means 1.00 for fiscal year 1998 and later.

(f) "Aid percentage factor" means 60 percent for fiscal year 1996, 70 percent for fiscal year 1997, 80 percent for fiscal year 1998, 90 percent for fiscal year 1999, and 100 percent for fiscal years 2000 and later.

(g) "Levy percentage factor" means 100 minus the aid percentage factor for that year.

Sec. 20. Minnesota Statutes 1995 Supplement, section 124.3201, subdivision 2, is amended to read:

Subd. 2. [SPECIAL EDUCATION BASE REVENUE.] The special education base revenue equals the sum of the following amounts computed using base year data:

(1) 68 percent of the salary of each essential person employed in the district's program for children with a disability during the regular school year, whether the person is employed by one or more districts;

(2) for the Minnesota state academy for the deaf or the Minnesota state academy for the blind, 68 percent of the salary of each instructional aide assigned to a child attending the academy, if that aide is required by the child's individual education plan;

(3) for special instruction and services provided to any pupil by contracting with public, private, or voluntary agencies other than school districts, in place of special instruction and services provided by the district, 52 percent of the difference between the amount of the contract and the basic revenue of the district for that pupil for the fraction of the school day the pupil receives services under the contract;

(4) for special instruction and services provided to any pupil by contracting for services with public, private, or voluntary agencies other than school districts, that are supplementary to a full educational program provided by the school district, 52 percent of the amount of the contract for that pupil;

(5) for supplies and equipment purchased or rented for use in the instruction of children with a disability an amount equal to 47 percent of the sum actually expended by the district but not to exceed an average of $47 in any one school year for each child with a disability receiving instruction; and

(6) for fiscal years 1997 and later, special education base revenue shall include amounts under clauses (1) to (5) for special education summer programs provided during the base year for that fiscal year.

Sec. 21. Minnesota Statutes 1995 Supplement, section 124.3201, is amended by adding a subdivision to read:

Subd. 2a. [SPECIAL EDUCATION TUITION REVENUE.] (a) For fiscal year 1996 and later, a district's special education tuition revenue is equal to 50 percent of the difference between tuition costs in the base year and actual tuition costs for pupils whose individual education plans require placement in another district under section 120.17.

(b) For purposes of this section, "tuition costs" means expenditures for tuition bills as defined in section 124.323, subdivision 2, paragraph (a), clause (2).

Sec. 22. Minnesota Statutes 1995 Supplement, section 124.3201, is amended by adding a subdivision to read:

Subd. 2b. [SPECIAL EDUCATION COURT PLACEMENT REVENUE.] For fiscal year 1996 and later, a district's special education court placement revenue is equal to 50 percent of the difference between expenditures for teachers' salaries, contracted services, supplies, and equipment eligible for revenues under sections 124.3201 and 124.3202, in the base year and actual expenditures for pupils with disabilities who receive services pursuant to a court order.

Sec. 23. Minnesota Statutes 1995 Supplement, section 124.3201, subdivision 3, is amended to read:

Subd. 3. [ADJUSTED SPECIAL EDUCATION BASE REVENUE.] For fiscal year 1996 and later, a district's adjusted special education base revenue equals the district's special education base revenue times the ratio of the district's average daily membership for the current school year to the district's average daily membership for the base year; plus the district's special education tuition revenue under subdivision 2a and special education court placement revenue under subdivision 2b.

Sec. 24. Minnesota Statutes 1995 Supplement, section 124.3201, subdivision 5, is amended to read:

Subd. 5. [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] (a) A school district's special education revenue for fiscal year 1996 and later equals the state total special education revenue, minus the amount determined under paragraph (b), times the ratio of the district's adjusted special education base revenue to the state total adjusted special education base revenue. If the state board of education modifies its rules for special education in a manner that increases a school district's special education obligations or service requirements, the commissioner of children, families, and learning shall annually increase each district's special education revenue by the amount necessary to compensate for the increased service requirements. The additional revenue equals the cost in the current year attributable to rule changes not reflected in the computation of special education base revenue, multiplied by the appropriate percentages from subdivision 2.

(b) Notwithstanding paragraph (a), if the special education base revenue for a district equals zero, the special education revenue equals the amount computed according to subdivision 2 using current year data.

Sec. 25. Minnesota Statutes 1995 Supplement, section 124.3202, is amended to read:

124.3202 [SPECIAL EDUCATION SUMMER PROGRAM REVENUE.]

Subdivision 1. [SUMMER PROGRAM BASE REVENUE.] The summer program base revenue for fiscal year 1996 and fiscal year 1997 equals the sum of the following amounts computed using base year data:

(1) 68 percent of the summer program salary of each essential person employed in the district's program for children with a disability, whether the person is employed by one or more districts;

(2) for the Minnesota state academy for the deaf or the Minnesota state academy for the blind, 68 percent of the summer program salary of each instructional aide assigned to a child attending the academy, if that aide is required by the child's individual education plan;

(3) for special instruction and services provided to any pupil by contracting with public, private, or voluntary agencies other than school districts, in place of special instruction and services provided by the district, 52 percent of the difference between the amount of the contract for the summer program and the basic revenue of the district for that pupil for the fraction of the school day the pupil receives services under the contract; and

(4) for special instruction and services provided to any pupil by contracting for services with public, private, or voluntary agencies other than school districts, that are supplementary to a full educational program provided by the school district, 52 percent of the amount of the summer program contract for that pupil.

Subd. 2. [ADJUSTED SUMMER PROGRAM BASE REVENUE.] For fiscal year 1996 and later fiscal year 1997, a district's adjusted summer program base revenue equals the district's summer program base revenue times the ratio of the district's average daily membership for the current school year to the district's average daily membership for the base year.

Subd. 3. [STATE TOTAL SUMMER PROGRAM REVENUE.] The state total summer program revenue for fiscal year 1996 equals $7,152,000. The state total summer program revenue for fiscal year 1997 equals $3,728,500. Fiscal year 1996 summer program revenue is for 1995 summer programs. Fiscal year 1997 summer program revenue is for 1996 summer programs provided in fiscal year 1996.

Subd. 4. [SCHOOL DISTRICT SUMMER PROGRAM REVENUE.] (a) A school district's summer program revenue for fiscal year 1996 and fiscal year 1997 equals the state total summer program revenue, minus the amount determined under paragraph (b), times the ratio of the district's adjusted summer program base revenue to the state total adjusted summer program base revenue.

(b) Notwithstanding paragraph (a), if the special education base revenue for a district under section 124.3201, subdivision 2, equals zero, the summer program revenue equals the amount computed according to subdivision 1 using current year data.

Subd. 5. [SPECIAL EDUCATION SUMMER PROGRAM AID.] A school district's special education summer program aid for fiscal year 1996 and fiscal year 1997 equals the district's summer program revenue times the aid percentage factor for that year.

Subd. 6. [REVENUE ALLOCATION FROM COOPERATIVE CENTERS AND INTERMEDIATES.] For the purposes of this section and section 124.321, a special education cooperative or an intermediate district shall allocate its approved expenditures for special education programs among participating school districts. Special education summer program aid for services provided by a cooperative or intermediate district shall be paid to the participating school districts.

Sec. 26. Minnesota Statutes 1995 Supplement, section 124.323, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] In this section, the definitions in this subdivision apply.

(a) "Unreimbursed special education cost" means the sum of the following:

(1) expenditures for teachers' salaries, contracted services, supplies, and equipment eligible for revenue under sections 124.3201, and 124.3202, and 124.321; plus

(2) expenditures for tuition bills received under section 120.17 for services eligible for revenue under sections 124.3201, subdivision 2, and 124.3202, subdivision 1; minus

(3) revenue for teachers' salaries, contracted services, supplies, and equipment under sections 124.3201, and 124.3202, and 124.321; minus

(4) tuition receipts under section 120.17 for services eligible for revenue under sections 124.3201, subdivision 2, and 124.3202, subdivision 1.

(b) "General revenue," for fiscal year 1996, means the sum of the general education revenue according to section 124A.22, subdivision 1, as adjusted according to section 124A.036, subdivision 5, plus the total referendum revenue according to section 124A.03, subdivision 1e. For fiscal years 1997 and later, "general revenue" means the sum of the general education revenue according to section 124A.22, subdivision 1, as adjusted according to section 124A.036, subdivision 5, plus the total referendum revenue minus transportation sparsity revenue minus total operating capital revenue.

Sec. 27. Minnesota Statutes 1995 Supplement, section 124.323, subdivision 2, is amended to read:

Subd. 2. [EXCESS COST REVENUE.] For 1996 and later fiscal years, a district's special education excess cost revenue equals the product of:

(1) 70 percent of the difference between (i) (1) the district's unreimbursed special education cost per actual pupil unit and (ii) (2) six percent for fiscal year 1996 and 5.7 percent for fiscal year 1997 and later years of the district's general revenue per actual pupil unit, times

(2) the district's actual pupil units for that year.

Sec. 28. Minnesota Statutes 1995 Supplement, section 124.574, subdivision 2f, is amended to read:

Subd. 2f. [STATE TOTAL SECONDARY VOCATIONAL-DISABLED REVENUE.] The state total secondary vocational-disabled revenue for fiscal year 1996 equals $7,645,000 $8,520,000. The state total secondary vocational-disabled revenue for fiscal year 1997 equals $7,960,000 $8,830,000. The state total secondary vocational-disabled revenue for later fiscal years equals:

(1) the state total secondary vocational-disabled revenue for the preceding fiscal year; times

(2) the program growth factor; times

(3) the ratio of the state total average daily membership for the current fiscal year to the state total average daily membership for the preceding fiscal year.

Sec. 29. Minnesota Statutes 1995 Supplement, section 124.574, subdivision 2g, is amended to read:

Subd. 2g. [SCHOOL DISTRICT SECONDARY VOCATIONAL-DISABLED REVENUE.] (a) A school district's secondary vocational-disabled revenue for fiscal year 1996 and later equals the state total secondary vocational-disabled revenue, minus the amount determined under paragraph (b), times the ratio of the district's adjusted secondary vocational-disabled base revenue to the state total adjusted secondary vocational-disabled base revenue.

(b) Notwithstanding paragraph (a), if the secondary vocational-disabled base revenue for a district equals zero and no district residents were enrolled in secondary vocational-disabled programs during the base year, the secondary vocational-disabled revenue equals the amount computed according to subdivision 2d using current year data.

Sec. 30. Minnesota Statutes 1994, section 124.86, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] Each year each American Indian-controlled tribal contract or grant school authorized by the United States Code, title 25, section 450f, that is located on a reservation within the state is eligible to receive tribal contract or grant school aid subject to the requirements in this subdivision.

(a) The school must plan, conduct, and administer an education program that complies with the requirements of either this chapter and chapters 120, 121, 122, 123, 124A, 124C, 125, 126, 129, and 268A or Code of Federal Regulations, title 25, sections 31.0 to 45.80.

(b) The school must comply with all other state statutes governing independent school districts or their equivalent in the Code of Federal Regulations, title 25.

(c) The state tribal contract or grant school aid must be used to supplement, and not to replace, the money for American Indian education programs provided by the federal government.

Sec. 31. Minnesota Statutes 1994, section 124.86, subdivision 2, is amended to read:

Subd. 2. [REVENUE AMOUNT.] An American Indian-controlled tribal contract or grant school that is located on a reservation within the state and that complies with the requirements in subdivision 1 is eligible to receive tribal contract or grant school aid. The amount of aid is derived by:

(1) multiplying the formula allowance under section 124A.22, subdivision 2, times the difference between (a) the actual pupil units as defined in section 124A.02, subdivision 15, in average daily membership, excluding section 124.17, subdivision 2f, and (b) the number of pupils for the current school year, weighted according to section 124.17, subdivision 1, receiving benefits under section 123.933 or 123.935 or for which the school is receiving reimbursement under section 126.23;

(2) subtracting from the result in clause (1) the amount of money allotted to the school by the federal government through Indian School Equalization Program of the Bureau of Indian Affairs, according to Code of Federal Regulations, title 25, part 39, subparts A to E, for the basic program as defined by section 39.11, paragraph (b), for the base rate as applied to kindergarten through twelfth grade, excluding small school adjustments and additional weighting, but not money allotted through subparts F to L for contingency funds, school board training, student training, interim maintenance and minor repair, interim administration cost, prekindergarten, and operation and maintenance, and the amount of money that is received according to section 126.23;

(3) dividing the result in clause (2) by the actual pupil units in average daily membership, excluding section 124.17, subdivision 2f; and

(4) multiplying the actual pupil units, including section 124.17, subdivision 2f, in average daily membership by the lesser of $1,500 or the sum of the result in clause (3) plus $300.

Sec. 32. Minnesota Statutes 1994, section 126.531, subdivision 3, is amended to read:

Subd. 3. Each committee shall be reimbursed for expenses according to section 15.059, subdivision 6. The state board shall determine the membership terms and the duration of each committee, which expire no later than June 30, 1997.

Sec. 33. Minnesota Statutes 1995 Supplement, section 325G.203, subdivision 11, is amended to read:

Subd. 11. [NONCONFORMITY.] "Nonconformity" means a specific condition or generic defect or malfunction, or a defect or condition that substantially impairs the use, value, or safety of an assistive device, but does not include a condition or defect that is the result of abuse or unauthorized modification or alteration of the assistive device by the consumer.

For those assistive devices regulated under section 153A.19, "nonconformity" does not include a condition of the device that is the result of normal use which could be resolved through fitting adjustments, cleaning, or proper care.

Sec. 34. Minnesota Statutes 1994, section 466.01, subdivision 1, is amended to read:

Subdivision 1. [MUNICIPALITY.] For the purposes of sections 466.01 to 466.15, "municipality" means any city, whether organized under home rule charter or otherwise, any county, town, public authority, public corporation, special district, school district, however organized, county agricultural society organized pursuant to chapter 38, joint powers board or organization created under section 471.59 or other statute, public library, regional public library system, multicounty multitype library system, family services collaborative established under section 121.8355, other political subdivision, or community action agency.

Sec. 35. Minnesota Statutes 1994, section 471.59, subdivision 11, is amended to read:

Subd. 11. [JOINT POWERS BOARD.] (a) Two or more governmental units, through action of their governing bodies, by adoption of a joint powers agreement that complies with the provisions of subdivisions 1 to 5, may establish a joint board to issue bonds or obligations pursuant to under any law by which any of the governmental units establishing the joint board may independently issue bonds or obligations and may use the proceeds of the

bonds or obligations to carry out the purposes of the law under which the bonds or obligations are issued. A joint board created pursuant to established under this section may issue obligations and other forms of indebtedness only pursuant to in accordance with express authority granted by the action of the governing bodies of the governmental units which that established the joint board. Except as provided in paragraph (b), the joint board established pursuant to under this subdivision shall must be composed solely of members of the governing bodies of the governmental unit which that established the joint board, and the. A joint board established under this subdivision may not pledge the full faith and credit or taxing power of any of the governmental units which that established the joint board. The obligations or other forms of indebtedness shall must be obligations of the joint board issued on behalf of the governmental units creating the joint board. The obligations or other forms of indebtedness shall must be issued in the same manner and subject to the same conditions and limitations which that would apply if the obligations were issued or indebtedness incurred by one of the governmental units which that established the joint board, provided that any reference to a governmental unit in the statute, law, or charter provision authorizing the issuance of the bonds or the incurring of the indebtedness shall be is considered a reference to the joint board.

(b) Notwithstanding paragraph (a), one school district, one county, and one public health entity, through action of their governing bodies, may establish a joint board to establish and govern a family services collaborative under section 121.8355. The school district, county, and public health entity may include other governmental entities at their discretion. The membership of a board established under this paragraph, in addition to members of the governing bodies of the participating governmental units, must include the representation required by section 121.8355, subdivision 1, paragraph (a), selected in accordance with section 121.8355, subdivision 1, paragraph (c).

Sec. 36. Laws 1995, First Special Session chapter 3, article 3, section 19, subdivision 7, is amended to read:

Subd. 7. [TRIBAL CONTRACT SCHOOLS.] For tribal contract school aid according to Minnesota Statutes, section 124.86:

$238,000 ..... 1996

$361,000 $861,000 ..... 1997

The 1996 appropriation includes $19,000 for 1995 and $219,000 for 1996.

The 1997 appropriation includes $38,000 for 1996 and $323,000 $823,000 for 1997.

Sec. 37. Laws 1995, First Special Session chapter 3, article 3, section 19, subdivision 15, is amended to read:

Subd. 15. [SECONDARY VOCATIONAL EDUCATION AID.] For secondary vocational education aid according to Minnesota Statutes, section 124.573:

$11,874,000..... 1996

$11,596,000 $11,771,000 ..... 1997

The 1996 appropriation includes $2,017,000 for 1995 and $9,857,000 for 1996.

The 1997 appropriation includes $1,739,000 for 1996 and $9,857,000 $10,032,000 for 1997.

Sec. 38. Laws 1995, First Special Session chapter 3, article 15, section 26, subdivision 7, is amended to read:

Subd. 7. [TARGETED NEEDS AID.] For targeted needs aid:

$37,682,000 $39,546,000 ..... 1996

$41,597,000 $41,606,000 ..... 1997

(a) Of the 1996 amount, $945,000 is for 1995 LEP aid and $4,359,000 $6,223,000 is for 1996 LEP aid. Of the 1996 amount, $1,979,000 is for 1995 AOM aid and $11,555,000 is for 1996 AOM aid. Of the 1996 amount, $18,844,000 is for 1996 integration aid.

(b) Of the 1997 amount, $1,089,000 $1,098,000 is for 1996 LEP aid and $7,913,000 is for 1997 LEP aid. Of the 1997 amount, $2,039,000 is for 1996 AOM aid and $11,712,000 is for 1997 AOM aid. Of the 1997 amount, $18,844,000 is for 1997 integration aid.

(c) As a condition of receiving a grant, each district must continue to report its costs according to the uniform financial accounting and reporting system. As a further condition of receiving a grant, each district must submit a report to the chairs of the education committees of the legislature about the actual expenditures it made for integration using the grant money including achievement results. These grants may be used to transport students attending a nonresident district under Minnesota Statutes, section 120.062, to the border of the resident district. A district may allocate a part of the grant to the transportation fund for this purpose.

Sec. 39. Laws 1995, First Special Session chapter 3, article 15, section 26, subdivision 8, is amended to read:

Subd. 8. [SECONDARY VOCATIONAL; STUDENTS WITH DISABILITIES.] For aid for secondary vocational education for pupils with disabilities according to Minnesota Statutes, section 124.574:

$4,489,000 $4,936,000 ..... 1996

$5,424,000 $6,020,000 ..... 1997

The 1996 appropriation includes $590,000 for 1995 and $3,899,000 $4,346,000 for 1996.

The 1997 appropriation includes $688,000 $766,000 for 1996 and $4,736,000 $5,254,000 for 1997.

Sec. 40. Laws 1995, First Special Session chapter 3, article 15, section 26, subdivision 10, is amended to read:

Subd. 10. [LOW-INCOME CONCENTRATION GRANTS.] For low-income concentration grants according to Laws 1994, chapter 647, article 8, section 43:

$1,150,000 ..... 1996

$1,150,000 $1,300,000 ..... 1997

Each grant shall be for no more than $50,000.

Sec. 41. [OSSEO LEVY.]

For levies payable in 1997 only, independent school district No. 279, Osseo, may levy a tax in an amount not to exceed $800,000. The proceeds of this levy must be used to provide instructional services for at-risk children.

Sec. 42. [FISCAL YEAR 1997 SECONDARY VOCATIONAL GUARANTEE.]

(a) Notwithstanding Minnesota Statutes, section 124.573, subdivision 2f, paragraphs (a) and (b), a school district's secondary vocational aid for fiscal year 1997 shall not be less than 25 percent of the lessor of (1) $90,000, or (2) the approved expenditure included in subdivision 2b, paragraph (b).

(b) Aid provided according to this section is not included in the fiscal year 1997 base for calculating fiscal year 1998 aid according to Minnesota Statutes, section 124.573, subdivision 2f, paragraph (a).

(c) The amounts allocated according to this section are not included in the secondary vocational aid base for fiscal year 1998 and after.

Sec. 43. [EFFECTIVE DATE.]

Sections 11 to 14, 26 and 29 are effective retroactively to July 1, 1995, for the 1995-1996 school year and later. Sections 21 to 23 are effective for fiscal year 1996. Sections 24 and 38 are effective the day following final enactment.

Section 1. [120.063] [SCHOOL ATTENDANCE.]

Attendance at a particular public school is a privilege not a right for a pupil.

Sec. 2. Minnesota Statutes 1995 Supplement, section 120.064, subdivision 9, is amended to read:

Subd. 9. [ADMISSION REQUIREMENTS.] A charter school may limit admission to:

(1) pupils within an age group or grade level;

(2) people who are eligible to participate in the high school graduation incentives program under section 126.22; or

(3) residents of a specific geographic area where the percentage of the population of non-Caucasian people of that area is greater than the percentage of the non-Caucasian population in the congressional district in which the geographic area is located, and as long as the school reflects the racial and ethnic diversity of the specific area.

A charter school shall enroll an eligible pupil who submits a timely application, unless the number of applications exceeds the capacity of a program, class, grade level, or building. In this case, pupils shall be accepted by lot.

A charter school may not limit admission to pupils on the basis of intellectual ability, measures of achievement or aptitude, or athletic ability.

Sec. 3. [121.615] [MINNESOTA SCHOOL-TO-WORK STUDENT ORGANIZATION.]

Subdivision 1. [CITATION.] This section may be cited as the "Minnesota school-to-work student organization act."

Subd. 2. [CREATION OF FOUNDATION.] There is created the Minnesota school-to-work student organization foundation. The purpose of the foundation shall be to promote vocational student organizations and applied leadership opportunities in Minnesota public schools through public-private partnerships. The foundation shall be a nonprofit organization. The board of directors of the foundation and activities of the foundation are under the direction of the department of children, families, and learning.

Subd. 3. [BOARD OF DIRECTORS.] The board of directors of the school-to-work student organization foundation shall consist of:

(1) chairs or designees from the board of directors of FFA (formerly Future Farmers of America), Future Leaders of America/Future Homemakers of America, post-secondary agriculture students, home economics related occupations, Health Occupations Student Association, Distributive Education Clubs of America, Delta Upsilon Chi, Secondary Vocational Industrial Clubs of America, Post-secondary Vocational Industrial Clubs of America, Secondary Business Professionals of America, and Post-secondary Business Professionals of America;

(2) four members from business and industry appointed by the governor; and

(3) five students representing diverse vocational areas, three of whom are appointed by the commissioner of the department of children, families, and learning and two of whom are appointed by the chancellor of the Minnesota state colleges and universities with the advice of the executive councils of each vocational education student organization.

Executive directors of vocational education student organizations are ex officio, nonvoting members of the board.

Subd. 4. [FOUNDATION PROGRAMS.] The foundation shall advance applied leadership and intracurricular vocational learning experiences for students. These may include, but are not limited to:

(1) recognition programs and awards for students demonstrating excellence in applied leadership;

(2) summer programs for student leadership, career development, applied academics, and mentorship programs with business and industry;

(3) recognition programs for teachers, administrators, and others who make outstanding contributions to school-to-work programs;

(4) outreach programs to increase the involvement of urban and suburban students;

(5) organized challenges requiring cooperation and competition for secondary and post-secondary students;

(6) assistance and training to community teams to increase career awareness and empowerment of youth as community leaders; and

(7) assessment and activities in order to plan for and implement continuous improvement.

To the extent possible, the foundation shall make these programs available to students in all parts of the state.

Subd. 5. [POWERS AND DUTIES.] The foundation may:

(1) identify and plan common goals and priorities for the various school-to-work student organizations in Minnesota;

(2) publish brochures or booklets relating to the purposes of the foundation and collect reasonable fees for the publications;

(3) seek and receive public and private money, grants, and in-kind services and goods from nonstate sources for the purposes of the foundation;

(4) contract with consultants on behalf of the school-to-work student organizations; and

(5) plan, implement, and expend money for awards and other forms of recognition for school-to-work student activities.

Subd. 6. [CONTRACTS.] The foundation board of directors shall review and approve foundation personnel and programming contracts.

Subd. 7. [FOUNDATION STAFF.] The commissioner of the department of children, families, and learning shall appoint the executive director of the foundation from three candidates nominated and submitted by the foundation board of directors and, as necessary, other staff who shall perform duties and have responsibilities solely related to the foundation. The employees appointed are not state employees under chapter 43A, but are covered under section 3.736. The employees may participate in the state health and state insurance plans for employees in unclassified service.

The commissioner shall appoint from the office of lifework development a liaison to the foundation board.

Subd. 8. [PUBLIC FUNDING.] The commissioner of the department of children, families, and learning shall identify and secure appropriate sources of state and federal funding from various state agencies, including, but not limited to, Minnesota state colleges and universities, for the operation and development of school-to-work student organizations.

Subd. 9. [PRIVATE FUNDING.] The foundation shall seek private resources to supplement the allocated state and federal money. Individuals, businesses, and other organizations may contribute to the foundation in any manner specified by the board of directors.

Subd. 10. [REPORT.] The foundation shall submit an annual report and assessment to the office of lifework development and to the board of trustees of the Minnesota state colleges and universities.

Subd. 11. [APPROPRIATION.] There is annually appropriated to the foundation all the amounts received by the foundation pursuant to this section.

Subd. 12. [STUDENT ORGANIZATIONS.] Individual boards of vocational education student organizations shall continue their operations in accordance with section 126.151 and applicable federal law.

Sec. 4. Minnesota Statutes 1994, section 121.8355, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] (a) In order to qualify as a family services collaborative, a minimum of one school district, one county, and one public health entity, one community action agency as defined in section 268.53, and one Head Start grantee if the community action agency is not the designated federal grantee for the Head Start program must agree in writing to provide coordinated family services and commit resources to an integrated fund. Collaboratives are expected to have broad community representation, which may include other local providers,

including additional school districts, counties, and public health entities, other municipalities, public libraries, existing culturally specific community organizations, tribal entities, local health organizations, private and nonprofit service providers, child care providers, local foundations, community-based service groups, businesses, local transit authorities or other transportation providers, community action agencies under section 268.53, senior citizen volunteer organizations, parent organizations, parents, and sectarian organizations that provide nonsectarian services.

(b) Community-based collaboratives composed of representatives of schools, local businesses, local units of government, parents, students, clergy, health and social services providers, youth service organizations, and existing culturally specific community organizations may plan and develop services for children and youth. A community-based collaborative must agree to collaborate with county, school district, community action, and public health entities. Their services may include opportunities for children or youth to improve child health and development, reduce barriers to adequate school performance, improve family functioning, provide community service, enhance self esteem, and develop general employment skills.

(c) Members of the governing bodies of political subdivisions involved in the establishment of a family services collaborative shall select representatives of the nongovernmental entities listed in paragraph (a) to serve on the governing board of a collaborative. The governing body members of the political subdivisions shall select one or more representatives of the nongovernmental entities within the family service collaborative.

Sec. 5. Minnesota Statutes 1994, section 121.8355, is amended by adding a subdivision to read:

Subd. 2a. [DUTIES OF CERTAIN COORDINATING BODIES.] By mutual agreement of the collaborative and a coordinating body listed in this subdivision, a family services collaborative may assume the duties of a community transition interagency committee established under section 120.17, subdivision 16; an interagency early intervention committee established under section 120.1701, subdivision 5; a local advisory council established under section 245.4875, subdivision 5; or a local coordinating council established under section 245.4875, subdivision 6.

Sec. 6. Minnesota Statutes 1994, section 124.17, is amended by adding a subdivision to read:

Subd. 5. [BASIC SKILLS SUMMER SCHOOL PUPIL UNITS.] When a pupil who has not passed an assessment of basic graduation standards in reading, writing, or mathematics is enrolled in a mastery of basic skills summer school program that is not a part of the regular school term and the student has a total enrollment time of more than 1,020 hours in a school year, the pupil may be counted as more than one pupil in average daily membership for purposes of this subdivision only. The amount in excess of one pupil must be determined by the ratio of the number of hours of instruction provided to that pupil in excess of 1,020 hours. For each pupil, only the amount of summer school enrollment time attributable to basic skills instruction may be used to calculate the additional hours in the school year. Basic skills instruction is defined as in Minnesota's rules on graduation standards and includes reading, writing, and mathematics. Hours that occur after the close of the instructional year in June shall be attributable to the following fiscal year. A pupil for whom payment is made under this subdivision may be counted by a district only for the computation of basic revenue, according to section 124A.22, subdivision 2, minus $300.

Sec. 7. Minnesota Statutes 1994, section 124.2711, subdivision 6, is amended to read:

Subd. 6. [RESERVE ACCOUNT.] Early childhood family education revenue, which includes aids, levies, fees, grants, and all other revenues received by the school district for early childhood family education programs, must be maintained in a reserve account within the community service fund.

Sec. 8. Minnesota Statutes 1994, section 124.2713, subdivision 10, is amended to read:

Subd. 10. [RESERVE ACCOUNT.] Community education revenue, which includes aids, levies, fees, grants, and all other revenues received by the school district for community education programs, must be maintained in a reserve account within the community service fund.

Sec. 9. Minnesota Statutes 1994, section 124.276, is amended to read:

124.276 [CAREER TEACHER FAMILY CONNECTIONS AID.]

Subdivision 1. [ELIGIBILITY.] A school district that has a career teacher family connections program, according to sections 125.70 to 125.705, for one or more of its teachers is eligible for aid to extend the teaching contract of a career family connections teacher.

Subd. 2. [STATE SHARE OF EXTENDED CONTRACT.] The state shall pay two-thirds of the portion of the teaching contract, excluding fringe benefits, that is in addition to the standard teaching contract of the district. The district shall pay the remaining portion.

Subd. 3. [COMMISSIONER APPROVAL.] The commissioner may approve plans and applications for districts throughout the state for career teacher family connections aid. Application procedures and deadlines shall be established by the commissioner.

Subd. 4. [USE OF AID.] Career teacher family connections aid may be used only to implement a career teacher family connections program.

Sec. 10. Minnesota Statutes 1994, section 124.912, subdivision 6, is amended to read:

Subd. 6. [CRIME RELATED COSTS.] For taxes levied in 1991 and subsequent years, payable in 1992 and subsequent years, each school district may make a levy on all taxable property located within the school district for the purposes specified in this subdivision. The maximum amount which may be levied for all costs under this subdivision shall be equal to $1 multiplied by the population of the school district. For purposes of this subdivision, "population" of the school district means the same as contained in section 275.14. The proceeds of the levy must be used for reimbursing the cities and counties who contract with the school district for the following purposes: (1) to pay the costs incurred for the salaries, benefits, and transportation costs of peace officers and sheriffs for liaison services in the district's middle and secondary schools and; (2) to pay the costs for a drug abuse prevention program as defined in Minnesota Statutes 1991 Supplement, section 609.101, subdivision 3, paragraph (f) in the elementary schools; or (3) to pay the costs for a gang resistance education training curriculum in the middle schools. The school district must initially attempt to contract for these services with the police department of each city or the sheriff's department of the county within the school district containing the school receiving the services. If a local police department or a county sheriff's department does not wish to provide the necessary services, the district may contract for these services with any other police or sheriff's department located entirely or partially within the school district's boundaries. The levy authorized under this subdivision is not included in determining the school district's levy limitations.

Sec. 11. Minnesota Statutes 1994, section 124A.291, is amended to read:

124A.291 [RESERVED REVENUE FOR CERTAIN TEACHER PROGRAM.]

A district that has a career teacher family connections program or a mentor-teacher program may reserve part of the basic revenue under section 124A.22, subdivision 2, for the district's share, of the portion of the teaching contract that is in addition to the standard teaching contract of the district.

Sec. 12. Minnesota Statutes 1994, section 124C.45, is amended by adding a subdivision to read:

Subd. 1a. [RESERVE REVENUE.] Each school district that is a member of an area learning center must reserve revenue in an amount equal to at least 90 percent of the basic revenue generated by each student attending an area learning center program under this section. The amount of reserved revenue under this subdivision may only be spent on program costs associated with the area learning center.

Sec. 13. Minnesota Statutes 1994, section 125.70, is amended to read:

125.70 [CITATION.]

Sections 125.701 to 125.705 may be cited as the "Minnesota career teacher family connections act."

Sec. 14. Minnesota Statutes 1994, section 125.701, is amended to read:

125.701 [PURPOSE OF THE CAREER TEACHER FAMILY CONNECTIONS ACT.]

The legislature recognizes the unique and lifelong learning and development process of all human beings. The legislature is committed to the goal of maximizing the individual growth potential of all learners. The purposes of the career teacher family connections act are:

(1) to offer career teacher family connections programs which emphasize learning and development based on learner outcomes;

(2) to recognize and utilize the unique skills that teachers, students, family, and the community have in both the teaching process and the learning and development process; and

(3) to provide an opportunity for maximum use of teachers, principals, and counselors.

Sec. 15. Minnesota Statutes 1994, section 125.703, is amended to read:

125.703 [ADVISORY COUNCIL.]

The school board of a district providing a career teacher family connections program shall appoint an advisory council. Council members shall be selected from the school attendance area in which programs are provided. Members of the council may include students, teachers, principals, administrators and community members. A majority of the members shall be parents with children participating in the local program. The local advisory council shall advise the school board in the development, coordination, supervision, and review of the career teacher program. The council shall meet at least two times each year with any established community education advisory council in the district. Members of the council may be members of the community education advisory council. The council shall report to the school board.

Sec. 16. Minnesota Statutes 1994, section 125.704, is amended to read:

125.704 [CAREER TEACHER FAMILY CONNECTIONS PROGRAM COMPONENTS.]

Subdivision 1. [MANDATORY COMPONENTS.] A career teacher family connections program shall include:

(1) participation by a designated individual as a career teacher, principal-teacher, or counselor teacher;

(2) an emphasis on each individual child's unique learning and development needs;

(3) procedures to give the career teacher a major responsibility for leadership of the instructional and noninstructional activities of each child beginning with early childhood family education;

(4) procedures to involve parents in the learning and development experiences of their children;

(5) procedures to implement outcome based education by focusing on the needs of the learner;

(6) procedures to coordinate and integrate the instructional program with all community education programs;

(7) procedures to concentrate career teacher programs at sites that provide early childhood family education and subsequent learning and development programs; and

(8) procedures for the district to fund the program.

Subd. 2. [OPTIONAL COMPONENTS.] A career teacher family connections program may include:

(1) efforts to improve curricula strategies, instructional strategies, and use of materials that respond to the individual educational needs and learning styles of each pupil in order to enable each pupil to make continuous progress and to learn at a rate appropriate to that pupil's abilities;

(2) efforts to develop student abilities in basic skills; applied learning skills; and, when appropriate, arts; humanities; physical, natural, and social sciences; multicultural education; physical, emotional, and mental health; consumer economics; and career education;

(3) use of community resources and communications media to pursue learning and development opportunities for pupils;

(4) staff development for teachers and other school personnel;

(5) improvements to the learning and development environment, including use of the community in general, to enhance the learning and development process;

(6) cooperative efforts with other agencies involved with human services or child development and development of alternative community based learning and development experiences;

(7) post-secondary education components for pupils who are able to accelerate or programs for pupils with special abilities and interests who are given advanced learning and development opportunities within existing programs;

(8) use of volunteers in the learning and development program;

(9) flexible attendance schedules for pupils;

(10) adult education component;

(11) coordination with early childhood family education and community education programs;

(12) variable student/faculty ratios for special education students to provide for special programming;

(13) inclusion of nonpublic pupils as part of the ratio in the career teacher, principal-teacher, and counselor teacher component;

(14) application of educational research findings;

(15) summer learning and development experiences for students as recommended by the career teacher, principal-teacher, and counselor teacher;

(16) use of education assistants, teacher aides, or paraprofessionals as part of the career teacher program;

(17) establishment of alternative criteria for high school graduation; and

(18) variable age and learning size groupings of students.

Sec. 17. Minnesota Statutes 1994, section 125.705, subdivision 1, is amended to read:

Subdivision 1. [STATUS.] A career teacher family connections program may include a career teacher, principal-teacher, and counselor teacher component. The career teacher, principal-teacher, and counselor teacher shall not be the exclusive teacher for students assigned to them but shall serve as a primary teacher and perform the function of developing and implementing a student's overall learning and development program. The career teacher, principal-teacher, and counselor teacher may be responsible for regular assignments as well as learning and development programs for other assigned students.

Sec. 18. Minnesota Statutes 1994, section 126.22, subdivision 1, is amended to read:

Subdivision 1. [PURPOSE.] The legislature finds that it is critical for persons to obtain at least a high school education to function in today's society to provide options for children to succeed in school. Therefore, the purpose of this section is to provide incentives for and encourage all Minnesota students who have experienced or are experiencing difficulty in the traditional education system to enroll in alternative programs in order to complete their high school education.

Sec. 19. Minnesota Statutes 1995 Supplement, section 126.22, subdivision 2, is amended to read:

Subd. 2. [ELIGIBLE PUPILS.] The following pupils are eligible to participate in the high school graduation incentives education options program:

(a) any pupil who is between the ages of 12 and under the age of 21, or who is an elementary pupil, and in either case, who:

(1) is at least two grade levels performs substantially below the performance level for pupils of the same age in a locally determined achievement test; or

(2) is at least one year behind in satisfactorily completing coursework or obtaining credits for graduation; or

(3) is pregnant or is a parent; or

(4) has been assessed as chemically dependent; or

(5) has been excluded or expelled according to sections 127.26 to 127.39; or

(6) has been referred by a school district for enrollment in an eligible program or a program pursuant to section 126.23; or

(7) is a victim of physical or sexual abuse; or

(8) has experienced mental health problems; or

(9) has experienced homelessness sometime within six months before requesting a transfer to an eligible program; or

(10) speaks English as a second language or has limited English proficiency; or

(b) any person who is at least 21 years of age and who:

(1) has received fewer than 14 years of public or nonpublic education, beginning at age 5;

(2) has not completed the requirements for a high school diploma; and

(3) at the time of application, (i) is eligible for reemployment insurance benefits or has exhausted the benefits, (ii) is eligible for, or is receiving income maintenance and support services, as defined in section 268.0111, subdivision 5, or (iii) is eligible for services under the displaced homemaker program, state wage-subsidy program, or any programs under the federal Jobs Training Partnership Act or its successor.

Sec. 20. Minnesota Statutes 1995 Supplement, section 126.22, subdivision 3, is amended to read:

Subd. 3. [ELIGIBLE PROGRAMS.] (a) A pupil who is eligible according to subdivision 2 may enroll in area learning centers under sections 124C.45 to 124C.48, or according to section 121.11, subdivision 12.

(b) A pupil who is eligible according to subdivision 2 and who is between the ages of 16 and 21 may enroll in post-secondary courses under section 123.3514.

(c) A pupil who is eligible under subdivision 2, may enroll in any public elementary or secondary education program. However, a person who is eligible according to subdivision 2, clause (b), may enroll only if the school board has adopted a resolution approving the enrollment.

(d) A pupil who is eligible under subdivision 2, may enroll part time, if 16 years of age or older, or full time in any nonprofit, nonpublic, nonsectarian school that has contracted with the serving school district to provide educational services.

(e) A pupil who is between the ages of 16 and 21 may enroll in any adult basic education programs approved under section 124.26 and operated under the community education program contained in section 121.88.

Sec. 21. Minnesota Statutes 1995 Supplement, section 126.22, subdivision 5, is amended to read:

Subd. 5. [DISSEMINATION OF INFORMATION.] A school district shall disseminate information, developed by the department of children, families, and learning, about the high school graduation incentives program to residents in the district who are under the age of 21.

Sec. 22. Minnesota Statutes 1995 Supplement, section 126.22, subdivision 8, is amended to read:

Subd. 8. [ENROLLMENT VERIFICATION.] (a) For a pupil attending an eligible program full time under subdivision 3, paragraph (d), the department of children, families, and learning shall pay 88 90 percent of the basic revenue of the district to the eligible program and 12 ten percent of the basic revenue to the resident district within 30 days after the eligible program verifies enrollment using the form provided by the department. For a pupil attending an eligible program part time, basic revenue shall be reduced proportionately, according to the amount of

time the pupil attends the program, and the payments to the eligible program and the resident district shall be reduced accordingly. A pupil for whom payment is made according to this section may not be counted by any district for any purpose other than computation of basic revenue, according to section 124A.22, subdivision 2. If payment is made for a pupil under this subdivision, a school district shall not reimburse a program under section 126.23 for the same pupil.

(b) The department of children, families, and learning shall pay up to 100 percent of the basic revenue to the eligible program if there is an agreement to that effect between the school district and the eligible program.

Sec. 23. Minnesota Statutes 1995 Supplement, section 126.23, is amended to read:

126.23 [AID FOR PRIVATE CONTRACTED ALTERNATIVE PROGRAMS.]

Subdivision 1. [AID.] If a pupil enrolls in an alternative program, eligible under section 126.22, subdivision 3, paragraph (d), or subdivision 3a, operated by a private organization that has contracted with a school district to provide educational services for eligible pupils under section 126.22, subdivision 2, the district contracting with the private organization must reimburse the provider an amount equal to at least 88 90 percent of the basic revenue of the district for each pupil attending the program full time. For a pupil attending the program part time, basic revenue paid to the program shall be reduced proportionately, according to the amount of time the pupil attends the program, and basic revenue paid to the district shall be reduced accordingly. Pupils for whom a district provides reimbursement may not be counted by the district for any purpose other than computation of basic revenue, according to section 124A.22, subdivision 2. If payment is made to a district or program for a pupil under this section, the department of children, families, and learning shall not make a payment for the same pupil under section 126.22, subdivision 8.

Subd. 2. [RESERVE ACCOUNT.] During the term of the contract to provide educational services under subdivision 1, all state aid under subdivision 1 accrues to the account assigned to the alternative program site and is reserved for that site.

Sec. 24. Minnesota Statutes 1995 Supplement, section 128B.03, subdivision 3a, is amended to read:

Subd. 3a. [STATE REVENUES.] The state shall pay to the council for the support of the school all aids, revenues, and grants available to a school district as though the school were a school district. The aids, revenues, and grants include, but are not limited to, the following:

(1) general education revenue, as defined in section 124A.22, subdivision 1, including at least compensatory revenue;

(2) transportation revenue;

(3) capital expenditure facilities revenue;

(4) capital expenditure equipment revenue;

(5) special education revenue;

(6) limited English proficiency aid;

(7) career teacher family connections aid;

(8) assurance of mastery revenue;

(9) school lunch revenue;

(10) school milk revenue;

(11) health and safety revenue;

(12) Indian language and culture grants;

(13) arts planning grants; and

(14) all other aids, revenues, or grants available to a school district.

If there are eligibility requirements for an aid, revenue, or grant, the requirements shall be met in order to obtain the aid, revenue, or grant, except that a requirement to levy shall be waived. To compute the amount of aid, revenue, or grant requiring a levy, the amount of the levy shall be zero.

If a school district obtains revenue from the proceeds of a levy, the council shall be deemed to have levied and the state shall pay aid equal to the amount that would have been levied. The amount shall be approved by the commissioner of children, families, and learning.

The proceeds of any aid, grant, or revenue shall be used only as provided in the applicable statute.

Sec. 25. Minnesota Statutes 1994, section 256.736, subdivision 11, is amended to read:

Subd. 11. [CASE MANAGEMENT SERVICES.] (a) The county agency may, to the extent of available resources, enroll targeted caretakers described in subdivision 16 in case management services and for those enrolled shall:

(1) Provide an assessment as described in subdivision 10, paragraph (a), clause (14). As part of the assessment, the case manager shall inform caretakers of the screenings available through the early periodic screening, diagnosis and treatment (EPSDT) program under chapter 256B and preschool screening under chapter 123, and encourage caretakers to have their children screened. The case manager must work with the caretaker in completing this task;

(2) Develop an employability development plan as described in subdivision 10, paragraph (a), clause (15). The case manager must work with the caretaker in completing this task. For caretakers who are not literate or who have not completed high school, the first goal for the caretaker should be to complete literacy training or a general equivalency diploma. Caretakers who are literate and have completed high school shall be counseled to set realistic attainable goals, taking into account the long-term needs of both the caretaker and the caretaker's family;

(3) Coordinate services such as child care, transportation, and education assistance necessary to enable the caretaker to work toward the goals developed in clause (2). The case manager shall refer caretakers to resource and referral services, if available, and shall assist caretakers in securing appropriate child care services. When a client needs child care services in order to attend a Minnesota public or nonprofit college, university or technical college, the case manager shall contact the appropriate agency to reserve child care funds for the client. A caretaker who needs child care services in order to complete high school or a general equivalency diploma is eligible for child care under sections 256H.01 to 256H.19;

(4) Develop, execute, and monitor a contract between the county agency and the caretaker. The contract must be based upon the employability development plan described in subdivision 10, paragraph (a), clause (15), but must be a separate document. It must include: (a) specific goals of the caretaker including stated measurements of progress toward each goal, the estimated length of participation in the program, and the number of hours of participation per week; (b) educational, training, and employment activities and support services provided by the county agency, including child care; and (c) the participant's obligations and the conditions under which the county will withdraw the services provided;

The contract must be signed and dated by the case manager and participant and may include other terms as desired or needed by either party. In all cases, however, the case manager must assist the participant in reviewing and understanding the contract and must ensure that the caretaker has set forth in the contract realistic goals consistent with the ultimate goal of self-sufficiency for the caretaker's family; and

(5) Develop and refer caretakers to counseling or peer group networks for emotional support while participating in work, education, or training.

(b) In addition to the duties in paragraph (a), for minor parents and pregnant minors, the case manager shall:

(1) Ensure that the contract developed under paragraph (a), clause (4), considers all factors set forth in section 257.33, subdivision 2;

(2) Assess the housing and support systems needed by the caretaker in order to provide the dependent children with adequate parenting. The case manager shall encourage minor parents and pregnant minors who are not living with friends or relatives to live in a group home or foster care setting. If minor parents and pregnant minors are unwilling to live in a group home or foster care setting or if no group home or foster care setting is available, the case manager shall assess their need for training in parenting and independent living skills and when appropriate shall refer them to available counseling programs designed to teach needed skills; and

(3) Inform minor parents or pregnant minors of, and assist them in evaluating the appropriateness of, the high school graduation incentives program under section 126.22, including post-secondary enrollment options, and the employment-related and community-based instruction programs.

(c) A caretaker may request a conciliation conference to attempt to resolve disputes regarding the contents of a contract developed under this section or a housing and support systems assessment conducted under this section. The caretaker may request a hearing pursuant to section 256.045 to dispute the contents of a contract or assessment developed under this section. The caretaker need not request a conciliation conference in order to request a hearing pursuant to section 256.045.

Sec. 26. Laws 1995, First Special Session chapter 3, article 1, section 61, is amended to read:

Sec. 61. [FORMULA ALLOWANCE.]

Notwithstanding the amount of the formula allowance for fiscal year 1997, in Minnesota Statutes, section 124A.22, subdivision 2, the commissioner shall use the amount of the formula allowance minus $300 for fiscal year 1997 in determining the payments under Minnesota Statutes, sections 123.3514, subdivisions 6 and 8; 6b; and 124A.02, subdivision 21; 126.22; and 126.23.

Sec. 27. Laws 1995, First Special Session chapter 3, article 4, section 29, subdivision 10, is amended to read:

Subd. 10. [FAMILY COLLABORATIVES.] For family collaboratives:

$6,000,000 ..... 1996

$6,000,000 ..... 1997

Of the appropriation, $150,000 each year is for grants targeted to assist in providing collaborative children's library service programs. To be eligible, a family collaborative grant recipient must collaborate with at least one public library and one children's or family organization. The public library must involve the regional public library system and multitype library system to which it belongs in the planning and provide for an evaluation of the program.

No more than 2.5 percent of the appropriation is available to the state to administer and evaluate the grant program.

Any balance in the first year does not cancel but is available in the second year. An applicant receiving a grant may carry forward any unencumbered money.

Sec. 28. Laws 1995, First Special Session chapter 3, article 8, section 25, subdivision 18, is amended to read:

Subd. 18. [CAREER TEACHER FAMILY CONNECTIONS AID.] For career teacher family connections aid according to Minnesota Statutes, section 124.276:

$125,000 ..... 1996

$125,000 $225,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

Notwithstanding Minnesota Statutes, section 124.276, subdivision 2, the aid may be used for the increased district contribution to the teachers' retirement association and to FICA resulting from the portion of the teaching contract that is in addition to the standard teaching contract of the district.

Sec. 29. [MINNESOTA COMMISSION ON NATIONAL AND COMMUNITY SERVICE.]

The Minnesota commission on national and community service retains responsibility for implementing federal programs under the federal commission on national and community service. Responsibilities of the Minnesota commission on national and community service may only be transferred to the governor's workforce development council under Minnesota Statutes 1995 Supplement, section 268.665 after the attorney general has certified that the workforce development council meets all the federal requirements for the commission on national and community service.

Notwithstanding Minnesota Statutes 1995 Supplement, section 121.705, if the Minnesota commission on national and community service retains responsibility for federal programs under this section, it also retains responsibility for administering the youth works program and state appropriations made for the youth works program under Laws 1995, First Special Session chapter 3, article 4, section 29, subdivisions 19 and 20.

Sec. 30. [PILOT AFTER-SCHOOL ENRICHMENT PROGRAMS.]

Subdivision 1. [ESTABLISHMENT.] A pilot after-school enrichment grant program is established to provide implementation grants to community collaboratives for designated neighborhoods of Minneapolis and St. Paul, and for selected areas outside Minneapolis and St. Paul. The commissioner of children, families, and learning shall develop criteria for after-school enrichment programs in up to three qualifying neighborhoods in each of the cities, and selected neighborhoods in the rest of the state. Qualifying neighborhoods are designated by the commissioner under subdivision 2.

Subd. 2. [QUALIFYING NEIGHBORHOODS.] In Minneapolis, the neighborhoods that qualify for designation are the Near North Side, Hawthorne, Sumner-Glenwood, Powderhorn Central, Whittier and Phillips. In St. Paul, neighborhoods that qualify for designation are Summit-University, Thomas-Dale, North End, Payne-Phalen, Daytons Bluff, and the West Side.

Subd. 3. [PROGRAM OUTCOMES.] The outcomes of the after-school enrichment programs are to:

(1) increase the number of children participating in after-school programs who live in the designated neighborhoods;

(2) reduce the juvenile crime rate in the designated neighborhoods;

(3) reduce the number of police calls involving juveniles during the afternoon after-school hours;

(4) increase school attendance;

(5) reduce the number of school suspensions;

(6) increase the number of youth engaged in community service;

(7) increase youth academic achievement; and

(8) increase the skills of youth in computers, the arts, athletics, and other activities.

Subd. 4. [PLAN.] By July 1, 1996, a community collaborative, consisting of representatives of community organizations and representatives of the county, city, and school district, shall develop a plan for an after-school enrichment program for children ages nine through 13 who reside in the designated neighborhood to be served. Reading mentorship programs may be included in the plan. Each community collaborative developing a plan shall identify points of collaboration with other organizations and resources available to implement an after-school enrichment program. The plan shall include:

(1) collaboration and leverage of community resources that exist and are effective;

(2) creative outreach to the children;

(3) collaboration of grassroots organizations;

(4) local governments and schools acting as resources;

(5) community control over the design of the enrichment program;

(6) the availability of enrichment activities for a minimum of five days per week after school with future plans to extend to seven days per week; and

(7) identification of the sources of nonstate funding to extend the programming beyond the period of the pilot grant.

Subd. 5. [PLAN APPROVAL; GRANTS.] (a) A plan developed by a community collaborative under subdivision 4 shall be submitted to the commissioner of children, family, and learning. When a collaborative's plan is approved by the commissioner, the commissioner shall award a grant to the community collaborative for the implementation of the plan.

Sec. 31. [GRANTS TO IMPLEMENT CONSTRUCTIVE SCHOOL DISCIPLINE POLICIES.]

Subdivision 1. [POLICY.] The legislature acknowledges the importance of teaching students in a regular classroom setting to the extent possible. Students in an educational setting are expected to behave in a manner that is appropriate for learning to take place. When students fail to meet behavioral expectations, school discipline policies should penalize students' inappropriate behavior, with the ultimate goal of returning students to their regular classrooms. Schools should involve parents in collaborative efforts to alter students' inappropriate classroom behavior. Schools and parents should find ways to ensure that students' inappropriate behavior does not become chronic, necessitating long-term intervention and the need for special services.

Subd. 2. [ESTABLISHMENT.] A grant program for fiscal year 1997 is established to develop, implement, and evaluate school discipline policies, consistent with the pupil fair dismissal act under Minnesota Statutes, sections 127.26 to 127.48. Discipline policies, developed under this section, should be designed to enable students to successfully return to the regular classroom setting after being sanctioned for inappropriate behavior. Discipline policies should focus on early intervention strategies to limit the need for providing regular education students with additional special programs and services.

Subd. 3. [ELIGIBILITY.] An applicant for a grant must be a school site, a school district, a charter school, or a provider of an alternative education program. To be eligible for a grant, the grant applicant must meet all of the following criteria:

(1) develop a plan to mediate issues relating to district or school site codes of conduct that apply to students who are removed from a class or activity period;

(2) include in the code of conduct a plan to remove from the regular classroom setting those students who violate the code;

(3) provide students who violate the code with an alternative education setting within the school or program site; and

(4) make the alternative education setting a constructive experience by using instructional materials tied to educational standards, placing students in an alternative setting outside the normal school day, involving parents in effecting disciplinary measures, or developing intervention techniques such as time outs, among other alternatives.

Subd. 4. [APPLICATION PROCESS.] To obtain a grant to implement constructive school discipline policies, a grant applicant must submit an application to the commissioner of children, families, and learning in the form and manner the commissioner establishes. The application must describe how the applicant will meet the eligibility criteria under subdivision 3. The commissioner may require the applicant to provide additional information.

Subd. 5. [GRANT AWARDS.] The commissioner may award grants of up to $50,000. Grant recipients must be located throughout the state. The commissioner shall make grant awards based on the district's disciplinary experience and on the alternative education settings the grant recipient proposes to use. Grant recipients must use the grant proceeds to accomplish the purposes of this section.

Subd. 6. [EVALUATION.] The commissioner shall evaluate the grant sites and selected control sites to determine the impact of the constructive discipline policy grant program on measures of student behavior and performance, including, but not limited to, student achievement and attendance, and the impact of the program on the school site, the student body, the classroom, and the school faculty. The evaluation must also address the financial impact of the program on the district and the school site. Upon implementing a student code of conduct consistent with this section, the grant recipient must cooperate in evaluating the impact of code policies. As a part of the evaluation process, the grant recipient must document student and parent response to code policies over at least a three-year period. The commissioner shall compile for the education committees of the legislature a progress report by February 1, 1998, and a final report by February 1, 2000, on the effectiveness and impact of discipline policies.

Sec. 32. [ADULT BASIC EDUCATION STUDY.]

The legislature finds that increased adult literacy and access to educational opportunities are necessary for undereducated adults to more fully participate in their families and to become self-sufficient contributors to their communities and the Minnesota economy. There is a growing recognition that basic education provides the opportunity for adults to learn the skills necessary for fuller participation. To examine the current and future needs for adult basic education and the resources necessary to meet these identified needs, the commissioner of the department of children, families, and learning shall conduct or contract for a study of adult basic education. The study, at a minimum, must include the following:

(1) an examination of the adult basic education formula under section 124.26;

(2) the percentage of full adult basic education formula funding that is prorated and the impact of proration on programming and service delivery;

(3) the hold harmless provision based on an adult basic education project's 1991-1992 state aid, and the impact on program delivery;

(4) the distribution of funds under the adult basic education formula and how closely it matches the need for adult basic education throughout the state;

(5) an inventory of federal, state and local projects and programs with skills and education programming for adults, including education programs operated by the department of corrections for inmates; and

(6) an examination of the changing role for adult basic education with potential changes in income maintenance programs and other aspects of welfare reform.

The commissioner shall report the findings of the study to the chairs of the education committees of the legislature by December 1, 1996. The report must contain recommendations for funding of adult basic education and for consolidation or coordination of adult education programming.

Sec. 33. [SPECIAL COMMUNITY SERVICE LEVY.]

In addition to other levies it is authorized to make each year, independent school district No. 2190, Yellow Medicine East, may levy on the property in the former school district No. 892, Clarkfield, for the costs of operating the district-owned swimming pool in Clarkfield. The proceeds of this levy must be deposited in the district's community service fund. The levy may not exceed the net actual cost operation of the pool in the previous year. Net actual costs are defined as operating costs less operating revenues.

Sec. 34. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.] The sums indicated in this section are appropriated from the general fund to the commissioner of children, families, and learning for the fiscal years designated.

Subd. 2. [YOUTH ENRICHMENT GRANTS.] For youth enrichment grants:

$5,000,000 ..... 1996

The commissioner may use up to five percent of this appropriation to provide technical assistance to community organizations.

The commissioner may use up to 20 percent of this appropriation for grants to neighborhoods outside of Minneapolis and St. Paul that meet the criteria established by the commissioner under section 30.

Of the amount for St. Paul, the commissioner may make a grant to independent school district No. 625 for operating and start-up costs of community-based charter schools sponsored by the district.

This appropriation is available until June 30, 1997.

Subd. 3. [DISCIPLINE.] For grants to implement constructive school discipline policies:

$300,000.....1997

Grant recipients may expend the grant proceeds over a three-year period. Of this amount, up to $20,000 is for evaluation under section 31, subdivision 6.

Subd. 4. [COMMUNITY-BASED CHARTER SCHOOL GRANT.] For a grant for community-based charter schools located in independent school district No. 625, St. Paul:

$300,000.....1997

The commissioner may establish criteria and any reporting or match requirements for the grant under this section.

Subd. 5. [AID FOR CONTRACTED ALTERNATIVE PROGRAMS.] For aid for contracted alternative programs under sections 22 and 23:

$330,000.....1997

The appropriation is 85 percent of the entitlement for fiscal year 1997.

Sec. 35. [EFFECTIVE DATE.]

Section 20 is effective June 30, 1996. Sections 29 and 32 are effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 124.239, subdivision 4, is amended to read:

Subd. 4. [LEVY PROHIBITED FOR CAPITAL PROJECTS.] A district that participates in the alternative facilities bonding and levy program is not eligible to levy and cannot receive aid for any capital projects under sections 124.83 and 124.84 for any capital projects funded under this section. A district may levy and receive aid for health and safety environmental management costs and health and safety regulatory, hazard assessment, record keeping, and maintenance programs as defined in section 124.494, subdivision 2, and approved by the commissioner.

Sec. 2. Minnesota Statutes 1995 Supplement, section 124.243, subdivision 2, is amended to read:

Subd. 2. [CAPITAL EXPENDITURE FACILITIES REVENUE.] (a) Capital expenditure facilities previous formula revenue for a district equals $128 times its actual pupil units for the school year.

(b) For fiscal years 1996, capital expenditure facilities revenue for a district equals $100 times the district's maintenance cost index times its actual pupil units for the school year.

(c) Notwithstanding paragraph (b), for fiscal year 1996, the revenue for each district equals 25 percent of the amount determined in paragraph (b) plus 75 percent of the previous formula revenue.

(d) Notwithstanding paragraph (b), for fiscal year 1997, the revenue for each district equals 50 percent of the amount determined in paragraph (b) plus 50 percent of the previous formula revenue.

(e) Notwithstanding paragraph (b), for fiscal year 1998, the revenue for each district equals 75 percent of the amount determined in paragraph (b) plus 25 percent of the previous formula revenue.

(f) The revenue in paragraph (b) for a district that operates a program under section 121.585, is increased by an amount equal to $15 times the number of actual pupil units at the site where the program is implemented.

Sec. 3. Minnesota Statutes 1995 Supplement, section 124.2445, is amended to read:

124.2445 [PURCHASE OF CERTAIN EQUIPMENT.]

The board of a school district may issue certificates of indebtedness or capital notes subject to the school district debt limits to purchase vehicles other than school buses, computers, telephone systems, cable equipment, photocopy and office equipment, technological equipment for instruction, and other capital equipment having an expected useful life at least as long as the terms of the certificates or notes. The certificates or notes must be payable in not more than five years and must be issued on the terms and in the manner determined by the board. The certificates or notes may be issued by resolution and without the requirement for an election. The certificates or notes are general obligation bonds for purposes of section 124.755. A tax levy must be made for the payment of the principal and interest on the certificates or notes, in accordance with section 475.61, as in the case of bonds. That The sum of the tax levy levies under this section and section 124.2455, for each year must not exceed the amount of the district's total operating capital revenue for the year the initial debt service levies are certified. The district's general education levy for each year must be reduced by the amount of the tax levies for debt service certified for each year for payment of the principal and interest on the certificates or notes as required by section 475.61.

Sec. 4. Minnesota Statutes 1995 Supplement, section 124.2455, is amended to read:

124.2455 [BONDS FOR CERTAIN CAPITAL FACILITIES.]

(a) In addition to other bonding authority, with approval of the commissioner, a school district may issue general obligation bonds for certain capital projects under this section. The bonds must be used only to make capital improvements including:

(1) under section 124.243, subdivision 6, capital expenditure facilities 124A.22, subdivision 11, total operating capital revenue uses specified in clauses (4), (6), (7), (8), (9), and (10);

(2) the cost of energy modifications;

(3) improving handicap accessibility to school buildings; and

(4) bringing school buildings into compliance with life and safety codes and fire codes.

(b) Before a district issues bonds under this subdivision, it must publish notice of the intended projects, the amount of the bond issue, and the total amount of district indebtedness.

(c) A bond issue tentatively authorized by the board under this subdivision becomes finally authorized unless a petition signed by more than 15 percent of the registered voters of the school district is filed with the school board within 30 days of the board's adoption of a resolution stating the board's intention to issue bonds. The percentage is to be determined with reference to the number of registered voters in the school district on the last day before the petition is filed with the school board. The petition must call for a referendum on the question of whether to issue the bonds for the projects under this section. The approval of 50 percent plus one of those voting on the question is required to pass a referendum authorized by this section.

(d) The bonds may be issued in a principal amount, that when combined with interest thereon, will be paid off with not more than 50 percent of current and anticipated revenue for capital facilities under this section or a successor section for the current year plus projected revenue not greater than that of the current year for the next ten years. Once finally authorized, the district must set aside the lesser of the amount necessary to make the principal and interest payments or 50 percent of the current year's revenue for capital facilities under this section or a successor section each year in a separate account until all principal and interest on the bonds is paid. The district must annually transfer this amount from its capital fund to the debt redemption fund. The bonds must be paid off within ten years of issuance. The bonds must be issued in compliance with chapter 475, except as otherwise provided in this section. A tax levy must be made for the payment of principal and interest on the bonds in accordance with section 475.61. The sum of the tax levies under this section and section 124.2455, for each year must not exceed the amount of the district's total operating capital revenue for the year the initial debt service levies are certified. The district's general education levy for each year must be reduced by the amount of the tax levies for debt service certified for each year for payment of the principal and interest on the bonds.

(e) Notwithstanding paragraph (d), bonds issued by a district within the first five years following voter approval of a combination according to section 122.243, subdivision 2, bonds may be issued in a principal amount, that when combined with interest thereon, will be paid off with not more than 50 percent of current and anticipated revenue for capital facilities under this section or a successive section for the current year plus projected revenue not greater than that of the current year for the next 20 years must be paid off within 20 years of issuance. All the other provisions and limitation of paragraph (d) apply.

Sec. 5. Minnesota Statutes 1994, section 124.91, subdivision 1, is amended to read:

Subdivision 1. [TO LEASE BUILDING OR LAND.] When a district finds it economically advantageous to rent or lease a building or land for any instructional purposes or for school storage or furniture repair, and it determines that the capital expenditure facilities revenues authorized under section sections 124.243 and 124A.22, subdivision 10, are insufficient for this purpose, it may apply to the commissioner for permission to make an additional capital expenditure levy for this purpose. An application for permission to levy under this subdivision must contain financial justification for the proposed levy, the terms and conditions of the proposed lease, and a description of the space to be leased and its proposed use. The criteria for approval of applications to levy under this subdivision must include: the reasonableness of the price, the appropriateness of the space to the proposed activity, the feasibility of transporting pupils to the leased building or land, conformity of the lease to the laws and rules of the state of Minnesota, and the appropriateness of the proposed lease to the space needs and the financial condition of the district. The commissioner must not authorize a levy under this subdivision in an amount greater than the cost to the district of renting or leasing a building or land for approved purposes. The proceeds of this levy must not be used for custodial or other maintenance services. A district may not levy under this subdivision for the purpose of leasing or renting a district-owned building to itself.

Sec. 6. Minnesota Statutes 1994, section 124.91, is amended by adding a subdivision to read:

Subd. 7. [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon application to, and approval by, the commissioner in accordance with the procedures and limits in subdivision 1, a district, as defined in this subdivision, may:

(1) purchase real or personal property under an installment contract or may lease real or personal property with an option to purchase under a lease purchase agreement, by which installment contract or lease purchase agreement title is kept by the seller or vendor or assigned to a third party as security for the purchase price, including interest, if any; and

(2) annually levy the amounts necessary to pay the district's obligations under the installment contract or lease purchase agreement.

(b) The obligation created by the installment contract or the lease purchase agreement must not be included in the calculation of net debt for purposes of section 475.53, and does not constitute debt under other law. An election is not required in connection with the execution of the installment contract or the lease purchase agreement.

(c) The proceeds of the levy authorized by this subdivision must not be used to acquire a facility to be primarily used for athletic or school administration purposes.

(d) For the purposes of this subdivision, "district" means:

(1) a school district required to have a comprehensive plan for the elimination of segregation whose plan has been determined by the commissioner to be in compliance with the state board of education rules relating to equality of educational opportunity and school desegregation; or

(2) a school district that participates in a joint program for interdistrict desegregation with a district defined in clause (1) if the facility acquired under this subdivision is to be primarily used for the joint program.

(e) Notwithstanding subdivision 1, the prohibition against a levy by a district to lease or rent a district-owned building to itself does not apply to levies otherwise authorized by this subdivision.

(f) For the purposes of this subdivision, any references in subdivision 1 to building or land shall include personal property.

Sec. 7. Minnesota Statutes 1994, section 124.95, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the eligible debt service revenue of a district is defined as follows:

(1) the amount needed to produce between five and six percent in excess of the amount needed to meet when due the principal and interest payments on the obligations of the district for eligible projects according to subdivision 2, including the amounts necessary for repayment of energy loans according to section 216C.37 or sections 298.292 to 298.298, debt service loans and capital loans, lease purchase payments under section 124.91, subdivisions 2 and 3, alternative facilities levies under section 124.239, subdivision 5, minus

(2) the amount of debt service excess levy reduction for that school year calculated according to the procedure established by the commissioner.

(b) The obligations in this paragraph are excluded from eligible debt service revenue:

(1) obligations under section 124.2445;

(2) the part of debt service principal and interest paid from the taconite environmental protection fund or northeast Minnesota economic protection trust;

(3) obligations issued under Laws 1991, chapter 265, article 5, section 18, as amended by Laws 1992, chapter 499, article 5, section 24; and

(4) obligations under section 124.2455.

(c) For purposes of this section, if a preexisting school district reorganized under section 122.22, 122.23, or 122.241 to 122.248 is solely responsible for retirement of the preexisting district's bonded indebtedness, capital loans or debt service loans, debt service equalization aid must be computed separately for each of the preexisting school districts.

Sec. 8. Minnesota Statutes 1995 Supplement, section 124.961, is amended to read:

124.961 [DEBT SERVICE APPROPRIATION.]

(a) $30,054,000 in fiscal year 1996, $27,370,000 $28,162,000 in fiscal year 1997, and $32,200,000 $33,948,000 in fiscal year 1998 and each year thereafter is appropriated from the general fund to the commissioner of children, families, and learning for payment of debt service equalization aid under section 124.95. The 1998 appropriation includes $4,830,000 $4,970,000 for 1997 and $27,370,000 $28,978,000 for 1998.

(b) The appropriations in paragraph (a) must be reduced by the amount of any money specifically appropriated for the same purpose in any year from any state fund.

Sec. 9. Minnesota Statutes 1994, section 128D.11, subdivision 3, is amended to read:

Subd. 3. [NO ELECTION.] Subject to the provisions of subdivisions 7 to 10, the school district may also by a two-thirds majority vote of all the members of its board of education and without any election by the voters of the district, issue and sell in each calendar year general obligation bonds of the district in an amount not to exceed one-half of one five and one-tenth per cent of the net tax capacity of the taxable property in the district (plus, for calendar years 1990 to 1996 2003, an amount not to exceed $7,500,000; with an additional provision that any amount of bonds so authorized for sale in a specific year and not sold can be carried forward and sold in the year immediately following); provided, however, that the board shall submit the list of projects and undertakings to be financed by a proposed issue to the city planning commission as provided in subdivision 10, paragraph (b).

Sec. 10. Minnesota Statutes 1994, section 128D.11, subdivision 5, is amended to read:

Subd. 5. [USE OF PROCEEDS.] The proceeds of the sale of the bonds shall be used only for the rehabilitating, remodeling, expanding, and equipping of existing school buildings and for the acquisition of sites, construction, and equipping of new school buildings, and for acquisition and betterment purposes, and no part of the proceeds shall be used for maintenance.

Sec. 11. Minnesota Statutes 1994, section 128D.11, subdivision 8, is amended to read:

Subd. 8. [NET DEBT LIMIT.] The school district shall not be subject to a net debt in excess of ten 102 percent of the net tax capacity of all taxable property therein.

Sec. 12. Laws 1995, First Special Session chapter 3, article 5, section 20, subdivision 5, is amended to read:

Subd. 5. [DEBT SERVICE AID.] For debt service aid according to Minnesota Statutes, section 124.95, subdivision 5:

$30,054,000..... 1996

$27,370,000 $28,162,000 ..... 1997

The 1996 appropriation includes $30,054,000 for 1996.

The 1997 appropriation includes $27,370,000 $28,162,000 for 1997. This appropriation is 85 percent of the aid entitlement for 1997.

Sec. 13. [136D.93] [REFUNDING BONDS.]

Sections 136D.281, subdivision 8, 136D.741, subdivision 8, and 136D.87, subdivision 8, do not apply to bonds issued solely for refunding purposes.

Sec. 14. Laws 1995, First Special Session chapter 3, article 5, section 20, subdivision 6, is amended to read:

Subd. 6. [PLANNING GRANT.] (a) For a grant to for independent school district Nos. 325, Lakefield; 328, Sioux Valley; 330, Heron Lake-Okabena; 513, Brewster; and 516, Round Lake acting as a joint powers agreement, and neighboring school districts to plan delivery of educational services:

$40,000 ..... 1996

The grant is may also be used to cover costs associated with planning for facility needs for a combined district. The facilities must provide for the location of a significant number of noneducational student and community service programs within the facility students served by these districts. The joint powers group districts must consult with neighboring districts including independent school district Nos. 324, Jackson; 177, Windom; and 518, Worthington, and include facility needs and availability in those districts in the group's planning.

(b) A portion of the appropriation must be used to conduct an independent survey of parents as to their preference for a school of attendance for their children if a single high school is located within this group of districts. The survey of attendance preferences must include the single high school and high schools in neighboring districts.

(c) This appropriation is available until June 30, 1997.

Sec. 15. Laws 1995, First Special Session chapter 3, article 5, section 20, subdivision 7, is amended to read:

Subd. 7. [PRESTON-FOUNTAIN; HARMONY DISTRICT.] For a grant to the new school district comprised of independent school district No. 233, Preston-Fountain, and independent school district No. 228, Harmony:

$70,000 ..... 1996

$70,000.....1997

This grant These grants must be placed in the district's debt redemption fund. The department must reduce the new district debt service levy levies by this amount these amounts.

Debt service equalization aid for fiscal year 1997 shall not be reduced as a result of the grant.

Sec. 16. [APPROVAL FOR DEBT SERVICE EQUALIZATION AID: ROYALTON.]

Notwithstanding Minnesota Statutes, section 124.95, subdivision 2, debt service levy attributable to bonds authorized at an election conducted in 1995 by independent school district No. 485, Royalton, qualifies for debt service equalization aid.

Sec. 17. [HEALTH AND SAFETY REVENUE; HIBBING.]

Notwithstanding Minnesota Statutes, section 124.83, subdivision 6, independent school district No. 701, Hibbing, that has a high school building on the National Historic Register, may use health and safety revenue for the construction of a stair tower with classroom space but only to the extent the revenue is substituted for other expenditures required under orders from the fire marshal.

Sec. 18. [LEVY AUTHORITY.]

Subdivision 1. [DELAVAN.] For property taxes payable in 1997 only, independent school district No. 218, Delavan, or its successor district, may levy up to $97,000 on the property in independent school district No. 218. This levy may be made only if independent school district No. 218 has voted to consolidate with independent school district No. 2148, Blue Earth. Revenue received according to this subdivision must be used for capital or maintenance purposes for facilities in independent school district No. 218.

Subd. 2. [ELMORE.] For property taxes payable in 1997 only, independent school district No. 219, Elmore, or its successor district, may levy up to $116,000 on the property in independent school district No. 219. This levy may be made only if independent school district No. 219 has voted to consolidate with independent school district No. 2148, Blue Earth. Revenue received according to this subdivision must be used for capital or maintenance purposes for facilities in independent school district No. 219.

Subd. 3. [BLUE EARTH.] For property taxes payable in 1997 only, independent school district No. 2148, Blue Earth, or its successor district, may levy up to $58,000 on the property in independent school district No. 2148. This levy may be made only if independent school district No. 2148 has voted to consolidate with independent school districts Nos. 218, Delavan, and 219, Elmore. Revenue received according to this subdivision must be used for capital or maintenance purposes for facilities in independent school district No. 2148.

Subd. 4. [NO REFERENDUM LEVY.] Districts making a levy according to this section may not make a levy according to Minnesota Statutes, section 124A.03.

Sec. 19. [NORTH BRANCH LEASE LEVY.]

Notwithstanding the instructional purposes limitation of Minnesota Statutes, section 124.91, subdivision 1, independent school district No. 138, North Branch, may apply to the commissioner of children, families, and learning to make an additional capital levy under Minnesota Statutes, section 124.91, subdivision 1, to rent or lease a building or land for administrative purposes. The levy may not exceed the amount necessary to obtain space similar in size and quality to the office space vacated for instructional purposes.

Sec. 20. [SCHOOL DISTRICTS; BONDS.]

Subdivision 1. [AUTHORIZATION.] Independent school district No. 316, Greenway-Coleraine, may issue bonds in an aggregate principal amount not exceeding $500,000; and independent school district No. 696, Ely, may issue bonds in an aggregate amount not exceeding $1,000,000; and independent school district No. 701, Hibbing, may issue bonds in an aggregate principal amount not exceeding $2,200,000; and independent school district No. 706, Virginia, may issue bonds in an aggregate principal amount not exceeding $6,000,000; and independent school district No. 2142, St. Louis county, may issue bonds in an aggregate principal amount not exceeding $3,000,000; and independent school district No. 2154, Eveleth-Gilbert, may issue bonds in an aggregate principal amount not exceeding $3,600,000; and independent school district No. 2711, Mesabi East, may issue bonds in an aggregate principal amount not exceeding $800,000 in addition to any bonds already issued or authorized, to provide funds to design, construct, equip, furnish, remodel, rehabilitate, and acquire land for school facilities and buildings, or abate, remove, and dispose of asbestos, polychlorinated biphenyls or petroleum as defined in Minnesota Statutes, section 115C.02, and make repairs related to the abatement, removal, or disposal of these substances. They may spend the proceeds of the bond sale for those purposes and any architect, engineer, and legal fees incidental to those purposes or the sale. The bond shall be authorized, issued, sold, executed, and delivered in the manner provided by Minnesota Statutes, chapter 475, including submission of the proposition to the electors under Minnesota Statutes, section 475.58. After authorization by the electors under Minnesota Statutes, section 475.58, a resolution of the board levying taxes for the payment of bonds and interest on them and pledging the proceeds of the levies for the payment of the bonds and interest on them shall be deemed to be in compliance with the provisions of Minnesota Statutes, chapter 475, with respect to the levying of taxes for their payment.

Subd. 2. [APPROPRIATION.] There is annually appropriated from the distribution of taconite production tax revenues to the taconite environmental protection fund pursuant to Minnesota Statutes, section 298.28, subdivision 11, and to the northeast Minnesota economic protection trust pursuant to section 298.28, subdivisions 9 and 11, in equal shares, an amount sufficient to pay when due 80 percent of the principal and interest on the bonds issued pursuant to subdivision 1. If the annual distribution to the northeast Minnesota economic protection trust is insufficient to pay its share after fulfilling any obligations of the trust under section 298.225 or 298.293, the deficiency shall be appropriated from the taconite environmental protection fund.

Subd. 3. [DISTRICT OBLIGATIONS.] Bonds issued under authority of this section shall be the general obligations of the school district, for which its full faith and credit and unlimited taxing powers shall be pledged. If there are any deficiencies in the amount received pursuant to subdivision 2, they shall be made good by general levies, not subject to limit, on all taxable properties in the district in accordance with Minnesota Statutes, section 475.64. If any deficiency levies are necessary, the school board may effect a temporary loan or loans on certificates of indebtedness issued in anticipation of them to meet payments of principal or interest on the bonds due or about to become due.

Subd. 4. [DISTRICT LEVY.] The school board shall by resolution levy on all property in the school district subject to the general ad valorem school tax levies, and not subject to taxation under Minnesota Statutes, sections 298.23 to 298.28, a direct annual ad valorem tax for each year of the term of the bonds in amounts that, if collected in full, will produce the amounts needed to meet when due 20 percent of the principal and interest payments on the bonds. A copy of the resolution shall be filed, and the necessary taxes shall be extended, assessed, collected, and remitted in accordance with Minnesota Statutes, section 475.61.

Subd. 5. [LEVY LIMITATIONS.] Taxes levied pursuant to this section shall be disregarded in the calculation of any other tax levies or limits on tax levies provided by other law.

Subd. 6. [BONDING LIMITATIONS.] Bonds may be issued under authority of this section notwithstanding any limitations upon the indebtedness of a district, and their amounts shall not be included in computing the indebtedness of a district for any purpose, including the issuance of subsequent bonds and the incurring of subsequent indebtedness.

Subd 7. [TERMINATION OF APPROPRIATION.] The appropriation authorized in subdivision 2 shall terminate upon payment or maturity of the last of those bonds.

Subd. 8. [BOND ISSUE REQUIREMENT.] No bonds may be issued under this section after February 28, 1998, unless they are issued under a contract in effect on or before February 28, 1998.

Subd. 9. [LOCAL APPROVAL.] This section is effective for independent school district No. 316 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 696 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 701 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 706 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 2142 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 2154 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3; and for independent school district No. 2711 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3.

Sec. 21. [COOK COUNTY SCHOOL DISTRICT BONDS.]

Subdivision 1. [AUTHORIZATION.] Independent school district No. 166, Cook county, may issue bonds in an aggregate principal amount not exceeding $9,240,000.

Subd. 2. [USES; PROCESS.] The bonds authorized under subdivision 1 may be issued in addition to any bonds already issued or authorized. The proceeds of the bonds shall be used to provide funds to design, construct, equip, furnish, remodel, rehabilitate, and acquire land for school facilities and buildings and to pay any architect, engineer and legal fees incidental to those purposes or to the sale of bonds. Except as permitted by this section, the bonds shall be authorized, issued, sold, executed, and delivered in the manner provided by Minnesota Statutes, chapter 475. A referendum on the question of issuing the bonds authorized under subdivision 1 is required. A resolution of the board levying taxes for the payment of the bonds and interest on them shall be deemed to be in compliance with the provisions of Minnesota Statutes, chapter 475 with respect to the levying of taxes for their payment.

Subd. 3. [APPROPRIATION.] There is annually appropriated from the distribution of taconite production tax revenues to the taconite environmental protection fund pursuant to Minnesota Statutes, section 298.28, subdivision 11, and to the northeast Minnesota economic protection trust pursuant to Minnesota Statutes, section 298.28, subdivisions 9 and 11, in equal shares, an amount sufficient to pay when due 70 percent of the principal and interest on the bonds issued under subdivision 1. If the annual distribution to the northeast Minnesota economic protection trust is insufficient to pay its share after fulfilling any obligations of the trust under Minnesota Statutes, section 298.225 or 298.293, the deficiency shall be appropriated from the taconite environmental protection fund.

Subd. 4. [DISTRICT OBLIGATIONS.] Bonds issued under authority of this section shall be the general obligations of the school district, for which its full faith and credit and unlimited taxing powers shall be pledged. If there are any deficiencies in the amount received pursuant to subdivision 3, they shall be satisfied by general levies, not subject to limit, on all taxable properties in the district in accordance with Minnesota Statutes, section 475.74. If any deficiency levies are necessary, the school board may effect a temporary loan or loans on certificates of indebtedness issued in anticipation of them to meet payments of principal or interest on the bonds due or about to become due.

Subd. 5. [DISTRICT LEVY.] The school board of the school district authorized to issue bonds under subdivision 1 shall by resolution levy on all property in the school district subject to the general ad valorem school tax levies, and not subject to taxation under Minnesota Statutes, sections 298.23 to 298.28, a direct annual ad valorem tax for each year of the term of the bonds in amounts that, if collected in full, will produce the amounts needed to meet when due 30 percent of the principal and interest payments on the bonds. A copy of the resolution shall be filed, and the necessary taxes shall be extended, assessed, collected, and remitted in accordance with Minnesota Statutes, section 475.61.

Subd. 6. [LEVY LIMITATIONS.] Taxes levied pursuant to this section shall be disregarded in the calculation of any other tax levies or limits on tax levies provided by other law.

Subd. 7. [BONDING LIMITATIONS.] Bonds may be issued under authority of this section notwithstanding any limitations upon the indebtedness of a district, and their amounts shall not be included in computing the indebtedness of a district for any purpose, including the issuance of subsequent bonds and the incurring of subsequent indebtedness.

Subd. 8. [TERMINATION OF APPROPRIATION.] The appropriation authorized in subdivision 3 shall terminate upon payment or maturity of the last of the bonds issued under this section.

Subd. 9. [BOND ISSUE REQUIREMENT.] No bonds may be issued under this section after February 28, 1998, unless they are issued under a contract in effect on or before February 28, 1998.

Subd. 10. [LOCAL APPROVAL.] This section is effective for independent school district No. 166 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3.

Sec. 22. [GRAND RAPIDS SCHOOL DISTRICT BONDS.]

Subdivision 1. [AUTHORIZATION.] Independent school district No. 318, Grand Rapids, may issue bonds in an aggregate principal amount not exceeding $5,600,000, in addition to any bonds already issued or authorized other than bonds authorized in Laws 1992, chapter 499, article 5, section 29, but not issued by February 15, 1996, to provide funds to design, construct, equip, furnish, remodel, rehabilitate, and acquire land for school facilities and buildings. The school district may not issue any of the bonds authorized in this subdivision unless the district expends at least $100,000 of the proceeds of the bonds for capital improvements for the industrial technology program at Big Fork. It may spend the proceeds of the bond sale for those purposes and any architects', engineers', and legal fees incidental to those purposes or the sale. Except as permitted by this section, the bonds shall be authorized, issued, sold, executed, and delivered in the manner provided by Minnesota Statutes, chapter 475. A resolution of the board levying taxes for the payment of the bonds and interest on them as authorized by this section and pledging the proceeds of the levies for the payment of the bonds and interest on them shall be deemed to be in compliance with the provisions of Minnesota Statutes, chapter 475, with respect to the levying of taxes for their payment.

Subd. 2. [APPROPRIATION.] There is annually appropriated from the distribution of taconite production tax revenues to the taconite environmental protection fund pursuant to Minnesota Statutes, section 298.28, subdivision 11, and to the northeast Minnesota economic protection trust pursuant to Minnesota Statutes, section 298.28, subdivisions 9 and 11, in equal shares, an amount sufficient to pay when due 80 percent of the principal and interest on the bonds issued pursuant to subdivision 1. If the annual distribution to the northeast Minnesota economic protection trust is insufficient to pay its share after fulfilling any obligations of the trust under Minnesota Statutes, section 298.225 or 298.293, the deficiency shall be appropriated from the taconite environmental protection fund.

Subd. 3. [DISTRICT OBLIGATIONS.] Bonds issued under authority of this section shall be the general obligations of the school district, for which its full faith and credit and unlimited taxing powers shall be pledged. If there are any deficiencies in the amount received pursuant to subdivision 2, they shall be made good by general levies, not subject to limit, on all taxable properties in the district in accordance with Minnesota Statutes, section 475.64. If any deficiency levies are necessary, the school board may effect a temporary loan or loans on certificates of indebtedness issued in anticipation of them to meet payments of principal or interest on the bonds due or about to become due.

Subd. 4. [DISTRICT LEVY.] The school board shall by resolution levy on all property in the school district subject to the general ad valorem school tax levies, and not subject to taxation under Minnesota Statutes, sections 298.23 to 298.28, a direct annual ad valorem tax for each year of the term of the bonds in amounts that, if collected in full, will produce the amounts needed to meet when due 20 percent of the principal and interest payments on the bonds. A copy of the resolution shall be filed, and the necessary taxes shall be extended, assessed, collected, and remitted in accordance with Minnesota Statutes, section 475.61.

Subd. 5. [LEVY LIMITATIONS.] Taxes levied pursuant to this section shall be disregarded in the calculation of any other tax levies or limits on tax levies provided by other law.

Subd. 6. [BONDING LIMITATIONS.] Bonds may be issued under authority of this section notwithstanding any limitations upon the indebtedness of a district, and their amounts shall not be included in computing the indebtedness of a district for any purpose, including the issuance of subsequent bonds and the incurring of subsequent indebtedness.

Subd. 7. [TERMINATION OF APPROPRIATION.] The appropriation authorized in subdivision 2 terminates upon payment or maturity of the last of those bonds.

Subd. 8. [BOND ISSUE REQUIREMENT.] No bonds may be issued under this section after February 28, 1998, unless they are issued under a contract in effect on or before February 28, 1998.

Subd. 9. [LOCAL APPROVAL.] This section is effective for independent school district No. 318 the day after its governing body complies with Minnesota Statutes, section 645.021, subdivision 3.

Sec. 23. [COOK COUNTY CAPITAL FACILITIES BONDS.]

Notwithstanding Minnesota Statutes 1995 Supplement, section 124.2455, paragraph (d), bonds issued by independent school district No. 166, Cook county, pursuant to Minnesota Statutes, section 124.2455, must be paid off within 20 years of issuance. All the other provisions and limitations of Minnesota Statutes 1995 Supplement, section 124.2455, paragraph (d) apply.

Sec. 24. [BONDS PAID FROM TACONITE PRODUCTION TAX REVENUES.]

Subdivision 1. [REFUNDING BONDS.] The appropriation of funds from the distribution of taconite production tax revenues to the taconite environmental protection tax fund and the northeast Minnesota economic protection fund made by Laws 1988, chapter 718, article 7, sections 62 and 63, Laws 1989, chapter 329, article 5, section 20, Laws 1990, chapter 604, article 8, section 13, Laws 1992, chapter 499, article 5, section 29, and by sections 18 to 20, shall continue to apply to bonds issued under Minnesota Statutes, chapter 475, to refund bonds originally issued pursuant to those chapters.

Subd. 2. [LOCAL PAYMENTS.] School districts that are required in Laws 1988, chapter 718, article 7, sections 62 and 63, Laws 1989, chapter 329, article 5, section 20, Laws 1990, chapter 604, article 8, section 13, Laws 1992, chapter 499, article 5, section 29, and by sections 18 to 20, to impose levies to pay debt service on the bonds issued under those provisions to the extent the principal and interest on the bonds is not paid by distributions from the taconite environmental protection fund and the northeast Minnesota economic protection trust, may pay their portion of the principal and interest from any funds available to them. To the extent a school district uses funds other than the proceeds of a property tax levy to pay its share of the principal and interest on the bonds, the requirement to impose a property tax to pay the local share does not apply to the school district.

Sec. 25. [TAXPAYER NOTIFICATION.]

Subdivision 1. [APPLICABILITY.] This section applies only to newly authorized bonding authority granted under section 128D.11, subdivision 3, and applies only to such bonds issued for calendar years 1997 to 2003.

Subd. 2. [NOTICE.] (a) A school board must prepare a notice of the public meeting on the proposed sale of all or any of the bonds and mail the notice to each postal patron residing within the school district. The notice must be mailed at least 15 days but not more than 30 days before the meeting. Notice of the meeting must also be posted in the administrative office of the school district and must be published twice during the 14 days before the meeting in the official newspaper of the city in which the school district is located.

(b) The notice must contain the following information:

(1) the proposed dollar amount of bonds to be issued;

(2) the dollar amount of the levy increase necessary to pay the principal and interest on the newly authorized bonds;

(3) the estimated levy amount and net tax capacity rate necessary to make the debt service payments on any existing outstanding debt;

(4) the projected effects on individual property types; and

(5) the required levy and principal and interest on all outstanding bonds in addition to the bonds proposed under clause (1).

(c) To comply with paragraph (b), clause (4), the notice must show the projected annual dollar increase and net tax capacity rate increase for a representative range of residential homestead, residential nonhomestead, apartments, and commercial-industrial properties located within each state senate district in the school district.

Subd. 3. [BOND AUTHORIZATION.] A school board may vote to issue bonds for calendar years 1997 to 2003 only after complying with the requirements of subdivision 2.

Sec. 26. [ELIGIBLE DEBT SERVICE REVENUE; DULUTH.]

Notwithstanding Minnesota Statutes, section 124.95, subdivision 1, paragraph (a), the eligible debt service revenue for independent school district No. 709, Duluth, shall not be reduced below the amount of the alternative facilities levy under Minnesota Statutes, section 124.239, subdivision 5, paragraph (b), as a result of debt service excess attributable to transfers from the health and safety account to the debt redemption fund approved by the commissioner of children, families, and learning in 1993.

Sec. 27. [SLEEPY EYE.]

In addition to other levies, for taxes payable in 1997 through 2001, independent school district No. 84, Sleepy Eye, may levy a total cumulative amount of up to $66,000 for the costs associated with converting its heating system from district heat to a boiler system.

Sec. 28. [SPECIAL LEVY; KASSON-MANTORVILLE.]

Independent school district No. 204, Kasson-Mantorville, may levy an amount not to exceed $210,000. This levy may be spread over 15 years.

Sec. 29. [EFFECTIVE DATE.]

(a) Sections 6, 13, 14, 17, and 24 are effective the day following final enactment.

(b) Sections 8, 12, and 16 are effective the day following final enactment and apply to debt service aid payments for fiscal year 1997, and thereafter.

(c) Sections 9 and 11 are effective retroactive to August 1, 1994.

(d) Sections 1, 7, 19, and 26 are effective for revenue for fiscal year 1998 and thereafter.

Section 1. Minnesota Statutes 1994, section 123.35, subdivision 19a, is amended to read:

Subd. 19a. [LIMITATION ON PARTICIPATION AND FINANCIAL SUPPORT.] (a) No school district shall be required by any type of formal or informal agreement except an agreement to provide building space according to paragraph (f), including a joint powers agreement, or membership in any cooperative unit defined in subdivision 19b, paragraph (d), to participate in or provide financial support for the purposes of the agreement for a time period in excess of one fiscal year, or the time period set forth in this subdivision. Any agreement, part of an agreement, or other type of requirement to the contrary is void.

(b) This subdivision shall not affect the continued liability of a school district for its share of bonded indebtedness or other debt incurred as a result of any agreement before July 1, 1993. The school district is liable only until the obligation or debt is discharged and only according to the payment schedule in effect on July 1, 1993, except that the payment schedule may be altered for the purpose of restructuring debt or refunding bonds outstanding on July 1, 1993, if the annual payments of the school district are not increased and if the total obligation of the school district for its share of outstanding bonds or other debt is not increased.

(c) To cease participating in or providing financial support for any of the services or activities relating to the agreement or to terminate participation in the agreement, the school board shall adopt a resolution and notify other parties to the agreement of its decision on or before February 1 of any year. The cessation or withdrawal shall be effective June 30 of the same year except that for a member of an education district organized under sections 122.91 to 122.95 or an intermediate district organized under chapter 136D, cessation or withdrawal shall be effective June 30 of the following fiscal year. At the option of the school board, cessation or withdrawal may be effective June 30 of the following fiscal year for a district participating in any type of agreement.

(d) Before issuing bonds or incurring other debt, the governing body responsible for implementing the agreement shall adopt a resolution proposing to issue bonds or incur other debt and the proposed financial effect of the bonds or other debt upon each participating district. The resolution shall be adopted within a time sufficient to allow the school board to adopt a resolution within the time permitted by this paragraph and to comply with the statutory deadlines set forth in sections 122.895, 125.12, and 125.17. The governing body responsible for implementing the agreement shall notify each participating school board of the contents of the resolution. Within 120 days of receiving the resolution of the governing body, the school board of the participating district shall adopt a resolution stating:

(1) its concurrence with issuing bonds or incurring other debt;

(2) its intention to cease participating in or providing financial support for the service or activity related to the bonds or other debt; or

(3) its intention to terminate participation in the agreement.

A school board adopting a resolution according to clause (1) is liable for its share of bonded indebtedness or other debt as proposed by the governing body implementing the agreement. A school board adopting a resolution according to clause (2) is not liable for the bonded indebtedness or other debt, as proposed by the governing body, related to the services or activities in which the district ceases participating or providing financial support. A school board adopting a resolution according to clause (3) is not liable for the bonded indebtedness or other debt proposed by the governing body implementing the agreement.

(e) After July 1, 1993, a district is liable according to paragraph (d) for its share of bonded indebtedness or other debt incurred by the governing body implementing the agreement to the extent that the bonds or other debt are directly related to the services or activities in which the district participates or for which the district provides financial support. The district has continued liability only until the obligation or debt is discharged and only according to the payment schedule in effect at the time the governing body implementing the agreement provides notice to the school board, except that the payment schedule may be altered for the purpose of refunding the outstanding bonds or restructuring other debt if the annual payments of the district are not increased and if the total obligation of the district for the outstanding bonds or other debt is not increased.

(f) A school district that is a member of a cooperative unit as defined in subdivision 19b, paragraph (d), may obligate itself to participate in and provide financial support for an agreement with a cooperative unit to provide school building space for a term not to exceed two years with an option on the part of the district to renew for an additional two years.

Sec. 2. Minnesota Statutes 1994, section 123.3514, subdivision 9, is amended to read:

Subd. 9. [EXCEPTION; INTERMEDIATE DISTRICTS.] A secondary pupil who is a resident of a member district of an intermediate district, as defined in section 136C.02, subdivision 7 136D.01, may not enroll in that intermediate district's vocational program as a post-secondary pupil under this section when the intermediate district operates a secondary program at a college facility and secondary students have access to the post-secondary curriculum and receive high school and college credit for successfully completing the program.

Sec. 3. Laws 1995, First Special Session chapter 3, article 6, section 17, subdivision 2, is amended to read:

Subd. 2. [SINGLE BOARD.] The districts shall provide in the enhanced pairing agreement that the governance of the districts will be by the combined membership of the separate boards acting as a single board for purposes of quorum and passing resolutions. A quorum must include a minimum of one member from each of the separate boards. The membership of the separate boards may be reduced to five four members in a manner consistent with Minnesota Statutes, section 123.33, subdivision 1. The actions reserved for the separate boards shall be ratification of amendments to the agreement, serving a notice of withdrawal from the agreement, and other items reserved for the separate boards as defined in the agreement.

Sec. 4. Laws 1995, First Special Session chapter 3, article 6, section 17, subdivision 4, is amended to read:

Subd. 4. [FINANCIAL.] (a) Fiscal operations shall be merged under the enhanced pairing agreement, and the single board shall be the fiscal agent to meet reporting requirements. The department of education children, families, and learning shall assign a single identification number to apply to the districts subject to the agreement. Aid entitlements and levy limitations shall be the sum of the amounts computed separately for each of the districts participating in the enhanced pairing agreement. Levies shall be made jointly except for levies under Minnesota Statutes, sections 124A.03 and 124.97 by the single board and shall be spread on all taxable property in the districts participating in the enhanced pairing agreement. Districts subject to the agreement shall be considered a single independent school district for purposes of fees or dues assessments.

(b) Notwithstanding paragraph (a), the single board may spread a levy under Minnesota Statutes, section 124A.03, approved before January 1, 1996, and levies under sections 124.2714, 124.83, 124.84, and 124.97, on the property which is taxable in each school district participating in the enhanced pairing agreement according to the separate levy limitations computed for each district. The single board shall certify to the county auditor and the department of children, families, and learning the amount of the levy to be spread on the taxable property in each district according to this paragraph.

(c) Title to all the unattached property and all cash reserves of any district subject to the enhanced pairing agreement shall become the property of the single board unless otherwise provided for in the agreement. All legally valid and enforceable claims and contract obligations pass to the single board. For purposes of litigation, the districts subject to the agreement may be recognized singly or jointly. If the agreement dissolves or a board withdraws from the agreement, the commissioner shall divide assets and liabilities of the single board proportionately based on the weighted average daily membership over the last three years.

Sec. 5. Laws 1995, First Special Session chapter 3, article 6, section 17, is amended by adding a subdivision to read:

Subd. 4a. [REFERENDUM REVENUE.] (a) The single board shall submit the question of authorizing referendum revenue under Minnesota Statutes, section 124A.03, to the voters of the districts subject to the agreement. A majority of those voting in the affirmative on the question is sufficient to authorize the referendum revenue. The single board must certify the vote of the election.

(b) As of the effective date of the dissolution of the enhanced pairing agreement, the authorization for all referendum revenues under Minnesota Statutes, section 124A.03, previously approved by the voters of the districts subject to the agreement is canceled.

Sec. 6. Laws 1995, First Special Session chapter 3, article 6, section 17, is amended by adding a subdivision to read:

Subd. 4b. [REFERENDUM; DEBT.] The single board shall submit the question of authorizing bonded debt to the voters of the districts subject to the agreement. The question submitted shall state the total amount of funding needed from all sources. A majority of those voting in the affirmative on the question is sufficient to authorize the bonded debt. The single board must certify the vote of the election and authorize the school boards to issue the bonds on public sale in accordance with Minnesota Statutes, chapter 475.

Sec. 7. Laws 1995, First Special Session chapter 3, article 6, section 17, is amended by adding a subdivision to read:

Subd. 4c. [DATA REPORTING.] (a) For purposes of computing aid entitlements and levy limitations for the school districts participating in the enhanced pairing agreement, the commissioner must allocate combined financial data among the participating school districts based on the number of actual pupil units in each school district in the year for which financial data are allocated.

(b) Notwithstanding paragraph (a), if requested by the single board, the commissioner may allocate financial data among participating school districts based on estimates of actual expenditures for projects or services by school district.

Sec. 8. [SCHOOL BOARD ELECTION.]

Subdivision 1. [SPECIFYING AN ELECTION PROCESS.] Notwithstanding any language to the contrary in Minnesota Statutes, chapter 205A, or other statutory language to the contrary governing school district consolidation and board formation, the election of school board members for a newly consolidated district comprised of independent school district No. 437, Argyle, and independent school district No. 443, Stephen, shall be described in this section.

Subd. 2. [1997 GENERAL ELECTION.] At the 1997 general election, the terms of four members of the transition board shall expire and two school board members shall be elected to four-year terms. One member shall be elected from the area of the former independent school district No. 437, Argyle, and one shall be elected from the area of the former independent school district No. 443, Stephen.

Subd. 3. [1999 GENERAL ELECTION.] At the 1999 general election, the terms of six members of the transition board shall expire and three school board members shall be elected to four-year terms. One member shall be elected from the former independent school district No. 437, Argyle, and one shall be elected from the area of the former independent school district No. 443, Stephen. One member shall be elected at large for a four-year term from the newly created district.

Subd. 4. [2001 GENERAL ELECTION.] At the 2001 general election, the terms of the two school board members elected in 1997 to four-year terms shall expire and two school board members shall be elected. One member shall be elected from the area of the former independent school district No. 437, Argyle, and one shall be elected from the area of the former independent school district No. 443, Stephen. Also at the 2001 general election, the terms of the two school board members elected in 1996 to five-year terms shall expire and one school board member shall be elected at large to a four-year term from the newly created district.

Subd. 5. [2003 GENERAL ELECTION AND THEREAFTER.] At the 2003 general election and thereafter, all school board members whose terms expire shall be elected at large to four-year terms from the newly created district.

Subd. 6. [BOARD SEATS; APPLICABLE PROVISIONS.] (a) The transitional board shall determine which board seats expire at each election.

(b) At the end of the transition period, the statutory provisions governing board formation and election and Minnesota Statutes, chapter 205A, shall apply.

Sec. 9. [LEVY CALCULATION.]

Levy calculations under section 4 are effective for taxes payable in 1996 and later. The commissioner of the department of children, families, and learning shall adjust levy calculations as necessary to be consistent with section 2.

Sec. 10. [APPROPRIATION.]

Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.] The sum indicated in this section is appropriated from the general fund to the department of children, families, and learning for the fiscal year designated.

Subd. 2. [CROW RIVER AND MEEKER AND WRIGHT SPECIAL EDUCATION COOPERATIVES.] For a grant to special education cooperatives No. 52-937, Crow River and No. 52-938, Meeker and Wright, for handicapped accessibility improvements to conform to the Americans with Disabilities Act and for code compliance in school building space for the students served by the cooperatives.

$ 100,000 ..... 1997

Sec. 11. [EFFECTIVE DATE.]

Section 9 is effective the day following final enactment.

Section 1. Minnesota Statutes 1995 Supplement, section 121.11, subdivision 7c, is amended to read:

Subd. 7c. [RESULTS-ORIENTED GRADUATION RULE.] (a) The legislature is committed to establishing a rigorous, results-oriented graduation rule for Minnesota's public school students. To that end, the state board shall use its rulemaking authority under subdivision 7b to adopt a statewide, results-oriented graduation rule to be implemented starting with students beginning ninth grade in the 1996-1997 school year. The board shall not prescribe in rule or otherwise the delivery system, form of instruction, or a single statewide form of assessment that local sites must use to meet the requirements contained in this rule.

(b) Assessments used to measure knowledge required by all students for graduation must be developed according to the most current version of professional standards for educational testing. To successfully accomplish paragraph (a), the state board shall set in rule high academic standards for all students. The standards must contain the foundational skills in the three core curricular areas of reading, writing, and mathematics while meeting requirements for high school graduation. The standards must also provide an opportunity for students to excel by meeting higher academic standards through a profile of learning that uses curricular requirements to allow students to expand their knowledge and skills beyond the foundational skills. All state board actions regarding the rule must be premised on the following:

(1) the rule is intended to raise academic expectations for students, teachers, and schools;

(2) any state action regarding the rule must evidence consideration of school district autonomy; and

(3) the department of children, families, and learning, with the assistance of school districts, must make available information about all state initiatives related to the rule to students and parents, teachers, and the general public in a timely format that is appropriate, comprehensive, and readily understandable.

(c) For purposes of adopting the rule, the state board, in consultation with the department, recognized psychometric experts in assessment, and other interested and knowledgeable educators, using the most current version of professional standards for educational testing, shall evaluate the alternative approaches to assessment.

(c) (d) The content of the graduation rule must differentiate between minimum competencies reflected in the basic requirements assessment and rigorous profile of learning standards. When fully implemented, the requirements for high school graduation in Minnesota, including must include both basic requirements and the required profile of learning,. The profile of learning must measure student performance using performance-based assessments compiled over time that integrate higher academic standards, higher order thinking skills, and application of knowledge from a variety of content areas. The profile of learning shall include a broad range of academic experience and accomplishment necessary to achieve the goal of preparing students to function effectively as purposeful thinkers, effective communicators, self-directed learners, productive group participants, and responsible citizens.

(d) (e) The state board shall periodically review and report on the assessment process and student achievement with the expectation of raising the standards and expanding high school graduation requirements.

(e) (f) The state board shall report in writing to the legislature annually by January 15 on its progress in developing and implementing the graduation requirements according to the requirements of this subdivision and section 123.97 until such time as all the graduation requirements are implemented.

Sec. 2. [121.1115] [SYSTEM ACCOUNTABILITY AND STATISTICAL ADJUSTMENTS.]

Subdivision 1. [EDUCATIONAL ACCOUNTABILITY AND PUBLIC REPORTING.] Consistent with the state board of education process to adopt a results-oriented graduation rule under section 121.11, subdivision 7c, the state board of education and the department of children, families, and learning, in consultation with education and other system stakeholders, shall establish a coordinated and comprehensive system of educational accountability and public reporting that promotes higher academic achievement.

Subd. 2. [STATISTICAL ADJUSTMENTS.] In developing policies and assessment processes to hold schools and school districts accountable for high levels of academic standards, including the profile of learning, the commissioner shall aggregate student data over time to report student performance levels measured at the school district, regional, or statewide level. When collecting and reporting the data, the commissioner shall: (1) acknowledge the impact of significant demographic factors such as residential instability, the number of single parent families, parents' level of education, and parents' income level on school outcomes; and (2) organize and report the data so that state and local policymakers can understand the educational implications of changes in districts' demographic profiles over time. Any report the commissioner disseminates containing summary data on student performance must integrate student performance and the demographic factors that strongly correlate with that performance.

Sec. 3. [123.97] [FINDINGS; IMPROVING INSTRUCTION AND CURRICULUM.]

The legislature finds that a process is needed to enable school boards and communities to decide matters related to planning, providing, and improving education instruction and curriculum in the context of the state's high school graduation standards. The process should help districts evaluate the impact of instruction and curriculum on students' abilities to meet graduation standards, use evaluation results to improve instruction and curriculum, and determine services that districts and other public education entities can provide collaboratively with institutions including families and private or public organizations and agencies. The legislature anticipates that a highly focused public education strategy will be an integral part of each district's review and improvement of instruction and curriculum.

Sec. 4. [123.972] [SCHOOL DISTRICT PROCESS.]

Subdivision 1. [DEFINITIONS.] For the purposes of sections 123.97 and 123.972, the following terms have the meanings given them.

(a) "Instruction" means methods of providing learning experiences that enables a student to meet graduation standards.

(b) "Curriculum" means written plans for providing students with learning experiences that lead to knowledge, skills, and positive attitudes.

Subd. 2. [ADOPTING POLICIES.] (a) A school board shall adopt annually a written policy that includes the following:

(1) district goals for instruction and curriculum;

(2) a process for evaluating each student's progress toward meeting graduation standards and identifying the strengths and weaknesses of instruction and curriculum affecting students' progress;

(3) a system for periodically reviewing all instruction and curriculum;

(4) a plan for improving instruction and curriculum; and

(5) an instruction plan that includes education effectiveness processes developed under section 121.608 and integrates instruction, curriculum, and technology.

Subd. 3. [INSTRUCTION AND CURRICULUM ADVISORY COMMITTEE.] Each school board shall establish an instruction and curriculum advisory committee to ensure active community participation in all phases of planning and improving the instruction and curriculum affecting state graduation standards. A district advisory committee, to the extent possible, shall reflect the diversity of the district and its learning sites, and shall include teachers, parents, support staff, pupils, and other community residents. The district may establish building teams as subcommittees of the district advisory committee under subdivision 4. The district advisory committee shall recommend to the school board districtwide education standards, assessments, and program evaluations. Learning sites may expand upon district evaluations of instruction, curriculum, assessments, or programs. Whenever possible, parents and other community residents shall comprise at least two-thirds of advisory committee members.

Subd. 4. [BUILDING TEAM.] A school may establish a building team to develop and implement an education effectiveness plan to improve instruction and curriculum. The team shall advise the board and the advisory committee about developing an instruction and curriculum improvement plan that aligns curriculum, assessment of student progress in meeting state graduation standards, and instruction.

Subd. 5. [REPORT.] (a) By October 1 of each year, the school board shall use standard statewide reporting procedures the commissioner develops and adopt a report that includes the following:

(1) student performance goals for meeting state graduation standards adopted for that year;

(2) results of local assessment data, and any additional test data;

(3) the annual school district improvement plans; and

(4) information about district and learning site progress in realizing previously adopted improvement plans.

(b) The school board shall publish the report in the local newspaper with the largest circulation in the district or by mail. The board shall make a copy of the report available to the public for inspection. The board shall send a copy of the report to the commissioner of children, families, and learning by October 15 of each year.

(c) The title of the report shall contain the name and number of the school district and read "Annual Report on Curriculum, Instruction, and Student Performance." The report must include at least the following information about advisory committee membership:

(1) the name of each committee member and the date when that member's term expires;

(2) the method and criteria the school board uses to select committee members; and

(3) the date by which a community resident must apply to next serve on the committee.

Subd. 6. [STUDENT EVALUATION.] The school board annually shall provide high school graduates or GED recipients who receive a diploma or its equivalent from the school district with an opportunity to report to the board on the following:

(1) the quality of district instruction, curriculum, and services;

(2) the quality of district delivery of instruction, curriculum, and services;

(3) the utility of district facilities; and

(4) the effectiveness of district administration.

Subd. 7. [PERIODIC REPORT.] Each school district shall periodically ask affected constituencies about their level of satisfaction with school. The district shall include the results of this evaluation in the report required under subdivision 5.

Subd. 8. [BIENNIAL EVALUATION; ASSESSMENT PROGRAM.] At least once every two years, the district report shall include an evaluation of the district testing programs, according to the following:

(1) written objectives of the assessment program;

(2) names of tests and grade levels tested;

(3) use of test results; and

(4) implementation of an assurance of mastery program.

Sec. 5. Minnesota Statutes 1995 Supplement, section 124.248, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION REVENUE.] General education revenue shall be paid to a charter school as though it were a school district. The general education revenue for each pupil unit is the state average general education revenue per pupil unit minus $170, calculated without compensatory revenue, transportation sparsity revenue, and the transportation portion of the transition revenue adjustment, plus compensatory revenue as though the school were a school district.

Sec. 6. Minnesota Statutes 1995 Supplement, section 124.248, subdivision 1a, is amended to read:

Subd. 1a. [TRANSPORTATION REVENUE.] Transportation revenue shall be paid to a charter school that provides transportation services according to section 120.064, subdivision 15, as though it were a school district according to this subdivision. Transportation aid shall equal transportation revenue.

(a) For the first two years that In addition to the revenue under subdivision 1, a charter school is providing transportation services, the regular transportation allowance for the charter school shall be equal to the regular transportation allowance for the school district in which the charter school is located. For the third year of transportation services and later fiscal years, the predicted base cost for the charter school shall be equal to the predicted base cost for the school district in which the charter school is located shall receive general education aid for each pupil unit equal to the sum of $170, plus the transportation sparsity allowance for the school district in which the charter school is located, plus the transportation transition allowance for the school district in which the charter school is located.

(b) For the first two years that a charter school is providing transportation services, the nonregular special programs transportation revenue equals the charter school's actual cost in the current school year for nonregular transportation services, minus the amount of regular transportation revenue attributable to FTE's in the handicapped category in the current school year for children with disabilities under section 124.223, subdivisions 4, 5, 7, and 8. For the third year of transportation services and later fiscal years, the nonregular special programs transportation revenue shall be computed according to section 124.225, subdivision 7d, paragraph (b) 14.

Sec. 7. Minnesota Statutes 1995 Supplement, section 124.248, subdivision 2, is amended to read:

Subd. 2. [CAPITAL EXPENDITURE EQUIPMENT USE OF TOTAL OPERATING CAPITAL REVENUE.] Capital expenditure equipment aid shall be paid to a charter school according to section 124.245, subdivision 6, as though it were a school district.

Capital expenditure equipment aid shall equal capital expenditure equipment revenue. Notwithstanding section 124.244 124A.22, subdivision 4 11, a charter school may use the total operating capital revenue for any purpose related to the school.

Sec. 8. Minnesota Statutes 1995 Supplement, section 124.248, subdivision 3, is amended to read:

Subd. 3. [SPECIAL EDUCATION AND LIMITED ENGLISH PROFICIENCY AID.] Special education aid shall be paid to a charter school according to section 124.32 sections 124.3201 and 124.3202, as though it were a school district. The charter school may charge tuition to the district of residence as provided in section 120.17, subdivision 4. Limited English proficiency programs aid shall be paid to a charter school according to section 124.273 as though it were a school district. The charter school shall allocate its special education levy equalization revenue to the resident districts of the pupils attending the charter school as though it were a cooperative, as provided in section 124.321, subdivision 2, paragraph (a), clauses (1) and (3). The districts of residence shall levy as though they were participating in a cooperative, as provided in section 124.321, subdivision 3.

Sec. 9. Minnesota Statutes 1994, section 124.311, subdivision 2, is amended to read:

Subd. 2. [ELIGIBLE DISTRICTS.] To be eligible to receive assurance of mastery revenue, a district must have a policy adopted according to section 126.67, subdivision 3a, that identifies the direct instructional services to be used to assure that individual pupils master the learner outcomes in communications and mathematics local process to review curriculum and instruction.

Sec. 10. Minnesota Statutes 1994, section 124.311, subdivision 3, is amended to read:

Subd. 3. [ELIGIBLE PUPILS.] A pupil is eligible to receive services provided with assurance of mastery revenue if the pupil has not demonstrated mastery of progress toward mastering learner outcomes in communications or mathematics, or both the required graduation standards, after receiving instruction that was designed to enable the pupil to master make progress toward mastering the learner outcomes required graduation standards in a regular classroom setting. To determine pupil eligibility, a district must use the learner outcomes and the evaluation a process, adopted by the school board under section 126.666, subdivision 1, paragraph (a), clauses (2) and (3) to review curriculum and instruction, for the subjects and at the grade level at which the district uses the revenue.

Sec. 11. Minnesota Statutes 1994, section 124.311, subdivision 7, is amended to read:

Subd. 7. [DISTRICT REPORT.] A district that receives assurance of mastery revenue shall include the following in the a report required by section 126.666, subdivision 4:

(a) (1) a summary of initial assessment results used to determine pupil eligibility to receive instructional services must be included. The summary must include:

(1) a description of the assessment device used;

(2) the number of pupils who were assessed; and

(3) the number of pupils who were determined to be eligible to receive services.;

(b) (2) a description of the services provided to eligible pupils must be included.; and

(c) (3) a summary of assessment results for eligible pupils obtained after providing the services must be included.

Sec. 12. Minnesota Statutes 1994, section 126.83, is amended to read:

126.83 [SECONDARY CREDIT FOR EIGHTH GRADE STUDENTS.]

A student in eighth grade who satisfactorily completes at least 120 hours of instruction in a high school course is eligible to shall receive secondary course credit and the credit shall count toward the student's graduation requirements. This section expires August 1, 1996.

Sec. 13. Laws 1995, First Special Session chapter 3, article 7, section 5, subdivision 4, is amended to read:

Subd. 4. [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY PILOT PROGRAM GRANTS.] For year-round school/extended week or day pilot program grants:

$1,800,000 ..... 1996

$500,000 is for a grant to independent school district No. 624, White Bear Lake.

$500,000 is for a grant to independent school district No. 833, South Washington county.

$100,000 is for a grant to independent school district No. 911, Cambridge.

$300,000 is for a grant to independent school district No. 625, St. Paul.

$400,000 is for grants to two or more rural school districts selected by the commissioner of education children, families, and learning.

This appropriation is available until June 30, 1997.

Sec. 14. [EFFECTIVE DATE.]

Section 13 is effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 123.932, subdivision 1b, is amended to read:

Subd. 1b. "Textbook" means any book or book substitute which a pupil uses as a text or text substitute in a particular class or program in the school regularly attended and a copy of which is expected to be available for the individual use of each pupil in this class or program, which book or book substitute or text or text substitute shall be limited to books, workbooks, or manuals, whether bound or in loose-leaf form, intended for use as a principal source of study material for a given class or a group of students. The term includes only such secular, neutral and nonideological textbooks as are available and are, used by, or of benefit to Minnesota public school pupils.

Sec. 2. Minnesota Statutes 1994, section 123.932, subdivision 1c, is amended to read:

Subd. 1c. "Standardized tests" means standardized tests and scoring services which are provided by commercial publishing organizations or the state and which are in use in the public schools of Minnesota to measure the progress of pupils in secular subjects.

Sec. 3. Minnesota Statutes 1994, section 123.932, subdivision 1e, is amended to read:

Subd. 1e. "Individualized instructional or cooperative learning materials" means educational materials which:

(a) are designed primarily for individual pupil use or use by pupils in a cooperative learning group in a particular class or program in the school the pupil regularly attends;

(b) are secular, neutral, nonideological and not capable of diversion for religious use; and

(c) are available and are, used by, or of benefit to Minnesota public school pupils.

Subject to the requirements in clauses (a), (b), and (c), "individualized instructional or cooperative learning materials" include, but are not limited to, the following if they do not fall within the definition of "textbook" in subdivision 1b: published materials; periodicals; documents; pamphlets; photographs; reproductions; pictorial or graphic works; film strips; prepared slides; prerecorded video programs; prerecorded tapes, cassettes and other sound recordings; manipulative materials; desk charts; games; study prints and pictures; desk maps; models; learning kits; blocks or cubes; flash cards; individualized multimedia systems; prepared instructional computer software programs; and prerecorded film cartridges choral and band sheet music; and CD Rom.

"Individualized instructional or cooperative learning materials" do not include the following: chemicals; wall maps; wall charts; pencils, pens or crayons; notebooks; blackboards; chalk and erasers; duplicating fluids; paper; 16 mm films; unexposed films; blank tapes, cassettes or videotape; and instructional equipment, instructional hardware, or ordinary daily consumable classroom supplies.

Sec. 4. Minnesota Statutes 1994, section 123.932, subdivision 11, is amended to read:

Subd. 11. "Health services" means physician, dental, nursing or optometric services provided to pupils and health supplies brought to the site by the health professional for pupil usage in the field of physical or mental health; provided the term does not include direct educational instruction, services which are required pursuant to sections 120.17 and 120.1701, or services which are eligible to receive special education aid pursuant to section 124.32.

Sec. 5. Minnesota Statutes 1994, section 123.933, as amended by Laws 1995, First Special Session chapter 3, article 16, section 13, is amended to read:

123.933 [TEXTBOOKS, INDIVIDUAL INSTRUCTION OR COOPERATIVE LEARNING MATERIAL, STANDARD TESTS.]

Subdivision 1. [PROVISION.] The state board of education shall promulgate rules under the provisions of chapter 14 requiring that in each school year, based upon formal requests by or on behalf of nonpublic school pupils in a nonpublic school, the local districts or intermediary service areas shall purchase or otherwise acquire textbooks, individualized instructional or cooperative learning materials, and standardized tests and loan or provide them for

use by children enrolled in that nonpublic school. These textbooks, individualized instructional or cooperative learning materials, and standardized tests shall be loaned or provided free to the children for the school year for which requested. The loan or provision of the textbooks, individualized instructional or cooperative learning materials, and standardized tests shall be subject to rules prescribed by the state board of education.

Subd. 2. [TITLE.] The title to textbooks, individualized instructional or cooperative learning materials, and standardized testing materials shall remain in the servicing school district or intermediary service area, and possession or custody may be granted or charged to administrators of the nonpublic school attended by the nonpublic school pupil or pupils to whom the textbooks, individualized instructional or cooperative learning materials, or standardized tests are loaned or provided.

Subd. 3. [COST OF TEXTBOOKS; LIMITATION.] (a) The cost per pupil of the textbooks, individualized instructional or cooperative learning materials, and standardized tests provided for in this section for each school year shall not exceed the statewide average expenditure per pupil, adjusted pursuant to clause (b), by the Minnesota public elementary and secondary schools for textbooks, individualized instructional materials and standardized tests as computed and established by the department of children, families, and learning by March 1 of the preceding school year from the most recent public school year data then available.

(b) The cost computed in clause (a) shall be increased by an inflation adjustment equal to the percent of increase in the formula allowance, pursuant to section 124A.22, subdivision 2, from the second preceding school year to the current school year.

(c) The commissioner shall allot to the school districts or intermediary service areas the total cost for each school year of providing or loaning the textbooks, individualized instructional or cooperative learning materials, and standardized tests for the pupils in each nonpublic school. The allotment shall not exceed the product of the statewide average expenditure per pupil, according to clause (a), adjusted pursuant to clause (b), multiplied by the number of nonpublic school pupils who make requests pursuant to this section and who are enrolled as of September 15 of the current school year.

Sec. 6. Minnesota Statutes 1994, section 123.935, subdivision 2, is amended to read:

Subd. 2. Health services may be provided to nonpublic school pupils pursuant to this section at a public school, a neutral site, the nonpublic school or any other suitable location. Guidance and counseling services may be provided to nonpublic school pupils pursuant to this section only at a public school or a neutral site. District or intermediary service area personnel and representatives of the nonpublic school pupils receiving pupil support services shall hold an annual consultation regarding the type of services, provider of services, and the location of the provision of these services. The district board or intermediary service area governing board shall make the final decision on the location of the provision of these services.

Sec. 7. Minnesota Statutes 1994, section 123.935, subdivision 7, is amended to read:

Subd. 7. [NONPUBLIC EDUCATION COUNCIL.] (a) The commissioner shall appoint a 15-member council on nonpublic education. The 15 members shall represent various areas of the state, represent various methods of providing nonpublic education, and shall be knowledgeable about nonpublic education. The compensation, removal of members, filling of vacancies, and terms are governed by section 15.0575. The council shall not expire. The council shall advise the commissioner and the state board on issues affecting nonpublic school matters under this section education and nonpublic schools. The council may recognize educational accrediting agencies, for the sole purpose of sections 120.101, 120.102, and 120.103. When requested by the commissioner or the state board, the council may submit its advice about other nonpublic school matters.

(b) A parent or guardian of a nonpublic school pupil or a nonpublic school may file a complaint about services provided under sections 123.931 to 123.937 with the nonpublic education council. The council may review the complaint and make a recommendation for resolution to the commissioner.

Sec. 8. Minnesota Statutes 1994, section 124.916, subdivision 4, is amended to read:

Subd. 4. [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year special school district No. 1, Minneapolis, may make an additional levy not to exceed the amount raised by a net tax rate of .10 percent times the adjusted net tax capacity for taxes payable in 1991 and thereafter of the property in the district for the preceding year. The proceeds may be used only to subsidize health insurance costs for eligible teachers as provided in this section.

"Eligible teacher" means a retired teacher who was a basic member of the Minneapolis teachers retirement fund association, who retired before May 1, 1974, or who had 20 or more years of basic member service in the Minneapolis teacher retirement fund association and retired before June 30, 1983, and who is not eligible to receive the hospital insurance benefits of the federal Medicare program of the Social Security Act without payment of a monthly premium. The district shall notify eligible teachers that a subsidy is available. To obtain a subsidy, an eligible teacher must submit to the school district a copy of receipts for health insurance premiums paid. The school district shall disburse the health insurance premium subsidy to each eligible teacher according to a schedule determined by the district, but at least annually. An eligible teacher may receive a subsidy up to an amount equal to the lesser of 90 percent of the cost of the eligible teacher's health insurance or up to 90 percent of the cost of the number two qualified plan of health coverage for individual policies made available by the Minnesota comprehensive health association under chapter 62E.

If funds remaining from the previous year's health insurance subsidy levy, minus the previous year's required subsidy amount, are sufficient to pay the estimated current year subsidy, the levy must be discontinued until the remaining funds are estimated by the school board to be insufficient to pay the subsidy.

This subdivision does not extend benefits to teachers who retire after June 30, 1983, and does not create a contractual right or claim for altering the benefits in this subdivision. This subdivision does not restrict the school district's right to modify or terminate coverage under this subdivision.

Sec. 9. [124C.77] [ENDOWED CHAIR.]

Subdivision 1. [PURPOSE.] The purpose of the endowed chair program is to increase curriculum offerings and learning experiences available to students.

Subd. 2. [ELIGIBILITY.] A school site, represented by the school site council or, if no site council exists, the principal or lead teacher, and the party interested in endowing a chair may enter into an agreement for an endowed chair for no longer than one year in length. The party endowing the chair and the school site may, at their discretion, renew annually.

Subd. 3. [PROGRAM.] An endowed chair program may be for a semester, a summer session, or a full school year. Curriculum developed or provided under the endowed chair program must supplement the existing curriculum offerings available at the school in the particular subject chosen.

Subd. 4. [AGREEMENT.] The agreement must make available funds sufficient for the salary and benefit costs of the instructor, and necessary supplies for the course. The participating site must provide the classroom space and administer the program. The parties, in consultation with the school district and the exclusive representative of the teachers, jointly select the instructor for the endowed chair.

Sec. 10. Laws 1995, First Special Session chapter 3, article 8, section 25, subdivision 2, is amended to read:

Subd. 2. [ABATEMENT AID.] For abatement aid according to Minnesota Statutes, section 124.214:

$24,241,000 $22,251,600 ..... 1996

$ 7,905,000 $ 9,543,400 ..... 1997

The 1996 appropriation includes $1,135,000 for 1995 and $23,106,000 $21,116,600 for 1996.

The 1997 appropriation includes $4,077,000 $3,726,400 for 1996 and $3,828,000 $5,817,000 for 1997.

Sec. 11. Laws 1995, First Special Session chapter 3, article 8, section 27, is amended to read:

Sec. 27. [EFFECTIVE DATES.]

Sections 18, 20, and 21 are effective the day following final enactment.

Section 13 is effective July 1, 1997, if the governing body of the city of Saint Paul and the governing body of independent school district No. 625 have approved it and complied with Minnesota Statutes, section 645.021, subdivision 3, before January 1 31, 1996. Section 14 does not abrogate language that references city of St. Paul civil service rules in bargaining unit agreements in existence on March 31, 1995.

Sec. 12. [SCIMATHMN INTERCHANGE EMPLOYEES.]

Notwithstanding Minnesota Statutes, section 15.53, subdivision 2, SciMathMN may contract with a school district for a period not to exceed three consecutive years for the services of a math specialist and a science specialist to work on curriculum frameworks.

Sec. 13. [SPECIAL LEVY; HENNING.]

For taxes payable in 1997, in addition to other levies, independent school district No. 545, Henning, may levy for up to $20,000 for the unreimbursed cost of an adult farm management program.

Sec. 14. [FUND TRANSFERS.]

Subdivision 1. [AITKIN.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 475.61, subdivision 4, on June 30, 1996, independent school district No. 0001, Aitkin, may permanently transfer the balance in its debt redemption fund to its building construction fund without making a levy reduction.

Subd. 2. [CHISAGO LAKES.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 475.61, subdivision 4, on June 30, 1996, independent school district No. 2144, Chisago Lakes, may permanently transfer up to $250,000 from the debt redemption fund to the capital expenditure fund for facility and technology improvements.

Subd. 3. [ADA-BORUP.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 475.61, subdivision 4, on June 30, 1996, the Ada-Borup school district may permanently transfer the balance in its debt redemption fund to its building construction fund without making a levy reduction.

Subd. 4. [NEVIS.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1996, independent school district No. 308, Nevis, may permanently transfer up to $100,000 from the bus purchase account in its transportation fund to its capital expenditure fund without making a levy reduction.

Subd. 5. [WHITE BEAR LAKE.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 123.36, subdivision 13, independent school district No. 624, White Bear Lake, may deposit the proceeds from a sale of properties known as the Beach school site or the Gall district center site into the building construction fund of the district without making a levy reduction.

Subd. 6. [LYLE.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1996, independent school district No. 497, Lyle, may permanently transfer the balance in its early childhood family education account to its capital expenditure fund for expanding the district's technology services.

Sec. 15. [INSTRUCTIONAL DAY CLARIFICATION.]

(a) This section applies to any school district employee who was scheduled to work on February 2, 1996, did not work on that day and did not receive compensation for that day.

(b) Notwithstanding any law to the contrary, a school district must either: (i) allow any school district employee under paragraph (a) the opportunity to work on another day that the school district designates and must compensate the employee working on the designated day at the employee's normal rate of pay; or (ii) compensate any school district employee under paragraph (a) for that day at the employee's normal rate of pay.

Sec. 16. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.] The sum indicated in this section is appropriated from the general fund to the commissioner of children, families, and learning for the fiscal year designated.

Subd. 2. [MONTEVIDEO GRANT.] For a grant to independent school district No. 129, Montevideo, for the unreimbursed costs of an adult farm management program:

$100,000.....1996

Subd. 3. [MULTICULTURAL CONTINUING EDUCATION GRANT.] For a grant to independent school district No. 38, Red Lake, for continuation of a multicultural continuing education pilot project for teachers:

$69,000.....1996

The district must match this sum with staff development revenue under Minnesota Statutes, section 124A.29. This appropriation is available until June 30, 1997.

Subd. 4. [NETT LAKE COMMUNITY CENTER.] For a grant to independent school district No. 707, Nett Lake, for maintenance replacement funds to cover delayed lease payments for the collaborative community center.

$74,000.....1997

Subd. 5. [WEST ST. PAUL GRANT.] For a grant to independent school district No. 197, West St. Paul, for a project investigating the development of multiple pathways for students to meet graduation standards.

$20,000.....1997

Subd. 6. [ST. PAUL ACCOUNTABILITY.] For a grant to independent school district No. 625, St. Paul, to assist in the implementation of the district accountability plan.

$100,000.....1997

The district must evaluate student achievement data by building and measure the results annually. The district must also establish criteria and modifications that may be used if buildings are not meeting the goals of the student improvement plan developed by the buildings.

Sec. 17. [EFFECTIVE DATE.]

Sections 9 and 12 are effective July 1, 1996. Sections 10, 14, 15, and 16 are effective the day following final enactment.

Section 1. Minnesota Statutes 1995 Supplement, section 115A.072, subdivision 1, is amended to read:

Subdivision 1. [WASTE ENVIRONMENTAL EDUCATION COALITION ADVISORY BOARD.] (a) The director shall provide for the development and implementation of a program of general public environmental education on waste management in cooperation and coordination with the pollution control agency, department of children, families, and learning, department of agriculture, environmental quality board, environmental education board, educational institutions, other public agencies with responsibility for waste management or public education, and three other persons who represent private industry and who have knowledge of or expertise in recycling and solid waste management issues. The objectives of the program are to: develop increased public awareness of and interest in environmentally sound waste management methods; encourage better informed decisions on waste management issues by business, industry, local governments, and the public; and disseminate practical information about ways in which households and other institutions and organizations can improve the management of waste programs that are designed to meet the goals listed in section 126A.01.

(b) The director shall appoint an environmental education advisory task force, to be called the waste education coalition, of up to 18 members to board shall advise the director in carrying out the director's responsibilities under this section and whose membership represents the agencies and entities listed in this subdivision. The board consists of 20 members as follows:

(1) a representative of the pollution control agency, appointed by the commissioner of the agency;

(2) a representative of the department of children, families, and learning, appointed by the commissioner of children, families, and learning;

(3) a representative of the department of agriculture, appointed by the commissioner of agriculture;

(4) a representative of the department of health, appointed by the commissioner of health;

(5) a representative of the department of natural resources, appointed by the commissioner of natural resources;

(6) a representative of the board of water and soil resources, appointed by that board;

(7) a representative of the environmental quality board, appointed by that board;

(8) a representative of the board of teaching, appointed by that board;

(9) a representative of the University of Minnesota extension service, appointed by the director of the service;

(10) a citizen member from each congressional district, of which two must be licensed teachers currently teaching in the K-12 system, appointed by the director; and

(11) three at-large citizen members, appointed by the director.

The citizen members shall serve two-year terms. Compensation of board members is governed by section 15.059, subdivision 6. The task force board expires on June 30, 1997 2003.

Sec. 2. Minnesota Statutes 1995 Supplement, section 120.1045, subdivision 1, is amended to read:

Subdivision 1. [BACKGROUND CHECK REQUIRED.] A school hiring authority, as defined in subdivision 4, shall request a criminal history background check from the superintendent of the bureau of criminal apprehension on all individuals who are offered employment in the school, as defined in subdivision 4. In order to be eligible for employment, an individual who is offered employment must provide an executed criminal history consent form and a money order or cashier's check payable to the bureau of criminal apprehension for the fee for conducting the criminal history background check. A school may charge a person offered employment an additional fee of up to $2 to cover the school's costs under this section. The superintendent shall perform the background check by retrieving criminal history data maintained in the criminal justice information system computers.

Sec. 3. Minnesota Statutes 1995 Supplement, section 120.1045, is amended by adding a subdivision to read:

Subd. 4. [DEFINITIONS.] For purposes of this section:

(a) "School" means a school as defined in section 120.101, subdivision 4, except a home-school, and includes a school receiving tribal contract or grant school aid under section 124.86.

(b) "School hiring authority" means the school principal or other person having general control and supervision of the school.

Sec. 4. Minnesota Statutes 1995 Supplement, section 123.3514, subdivision 6, is amended to read:

Subd. 6. [FINANCIAL ARRANGEMENTS.] For a pupil enrolled in a course under this section, the department of children, families, and learning shall make payments according to this subdivision for courses that were taken for secondary credit.

The department shall not make payments to a school district or post-secondary institution for a course taken for post-secondary credit only. The department shall not make payments to a post-secondary institution for a course from which a student officially withdraws during the first 14 days of the quarter or semester or who has been absent from the post-secondary institution for the first 15 consecutive school days of the quarter or semester and is not receiving instruction in the home or hospital.

A post-secondary institution shall receive the following:

(1) for an institution granting quarter credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the formula allowance, multiplied by 1.3, and divided by 45; or

(2) for an institution granting semester credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the general revenue formula allowance, multiplied by 1.3, and divided by 30.

The department of children, families, and learning shall pay to each post-secondary institution 100 percent of the amount in clause (1) or (2) within 30 days of receiving initial enrollment information each quarter or semester. If changes in enrollment occur during a quarter or semester, the change shall be reported by the post-secondary institution at the time the enrollment information for the succeeding quarter or semester is submitted. At any time the department of children, families, and learning notifies a post-secondary institution that an overpayment has been made, the institution shall promptly remit the amount due.

Sec. 5. Minnesota Statutes 1995 Supplement, section 123.3514, subdivision 6b, is amended to read:

Subd. 6b. [FINANCIAL ARRANGEMENTS, PUPILS AGE 21 OR OVER.] For a pupil enrolled in a course according to this section, the department of children, families, and learning shall make payments according to this subdivision for courses taken to fulfill high school graduation requirements by pupils eligible for adult high school graduation aid.

The department must not make payments to a school district or post-secondary institution for a course taken for post-secondary credit only. The department shall not make payments to a post-secondary institution for a course from which a student officially withdraws during the first 14 days of the quarter or semester or who has been absent from the post-secondary institution for the first 15 consecutive school days of the quarter or semester and is not receiving instruction in the home or hospital.

A post-secondary institution shall receive the following:

(1) for an institution granting quarter credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the formula allowance, multiplied by 1.3, and divided by 45; or

(2) for an institution granting semester credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the general revenue formula allowance multiplied by 1.3, and divided by 30.

The department of children, families, and learning shall pay to each post-secondary institution 100 percent of the amount in clause (1) or (2) within 30 days of receiving initial enrollment information each quarter or semester. If changes in enrollment occur during a quarter or semester, the change shall be reported by the post-secondary institution at the time the enrollment information for the succeeding quarter or semester is submitted. At any time the department of children, families, and learning notifies a post-secondary institution that an overpayment has been made, the institution shall promptly remit the amount due.

A school district shall receive:

(1) for a pupil who is not enrolled in classes at a secondary program, 12 percent of the general education formula allowance times .65, times 1.3; or

(2) for a pupil who attends classes at a secondary program part time, the general education formula allowance times .65, times 1.3, times the ratio of the total number of hours the pupil is in membership for courses taken by the pupil for credit to 1020 hours.

Sec. 6. Minnesota Statutes 1995 Supplement, section 124A.22, subdivision 2a, is amended to read:

Subd. 2a. [CONTRACT DEADLINE AND PENALTY.] (a) The following definitions apply to this subdivision:

(1) "Public employer" means:

(i) a school district; and

(ii) a public employer, as defined by section 179A.03, subdivision 15, other than a school district that (i) negotiates a contract under chapter 179A with teachers, and (ii) is established by, receives state money, or levies under chapters 120 to 129, or 136D, or 268A.

(2) "Teacher" means a person, other than a superintendent or assistant superintendent, principal, assistant principal, or a supervisor or confidential employee who occupies a position for which the person must be licensed by the board of teaching, state board of education, or state the former board of technical colleges, or the board of trustees of the Minnesota state colleges and universities.

(b) Notwithstanding any law to the contrary, a public employer and the exclusive representative of the teachers shall both sign a collective bargaining agreement on or before January 15 of an even-numbered calendar year. If a collective bargaining agreement is not signed by that date, state aid paid to the public employer for that fiscal year shall be reduced. However, state aid shall not be reduced if:

(1) a public employer and the exclusive representative of the teachers have submitted all unresolved contract items to interest arbitration according to section 179A.16 before December 31 of an odd-numbered year and filed required final positions on all unresolved items with the commissioner of mediation services before January 15 of an even-numbered year; and

(2) the arbitration panel has issued its decision within 60 days after the date the final positions were filed.

(c)(1) For a district that reorganizes according to section 122.22, 122.23, or 122.241 to 122.248 effective July 1 of an odd-numbered year, state aid shall not be reduced according to this subdivision if the school board and the exclusive representative of the teachers both sign a collective bargaining agreement on or before the March 15 following the effective date of reorganization.

(2) For a district that jointly negotiates a contract prior to the effective date of reorganization under section 122.22, 122.23, or 122.241 to 122.248 that, for the first time, includes teachers in all districts to be reorganized, state aid shall not be reduced according to this subdivision if the school board and the exclusive representative of the teachers sign a collective bargaining agreement on or before the March 15 following the expiration of the teacher contracts in each district involved in the joint negotiation.

(3) Only one extension of the contract deadline is available to a district under this paragraph.

(d) The reduction shall equal $25 times the number of actual pupil fund balance pupil units:

(1) for a school district, that are in the district during that fiscal year; or

(2) for a public employer other than a school district, that are in programs provided by the employer during the preceding fiscal year.

The department of children, families, and learning shall determine the number of full-time equivalent actual pupil units in the programs. The department of children, families, and learning shall reduce general education aid; if general education aid is insufficient or not paid, the department shall reduce other state aids.

(e) Reductions from aid to school districts and public employers other than school districts shall be returned to the general fund.

Sec. 7. Minnesota Statutes 1994, section 125.05, subdivision 1a, is amended to read:

Subd. 1a. [TEACHER AND SUPPORT PERSONNEL QUALIFICATIONS.] (a) The board of teaching shall issue licenses under its jurisdiction to persons the board finds to be qualified and competent for their respective positions.

(b) The board shall require a person to successfully complete an examination of skills in reading, writing, and mathematics before being granted an initial teaching license to provide direct instruction to pupils in prekindergarten, elementary, secondary, or special education programs. The board shall require colleges and universities offering a board approved teacher preparation program to provide remedial assistance that includes a formal diagnostic component to persons enrolled in their institution who did not achieve a qualifying score on the skills examination, including those for whom English is a second language. The colleges and universities must provide assistance in the specific academic areas of deficiency in which the person did not achieve a qualifying score. School districts must provide similar, appropriate, and timely remedial assistance that includes a formal diagnostic component and mentoring to those persons employed by the district who completed their teacher education program outside the state of Minnesota, received a one-year license to teach in Minnesota and did not achieve a qualifying score on the skills examination, including those persons for whom English is a second language.

(c) A person who has completed an approved teacher preparation program and obtained a one-year license to teach, but has not successfully completed the skills examination, may renew the one-year license for two additional one-year periods. Each renewal of the one-year license is contingent upon the licensee:

(1) providing evidence of participating in an approved remedial assistance program provided by a school district or post-secondary institution that includes a formal diagnostic component in the specific areas in which the licensee did not obtain qualifying scores; and

(2) attempting to successfully complete the skills examination during the period of each one-year license.

(d) The board of teaching shall grant continuing licenses only to those persons who have met board criteria for granting a continuing license, which includes successfully completing the skills examination in reading, writing, and mathematics.

(e) All colleges and universities approved by the board of teaching to prepare persons for teacher licensure shall include in their teacher preparation programs a common core of teaching knowledge and skills to be acquired by all persons recommended for teacher licensure. This common core shall meet the standards developed by the interstate new teacher assessment and support consortium in its 1992 "model standards for beginning teacher licensing and development." Amendments to standards adopted under this paragraph are covered by chapter 14.

Sec. 8. Minnesota Statutes 1994, section 125.05, is amended by adding a subdivision to read:

Subd. 9. [TEACHER LICENSES.] The board of teaching may issue teacher licenses under the licensure rules in place on July 31, 1996.

Sec. 9. [125.192] [TEACHER LICENSURE.]

Teachers licensed in the education of blind and visually impaired students must demonstrate competence in reading and writing Braille. The board of teaching, at such time as a valid and reliable test is available, shall adopt a rule to assess these competencies that is consistent with the standards of the National Library Services for the Blind and Physically Handicapped.

Sec. 10. [126.091] [MOMENT OF SILENCE.]

A moment of silence may be observed.

Sec. 11. Minnesota Statutes 1995 Supplement, section 126.70, subdivision 1, is amended to read:

Subdivision 1. [STAFF DEVELOPMENT COMMITTEE.] A school board shall use the revenue authorized in section 124A.29 for in-service education for programs under section 126.77, subdivision 2, or for staff development plans under this section. The board must establish a staff development committee to develop the plan, assist site decision-making teams in developing a site plan consistent with the goals of the plan, and evaluate staff development efforts at the site level. A majority of the advisory committee must be teachers representing various grade levels, subject areas, and special education. The advisory committee must also include nonteaching staff, parents, and administrators. Districts shall report staff development results and expenditures to the commissioner in the form and manner determined by the commissioner. The expenditure report shall include expenditures by the school board for district level activities and expenditures made by the staff. The report shall provide a breakdown of expenditures for (1) curriculum development and programs, (2) inservice education, workshops, and conferences, and (3) the cost of teachers or substitute teachers for staff development purposes. Within each of these categories, the report shall also indicate whether the expenditures were incurred at the district level or the school site level, and whether the school site expenditures were made possible by the grants to school sites that demonstrate exemplary use of allocated staff development revenue. These expenditures are to be reported using the UFARS system. The commissioner shall report the staff development expenditure data to the education committees of the legislature by February 15 each year.

Sec. 12. Minnesota Statutes 1994, section 128D.11, subdivision 10, is amended to read:

Subd. 10. [CITY PLANNING COMMISSION APPROVAL; EXCEPTIONS.] (a) No election shall be held on a proposed issue of bonds unless the board has submitted to the city planning commission a statement of the location and general description, so far as then known, of any project proposed to be constructed or acquired from the proceeds of such bonds with a request for preliminary approval of each such project as being in accordance with the comprehensive plan of the city of Minneapolis. The commission may state its preliminary approval or disapproval of the projects included in such statement within 60 days after receipt thereof, and failure so to do shall be deemed to signify preliminary approval of such projects. In the event the commission shall disapprove any proposed project included in the statement, a vote of at least six members of the board of education shall be required for the adoption of a resolution submitting the proposed bond issue to the electors. Notwithstanding the preliminary approval of any project as herein provided, such project shall be resubmitted to the city planning commission at the time and in the manner specified in paragraph (b). The location and nature of each project shall be determined by the board of education and reviewed by the city planning commission at the time, with reference to the circumstances then

existing. Nothing herein shall prevent the revision or elimination of any project previously given preliminary approval or the substitution of another project therefor, by the procedure specified in paragraph (b), if considered necessary by the board to fulfill its responsibilities for public education, and for the construction of school facilities so far as possible in accordance with the comprehensive city plan, provided however no such revision, elimination, or substitution shall be made unless approved by unanimous vote of all members of the board of education. Notwithstanding anything to the contrary contained in this act no election shall be held on a proposed issue of bonds on a date earlier than 60 days after preliminary approval or disapproval by the city planning commission.

(b) The school district shall not expend the proceeds of bonds for any purpose provided for in subdivisions 1 to 6 requiring approval of the city planning commission unless a proposed resolution stating the location and general description of the project or undertaking shall have been submitted to the city planning commission for consideration of the proposed project or undertaking as being in accordance with the comprehensive plan of the city of Minneapolis. The commission may state its approval or disapproval of the proposed project or undertaking within 60 days thereafter. A failure on the part of the commission to state its disapproval within 60 days after receipt of such resolution shall be deemed an approval. In the event the commission shall disapprove any proposed project or undertaking, a unanimous vote of the members of the board of education shall be required for the adoption of the resolution.

Sec. 13. Laws 1993, chapter 224, article 12, section 39, as amended by Laws 1994, chapter 532, article 2, section 14; Laws 1994, chapter 647, article 8, section 32; Laws 1994, chapter 647, article 12, section 35; and Laws 1995, First Special Session chapter 3, article 8, section 15, is amended to read:

Sec. 39. [REPEALER.]

(a) Minnesota Rules, parts 3500.0500; 3500.0600, subparts 1 and 2; 3500.0605; 3500.0800; 3500.1090; 3500.1800; 3500.2950; 3500.3100, subparts 1 to 3; 3500.3500; 3500.3600; 3500.4400; 3510.2200; 3510.2300; 3510.2400; 3510.2500; 3510.2600; 3510.6200; 3520.0200; 3520.0300; 3520.0600; 3520.1000; 3520.1200; 3520.1300; 3520.1800; 3520.2700; 3520.3802; 3520.3900; 3520.4500; 3520.4620; 3520.4630; 3520.4640; 3520.4680; 3520.4750; 3520.4761; 3520.4811; 3520.4831; 3520.4910; 3520.5330; 3520.5340; 3520.5370; 3520.5461; 3525.2850; 3530.0300; 3530.0600; 3530.0700; 3530.0800; 3530.1100; 3530.1300; 3530.1400; 3530.1600; 3530.1700; 3530.1800; 3530.1900; 3530.2000; 3530.2100; 3530.2800; 3530.2900; 3530.3100, subparts 2 to 4; 3530.3200, subparts 1 to 5; 3530.3400, subparts 1, 2, and 4 to 7; 3530.3500; 3530.3600; 3530.3900; 3530.4000; 3530.4100; 3530.5500; 3530.5700; 3530.6100; 3535.0800; 3535.1000; 3535.1400; 3535.1600; 3535.1800; 3535.1900; 3535.2100; 3535.2200; 3535.2600; 3535.2900; 3535.3100; 3535.3500; 3535.9930; 3535.9940; 3535.9950; 3540.0600; 3540.0700; 3540.0800; 3540.0900; 3540.1000; 3540.1100; 3540.1200; 3540.1300; 3540.1700; 3540.1800; 3540.1900; 3540.2000; 3540.2100; 3540.2200; 3540.2300; 3540.2400; 3540.2800; 3540.2900; 3540.3000; 3540.3100; 3540.3200; 3540.3300; 3540.3400; 3545.1000; 3545.1100; 3545.1200; 3545.2300; 3545.2700; 3545.3000; 3545.3002; 3545.3004; 3545.3005; 3545.3014; 3545.3022; 3545.3024; 8700.4200; 8700.6800; and 8700.7100, are repealed.

(b) Minnesota Rules, parts 3520.1600; 3520.2900; 3520.3000; 3520.3200; 3520.3500; 3520.3680; 3520.3701; 3520.3801; 3520.4001; 3520.4100; 3520.4201; 3520.4301; 3520.4400; 3520.4510; 3520.4531; 3520.4540; 3520.4550; 3520.4560; 3520.4570; 3520.4600; 3520.4610; 3520.4650; 3520.4670; 3520.4701; 3520.4711; 3520.4720; 3520.4731; 3520.4741; 3520.4801; 3520.4840; 3520.4850; 3520.4900; 3520.4930; 3520.4980; 3520.5000; 3520.5010; 3520.5111; 3520.5120; 3520.5141; 3520.5151; 3520.5160; 3520.5171; 3520.5180; 3520.5190; 3520.5200; 3520.5220; 3520.5230; 3520.5300; 3520.5310; 3520.5361; 3520.5380; 3520.5401; 3520.5450; 3520.5471; 3520.5481; 3520.5490; 3520.5500; 3520.5510; 3520.5520; 3520.5531; 3520.5551; 3520.5560; 3520.5570; 3520.5580; 3520.5600; 3520.5611; 3520.5700; 3520.5710; 3520.5900; 3520.5910; and 3520.5920, are repealed.

(c) Minnesota Rules, parts 3500.1400; 3500.3700; 3510.0300; 3510.8100; 3510.8200; 3510.8300; 3510.8400; 3515.0100, subparts 2, 5, 6, and 26; 3515.0500, subpart 4, option two, items D and E; 3515.0700, subpart 4, options 4, 6, 7, and 8; 3515.1100; 3515.1500, subparts 2 and 3, item C; 3515.2100, subparts 2 and 3; 3515.3300; 3515.3400; 3515.3500; 3515.3600; 3515.3700; 3515.3800; 3515.3900; 3515.4000; 3515.4500; 3515.4600; 3515.4621; 3515.4700; 3515.4800; 3515.5000, subpart 2; 3515.5050; 3515.5500, subparts 3, 4, 5, 6, 7, 9, 10, and 11; 3515.5600; 3515.6005, subparts 2 and 3; 3515.6100; 3515.8300; 3515.8900; 3515.9910; 3515.9911; 3515.9912; 3515.9913; 3515.9920; 3515.9942; 3517.3150; 3517.3170; 3517.3420; 3517.3450; 3517.3500; 3517.3650; 3517.8500; 3517.8600; 3520.2400; 3520.2500; 3520.2600; 3520.2800; 3520.3100; 3520.3400; 3530.6500; 3530.6600; 3530.6700; 3530.6800; 3530.6900; 3530.7000; 3530.7100; 3530.7200; 3530.7300; 3530.7400; 3530.7500; 3530.7600; 3530.7700; 3530.7800; and chapter 3560, are repealed.

(d) Minnesota Rules, parts 3500.0710; 3500.1060; 3500.1075; 3500.1100; 3500.1150; 3500.1200; 3500.1500; 3500.1600; 3500.1900; 3500.2000; 3500.2020; 3500.2100; 3500.2900; 3500.5010; 3500.5020; 3500.5030; 3500.5040; 3500.5050; 3500.5060; 3500.5070; 3505.2700; 3505.2800; 3505.2900; 3505.3000; 3505.3100; 3505.3200; 3505.3300; 3505.3400; 3505.3500; 3505.3600; 3505.3700; 3505.3800; 3505.3900; 3505.4000; 3505.4100; 3505.4200; 3505.4400; 3505.4500; 3505.4600; 3505.4700; 3505.5100;

8700.2900; 8700.3000; 8700.3110; 8700.3120; 8700.3200; 8700.3300; 8700.3400; 8700.3500; 8700.3510; 8700.3600; 8700.3700; 8700.3810; 8700.3900; 8700.4000; 8700.4100; 8700.4300; 8700.4400; 8700.4500; 8700.4600; 8700.4710; 8700.4800; 8700.4901; 8700.4902; 8700.5100; 8700.5200; 8700.5300; 8700.5310; 8700.5311; 8700.5500; 8700.5501; 8700.5502; 8700.5503; 8700.5504; 8700.5505; 8700.5506; 8700.5507; 8700.5508; 8700.5509; 8700.5510; 8700.5511; 8700.5512; 8700.5800; 8700.6310; 8700.6410; 8700.6900; 8700.7010; 8700.7700; 8700.7710; 8700.8000; 8700.8010; 8700.8020; 8700.8030; 8700.8040; 8700.8050; 8700.8060; 8700.8070; 8700.8080; 8700.8090; 8700.8110; 8700.8120; 8700.8130; 8700.8140; 8700.8150; 8700.8160; 8700.8170; 8700.8180; 8700.8190; 8700.9000; 8700.9010; 8700.9020; 8700.9030; 8750.0200; 8750.0220; 8750.0240; 8750.0260; 8750.0300; 8750.0320; 8750.0330; 8750.0350; 8750.0370; 8750.0390; 8750.0410; 8750.0430; 8750.0460; 8750.0500; 8750.0520; 8750.0600; 8750.0620; 8750.0700; 8750.0720; 8750.0740; 8750.0760; 8750.0780; 8750.0800; 8750.0820; 8750.0840; 8750.0860; 8750.0880; 8750.0890; 8750.0900; 8750.0920; 8750.1000; 8750.1100; 8750.1120; 8750.1200; 8750.1220; 8750.1240; 8750.1260; 8750.1280; 8750.1300; 8750.1320; 8750.1340; 8750.1360; 8750.1380; 8750.1400; 8750.1420; 8750.1440; 8750.1500; 8750.1520; 8750.1540; 8750.1560; 8750.1580; 8750.1600; 8750.1700; 8750.1800; 8750.1820; 8750.1840; 8750.1860; 8750.1880; 8750.1900; 8750.1920; 8750.1930; 8750.1940; 8750.1960; 8750.1980; 8750.2000; 8750.2020; 8750.2040; 8750.2060; 8750.2080; 8750.2100; 8750.2120; 8750.2140; 8750.4000; 8750.4100; and 8750.4200; 8750.9000; 8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 8750.9600; and 8750.9700, are repealed.

(e) Minnesota Rules, parts 3510.0100; 3510.0200; 3510.0400; 3510.0500; 3510.0600; 3510.0800; 3510.1100; 3510.1200; 3510.1300; 3510.1400; 3510.1500; 3510.1600; 3510.2800; 3510.2900; 3510.3000; 3510.3200; 3510.3400; 3510.3500; 3510.3600; 3510.3700; 3510.3800; 3510.7200; 3510.7300; 3510.7400; 3510.7500; 3510.7600; 3510.7700; 3510.7900; 3510.8000; 3510.8500; 3510.8600; 3510.8700; 3510.9000; 3510.9100; 3517.0100; and 3517.0120, are repealed.

Sec. 14. Laws 1993, chapter 224, article 12, section 41, as amended by Laws 1995, First Special Session chapter 3, article 8, section 16, is amended to read:

Sec. 41. [EFFECTIVE DATE.]

Sections 22 to 25 are effective July 1, 1995.

Section 32, paragraph (b), is effective July 1, 1995. Section 32, paragraph (c), is effective August 1, 1996.

Section 39, paragraph (b), is effective August 1, 1994. Section 39, paragraph (c), is effective July 1, 1995. Section 39, paragraph (d), is effective August 1, 1996. Section 39, paragraph (e), is effective July 1 December 31, 1996.

Sec. 15. [RECOMMENDATIONS FOR CONDUCTING BACKGROUND CHECKS.]

Subdivision 1. [WORKING GROUP.] The commissioner of children, families, and learning shall convene a working group to recommend an efficient and effective process for conducting background checks on candidates for teacher licensure, elementary and secondary school teachers, and other school district employees, consistent with the requirements under Minnesota Statutes, sections 120.1045 and 125.05, subdivision 8. The working group must include one representative from each of the following organizations: the state board of teaching; the Minnesota school boards association; the Minnesota education association; the Minnesota federation of teachers; the Minnesota state colleges and universities; the University of Minnesota; the private college council; the Minnesota association of colleges of teacher education; the statewide student associations from the state universities, the University of Minnesota, and the private liberal arts colleges; the Minnesota bureau of criminal apprehension; the American association of state, county and municipal employees; and other groups that the commissioner determines are relevant. By February 1, 1997, the commissioner shall submit the group's recommendations concerning an efficient and effective process, including recommended statutory changes, to the chairs of the education committees of the legislature.

Subd. 2. [ISSUES TO RESOLVE.] In recommending an efficient and effective process for conducting background checks, the working group must address at least the following:

(1) how might the process for conducting background checks be made more efficient and less burdensome for substitute employees;

(2) to what extent should service cooperative employees, teacher interns, student teachers, school volunteers, independent contractors, or student employees be subject to background checks;

(3) how might the process of paying for background checks be made more flexible and less expensive;

(4) to what extent should nonstate residents applying for school district employment be subject to background check requirements;

(5) to what extent would a central repository of background check data be useful and, if it is useful, how would it operate;

(6) how might duplication between licensure and employment checks be avoided;

(7) to what extent should an individual be subject to a periodic background check; and

(8) whether the scope of the background check is appropriate to accomplish the intended purpose of the statutes and whether the scope of the background check should be tailored to particular classes of individuals.

Subd. 3. [TEMPORARY PROVISIONS.] (a) Notwithstanding any law to the contrary, the following provisions apply until June 30, 1997.

(b) Any candidate for teacher licensure and any prospective school district employee for whom a background check was completed after December 1, 1995, shall not be required to undergo another background check solely to comply with the requirements of Minnesota Statutes, sections 120.1045 and 125.05, subdivision 8.

(c) The board of teaching and the state board of education shall issue a license to an otherwise qualified individual while completion of a background check is pending, subject to Minnesota Statutes, section 125.05, subdivision 8.

(d) A school hiring authority may use the results of a criminal history background check performed at the request of another school hiring authority if: the results of the check are on file with the other school hiring authority or are otherwise assessable; the check was performed within the past year; and there is no reason to believe that the individual has committed an act subsequent to the check that would not be included in it.

Sec. 16. [PARENT EDUCATION INSTRUCTOR LICENSE.]

(a) Notwithstanding Minnesota Statutes, section 125.05, subdivision 1, persons who currently hold or have held a parent education instructor license issued by the board of technical colleges or the board of trustees of the Minnesota state colleges and universities prior to June 30, 1997, shall, upon application, be issued a family education/parent educator license granted by the Minnesota board of teaching upon evidence of having met the renewal requirements listed on the expiring license.

(b) Effective June 30, 1997, the board of trustees of the Minnesota state colleges and universities shall not issue parent education instructor licenses.

Sec. 17. [BUFFALO; FARIBAULT; SLEEPY EYE; SCHOOL YEAR.]

Subdivision 1. [EXCEPTION.] Notwithstanding Minnesota Statutes, section 126.12, subdivision 1, independent school districts No. 877, Buffalo, No. 656, Faribault, No. 84, Sleepy Eye, and students from the residential academies, independent school No. 0160 may begin the 1996-1997 school year prior to Labor Day only by the number of days necessary to accommodate the transition into the new or renovated elementary or senior high school buildings.

Subd. 2. [CONDITIONAL EXCEPTION.] If this act is effective after April 1, 1996, the boards of independent school district No. 877, Buffalo, No. 84, Sleepy Eye, and No. 656, Faribault, are exempt from the April 1 deadline for setting a school calendar for the 1996-1997 school year in Minnesota Statutes, section 126.12, subdivision 2. The board must set the calendar as soon as possible after the effective date of this section.

Subd. 3. [APPLICATION.] This section applies only for the 1996-1997 school year.

Sec. 18. [LOLA AND RUDY PERPICH SCHOOL FOR THE ARTS AND RESOURCE CENTER.]

It is the desire of the Minnesota legislature to recognize the many contributions of Lola and Rudy Perpich to the state and people of Minnesota, including the instrumental role Lola and Rudy Perpich played in establishing and supporting the Minnesota school for the arts and resource center. The legislature understands that the school's critical early successes were due in large measure to Lola and Rudy Perpich and greatly appreciates their efforts.

Sec. 19. [REVISOR INSTRUCTION.]

In the next and subsequent editions of Minnesota Statutes, the revisor shall change all references from "Minnesota center for arts education" to "Lola and Rudy Perpich Minnesota center for arts education."

Sec. 20. [REPEALER.]

(a) Minnesota Statutes 1995 Supplement, section 120.1045, subdivision 3, is repealed the day following final enactment.

(b) Minnesota Statutes 1995 Supplement, section 126A.02, subdivision 2, is repealed.

(c) Minnesota Rules, parts 8700.7700; 8700.7710; 8750.9000; 8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 8750.9600; and 8750.9700, are repealed.

Sec. 21. [EFFECTIVE DATE.]

Section 6 is effective for the 1995-1996 school year. Sections 1, 9, 13, 14, 16, and 20, paragraphs (a) and (b), are effective the day following final enactment. Section 12 is effective January 1, 1997.

Section 20, paragraph (c), is effective August 1, 1997.

Section 1. Minnesota Statutes 1994, section 134.34, is amended by adding a subdivision to read:

Subd. 7. [PROPOSED BUDGET.] In addition to the annual report required in section 134.13, a regional public system that receives a basic system support grant under this section must provide each participating county and city with its proposed budget for the next year.

Section 1. Laws 1995, First Special Session chapter 3, article 11, section 21, subdivision 2, is amended to read:

Subd. 2. [DEPARTMENT.] For the department of education children, families, and learning:

$23,150,000 $26,110,000 ..... 1996

$21,803,000 ..... 1997

(a) Any balance in the first year does not cancel but is available in the second year.

(b) $21,000 each year is from the trunk highway fund.

(c) $522,000 each year is for the academic excellence foundation.

Up to $50,000 each year is contingent upon the match of $1 in the previous year from private sources consisting of either direct monetary contributions or in-kind contributions of related goods or services, for each $1 of the appropriation. The commissioner of education children, families, and learning must certify receipt of the money or documentation for the private matching funds or in-kind contributions. The unencumbered balance from the amount actually appropriated from the contingent amount in 1996 does not cancel but is available in 1997. The amount carried forward must not be used to establish a larger annual base appropriation for later fiscal years.

(d) $204,000 each year is for the state board of education.

(e) $227,000 each year is for the board of teaching.

(f) $775,000 each year is for educational effectiveness programs according to Minnesota Statutes, sections 121.602 and 121.608.

(g) $60,000 each year is for contracting with the state fire marshal to provide the services required according to Minnesota Statutes, section 121.1502.

(h) $400,000 each year is for health and safety management assistance contracts under Minnesota Statutes, section 124.83.

(i) The expenditures of federal grants and aids as shown in the biennial budget document and its supplements are approved and appropriated and shall be spent as indicated.

(j) The commissioner shall maintain no more than five total complement in the categories of commissioner, deputy commissioner, assistant commissioner, assistant to the commissioner, and executive assistant.

The department of education children, families, and learning may establish full-time, part-time, or seasonal positions as necessary to carry out assigned responsibilities and missions. Actual employment levels are limited by the availability of state funds appropriated for salaries, benefits, and agency operations or funds available from other sources for such purposes.

(k) The department of education children, families, and learning shall develop a performance report on the quality of its programs and services. The report must be consistent with the process specified in Minnesota Statutes, sections 15.90 to 15.92. The goals, objectives, and measures of this report must be developed in cooperation with the chairs of the finance divisions of the education committees of the house of representatives and senate, the department of finance, and the office of legislative auditor. The report prepared in 1995 must include a complete set of goals, objectives, and measures for the department. The report presented in 1996 and subsequent years must include data to indicate the progress of the department in meeting its goals and objectives.

The department of education children, families, and learning must present a plan for a biennial report on the quality and performance of key education programs in Minnesota's public early childhood, elementary, middle, and secondary education programs. To the extent possible, the plan must be consistent with Minnesota Statutes, sections 15.90 to 15.92. The department must consult with the chairs of the finance divisions of the education committees of the house of representatives and senate, the department of finance, and the office of legislative auditor in developing this plan. The plan for this report must be presented in 1995 and the first biennial report presented in 1996.

(l) The commissioner of education children, families, and learning shall perform a facilities standards evaluation of public elementary and secondary facilities in the state. This evaluation shall include a measure of the following:

(1) the physical condition of education facilities;

(2) the level of utilization relative to the capacity of education facilities;

(3) the intensity of technological use in both administrative and instructional areas in education facilities;

(4) the alignment between education programs in place and the structure of education facilities; and

(5) an estimate of facility construction over the next decade.

This evaluation may be based on a sample of facilities but must include geographic breakdowns of the state.

The report shall indicate which construction and repair of district facilities is required to bring a district into compliance with fire safety codes, occupational safety and health requirements, and the Americans with Disabilities Act.

The commissioner shall recommend to the 1996 legislature standards for the review and comment process under Minnesota Statutes, section 121.15. The standards must integrate the use of technology, both current and potential, flexible scheduling, and program adjustments relative to implementation of the graduation rule.

(m) $120,000 is for a feasibility and design study to develop a statewide student performance accountability report. The department must identify and assess the current availability of critical data-based information about student performance and feasibility of using information from the existing sources, recommend additional data-based elements and data collection strategies that will provide for ongoing assessment of educational reform and improvement, and recommend methods for improving the coordination and dissemination of local accountability reports as part of a statewide reporting system. The study must include a statewide implementation and budget plan. The study process must involve other government units, school and citizen leaders, and members of higher education concerned with the education and development of children and youth. It must also consider ways to access the research and development capacity of institutions of higher education in Minnesota. The commissioner shall report the results of the study to the education committees of the legislature and the state board of education by February 1, 1996.

(n) $1,000,000 in fiscal year 1996 is for grants to special school district No. 1, Minneapolis, and independent school district No. 625, St. Paul, for after school enrichment pilot programs targeted towards junior high and middle school students. These programs shall be developed collaboratively with city government, park boards, family services collaboratives, and any other community organizations offering similar programming. Any balance remaining in the first year does not cancel but is available in the second year.

(o) $188,000 each year is appropriated from the special revenue fund for the graduation rule. The department appropriation is to be used to fund continued assessment and standards development and piloting; to broaden public understanding through communication; to continue development of learning benchmarks; for ongoing statewide assessment efforts; to develop system performance standards; and to provide technical assistance to schools throughout the state. The appropriation from the special revenue fund is to be used for appropriate development efforts in health-related standards and assessments. The commissioner may transfer any portion of this appropriation from the special revenue fund not needed for the purposes of this paragraph to the Minnesota highway safety center at St. Cloud state university. Any amount of this appropriation does not cancel and shall be carried forward to the following fiscal year. Notwithstanding any law to the contrary, the commissioner may contract for national expertise and related services in each of these development areas. Notwithstanding Minnesota Statutes, section 15.53, subdivision 2, the commissioner of education children, families, and learning may contract with a school district for a period no longer than five consecutive years for the services of an educator to work in the development, implementation, or both, of the graduation rule. The commissioner may contract for services and expertise as necessary for development and implementation of the graduation standards. Notwithstanding any law to the contrary, the contracts are not subject to the contract certification procedures of the commissioner of administration or of Minnesota Statutes, chapter 16B, and are not subject to or included in any spending limitations on contracts.

(p) $600,000 in 1996 and $350,000 in 1997 is for transition aid for information support.

(q) Up to $50,000 each year is for grants to school districts for mentorship cooperative ventures between school districts and post-secondary teacher preparation institutions for alternative licensure programs according to Minnesota Statutes, section 125.188.

(r) Up to $50,000 each year is for GED coordination.

(s) Of the 1997 appropriation for education and employment transitions grants in Laws 1995, First Special Session chapter 3, article 4, section 29, subdivision 8, $100,000 is for work-based learning pilot programs.

Sec. 2. Laws 1995, First Special Session chapter 3, article 11, section 22, is amended to read:

Sec. 22. [APPROPRIATIONS; MINNESOTA CENTER FOR ARTS EDUCATION.]

The sums indicated in this section are appropriated from the general fund to the Minnesota center for arts education for the fiscal years designated:

$5,217,000 $5,330,000 ..... 1996

$5,217,000 $5,456,000 ..... 1997

Of the fiscal year 1996 appropriation, $154,000 is to fund artist and arts organization participation in the education residency and education technology projects, $75,000 is for school support for the residency project, and $121,000 is for further development of the partners: arts and school for students (PASS) program, including pilots. Of the fiscal year 1997 appropriation, $154,000 is to fund artist and arts organizations participation in the education residency project, $75,000 is for school support for the residency project, and $121,000 is to fund the PASS program, including additional pilots. The guidelines for the education residency project and the pass program shall be developed and defined by the Minnesota arts board. The Minnesota arts board shall participate in the review and allocation process. The center for arts education shall cooperate with the Minnesota arts board to fund these projects.

Any balance remaining in the first year does not cancel, but is available in the second year.

The Minnesota center for arts education may establish full-time, part-time, or seasonal positions as necessary to carry out assigned responsibilities and missions. Actual employment levels are limited by the availability of state funds appropriated for salaries, benefits and agency operations or funds available from other sources for such purposes.

In the next biennial budget, the Minnesota center for arts education must assess its progress in meeting its established performance measures and inform the legislature on the content of that assessment. The information must include an assessment of its progress by consumers and employees.

Sec. 3. Laws 1995, First Special Session chapter 3, article 11, section 23, is amended to read:

Sec. 23. [APPROPRIATIONS; FARIBAULT ACADEMIES.]

The sums indicated in this section are appropriated from the general fund to the department of education children, families, and learning for the Faribault academies for the fiscal years designated:

$8,075,000 $8,316,000 ..... 1996

$8,075,000 $8,526,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

The state board of education may establish full-time, part-time, or seasonal positions as necessary to carry out assigned responsibilities and missions of the Faribault academies. Actual employment levels are limited by the availability of state funds appropriated for salaries, benefits and agency operations or funds available from other sources for such purposes.

In the next biennial budget, the academies must assess their progress in meeting the established performance measures for the Faribault academies and inform the legislature on the content of that assessment. The information must include an assessment of its progress by consumers and employees.

Sec. 4. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.] The sums indicated in this section are appropriated from the general fund to the commissioner of children, families, and learning for the fiscal years designated.

Subd. 2. [LITIGATION COSTS.] For costs associated with desegregation litigation:

$700,000.....1996

This appropriation is available until June 30, 1997, and may be expended only to the extent costs are incurred.

Subd. 3. [RETRAINING.] For retraining of department employees and employees who become department employees as a result of transfer from other agencies pursuant to Minnesota Statutes, section 119A.04:

$275,000.....1996

This appropriation is available until June 30, 1997.

The retraining is subject to Laws 1995, First Special Session chapter 3, article 16, section 10, subdivision 5.

Subd. 4. [STUDENT ORGANIZATIONS.] To replace federal funds for grants to organizations supporting vocational student groups:

$90,000.....1997

The commissioner must use these funds, in addition to state funds already designated for this purpose, to make grants to the student groups.

Subd. 5. [INTERNATIONAL CENTER.] For grants to the Minnesota International Center to expand the number of international speakers going into Minnesota classrooms to stimulate global understanding:

$40,000.....1997

This grant is available to the extent it is matched by contributions from nonpublic sources.

Sec. 5. [FEDERAL FUNDS.]

The expenditures of federal grants and aids as shown in budget change order number 1 dated January 18, 1996, for the department of children, families, and learning are approved and appropriated and may be spent as indicated. If the funds are spent for purposes other than those indicated in the change order, the department must notify the appropriate committees of the legislature.

Sec. 6. [EFFECTIVE DATE.]

Sections 1 to 5 are effective the day following final enactment.

Section 1. [121.95] [EDUCATION TECHNOLOGY IMPROVEMENT CLEARINGHOUSES.]

Subdivision 1. [ESTABLISHMENT.] The commissioner of children, families, and learning shall establish a grant program for regional clearinghouses for school districts. The grants must be used to upgrade and refurbish computers that are donated to schools and provide opportunities for student involvement. The purposes of the enterprises are to:

(1) serve as centers where business or others may donate new or used computer and other technology for use by Minnesota schools;

(2) provide an opportunity for students to upgrade donated and existing school-owned computers so that they are capable of being connected to the internet and local networks; and

(3) provide a means of informing schools of available technology and distributing donated and upgraded computers to schools for technology improvements in support of learning.

Each clearinghouse must encourage opportunities for students to learn skills, including the technical skills needed to retrofit and upgrade computers. The clearinghouse shall retain the ability to review equipment for suitability and refuse equipment that does not meet the standards or is not suitable for use in schools. At a minimum, all donated computers must be suitable for upgrade so that the retrofitted computer can be connected to the internet and a local computer network.

Subd. 2. [GRANTS.] The commissioner shall establish procedures and develop forms for applying for grants under this section. The grants may be used to purchase needed technology for upgrading donated computers and other donated technology, for the cost of computer distribution, and for the cost of informing businesses and others about technology donations to the clearinghouse. The commissioner shall develop guidelines for the use and distribution of any computers donated and upgraded through this grant program. The commissioner may establish priorities and prorate grants to match appropriations for the grant program.

Sec. 2. Minnesota Statutes 1995 Supplement, section 124C.74, subdivision 2, is amended to read:

Subd. 2. [SCHOOL DISTRICT TELECOMMUNICATIONS GRANT.] (a) A school district may apply for a grant under this subdivision to: (1) establish connections among school districts, and between school districts and the MNet statewide telecommunications network administered by the department of administration under section 16B.465; or (2) if such a connection meeting minimum electronic connectivity standards is already established, enhance telecommunications capacity for a school district. The minimum standards of capacity are a 56 kilobyte data line and 768 kilobyte ITV connection, subject to change based on the recommendations by the Minnesota education telecommunications council. A district may submit a grant application for interactive television with higher capacity connections in order to maintain multiple simultaneous connections. To ensure coordination among school districts, a school district must submit its grant application to the council through an organization that coordinates the applications and connections of at least ten school districts or through an existing technology cooperative.

(b) The application must, at a minimum, contain information to document for each applicant school district the following:

(1) that the proposed connection meets the minimum standards and employs an open network architecture that will ensure interconnectivity and interoperability with other education institutions and libraries;

(2) that the proposed connection and system will be connected to MNet through the department of administration under section 16B.465 and that a network service and management agreement is in place;

(3) that the proposed connection and system will be connected to the higher education telecommunication network and that a governance agreement has been adopted which includes agreements between the school district system, a higher education regional council, libraries, and coordinating entities;

(4) the telecommunication vendor, which may be MNet, selected to provide service from the district to an MNet hub or to a more cost-effective connection point to MNet; and

(5) other information, as determined by the commissioner in consultation with the education telecommunications council, to ensure that connections are coordinated, meet state standards and are cost-effective, and that service is provided in an efficient and cost-effective manner.

(c) A grant applicant shall obtain a grant proposal for network services from MNet. If MNet is not selected as the vendor, the application must provide the reasons for choosing an alternative vendor. A school district may include, in its grant application, telecommunications access for collaboration with nonprofit arts organizations for the purpose of educational programs, or access for a secondary media center that: (1) is a member of a multitype library system; (2) is open during periods of the year when classroom instruction is occurring; and (3) has licensed school media staff on site.

(d) The Minnesota education telecommunications council shall award grants and the funds shall be dispersed by the commissioner. The highest priority for these grants shall be to bring school districts up to the minimum connectivity standards. The telecommunications council shall also give priority to grant proposals from school districts with fewer than 1,000 students which do not have a data connection. A grant to enhance telecommunications capacity beyond the minimum connectivity standards shall be no more than 75 percent of the maximum grant under this subdivision. Grant applications for minimum connection and enhanced telecommunications capacity grants must be submitted to the commissioner by a coordinating organization including, but not limited to, service cooperatives and education districts. For the purposes of this section, a school district includes charter schools under section 120.064. For the purposes of the grant, a school district may include a charter school under section 120.064, or the Faribault academies. Based on the award made by the council, all grants under this subdivision shall be paid by the commissioner directly to a school district (unless this application requests that the funds be paid to the coordinating agency). Nonpublic schools as defined in section 237.065, subdivision 2, located within the district may access the network. The nonpublic school is responsible for actual costs for connection from the school to the access site.

(e) Money awarded under this section may be used only for the purposes explicitly stated in the grant application.

Sec. 3. Minnesota Statutes 1995 Supplement, section 124C.74, subdivision 3, is amended to read:

Subd. 3. [REGIONAL LIBRARY TELECOMMUNICATION GRANT.] (a) A regional public library system may apply for a telecommunication access grant. The grant must be used to create or expand the capacity of electronic data access and connect the library system with the MNet statewide telecommunications network administered by the department of administration under section 16B.465. Connections must meet minimum system standards of a 56 kilobyte data line and 768 kilobyte ITV connection. To be eligible for a telecommunications access grant, a regional public library system must: (1) meet the level of local support required under section 134.34; and (2) be open at least 20 hours per week; and (3) provide a local match for the grant with local funds under section 134.46.

(b) Any grant award under this subdivision may not be used to substitute for any existing local funds allocated to provide electronic access, or equipment for library staff or the public, or local funds previously dedicated to other library operations.

(c) An application for a regional public library telecommunications access grant must, at a minimum, contain information to document the following:

(1) that the connection meets the minimum standards and employs an open network architecture that will ensure interconnectivity and interoperability with other libraries and the educational system;

(2) that the connection is being established through the most cost-effective means and that the public library has explored and coordinated connections through school districts or other governmental agencies;

(3) that the proposed connection and system will be connected to MNet through the department of administration under section 16B.465 and that a network service and management agreement is in place;

(4) that the proposed connection and system will be connected to the higher education and to the school district telecommunication networks subject to a governance agreement with one or more school districts and a higher education regional council specifying how the system will be coordinated;

(5) the telecommunication vendor, which may be MNet, selected to provide service from the library to an MNet hub or through a more cost-effective connection point to MNet; and

(6) other information, as determined by the commissioner, to ensure that connections are coordinated, meet state standards, are cost-effective, and that service is provided in an efficient and cost-effective manner so that libraries throughout the state are connected in as seamless a manner as technically possible.

(d) A grant applicant shall obtain a grant proposal for network services from MNet. If MNet is not selected as the vendor, the application must provide the reasons for choosing an alternative vendor.

Sec. 4. Minnesota Statutes 1995 Supplement, section 134.46, is amended to read:

134.46 [REGIONAL LIBRARY TELECOMMUNICATIONS AID.]

(a) A regional public library system may apply to the commissioner for telecommunications aid to support data access through regional public library systems, including access to Internet for library staff and the public. The maximum amount of aid for each public library shall be calculated as follows:

(1) multiply $1 times the lesser of the population of the area served by the regional public library system, or the sum of the populations of the participating portions of the system; and

(2) deduct an amount equal to the sum of .1 percent times the adjusted net tax capacity for each participating city or county for the year preceding the year the levy is certified.

(b) A regional public library must match state aid with local funds equal to .1 percent times the adjusted net tax capacity for each participating city or county for the year preceding the year the levy is certified. A regional public library that receives a telecommunications access grant under section 124C.74 may use local funds under this section for the grant match in the year the grant is awarded, without a reduction in state aid. Local matching funds must be an increase in the amount of local funds allocated to support library operations in the year prior to the first year of the telecommunication access grant. Local matching funds are exempt from section 134.34. A grant award under this section may not be used to substitute for any existing local funds allocated to provide electronic data access or equipment for library staff or the public, or local funds previously dedicated to other library operations.

(c) Telecommunications aid under this section may be used for the:

(1) construction, maintenance, and lease costs of data access connections, including Internet connections;

(2) purchase, maintenance, professional development, and support of computer hardware and software for data access;

(3) cost of technical support for a regional library systems' technology investments, including technical support, personnel, contracted services for technical support, and training; and

(4) promotion of electronic access through public libraries for members of the public.

(d) If appropriations are insufficient to fully fund aid under this section, the commissioner shall prorate aid payments to participating regional library systems.

Sec. 5. Minnesota Statutes 1995 Supplement, section 237.065, is amended to read:

237.065 [RATES FOR SPECIAL SERVICE TO SCHOOLS.]

Subdivision 1. [BASIC SERVICES.] Each telephone company, including a company that has developed an incentive plan under section 237.625, that provides local telephone service in a service area that includes a school that has classes within the range from kindergarten to 12th grade shall provide, upon request, additional service to the school

that is sufficient to ensure access to basic telephone service from each classroom and other areas within the school, as determined by the school board. Each company shall set a flat rate for this additional service that is less than the company's flat rate for an access line for a business and the same as or greater than the company's flat rate for an access line for a residence in the same local telephone service exchange. When a company's flat rates for businesses and residences are the same, the company shall use the residential rate for service to schools under this section. The rate required under this section is available only for a school that installs additional service that includes access to basic telephone service from each classroom and other areas within the school, as determined by the school board.

Subd. 2. [BASIC AND ADVANCED TELECOMMUNICATION SERVICES.] (a) Notwithstanding the provisions of sections 237.09, 237.14, 237.60, subdivision 3, and 237.74, each telephone company and telecommunications carrier that provides local telephone service in a service area that includes a school that has classes within the range from kindergarten to grade 12 or that includes a public library may provide, upon request, basic and advanced telecommunication services at reduced or no cost to that school or library. A school or library receiving telecommunications services at reduced or no cost may not resell or sublease the discounted services. Telecommunications services shall be provided in accordance with Public Law Number 104-104.

(b) An agent that provides telecommunications services to a school or library may request the favorable rate on behalf of and for the exclusive benefit of the school or library. The school or library must authorize the agent to make the request of the local telephone company or telecommunications carrier. The telephone company or telecommunications carrier is not required to offer the same price discount to the agent that it would offer to the school district or library. An agent that receives a price discount for telecommunications services on behalf of a school or library may only resell or sublease the discounted services to that school or library.

(c) For the purposes of this subdivision, "school" includes a public school as defined in section 120.05, nonpublic, and church or religious organization schools that provide instruction in compliance with sections 120.101 to 120.102.

Sec. 6. Laws 1995, First Special Session chapter 3, article 12, section 8, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT; PURPOSE.] A grant program is established to help school districts work together and with higher education institutions, businesses, local government units, libraries, and community organizations in order to facilitate individualized learning and manage information by employing technological advances, especially computers and computer-related products, and other advanced industrial technologies supporting school-to-work transitions in manufacturing, engineering, and transportation courses. Recipients shall use grant proceeds to:

(1) enhance teaching and learning productivity through the use of technology;

(2) develop individual learner classroom-based teaching and learning systems that can be aggregated into site, district, and state frameworks;

(3) develop personalized learning plans designed to give learners more responsibility for their learning success and change the role of teacher to learning facilitator;

(4) match and allocate resources;

(5) create a curriculum environment that is multiplatform;

(6) provide user and contributor access to electronic libraries;

(7) schedule activities;

(8) automate progress reports;

(9) increase collaboration between school districts and sites, and with businesses, higher education institutions, libraries, and local government units;

(10) correlate state-defined outcomes to curriculum units for each student;

(11) increase accountability through a reporting system; and

(12) provide technical support, project evaluation, dissemination services, and replication.

Sec. 7. Laws 1995, First Special Session chapter 3, article 12, section 12, subdivision 7, is amended to read:

Subd. 7. [TELECOMMUNICATION ACCESS GRANTS.] For grants to school districts and regional public library systems to establish connections to MNet according to Minnesota Statutes, section 124C.74:

$5,500,000 ..... 1996

$5,000,000 $10,000,000 ..... 1997

Of these appropriations, up to $300,000 is to pay the transmission costs for programming over the network and costs associated with operating the network.

This appropriation is available until June 30, 1997. These appropriations do not cancel but are available until expended.

Sec. 8. [TECHNOLOGY; TECHNICAL ASSISTANCE.]

The commissioner of the department of children, families, and learning shall work with interested and involved organizations including, but not limited to, representatives of school districts, service cooperatives, TIES, education districts, higher education institutions, public libraries, and other government agencies to develop a technology planning guide for school districts. The department must distribute the guides to school districts and hold regional meetings to discuss the planning process. The commissioner may consider a school district's technology plan in making technology-related funding decisions.

Sec. 9. [AFTER-SCHOOL PROGRAMS.]

The commissioner of children, families, and learning shall establish a process to initiate a competitive grant program to enhance the use of technology in after-school programs. Eligible organizations include school districts, private schools, nonprofit community organizations, public housing agencies, and other successful programs that serve youth.

Sec. 10. [ADVANCEMENT OF TECHNOLOGY IN EDUCATION.]

The commissioner shall make a grant to the center for applied research and educational improvement, college of education and human development, University of Minnesota. The grant must be used to publicize information about the use of new methods and curriculum for using telecommunications and computers in support of learning. Information on new techniques, uses, and curricula must be distributed throughout the state. The center may use electronic or print distribution to reach classrooms and teachers in all parts of Minnesota.

Sec. 11. [COOPERATIVE PURCHASING.]

The department of children, families, and learning shall work with the department of administration to make available to public libraries, public and nonpublic schools, political subdivisions and state agencies, state level contracts from multiple sources, including manufacturers and software publishers, for the purchase of instructional and administrative software, computers, video, and network hardware. Public and nonpublic schools, public libraries, and political subdivisions may participate in the contracts if it meets their purchasing needs.

Sec. 12. [TECHNOLOGY INCENTIVES PILOT PROGRAM.]

Subdivision 1. [TECHNOLOGY INCENTIVES PILOT PROGRAM LEVY.] The commissioner of children, families, and learning shall select one district for a technology incentives pilot program. The purpose of the pilot program is to provide secondary school students with individual access to technology throughout the student's secondary educational program, to integrate computers into classroom learning activities, and to provide incentives for students to stay in school and achieve high educational standards.

Subd. 2. [APPLICATION.] In order to be considered for the technology incentives pilot program, a district shall submit a plan developed cooperatively with one or more private partners to the commissioner of children, families, and learning in the form and manner prescribed by the commissioner. The plan shall include goals for improving access to technology, student achievement, and school attendance for students participating in the pilot program; a description of the public and private partnership involved in developing the technology incentives plan; and the

responsibilities of each partner. In selecting a district for the technology incentives pilot program, the commissioner shall take into consideration the number of students in a site who are from families whose household income is less than 185 percent of the federal poverty level.

Subd. 3. [TECHNOLOGY INCENTIVES LEVY.] A district may levy an amount not to exceed one-fourth of the cost of the district's lease purchase agreement under subdivision 4. The district may not levy under this section for more than three years following the first year of the lease purchase agreement.

Subd. 4. [USE OF LEVY.] A district shall use the technology levy to purchase a computer for each ninth grade student enrolled in one or more participating school sites. A portion may be used to purchase or provide technical support or maintenance services directly related to the program. The district may purchase computers for this program under a lease purchase agreement. Notwithstanding section 123.37, subdivision 1, a district may enter into a four-year lease purchase agreement after complying with the other contracting provisions of section 123.37. A ninth grade student must have exclusive use of a computer assigned by this program throughout the time the student is enrolled in the district issuing the computer or enrolled at a participating school site. Notwithstanding sections 120.71 to 120.76, the district may sell the computer to the student when the student receives a high school diploma from the district. The district shall consider ability to pay in establishing the purchase prices of computers.

Subd. 5. [REPORT.] By January 1, 1999, the selected district shall submit a report to the commissioner on the program with recommendations for expanding it or making changes.

Sec. 13. [TECHNOLOGY INTEGRATION MATCHING GRANTS.]

A technology integration matching grant program is established. Grant amounts shall be allocated to districts on a per pupil basis. To be eligible, a district must match the grant with $2 of local funds for each $1 of state funds and must have identified a person to act as a technology coordinator for the district. The grant and matching funds must be used to provide for training in districts to help staff learn how to integrate the use of technology in the classroom with alternative curriculum and instructional approaches, and to purchase computer hardware. Students may be included in training funded through this grant. The department shall establish guidelines and an application process for the grant.

Sec. 14. [TECHNOLOGY RELATED FUND BALANCE ADJUSTMENTS.]

Notwithstanding Minnesota Statutes, section 124A.26, a district must not receive an aid or levy reduction for general education revenue according to that section for fiscal year 1996. Aid adjustments shall be paid in fiscal year 1997. The department shall make the appropriate levy adjustments. This revenue must be transferred to the district's capital equipment account or the operating capital account for technology purposes. This provision assumes an aid payment of approximately $1,300,000 to be paid from general education and a levy of $800,000.

Sec. 15. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.] The sums indicated in this section are appropriated from the general fund to the department of children, families, and learning for the fiscal year designated.

Subd. 2. [EDUCATION TECHNOLOGY CLEARINGHOUSE AND UPGRADE SYSTEM.] For the education technology clearinghouse and upgrade system under section 1:

$250,000.....1997

Any amount of this appropriation not used shall be available for grants under section 7.

Subd. 3. [AFTER-SCHOOL PROGRAMS.] For after-school program grants under section 9:

$1,000,000 ..... 1997

The appropriation is available until June 30, 1998.

Subd. 4. [ELECTRONIC CURRICULUM.] For support of electronic curriculum development:

$860,000.....1997

(a) Of this amount, $750,000 shall be used for a pilot project for districts or a group of districts to implement and demonstrate an electronic curriculum library. The library must be aligned with the content standards of the graduation rule and must include benchmarks to track students' progress. The department shall establish guidelines and an application process to implement this project. The department shall give additional consideration to applicants who work with private sector experts and vendors in developing the library.

(b) Of this amount, $50,000 is for a grant to the environmental conservation section of the Minneapolis library for technology investments and for the expansion on the Internet of environmentally related information.

(c) Of this amount, $20,000 is for a grant to the center for applied research and educational improvement to publicize information about the use of new methods and curriculum for using telecommunications and computers in support of learning.

(d) Of this amount, $40,000 is for a grant to an organization with a demonstrated proficiency in applying computer hardware and software to reading improvement for at-risk students. The grant must be used to advance these techniques in other education organizations.

Subd. 5. [TECHNOLOGY INTEGRATION GRANTS.] For the purposes of sections 13 and 14:

$3,500,000 ..... 1997

Sec. 16. [EFFECTIVE DATE.]

Sections 5, 7, and 11 are effective the day following final enactment.

Section 1. Minnesota Statutes 1995 Supplement, section 43A.316, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] For the purpose of this section, the terms defined in this subdivision have the meaning given them.

(a) [COMMISSIONER.] "Commissioner" means the commissioner of employee relations.

(b) [EMPLOYEE.] "Employee" means:

(1) a person who is a public employee within the definition of section 179A.03, subdivision 14, who is insurance eligible and is employed by an eligible employer;

(2) an elected public official of an eligible employer who is insurance eligible; or

(3) a person employed by a labor organization or employee association certified as an exclusive representative of employees of an eligible employer or by another public employer approved by the commissioner, so long as the plan meets the requirements of a governmental plan under United States Code, title 29, section 1002(32).

(c) [ELIGIBLE EMPLOYER.] "Eligible employer" means:

(1) a public employer within the definition of section 179A.03, subdivision 15, that is a town, county, city, school district as defined in section 120.02, service cooperative as defined in section 123.582, intermediate district as defined in section 136C.02, subdivision 7 136D.01, cooperative center for vocational education as defined in section 123.351, regional management information center as defined in section 121.935, or an education unit organized under the joint powers action, section 471.59; or

(2) an exclusive representative of employees, as defined in paragraph (b); or

(3) another public employer approved by the commissioner.

(d) [EXCLUSIVE REPRESENTATIVE.] "Exclusive representative" means an exclusive representative as defined in section 179A.03, subdivision 8.

(e) [LABOR-MANAGEMENT COMMITTEE.] "Labor-management committee" means the committee established by subdivision 4.

(f) [PROGRAM.] "Program" means the statewide public employees insurance program created by subdivision 3.

Sec. 2. Minnesota Statutes 1995 Supplement, section 65B.132, is amended to read:

65B.132 [STUDENT DISCOUNTS; ELIGIBILITY.]

Any insurance company providing discounts on automobile insurance premiums to eligible persons attending colleges and universities must provide the discount to eligible students enrolled in technical colleges accredited by the department of children, families, and learning.

Sec. 3. Minnesota Statutes 1994, section 120.06, subdivision 1, is amended to read:

Subdivision 1. [AGE LIMITATIONS; PUPILS.] All schools supported in whole or in part by state funds are public schools. Admission to a public school, except a technical college, is free to any person who resides within the district which operates the school, who is under 21 years of age, and who satisfies the minimum age requirements imposed by this section. Notwithstanding the provisions of any law to the contrary, the conduct of all students under 21 years of age attending a public secondary school shall be governed by a single set of reasonable rules and regulations promulgated by the school board. No person shall be admitted to any public school (1) as a kindergarten pupil, unless the pupil is at least five years of age on September 1 of the calendar year in which the school year for which the pupil seeks admission commences; or (2) as a 1st grade student, unless the pupil is at least six years of age on September 1 of the calendar year in which the school year for which the pupil seeks admission commences or has completed kindergarten; except that any school board may establish a policy for admission of selected pupils at an earlier age.

Sec. 4. Minnesota Statutes 1994, section 120.08, subdivision 3, is amended to read:

Subd. 3. [SEVERANCE PAY.] A district shall pay severance pay to a teacher who is placed on unrequested leave of absence by the district as a result of an agreement under this section. A teacher is eligible under this subdivision if the teacher:

(1) is a teacher, as defined in section 125.12, subdivision 1, but not a superintendent;

(2) has a continuing contract with the district according to section 125.12, subdivision 4.

The amount of severance pay shall be equal to the teacher's salary for the school year during which the teacher was placed on unrequested leave of absence minus the gross amount the teacher was paid during the 12 months following the teacher's termination of salary, by an entity whose teachers by statute or rule must possess a valid Minnesota teaching license, and minus the amount a teacher receives as severance or other similar pay according to a contract with the district or district policy. These entities include, but are not limited to, the school district that placed the teacher on unrequested leave of absence, another school district in Minnesota, an education district, an intermediate school district, an ECSU, a board formed under section 471.59, a technical college, a state residential academy, the Minnesota center for arts education, a vocational center, or a special education cooperative. These entities do not include a school district in another state, a Minnesota public post-secondary institution, or a state agency. Only amounts earned by the teacher as a substitute teacher or in a position requiring a valid Minnesota teaching license shall be subtracted. A teacher may decline any offer of employment as a teacher without loss of rights to severance pay.

To determine the amount of severance pay that is due for the first six months following termination of the teacher's salary, the district may require the teacher to provide documented evidence of the teacher's employers and gross earnings during that period. The district shall pay the teacher the amount of severance pay it determines to be due from the proceeds of the levy for this purpose. To determine the amount of severance pay that is due for the second six months of the 12 months following the termination of the teacher's salary, the district may require the teacher to provide documented evidence of the teacher's employers and gross earnings during that period. The district shall pay the teacher the amount of severance pay it determines to be due from the proceeds of the levy for this purpose.

A teacher who receives severance pay under this subdivision waives all further reinstatement rights under section 125.12, subdivision 6a or 6b. If the teacher receives severance pay, the teacher shall not receive credit for any years of service in the district paying severance pay prior to the year in which the teacher becomes eligible to receive severance pay.

The severance pay is subject to section 465.72. The district may levy annually according to section 124.912, subdivision 1, for the severance pay.

Sec. 5. Minnesota Statutes 1995 Supplement, section 121.15, subdivision 1, is amended to read:

Subdivision 1. [CONSULTATION.] A school district shall consult with the commissioner of children, families, and learning before developing any plans and specifications to construct, remodel, or improve the building or site of an educational facility, other than a technical college, for which the estimated cost exceeds $100,000. This consultation shall occur before a referendum for bonds, solicitation for bids, or use of capital expenditure facilities revenue according to section 124.243, subdivision 6, clause (2). The commissioner may require the district to participate in a management assistance plan before conducting a review and comment on the project.

Sec. 6. Minnesota Statutes 1994, section 121.914, subdivision 1, is amended to read:

Subdivision 1. The "operating debt" of a school district means the net negative undesignated fund balance in all school district funds, other than capital expenditure, building construction, debt service, and trust and agency, and post-secondary vocational technical education funds, calculated as of June 30 of each year in accordance with the uniform financial accounting and reporting standards for Minnesota school districts.

Sec. 7. Minnesota Statutes 1994, section 121.915, is amended to read:

121.915 [REORGANIZATION OPERATING DEBT.]

The "reorganization operating debt" of a school district means the net negative undesignated fund balance in all school district funds, other than capital expenditure, building construction, debt redemption, and trust and agency, and post-secondary vocational technical education funds, calculated in accordance with the uniform financial accounting and reporting standards for Minnesota school districts as of:

(1) June 30 of the fiscal year before the first year that a district receives revenue according to section 124.2725; or

(2) June 30 of the fiscal year before the effective date of reorganization according to section 122.22 or 122.23.

Sec. 8. Minnesota Statutes 1995 Supplement, section 121.935, subdivision 1a, is amended to read:

Subd. 1a. [CENTER FOR DISTRICTS WITH ALTERNATIVE SYSTEMS.] Districts that operate alternative systems approved by the state board according to section 121.936 commissioner according to section 121.932, subdivision 4a, may create one regional management information center under section 471.59. The center shall have all of the powers authorized under section 471.59.

The center board may purchase or lease equipment. It may not employ any staff but may enter into a term contract for services. A person providing services according to a contract with the center board is not a state employee.

The department shall provide the center all services that are provided to regional centers formed under subdivision 1, including transferring software and providing accounting assistance.

Sec. 9. Minnesota Statutes 1994, section 122.32, subdivision 1, is amended to read:

Subdivision 1. If there be any organized school district not maintaining a classified school within the district, except those districts which have a contract with the a state university board, or with the board of regents of the University of Minnesota for the education of all the children of the district, such district shall hereby be dissolved as of the date the district ceases to maintain a classified school. Any such district not maintaining a classified school shall forthwith be attached by order of the county board to such district maintaining classified elementary or secondary schools upon notice and hearing as provided in section 122.22 for the attachment of dissolved districts.

Sec. 10. Minnesota Statutes 1994, section 122.535, subdivision 6, is amended to read:

Subd. 6. [SEVERANCE PAY.] A district shall pay severance pay to a teacher who is placed on unrequested leave of absence by the district as a result of the agreement. A teacher is eligible under this subdivision if the teacher:

(1) is a teacher, as defined in section 125.12, subdivision 1, but not a superintendent;

(2) has a continuing contract with the district according to section 125.12, subdivision 4.

The amount of severance pay shall be equal to the teacher's salary for the school year during which the teacher was placed on unrequested leave of absence minus the gross amount the teacher was paid during the 12 months following the teacher's termination of salary, by an entity whose teachers by statute or rule must possess a valid Minnesota teaching license, and minus the amount a teacher receives as severance or other similar pay according to a contract with the district or district policy. These entities include, but are not limited to, the school district that placed the teacher on unrequested leave of absence, another school district in Minnesota, an education district, an intermediate school district, an ECSU, a board formed under section 471.59, a technical college, a state residential academy, the Minnesota center for arts education, a vocational center, or a special education cooperative. These entities do not include a school district in another state, a Minnesota public post-secondary institution, or a state agency. Only amounts earned by the teacher as a substitute teacher or in a position requiring a valid Minnesota teaching license shall be subtracted. A teacher may decline any offer of employment as a teacher without loss of rights to severance pay.

To determine the amount of severance pay that is due for the first six months following termination of the teacher's salary, the district may require the teacher to provide documented evidence of the teacher's employers and gross earnings during that period. The district shall pay the teacher the amount of severance pay it determines to be due from the proceeds of the levy for this purpose. To determine the amount of severance pay that is due for the second six months of the 12 months following the termination of the teacher's salary, the district may require the teacher to provide documented evidence of the teacher's employers and gross earnings during that period. The district shall pay the teacher the amount of severance pay it determines to be due from the proceeds of the levy for this purpose.

A teacher who receives severance pay under this subdivision waives all further reinstatement rights under section 125.12, subdivision 6a or 6b. If the teacher receives severance pay, the teacher shall not receive credit for any years of service in the district paying severance pay prior to the year in which the teacher becomes eligible to receive severance pay.

The severance pay is subject to section 465.72. The district may levy annually according to section 124.912, subdivision 1, for the severance pay.

Sec. 11. Minnesota Statutes 1994, section 122.895, subdivision 2, is amended to read:

Subd. 2. [APPLICABILITY.] This section applies to:

(1) an education district organized according to sections 122.91 to 122.95;

(2) a cooperative vocational center organized according to section 123.351;

(3) a joint powers district or board organized according to section 471.59 which employs teachers to provide instruction;

(4) a joint vocational technical district organized according to sections 136C.60 to 136C.69;

(5) an intermediate district organized according to chapter 136D;

(6) (5) an educational cooperative service unit a service cooperative which employs teachers to provide instruction; and

(7) (6) school districts participating in an agreement for the cooperative provision of special education services to children with disabilities according to section 120.17, subdivision 4.

Sec. 12. Minnesota Statutes 1994, section 123.351, subdivision 10, is amended to read:

Subd. 10. [REVENUE.] A secondary vocational cooperative may be eligible for revenue under section 124.575 124.573.

Sec. 13. Minnesota Statutes 1994, section 123.37, subdivision 1a, is amended to read:

Subd. 1a. The board may authorize its superintendent or business manager, or technical college president in those districts operating a technical college, to lease, purchase, and contract for goods and services within the budget as approved by the board, provided that any transaction in an amount exceeding the minimum amount for which bids are required must first be specifically authorized by the board and must fulfill all other applicable requirements in subdivision 1.

Sec. 14. Minnesota Statutes 1994, section 123.38, subdivision 2, is amended to read:

Subd. 2. The board shall take charge of and control all cocurricular school activities of the teachers and children of the public schools in that district held in the school building or school grounds or under the supervision or direction of the school board and to that end adopt rules and regulations for the conduct of these activities in which the schools of the district or any class or pupils therein may participate. All money received on account of such activities shall be turned over to the school district treasurer, who shall keep the same in the general fund or the technical colleges fund, if applicable, to be disbursed for expenses and salaries connected with the activities, or otherwise, by the board upon properly allowed itemized claims.

No cocurricular activity shall be participated in by the teachers or pupils in the public schools of such district, nor shall the school name or any allied name be used in connection therewith, except by consent and direction of the board.

Sec. 15. Minnesota Statutes 1994, section 123.38, subdivision 2b, is amended to read:

Subd. 2b. (a) The board may take charge of and control all extracurricular activities of the teachers and children of the public schools in the district. Extracurricular activities shall mean all direct and personal services for public school pupils for their enjoyment that are managed and operated under the guidance of an adult or staff member.

(b) Extracurricular activities have all of the following characteristics:

(1) they are not offered for school credit nor required for graduation;

(2) they are generally conducted outside school hours, or if partly during school hours, at times agreed by the participants, and approved by school authorities;

(3) the content of the activities is determined primarily by the pupil participants under the guidance of a staff member or other adult.

(c) If the board does not take charge of and control extracurricular activities, these activities shall be self-sustaining with all expenses, except direct salary costs and indirect costs of the use of school facilities, met by dues, admissions, or other student fundraising events. The general fund or the technical colleges fund, if applicable, shall reflect only those salaries directly related to and readily identified with the activity and paid by public funds. Other revenues and expenditures for extra curricular activities must be recorded according to the "Manual of Instruction for Uniform Student Activities Accounting for Minnesota School Districts and Area Vocational-Technical Colleges." Extracurricular activities not under board control must have an annual financial audit and must also be audited annually for compliance with this section.

(d) If the board takes charge of and controls extracurricular activities, any or all costs of these activities may be provided from school revenues and all revenues and expenditures for these activities shall be recorded in the same manner as other revenues and expenditures of the district.

(e) If the board takes charge of and controls extracurricular activities, no such activity shall be participated in by the teachers or pupils in the district, nor shall the school name or any allied name be used in connection therewith, except by consent and direction of the board.

Sec. 16. Minnesota Statutes 1994, section 124.573, subdivision 3, is amended to read:

Subd. 3. [COMPLIANCE WITH RULES.] Aid shall be paid under this section only for services rendered or for costs incurred in secondary vocational education programs approved by the commissioner and operated in accordance with rules promulgated by the state board. These rules shall provide minimum student-staff ratios required for a secondary vocational education program area to qualify for this aid. The rules must not require the collection of data at the program or course level to calculate secondary vocational aid. The rules shall not require any minimum number of administrative staff, any minimum period of coordination time or extended employment for secondary vocational education personnel, or the availability of vocational student activities or organizations for a secondary vocational education program to qualify for this aid. The requirement in these rules that program components be available for a minimum number of hours shall not be construed to prevent pupils from enrolling in secondary vocational education courses on an exploratory basis for less than a full school year. The state board shall not require a school district to offer more than four credits or 560 hours of vocational education course offerings in any school

year. Rules relating to secondary vocational education programs shall not incorporate the provisions of the state plan for vocational education by reference. This aid shall be paid only for services rendered and for costs incurred by essential, licensed personnel who meet the work experience requirements for licensure pursuant to the rules of the state board. Licensed personnel means persons holding a valid secondary vocational license issued by the commissioner, except that when an average of five or fewer secondary full-time equivalent students are enrolled per teacher in an approved post-secondary program at intermediate district No. 287, 916, or 917, licensed personnel means persons holding a valid vocational license issued by the commissioner or, the state board for vocational technical education, or the board of trustees of the Minnesota state colleges and universities. Notwithstanding section 124.15, the commissioner may modify or withdraw the program or aid approval and withhold aid under this section without proceeding under section 124.15 at any time. To do so, the commissioner must determine that the program does not comply with rules of the state board or that any facts concerning the program or its budget differ from the facts in the district's approved application.

Sec. 17. Minnesota Statutes 1995 Supplement, section 124.71, subdivision 2, is amended to read:

Subd. 2. Commissioner as used in sections 124.71 to 124.76 means the commissioner of children, families, and learning or, for certificates for a technical college, the chancellor of vocational technical education.

Sec. 18. Minnesota Statutes 1995 Supplement, section 124.912, subdivision 1, is amended to read:

Subdivision 1. [STATUTORY OBLIGATIONS.] (a) A school district may levy the amount authorized for liabilities of dissolved districts pursuant to section 122.45; the amounts necessary to pay the district's obligations under section 268.06, subdivision 25; the amounts necessary to pay for job placement services offered to employees who may become eligible for benefits pursuant to section 268.08; the amounts necessary to pay the district's obligations under section 127.05; the amounts authorized by section 122.531; the amounts necessary to pay the district's obligations under section 122.533; and for severance pay required by sections 120.08, subdivision 3, and 122.535, subdivision 6.

(b) An education district that negotiates a collective bargaining agreement for teachers under section 122.937 may certify to the department of children, families, and learning the amount necessary to pay all of the member districts' obligations and the education district's obligations under section 268.06, subdivision 25.

The department of children, families, and learning must allocate the levy amount proportionately among the member districts based on adjusted net tax capacity. The member districts must levy the amount allocated.

(c) Each year, a member district of an education district that levies under this subdivision must transfer the amount of revenue certified under paragraph (b) to the education district board according to this subdivision. By June 20 and November 30 of each year, an amount must be transferred equal to:

(1) 50 percent times

(2) the amount certified in paragraph (b) minus homestead and agricultural credit aid allocated for that levy according to section 273.1398, subdivision 6.

Sec. 19. Minnesota Statutes 1995 Supplement, section 125.05, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY TO LICENSE.] (a) The board of teaching shall license teachers, as defined in section 125.03, subdivision 1, except for supervisory personnel, as defined in section 125.03, subdivision 4.

(b) The state board of education shall license supervisory personnel as defined in section 125.03, subdivision 4.

(c) The state board of technical colleges, according to section 136C.04, shall license post-secondary vocational and adult vocational teachers, support personnel, and supervisory personnel in technical colleges.

(d) Licenses under the jurisdiction of the board of teaching and the state board of education must be issued through the licensing section of the department of children, families, and learning.

Sec. 20. Minnesota Statutes 1994, section 125.09, subdivision 4, is amended to read:

Subd. 4. [MANDATORY REPORTING.] A school board shall report to the board of teaching, the state board of education, or the state board of technical colleges trustees of the Minnesota state colleges and universities, whichever has jurisdiction over the teacher's license, when its teacher is discharged or resigns from employment after a charge is filed with the school board under section 125.17, subdivisions 4, clauses (1), (2), and (3), and 5, or after charges are

filed that are ground for discharge under section 125.12, subdivision 8, clauses (a), (b), (c), (d), and (e), or when a teacher is suspended or resigns while an investigation is pending under section 125.12, subdivision 8, clauses (a), (b), (c), (d), and (e); 125.17, subdivisions 4, clauses (1), (2), and (3), and 5; or 626.556. The report must be made to the board within ten days after the discharge, suspension, or resignation has occurred. The board to which the report is made shall investigate the report for violation of subdivision 1 and the reporting school board shall cooperate in the investigation. Notwithstanding any provision in chapter 13 or any law to the contrary, upon written request from the licensing board having jurisdiction over the teacher's license, a school board or school superintendent shall provide the licensing board with information about the teacher from the school district's files, any termination or disciplinary proceeding, any settlement or compromise, or any investigative file. Upon written request from the appropriate licensing board, a school board or school superintendent may, at the discretion of the school board or school superintendent, solicit the written consent of a student and the student's parent to provide the licensing board with information that may aid the licensing board in its investigation and license proceedings. The licensing board's request need not identify a student or parent by name. The consent of the student and the student's parent must meet the requirements of chapter 13 and Code of Federal Regulations, title 34, section 99.30. The licensing board may provide a consent form to the school district. Any data transmitted to any board under this section shall be private data under section 13.02, subdivision 12, notwithstanding any other classification of the data when it was in the possession of any other agency.

The board to which a report is made shall transmit to the attorney general's office any record or data it receives under this subdivision for the sole purpose of having the attorney general's office assist that board in its investigation. When the attorney general's office has informed an employee of the appropriate licensing board in writing that grounds exist to suspend or revoke a teacher's license to teach, that licensing board must consider suspending or revoking or decline to suspend or revoke the teacher's license within 45 days of receiving a stipulation executed by the teacher under investigation or a recommendation from an administrative law judge that disciplinary action be taken.

Sec. 21. Minnesota Statutes 1994, section 125.1385, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY; LIMITS.] The state university board of trustees of the Minnesota state colleges and universities and the board of regents of the University of Minnesota may develop programs to exchange faculty between colleges or schools of education and school districts, subject to section 125.138.

The programs must be used to assist in improving teacher education by involving current teachers in education courses and placing post-secondary faculty in elementary and secondary classrooms. Programs must include exchanges that extend beyond the immediate service area of the institution to address the needs of different types of schools, students, and teachers.

Sec. 22. Minnesota Statutes 1994, section 125.185, subdivision 4, is amended to read:

Subd. 4. [LICENSE AND RULES.] (a) The board shall adopt rules to license public school teachers and interns subject to chapter 14.

(b) The board shall adopt rules requiring a person to successfully complete a skills examination in reading, writing, and mathematics as a requirement for initial teacher licensure. Such rules shall require college and universities offering a board approved teacher preparation program to provide remedial assistance to persons who did not achieve a qualifying score on the skills examination, including those for whom English is a second language.

(c) The board shall adopt rules to approve teacher preparation programs.

(d) The board shall provide the leadership and shall adopt rules for the redesign of teacher education programs to implement a research based, results-oriented curriculum that focuses on the skills teachers need in order to be effective. The board shall implement new systems of teacher preparation program evaluation to assure program effectiveness based on proficiency of graduates in demonstrating attainment of program outcomes.

(e) The board shall adopt rules requiring successful completion of an examination of general pedagogical knowledge and examinations of licensure-specific teaching skills. The rules shall be effective on the dates determined by the board, but not later than July 1, 1999.

(f) The board shall adopt rules requiring teacher educators to work directly with elementary or secondary school teachers in elementary or secondary schools to obtain periodic exposure to the elementary or secondary teaching environment.

(g) The board shall grant licenses to interns and to candidates for initial licenses.

(h) The board shall design and implement an assessment system which requires a candidate for an initial license and first continuing license to demonstrate the abilities necessary to perform selected, representative teaching tasks at appropriate levels.

(i) The board shall receive recommendations from local committees as established by the board for the renewal of teaching licenses.

(j) The board shall grant life licenses to those who qualify according to requirements established by the board, and suspend or revoke licenses pursuant to sections 125.09 and 214.10. The board shall not establish any expiration date for application for life licenses.

(k) With regard to post-secondary vocational education teachers the board of teaching shall adopt and maintain as its rules the rules of the state board of technical colleges.

Sec. 23. Minnesota Statutes 1994, section 125.60, subdivision 2, is amended to read:

Subd. 2. The board of any district may grant an extended leave of absence without salary to any full- or part-time elementary, or secondary, or technical college teacher who has been employed by the district for at least five years and has at least ten years of allowable service, as defined in section 354.05, subdivision 13, or the bylaws of the appropriate retirement association or ten years of full-time teaching service in Minnesota public elementary, and secondary, and technical colleges schools. The maximum duration of an extended leave of absence pursuant to this section shall be determined by mutual agreement of the board and the teacher at the time the leave is granted and shall be at least three but no more than five years. An extended leave of absence pursuant to this section shall be taken by mutual consent of the board and the teacher. If the school board denies a teacher's request, it shall provide reasonable justification for the denial.

Sec. 24. Minnesota Statutes 1994, section 125.611, subdivision 1, is amended to read:

Subdivision 1. [CRITERIA.] For purposes of this section, "teacher" means a teacher as defined in section 125.03, subdivision 1, who:

(a) is employed in the a public elementary, or secondary, or technical colleges school in the state and

(b) either

(1)(i) has not less than 15 total years of full-time teaching service in elementary, secondary, and technical colleges, or at least 15 years of allowable service as defined in sections 354.05, subdivision 13; 354.092; 354.093; 354.094; 354.53; 354.66; 354A.011, subdivision 4; 354A.091; 354A.092; 354A.093; 354A.094; or Laws 1982, chapter 578, article II, section 1 and

(ii) has or will have attained the age of 55 years but less than 65 years as of the June 30 in the school year during which an application for an early retirement incentive is made, or

(2) has not less than 30 total years of full-time teaching service in elementary, secondary, and technical colleges, or at least 30 years of allowable service as defined in sections 354.05, subdivision 13; 354.092; 354.093; 354.094; 354.53; 354.66; 354A.011, subdivision 4; 354A.091; 354A.092; 354A.093; 354A.094; or Laws 1982, chapter 578, article II, section 1.

Sec. 25. Minnesota Statutes 1995 Supplement, section 126.151, subdivision 1, is amended to read:

Subdivision 1. [ACTIVITIES OF THE ORGANIZATION.] Any student enrolled in a vocational technical education program approved by the state boards board of education and technical colleges or the board of trustees of the Minnesota state colleges and universities may belong to a vocational student organization that is operated as an integral part of the vocational program. The commissioner of children, families, and learning and the chancellor of technical colleges board of trustees of the Minnesota state colleges and universities may provide necessary technical assistance and leadership at the state level for administration of approved vocational student organizations and fiscal accounts, including administration of state and national conferences.

Sec. 26. Minnesota Statutes 1994, section 126.151, subdivision 2, is amended to read:

Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner and the state board of technical trustees of the Minnesota state colleges and universities may retain dues and other money collected on behalf of students participating in approved vocational student organizations and may deposit the money in separate accounts. The money in these accounts shall be available for expenditures for state and national activities related to specific organizations. Administration of money collected under this section is not subject to the provisions of chapters 15, 16A, and 16B, and may be deposited outside the state treasury. Money shall be administered under the policies of the applicable state board or agency relating to post-secondary and secondary vocational student organizations and is subject to audit by the legislative auditor. Any unexpended money shall not cancel but may be carried forward to the next fiscal year.

Sec. 27. [136D.01] [INTERMEDIATE DISTRICT.]

"Intermediate district" means a district with a cooperative program which has been established under Laws 1967, chapter 822, as amended; Laws 1969, chapter 775, as amended; and Laws 1969, chapter 1060, as amended, offering integrated services for secondary, post-secondary, and adult students in the areas of vocational education, special education, and other authorized services.

Sec. 28. Minnesota Statutes 1994, section 136D.23, subdivision 1, is amended to read:

Subdivision 1. [PUBLIC AGENCY.] The joint school board shall be a public agency of the participating school districts and may receive and disburse federal and state funds made available to it or to the participating school districts, including moneys described in section 136C.07.

Sec. 29. Minnesota Statutes 1994, section 136D.83, subdivision 1, is amended to read:

Subdivision 1. [PUBLIC AGENCY.] The joint school board shall be a public agency of the participating school districts and may receive and disburse federal and state funds made available to it or to the participating school districts, including moneys described in section 136C.07.

Sec. 30. Minnesota Statutes 1994, section 144.4165, is amended to read:

144.4165 [TOBACCO PRODUCTS PROHIBITED IN PUBLIC SCHOOLS.]

No person shall at any time smoke, chew, or otherwise ingest tobacco or a tobacco product in a public school, as defined in section 120.05, subdivision 2. This prohibition extends to all facilities, whether owned, rented, or leased, and all vehicles that a school district owns, leases, rents, contracts for, or controls. This prohibition does not apply to a technical college. Nothing in this section shall prohibit the lighting of tobacco by an adult as a part of a traditional Indian spiritual or cultural ceremony. For purposes of this section, an Indian is a person who is a member of an Indian tribe as defined in section 257.351, subdivision 9.

Sec. 31. [REPEALER.]

Minnesota Statutes 1994, sections 121.11, subdivision 15; and 136D.75, are repealed.

Section 1. Minnesota Statutes 1995 Supplement, section 121.904, subdivision 4c, is amended to read:

Subd. 4c. [CHANGE IN LEVY RECOGNITION PERCENT.] (a) Money appropriated under section 16A.152, subdivision 2, must be used to reduce the levy recognition percent specified in subdivision 4a, clauses (b)(2) and (b)(3), for taxes payable in the succeeding same calendar year the appropriation is made.

(b) The levy recognition percent shall equal the result of the following computation: the current levy recognition percent, times the ratio of

(1) the statewide total amount of levy recognized in June of the year in which the taxes are payable pursuant to subdivision 4a, clause (b), excluding those levies that are shifted for revenue recognition but are not included in the computation of the adjustment to aids under section 124.155, subdivision 1, reduced by the difference between the

amount of money appropriated under section 16A.152, subdivision 2, and the amount required for the adjustment payment under clause (d), to

(2) the statewide total amount of the levy recognized in June of the year in which the taxes are payable pursuant to subdivision 4a, clause (b), excluding those levies that are shifted for revenue recognition but are not included in the computation of the adjustment to aids under section 124.155, subdivision 1.

The result shall be rounded up to the nearest one-tenth of a percent. However, in no case shall the levy recognition percent be reduced below zero or increased above the current levy recognition percent.

(c) The commissioner of finance must certify to the commissioner of children, families, and learning the amount available to reduce the levy recognition percent computed under this subdivision by January 5 of each year. The commissioner of children, families, and learning must notify school districts of a change in the levy recognition percent by January 15 of the same month.

(d) When the levy recognition percent is increased or decreased as provided in this subdivision, a special aid adjustment shall be made to each school district with an operating referendum levy:

(i) When the levy recognition percent is increased from the prior fiscal year, the commissioner of children, families, and learning shall calculate the difference between (1) the amount of the levy under section 124A.03, that is recognized as revenue for the current fiscal year according to subdivision 4a; and (2) the amount of the levy, under section 124A.03, that would have been recognized as revenue for the current fiscal year had the percentage according to subdivision 4a, not been increased. The commissioner shall reduce other aids due the district by the amount of the difference. This aid reduction shall be in addition to the aid reduction required because of the increase pursuant to this subdivision of the levy recognition percent.

(ii) When the levy recognition percent is reduced from the prior fiscal year, a special adjustment payment shall be made to each school district with an operating referendum levy that received an aid reduction when the levy recognition percent was last increased. The special adjustment payment shall be in addition to the additional payments required because of the reduction pursuant to this subdivision of the levy recognition percent. The amount of the special adjustment payment shall be computed by the commissioner of children, families, and learning such that any remaining portion of the aid reduction these districts received that has not been repaid is repaid on a proportionate basis as the levy recognition percent is reduced from 50 percent to 31 percent. The special adjustment payment must be included in the state aid payments to school districts according to the schedule specified in section 124.195, subdivision 3.

(e) The commissioner of finance shall transfer from the general fund to the education aids appropriations specified by the commissioner of children, families, and learning, the amounts needed to finance the additional payments required because of the reduction pursuant to this subdivision of the levy recognition percent. Payments to a school district of additional state aids resulting from a reduction in the levy recognition percent must be included in the cash metering of payments made according to section 124.195 after January 15, and must be paid in a manner consistent with the percent specified in that section.

Sec. 2. Minnesota Statutes 1995 Supplement, section 124.17, subdivision 1, is amended to read:

Subdivision 1. [PUPIL UNIT.] Pupil units for each resident pupil in average daily membership shall be counted according to this subdivision.

(a) A prekindergarten pupil with a disability who is enrolled in a program approved by the commissioner and has an individual education plan is counted as the ratio of the number of hours of assessment and education service to 825 with a minimum of 0.28, but not more than one.

(b) A prekindergarten pupil who is assessed but determined not to be handicapped is counted as the ratio of the number of hours of assessment service to 825.

(c) A kindergarten pupil with a disability who is enrolled in a program approved by the commissioner is counted as the ratio of the number of hours of assessment and education services required in the fiscal year by the pupil's individual education program plan to 875, but not more than one.

(d) A kindergarten pupil who is not included in paragraph (c) is counted as .53 of a pupil unit for fiscal year 1995 and thereafter.

(e) A pupil who is in any of grades 1 to 6 is counted as 1.06 pupil units for fiscal year 1995 and thereafter.

(f) For fiscal year 1996 and fiscal year 1997, a pupil who is in any of grades 7 to 12 is counted as 1.3 pupil units. For fiscal year 1998, a pupil who is in any of grades 7 to 12 is counted as 1.25 pupil units. For fiscal year 1999 and later years, a pupil who is in any of grades 7 to 12 is counted as 1.2 pupil units.

(g) For fiscal year 1996 and fiscal year 1997, a pupil who is in the post-secondary enrollment options program is counted as 1.3 pupil units. For fiscal year 1998, a pupil who is in the post-secondary enrollment options program is counted as 1.25 pupil units. For fiscal year 1999 and later years, a pupil who is in the post-secondary enrollment options program is counted as 1.2 pupil units.

(h) In fiscal year 1998, the sum of pupil units used in computing a district's general education revenue and referendum revenue may not be reduced by more than two percent due to the reduction in the secondary pupil weight from 1.3 as specified in paragraphs (f) and (g). In fiscal year 1999 and later years, the sum of pupil units used in computing a district's general education revenue and referendum revenue may not be decreased by more than four percent due to the reduction in the secondary weight from 1.3 as specified in paragraphs (f) and (g).

Sec. 3. Laws 1995, First Special Session chapter 3, article 14, section 5, is amended to read:

Sec. 5. [FISCAL YEAR 1998 AND 1999 APPROPRIATIONS.]

The appropriations for the 1998-99 biennium for programs contained in this act shall be $2,943,900,000 $2,968,714,000 for fiscal year 1998 and $3,076,600,000 $3,022,210,000 for fiscal year 1999, plus or minus any adjustments due to variance in pupil forecasts, levies, or other factors generating entitlements for the general revenue program. These amounts shall first be allocated to fully fund the general revenue program. Amounts remaining shall be allocated to other programs in proportion to the fiscal year 1997 appropriations or to entitlements generated by existing law for those programs for each year, up to the amount of the entitlement or the fiscal year 1997 appropriations. Any amounts remaining after allocation to these other programs shall be maintained for allocation recommendations by the governor and legislature in the 1997 session.

Sec. 4. [LEVY RECOGNITION; REFERENDUM.]

Notwithstanding Minnesota Statutes 1995 Supplement, section 121.904, subdivision 4a, the levy recognition percentage for fiscal year 1996 and later applied to the operating referendum levy is 31.

Sec. 5. [EFFECTIVE DATE.]

Sections 1 and 4 are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to education; prekindergarten through grade 12; providing for general education; transportation; special programs; community education; facilities; organization and cooperation; education excellence; other education programs and financing; education policy provisions; libraries; state agencies; technology; conforming amendments; appropriating money; amending Minnesota Statutes 1994, sections 120.06, subdivision 1; 120.08, subdivision 3; 120.17, subdivision 9, and by adding a subdivision; 120.1701, subdivision 10; 120.73, subdivision 1; 121.8355, subdivision 1, and by adding a subdivision; 121.906; 121.914, subdivision 1; 121.915; 122.32, subdivision 1; 122.535, subdivision 6; 122.895, subdivision 2; 123.35, subdivision 19a, and by adding a subdivision; 123.351, subdivision 10; 123.3514, subdivision 9; 123.37, subdivision 1a; 123.38, subdivisions 2 and 2b; 123.39, subdivision 8b; 123.932, subdivisions 1b, 1c, 1e, and 11; 123.933, as amended; 123.935, subdivisions 2 and 7; 124.09; 124.17, subdivision 1e, and by adding subdivisions; 124.195, subdivision 8; 124.239, subdivision 4; 124.2711, subdivision 6; 124.2713, subdivision 10; 124.273, by adding subdivisions; 124.276; 124.311, subdivisions 1, 2, 3, 4, 5, and 7; 124.573, subdivision 3; 124.86, subdivisions 1 and 2; 124.91, subdivision 1, and by adding a subdivision; 124.912, subdivision 6; 124.916, subdivision 4; 124.95, subdivision 1; 124A.02, subdivision 25; 124A.029, subdivision 4; 124A.03, subdivisions 2b, 3b, and by adding a subdivision; 124A.0311, subdivision 3; 124A.035, subdivision 4; 124A.036, by adding a subdivision; 124A.22, by adding a subdivision; 124A.28, subdivision 1; 124A.291; 124C.45, by adding a subdivision; 125.05, subdivision 1a, and by adding a subdivision; 125.09, subdivision 4; 125.1385, subdivision 1; 125.185, subdivision 4; 125.60, subdivision 2; 125.611, subdivision 1; 125.70; 125.701; 125.703; 125.704; 125.705, subdivision 1; 126.151, subdivision 2; 126.22, subdivision 1; 126.531, subdivision 3; 126.83; 128D.11, subdivisions 3, 5, 8, and 10; 134.34, by adding a subdivision; 136D.23, subdivision 1; 136D.83, subdivision 1; 144.4165; 169.4504, by

adding a subdivision; 256.736, subdivision 11; 466.01, subdivision 1; and 471.59, subdivision 11; Minnesota Statutes 1995 Supplement, sections 13.46, subdivision 2; 43A.316, subdivision 2; 65B.132; 115A.072, subdivision 1; 120.064, subdivision 9; 120.1045, subdivision 1, and by adding a subdivision; 120.17, subdivisions 3a, 3b, and 6; 120.1701, subdivision 20; 120.181; 120.74, subdivision 1; 121.11, subdivision 7c; 121.15, subdivision 1; 121.904, subdivision 4c; 121.911, subdivision 5; 121.917, subdivision 4; 121.935, subdivision 1a; 123.3514, subdivisions 6 and 6b; 123.7991, subdivision 2; 124.155, subdivision 2; 124.17, subdivision 1; 124.195, subdivision 12; 124.223, subdivision 4; 124.225, subdivisions 8l, 14, 16, and 17; 124.227; 124.243, subdivision 2; 124.2445; 124.2455; 124.248, subdivisions 1, 1a, 2, and 3; 124.273, subdivisions 1c and 1d; 124.314, subdivision 2; 124.3201, subdivisions 1, 2, 3, 5, and by adding subdivisions; 124.3202; 124.323, subdivisions 1 and 2; 124.574, subdivisions 2f and 2g; 124.71, subdivision 2; 124.912, subdivision 1; 124.918, subdivision 2; 124.961; 124A.03, subdivision 2; 124A.0311, subdivision 2; 124A.22, subdivisions 2a, 10, and 13b; 124A.23, subdivision 4; 124C.74, subdivisions 2 and 3; 125.05, subdivision 1; 126.151, subdivision 1; 126.22, subdivisions 2, 3, 5, and 8; 126.23; 126.70, subdivision 1; 128B.03, subdivision 3a; 134.46; 169.01, subdivision 6; 237.065; 325G.203, subdivision 11; and 631.40, subdivision 1a; Laws 1993, chapter 224, article 1, section 34, subdivisions 2 and 3; article 12, sections 39, as amended; and 41, as amended; Laws 1995, First Special Session chapter 3, article 1, sections 61; and 63, subdivision 2; article 2, section 53; article 3, section 19, subdivisions 7 and 15; article 4, section 29, subdivision 10; article 5, section 20, subdivisions 5, 6, and 7; article 6, section 17, subdivisions 2, 4, and by adding subdivisions; article 7, section 5, subdivision 4; article 8, sections 25, subdivisions 2 and 18; and 27; article 11, sections 21, subdivision 2; 22; and 23; article 12, sections 8, subdivision 1; and 12, subdivision 7; article 14, section 5; article 15, sections 25; and 26, subdivisions 7, 8, and 10; proposing coding for new law in Minnesota Statutes, chapters 120; 121; 123; 124; 124C; 125; 126; and 136D; repealing Minnesota Statutes 1994, sections 121.11, subdivision 15; and 136D.75; Minnesota Statutes 1995 Supplement, sections 120.1045, subdivision 3; and 126A.02, subdivision 2; Laws 1993, chapter 224, article 1, section 34, subdivision 1; Minnesota Rules, parts 8700.7700; 8700.7710; 8750.9000; 8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 8750.9600; and 8750.9700."

We request adoption of this report and repassage of the bill.

House Conferees: Alice M. Johnson, Lyndon R. Carlson, Matt Entenza, Jeff Bertram and Robert Ness.

Senate Conferees: Lawrence J. Pogemiller, Jane Krentz, Jerry R. Janezich, Martha R. Robertson and David L. Knutson.

Johnson, A., moved that the report of the Conference Committee on H. F. No. 2156 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2156, A bill for an act relating to education; prekindergarten through grade 12; providing for general education; transportation; special programs; community education; facilities; organization and cooperation; education excellence; other education programs and financing; education policy provisions; libraries; state agencies; technology; conforming amendments; budget reserve and cost management; appropriating money; amending Minnesota Statutes 1994, sections 120.06, subdivision 1; 120.08, subdivision 3; 120.101, by adding a subdivision; 120.17, subdivision 9; 120.1701, subdivision 10; 120.73, subdivision 1; 121.11, subdivision 15; 121.8355, subdivision 1; 121.906; 121.914, subdivision 1; 121.915; 122.32, subdivision 1; 122.535, subdivision 6; 122.895, subdivision 2; 123.35, subdivision 19a; 123.351, subdivision 10; 123.3514, subdivision 9; 123.37, subdivision 1a; 123.38, subdivisions 2 and 2b; 123.932, subdivisions 1b, 1c, 1e, and 11; 123.933, as amended; 123.935, subdivisions 2 and 7; 123.951; 124.09; 124.155, subdivision 1; 124.17, subdivision 1e, and by adding subdivisions; 124.19, subdivision 1; 124.195, subdivision 8; 124.239, subdivision 5, and by adding subdivisions; 124.2711, subdivision 6; 124.2713, subdivision 10; 124.273, by adding subdivisions; 124.311, subdivisions 2, 3, 5, and 7; 124.48, subdivision 3; 124.573, subdivisions 2e, 2f, and 3; 124.86, subdivision 1; 124.91, subdivision 1, and by adding a subdivision; 124.912, subdivision 6; 124.916, subdivision 4; 124A.02, subdivision 25; 124A.029, subdivision 4; 124A.03, subdivisions 2b, 3b, and by adding a subdivision; 124A.0311, subdivision 3; 124A.035, subdivision 4; 124A.036, by adding a subdivision; 124A.22, by adding a subdivision; 124A.26, subdivision 1; 125.05, subdivision 1a, and by adding a subdivision; 125.09, subdivision 4; 125.1385, subdivision 1; 125.185, subdivision 4; 125.60, subdivision 2; 125.611, subdivision 1; 126.151, subdivision 2; 127.29, subdivision 2; 134.34, by adding a subdivision; 136D.23, subdivision 1; 136D.83, subdivision 1; 144.4165; 169.4504, by adding a subdivision; and 256.736, subdivision 11; Minnesota Statutes 1995 Supplement, sections 13.46, subdivision 2; 43A.316, subdivision 2; 65B.132; 120.064, subdivision 9; 120.1045; 120.17, subdivisions 3a, 3b, and 6; 120.1701, subdivision 20; 120.181; 120.74, subdivision 1; 121.11, subdivision 7c; 121.15, subdivision 1; 121.904, subdivisions 4a and 4c; 121.911, subdivision 5; 121.917, subdivision 4; 121.935, subdivision 1a; 123.3514, subdivisions 6

and 6b; 124.155, subdivision 2; 124.17, subdivisions 1 and 1d; 124.195, subdivision 12; 124.223, subdivision 4; 124.225, subdivisions 8l, 14, 16, and 17; 124.227; 124.243, subdivision 2; 124.2445; 124.2455; 124.248, subdivisions 1, 1a, 2, and 3; 124.273, subdivisions 1c and 1d; 124.314, subdivision 2; 124.32, subdivision 12; 124.3201, subdivisions 1, 2, 3, and by adding subdivisions; 124.3202; 124.323, subdivisions 1 and 2; 124.574, subdivisions 2f and 2g; 124.71, subdivision 2; 124.912, subdivision 1; 124.961; 124A.0311, subdivision 2; 124A.22, subdivisions 2a, 10, and 13b; 124A.23, subdivision 4; 124C.74, subdivisions 2 and 3; 125.05, subdivision 1; 126.12, subdivision 2; 126.151, subdivision 1; 126.22, subdivisions 2 and 5; 126.70, subdivision 1; 134.46; 169.01, subdivision 6; 237.065; and 631.40, subdivision 1a; Laws 1993, chapter 224, article 1, section 34; article 12, sections 32, as amended; 39, as amended; and 41, as amended; Laws 1995, First Special Session chapter 3, article 1, sections 61; and 63; article 3, section 19, subdivision 15; article 4, section 29, subdivision 5; article 5, section 20, subdivisions 5 and 6; article 6, section 17, subdivisions 2, 4, and by adding subdivisions; article 8, sections 25, subdivision 2; and 27; article 11, sections 21, subdivision 2; 22; and 23; article 12, sections 8, subdivision 1; and 12, subdivision 7; article 14, section 5; and article 15, section 26, subdivisions 7 and 10; proposing coding for new law in Minnesota Statutes, chapters 120; 121; 123; 124; 124A; 124C; 125; 126; and 136D; repealing Minnesota Statutes 1994, sections 124A.03, subdivision 3b; 124B.02; 124B.10; 124B.20, subdivisions 2 and 3; and 136D.75; Minnesota Statutes 1995 Supplement, sections 120.1045, subdivision 3; 124B.01; 124B.03; and 124B.20, subdivision 1; Minnesota Rules, parts 8700.7700; 8700.7710; 8750.9000; 8750.9100; 8750.9200; 8750.9300; 8750.9400; 8750.9500; 8750.9600; and 8750.9700.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 117 yeas and 16 nays as follows:

Those who voted in the affirmative were:

Anderson, R. Finseth      Kelso        Olson, E.    Solberg
Bakk         Frerichs     Kinkel       Opatz        Stanek
Bettermann   Garcia       Knight       Orfield      Sviggum
Bishop       Girard       Larsen       Osskopp      Swenson, D.
Boudreau     Goodno       Leighton     Osthoff      Swenson, H.
Broecker     Greenfield   Leppik       Ostrom       Sykora
Brown        Greiling     Lieder       Otremba      Tomassoni
Carlson, L.  Gunther      Lindner      Ozment       Tompkins
Carlson, S.  Haas         Long         Paulsen      Trimble
Carruthers   Hackbarth    Lourey       Pawlenty     Tunheim
Clark        Harder       Luther       Pelowski     Van Dellen
Commers      Hasskamp     Macklin      Perlt        Vickerman
Cooper       Hausman      Mahon        Peterson     Wagenius
Daggett      Holsten      Mares        Pugh         Warkentin
Dauner       Huntley      Mariani      Rest         Weaver
Davids       Jaros        Marko        Rhodes       Wejcman
Dawkins      Jefferson    McCollum     Rice         Wenzel
Dehler       Jennings     McElroy      Rostberg     Winter
Delmont      Johnson, A.  McGuire      Rukavina     Worke
Dempsey      Johnson, R.  Milbert      Sarna        Workman
Dorn         Johnson, V.  Molnau       Schumacher   Sp.Anderson,I
Entenza      Kahn         Munger       Seagren      
Erhardt      Kalis        Murphy       Skoglund     
Farrell      Kelley       Ness         Smith        

Abrams       Koppendrayer Mulder       Pellow       
Anderson, B. Kraus        Olson, M.    Tuma         
Bradley      Krinkie      Onnen        Van Engen    
Knoblach     Lynch        Orenstein    Wolf         

A bill for an act relating to cemeteries; clarifying procedures for examination of certain accounts and records by the state auditor; providing for transfer of cemeteries to and from local units of government; amending Minnesota Statutes 1994, sections 149.13, subdivision 5; 306.02, subdivision 2; 306.025; 306.243, by adding a subdivision; and 306.97.

March 20, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2413, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments.

We request adoption of this report and repassage of the bill.

House Conferees: Loren Jennings and Mindy Greiling.

Senate Conferees: Janet B. Johnson, Leonard R. Price and Edward C. Oliver.

Jennings moved that the report of the Conference Committee on H. F. No. 2413 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2413, A bill for an act relating to cemeteries; clarifying procedures for examination of certain accounts and records by the state auditor; providing for transfer of cemeteries to and from local units of government; amending Minnesota Statutes 1994, sections 149.13, subdivision 5; 306.02, subdivision 2; 306.025; 306.243, by adding a subdivision; and 306.97.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Ness         Smith
Anderson, B. Finseth      Knoblach     Olson, E.    Solberg
Anderson, R. Frerichs     Koppendrayer Olson, M.    Stanek
Bakk         Garcia       Kraus        Onnen        Sviggum
Bertram      Girard       Krinkie      Opatz        Swenson, D.
Bettermann   Goodno       Larsen       Orenstein    Swenson, H.
Bishop       Greenfield   Leighton     Orfield      Sykora
Boudreau     Greiling     Leppik       Osskopp      Tomassoni
Bradley      Gunther      Lieder       Osthoff      Tompkins
Broecker     Haas         Lindner      Ostrom       Trimble
Brown        Hackbarth    Long         Otremba      Tuma
Carlson, L.  Harder       Lourey       Ozment       Tunheim
Carlson, S.  Hasskamp     Luther       Paulsen      Van Dellen
Carruthers   Hausman      Lynch        Pawlenty     Van Engen
Clark        Holsten      Macklin      Pellow       Vickerman
Commers      Huntley      Mahon        Pelowski     Wagenius
Cooper       Jaros        Mares        Perlt        Warkentin
Daggett      Jefferson    Mariani      Peterson     Weaver
Dauner       Jennings     Marko        Pugh         Wejcman
Davids       Johnson, A.  McCollum     Rest         Wenzel
Dawkins      Johnson, R.  McElroy      Rhodes       Winter
Dehler       Johnson, V.  McGuire      Rostberg     Wolf
Delmont      Kahn         Milbert      Rukavina     Worke
Dempsey      Kalis        Molnau       Sarna        Workman
Dorn         Kelley       Mulder       Schumacher   Sp.Anderson,I
Entenza      Kelso        Munger       Seagren      
Erhardt      Kinkel       Murphy       Skoglund     

A bill for an act relating to veterinarians; changing the veterinary practice act; amending Minnesota Statutes 1994, sections 156.001, subdivisions 3 and 6; 156.01, subdivisions 1, 2, 5, and by adding a subdivision; 156.02; 156.04; 156.05; 156.06; 156.07; 156.071; 156.072; 156.081; 156.10; 156.12, subdivisions 2, 3, and 4; 156.16, subdivisions 3 and 14; 156.17; and 156.18, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapter 156; repealing Minnesota Statutes 1994, section 156.12, subdivision 5.

March 21, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2059, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2059 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 53b. [VETERINARY RECORDS.] Veterinary records on clients are classified under section 156.082.

Sec. 2. Minnesota Statutes 1994, section 156.001, subdivision 3, is amended to read:

Subd. 3. [ANIMAL.] "Animal" does not mean include poultry or birds of any kind.

Sec. 3. Minnesota Statutes 1994, section 156.001, subdivision 6, is amended to read:

Subd. 6. [EDUCATIONAL COMMISSION FOR FOREIGN VETERINARY GRADUATES CERTIFICATE; ECFVG CERTIFICATE.] "Educational commission for foreign veterinary graduates certificate" or "ECFVG certificate" means a certificate issued by the American veterinary medical association education commission for graduates of a foreign college of veterinary medicine graduates, indicating that the holder has demonstrated knowledge and skill equivalent to that possessed by a graduate of an accredited or approved college of veterinary medicine.

Sec. 4. Minnesota Statutes 1994, section 156.01, subdivision 1, is amended to read:

Subdivision 1. [CREATION; MEMBERSHIP.] There is hereby created a state board of veterinary medicine which shall consist of two public members as defined by section 214.02 and five qualified licensed veterinarians appointed by the governor. Each appointee shall be a resident of the state of Minnesota, and the veterinarian members of the board shall have practiced veterinary medicine in this state for at least five years prior to their appointment and shall be graduates of an accredited veterinary college. Membership terms, compensation of members, removal of members, the filling of membership vacancies, and fiscal year and reporting requirements shall be as provided in sections 214.07 to 214.09. The provision of staff, administrative services and office space; the review and processing of complaints; the setting of board fees; and other provisions relating to board operations shall be as provided in chapter 214.

Sec. 5. Minnesota Statutes 1994, section 156.01, subdivision 2, is amended to read:

Subd. 2. [NOMINATION OF APPOINTEES.] Whenever the occasion arises pursuant to this chapter for the appointment of a veterinarian member of the board by the governor, the board of trustees directors of the Minnesota state veterinary medical society association may recommend to the governor, at least 30 days in advance of the date that the appointment is to be made, not more than three veterinarians qualified to serve on the board for each appointment so to be made.

Sec. 6. Minnesota Statutes 1994, section 156.01, subdivision 5, is amended to read:

Subd. 5. [CORRESPONDENCE; RECORD; REGISTERS.] The executive secretary director shall conduct all correspondence necessary to carry out the provisions of this chapter. The board shall keep an official record of all meetings. The board shall keep an official register of all applicants for licenses and a register of licensees. Such registers shall be prima facie evidence of the matters therein contained.

Sec. 7. Minnesota Statutes 1994, section 156.01, is amended by adding a subdivision to read:

Subd. 6. [IMMUNITY.] Members and employees of the board and consultants or other persons engaged in the investigation of violations and in the preparation, presentation, or management of and testimony pertaining to charges of violations of section 156.081 or other board regulatory provisions on behalf of the board are not civilly liable for any actions, transactions, or publications in the performance of their duties in accordance with those provisions.

Sec. 8. Minnesota Statutes 1994, section 156.02, is amended to read:

156.02 [APPLICANTS FOR LICENSE; QUALIFICATIONS.]

Subdivision 1. [LICENSE APPLICATION.] Application for a license to practice veterinary medicine in this state shall be made in writing to the board of veterinary medicine upon a form furnished by the board, accompanied by satisfactory evidence that the applicant is at least 18 years of age, is of good moral character, and has one of the following:

(1) a diploma conferring the degree of doctor of veterinary medicine, or an equivalent degree, from an accredited or approved college of veterinary medicine;

(2) an ECFVG certificate; or

(3) a certificate from the dean of an accredited or approved college of veterinary medicine stating that the applicant is a student in good standing expecting to be graduated at the completion of the current academic year of the college in which the applicant is enrolled.

The application shall contain the information and material required by subdivision 2 and any other information that the board may, in its sound judgment, require. The application shall be filed with the secretary of the board at least 45 days before the date of the examination. If the board deems it advisable, it may require that such application be verified by the oath of the applicant.

Subd. 2. [REQUIRED WITH APPLICATION.] Every application shall contain the following information and material: (1) A the fee as set by the board in the form of a check or money order payable to the state treasurer board, which fee shall is not be returnable in the event permission to take the examination is denied upon for good cause; (2) a copy of a diploma from an accredited or approved college of veterinary medicine or a certificate from the dean or secretary of an accredited or approved college of veterinary medicine showing the time spent in the school, and the date when the applicant was duly and regularly graduated or will duly and regularly graduate. If the applicant attended more than one college of veterinary medicine, the applicant shall furnish transcripts from each as to work done in each; (3) affidavits of at least two veterinarians and three adults who are not related to the applicant setting forth how long a time, when, and under what circumstances they have known the applicant, and any other facts as may be proper to enable the board to determine the qualifications of the applicant; and (4) if the applicant has served in the armed forces, the applicant shall furnish a copy of discharge papers.

Subd. 3. [EXAMINATION OF CERTAIN INDIVIDUALS.] The board may, on an individual basis, permit individuals not qualified for a Minnesota license by reason of graduation from a nonaccredited or approved college of veterinary medicine to take the national examinations in veterinary medicine when necessary as a prerequisite to obtaining the ECFVG certification.

Sec. 9. Minnesota Statutes 1994, section 156.04, is amended to read:

156.04 [BOARD TO ISSUE LICENSE.]

The board of veterinary medicine shall issue to every applicant who has successfully passed the required examination, who has received a diploma conferring the degree of doctor of veterinary medicine or an equivalent degree from a an accredited or approved college of veterinary school approved by the board medicine or an ECFVG certificate, and who shall have been adjudged to be duly qualified to practice veterinary medicine, a license to practice.

Sec. 10. Minnesota Statutes 1994, section 156.05, is amended to read:

156.05 [LICENSE.]

The license shall be subscribed by the members president and secretary of the board of veterinary medicine and have affixed to it by the director the seal of the board.

Sec. 11. Minnesota Statutes 1994, section 156.06, is amended to read:

156.06 [LICENSE RECORDED.]

The license, before issued, shall be recorded in a book or computer database to be kept in the office which the board of veterinary medicine shall establish for the purpose of carrying out the provisions of this chapter. These records shall be open to available for public inspection with proper restrictions as to their preservation as provided in section 13.41.

Sec. 12. Minnesota Statutes 1994, section 156.07, is amended to read:

156.07 [LICENSE RENEWAL.]

Persons licensed under this chapter, shall conspicuously display their license in their principal place of business.

Persons now qualified to practice veterinary medicine in this state, or who shall hereafter be licensed by the board of veterinary medicine to engage in the practice, shall periodically renew their license in a manner prescribed by the board. The board shall establish license renewal fees shall be set by the board and continuing education requirements. The board may establish, by rule, an inactive license category, at a lower fee, for licensees not actively engaged in the practice of veterinary medicine within the state of Minnesota. The board may assess a charge for delinquent payment of a renewal fee.

Any person who is licensed to practice veterinary medicine in this state pursuant to this chapter, shall be entitled to receive a license to continue to practice upon making application to the board and complying with the terms of this section and rules of the board.

Sec. 13. Minnesota Statutes 1994, section 156.071, is amended to read:

156.071 [REINSTATEMENT OF EXPIRED LICENSE.]

Except as otherwise provided in this chapter, an expired license, which is suspended by the board pursuant to section 156.07, may be reinstated at any time within five years after its suspension on filing an application for reinstatement on a form prescribed by with the board and by payment of the renewal fee in effect on the last preceding regular renewal date, plus all back fees and the, late filing fee fees, and reinstatement fees. In addition, satisfactory evidence of meeting yearly continuing education requirements must be furnished to the board.

A person who fails to renew a license within five years after its suspension may not renew it, and it shall not be restored, reissued, or reinstated thereafter, but such person may apply for and obtain a new license on complying with the following conditions: (1) the person is of good moral character; (2) no fact, circumstance, or condition exists which, if the license were issued, would justify its revocation or suspension; (3) the person takes and passes the examination examinations, if any, which would be required if the person were then applying for a license for the first time, or otherwise establishes to the satisfaction of the board that, with due regard for the public interest the person is qualified to practice veterinary medicine; and (4) the person pays all of the fees that would be required if the person were then applying for the license for the first time.

Sec. 14. Minnesota Statutes 1994, section 156.072, is amended to read:

156.072 [NONRESIDENTS; LICENSES.]

Subdivision 1. [APPLICATION.] A doctor of veterinary medicine duly admitted to practice in any of the other states or territories or District of Columbia desiring permission to practice veterinary medicine in this state shall submit an application to the board upon forms prescribed by the board. Upon proof of licensure to practice in any other state or territory or in the District of Columbia and has having been actively engaged in practicing veterinary

medicine therein, for at least three of the five years next preceding the application, or has having been engaged in full time teaching of veterinary medicine in an approved or accredited college for at least three of the five years next preceding the application, or any combination thereof, the examination may be waived, upon the recommendation of the board, and the applicant be admitted to practice without examination. However, the board may impose any other tests as it considers proper.

Subd. 2. [REQUIRED WITH APPLICATION.] Such doctor of veterinary medicine shall accompany the application by the following:

(1) A certified copy of the license registration and affidavits of two practicing doctors of veterinary medicine of the state, territory or District of Columbia so certifying that they are well acquainted with such applicant, that the applicant is a person of good moral character, and has been actively engaged in practicing or teaching as the case may be in such state, territory, or District of Columbia for the period above prescribed;

(2) a certificate from the proper body therein regulatory agency having jurisdiction over the conduct of practice of veterinary medicine that such applicant is in good standing and is not under the subject of disciplinary action or pending charges of misconduct; and disciplinary action;

(3) a certificate from all other jurisdictions in which the applicant holds a currently active license or held a license within the past ten years, stating that the applicant is and was in good standing and has not been subject to disciplinary action; and

(4) a fee as set by the board in form of check or money order payable to the treasurer of the state of Minnesota board, no part of which shall be refunded, should the application be denied.

Subd. 3. [EXAMINATION.] A doctor of veterinary medicine duly admitted to practice in any of the other states or territories or in the District of Columbia desiring admission to practice in this state but who has not been actively engaged in the practice thereof for the period prescribed herein at least three of the preceding five years must be examined for admission in accordance with the rules requirements prescribed herein for those not admitted to practice anywhere and in addition, must meet all of the requirements of this section except that the fee may differ from the fee charged to those not admitted to practice in other states.

Subd. 4. The board may enter into reciprocity agreements with other states that have comparable licensing requirements and may issue a license without requiring an examination.

Subd. 5. [TEMPORARY PERMIT.] The board may issue without examination a temporary permit to practice veterinary medicine in this state to a person who has submitted an application approved by the board for license pending examination, and holds a degree doctor of veterinary medicine degree or an equivalent degree from a an approved or accredited veterinary college approved by the board. The temporary permit shall expire the day after publication of the notice of results of the first examination given after the permit is issued. No temporary permit may be issued to any applicant who has previously failed the examination in this state or in any other state, territory, or district of the United States or a foreign country.

Sec. 15. Minnesota Statutes 1994, section 156.081, is amended to read:

156.081 [REVOCATION; SUSPENSION.]

Subdivision 1. [AUTHORITY.] The board may revoke or suspend for a certain time limit, suspend, or revoke the license of any person to practice veterinary medicine or any branch thereof in this state for any of the causes provided in this section. The executive secretary director, in all cases of suspension or revocation of disciplined licenses, shall enter on the register the fact of suspension or revocation the disciplinary action, as the case may be. The record of such suspension or revocation so disciplinary action made by the secretary executive director shall be prima facie evidence of the fact thereof, and of the regularity of all the proceedings of the board in the matter of the suspension or revocation disciplinary action.

Subd. 2. [CAUSES.] The board may revoke or, suspend, or impose limitations upon a license for any of the following causes:

(1) the employment of fraud, misrepresentation or deception in obtaining such license.;

(2) Conviction of a crime involving moral turpitude or conviction of a felony, in which case the record shall be conclusive evidence of such conviction. being convicted of a felony or gross misdemeanor, including a finding or verdict of guilt, whether or not the adjudication of guilt is withheld or not entered, an admission of guilt, or a no contest plea, as evidenced by a certified copy of the conviction;

(3) Chronic inebriety or addiction to the use of habit forming drugs. being unable to practice with reasonable skill and safety by reason of illness, use of alcohol, drugs, chemicals, or any other materials, or as a result of any mental or physical condition;

(4) existence of a professional connection with or the lending of one's name to any illegal practitioner of veterinary medicine and the various branches thereof.;

(5) Violation or attempt to violate, directly or indirectly, any of the provisions of this chapter.

(6) Revocation by another state or territory of a license or certificate by virtue of which one is licensed to practice veterinary medicine in that state or territory, notwithstanding that such license or certificate did not support the application for license to practice in this state.

(7) Conviction of or cash compromise of a charge or violation of the Harrison Narcotic Act, regulating narcotics, in which case the record of such conviction or compromise, as the case may be, shall be conclusive evidence.

(8) Fraud or dishonesty in applying, treating, or reporting on tuberculin or other biological tests.

(9) Employment of anyone but a veterinarian licensed in the state of Minnesota to demonstrate the use of biologics in the treatment of animals.

(10) False or misleading advertising having for its purpose or intent deception or fraud.

(11) Habitual conduct reflecting unfavorably on the profession of veterinary medicine or conduct in violation of law or rules of the board.

(5) having been the subject of revocation, suspension, or surrender of a veterinary license in resolution of a complaint or other adverse action related to licensure in another jurisdiction or country;

(6) violating a state or federal narcotics or controlled substance law irrespective of any proceedings under section 152.18 or federal law;

(7) fraudulently conducting or reporting results of physical examinations or biological tests used to detect and prevent the dissemination of animal diseases, transportation of diseased animals, or distribution of contaminated, infected, or inedible animal products, or failing to report, as required by law, any contagious or infectious disease;

(8) engaging in false, fraudulent, deceptive, or misleading advertising;

(12) (9) conviction on a charge of cruelty to animals.;

(13) (10) failure, after written notification by the board, to keep one's premises and all equipment therein in a clean and sanitary condition, according to reasonable standards adopted by the board.;

(14) (11) fraud, deception, or incompetence in the practice of veterinary medicine., including any departure from or failure to conform to the minimum standards of acceptable and prevailing practice without actual injury having to be established;

(15) (12) engaging in unprofessional conduct as defined in rules adopted by the board.

A plea or verdict of guilty to a charge of a felony or of any offense involving moral turpitude is deemed to be a conviction within the meaning of this section. The board may order the license suspended or revoked, or may decline to issue a license, when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal.

Subd. 3. The adjudication of insanity or mental illness, of any licensee shall operate as a suspension of the right to practice under this chapter. Such suspension shall continue until such licensee is restored to capacity by proper authorities, except that any such licensee may practice veterinary medicine while on a provisional discharge. or engaging in conduct which violates any statute or rule promulgated by the board or any board order;

(13) being adjudicated by a court of competent jurisdiction, within or without this state, as incapacitated, mentally incompetent or mentally ill, chemically dependent, mentally ill and dangerous to the public, or a psychopathic personality;

(14) revealing a privileged communication from or relating to a client except when otherwise required or permitted by law;

(15) obtaining money, property, or services from a client through the use of undue influence, harassment, duress, deception, or fraud or through the improper use of the regulated individual's position as a professional;

(16) practicing outside the scope of practice authorized by the board's practice act; or

(17) making a false statement or misrepresentation to the board.

Sec. 16. [156.082] [VETERINARY MEDICAL RECORDS.]

Veterinary records of a client that are maintained by a state agency, statewide system, or political subdivision are private data on individuals or nonpublic data as defined in section 13.02.

Sec. 17. Minnesota Statutes 1994, section 156.10, is amended to read:

156.10 [UNLAWFUL PRACTICE WITHOUT LICENSE OR PERMIT.]

It shall be unlawful for any person to practice veterinary medicine, or any branch thereof, in the state without having first secured a license or temporary permit, as provided in this chapter, and any person violating the provisions of this section shall be guilty of a gross misdemeanor and punished therefor according to the laws of the state.

Sec. 18. Minnesota Statutes 1994, section 156.12, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZED ACTIVITIES.] No provision of this chapter shall be construed to prohibit:

(a) a person from rendering necessary gratuitous assistance in the treatment of any animal when the assistance does not amount to prescribing, testing for, or diagnosing, operating, or vaccinating and when the attendance of a licensed veterinarian cannot be procured;

(b) a person who is a regular student in an accredited or approved college of veterinary medicine from performing duties or actions assigned by instructors or preceptors or working under the direct supervision of a licensed veterinarian;

(c) a veterinarian regularly licensed in another jurisdiction from consulting with a licensed veterinarian in this state;

(d) the owner of an animal and the owner's regular employee from caring for and treating the animal belonging to the owner, except where the ownership of the animal was transferred for purposes of circumventing this chapter;

(e) veterinarians employed by the University of Minnesota from performing their duties with the college of veterinary medicine, college of agriculture, agricultural experiment station, agricultural extension service, medical school, school of public health, or other unit within the university; or a person from lecturing or giving instructions or demonstrations at the university or in connection with a continuing education course or seminar to veterinarians;

(f) any person from selling or applying any pesticide, insecticide or herbicide;

(g) any person from engaging in bona fide scientific research or investigations which reasonably requires experimentation involving animals;

(h) any employee of a licensed veterinarian from performing duties other than diagnosis, prescription or surgical correction under the direction and supervision of the veterinarian, who shall be responsible for the performance of the employee;

(i) a graduate of a foreign college of veterinary medicine from working under the direct personal instruction, control, or supervision of a licensed veterinarian faculty member of the College of Veterinary Medicine, University of Minnesota in order to complete the requirements necessary to obtain an ECFVG certificate.

Sec. 19. Minnesota Statutes 1994, section 156.12, subdivision 3, is amended to read:

Subd. 3. Any person who both sells and applies or offers to apply, any prescription drug, medicine, biologic preparation, including sera, vaccines, bacterins, tuberculin, mallein, johnin, or any other material agency agent for the treatment, vaccination, or testing of any animal belonging to another, shall be engaged in the practice of veterinary medicine.

Sec. 20. Minnesota Statutes 1994, section 156.12, subdivision 4, is amended to read:

Subd. 4. It shall be unlawful for a person who has not received a professional degree from a an accredited or approved college of veterinary medicine to use any of the following titles or designations: Veterinary, veterinarian, animal doctor, animal surgeon, animal dentist, or any other title, designation, word, letter, abbreviation, sign, card, or device tending to indicate that the person is qualified to practice veterinary medicine.

Sec. 21. [156.121] [FACILITY INSPECTION.]

The executive director, or an authorized representative of the board may, in response to a complaint, inspect a facility in which veterinary medicine is practiced, at any time during which the facility is open for business, to ensure compliance with the requirements of this chapter and the regulations of the board.

Sec. 22. [156.122] [COURTS TO REPORT.]

The court administrator shall report to the board a judgment or finding by a court that a person regulated by the board:

(1) is mentally ill, chemically dependent, mentally ill and dangerous to the public, or is a sexual psychopathic personality or sexually dangerous person under chapter 253B or other applicable law;

(2) is guilty of a felony or gross misdemeanor; violation of a law involving the use, possession, or sale of a controlled substance; or operating a motor vehicle under the influence of alcohol or a controlled substance; or

(3) is in need of a guardian of the person under sections 525.54 to 525.61.

Sec. 23. [156.123] [COOPERATION REQUIRED.]

A regulated person who is the subject of an investigation, or who is questioned in connection with an investigation, by or on behalf of the board shall cooperate fully with the investigation. Requests must be consistent with the nature and seriousness of the conduct being investigated. Cooperation includes responding fully and promptly to questions raised by or on behalf of the board relating to the subject of the investigation, providing copies of client and other records in the regulated person's possession relating to the matter under investigation as requested by the board, assisting the board in its investigation which includes executing releases for records as requested by the board, and appearing at disciplinary or educational conferences scheduled by the board.

Sec. 24. [156.124] [IMMUNITY.]

Any licensee of the board, person, agency, institution, facility, business, or organization is immune from civil liability for submitting a report in good faith to the board under this section or for otherwise reporting to the board violations or alleged violations of section 156.081 or any of the board's regulatory provisions, or for cooperating with an investigation of a report.

Sec. 25. [156.125] [MENTAL EXAMINATION; ACCESS TO MEDICAL DATA.]

Subdivision 1. [ORDER FOR EXAMINATION; CONSENT.] If the board has probable cause to believe that grounds exist under section 156.081, subdivision 2, clause (3) or (13), against a regulated person, the executive director may authorize the issuance of an order directing the regulated person to submit to a mental or physical examination or chemical dependency evaluation. For the purpose of this section, every regulated person is considered to have consented to submit to a mental or physical examination or chemical dependency evaluation when ordered to do so and to have waived all objections to the admissibility of the examiner's or evaluator's testimony or reports on the grounds that the testimony or reports constitute a privileged communication. An order for examination under this chapter is private data on an individual.

Subd. 2. [FAILURE TO SUBMIT TO OR COMPLETE AN EXAMINATION.] Failure to submit to or complete an examination or evaluation, unless the failure was due to circumstances beyond the control of the regulated person, constitutes an admission that grounds exist under section 156.081, subdivision 2, clause (3) or (13), against the regulated person, based on the factual specifications in the examination or evaluation order, and may result in an application being denied or, after a contested case hearing as described in this subdivision, a disciplinary order. The only issues to be determined at the hearing are whether the executive director had probable cause to authorize the examination or evaluation order and whether the failure to submit was due to circumstances beyond the control of the regulated person. Neither the record of a proceeding under this subdivision nor the orders entered by the board are admissible, subject to subpoena, or to be used against the regulated person in a proceeding in which the board is not a party.

Subd. 3. [OBTAINING DATA AND HEALTH RECORDS.] In addition to ordering a physical or mental examination and notwithstanding section 13.42, 144.335, 144.651, or 595.02, or any other law limiting access to medical or other health records, the board may authorize obtaining data and health records relating to a regulated person without the regulated person's consent if the executive director has probable cause to believe that grounds exist under section 156.081, subdivision 2, clause (3) or (13), against the regulated person. A regulated person, insurance company, health care facility, provider as defined in section 144.335, subdivision 1, paragraph (b), or government agency shall comply with any written request under this subdivision and is not liable in any action for damages for releasing the data requested if the data are released in accordance with a written request made under this subdivision. Information on individuals obtained under this subdivision is investigative data under section 13.41.

Sec. 26. [156.126] [TEMPORARY SUSPENSION OF LICENSE.]

In addition to any other remedy provided by law, the board, acting through its executive director and one or more designated board members without a hearing, may temporarily suspend the license of a regulated person if the executive director and one or more designated board members finds that the regulated person has violated a statute or rule that the board is empowered to enforce and continued practice by the regulated person would create an imminent risk of harm to others. The suspension is in effect upon service of a written temporary suspension order on the regulated person specifying the statute or rule violated. Service of the temporary suspension order is effective upon personal service or service by first class mail upon the regulated person or counsel at the regulated person's or counsel's last known address. The temporary order remains in effect until the board issues an order after a limited hearing described in this subdivision or upon agreement between the board and the regulated person. Within ten days of service of the temporary suspension order, the board shall conduct a limited hearing before its own members on the sole issue of whether there is a reasonable basis for the temporary suspension order to remain in effect. Both parties shall be given an opportunity to present evidence and oral argument at the hearing. Within five business days after the hearing, the board shall issue an order and, if the temporary suspension is to remain in effect, initiate a contested case hearing to be commenced within 45 days after service of the order. The administrative law judge shall issue a report within 30 days after closing the contested case hearing record. The board shall issue a final order within 30 days after receiving the administrative law judge's report.

Sec. 27. [156.127] [FORMS OF DISCIPLINARY ACTION.]

Subdivision 1. [BOARD ACTION.] When grounds exist under section 156.081, or other statute or rule which the board is authorized to enforce, the board may take one or more of the following disciplinary actions:

(1) deny an application for a license;

(2) revoke the regulated person's license;

(3) suspend the regulated person's license;

(4) impose limitations on the regulated person's license;

(5) impose conditions on the regulated person's license;

(6) censure or reprimand, publicly or privately, the regulated person;

(7) impose an administrative penalty not exceeding $5,000 for each separate violation, the amount of the penalty to be fixed so as to deprive the person of any economic advantage gained by reason of the violation or to discourage repeated violations; or

(8) take any other action justified by the facts of the case.

Subd. 2. [AGREEMENT.] When grounds exist under section 156.081, or other statute or rule which the board is authorized to enforce, the executive director and complaint committee may enter into an agreement with the regulated person for corrective action which may include requiring the regulated person:

(1) to complete an educational course or activity;

(2) to submit to the executive director or designated board member a written protocol or reports designed to prevent future violations of the same kind;

(3) to meet with a board member or board designee to discuss prevention of future violations of the same kind;

(4) to perform other action justified by the facts; or

(5) to cease performing specific acts or procedures justified by the facts.

The listing of these measures in this subdivision does not preclude a board from including the measures in an order for disciplinary action.

Subd. 3. [DISCIPLINARY ACTION AND REINSTATEMENT FEE.] Upon reinstating a regulated person's license or granting an applicant's license, the board may, at its discretion, impose any disciplinary action listed in subdivision 1, as well as any reinstatement fee.

Subd. 4. [ANNUAL PUBLICATION OF DISCIPLINARY ACTIONS.] At least annually, the board may publish and make available to the public a description of all public disciplinary action taken by the board. The publication must include, for each disciplinary action taken, the name and the business address of the regulated person, and the form of disciplinary action taken by the board.

Sec. 28. Minnesota Statutes 1994, section 156.16, subdivision 3, is amended to read:

Subd. 3. [DISPENSING.] "Dispensing" means distribution of veterinary prescription drugs or over-the-counter drugs for extra-label use by a person registered licensed as a pharmacist by the board of pharmacy to dispense or a person licensed by the board of veterinary medicine.

Sec. 29. Minnesota Statutes 1994, section 156.16, subdivision 14, is amended to read:

Subd. 14. [VETERINARY PRESCRIPTION DRUG.] "Veterinary prescription drug" means:

(1) a drug that is not safe for animal use except under the supervision of a veterinarian, and that is required by federal law to bear the following statement: "Caution: federal law restricts this drug to use by or on the order of a licensed veterinarian";

(2) a drug that is required by state law to be dispensed only on order or prescription of a licensed veterinarian; and

(3) the extra-label use of an over-the-counter animal drug or human drugs; and

(4) a medicament compounded by mixing two or more legally obtained over-the-counter or prescription drugs.

Sec. 30. Minnesota Statutes 1994, section 156.17, is amended to read:

156.17 [POSSESSION PROHIBITED.]

A person may not possess a veterinary prescription drug unless the person is a licensed veterinarian or pharmacist, a bona fide employee of a veterinarian acting in the course of that employment, a client holding a veterinary prescription drug by or on the order of a veterinarian, a manufacturer or wholesaler of veterinary drugs, an animal health researcher, or a person performing official state or federal regulatory duties.

Sec. 31. Minnesota Statutes 1994, section 156.18, subdivision 1, is amended to read:

Subdivision 1. [PRESCRIPTION.] (a) A person may not dispense a veterinary prescription drug to a client without a prescription or other veterinary authorization. A person may not make extra-label use of a veterinary an animal or human drug for an animal without a prescription from a veterinarian. A veterinarian or the veterinarian's

authorized agent employee may dispense a veterinary prescription drug to a client or oversee the extra-label use of a veterinary drug directly by a client without a separate written prescription, providing there is an existing veterinarian-client-patient relationship.

(b) A veterinarian may sell dispense prescription veterinary drugs and prescribe and dispense extra-label use drugs to a client without personally examining the animal if a bona fide veterinarian-client-patient relationship exists and in the judgment of the veterinarian the client has sufficient knowledge to use the drugs properly.

(c) A veterinarian may issue a prescription or other veterinary authorization by oral or written communication to the dispenser, or by computer connection. If the communication is oral, the veterinarian must enter it into the patient's record. The dispenser must record the veterinarian's prescription or other veterinary authorization within 72 hours.

(d) A prescription or other veterinary authorization must include:

(1) the name, address, and, if written, the signature of the prescriber;

(2) the name and address of the client;

(3) identification of the species for which the drug is prescribed or ordered;

(4) the name, strength, and quantity of the drug;

(5) the date of issue;

(6) directions for use; and

(7) withdrawal time.

(e) A veterinarian may, in the course of professional practice and an existing veterinarian-client-patient relationship, prepare medicaments that combine drugs approved by the United States Food and Drug Administration and other legally obtained ingredients with appropriate vehicles.

(f) A veterinarian or a bona fide employee of a veterinarian may dispense veterinary prescription drugs to a person on the basis of a prescription issued by a licensed veterinarian. The provisions of paragraphs (c) and (d) apply.

(g) This section does not limit the authority of the Minnesota racing commission to regulate veterinarians providing services at a licensed racetrack.

Sec. 32. Minnesota Statutes 1994, section 156.18, subdivision 2, is amended to read:

Subd. 2. [LABEL OF DISPENSED VETERINARY DRUGS.] (a) A veterinarian or the veterinarian's authorized agent dispensing a veterinary prescription drug or prescribing the extra-label use of an over-the-counter drug must provide written information which includes the name and address of the veterinarian, date of filling, species of patient, name or names of drug, strength of drug or drugs, directions for use, withdrawal time, and cautionary statements, if any, appropriate for the drug.

(b) If the veterinary drug has been prepared, mixed, formulated, or packaged by the dispenser, all of the information required in paragraph (a) must be provided on a label affixed to the container.

(c) If the veterinary drug is in the manufacturer's original package, the information required in paragraph (a) must be supplied in writing but need not be affixed to the container. Information required in paragraph (a) that is provided by the manufacturer on the original package does not need to be repeated in the separate written information. Written information required by this paragraph may be written on the sales invoice.

Sec. 33. [REPEALER.]

Minnesota Statutes 1994, section 156.12, subdivision 5, is repealed."

Delete the title and insert:

"A bill for an act relating to veterinarians; changing the veterinary practice act; amending Minnesota Statutes 1994, sections 13.99, by adding a subdivision; 156.001, subdivisions 3 and 6; 156.01, subdivisions 1, 2, 5, and by adding a subdivision; 156.02; 156.04; 156.05; 156.06; 156.07; 156.071; 156.072; 156.081; 156.10; 156.12, subdivisions 2, 3, and 4; 156.16, subdivisions 3 and 14; 156.17; and 156.18, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapter 156; repealing Minnesota Statutes 1994, section 156.12, subdivision 5."

We request adoption of this report and repassage of the bill.

House Conferees: Steve Kelley, Robert Leighton and Jim Girard.

Senate Conferees: Steve Dille, Randy C. Kelly and Sam G. Solon.

Kelley moved that the report of the Conference Committee on H. F. No. 2059 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2059, A bill for an act relating to veterinarians; changing the veterinary practice act; amending Minnesota Statutes 1994, sections 156.001, subdivisions 3 and 6; 156.01, subdivisions 1, 2, 5, and by adding a subdivision; 156.02; 156.04; 156.05; 156.06; 156.07; 156.071; 156.072; 156.081; 156.10; 156.12, subdivisions 2, 3, and 4; 156.16, subdivisions 3 and 14; 156.17; and 156.18, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapter 156; repealing Minnesota Statutes 1994, section 156.12, subdivision 5.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 127 yeas and 6 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knoblach     Opatz        Stanek
Anderson, B. Finseth      Koppendrayer Orenstein    Sviggum
Anderson, R. Garcia       Kraus        Orfield      Swenson, D.
Bakk         Girard       Larsen       Osskopp      Swenson, H.
Bertram      Goodno       Leighton     Osthoff      Sykora
Bettermann   Greenfield   Leppik       Ostrom       Tomassoni
Bishop       Greiling     Lieder       Otremba      Tompkins
Boudreau     Gunther      Lourey       Ozment       Trimble
Bradley      Haas         Luther       Paulsen      Tuma
Broecker     Hackbarth    Lynch        Pawlenty     Tunheim
Brown        Harder       Macklin      Pellow       Van Dellen
Carlson, L.  Hasskamp     Mahon        Pelowski     Van Engen
Carlson, S.  Hausman      Mares        Perlt        Vickerman
Carruthers   Holsten      Mariani      Peterson     Wagenius
Clark        Huntley      Marko        Pugh         Warkentin
Cooper       Jaros        McCollum     Rest         Weaver
Daggett      Jefferson    McElroy      Rhodes       Wejcman
Dauner       Jennings     McGuire      Rice         Wenzel
Davids       Johnson, A.  Milbert      Rostberg     Winter
Dawkins      Johnson, R.  Molnau       Rukavina     Wolf
Dehler       Johnson, V.  Mulder       Sarna        Worke
Delmont      Kahn         Munger       Schumacher   Workman
Dempsey      Kalis        Murphy       Seagren      Sp.Anderson,I
Dorn         Kelley       Ness         Skoglund     
Entenza      Kelso        Olson, E.    Smith        
Erhardt      Kinkel       Onnen        Solberg      

Commers      Knight       Lindner      
Frerichs     Krinkie      Olson, M.    

Clark, Leighton and Ozment.

The following Conference Committee Report was received:

A bill for an act relating to financial institutions; regulating consumer credit; modifying rates, fees, and other terms and conditions; providing clarifying and technical changes; providing opportunities for state banks to develop their Minnesota markets through broader intrastate branching; regulating the use of credit cards by institutions; modifying interest rates, fees, and other terms and conditions governing the use of credit cards; providing technical corrections; amending Minnesota Statutes 1994, sections 9.031, subdivision 13; 13.71, by adding a subdivision; 46.041, subdivision 1; 46.044, subdivision 1; 47.10, subdivision 4; 47.101, as amended; 47.201, subdivision 2; 47.51; 47.62, subdivision 1; 48.09; 48.10; 48.185, subdivisions 3 and 4; 48.301; 48.34; 48.845, subdivision 4; 52.131; 53.01; 53.03, subdivision 1; 53.07, subdivision 2; 118.005, subdivision 1; 168.69; 168.705; 168.72, by adding a subdivision; 168.73; 300.025; 332.50, subdivision 2; 334.02; 334.03; Minnesota Statutes 1995 Supplement, sections 46.048, subdivision 2b; 47.20, subdivision 9; 47.52; 47.59, subdivisions 2, 3, 4, 5, 6, and by adding subdivisions; 47.60, subdivision 2; 47.61, subdivision 3; 48.153, subdivision 3a; 48.194; 48.65; 50.1485, subdivision 1; 50.245, subdivision 4; 53.04, subdivision 3a; 53.09, subdivision 2; 56.131, subdivisions 2, 4, and 6; 56.14; 62B.04, subdivisions 1 and 2; Laws 1995, chapter 171, section 70; proposing coding for new law in Minnesota Statutes, chapter 49; repealing Minnesota Statutes 1994, sections 47.201, subdivision 7; 47.27, subdivision 3; 48.185, subdivision 5; 48.94; 51A.01; 51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13; 51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; 51A.57; 53.04, subdivision 3b; Minnesota Statutes 1995 Supplement, sections 51A.02, subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; 51A.58; 53.04, subdivisions 3c and 4a; Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1100; 2655.1200; and 2655.1300.

March 21, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2369, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2369 be further amended as follows:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 9.031, subdivision 13, is amended to read:

Subd. 13. [REQUIRED COMMUNITY REINVESTMENT RATING.] Banks and trust companies designated as depositories must have received ratings of "outstanding" or "satisfactory" as their most recent rating under section 47.83 or under United States Code, title 12, section 2906. If a state depository receives a rating that is below

"satisfactory," the executive council shall revoke its designation as a depository. The executive council may delay the effective date of the revocation if necessary to allow a reasonable period of time to arrange for a replacement depository.

Sec. 2. Minnesota Statutes 1994, section 13.71, is amended by adding a subdivision to read:

Subd. 21. [BANK CHARTER TRADE SECRETS DATA.] Trade secret data provided in bank charter applications is classified under section 46.041, subdivision 1.

Sec. 3. Minnesota Statutes 1994, section 46.041, subdivision 1, is amended to read:

Subdivision 1. [FILING; FEE; PUBLIC INSPECTION.] The incorporators of a bank proposed to be organized under the laws of this state shall execute and acknowledge a written application in the form prescribed by the commissioner of commerce. The application must be signed by two or more of the incorporators and request a certificate authorizing the proposed bank to transact business at the place and in the name stated in the application. The applicant shall file the application with the department with a $1,000 filing fee and a $500 investigation fee. The fees must be turned over by the commissioner to the state treasurer and credited to the general fund. The application file must be public, with the exception of financial data on individuals which is private under the Minnesota government data practices act and data defined as trade secret information under section 13.37, subdivision 1, paragraph (b), which must be given nonpublic classification upon written request by the applicant.

Sec. 4. Minnesota Statutes 1994, section 46.044, subdivision 1, is amended to read:

Subdivision 1. [CHARTERS ISSUED, CONDITIONS.] An application for a bank charter must be granted if (1) the applicants are of good moral character and financial integrity, (2) there is a reasonable public demand for this bank in this location, (3) the organization expenses being paid by the bank do not exceed those allowed by section 46.043, (4) the probable volume of business in this location is sufficient to insure and maintain the solvency of the new bank and the solvency of the then existing bank or banks in the locality without endangering the safety of any bank in the locality as a place of deposit of public and private money, (5) the commissioner of commerce is satisfied that the proposed bank will be properly and safely managed, and (6) the commissioner is satisfied that the capital funds required pursuant to section 48.02 are available and the commissioner may accept any reasonable demonstration including subscription agreements supported by current financial statements, and (7) the applicant, if it is an interstate bank holding company, as defined in section 48.92, has provided developmental loans as required by section 48.991, and has complied with the net new funds reporting requirements of section 48.93, the application must be granted; otherwise. If the application does not satisfy the requirements of this subdivision, it must be denied. In case of the denial of the application, the commissioner of commerce shall specify the grounds for the denial. A person aggrieved, may obtain judicial review of the determination in accordance with chapter 14.

Sec. 5. Minnesota Statutes 1995 Supplement, section 46.048, subdivision 2b, is amended to read:

Subd. 2b. [NOTICE.] Upon the filing of an application a notice:

(1) an applicant acquiring party shall publish once in a newspaper of general circulation notice of the proposed acquisition in a form acceptable to the commissioner; and

(2) the commissioner shall accept public comment on an application a notice for a period of not less than 30 days from the date of the publication required by clause (1).

Sec. 6. Minnesota Statutes 1994, section 47.10, subdivision 4, is amended to read:

Subd. 4. [APPROVAL OF CERTAIN INSIDER AGREEMENTS.] No bank, trust company, savings bank, or savings association may purchase or, sell, or lease real property, personal property, improvements or equipment of a value of $25,000 or more if the purchaser or, seller, lessor, or lessee other than the bank, trust company, savings bank, or savings association has an existing direct or indirect interest in the institution without prior written approval by the commissioner. Each bank, trust company, savings bank, or savings association must maintain documentation of transactions with interested parties, including personal property leases and purchases or sales of under $25,000, which demonstrates the commercial reasonableness and fair market value of the transaction.

Sec. 7. Minnesota Statutes 1995 Supplement, section 47.20, subdivision 1, is amended to read:

Subdivision 1. Pursuant to rules the commissioner of commerce finds to be necessary and proper, if any, banks, savings banks, and savings associations organized under the laws of this state or the United States, trust companies, trust companies acting as fiduciaries, and other banking institutions subject to the supervision of the commissioner

of commerce, and mortgagees or lenders approved or certified by the secretary of housing and urban development or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the farmers home administration or any successor, or approved or certified by the federal home loan mortgage corporation, or approved or certified by the federal national mortgage association, are authorized:

(1) To make loans and advances of credit and purchases of obligations representing loans and advances of credit which are insured or guaranteed by the secretary of housing and urban development pursuant to the national housing act, as amended, or the administrator of veterans affairs pursuant to the servicemen's readjustment act of 1944, as amended, or the administrator of the farmers home administration or any successor pursuant to the consolidated farm and rural development act, Public Law Number 87-128, as amended, and to obtain the insurance or guarantees;

(2) To make loans secured by mortgages on real property and loans secured by a share or shares of stock or a membership certificate or certificates issued to a stockholder or member by a cooperative apartment corporation which the secretary of housing and urban development, the administrator of veterans affairs, or the administrator of the farmers home administration or any successor has insured or guaranteed or made a commitment to insure or guarantee, and to obtain the insurance or guarantees;

(3) To make, purchase, or participate in such loans and advances of credit; including reverse mortgage loans, notwithstanding anything in sections 47.20, subdivision 4b, 47.58, and 334.01 and chapter 56 to the contrary; as would be eligible for purchase, in whole or in part, by the federal national mortgage association or the federal home loan mortgage corporation, but without regard to any limitation placed upon the maximum principal amount of an eligible loan;

(4) To make, purchase or participate in such loans and advances of credit secured by mortgages on real property which are authorized or allowed by the office of thrift supervision or the office of the comptroller of the currency, or any successor to these federal agencies.

Sec. 8. Minnesota Statutes 1995 Supplement, section 47.20, subdivision 9, is amended to read:

Subd. 9. (1) For purposes of this subdivision the term "mortgagee" shall mean all state banks and trust companies, national banking associations, state and federally chartered savings associations, mortgage banks, savings banks, insurance companies, credit unions or assignees of the above.

(a) Each mortgagee requiring funds of a mortgagor to be paid into an escrow, agency or similar account for the payment of taxes or insurance premiums with respect to a mortgaged one-to-four family, owner occupied residence located in this state, unless the account is required by federal law or regulation or maintained in connection with a conventional loan in an original principal amount in excess of 80 percent of the lender's appraised value of the residential unit at the time the loan is made or maintained in connection with loans insured or guaranteed by the secretary of housing and urban development, by the administrator of veterans affairs, or by the administrator of the farmers home administration or any successor, shall calculate interest on such funds at a rate of not less than five three percent per annum. Such interest shall be computed on the average monthly balance in such account on the first of each month for the immediately preceding 12 months of the calendar year or such other fiscal year as may be uniformly adopted by the mortgagee for such purposes and shall be annually credited to the remaining principal balance on the mortgage, or at the election of the mortgagee, paid to the mortgagor or credited to the mortgagor's account. If the interest exceeds the remaining balance, the excess shall be paid to the mortgagor or vendee. The requirement to pay interest shall apply to such accounts created prior to June 1, 1976, as well as to accounts created after June 1, 1976 in conjunction with mortgage loans made prior to July 1, 1996.

(b) Unless the account is exempt from the requirements of paragraph (a), a mortgagee shall allow a mortgagor to elect to discontinue the escrow account after the seventh anniversary of the date of the mortgage, unless the mortgagor has been more than 30 days delinquent in the previous 12 months. This paragraph shall apply to accounts created prior to July 1, 1996, as well as to accounts created on or after July 1, 1996. The mortgagor's election shall be in writing. If the escrow account has a negative balance or a shortage at the time the mortgagor requests discontinuance, the mortgagee is not obligated to allow discontinuance until the escrow account is balanced or the shortage has been repaid.

(c) The mortgagee shall notify the mortgagor within 60 days after the seventh anniversary of the date of the mortgage if the right to discontinue the escrow account is in accordance with paragraph (b). For mortgage loans entered into, on or prior to July 1, 1989, the notice required by this paragraph shall be provided to the mortgagor by January 1, 1997.

(d) A mortgagee may require the mortgagor to reestablish the escrow account if the mortgagor has failed to make timely payments for two consecutive payment periods at any time during the remaining term of the mortgage, or if the mortgagor has failed to pay taxes or insurance premiums when due. A payment received during a grace period shall be deemed timely.

(e) The mortgagee shall, subject to paragraph (b), return any funds remaining in the account to the mortgagor within 60 days after receipt of the mortgagor's written notice of election to discontinue the escrow account.

(f) The mortgagee shall not charge a direct fee for the administration of the escrow account, nor shall the mortgagee charge a fee or other consideration for allowing the mortgagor to discontinue the escrow account.

(2) A mortgagee offering the following option (c) to a mortgagor but not requiring maintenance of escrow accounts as described in clause (1), whether or not the accounts were required by the mortgagee or were optional with the mortgagor, shall offer to each of such mortgagors the following options:

(a) the mortgagor may personally manage the payment of insurance and taxes;

(b) the mortgagor may open with the mortgagee a passbook savings account carrying the current rate of interest being paid on such accounts by the mortgagee in which the mortgagor can deposit the funds previously paid into the escrow account; or

(c) the mortgagor may elect to maintain a noninterest bearing escrow account as described in clause (1) to be serviced by the mortgagee at no charge to the mortgagor.

A mortgagee that is not a depository institution offering passbook savings accounts shall instead of offering option (b) above notify its mortgagors (1) that they may open such accounts at a depository institution and (2) of the current maximum legal interest rate on such accounts.

A mortgagee offering option (c) above to a mortgagor but not requiring the maintenance of escrow accounts shall notify its mortgagor of the options under (a), (b) and (c). The notice shall state the option and state that an escrow account is not required by the mortgagee, that the mortgagor is legally responsible for the payment of taxes and insurance, and that the notice is being given pursuant to this subdivision.

Notice shall be given within 30 days after the effective date of the provisions of Laws 1977, chapter 350 amending the subdivision, as to mortgagees offering option (c) above to mortgagors but not requiring escrow accounts as of the effective date, or within 30 days after a mortgagee's decision to discontinue requiring escrow accounts if the mortgagee continues to offer option (c) above to mortgagors. If no reply is received within 30 days, option (c) shall be selected for the mortgagor but the mortgagor may, at any time, select another option.

A mortgagee making a new mortgage and offering option (c) above to a prospective mortgagor shall, at the time of loan application, notify the prospective mortgagor of options (a), (b) and (c) above which must be extended to the prospective mortgagor. The mortgagor shall select one of the options at the time the loan is made.

Any notice required by this clause shall be on forms approved by the commissioner of commerce and shall provide that at any time a mortgagor may select a different option. The form shall contain a blank where the current passbook rate of interest shall be entered by the mortgagee. Any option selected by the mortgagor shall be binding on the mortgagee.

This clause does not apply to escrow accounts which are excepted from the interest paying requirements of clause (1).

(3) A mortgagee shall be prohibited from charging a direct fee for the administration of the escrow account.

Sec. 9. Minnesota Statutes 1994, section 47.20, subdivision 14, is amended to read:

Subd. 14. (a) A lender requiring or offering private mortgage insurance shall make available to the borrower or other person paying the insurance premium the same premium payment plans as are available to the lender in paying the private mortgage insurance premium.

(b) Any refund or rebate for unearned private mortgage insurance premiums shall be paid to the borrower or other person actually providing the funds for payment of the premium.

(c) With regard to first mortgage loans made on or after January 1, 1997, the mortgagor shall have the right to elect, in writing, to cancel borrower-purchased private mortgage insurance if all of the following terms and conditions have been met:

(1) if the current unpaid principal balance of a first mortgage is 75 percent or less of the current fair market appraised value of the property. "Current fair market appraised value" shall be based upon a current appraisal by a real estate appraiser licensed or certified by the appropriate state or federal agency and reasonably acceptable to the lender. The lender may require the mortgagor to pay for the appraisal;

(2) the mortgagor's monthly installments of principal, interest, and escrow obligations have not been more than 30 days past due over the 24-month period immediately preceding the request for cancellation and all accrued late charges have been paid;

(3) the mortgage was made at least 24 months prior to the receipt of a request for cancellation of private mortgage insurance;

(4) the property securing the mortgage is owner-occupied; and

(5) the mortgage has not been pooled with other mortgages in order to constitute, in whole or in part, collateral for bonds issued by the state of Minnesota or any political subdivision of the state of Minnesota or of any agency of any political subdivision of the state of Minnesota.

(d) Other than the appraisal fee allowed pursuant to paragraph (c), clause (1), the lender shall not charge the borrower a fee or other consideration for cancellation of the private mortgage insurance.

(e) A lender requiring private mortgage insurance shall, after the payment of the 24th monthly premium installment of private mortgage insurance, provide an annual written notice to each mortgagor currently paying premiums for private mortgage insurance. The notice may be included in the annual statement or may be included in other regular mailings to the mortgagor. The annual notice shall be on its own page, unless included in a private mortgage insurance notice required under the federal Real Estate Settlement Procedures Act, and shall appear substantially as follows:

If you currently pay private mortgage insurance premiums, you may have the right to cancel the insurance and cease paying premiums. This would permit you to make a lower total monthly mortgage payment. In most cases, you have the right to cancel private mortgage insurance if the principal balance of your loan is 80 percent or less of the current fair market appraised value of your home. If you wish to learn whether you are eligible to cancel this insurance, please contact us at (address/phone)."

(f) If a mortgage loan governed by paragraph (c) is serviced in accordance with the guidelines of either the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, the lender shall cancel private mortgage insurance in accordance with the cancellation guidelines of the applicable entity in effect at the time the request for cancellation is received.

Sec. 10. Minnesota Statutes 1994, section 47.201, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZATION.] Notwithstanding the provisions of sections section 334.01, subdivision 1, and 51A.37, subdivision 3, clause (d), any financial institution is authorized to make graduated payment home loans and purchases representing graduated payment home loans pursuant to such rules as the commissioner of commerce finds to be necessary and proper, if any, at an interest rate not in excess of the maximum lawful interest rate prescribed in section 47.20, subdivision 4a. Notwithstanding the provisions of section 334.01, subdivision 1, where initial repayments of a graduated payment home loan are less than the total accrued outstanding interest, the excess accrued and unpaid interest may be added to the outstanding loan balance on which interest accrues at the contracted rate.

Sec. 11. Minnesota Statutes 1995 Supplement, section 47.61, subdivision 3, is amended to read:

Subd. 3. (a) "Electronic financial terminal" means an electronic information processing device that is established to do either or both of the following:

(1) capture the data necessary to initiate financial transactions; or

(2) through its attendant support system, store or initiate the transmission of the information necessary to consummate a financial transaction.

(b) "Electronic financial terminal" does not include:

(1) a telephone;

(2) an electronic information processing device that is used internally by a financial institution to conduct the business activities of the institution; or

(3) an electronic point-of-sale terminal operated by a retailer that is used to process payments for the purchase of goods and services by consumers, and which also may be used to obtain cash advances or cash back not to exceed $25 and only if incidental to the retail sale transactions, through the use of credit cards or debit cards, provided that the payment transactions using debit cards are subject to the federal Electronic Funds Transfer Act, United States Code, title 12, sections 1693 et seq., and Regulation E of the Federal Reserve Board, Code of Federal Regulations, title 12, subpart 205.2; this clause does not exempt the retailer from liability for negligent conduct or intentional misconduct of the operator under section 47.69, subdivision 5.

Sec. 12. Minnesota Statutes 1994, section 48.09, is amended to read:

48.09 [DIVIDENDS; SURPLUS.]

Subdivision 1. [CREATION OF SURPLUS FUND.] At the end of each dividend period, after deducting all necessary expenses, losses, amounts receivable more than one year overdue and not well secured, interest, and taxes due or levied, all of the remaining net profits for the period shall be set aside as a surplus fund, if the surplus fund of the banking institution is not then equal to one-fifth of the capital stock. If the surplus fund is more than one-fifth of the capital stock, ten percent of the remaining net profits for the period shall be set aside as a surplus fund until it equals 50 percent of the capital stock. The directors may then declare a dividend of so much of the remainder as they may think expedient, subject to the commissioner's approval. When in any way impaired the surplus fund shall be raised to this percentage in like manner.

Subd. 2. [UNDECLARED NET PROFITS, PRIOR DIVIDEND PERIODS.] Any amount of remaining net profits qualifying for dividend declaration in subdivision 1 and not declared at the end of each annual dividend period may be subject to dividend declaration under the requirements of subdivision 1 during any of the three subsequent annual dividend periods.

Sec. 13. Minnesota Statutes 1994, section 48.10, is amended to read:

48.10 [ANNUAL AUDIT; REPORT.]

The board of directors of a bank, bank and trust, or trust company shall annually examine the its books of, a bank, either in person, or by appointing an examining committee, or an auditor, who may be an independent auditor or accountant. The examining committee or auditor shall be solely responsible to the directors. A report shall be made to the directors as to the scope of the examination or audit, and also to show those assets, excluding marketable securities and fixed assets, which are carried on the books for more than actual value. This report shall be retained as a permanent record or incorporated in the minutes of the meeting, and a copy of the report shall be sent to the commissioner of commerce.

Sec. 14. Minnesota Statutes 1995 Supplement, section 48.153, subdivision 3a, is amended to read:

Subd. 3a. A savings bank organized under chapter 50, a savings association subject to the provisions of sections 51A.01 to 51A.57, or a savings association chartered under the laws of the United States, that has its principal place of business in this state, may make a loan for consumer purposes to a natural person in an amount not exceeding $25,000 repayable in installments, and may charge a rate of interest upon the unpaid principal balance of the amount financed of 12 percent a year, or the rate of interest authorized by section 48.195, whichever is greater. If the rate of interest charged is permitted by section 48.195 at the time the loan is made, the rate does not later become usurious because of a fluctuation in the federal discount rate.

Sec. 15. Minnesota Statutes 1995 Supplement, section 48.194, is amended to read:

48.194 [INSTALLMENT SALES CONTRACTS; LOANS.]

A person may enter into a credit sale or service contract for sale to a state or national bank doing business in this state, and a bank may purchase and enforce the contract under the terms and conditions set forth in sections section 47.59, subdivisions 2 and 4 to 14; and 51A.386, subdivision 4. A state bank or national bank may extend credit pursuant to the terms and conditions set forth in sections 47.59, and 47.60, and 51A.386, subdivision 4.

Sec. 16. Minnesota Statutes 1994, section 48.301, is amended to read:

48.301 [MULTIPARTY ACCOUNTS.]

When any deposit is made in the names of two or more persons jointly, or by any person payable on death (P.O.D.) to another, or by any person in trust for another, the rights of the parties and the financial institution are determined by chapter 528 524.

Sec. 17. Minnesota Statutes 1995 Supplement, section 48.65, is amended to read:

48.65 [TRUST COMPANIES TO COMPLY WITH CERTAIN LAWS.]

No trust company of this state shall conduct a banking business, as defined in section 47.02, exercising deposit taking powers, without fully complying with the provisions of section 48.221 relating to the reserve requirements of the state banks.

Sec. 18. Minnesota Statutes 1994, section 48.845, subdivision 4, is amended to read:

Subd. 4. "Affiliated bank" with respect to another bank or a trust company means any bank which is owned or controlled by the corporation which owns or controls that other bank or trust company, including a wholly owned subsidiary of the other bank or trust company.

Sec. 19. Minnesota Statutes 1995 Supplement, section 50.1485, subdivision 1, is amended to read:

Subdivision 1. [GENERALLY.] In addition to other investments authorized by law, a savings bank may make, purchase, or invest in:

(a) loans secured by the pledge of policies of life insurance, the assignment of which is properly acknowledged by the insurer;

(b) consumer loans, which may be unsecured or secured by personal or real property. Consumer loans include, but are not limited to, closed-end installment loans, single payment loans, nonamortizing loans, open-end revolving line of credit loans, credit card loans and extensions of credit, and overdraft protection loans. For the purpose of this paragraph, "consumer loan" means a loan made by the savings bank in which: (1) the debtor is a person other than an organization; (2) the debt is incurred primarily for personal, family, or household purpose; and (3) the debt is payable in installments or a finance charge is made;

(c) secured and unsecured loans to organizations and natural persons for business or commercial purposes. For the purpose of this paragraph, "organization" means a corporation, government or governmental subdivision, or agency, trust, estate, partnership, limited liability partnership, limited liability company, joint venture, cooperative, or association. "Business or commercial purpose" means a purpose other than personal, family, household, or agricultural purpose;

(d) secured and unsecured loans for agricultural purposes. For the purpose of this paragraph, "agricultural purpose" means a purpose relating to the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products. "Agricultural products" includes agricultural, horticultural, viticultural, and dairy products, livestock, wildlife, poultry, bees, and forest products, and products raised or produced on farms, including processed or manufactured products;

(e) credit sale contracts, which means a sale of goods, services, or an interest in land in which credit is granted by a seller who regularly engages as a seller in credit transactions of the same kind, and the debt is payable in installments or a finance charge is made;

(f) loans on the security of deposit accounts;

(g) real estate loans, subject to the conditions applicable to savings associations under section 51A.38 and Minnesota Statutes 1994, section 51A.385. "Real estate loans" which include a loan or other obligation secured by a first lien on real estate in fee or in a leasehold extending or renewable automatically for a period of at least ten years beyond the date scheduled for the final principal payment of the loan or obligation, or a transaction out of which a first lien or claim is created against the real estate, including the purchase of the real estate in fee by a savings bank and the concurrent or immediate sale of it on installment contract;

(h) secured or unsecured loans for the purpose of repair, improvement, rehabilitation, or furnishing of real estate;

(i) loans for the purpose of financing or refinancing an ownership interest in certificates of stock, certificates of beneficial interest, or other evidence of an ownership interest in, or a proprietary lease from, a corporation, limited liability company, trust, limited liability partnership, or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of certificates or other evidence of ownership of the borrower;

(j) loans guaranteed or insured, in whole or in part, by the United States or any of its instrumentalities;

(k) issuance of letters of credit or other similar arrangements; and

(l) any other type of loan authorized by rules adopted by the commissioner.

Sec. 20. Minnesota Statutes 1995 Supplement, section 50.245, subdivision 4, is amended to read:

Subd. 4. [PROCEDURAL REQUIREMENTS.] Procedural requirements equivalent to those contained in sections 48.90 to 48.991 48.995 apply to reciprocal interstate branching and acquisitions by savings banks and savings bank holding companies.

Sec. 21. Minnesota Statutes 1994, section 52.131, is amended to read:

52.131 [MULTIPARTY ACCOUNTS.]

When any deposit is made in the names of two or more persons jointly, or by any person payable on death (P.O.D.) to another, or by any person in trust for another, the rights of the parties and the financial institution are determined by chapter 528 524.

Sec. 22. Minnesota Statutes 1994, section 53.01, is amended to read:

53.01 [ORGANIZATION.]

It is lawful for three or more persons, who desire to form a corporation for the purpose of carrying on primarily the business of loaning money to persons within the conditions set forth in this chapter, to organize, under this chapter, an industrial loan and thrift company, by filing with the secretary of state articles of incorporation, and upon paying the fees prescribed by sections 301.07 and 301.071 or chapter 302A and upon compliance with the procedure provided for the organization and government of ordinary corporations under the laws of this state, and upon compliance with the additional requirements of this chapter prior to receiving authorization to do business.

Sec. 23. Minnesota Statutes 1994, section 53.03, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION, FEE, NOTICE.] Any corporation hereafter organized as an industrial loan and thrift company, shall, after compliance with the requirements set forth in sections 53.01 and 53.02, file a written application with the department of commerce for a certificate of authorization. A corporation that will not sell or issue thrift certificates for investment as permitted by this chapter need not comply with subdivision 2b. The application must be in the form prescribed by the department of commerce. The application must be made in the name of the corporation, executed and acknowledged by an officer designated by the board of directors of the corporation, requesting a certificate authorizing the corporation to transact business as an industrial loan and thrift company, at the place and in the name stated in the application. At the time of filing the application the applicant shall pay a $1,000 filing fee and a $500 investigation fee. The fees must be turned over by the commissioner to the state treasurer and credited to the general fund. The applicant shall also submit a copy of the bylaws of the

corporation, its articles of incorporation and all amendments thereto at that time. If the application is contested, 50 percent of an additional fee equal to the actual costs incurred by the department of commerce in approving or disapproving the application, payable to the state treasurer and credited to the general fund shall be paid by the applicant and 50 percent equally by the intervening parties. An application for powers under subdivision 2b must also require that a notice of the filing of the application must be published once within 30 days of the receipt of the form prescribed by the department of commerce, at the expense of the applicant, in a qualified newspaper published in the municipality in which the proposed industrial loan and thrift company is to be located, or, if there be none, in a qualified newspaper likely to give notice in the municipality in which the company is proposed to be located. If the department of commerce receives a written objection to the application from any person within 20 21 days of the notice having been fully published a contested case hearing must be conducted on the application. Notice of a hearing in connection with this section must be published once in the form prescribed by the department of commerce, at the expense of the applicant, in the same manner as a notice of application, the commissioner shall proceed in the same manner as required under section 46.041, subdivisions 3 and 4, relating to state banks.

Sec. 24. Minnesota Statutes 1994, section 53.07, subdivision 2, is amended to read:

Subd. 2. [TEMPORARY RESERVE MINIMUM.] Until an industrial loan and thrift company obtains a commitment for insurance or guarantee of accounts acceptable to the commissioner as required by section 53.10, it shall establish a minimum reserve against the certificates of indebtedness, savings accounts, and savings deposits described in section 53.04, subdivision 5, of not less than ten percent of the amount of indebtedness thus created. Three percent of this indebtedness shall be in cash in the actual possession of the industrial loan company or on demand deposit in approved banks of this state, and seven percent of the total indebtedness may be in bonds admissible for investment by mutual savings banks under the laws of this state.

Sec. 25. Minnesota Statutes 1995 Supplement, section 53.09, subdivision 2, is amended to read:

Subd. 2. [REPORT TO COMMISSIONER.] (1) Each industrial loan and thrift company shall annually on or before the first day of March file a report with the commissioner stating in detail, under appropriate heads, its assets and liabilities at the close of business on the last day of the preceding calendar year. This report shall be made under oath in the form prescribed by the commissioner.

(2) Each industrial loan and thrift company which holds authority to accept accounts pursuant to section 53.04, subdivision 5, shall in place of the requirement in clause (1) submit the reports and make the publication required of state banks pursuant to section 48.48.

(3) Within 30 days following a change in controlling ownership of the capital stock of an industrial loan and thrift company, it shall file a written report with the commissioner stating in detail the nature of such change in ownership.

Sec. 26. Minnesota Statutes 1995 Supplement, section 55.10, subdivision 4, is amended to read:

Subd. 4. [WILL SEARCHES, BURIAL DOCUMENTS PROCUREMENT, AND INVENTORY OF CONTENTS.] (a) Upon being furnished with satisfactory proof of death of a sole lessee or the last surviving co-lessee of a safe deposit box, an employee of the safe deposit company shall open the box and examine the contents in the presence of an employee of the safe deposit company and an individual who appears in person and furnishes an affidavit stating that the individual believes:

(1) the box may contain the will or deed to a burial lot or a document containing instructions for the burial of the lessee or that the box may contain property belonging to the estate of the lessee; and

(2) the individual is an interested person as defined in this section and wishes to open the box for any one or more of the following purposes:

(i) to conduct a will search;

(ii) to obtain a document required to facilitate the lessee's wishes regarding body, funeral, or burial arrangements; or

(iii) to obtain an inventory of the contents of the box.

(b) The safe deposit company may not open the box under this section if it has received a copy of letters of office of the representative of the deceased lessee's estate or other applicable court order.

(c) The safe deposit company need not open the box if:

(1) the box has previously been opened under this section for the same purpose;

(2) the safe deposit company has received notice of a written or oral objection from any person or has reason to believe that there would be an objection; or

(3) the lessee's key or combination is not available.

(d) For purposes of this section, the term "interested person" means any of the following:

(1) a person named as personal representative in a purported will of the lessee;

(2) a person who immediately prior to the death of the lessee had the right of access to the box as a deputy;

(3) the surviving spouse of the lessee;

(4) a devisee of the lessee;

(5) an heir of the lessee; or

(6) a person designated by the lessee in a writing acceptable to the safe deposit company which is filed with the safe deposit company before death.

(e) For purposes of this section, the term "will" includes a will or a codicil.

(f) If the box is opened for the purpose of conducting a will search, the safe deposit company shall remove any document that appears to be a will and make a true and correct machine copy thereof, replace the copy in the box, and then deliver the original thereof to the clerk of court for the county in which the lessee resided immediately before the lessee's death, if known to the safe deposit company, otherwise to the clerk of the court for the county in which the safe deposit box is located. The will must be personally delivered or sent by registered mail. If the interested person so requests, any deed to burial lot or document containing instructions for the burial of the lessee may be copied by the safe deposit box company and the copy or copies thereof delivered to the interested person.

(g) If the box is opened for the purpose of obtaining a document required to facilitate the lessee's wishes regarding the body, funeral, or burial arrangements, any such document may be removed from the box and delivered to the interested person with a true and correct machine copy retained in the box. If the safe deposit box company discovers a document that appears to be a will, the safe deposit company shall act in accordance with paragraph (f).

(h) If the box is opened for the purpose of obtaining an inventory of the contents of the box, the employee of the safe deposit company shall make, or cause to be made, an inventory of the contents of the box, to which the employee and the interested person shall attest under penalty of perjury to be correct and complete. Within ten days of opening the box pursuant to this subdivision, the safe deposit company shall deliver the original inventory of the contents to the court administrator for the county in which the lessee resided immediately before the lessee's death, if known to the safe deposit company, otherwise to the court administrator for the county in which the safe deposit box is located. The inventory must be personally delivered or sent by registered mail. If the interested person so requests, the safe deposit company shall make a true and correct copy of any document in the box and deliver that copy to the interested person. If the contents of the box include a document that appears to be a will, the safe deposit company shall act in accordance with paragraph (f).

(i) The safe deposit company need not ascertain the truth of any statement in the affidavit required to be furnished under this subdivision and when acting in reliance upon an affidavit, it is discharged as if it dealt with the personal representative of the lessee. The safe deposit company is not responsible for the adequacy of the description of any property included in an inventory of the contents of a safe deposit box, nor for conversion of the property in connection with actions performed under this subdivision, except for conversion by intentional acts of the company or its employees, directors, officers, or agents. If the safe deposit company is not satisfied that the requirements of this subdivision have been met, it may decline to open the box.

(j) No contents of a box other than a will and a document required to facilitate the lessee's wishes regarding body, funeral, or burial arrangements may be removed pursuant to this subdivision. The entire contents of the box, however, may be removed pursuant to section 524.3-1201.

Sec. 27. Minnesota Statutes 1995 Supplement, section 56.131, subdivision 4, is amended to read:

Subd. 4. [ADJUSTMENT OF DOLLAR AMOUNTS.] (a) The dollar amounts in this section, sections 53.04, subdivision 3a, paragraph (c), 56.01, 56.12, and 56.125 shall change periodically, as provided in this section, according to and to the extent of changes in the implicit price deflator for the gross domestic product, 1987 = 100, compiled by the United States Department of Commerce, and hereafter referred to as the index. The index for December 1991 is the reference base index for adjustments of dollar amounts 47.59, subdivision 3.

(b) The designated dollar amounts shall change on July 1 of each even-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the index for December of the preceding year and the reference base index is ten percent or more, but;

(1) the portion of the percentage change in the index in excess of a multiple of ten percent shall be disregarded and the dollar amounts shall change only in multiples of ten percent of the amounts appearing in Laws 1995, chapter 202, on the date of enactment; and

(2) the dollar amounts shall not change if the amounts required by this section are those currently in effect pursuant to Laws 1995, chapter 202, as a result of earlier application of this section.

(c) If the index is revised, the percentage of change pursuant to this section shall be calculated on the basis of the revised index. If a revision of the index changes the reference base index, a revised reference base index shall be determined by multiplying the reference base index then applicable by the rebasing factor furnished by the department of commerce. If the index is superseded, the index referred to in this section is the one represented by the department of commerce as reflecting most accurately changes in the purchasing power of the dollar for consumers.

(d) The commissioner shall announce and publish:

(1) on or before April 30 of each year in which dollar amounts are to change, the changes in dollar amounts required by paragraph (b); and

(2) promptly after the changes occur, changes in the index required by paragraph (c) including, if applicable, the numerical equivalent of the reference base index under a revised reference base index and the designation or title of any index superseding the index.

(e) A person does not violate this chapter with respect to a transaction otherwise complying with this chapter if that person relies on dollar amounts either determined according to paragraph (b), clause (2) or appearing in the last publication of the commissioner announcing the then current dollar amounts.

(f) The adjustments provided in this section shall not be affected unless explicitly provided otherwise by law.

Sec. 28. Minnesota Statutes 1995 Supplement, section 56.14, is amended to read:

56.14 [DUTIES OF LICENSEE.]

Every licensee shall:

(1) deliver to the borrower (or if there are two or more borrowers to one of them) at the time any loan is made a statement making the disclosures and furnishing the information required by the federal Truth-in-Lending Act, United States Code, title 15, sections 1601 to 1667e, as amended from time to time, with respect to the contract of loan. A copy of the loan contract may be delivered in lieu of a statement if it discloses the required information;

(2) deliver or mail to the borrower without request, a written receipt within 30 days following payment for each payment by coin or currency made on account of any loan wherein charges are computed and paid on unpaid principal balances for the time actually outstanding, specifying the amount applied to charges and the amount, if any, applied to principal, and stating the unpaid principal balance, if any, of the loan; and wherein precomputed charges have been added to the principal of the loan specifying the amount of the payment applied to principal and charges combined, the amount applied to default or extension charges, if any, and stating the unpaid balance, if any, of the precomputed loan contract. A periodic statement showing a payment received by mail complies with this clause;

(3) permit payment to be made in advance in any amount on any contract of loan at any time, but the licensee may apply the payment first to all charges in full at the agreed rate up to the date of the payment;

(4) upon repayment of the loan in full, mark indelibly every obligation and security, other than a mortgage or security agreement which secures a new loan to the licensee, signed by the borrower with the word "Paid" or "Canceled," and release any mortgage or security agreement which no longer secures a loan to the licensee, restore any pledge, and cancel and return any note, and any assignment given to the licensee which does not secure a new loan to the licensee within 20 days after the repayment. For purposes of this requirement, the document including actual evidence of an obligation or security may be maintained, stored, and retrieved in a form or format acceptable to the commissioner under section 46.04, subdivision 3;

(5) display prominently in each licensed place of business a full and accurate schedule, to be approved by the commissioner, of the charges to be made and the method of computing the same; furnish a copy of the contract of loan to any person obligated on it or who may become obligated on it at any time upon the request of that person;

(6) show in the loan contract or statement of loan the rate or rates of charge on which the charge in the contract is based, expressed in terms of rate or rates per annum. The rate expression shall be printed in at least 8-point type on the loan statement or copy of the loan contract given to the borrower;

(7) if a payment results in the prepayment of three or more installment payments on a precomputed loan, at the same time the receipt required by clause (2) is delivered or mailed within 15 days of receipt of the prepayment, deliver or mail to the borrower a notice in at least eight-point type as part of the receipt or together with the receipt. The notice must contain the following statement:

"You have substantially prepaid the installment payments on your loan and may experience an interest savings over the remaining term only if you refinance the balance within the next 30 days."

Sec. 29. Minnesota Statutes 1995 Supplement, section 62B.04, subdivision 1, is amended to read:

Subdivision 1. [CREDIT LIFE INSURANCE.] (1) The initial amount of credit life insurance shall not exceed the amount of principal repayable under the contract of indebtedness plus an amount equal to one monthly payment. Thereafter, if the indebtedness is repayable in substantially equal installments according to a predetermined schedule, the amount of insurance on which the premium is calculated shall not exceed be equal to the scheduled indebtedness plus one monthly payment or actual amount of indebtedness, whichever is greater. If the contract of indebtedness provides for a variable rate of finance charge or interest, the initial rate or the scheduled rates based on the initial index must be used in determining the scheduled amount of indebtedness and subsequent changes to the rate must be disregarded in determining whether the contract is repayable in substantially equal installments according to a predetermined schedule.

(2) Notwithstanding clause (1), the amount of credit life insurance written in connection with credit transactions repayable over a specified term exceeding 63 months shall not exceed the greater of: (i) the actual amount of unpaid indebtedness as it exists from time to time; or (ii) where an indebtedness is repayable in substantially equal installments according to a predetermined schedule, the scheduled amount of unpaid indebtedness, less any unearned interest or finance charges, plus an amount equal to two monthly payments. If the credit transaction provides for a variable rate of finance charge or interest, the initial rate or the scheduled rates based on the initial index must be used in determining the scheduled amount of unpaid indebtedness and subsequent changes in the rate must be disregarded in determining whether the contract is repayable in substantially equal installments according to a predetermined schedule.

(3) Notwithstanding clauses (1) and (2), insurance on educational, agricultural, and horticultural credit transaction commitments may be written on a nondecreasing or level term plan for the amount of the loan commitment.

(4) If the contract of indebtedness provides for a variable rate of finance charge or interest, the initial rate or the scheduled rates based on the initial index shall be used in determining the scheduled amount of indebtedness, and subsequent changes to the rate shall be disregarded in determining whether the contract is repayable in substantially equal installments according to a predetermined schedule.

Sec. 30. Minnesota Statutes 1994, section 118.01, subdivision 1, is amended to read:

Subdivision 1. Any bank, trust company or thrift institution authorized to do business in this state may, in lieu of the corporate or personal surety bond required to be furnished to secure deposited funds, deposit with the custodian of the funds as collateral security: (1) certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation; (2) notes secured by first mortgages

of future maturity, upon which interest is not past due, on improved real estate free from delinquent taxes, within the county wherein the depository is located, or within counties immediately adjoining the county in the state of Minnesota; (3) obligations which are legally authorized investments for debt service funds under section 475.66, subdivision 3; and (4) qualified state or local government obligations acceptable to the treasurer or chief financial officer; and (5) irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence of the bank's public debt rating contemplated by this subdivision. Qualified obligations under clause (4) must be general obligations rated "A" or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; and Federal Home Loan Banks issuing letters of credit under clause (5) must have a rating of "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation.

Sec. 31. Minnesota Statutes 1994, section 168.69, is amended to read:

168.69 [COMPLAINT ALLEGING VIOLATION.]

Any retail buyer having reason to believe that sections 168.66 to 168.77 relating to the buyer's retail installment contract has been violated may file with the administrator a written complaint setting forth the details of such alleged violation and the administrator, upon receipt of such complaint, may inspect the pertinent books, records, letters and contracts of the licensee, assignee of the licensee or retail seller, and of the retail seller involved, relating to such specific written complaint.

Sec. 32. Minnesota Statutes 1994, section 168.705, is amended to read:

168.705 [EXAMINATIONS, SPECIAL INVESTIGATIONS, COSTS.]

For the purpose of discovering violations of sections 168.66 to 168.77 or securing information lawfully required by the administrator hereunder, the administrator may, at any time, either personally or by a person or persons duly designated by the administrator, investigate the conditional sales contracts and business related to the conditional sales contracts and examine the books, accounts, records, and files used therein, of every licensee, assignee of the licensee, and of every person who shall be engaged in the business of a sales finance company, including the retail seller and assignee of the retail seller, whether the person shall act as principal or agent, or under or without the authority of sections 168.66 to 168.77. For that purpose, the administrator and the administrator's duly designated representative shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons. The administrator and all persons duly designated by the administrator shall have authority to require the attendance of and to examine, under oath, all persons whomsoever whose testimony the administrator may require relative to the conditional sales contract or the business or to the subject matter of any examination, investigation, or hearing.

The administrator may make an examination of the affairs, business, office, and records of licensees, and of other persons subject to examination under this section, as often as considered necessary. The administrator may assess a fee covering the necessary costs of an examination or special investigation under this section, section 168.69, or reports filed under section 168.706. The fee is payable to the administrator on the administrator's request for payment. The administrator may maintain an action for the recovery of the costs in any court of competent jurisdiction.

Sec. 33. Minnesota Statutes 1994, section 168.71, is amended to read:

168.71 [RETAIL INSTALLMENT CONTRACTS.]

(a)(1) Every retail installment contract shall be in writing, shall contain all the agreements of the parties, shall be signed by the retail buyer and seller, and a copy thereof signed by the retail buyer shall be furnished to such retail buyer at the time of the execution of retail buyer executes the contract. The copy signed by both the retail buyer and retail seller shall be provided to the retail buyer within seven days after delivery of the vehicle. With respect to any contract executed prior to August 1, 1996, which has not been paid in full by the retail buyer, the retail seller shall provide such retail buyer a copy signed by both the retail buyer and retail seller within 120 days after August 1, 1996.

(2) No provisions for confession of judgment or power of attorney therefor contained in any retail installment contract or contained in a separate agreement relating thereto, shall be valid or enforceable.

(3) The holder of a precomputed retail installment contract may, if the contract so provides, collect a delinquency and collection charge on each installment in arrears for a period not less than ten days in an amount not in excess of five percent of each installment or $5, whichever is greater. In addition to such delinquency and collection charge,

the retail installment contract, whether interest-bearing or precomputed, may provide for the payment of attorneys' fees not exceeding 15 percent of the amount due and payable under such contract where such contract is referred to an attorney not a salaried employee of the holder of the contract for collection plus the court costs.

(4) Unless written notice has been given to the retail buyer of actual or intended assignment of a retail installment contract, payment thereunder or tender thereof made by the retail buyer to the last known holder of such contract shall be binding upon all subsequent holders or assignees.

(5) Upon written request from the retail buyer, the holder of the retail installment contract shall give or forward to the retail buyer a written statement of the dates and amounts of payments and the total amount unpaid under such contract. A retail buyer shall be given a written receipt for any payment when made in cash.

(b) The retail installment contract shall contain the following items:

(1) The cash sale price of the motor vehicle which is the subject matter of the retail installment contract;

(2) The total amount of the retail buyer's down payment, whether made in money or goods, or partly in money or partly in goods;

(3) The difference between items one and two;

(4) The charge, if any, included in the transaction for any insurance and other benefits not included in clause (1), specifying the types of coverage and taxes, fees, and charges that actually are or will be paid to public officials or government agencies, including those for perfecting, releasing, or satisfying a security interest if such taxes, fees, or charges are not included in clause (1);

(5) Principal balance, which is the sum of items three and four;

(6) The amount of the finance charge;

(7) The total of payments payable by the retail buyer to the retail seller and the number of installment payments required and the amount of each installment expressed in dollars or percentages, and date of each payment necessary finally to pay the total of payments which is the sum of item five and item six.

Provided, however, that said items one to seven inclusive need not be stated in the terms, sequence or order set forth above. Provided further, that clauses (6) and (7) may be disclosed on the assumption that all scheduled payments under the contract will be made when due.

In lieu of the above clauses, the retail seller may give the retail buyer disclosures which satisfy the requirements of the Federal Truth-In-Lending Act in effect as of the time of the contract, notwithstanding whether or not that act applies to the transaction.

(c) Every retail seller or sales finance company, if a charge for insurance on the motor vehicle is included in a retail installment contract shall within 30 days after execution of the retail installment contract send or cause to be sent to the retail buyer a policy or policies or certificate of insurance, which insurance shall be written by a company authorized to do business in this state, clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all the terms, exceptions, limitations, restrictions and conditions of the contract or contracts of the insurance. The buyer of a motor vehicle under a retail installment contract shall have the privilege of purchasing such insurance from an agent or broker of the buyer's own selection and selecting an insurance company mutually acceptable to the seller and the buyer; provided, however, that the inclusion of the cost of the insurance premium in the retail installment contract when the buyer selects the agent, broker or company, shall be optional with the seller.

(d) Any sales finance company hereunder may purchase or acquire from any retail seller any retail installment contract on such terms and conditions as may be mutually agreed upon between them.

(e) An acknowledgment by the retail buyer of the delivery of any such copy or notice as required in subsection (a) contained in the body of the statement or contract shall be conclusive proof of delivery in any action or proceeding by or against any assignee of a retail installment contract.

Sec. 34. Minnesota Statutes 1994, section 168.73, is amended to read:

168.73 [PREPAYMENT IN FULL, REFUND CREDITS, ALLOWANCE.]

Subdivision 1. [PREPAYMENT IN FULL.] Notwithstanding the provisions of any retail installment contract to the contrary, any retail buyer may pay in full at any time before maturity the debt of any retail installment contract without penalty. In paying a precomputed retail installment contract in full, the retail buyer shall receive a refund credit thereon for such anticipation of payments. For contracts with substantially equal scheduled monthly payments remaining after the date of prepayment in full, the refund must be calculated for all fully unexpired monthly payment periods following the date of payment in full. For all other contracts, the refund must be calculated as of the date in the month following prepayment which corresponds to the original contract date. The refund shall be calculated according to the actuarial method, less an acquisition cost of $15 which may be deducted from the refund so calculated.

Where the amount of the credit for anticipation of payment is less than $1, no refund need be made.

The actuarial method means the method of allocating payments on a contract between the principal amount and finance charge at the contract rate charged under section 168.72, whereby a payment is applied first to the accumulated finance charge and then to the unpaid principal balance based on the original terms of the contract and based on the assumption that all payments are made on the due date as originally scheduled or deferred.

Subd. 2. [PARTIAL PREPAYMENT; NOTICE.] If a payment results in the prepayment of three or more installment payments on a precomputed contract, the retail seller or assignee of the retail seller shall within 15 days of receipt of the prepayment, deliver or mail to the retail buyer a notice in a least eight-point type. The notice must contain the following statement:

"You have substantially prepaid the installment payments on your contract and may experience an interest savings over the remaining term only if you refinance the balance within the next 30 days."

Sec. 35. Minnesota Statutes 1994, section 256.99, is amended to read:

256.99 [REVERSE MORTGAGE PROCEEDS DISREGARDED.]

All reverse mortgage loan proceeds received pursuant to section 47.58, including interest or earnings thereon, shall be disregarded and shall not be considered available to the borrower for purposes of determining initial or continuing eligibility for, or amount of, medical assistance, Minnesota supplemental assistance, general assistance, general assistance medical care, or a federal or state low interest loan or grant. This section applies regardless of the time elapsed since the loan was made or the disposition of the proceeds.

For purposes of medical assistance eligibility provided under sections 256B.055, 256B.056, and 256B.06, proceeds from a reverse mortgage must be disregarded as income in the month of receipt but are a resource if retained after the month of receipt.

Sec. 36. Minnesota Statutes 1994, section 300.025, is amended to read:

300.025 [ORGANIZATION OF FINANCIAL CORPORATIONS.]

(a) Three or more persons may form a corporation for any of the purposes specified in section 47.12 by applying to the department of commerce and complying with all applicable organizational requirements and the conditions set out in clauses (1) to (7). However, no corporation may be formed under this section if it may be formed under the Minnesota business corporation act. The incorporators must subscribe a certificate specifying:

(1) the corporation's name, which must distinguish it from all other corporations authorized to do business in this state, and must contain the word "company," "corporation," "bank," "association," or "incorporated";

(2) the general nature of the corporation's business and its principal place of business;

(3) the period of its duration, if limited;

(4) the names and places of residence of the incorporators;

(5) the board in which the management of the corporation will be vested, the date of the annual meeting at which it will be elected, and the names and addresses of the board members until the first election, a majority of whom must always be residents of this state;

(6) the amount of capital stock, if any, how the capital stock is to be paid in, the number of shares into which it is to be divided, and the par value of each share; and, if there is to be more than one class, a description and the terms of issue of each class, and the method of voting on each class; and

(7) the highest amount of indebtedness or liability to which the corporation will at any time be subject.

The certificate may contain any other lawful provision defining and regulating the powers and business of the corporation, its officers, directors, trustees, members, and stockholders. However, a corporation subject to sections section 48.27 and 51A.22, subdivision 2, may show its highest amount of indebtedness to be 30 times the amount of its capital and actual surplus.

(b) A person doing business in this state may contest the subsequent registration of a name with the office of the secretary of state as provided in section 5.22.

Sec. 37. Minnesota Statutes 1994, section 303.02, subdivision 2, is amended to read:

Subd. 2. [CORPORATION.] In addition to the meaning set forth in section 300.02, subdivision 2, "corporation" means a corporation formed for profit and includes a cooperative.

Sec. 38. Minnesota Statutes 1994, section 308A.135, subdivision 3, is amended to read:

Subd. 3. [CERTIFICATE.] (a) A certificate must be prepared stating:

(1) the vote and meeting of the board adopting a resolution of the proposed amendment;

(2) the notice given to members of the meeting that at which the amendment was adopted;

(3) the quorum registered at the meeting; and

(4) the vote cast adopting the amendment.

(b) The certificate must be signed by the chair, vice-chair, president, vice-president, secretary, or assistant secretary and filed with the records of the cooperative.

Sec. 39. Minnesota Statutes 1994, section 308A.165, subdivision 2, is amended to read:

Subd. 2. [ADOPTION AND AMENDMENT.] (a) Except as provided in paragraph (b), the bylaws of a cooperative may be adopted or amended at a regular or special members' meeting if:

(1) the notice of the meeting contains a summary statement of the proposed bylaws or amendment;

(2) a quorum is registered as being present or represented by mail vote if authorized by the board; and

(3) the bylaws or amendment is approved by a majority of the votes cast, or for a cooperative with articles or bylaws requiring more than majority approval or other conditions for approval, the bylaws or amendment is approved by a proportion of the votes cast or a number of the total members as required by the articles or bylaws and the conditions for approval in the articles or bylaws have been satisfied.

(b) Until the first annual members meeting, the majority of directors may adopt and amend bylaws for the cooperative that are consistent with subdivision 3 if the cooperative does not have any members or stockholders with voting rights.

Sec. 40. Minnesota Statutes 1994, section 332.21, is amended to read:

332.21 [CONTRACTS.]

Each contract entered into by the licensee and the debtor shall be in writing and signed by both parties. The licensee shall furnish the debtor with a copy of the signed contract. Each such contract shall set forth (1) the dollar charges agreed upon for the services of the licensee, clearly disclosing to such debtor the total amount which may be

retained by licensee for services if the contract is fully performed, which maximum amount would be the origination fee together with 15 percent of the amount scheduled to be liquidated by such contract, (2) the terms upon which the debtor may cancel the contract as set out in section 332.23, (3) all debts which are to be managed by the licensee, including the name of the creditor and the amount of the debt, and (4) such other matter as the commissioner may require by rule. A contract shall not be effective until a payment has been made to the licensee for distribution to creditors or until three business days after the signing thereof, whichever is later. Within such period an individual may disaffirm said contract and upon such disaffirmance said contract shall be null and void. Total fees contained in the contract may be exceeded in relation to creditors under open-end agreements if it is agreed to in the contract and the additional debts so contracted to be prorated do not exceed ten percent of the original debts in the contract or written revisions to the original contract.

Sec. 41. Minnesota Statutes 1994, section 332.50, subdivision 2, is amended to read:

Subd. 2. [ACTS CONSTITUTING.] (a) Whoever issues any check that is dishonored and is not paid within 30 days after mailing a notice of dishonor that includes a citation to this section and section 609.535, and a description of the penalties contained in these sections, in compliance with subdivision 3, is liable to the payee, holder, or agent of the holder for: (1) the amount of the check plus a civil penalty of up to $100 or up to 100 percent of the value of the check, whichever is greater; (2) interest at the rate payable on judgments pursuant to section 549.09 on the face amount of the check from the date of dishonor; and (3) reasonable attorney fees if the aggregate amount of dishonored checks issued by the issuer to all payees within a six-month period is over $1,250.

(b) If the amount of the dishonored check plus any service charges that have been incurred under paragraph (d) or (e) have not been paid within 30 days after having mailed a notice of dishonor in compliance with subdivision 3 but before bringing an action, a payee, holder, or agent of the holder may make a written demand for payment for the liability imposed by paragraph (a) by sending a copy of this section and a description of the liability contained in this section to the issuer's last known address.

(c) After notice has been sent but before an action under this section is heard by the court, the plaintiff shall settle the claim if the defendant gives the plaintiff the amount of the check plus court costs, any service charge owed under paragraph (d), and reasonable attorney fees if provided for under paragraph (a), clause (3).

(d) A service charge may be imposed immediately on any dishonored check, regardless of mailing a notice of dishonor, if written notice of the service charge was conspicuously displayed on the premises when the check was issued. The service charge may not exceed $20, except that if the payee uses the services of a law enforcement agency to obtain payment of a dishonored check, a service charge of up to $25 may be imposed if the service charge is used to reimburse the law enforcement agency for its expenses. A payee may impose only one service charge under this paragraph for each dishonored check.

(e) This subdivision prevails over any provision of law limiting, prohibiting, or otherwise regulating service charges authorized by this subdivision, but does not nullify charges for dishonored checks, which do not exceed the charges in paragraph (d) or the actual cost of collection, but in no case more than $30, or terms or conditions for imposing the charges which have been agreed to by the parties to an express contract.

Sec. 42. Laws 1995, chapter 171, section 70, is amended to read:

Sec. 70. [REPEALER.]

Minnesota Statutes 1994, sections 47.095; 47.30, subdivisions 4 and 6; 48.67; 50.02; 50.07; 50.08; 50.09; 50.10; 50.12; 50.15; 50.16; 50.21; and 50.22, are repealed.

Sec. 43. [CAPITAL REQUIREMENTS FOR TRUST COMPANIES; REENACTMENT OF REPEALED SECTION.]

Notwithstanding Minnesota Statutes, section 645.36, Minnesota Statutes, section 48.67, inadvertently repealed in Laws 1995, chapter 171, section 70, is reenacted as of the effective date of Laws 1995, chapter 171, section 70.

Sec. 44. [REPEALER.]

(a) Minnesota Statutes 1994, sections 51A.01; 51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13;

51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; and 51A.57; Minnesota Statutes 1995 Supplement, sections 47.201, subdivision 7; 47.27, subdivision 3; 51A.02, subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; and 51A.58, are repealed.

(b) Minnesota Statutes 1994, section 48.94, is repealed.

(c) Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1000; 2655.1100; 2655.1200; and 2655.1300, are repealed.

Sec. 45. [EFFECTIVE DATE.]

Sections 1 to 5, 7 to 9, 11, 12, 16, 20 to 27, 30, 33, 35, 42, 43, and 44, paragraphs (b) and (c), are effective the day following final enactment. Section 44, paragraph (a), is effective July 1, 1998.

Sections 10, 14, 15, 19, and 36 are effective on the effective date of the repeals in section 44, paragraph (a).

Section 1. Minnesota Statutes 1995 Supplement, section 47.59, subdivision 2, is amended to read:

Subd. 2. [APPLICATION.] This section does not apply to loans and other Extensions of credit or purchases of extensions of credit by financial institutions under sections 47.20, 47.21, 47.201, 47.204, 47.58, 47.60, 48.153, 48.185, 48.195, 59A.01 to 59A.15, 168.66 to 168.77, 334.01, 334.011, 334.012, 334.021, 334.06, and 334.061 to 334.19. may, but need not, be made according to those sections in lieu of the authority set forth in this section to the extent those sections authorize the financial institution to make extensions of credit or purchase extensions of credit under those sections. If a financial institution elects to make an extension of credit or to purchase an extension of credit under those other sections, the extension of credit or the purchase of an extension of credit is subject to those sections and not this section, except this subdivision, and except as expressly provided in those sections. A financial institution may also charge an organization a rate of interest and any charges agreed to by the organization and may calculate and collect finance and other charges in any manner agreed to by that organization. Except for extensions of credit a financial institution elects to make under section 334.01, 334.011, 334.012, 334.021, 334.06, or 334.061 to 334.19, chapter 334 does not apply to extensions of credit made according to this section or the sections listed in this subdivision. This subdivision does not authorize a financial institution to extend credit or purchase an extension of credit under any of the sections listed in this subdivision if the financial institution is not authorized to do so under those sections. A financial institution extending credit under any of the sections listed in this subdivision shall specify in the promissory note, contract, or other loan document the section under which the extension of credit is made.

Sec. 2. Minnesota Statutes 1995 Supplement, section 47.59, subdivision 3, is amended to read:

Subd. 3. [FINANCE CHARGE FOR LOANS.] (a) With respect to a loan, including a loan pursuant to open-end credit but excluding open-end credit pursuant to a credit card, a financial institution may contract for and receive a finance charge on the unpaid balance of the principal amount not to exceed the greater of:

(1) an annual percentage rate not exceeding 21.75 percent; or

(2) the total of:

(i) 33 percent per year on that part of the unpaid balance of the principal amount not exceeding $750; and

(ii) 19 percent per year on that part of the unpaid balance of the principal amount exceeding $750.

With respect to open-end credit pursuant to a credit card, the financial institution may contract for and receive a finance charge on the unpaid balance of the principal amount at an annual percentage rate not exceeding 18 percent per year.

(b) On a loan where the finance charge is calculated according to the method provided for in paragraph (a), clause (2), the finance charge must be contracted for and earned as provided in that provision or at the single annual percentage rate computed to the nearest .001 one-tenth of one percent that would earn the same total finance charge at maturity of the contract as would be earned by the application of the graduated rates provided in paragraph (a), clause (2), when the debt is paid according to the agreed terms and the calculations are made according to the actuarial method.

(c) With respect to a loan, the finance charge must be considered not to exceed the maximum annual percentage rate permitted under this section if the finance charge contracted for and received does not exceed the equivalent of the maximum annual percentage rate calculated in accordance with Code of Federal Regulations, title 12, part 226, but using the definition of finance charge provided in this section.

(d) This subdivision does not limit or restrict the manner of calculating the finance charge, whether by way of add-on, discount, discount points, precomputed charges, single annual percentage rate, variable rate, interest in advance, compounding, average daily balance method, or otherwise, if the annual percentage rate does not exceed that permitted by this section. Discount points permitted by this paragraph and not collected but included in the principal amount must not be included in the amount on which credit insurance premiums are calculated and charged.

(e) With respect to a loan secured by real estate, if a finance charge is calculated or collected in advance, or included in the principal amount of the loan, and the borrower prepays the loan in full, the financial institution shall credit the borrower with a refund of the charge to the extent that the annual percentage rate yield on the loan would exceed the maximum rate permitted under paragraph (a), taking into account the prepayment. The refund need not be made if it would be less than $5.

(f) With respect to all other loans, if the finance charge is calculated or collected in advance, or included in the principal amount of the loan, and the borrower prepays the loan in full, the financial institution shall credit the borrower with a refund of the charge to the extent the annual percentage rate yield on the loan would exceed the annual percentage rate on the loan as originally determined under paragraph (a) and taking into account the prepayment. The refund need not be made if it would be less than $5.

(g) For the purpose of calculating the refund under this subdivision, the financial institution may assume that the contract was paid before the date of prepayment according to the schedule of payments under the loan and that all payments were paid on their due dates.

(h) For loans repayable in substantially equal successive monthly installments, the financial institution may calculate the refund under paragraph (f) as the portion of the finance charge allocable on an actuarial basis to all wholly unexpired payment periods following the date of prepayment, based on the annual percentage rate on the loan as originally determined under paragraph (a), and for the purpose of calculating the refund may assume that all payments are made on the due date.

(i) The dollar amounts in this subdivision and subdivision 6, paragraph (a), clause (4), shall change periodically, as provided in this section, according to and to the extent of changes in the implicit price deflator for the gross domestic product, 1987 = 100, compiled by the United States Department of Commerce, and hereafter referred to as the index. The index for December 1991 is the reference base index for adjustments of dollar amounts.

(j) The designated dollar amounts shall change on July 1 of each even-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the index for December of the preceding year and the reference base index is ten percent or more; but

(1) the portion of the percentage change in the index in excess of a multiple of ten percent shall be disregarded and the dollar amounts shall change only in multiples of ten percent of the amounts appearing in Laws 1995, chapter 202, on May 24, 1995; and

(2) the dollar amounts shall not change if the amounts required by this section are those currently in effect pursuant to Laws 1995, chapter 202, as a result of earlier application of this section.

(k) If the index is revised, the percentage of change pursuant to this section shall be calculated on the basis of the revised index. If a revision of the index changes the reference base index, a revised reference base index shall be determined by multiplying the reference base index then applicable by the rebasing factor furnished by the

department of commerce. If the index is superseded, the index referred to in this section is the one represented by the department of commerce as reflecting most accurately changes in the purchasing power of the dollar for consumers.

(l) The commissioner shall announce and publish:

(1) on or before April 30 of each year in which dollar amounts are to change, the changes in dollar amounts required by paragraph (j); and

(2) promptly after the changes occur, changes in the index required by paragraph (k) including, if applicable, the numerical equivalent of the reference base index under a revised reference base index and the designation or title of any index superseding the index.

(m) A person does not violate this chapter with respect to a transaction otherwise complying with this chapter if that person relies on dollar amounts either determined according to paragraph (j), clause (2), or appearing in the last publication of the commissioner announcing the then current dollar amounts.

(n) The adjustments provided in this section shall not be affected unless explicitly provided otherwise by law.

Sec. 3. Minnesota Statutes 1995 Supplement, section 47.59, subdivision 4, is amended to read:

Subd. 4. [FINANCE CHARGE FOR CREDIT SALES MADE BY A THIRD PARTY.] (a) A person may enter into a credit sale contract for sale to a financial institution and a financial institution may purchase and enforce the contract, if the annual percentage rate provided for in the contract does not exceed that permitted in this section, or, in the case of contracts governed by sections 168.66 to 168.77, the rates permitted by those sections subdivision 4a.

(b) The annual percentage rate may not exceed the equivalent of the greater of either of the following:

(1) the total of:

(i) 36 percent per year on that part of the unpaid balances of the amount financed that is $300 or less;

(ii) 21 percent per year on that part of the unpaid balances of the amount financed which exceeds $300 but does not exceed $1,000; and

(iii) 15 percent per year on that part of the unpaid balances of the amount financed which exceeds $1,000; or

(2) 19 percent per year on the unpaid balances of the amount financed.

(c) This subdivision does not limit or restrict the manner of calculating the finance charge whether by way of add-on, discount, discount points, single annual percentage rate, precomputed charges, variable rate, interest in advance, compounding, or otherwise, if the annual percentage rate calculated under paragraph (d) does not exceed that permitted by this section. The finance charge may be contracted for and earned at the single annual percentage rate that would earn the same finance charge as the graduated rates when the debt is paid according to the agreed terms and the finance charge is calculated under paragraph (d). If the finance charge is calculated and collected in advance, or included in the principal amount of the contract, and the borrower prepays the contract in full, the financial institution shall credit the borrower with a refund of the charge to the extent the annual percentage rate yield on the contract would exceed the annual percentage rate on the contract as originally determined under paragraph (d) and taking into account the prepayment. For the purpose of calculating the refund under this subdivision, the financial institution may assume that the contract was paid before the date of prepayment according to the schedule of payments under the contract and that all payments were paid on their due dates. For contracts repayable in substantially equal successive monthly installments, the financial institution may calculate the refund as the portion of the finance charge allocable on an actuarial basis to all wholly unexpired payment periods following the date of prepayment, based on the annual percentage rate on the contract as originally determined under paragraph (d), and for the purpose of calculating the refund may assume that all payments are made on the due date.

(d) The annual percentage rate must be calculated in accordance with Code of Federal Regulations, title 12, part 226, except that the following will not in any event be considered a finance charge:

(1) a charge as a result of delinquency or default under subdivision 6 if made for actual unanticipated late payment, delinquency, default, or other similar occurrence, and a charge made for an extension or deferment under subdivision 5, unless the parties agree that these charges are finance charges;

(2) an additional charge under subdivision 6; or

(3) a discount, if a financial institution purchases a contract evidencing a credit sale at less than the face amount of the obligation or purchases or satisfies obligations of a cardholder according to a credit card and the purchase or satisfaction is made at less than the face amount of the obligation.

Sec. 4. Minnesota Statutes 1995 Supplement, section 47.59, is amended by adding a subdivision to read:

Subd. 4a. [FINANCE CHARGE FOR MOTOR VEHICLE RETAIL INSTALLMENT SALES.] A retail installment contract evidencing the retail installment sale of a motor vehicle as defined in section 168.66 is subject to the finance charge limitations in paragraphs (a) and (b).

(a) The finance charge authorized by this subdivision in a retail installment sale may not exceed the following annual percentage rates:

(1) Class 1. A motor vehicle designated by the manufacturer by a year model of the same or not more than one year before the year in which the sale is made, 18 percent per year.

(2) Class 2. A motor vehicle designated by the manufacturer by a year model of two to three years before the year in which the sale is made, 19.75 percent per year.

(3) Class 3. Any motor vehicle not in Class 1 or Class 2, 23.25 percent per year.

(b) A sale of a manufactured home made after July 31, 1983, is governed by this subdivision for purposes of determining the lawful finance charge rate, except that the maximum finance charge for a Class 1 manufactured home may not exceed 14.5 percent per year. A retail installment sale of a manufactured home that imposes a finance charge that is greater than the rate permitted by this subdivision is lawful and enforceable in accordance with its terms until the indebtedness is fully satisfied if the rate was lawful when the sale was made.

Sec. 5. Minnesota Statutes 1995 Supplement, section 47.59, subdivision 5, is amended to read:

Subd. 5. [EXTENSIONS AND, DEFERMENTS, AND CONVERSION TO INTEREST BEARING.] (a) The parties may agree in writing, either in the loan contract or credit sale contract or in a subsequent agreement, to a deferment of wholly unpaid installments. For precomputed loans and credit sale contracts, the manner of deferment charge shall be determined as provided for in this section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one-month period may not exceed the applicable charge for the installment period immediately following the due date of the last undeferred payment. A proportionate charge may be made for deferment periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. If a loan or credit sale is prepaid in full during a deferment period, the financial institution shall make or credit to the borrower a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan or credit sale in full.

For the purpose of this subdivision, "applicable charge" means the amount of finance charge attributable to each monthly installment period for the loan or credit sale contract. The applicable charge is computed as if each installment period were one month and any charge for extending the first installment period beyond the one month, or reduction in charge for a first installment less than one month, is ignored. The applicable charge for any installment period is that which would have been made for the period had the loan been made on an interest-bearing basis at the single annual percentage rate provided for in the contract based upon the assumption that all payments were made according to schedule. For convenience in computation, the financial institution may round the single annual rate to the nearest one quarter of one percent.

(b) Subject to a refund of unearned finance or deferment charge required by this section, a financial institution may convert a loan or credit sale contract to an interest bearing balance, if:

(1) the loan contract or credit sale contract so provides and is subject to a change of the terms of the written agreement between the parties; or

(2) the loan contract so provides and two or more installments are delinquent one full month or more on any due date.

Thereafter, and in lieu of any other default, extension, or deferment charges, the single annual percentage rate must be determined under the applicable charge provisions of this subdivision.

Sec. 6. Minnesota Statutes 1995 Supplement, section 47.59, subdivision 6, is amended to read:

Subd. 6. [ADDITIONAL CHARGES.] (a) In addition to the finance charges permitted by this section, a financial institution may contract for and receive the following additional charges that may be included in the principal amount financed of the loan or credit sale unpaid balances:

(1) official fees and taxes;

(2) charges for insurance as described in paragraph (b);

(3) with respect to a loan or credit sale contract secured by real estate, the following "closing costs," if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section:

(i) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;

(ii) fees for preparation of a deed, mortgage, settlement statement, or other documents, if not paid to the financial institution;

(iii) escrows for future payments of taxes, including assessments for improvements, insurance, and water, sewer, and land rents;

(iv) fees for notarizing deeds and other documents;

(v) appraisal and credit report fees; and

(vi) fees for determining whether any portion of the property is located in a flood zone and fees for ongoing monitoring of the property to determine changes, if any, in flood zone status;

(4) a delinquency charge on a payment, including the minimum payment due in connection with the open-end credit, not paid in full on or before the tenth day after its due date in an amount not to exceed five percent of the amount of the payment or $5.20, whichever is greater;

(5) for a returned check or returned automatic payment withdrawal request, an amount not in excess of the service charge limitation in section 332.50; and

(6) charges for other benefits, including insurance, conferred on the borrower that are of a type that is not for credit.

(b) An additional charge may be made for insurance written in connection with the loan or credit sale contract, which may be included in the principal amount financed of the loan or credit sale unpaid balances:

(1) with respect to insurance against loss of or damage to property, or against liability arising out of the ownership or use of property, if the financial institution furnishes a clear, conspicuous, and specific statement in writing to the borrower setting forth the cost of the insurance if obtained from or through the financial institution and stating that the borrower may choose the person through whom the insurance is to be obtained;

(2) with respect to credit insurance or mortgage insurance providing life, accident, health, or unemployment coverage, if the insurance coverage is not required by the financial institution, and this fact is clearly and conspicuously disclosed in writing to the borrower, and the borrower gives specific, dated, and separately signed affirmative written indication of the borrower's desire to do so after written disclosure to the borrower of the cost of the insurance; and

(3) with respect to the vendor's single interest insurance, but only (i) to the extent that the insurer has no right of subrogation against the borrower; and (ii) to the extent that the insurance does not duplicate the coverage of other insurance under which loss is payable to the financial institution as its interest may appear, against loss of or damage to property for which a separate charge is made to the borrower according to clause (1); and (iii) if a clear, conspicuous, and specific statement in writing is furnished by the financial institution to the borrower setting forth the cost of the insurance if obtained from or through the financial institution and stating that the borrower may choose the person through whom the insurance is to be obtained.

(c) In addition to the finance charges and other additional charges permitted by this section, a financial institution may contract for and receive the following additional charges in connection with open-end credit, which may be included in the principal amount financed of the loan or balance upon which the finance charge is computed:

(1) annual charges, not to exceed $50 per annum, payable in advance, for the privilege of opening and maintaining open-end credit;

(2) charges for the use of an automated teller machine;

(3) charges for any monthly or other periodic payment period in which the borrower has exceeded or, except for the financial institution's dishonor would have exceeded, the maximum approved credit limit, in an amount not in excess of the service charge permitted in section 332.50;

(4) charges for obtaining a cash advance in an amount not to exceed the service charge permitted in section 332.50; and

(5) charges for check and draft copies and for the replacement of lost or stolen credit cards.

(d) In addition to the finance charges and other additional charges permitted by this section, a financial institution may contract for and receive a one-time loan administrative fee not exceeding $25 in connection with closed-end credit, which may be included in the amount financed or principal balance upon which the finance charge is computed. This paragraph applies only to closed-end credit in an original principal amount of $4,320 or less. The determination of an original principal amount must exclude the administrative fee contracted for and received according to this paragraph.

Sec. 7. Minnesota Statutes 1995 Supplement, section 47.60, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZATION, TERMS, CONDITIONS, AND PROHIBITIONS.] (a) In lieu of the interest, finance charges, or fees in any other law, a consumer small loan lender may charge the following:

(i) (1) on any amount up to and including $50, a charge of $5.50 may be added;

(ii) (2) on amounts in excess of $50, but not more than $100, a charge may be added equal to ten percent of the loan proceeds plus a $5 administrative fee;

(iii) (3) on amounts in excess of $100, but not more than $250, a charge may be added equal to seven percent of the loan proceeds with a minimum of $10 plus a $5 administrative fee;

(iv) (4) for amounts in excess of $250 and not greater than the maximum in subdivision 1, paragraph (a), a charge may be added equal to six percent of the loan proceeds with a minimum of $17.50 plus a $5 administrative fee.

(b) The term of a loan made under this section shall be for no more than 30 calendar days.

(c) After maturity, the contract rate must not exceed 2.75 percent per month of the remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly rate in the contract for each calendar day the balance is outstanding.

(d) No insurance charges or other charges must be permitted to be charged, collected, or imposed on a consumer small loan except as authorized in this section.

(e) On a loan transaction in which cash is advanced in exchange for a personal check, a return check charge may be charged as authorized by section 332.50, subdivision 2, paragraph (d).

(f) A loan made under this section must not be repaid by the proceeds of another loan made under this section by the same lender or related interest. The proceeds from a loan made under this section must not be applied to another loan from the same lender or related interest. No loan to a single borrower made pursuant to this section shall be split or divided and no single borrower shall have outstanding more than one loan with the result of collecting a higher charge than permitted by this section or in an aggregate amount of principal exceed at any one time the maximum of $350.

Sec. 8. Minnesota Statutes 1995 Supplement, section 53.04, subdivision 3a, is amended to read:

Subd. 3a. (a) The right to make loans, secured or unsecured, at the rates and on the terms and other conditions permitted in section 47.59 under chapters 47 and 334. Loans made under this authority must be in amounts in compliance with section 53.05, clause (7). The right to extend credit or lend money and to collect and receive charges therefor as provided by chapter 334. The provisions of sections 47.20 and 47.21 do not apply to loans made under this subdivision, except as specifically provided in this subdivision. Nothing in this subdivision is deemed to supersede, repeal, or amend any provision of section 53.05. A licensee making a loan under this chapter secured by a lien on real estate shall comply with the requirements of section 47.20, subdivision 8.

(b) Loans made under this subdivision at a rate of interest not in excess of that provided for in paragraph (a) may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.

(c) A loan made under this subdivision that is secured by real estate and that is in a principal amount of $12,000 or more and a maturity of 60 months or more may contain a provision permitting discount points, if the loan does not provide a loan yield in excess of the maximum rate of interest permitted by this subdivision.

(d) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the farmers home administration, or approved or certified by the federal home loan mortgage corporation, or approved or certified by the federal national mortgage association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.

(d) This subdivision does not authorize an industrial loan and thrift company to make loans under an overdraft checking plan.

Sec. 9. Minnesota Statutes 1995 Supplement, section 56.131, subdivision 2, is amended to read:

Subd. 2. [ADDITIONAL CHARGES.] In addition to the charges provided for by this section and section 56.155, and notwithstanding section 47.59, subdivision 5 6, to the contrary, no further or other amount whatsoever, shall be directly or indirectly charged, contracted for, or received for the loan made, except actual out of pocket expenses of the licensee to realize on a security after default, and except for the following additional charges which may be included in the principal amount of the loan:

(a) lawful fees and taxes paid to any public officer to record, file, or release security;

(b) with respect to a loan secured by an interest in real estate, the following closing costs, if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this section; provided the costs do not exceed one percent of the principal amount or $400, whichever is greater:

(1) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;

(2) fees, if not paid to the licensee, an employee of the licensee, or a person related to the licensee, for preparation of a mortgage, settlement statement, or other documents, fees for notarizing mortgages and other documents, and appraisal fees;

(c) the premium for insurance in lieu of perfecting and releasing a security interest to the extent that the premium does not exceed the fees described in paragraph (a);

(d) discount points and appraisal fees may not be included in the principal amount of a loan secured by an interest in real estate when the loan is a refinancing for the purpose of bringing the refinanced loan current and is made within 24 months of the original date of the refinanced loan. For purposes of this paragraph, a refinancing is not considered to be for the purpose of bringing the refinanced loan current if new funds advanced to the customer, not including closing costs or delinquent installments, exceed $1,000;

(e) the one-time loan administrative fee in section 47.59, subdivision 6, paragraph (d).

Sec. 10. Minnesota Statutes 1995 Supplement, section 56.131, subdivision 6, is amended to read:

Subd. 6. [DISCOUNT POINTS.] A loan made under this section that is secured by real estate and that is in a principal amount of $12,000 or more and has a maturity of 60 months or more may contain a provision permitting discount points, if the loan does not provide a loan yield in excess of the maximum rate of interest permitted by this section. Loan yield means the annual rate of return obtained by a licensee computed as the annual percentage rate is computed under Federal Regulation Z. If the loan is prepaid in full, the licensee must make a refund to the borrower to the extent that the loan yield will exceed the maximum rate of interest provided by this section when the prepayment is taken into account. Discount points permitted by this subdivision and not collected but included in the principal amount must not be included in the amount on which credit insurance premiums are calculated and charged.

Sec. 11. Minnesota Statutes 1994, section 168.72, is amended by adding a subdivision to read:

Subd. 5. In lieu of this section and sections 168.66, subdivisions 9, 10, and 11; 168.71; 168.73; and 168.74, a retail seller may proceed under section 47.59 relating to credit sales made by a third party. In cases where the retail seller proceeds under section 47.59, the remaining provisions of sections 168.66 to 168.77 apply notwithstanding section 47.59.

Sec. 12. Minnesota Statutes 1994, section 334.02, is amended to read:

334.02 [USURIOUS INTEREST; RECOVERY.]

Every person who for any such loan or forbearance shall have paid or delivered any greater sum or value than in section 334.01 allowed to be received may, personally or through personal representatives, recover in an action against the person who shall have received the same, or the receiver's personal representatives, the full amount of interest or premium so paid, with costs, if action is brought within two years after such payment or delivery. This section does not apply when the loan or forbearance is made by a lender and the lender is liable for the penalty provided in subject to section 47.59 or 48.196 or chapter 56 in connection with the loan or forbearance. For purposes of this section, the term "lender" means a bank or savings bank organized under the laws of this state, a federally chartered savings and loan association or savings bank, a savings association organized under chapter 51A, a federally chartered credit union, a credit union organized under chapter 52, an industrial loan and thrift company organized under chapter 53, a licensed lender under chapter 56, or a mortgagee or lender approved or certified by the secretary of housing and urban development or approved or certified by the administrator of veterans affairs.

Sec. 13. Minnesota Statutes 1994, section 334.03, is amended to read:

334.03 [USURIOUS CONTRACTS INVALID; EXCEPTIONS.]

All bonds, bills, notes, mortgages, and all other contracts and securities, and all deposits of goods, or any other thing, whereupon or whereby there shall be reserved, secured, or taken any greater sum or value for the loan or forbearance of any money, goods, or things in action than prescribed, except such instruments which are taken or received in accordance with and in reliance upon the provisions of any statute, shall be void except as to a holder in due course. No merely clerical error in the computation of interest, made without intent to avoid the provisions of this chapter, shall constitute usury. Interest at the rate of 1/12 of eight percent for every 30 days shall not be construed to exceed eight percent per annum; nor shall the payment of interest in advance of one year, or any less time, at a rate not exceeding eight percent per annum constitute usury; and nothing herein shall prevent the purchase of negotiable mercantile paper, usurious or otherwise, for a valuable consideration, by a purchaser without notice, at any price before the maturity of the same, when there has been no intent to evade the provisions of this chapter, or where such purchase has not been a part of the original usurious transactions; but where the original holder of a usurious note sells the same to an innocent purchaser, the maker thereof, or the maker's representatives, may recover back from the original holder the amount of principal and interest paid on the note. This section does not apply when the loan or forbearance is made by a lender and the lender is liable for the penalty provided in subject to section 47.59 or 48.196 or chapter 56 in connection with the loan or forbearance. For purposes of this section, the term "lender" means a bank or savings bank organized under the laws of this state, a federally chartered savings and loan association or savings bank, a savings association organized under chapter 51A, a federally chartered credit union, a credit union organized under chapter 52, an industrial loan and thrift company organized under chapter 53, a licensed lender under chapter 56, or a mortgagee or lender approved or certified by the secretary of housing and urban development or approved or certified by the administrator of veterans affairs.

Sec. 14. [334.062] [AGRICULTURAL COOPERATIVES AND FARM SUPPLY.]

Notwithstanding sections 334.01 and 334.011, a cooperative organized for agricultural purposes under chapter 308A, or a similar statute of another state and registered to conduct business in this state, and other persons or entities engaged in an agricultural retail or farm supply business, may impose, charge, and collect a finance charge on goods, products, and services, including sales and open- and closed-end credit transactions that do not exceed a monthly rate of 1-1/2 percent or an annual rate of 18 percent, and the delinquency and collection charge authorized under section 334.171, provided, however, for a cooperative, the finance, delinquency, and collection charge is the same for member and nonmember patrons.

Sec. 15. [REPEALER.]

Minnesota Statutes 1994, section 53.04, subdivision 3b; and Minnesota Statutes 1995 Supplement, section 53.04, subdivisions 3c and 4a, are repealed.

Sec. 16. [EFFECTIVE DATE.]

Sections 1, 3 to 9, 11 to 13, and 15 are effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 47.101, subdivision 2, is amended to read:

Subd. 2. [BANKING INSTITUTIONS; CERTAIN RELOCATIONS, APPLICATIONS, NOTICE, APPROVAL.] A banking institution defined in section 48.01, subdivision 2, desiring to relocate its main office within the lesser of a radius of three miles measured in a straight line or the municipality, as defined in section 47.51, in which it is located shall submit an application notify the commissioner of commerce in a form prescribed by the commissioner of commerce., an investigation fee of $500 and additional fees as prescribed in section 46.041 if subsequently processed under subdivision 3. After the application is deemed to be complete and accepted by the commissioner of commerce, The applicant shall publish once in a form prescribed by the commissioner a notice of the filing of the application relocation in a qualified newspaper published in the municipalities municipality where the banking institution is located and relocating if different. If there are no such newspapers, then notice of the filing shall be published in qualified newspapers likely to give notice in the existing and proposed municipalities municipality. The applicant shall cause the notice to be publicly displayed in its lobby and sent by certified mail to all banking institutions within three miles of the proposed location measured in a straight line. Upon expiration of a period of 21 days for comment, the commissioner, after considering the applicable conditions for issuance of the bank charter defined in section 46.044, shall within 60 days approve or disapprove the application.

Sec. 2. Minnesota Statutes 1994, section 47.101, subdivision 3, is amended to read:

Subd. 3. [APPLICATIONS TO DEPARTMENT OF COMMERCE.] An application by a banking institution to relocate its main office outside a radius of three miles measured in a straight line other than those provided for in subdivision 2 shall be approved or disapproved by the commissioner of commerce as provided for in sections 46.041 and 46.044.

Sec. 3. Minnesota Statutes 1994, section 47.51, is amended to read:

47.51 [DETACHED BANKING FACILITIES; DEFINITIONS.]

As used in sections 47.51 to 47.57:

"Extension of the main banking house" means any structure or stationary mechanical device serving as a drive-in or walk-up facility, or both, which is located within 150 1,500 feet of the main banking house or detached facility, the distance to be measured in a straight line from the closest points of the closest structures involved and which performs one or more of the functions described in section 47.53.

"Detached facility" means any permanent structure, office accommodation located within the premises of any existing commercial or business establishment, stationary automated remote controlled teller facility, stationary unstaffed cash dispensing or receiving device, located separate and apart from the main banking house which is not

an "extension of the main banking house" as above defined, that serves as a drive-in or walk-up facility, or both, with one or more tellers windows, or as a remote controlled teller facility or a cash dispensing or receiving device, and which performs one or more of those functions described in section 47.53.

"Bank" means a bank as defined in section 46.046 and any banking office established prior to the effective date of Laws 1923, chapter 170, section 1.

"Commissioner" means the commissioner of commerce.

"Municipality" means the geographical area encompassing the boundaries of any home rule charter or statutory city located in this state, and any detached area, pursuant to section 473.625, operated as a major airport by the metropolitan airports commission pursuant to sections 473.601 to 473.679. When a bank is located in a township, the term municipality is expanded to mean the geographical area encompassing the boundaries of the township.

Sec. 4. Minnesota Statutes 1995 Supplement, section 47.52, is amended to read:

47.52 [AUTHORIZATION.]

(a) With the prior approval of the commissioner, any bank doing business in this state may establish and maintain not more than five detached facilities provided the facilities are located within: (1) the municipality in which the principal office of the applicant bank is located; or within (2) 5,000 feet of its principal office measured in a straight line from the closest points of the closest structures involved; or within 100 miles of its principal office measured in a straight line from the closest points of the closest structures involved, if the detached facility is within any (3) a municipality in which no bank is located at the time of application; or if the detached facility is in (4) a municipality having a population of more than 10,000,; or if the detached facility is located in (5) a municipality having a population of 10,000 or less, as determined by the commissioner from the latest available data from the state demographer, or for municipalities located in the seven-county metropolitan area from the metropolitan council, and all the banks having a principal office in the municipality have consented in writing to the establishment of the facility.

(b) A detached facility shall not be closer than 50 feet to a detached facility operated by any other bank and shall not be closer than 100 feet to the principal office of any other bank, the measurement to be made in the same manner as provided above. This paragraph shall not be applicable if the proximity to the facility or the bank is waived in writing by the other bank and filed with the application to establish a detached facility.

(c) Any bank is allowed, in addition to other facilities, one drive-in or walk-up facility located between 150 to 1,500 feet of the main banking house or within 1,500 feet from a detached facility. The drive-in or walk-up facility permitted by this clause is subject to paragraph (b) and section 47.53.

(d) A bank is allowed, in addition to other facilities, part-time deposit-taking locations at elementary and secondary schools located within the municipality in which the main banking house or a detached facility is located if they are established in connection with student education programs approved by the school administration and consistent with safe, sound banking practices.

(e) (d) A bank whose home state is Minnesota as defined in section 48.92 is allowed, in addition to facilities otherwise permitted, to establish and operate a de novo detached facility in a location in the host states of Iowa, North Dakota, South Dakota, and Wisconsin not more than 30 miles from its principal office measured in a straight line from the closest points of the closest structures involved and subject to requirements of sections 47.54 and 47.561 and the following additional requirements and conditions:

(1) there is in effect in the host state a law, rule, or ruling that permits Minnesota home state banks to establish de novo branches in the host state under conditions substantially similar to those imposed by the laws of Minnesota as determined by the commissioner; and

(2) there is in effect a cooperative agreement between the home and host state banking regulators to facilitate their respective regulation and supervision of the bank including the coordination of examinations.

For purposes of this paragraph, "host state" means a state other than the home state, as defined in section 48.92.

Sec. 5. Minnesota Statutes 1994, section 47.62, subdivision 1, is amended to read:

Subdivision 1. Any person may establish and maintain one or more electronic financial terminals. Any financial institution may provide for its customers the use of an electronic financial terminal by entering into an agreement with any person who has established and maintains one or more electronic financial terminals if that person authorizes use of the electronic financial terminal to all financial institutions on a nondiscriminatory basis pursuant to section 47.64. Electronic financial terminals to be established and maintained in this state by financial institutions located in states other than Minnesota must file a notification to the commissioner as required in this section. The notification may be in the form lawfully required by the state regulator responsible for the examination and supervision of that financial institution. If there is no such requirement, then notification must be in the form required by this section for Minnesota financial institutions.

Sec. 6. Minnesota Statutes 1994, section 48.34, is amended to read:

48.34 [BRANCH BANKS PROHIBITED.]

No bank or trust company organized under the laws of this state shall maintain a branch bank or receive deposits or pay checks within this state, except at its own banking house, and except as authorized by sections 47.51 to 47.57 and, 47.61 to 47.74, and 49.411. The commissioner shall take possession of and liquidate the business and affairs of any state bank or trust company violating the provisions of this section, in the manner prescribed by law for the liquidation of insolvent state banks and trust companies.

Sec. 7. [49.411] [INTERSTATE BANK MERGERS AFFECTING INTERSTATE BRANCHING.]

Subdivision 1. [PURPOSE.] It is the express intent of this section to permit interstate branching by mergers under section 102 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law Number 103-328, according to this section.

Subd. 2. [DEFINITIONS.] As used in this section, unless the context clearly indicates otherwise, the following terms have the meanings given them.

(a) "Bank" has the meaning given in United States Code, title 12, section 1813(h) with the following exceptions: (1) the term does not include a foreign bank as defined in United States Code, title 12, section 3101(7); and (2) the term includes a foreign bank organized under the laws of a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, the deposits of which are insured by the Federal Deposit Insurance Corporation.

(b) "Bank holding company" has the meaning given in United States Code, title 12, section 1841(a)(1).

(c) "Bank supervisory agency" means:

(1) an agency of another state with the primary responsibility for chartering and supervising banks; and

(2) the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and any successor to these agencies.

(d) "Branch" has the meaning given in United States Code, title 12, section 1813(o).

(e) "Commissioner" means the commissioner of commerce.

(f) "Control" has the meaning given in section 46.048, subdivision 1.

(g) "Home state" has the meaning given in section 48.92, subdivision 6, except in relation to foreign banks, for which home state means the state determined to be the home state of the foreign bank under United States Code, title 12, section 3103(c).

(h) "Home state regulator" means, with respect to an out-of-state state bank, the bank supervisory agency of the state in which the bank is chartered.

(i) "Host state" means a state other than the home state of a bank in which the bank maintains or seeks to establish and maintain a branch.

(j) "Interstate merger transaction" means:

(1) the merger or consolidation of banks with different home states, and the conversion of branches of any bank involved in the merger or consolidation into branches of the resulting bank; or

(2) the purchase of all or substantially all of the assets including all or substantially all of the branches of a bank whose home state is different from the home state of the acquiring bank.

(k) "Out-of-state bank" has the meaning given in section 48.92, subdivision 11.

(l) "Out-of-state state bank" means a bank chartered under the laws of any state other than Minnesota.

(m) "Resulting bank" means a bank that has resulted from an interstate merger transaction under this section.

(n) "State" means any state of the United States, the District of Columbia, or any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.

(o) "Minnesota bank" means a bank whose home state is Minnesota.

(p) "Minnesota state bank" means a bank chartered under the laws of Minnesota.

Subd. 3. [AUTHORITY OF STATE BANKS TO ESTABLISH INTERSTATE BRANCHES BY MERGER.] With the prior approval of the commissioner, a Minnesota state bank may establish, maintain, and operate one or more branches in a state other than Minnesota as a result of an interstate merger transaction in which the Minnesota state bank is the resulting bank. Not later than the date on which the required application for the interstate merger transaction is filed with the responsible federal bank supervisory agency, the applicant Minnesota state bank shall file with the commissioner an application on a form prescribed by the commissioner and pay the fee prescribed by section 49.36. The applicant shall also comply with the applicable provisions of sections 49.33 to 49.41. After considering the criteria in section 49.36, subdivision 3, the commissioner may approve the interstate merger transaction and the operation of branches outside of Minnesota by the Minnesota state bank. Such an interstate merger transaction may be consummated only after the applicant has received the commissioner's written approval.

Subd. 4. [INTERSTATE MERGER TRANSACTIONS AND BRANCHING PERMITTED.] (a) One or more Minnesota banks may enter into an interstate merger transaction with one or more out-of-state banks under this section, and an out-of-state bank resulting from the transaction may maintain and operate the branches in Minnesota of a Minnesota bank that participated in the transaction if the conditions and filing requirements of this section are met.

(b) An interstate merger transaction resulting in the acquisition by an out-of-state bank of a Minnesota state bank, or all or substantially all of the branches of a Minnesota state bank, shall not be permitted under this section unless the Minnesota state bank has been in continuous operation, on the date of the acquisition, for at least five years. For purposes of this paragraph, a bank that has been chartered solely for the purpose of, and does not open for business before, acquiring control of, or acquiring all or substantially all of the assets of, an existing bank is considered to have been in existence for the same period of time as the bank to be acquired. For determining the time period of existence of a bank, the time period begins after the issuance of a certificate of authorization and from the date the approved bank actually opens for business.

Subd. 5. [NOTICE AND FILING REQUIREMENT.] An out-of-state bank that will be the resulting bank under an interstate merger transaction involving a Minnesota state bank shall notify the commissioner of the proposed merger not later than the date on which it files an application for an interstate merger transaction with the responsible federal bank supervisory agency, and shall submit a copy of that application to the commissioner and pay the filing fee, if any, required by the commissioner. A Minnesota state bank that is a party to an interstate merger transaction shall comply with sections 49.33 to 49.41 and with other applicable state and federal laws. An out-of-state bank that is the resulting bank in such an interstate merger transaction shall provide satisfactory evidence to the commissioner of compliance with applicable requirements of the bank's home state.

Subd. 6. [POWERS; ADDITIONAL BRANCHES.] (a) An out-of-state state bank that establishes and maintains one or more branches in Minnesota under this section may conduct any activities at the branch or branches that are authorized under the laws of this state for Minnesota state banks.

(b) A Minnesota state bank may conduct any activities at or in connection with a branch outside Minnesota that are permissible for a bank chartered by the host state where the branch is located, except to the extent that the activities are expressly prohibited by the laws of this state or by any rule or order of the commissioner applicable to the Minnesota state bank. The commissioner may waive the prohibition if the commissioner determines, by rule or order, that the involvement of out-of-state branches of Minnesota state banks in particular activities would not threaten the safety or soundness of the banks.

(c) An out-of-state bank that has established or acquired a branch in Minnesota under this section may establish or acquire additional branches in Minnesota to the same extent that a Minnesota bank may establish or acquire a branch in Minnesota under applicable federal and state law where a bank involved in the transaction could have established, acquired, or operated the additional branches if the bank had not been a party to the merger transaction.

Subd. 7. [EXAMINATIONS; PERIODIC REPORTS; COOPERATIVE AGREEMENTS; ASSESSMENT OF FEES.] (a) To the extent consistent with paragraph (c), the commissioner may make examinations of a branch established and maintained in this state under this section by an out-of-state state bank as the commissioner considers necessary to determine whether the branch is being operated in compliance with the laws of this state and according to safe and sound banking practices. Section 46.04 applies to the examinations.

(b) The commissioner may prescribe requirements for periodic reports regarding an out-of-state bank that operates a branch in Minnesota under this section. The required reports must be provided by the bank or by the bank supervisory agency having primary responsibility for the bank. Reporting requirements prescribed by the commissioner under this paragraph must be: (1) consistent with the reporting requirements applicable to Minnesota state banks; and (2) appropriate for the purpose of enabling the commissioner to carry out responsibilities under this section.

(c) The commissioner may enter into cooperative, coordinating, and information-sharing agreements with any other bank supervisory agencies or any organization affiliated with or representing one or more bank supervisory agencies with respect to the periodic examination or other supervision of a branch in Minnesota of an out-of-state state bank, or a branch of a Minnesota state bank in a host state. The commissioner may accept the parties' reports of examination and reports of investigation in lieu of conducting the commissioner's own examinations or investigations.

(d) The commissioner may enter into contracts with a bank supervisory agency that has concurrent jurisdiction over a Minnesota state bank or an out-of-state state bank operating a branch in this state under this section to engage the services of the agency's examiners at a reasonable rate of compensation, or to provide the services of the commissioner's examiners to the agency at a reasonable rate of compensation.

(e) The commissioner may enter into joint examinations or joint enforcement actions with other bank supervisory agencies having concurrent jurisdiction over a branch in Minnesota of an out-of-state state bank or a branch of a Minnesota state bank in a host state. However, the commissioner may at any time take the actions independently if the commissioner considers the actions to be necessary or appropriate to carry out responsibilities under this section or to ensure compliance with the laws of this state. In the case of an out-of-state state bank, the commissioner shall recognize the exclusive authority of the home state regulator over corporate governance matters and the primary responsibility of the home state regulator with respect to safety and soundness matters.

(f) Each out-of-state state bank that maintains one or more branches in this state may be assessed and charged according to section 46.131 as if it were a Minnesota state bank and, if assessed, shall pay supervisory and examination fees according to the laws of this state and rules of the commissioner. The fees may be shared with other bank supervisory agencies or an organization affiliated with or representing one or more bank supervisory agencies according to agreements between the parties and the commissioner.

Subd. 8. [ENFORCEMENT.] If the commissioner determines that a branch maintained by an out-of-state state bank in this state is being operated in violation of the laws of this state, or that the branch is being operated in an unsafe and unsound manner, the commissioner has the authority to take all enforcement actions the commissioner would be empowered to take if the branch were a Minnesota state bank. The commissioner shall promptly give notice to the home state regulator of each enforcement action taken against an out-of-state state bank and, to the extent practicable, shall consult and cooperate with the home state regulator in pursuing and resolving enforcement action.

Subd. 9. [NOTICE OF SUBSEQUENT MERGER.] Each out-of-state state bank that has established and maintains a branch in this state under this section shall give at least 60 days' prior written notice or, in the case of an emergency transaction, shorter notice as is consistent with applicable state or federal law to the commissioner of any merger,

consolidation, or other transaction that would cause a change of control with respect to the bank or any bank holding company that controls the bank, with the result that an application would be required to be filed under United States Code, title 12, section 1817(j), or the federal Bank Holding Company Act of 1956, as amended, United States Code, title 12, section 1841, et seq.

Subd. 10. [SEVERABILITY.] If a provision of this section, or the application of the provision, is found by any court of competent jurisdiction in the United States to be invalid as to a bank, bank holding company, foreign bank, or other person or circumstances, or to be superseded by federal law, the remaining provisions of this section shall not be affected and shall continue to apply to a bank, bank holding company, foreign bank, or other person or circumstance.

Sec. 8. Minnesota Statutes 1995 Supplement, section 50.245, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY FOR BRANCH OFFICES.] A savings bank may establish five any number of detached facilities as may be approved by the commissioner of commerce pursuant to sections 47.51 to 47.57 in the territories of Hennepin and Anoka counties. The savings bank shall not change the location of a detached facility without prior written approval of the commissioner of commerce. A savings bank may establish a loan production office, without restriction as to geographical location, upon written notice to the commissioner of commerce.

Sec. 9. [EFFECTIVE DATE.]

Sections 1 to 5 and 8 are effective the day following final enactment. Sections 6 and 7 are effective June 1, 1997."

Delete the title and insert:

"A bill for an act relating to financial institutions; regulating consumer credit; modifying rates, fees, and other terms and conditions; providing clarifying and technical changes; providing opportunities for state banks to develop their Minnesota markets through broader intrastate branching; modifying finance charge provisions and other provisions for certain cooperatives; providing technical corrections; amending Minnesota Statutes 1994, sections 9.031, subdivision 13; 13.71, by adding a subdivision; 46.041, subdivision 1; 46.044, subdivision 1; 47.10, subdivision 4; 47.101, subdivisions 2 and 3; 47.20, subdivision 14; 47.201, subdivision 2; 47.51; 47.62, subdivision 1; 48.09; 48.10; 48.301; 48.34; 48.845, subdivision 4; 52.131; 53.01; 53.03, subdivision 1; 53.07, subdivision 2; 118.01, subdivision 1; 168.69; 168.705; 168.71; 168.72, by adding a subdivision; 168.73; 256.99; 300.025; 303.02, subdivision 2; 308A.135, subdivision 3; 308A.165, subdivision 2; 332.21; 332.50, subdivision 2; 334.02; and 334.03; Minnesota Statutes 1995 Supplement, sections 46.048, subdivision 2b; 47.20, subdivisions 1 and 9; 47.52; 47.59, subdivisions 2, 3, 4, 5, 6, and by adding a subdivision; 47.60, subdivision 2; 47.61, subdivision 3; 48.153, subdivision 3a; 48.194; 48.65; 50.1485, subdivision 1; 50.245, subdivisions 1 and 4; 53.04, subdivision 3a; 53.09, subdivision 2; 55.10, subdivision 4; 56.131, subdivisions 2, 4, and 6; 56.14; and 62B.04, subdivision 1; Laws 1995, chapter 171, section 70; proposing coding for new law in Minnesota Statutes, chapters 49; and 334; repealing Minnesota Statutes 1994, sections 48.94; 51A.01; 51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13; 51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; 51A.57; and 53.04, subdivision 3b; Minnesota Statutes 1995 Supplement, sections 47.201, subdivision 7; 47.27, subdivision 3; 51A.02, subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; 51A.58; and 53.04, subdivisions 3c and 4a; Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1000; 2655.1100; 2655.1200; and 2655.1300."

We request adoption of this report and repassage of the bill.

House Conferees: Don Ostrom, Mike Delmont and Jim Girard.

Senate Conferees: James P. Metzen, Cal Larson and Deanna Wiener.

Ostrom moved that the report of the Conference Committee on H. F. No. 2369 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2369, A bill for an act relating to financial institutions; regulating consumer credit; modifying rates, fees, and other terms and conditions; providing clarifying and technical changes; providing opportunities for state banks to develop their Minnesota markets through broader intrastate branching; regulating the use of credit cards by institutions; modifying interest rates, fees, and other terms and conditions governing the use of credit cards; providing technical corrections; amending Minnesota Statutes 1994, sections 9.031, subdivision 13; 13.71, by adding a subdivision; 46.041, subdivision 1; 46.044, subdivision 1; 47.10, subdivision 4; 47.101, as amended; 47.201, subdivision 2; 47.51; 47.62, subdivision 1; 48.09; 48.10; 48.185, subdivisions 3 and 4; 48.301; 48.34; 48.845, subdivision 4; 52.131; 53.01; 53.03, subdivision 1; 53.07, subdivision 2; 118.005, subdivision 1; 168.69; 168.705; 168.72, by adding a subdivision; 168.73; 300.025; 332.50, subdivision 2; 334.02; 334.03; Minnesota Statutes 1995 Supplement, sections 46.048, subdivision 2b; 47.20, subdivision 9; 47.52; 47.59, subdivisions 2, 3, 4, 5, 6, and by adding subdivisions; 47.60, subdivision 2; 47.61, subdivision 3; 48.153, subdivision 3a; 48.194; 48.65; 50.1485, subdivision 1; 50.245, subdivision 4; 53.04, subdivision 3a; 53.09, subdivision 2; 56.131, subdivisions 2, 4, and 6; 56.14; 62B.04, subdivisions 1 and 2; Laws 1995, chapter 171, section 70; proposing coding for new law in Minnesota Statutes, chapter 49; repealing Minnesota Statutes 1994, sections 47.201, subdivision 7; 47.27, subdivision 3; 48.185, subdivision 5; 48.94; 51A.01; 51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13; 51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; 51A.57; 53.04, subdivision 3b; Minnesota Statutes 1995 Supplement, sections 51A.02, subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; 51A.58; 53.04, subdivisions 3c and 4a; Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1100; 2655.1200; and 2655.1300.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Ness         Smith
Anderson, B. Finseth      Knoblach     Olson, E.    Solberg
Anderson, R. Frerichs     Koppendrayer Olson, M.    Stanek
Bakk         Garcia       Kraus        Onnen        Sviggum
Bertram      Girard       Krinkie      Opatz        Swenson, D.
Bettermann   Goodno       Larsen       Orenstein    Swenson, H.
Bishop       Greenfield   Leighton     Orfield      Sykora
Boudreau     Greiling     Leppik       Osskopp      Tomassoni
Bradley      Gunther      Lieder       Osthoff      Tompkins
Broecker     Haas         Lindner      Ostrom       Trimble
Brown        Hackbarth    Long         Otremba      Tuma
Carlson, L.  Harder       Lourey       Ozment       Tunheim
Carlson, S.  Hasskamp     Luther       Paulsen      Van Dellen
Carruthers   Hausman      Lynch        Pawlenty     Van Engen
Clark        Holsten      Macklin      Pellow       Vickerman
Commers      Huntley      Mahon        Pelowski     Wagenius
Cooper       Jaros        Mares        Perlt        Warkentin
Daggett      Jefferson    Mariani      Peterson     Weaver
Dauner       Jennings     Marko        Pugh         Wejcman
Davids       Johnson, A.  McCollum     Rest         Wenzel
Dawkins      Johnson, R.  McElroy      Rhodes       Winter
Dehler       Johnson, V.  McGuire      Rice         Wolf
Delmont      Kahn         Milbert      Rostberg     Worke
Dempsey      Kalis        Molnau       Rukavina     Workman
Dorn         Kelley       Mulder       Sarna        Sp.Anderson,I
Entenza      Kelso        Munger       Schumacher   
Erhardt      Kinkel       Murphy       Seagren      

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1885.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to human services; clarifying foster care payment and placement; clarifying adoption assistance; defining egregious harm in the juvenile code; amending the parental rights termination statute; amending Minnesota Statutes 1994, sections 256E.08, by adding a subdivision; 257.071, subdivision 1a, and by adding subdivisions; 257.072, subdivisions 1, 5, and 8; 257.0725; 259.67, subdivisions 4 and 6; 259.77; 260.015, by adding a subdivision; and 260.181, subdivision 3; Minnesota Statutes 1995 Supplement, sections 256.045, subdivision 3; and 260.221, subdivision 1; Laws 1995, chapter 207, article 1, section 2, subdivision 4.

March 26, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1885, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 1885 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1995 Supplement, section 256.045, subdivision 3, is amended to read:

Subd. 3. [STATE AGENCY HEARINGS.] (a) State agency hearings are available for the following: (1) any person applying for, receiving or having received public assistance or a program of social services granted by the state agency or a county agency under sections 252.32, 256.031 to 256.036, and 256.72 to 256.879, chapters 256B, 256D, 256E, 261, or the federal Food Stamp Act whose application for assistance is denied, not acted upon with reasonable promptness, or whose assistance is suspended, reduced, terminated, or claimed to have been incorrectly paid; (2) any patient or relative aggrieved by an order of the commissioner under section 252.27; (3) a party aggrieved by a ruling of a prepaid health plan; or (4) any individual or facility determined by a lead agency to have maltreated a vulnerable adult under section 626.557 after they have exercised their right to administrative reconsideration under section 626.557; (5) any person whose claim for foster care payment pursuant to a placement of the child resulting from a child protection assessment under section 626.556 is denied or not acted upon with reasonable promptness, regardless of funding source; or (6) any person to whom a right of appeal pursuant to this section is given by other provision of law. Individuals and organizations specified in this section may contest the specified action, decision, or final disposition

before the state agency by submitting a written request for a hearing to the state agency within 30 days after receiving written notice of the action, decision, or final disposition, or within 90 days of such written notice if the applicant, recipient, patient, or relative shows good cause why the request was not submitted within the 30-day time limit.

The hearing for an individual or facility under clause (4) is the only administrative appeal to the final lead agency disposition specifically, including a challenge to the accuracy and completeness of data under section 13.04.

For purposes of this section, bargaining unit grievance procedures are not an administrative appeal.

The scope of hearings involving claims to foster care payments under clause (5) shall be limited to the issue of whether the county is legally responsible for a child's placement under court order or voluntary placement agreement and, if so, the correct amount of foster care payment to be made on the child's behalf and shall not include review of the propriety of the county's child protection determination or child placement decision.

(b) Except for a prepaid health plan, a vendor of medical care as defined in section 256B.02, subdivision 7, or a vendor under contract with a county agency to provide social services under section 256E.08, subdivision 4, is not a party and may not request a hearing under this section, except if assisting a recipient as provided in subdivision 4.

(c) An applicant or recipient is not entitled to receive social services beyond the services included in the amended community social services plan developed under section 256E.081, subdivision 3, if the county agency has met the requirements in section 256E.081.

Sec. 2. Minnesota Statutes 1994, section 256E.08, is amended by adding a subdivision to read:

Subd. 11. [USE OF COMMUNITY SOCIAL SERVICES FUNDS FOR FOSTER CARE.] If foster care services are described in a county's community social services plan, the county may use funds from its community social services fund to provide foster care benefits on behalf of children for whom the county has legal placement responsibility pursuant to court order or voluntary placement agreement.

Sec. 3. Minnesota Statutes 1994, section 257.071, subdivision 1a, is amended to read:

Subd. 1a. [PROTECTION OF HERITAGE OR BACKGROUND.] The authorized child-placing agency shall ensure that the child's best interests are met by giving due, not sole, consideration of the child's race or ethnic heritage in making a family foster care placement. The authorized child-placing agency shall place a child, released by court order or by voluntary release by the parent or parents, in a family foster home selected by following the preferences described in section 260.181, subdivision 3.

In instances where a child from a family of color is placed in a family foster home of a different racial or ethnic background, the local social service agency shall review the placement after 30 days and each 30 days thereafter for the first six months to determine if there is another available placement that would better satisfy the requirements of this subdivision. When there is not a family foster home of the same race or ethnic heritage available that can meet the needs of the child, the agency must place the child in a home of a foster family that is of different racial or ethnic heritage that can meet the needs of the child. Placement of a child cannot be delayed or denied based solely on race.

Sec. 4. Minnesota Statutes 1994, section 257.071, is amended by adding a subdivision to read:

Subd. 9. [FAIR HEARING REVIEW.] Any person whose claim for foster care payment pursuant to the placement of a child resulting from a child protection assessment under section 626.556 is denied or not acted upon with reasonable promptness may appeal the decision under section 256.045, subdivision 3. The application and fair hearing procedures set forth in the administration of community social services rule, Minnesota Rules, parts 9550.0070 to 9550.0092, do not apply to foster care payment issues appealable under this subdivision.

Sec. 5. Minnesota Statutes 1994, section 257.071, is amended by adding a subdivision to read:

Subd. 10. [RULES; FOSTER CARE FAIR HEARINGS.] The commissioner shall review and, where necessary, revise foster care rules to ensure that the rules provide adequate guidance for implementation of foster care fair hearings, pursuant to section 256.045, subdivision 3, clause (5), that comply with all applicable federal requirements and the requirements of section 256.045.

Sec. 6. Minnesota Statutes 1994, section 257.072, subdivision 1, is amended to read:

Subdivision 1. [RECRUITMENT OF FOSTER FAMILIES.] Each authorized child-placing agency shall make special efforts to recruit a foster family from among the child's relatives, except as authorized in section 260.181, subdivision 3, and among families of the same racial or ethnic heritage. Each agency shall provide for diligent recruitment of potential foster families that reflect the ethnic and racial diversity of the children in the state for whom foster homes are needed. Special efforts include contacting and working with community organizations and religious organizations and may include contracting with these organizations, utilizing local media and other local resources, conducting outreach activities, and increasing the number of minority recruitment staff employed by the agency. The requirement of special efforts to locate relatives in this section is satisfied if the responsible child-placing agency has made appropriate efforts for six months following the child's placement in a residential facility and the court approves the agency's efforts pursuant to section 260.191, subdivision 3a. The agency may accept any gifts, grants, offers of services, and other contributions to use in making special recruitment efforts.

Sec. 7. Minnesota Statutes 1994, section 257.072, subdivision 5, is amended to read:

Subd. 5. [MINORITY PLACEMENTS.] Beginning December 1, 1989 1996, the commissioner shall provide to the Indian affairs council, the council on affairs of Spanish-speaking people, the council on Black Minnesotans, and the council on Asian-Pacific Minnesotans the semiannual reports annual report required under section 257.0725.

Sec. 8. Minnesota Statutes 1994, section 257.072, subdivision 8, is amended to read:

Subd. 8. [REPORTING REQUIREMENTS.] Each authorized child-placing agency shall provide to the commissioner of human services all data needed by the commissioner for the report required by section 257.0725. The agency shall provide the data within 60 15 days of the end of the six-month period for which the data is applicable.

Sec. 9. Minnesota Statutes 1994, section 257.0725, is amended to read:

257.0725 [SEMIANNUAL ANNUAL REPORT.]

The commissioner of human services shall publish a semiannual an annual report on children in out-of-home placement. The report shall include, by county and statewide, information on legal status, living arrangement, age, sex, race, accumulated length of time in placement, reason for most recent placement, race of family with whom placed, number of families from the child's own culture in the placement pool during the period for which data is provided, and other demographic information deemed appropriate on all children in out-of-home placement. The commissioner shall provide the required data for children who entered placement during the previous quarter and for children who are in placement at the end of the quarter. Out-of-home placement includes placement in any facility by an authorized child-placing agency. By December 1, 1989, and by December 1 of each successive year, the commissioner shall publish a report covering the first six months of the calendar year. By June 1, 1990, and by June 1 of each successive year, the commissioner shall publish a report covering the last six months of the calendar year.

Sec. 10. Minnesota Statutes 1994, section 259.29, is amended to read:

259.29 [PROTECTION OF HERITAGE OR BACKGROUND.]

The policy of the state of Minnesota is to ensure that the best interests of the child are met by requiring due, not sole, consideration of the child's race or ethnic heritage in adoption placements. For purposes of intercountry adoptions, due consideration is deemed to have occurred if the appropriate authority in the child's country of birth has approved the placement of the child.

The authorized child-placing agency shall give preference, in the absence of good cause to the contrary, to placing the child with (a) a relative or relatives of the child, or, if that would be detrimental to the child or a relative is not available, (b) an important friend with whom the child has resided or had significant contact, or if that is not possible, (c) a family with the same racial or ethnic heritage as the child, or, if that is not feasible, (c) (d) a family of different racial or ethnic heritage from the child which is knowledgeable and appreciative of the child's racial or ethnic heritage. In implementing the order of preference, an authorized child-placing agency may disclose private or confidential data, as defined in section 13.02, to relatives of the child for the purpose of locating a suitable adoptive home. The agency shall disclose only data that is necessary to facilitate implementing the preference.

If the child's birth parent or parents explicitly request that the preference described in clause (a) or clauses (a) and, (b), or (c) not be followed, the authorized child-placing agency shall honor that request consistent with the best interests of the child.

If the child's birth parent or parents express a preference for placing the child in an adoptive home of the same or a similar religious background to that of the birth parent or parents, in following the preferences in clause (a) or, (b), or (c), the agency shall place the child with a family that also meets the birth parent's religious preference. Only if no family is available that is described in clause (a) or, (b), or (c) may the agency give preference to a family described in clause (c) (d) that meets the parent's religious preference.

Sec. 11. Minnesota Statutes 1994, section 259.67, subdivision 4, is amended to read:

Subd. 4. [ELIGIBILITY CONDITIONS.] (a) The placing agency shall determine the child's eligibility for adoption assistance under title IV-E of the Social Security Act. If the child does not qualify, the placing agency shall certify a child as eligible for state funded adoption assistance only if the following criteria are met:

(a) (1) Due to the child's characteristics or circumstances it would be difficult to provide the child and an adoptive home without adoption assistance.

(b)(1) (2)(i) A placement agency has made reasonable efforts to place the child for adoption without subsidy adoption assistance, but has been unsuccessful; or

(2) (ii) the child's licensed foster parents desire to adopt the child and it is determined by the placing agency that the adoption is in the best interest of the child.

(c) (3) The child has been a ward of the commissioner or a Minnesota-licensed child-placing agency.

(b) For purposes of this subdivision, the characteristics or circumstances that may be considered in determining whether a child is a child with special needs under United States Code, title 42, chapter 7, subchapter IV, part E, or meets the requirements of paragraph (a), clause (1), are the following:

(1) The child is a member of a sibling group to be placed as one unit in which at least one sibling is older than 15 months of age or is described in clause (2) or (3).

(2) The child has documented physical, mental, emotional, or behavioral disabilities.

(3) The child has a high risk of developing physical, mental, emotional, or behavioral disabilities.

(c) When a child's eligibility for adoption assistance is based upon the high risk of developing physical, mental, emotional, or behavioral disabilities, payments shall not be made under the adoption assistance agreement unless and until the potential disability manifests itself as documented by an appropriate health care professional.

Sec. 12. Minnesota Statutes 1994, section 259.67, subdivision 6, is amended to read:

Subd. 6. [RIGHT OF APPEAL.] (a) The adoptive parents have the right to appeal to the commissioner pursuant to section 256.045, when the commissioner denies, discontinues, or modifies the agreement.

(b) Adoptive parents who believe that their adopted child was incorrectly denied adoption assistance, or who did not seek adoption assistance on the child's behalf because of being provided with inaccurate or insufficient information about the child or the adoption assistance program, may request a hearing under section 256.045. Notwithstanding subdivision 2, the purpose of the hearing shall be to determine whether, under standards established by the federal Department of Health and Human Services, the circumstances surrounding the child's adoption warrant making an adoption assistance agreement on behalf of the child after the final decree of adoption has been issued. The commissioner shall enter into an adoption assistance agreement on the child's behalf if it is determined that the child was eligible for adoption assistance under United States Code, title 42, chapter 7, subchapter IV, part E, sections 670 to 679a, at the time of the adoption and at the time the request for a hearing was submitted but, because of extenuating circumstances, did not receive adoption assistance. An adoption assistance agreement made under this paragraph shall be effective the date the request for a hearing was received by the commissioner or the local agency.

Sec. 13. Minnesota Statutes 1994, section 259.77, is amended to read:

259.77 [FAMILY RECRUITMENT.]

Each authorized child-placing agency shall make special efforts to recruit an adoptive family from among the child's relatives, except as authorized in section 259.57, subdivision 2, and among families of the same racial or ethnic heritage. Each agency shall provide for the diligent recruitment of potential adoptive families that reflect the ethnic

and racial diversity of children in the state for whom adoptive homes are needed. Special efforts include contacting and working with community organizations and religious organizations and may include contracting with these organizations, utilizing local media and other local resources, and conducting outreach activities. The requirement of special efforts to locate relatives in this section is satisfied if the efforts have continued for six months after the child becomes available for adoption or if special efforts have been satisfied and approved by the court pursuant to section 260.191, subdivision 3a. The agency may accept any gifts, grants, offers of services, and other contributions to use in making special recruitment efforts.

Sec. 14. Minnesota Statutes 1994, section 260.015, is amended by adding a subdivision to read:

Subd. 29. [EGREGIOUS HARM.] "Egregious harm" means the infliction of bodily harm to a child or neglect of a child which demonstrates a grossly inadequate ability to provide minimally adequate parental care. The egregious harm need not have occurred in the state or in the county where a termination of parental rights action is otherwise properly venued. Egregious harm includes, but is not limited to:

(1) conduct towards a child that constitutes a violation of section 609.185 to 609.21, or any other similar law of the United States or any other state;

(2) the infliction of "substantial bodily harm" to a child, as defined in section 609.02, subdivision 8;

(3) conduct towards a child that constitutes felony malicious punishment of a child under section 609.377;

(4) conduct towards a child that constitutes felony unreasonable restraint of a child under section 609.255, subdivision 3;

(5) conduct towards a child that constitutes felony neglect or endangerment of a child under section 609.378;

(6) conduct towards a child that constitutes assault under sections 609.221, 609.222, or 609.223;

(7) conduct towards a child that constitutes solicitation, inducement or promotion of prostitution under section 609.322; or

(8) conduct towards a child that constitutes receiving profit derived from prostitution under section 609.323.

Sec. 15. Minnesota Statutes 1994, section 260.181, subdivision 3, is amended to read:

Subd. 3. [PROTECTION OF HERITAGE OR BACKGROUND.] The policy of the state is to ensure that the best interests of children are met by requiring due, not sole, consideration of the child's race or ethnic heritage in foster care placements.

The court, in transferring legal custody of any child or appointing a guardian for the child under the laws relating to juvenile courts, shall place the child, in the following order of preference, in the absence of good cause to the contrary, in the legal custody or guardianship of an individual who (a) is the child's relative related to the child by blood, marriage, or adoption, or if that would be detrimental to the child or a relative is not available, who (b) is an important friend with whom the child has resided or had significant contact, or if that is not possible, who (c) is of the same racial or ethnic heritage as the child, or if that is not possible, who (c) (d) is knowledgeable and appreciative of the child's racial or ethnic heritage. The court may require the county welfare agency to continue efforts to find a guardian of the child's racial or ethnic heritage when such a guardian is not immediately available. For purposes of this subdivision, "relative" includes members of a child's extended family and important friends with whom the child has resided or had significant contact.

If the child's birth parent or parents explicitly request that the preference described in clause (a) or in clauses (a) and, (b), or (c) not be followed, the court shall honor that request if it is consistent with the best interests of the child.

If the child's birth parent or parents express a preference for placing the child in a foster or adoptive home of the same or a similar religious background to that of the birth parent or parents, in following the preferences in clause (a) or, (b), or (c), the court shall order placement of the child with an individual who meets the birth parent's religious preference. Only if no individual is available who is described in clause (a) or, (b), or (c) may the court give preference to an individual described in clause (c) (d) who meets the parent's religious preference.

Sec. 16. Minnesota Statutes 1995 Supplement, section 260.221, subdivision 1, is amended to read:

Subdivision 1. [VOLUNTARY AND INVOLUNTARY.] The juvenile court may upon petition, terminate all rights of a parent to a child in the following cases:

(a) With the written consent of a parent who for good cause desires to terminate parental rights; or

(b) If it finds that one or more of the following conditions exist:

(1) That the parent has abandoned the child. Abandonment is presumed when:

(i) the parent has had no contact with the child on a regular basis and no demonstrated, consistent interest in the child's well-being for six months; and

(ii) the social service agency has made reasonable efforts to facilitate contact, unless the parent establishes that an extreme financial or physical hardship or treatment for mental disability or chemical dependency or other good cause prevented the parent from making contact with the child. This presumption does not apply to children whose custody has been determined under chapter 257 or 518. The court is not prohibited from finding abandonment in the absence of this presumption; or

(2) That the parent has substantially, continuously, or repeatedly refused or neglected to comply with the duties imposed upon that parent by the parent and child relationship, including but not limited to providing the child with necessary food, clothing, shelter, education, and other care and control necessary for the child's physical, mental, or emotional health and development, if the parent is physically and financially able, and reasonable efforts by the social service agency have failed to correct the conditions that formed the basis of the petition; or

(3) That a parent has been ordered to contribute to the support of the child or financially aid in the child's birth and has continuously failed to do so without good cause. This clause shall not be construed to state a grounds for termination of parental rights of a noncustodial parent if that parent has not been ordered to or cannot financially contribute to the support of the child or aid in the child's birth; or

(4) That a parent is palpably unfit to be a party to the parent and child relationship because of a consistent pattern of specific conduct before the child or of specific conditions directly relating to the parent and child relationship either of which are determined by the court to be of a duration or nature that renders the parent unable, for the reasonably foreseeable future, to care appropriately for the ongoing physical, mental, or emotional needs of the child. It is presumed that a parent is palpably unfit to be a party to the parent and child relationship upon a showing that:

(i) the child was adjudicated in need of protection or services due to circumstances described in section 260.015, subdivision 2a, clause (1), (2), (3), (5), or (8); and

(ii) within the three-year period immediately prior to that adjudication, the parent's parental rights to one or more other children were involuntarily terminated under clause (1), (2), (4), or (7), or under clause (5) if the child was initially determined to be in need of protection or services due to circumstances described in section 260.015, subdivision 2a, clause (1), (2), (3), (5), or (8); or

(5) That following upon a determination of neglect or dependency, or of a child's need for protection or services, reasonable efforts, under the direction of the court, have failed to correct the conditions leading to the determination. It is presumed that reasonable efforts under this clause have failed upon a showing that:

(i) a child has resided out of the parental home under court order for more than one year following an adjudication of dependency, neglect, need for protection or services under section 260.015, subdivision 2a, clause (1), (2), (3), (6), (8), or (9), or neglected and in foster care, and an order for disposition under section 260.191, including adoption of the case plan required by section 257.071;

(ii) conditions leading to the determination will not be corrected within the reasonably foreseeable future. It is presumed that conditions leading to a child's out-of-home placement will not be corrected in the reasonably foreseeable future upon a showing that the parent or parents have not substantially complied with the court's orders and a reasonable case plan, and the conditions which led to the out-of-home placement have not been corrected; and

(iii) reasonable efforts have been made by the social service agency to rehabilitate the parent and reunite the family.

This clause does not prohibit the termination of parental rights prior to one year after a child has been placed out of the home.

It is also presumed that reasonable efforts have failed under this clause upon a showing that:

(i) the parent has been diagnosed as chemically dependent by a professional certified to make the diagnosis;

(ii) the parent has been required by a case plan to participate in a chemical dependency treatment program;

(iii) the treatment programs offered to the parent were culturally, linguistically, and clinically appropriate;

(iv) the parent has either failed two or more times to successfully complete a treatment program or has refused at two or more separate meetings with a caseworker to participate in a treatment program; and

(v) the parent continues to abuse chemicals.

Provided, that this presumption applies only to parents required by a case plan to participate in a chemical dependency treatment program on or after July 1, 1990; or

(6) That the parent has been convicted of causing the death of another of the parent's children a child has experienced egregious harm in the parent's care which is of a nature, duration, or chronicity that indicates a lack of regard for the child's well-being, such that a reasonable person would believe it contrary to the best interest of the child or of any child to be in the parent's care; or

(7) That in the case of a child born to a mother who was not married to the child's father when the child was conceived nor when the child was born the person is not entitled to notice of an adoption hearing under section 259.49 and either the person has not filed a notice of intent to retain parental rights under section 259.51 or that the notice has been successfully challenged; or

(8) That the child is neglected and in foster care.

In an action involving an American Indian child, sections 257.35 to 257.3579 and the Indian Child Welfare Act, United States Code, title 25, sections 1901 to 1923, control to the extent that the provisions of this section are inconsistent with those laws.

Sec. 17. Laws 1995, chapter 207, article 1, section 2, subdivision 4, is amended to read:

Subd. 4. Children's Program 19,860,00021,453,000

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) Children's Trust Fund Grants

247,000 247,000

(b) Families With Children Services Grants and Administration

1,718,000 1,710,000

(c) Family Service Collaborative Grants

1,000,000 1,500,000

(d) Family Preservation, Family Support, and Child Protection Grants

8,573,000 8,573,000

(e) Subsidized Adoption Grants

5,587,000 6,688,000

(f) Other Families with Children Services Grants

2,735,000 2,735,000

[FAMILY SERVICES COLLABORATIVE.] Plans for the expenditure of funds for family services collaboratives must be approved by the children's cabinet according to criteria in Minnesota Statutes, section 121.8355. Money appropriated for these purposes may be expended in either year of the biennium. Money appropriated for family services collaboratives is also available for start-up funds under Minnesota Statutes, section 245.492, subdivision 19, for children's mental health collaboratives.

[HOME CHOICE PROGRAM.] Of this appropriation, $75,000 each year must be used as a grant to the metropolitan council to support the housing and related counseling component of the home choice program.

[FOSTER CARE.] Foster care, as defined in Minnesota Statutes, section 260.015, subdivision 7, is not a community social service as defined in Minnesota Statutes, section 256E.03, subdivision 2, paragraph (a). This paragraph is effective the day following final enactment.

[NEW CHANCE.] Of this appropriation, $100,000 each year is for a grant to the New Chance demonstration project that provides comprehensive services to young AFDC recipients who became pregnant as teenagers and dropped out of high school. The commissioner shall provide an annual report on the progress of the demonstration project, including specific data on participant outcomes in comparison to a control group that received no services. The commissioner shall also include recommendations on whether strategies or methods that have proven successful in the demonstration project should be incorporated into the STRIDE employment program for AFDC recipients.

[HIPPY CARRY FORWARD.] $50,000 in unexpended money appropriated in fiscal year 1995 for the Home Instruction Program for Preschool Youngsters (HIPPY) in Laws 1994, chapter 636, article 1, section 11, does not cancel but is available for the same purposes for fiscal year 1996.

[COMMUNITY COLLABORATIVE MATCHING GRANT.] Of the funds appropriated for family services collaboratives, $75,000 in fiscal year 1996 shall be used for the commissioner of human services to provide a matching grant for community collaborative projects for children and youth developed by a regional organization established under Minnesota Statutes, section 116N.08, to receive rural development challenge grants. The regional organization must include a broad cross-section of public and private sector community representatives to develop programs, services or facilities to address specific community needs of children and youth. The regional organization must also provide a two-to-one match of nonstate dollars for this grant.

[INDIAN CHILD WELFARE GRANTS.] $100,000 is appropriated from the general fund to the commissioner of human services for the purposes of providing compliance grants to an Indian child welfare defense corporation, pursuant to Minnesota Statutes, section 257.3571, subdivision 2a, to be available until June 30, 1997.

Sec. 18. [EFFECTIVE DATE.]

Sections 1 to 17 are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to human services; clarifying foster care payment and placement; clarifying adoption assistance; defining egregious harm in the juvenile code; amending the parental rights termination statute; amending Minnesota Statutes 1994, sections 256E.08, by adding a subdivision; 257.071, subdivision 1a, and by adding subdivisions; 257.072, subdivisions 1, 5, and 8; 257.0725; 259.29; 259.67, subdivisions 4 and 6; 259.77; 260.015, by adding a subdivision; and 260.181, subdivision 3; Minnesota Statutes 1995 Supplement, sections 256.045, subdivision 3; and 260.221, subdivision 1; Laws 1995, chapter 207, article 1, section 2, subdivision 4."

We request adoption of this report and repassage of the bill.

Senate Conferees: David L. Knutson, Linda Berglin and Richard J. Cohen.

House Conferees: Barbara Sykora, Linda Wejcman and Matt Entenza.

Sykora moved that the report of the Conference Committee on S. F. No. 1885 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1885, A bill for an act relating to human services; clarifying foster care payment and placement; clarifying adoption assistance; defining egregious harm in the juvenile code; amending the parental rights termination statute; amending Minnesota Statutes 1994, sections 256E.08, by adding a subdivision; 257.071, subdivision 1a, and by adding subdivisions; 257.072, subdivisions 1, 5, and 8; 257.0725; 259.67, subdivisions 4 and 6; 259.77; 260.015, by adding a subdivision; and 260.181, subdivision 3; Minnesota Statutes 1995 Supplement, sections 256.045, subdivision 3; and 260.221, subdivision 1; Laws 1995, chapter 207, article 1, section 2, subdivision 4.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knoblach     Olson, E.    Smith
Anderson, B. Finseth      Koppendrayer Olson, M.    Solberg
Anderson, R. Frerichs     Kraus        Onnen        Stanek
Bakk         Garcia       Krinkie      Opatz        Sviggum
Bertram      Girard       Larsen       Orenstein    Swenson, D.
Bettermann   Goodno       Leighton     Orfield      Swenson, H.
Bishop       Greenfield   Leppik       Osskopp      Sykora
Boudreau     Greiling     Lieder       Osthoff      Tomassoni
Bradley      Gunther      Lindner      Ostrom       Tompkins
Broecker     Haas         Long         Otremba      Trimble
Brown        Hackbarth    Lourey       Ozment       Tuma
Carlson, L.  Harder       Luther       Paulsen      Tunheim
Carlson, S.  Hasskamp     Lynch        Pawlenty     Van Dellen
Carruthers   Hausman      Macklin      Pellow       Van Engen
Clark        Holsten      Mahon        Pelowski     Vickerman
Commers      Huntley      Mares        Perlt        Wagenius
Cooper       Jaros        Mariani      Peterson     Warkentin
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9215

Daggett      Jefferson    Marko        Pugh         Weaver
Dauner       Jennings     McCollum     Rest         Wejcman
Davids       Johnson, A.  McElroy      Rhodes       Wenzel
Dawkins      Johnson, R.  McGuire      Rice         Winter
Dehler       Johnson, V.  Milbert      Rostberg     Wolf
Delmont      Kalis        Molnau       Rukavina     Worke
Dempsey      Kelley       Mulder       Sarna        Workman
Dorn         Kelso        Munger       Schumacher   Sp.Anderson,I
Entenza      Kinkel       Murphy       Seagren      
Erhardt      Knight       Ness         Skoglund     

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1919.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to reemployment insurance; making technical and administrative changes; amending Minnesota Statutes 1994, sections 268.04, subdivisions 2, 4, and by adding a subdivision; 268.06, subdivisions 5 and 24; 268.07; 268.072, subdivisions 2, 3, and 5; 268.073, subdivisions 3, 4, and 7; 268.074, subdivision 4; 268.08, as amended; 268.09, subdivision 2; 268.12, by adding a subdivision; 268.16, subdivision 4; 268.164, subdivisions 1 and 2; and 268.23; Minnesota Statutes 1995 Supplement, sections 268.041; 268.06, subdivision 20; 268.09, subdivision 1; 268.105, by adding a subdivision; 268.161, subdivision 9; and 268.18, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 268; repealing Minnesota Statutes 1994, sections 268.04, subdivisions 18 and 24; 268.10, subdivision 1; and 268.231; Minnesota Statutes 1995 Supplement, section 268.10, subdivision 2; Laws 1994, chapter 503, section 5.

March 20, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1919, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 1919 be further amended as follows:

Page 5, after line 29, insert:

"(b) Benefits paid a claimant whose separation from employment was required by a law or Minnesota administrative rule mandating a background check, or whose separation from employment was required by law or Minnesota administrative rule because of a criminal conviction, shall not be charged to an employer that is liable for payments in lieu of contributions or to the experience rating account of an employer.

This paragraph shall be retroactive to the date the law or Minnesota administrative rule mandating a background check is effective or to the date the law or Minnesota administrative rule requiring a separation for a criminal conviction is effective."

Page 5, line 30, delete "(b)" and insert "(c)"

Page 5, line 35, delete "(c)" and insert "(d)"

Page 32, line 21, delete "(1) whose"

Page 32, delete lines 22 to 25

Page 32, line 26, delete "whose separation was"

We request adoption of this report and repassage of the bill.

Senate Conferees: Linda Runbeck and James P. Metzen.

House Conferees: Walter E. Perlt and Ken Wolf.

Perlt moved that the report of the Conference Committee on S. F. No. 1919 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1919, A bill for an act relating to reemployment insurance; making technical and administrative changes; amending Minnesota Statutes 1994, sections 268.04, subdivisions 2, 4, and by adding a subdivision; 268.06, subdivisions 5 and 24; 268.07; 268.072, subdivisions 2, 3, and 5; 268.073, subdivisions 3, 4, and 7; 268.074, subdivision 4; 268.08, as amended; 268.09, subdivision 2; 268.12, by adding a subdivision; 268.16, subdivision 4; 268.164, subdivisions 1 and 2; and 268.23; Minnesota Statutes 1995 Supplement, sections 268.041; 268.06, subdivision 20; 268.09, subdivision 1; 268.105, by adding a subdivision; 268.161, subdivision 9; and 268.18, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 268; repealing Minnesota Statutes 1994, sections 268.04, subdivisions 18 and 24; 268.10, subdivision 1; and 268.231; Minnesota Statutes 1995 Supplement, section 268.10, subdivision 2; Laws 1994, chapter 503, section 5.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 116 yeas and 17 nays as follows:

Those who voted in the affirmative were:

Abrams       Finseth      Kraus        Onnen        Sviggum
Anderson, B. Frerichs     Krinkie      Opatz        Swenson, D.
Anderson, R. Girard       Larsen       Osskopp      Swenson, H.
Bakk         Goodno       Leighton     Osthoff      Sykora
Bertram      Greiling     Leppik       Ostrom       Tomassoni
Bettermann   Gunther      Lieder       Otremba      Tompkins
Bishop       Haas         Lindner      Ozment       Trimble
Boudreau     Hackbarth    Long         Paulsen      Tuma
Bradley      Harder       Lourey       Pawlenty     Tunheim
Broecker     Hasskamp     Luther       Pellow       Van Dellen
Brown        Holsten      Lynch        Pelowski     Van Engen
Carlson, L.  Huntley      Macklin      Perlt        Vickerman
Carlson, S.  Jefferson    Mahon        Peterson     Warkentin
Carruthers   Jennings     Mares        Pugh         Weaver
Commers      Johnson, A.  Mariani      Rhodes       Wenzel
Cooper       Johnson, R.  McElroy      Rice         Winter
Daggett      Johnson, V.  Milbert      Rostberg     Wolf
Davids       Kahn         Molnau       Rukavina     Worke
Dehler       Kalis        Mulder       Sarna        Workman
Delmont      Kelley       Munger       Schumacher   Sp.Anderson,I
Dempsey      Kinkel       Murphy       Seagren      
Dorn         Knight       Ness         Skoglund     
Erhardt      Knoblach     Olson, E.    Smith        
Farrell      Koppendrayer Olson, M.    Stanek       

Clark        Garcia       Kelso        Orenstein    Wejcman 
Dauner       Greenfield   Marko        Orfield      
Dawkins      Hausman      McCollum     Rest         
Entenza      Jaros        McGuire      Wagenius     

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2116.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to liquor; allowing persons holding either the proper license or permit to charge for possession; exempting certain types of wine tastings from authorized testings; regulating malt liquor furnished for sampling; providing for authority of the cities of Wadena, Eagan, and West St. Paul to issue on-sale licenses; authorizing certain cities to issue a temporary license for a certain wine auction; amending Minnesota Statutes 1994, sections 340A.418, subdivision 2; and 340A.510; Minnesota Statutes 1995 Supplement, sections 340A.401; and 340A.404, subdivision 10; Laws 1994, chapter 611, section 32; proposing coding for new law in Minnesota Statutes, chapter 340A; repealing Laws 1974, chapter 452.

March 22, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2116, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 2116 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 340A.301, subdivision 2, is amended to read:

Subd. 2. [PERSONS ELIGIBLE.] Licenses under this section may be issued only to a person who:

(1) is a citizen of the United States or a resident alien;

(2) is of good moral character and repute;

(3) (2) is 21 years of age or older;

(4) (3) has not had a license issued under this chapter revoked within five years of the date of license application, or to any person who at the time of the violation owns any interest, whether as a holder of more than five percent of the capital stock of a corporation licensee, as a partner or otherwise, in the premises or in the business conducted thereon, or to a corporation, partnership, association, enterprise, business, or firm in which any such person is in any manner interested; and

(5) (4) has not been convicted within five years of the date of license application of a felony, or of a willful violation of a federal or state law, or local ordinance governing the manufacture, sale, distribution, or possession for sale or distribution of alcoholic beverages.

Sec. 2. Minnesota Statutes 1994, section 340A.316, is amended to read:

340A.316 [SACRAMENTAL WINE.]

The commissioner may issue licenses for the importation and sale of wine exclusively for sacramental purposes. The holder of a sacramental wine license may sell wine only to a rabbi, priest, or minister of a church, or other established religious organization, or individual members of a religious organization who conduct ceremonies in their homes, if the purchaser certifies in writing that the wine will be used exclusively for sacramental purposes in religious ceremonies. The annual fee for a sacramental wine license is $50.

A rabbi, priest, or minister of a church or other established religious organization may import wine exclusively for sacramental purposes without a license.

Sec. 3. Minnesota Statutes 1995 Supplement, section 340A.401, is amended to read:

340A.401 [LICENSE REQUIRED.]

Except as provided in this chapter, no person may directly or indirectly, on any pretense or by any device, sell, barter, keep for sale, charge for possession, or otherwise dispose of alcoholic beverages as part of a commercial transaction without having obtained a the required license or permit.

Sec. 4. [340A.4011] [BED AND BREAKFAST FACILITIES; WHEN LICENSE NOT REQUIRED.]

Subdivision 1. [DEFINITION.] For purposes of this section "bed and breakfast facility" means a place of lodging that (1) provides not more than eight rooms for rent to no more than 20 guests at a time, (2) is located on the same property as the owner's personal residence, (3) provides no meals, other than breakfast served to persons who rent rooms, and (4) was originally built and occupied as, or was converted to, a single-family residence prior to being used as a place of lodging.

Subd. 2. [LICENSE NOT REQUIRED.] (a) Notwithstanding section 340A.401, no license under this chapter is required for a bed and breakfast facility to provide at no additional charge to a person renting a room at the facility not more than two glasses per day each containing not more than four fluid ounces of wine. Wine so furnished may be consumed only on the premises of the bed and breakfast facility.

(b) A bed and breakfast facility may furnish wine under paragraph (a) only if the facility is registered with the commissioner. Application for such registration must be on a form the commissioner provides. The commissioner may revoke registration under this paragraph for any violation of this chapter or a rule adopted under this chapter.

Sec. 5. Minnesota Statutes 1994, section 340A.404, subdivision 8, is amended to read:

Subd. 8. [LAKE SUPERIOR, ST. CROIX RIVER, AND MISSISSIPPI RIVER TOUR BOATS.] (a) The commissioner may issue an on-sale intoxicating liquor license to a person regularly engaged, on an annual or seasonal basis, in the business of offering tours by boat on Lake Superior and adjacent bays, the St. Croix river, and the Mississippi river. The license shall authorize the sale of intoxicating liquor between May 1 and October 1 for consumption on the boat while underway or attached to a dock or other mooring. No license may be issued unless each boat used in the tour business regularly sells meals in the place where intoxicating liquor is sold.

(b) All sales of intoxicating liquor made on a boat while it is attached to a dock or other mooring are subject to any restrictions on the sale of liquor prescribed by the governing body of the city where the boat is attached, or of a county when it is attached outside a city. A governing body may prohibit liquor sales within its jurisdiction but may not require an additional license, or require a fee or occupation tax, for the sales.

(c) If a boat is moored for a period of at least three consecutive months, the city may require the boat to obtain an on-sale intoxicating liquor license from the city, and the fee charged for the license must not exceed one-half the fee charged for a comparable annual on-sale intoxicating liquor license.

Sec. 6. Minnesota Statutes 1995 Supplement, section 340A.404, subdivision 10, is amended to read:

Subd. 10. [TEMPORARY ON-SALE LICENSES.] The governing body of a municipality may issue to a club or charitable, religious, or other nonprofit organization in existence for at least three years, or to a political committee registered under section 10A.14, a temporary license for the on-sale of intoxicating liquor in connection with a social

event within the municipality sponsored by the licensee. The license may authorize the on-sale of intoxicating liquor for not more than four consecutive days, and may authorize on-sales on premises other than premises the licensee owns or permanently occupies. The license may provide that the licensee may contract for intoxicating liquor catering services with the holder of a full-year on-sale intoxicating liquor license issued by any municipality. The licenses are subject to the terms, including a license fee, imposed by the issuing municipality. Licenses issued under this subdivision are subject to all laws and ordinances governing the sale of intoxicating liquor except section sections 340A.409 and 340A.504, subdivision 3, paragraph (d), and those laws and ordinances which by their nature are not applicable. Licenses under this subdivision are not valid unless first approved by the commissioner of public safety.

A county under this section may issue a temporary license only to a premises located in the unincorporated or unorganized territory of the county.

Sec. 7. Minnesota Statutes 1994, section 340A.408, subdivision 4, is amended to read:

Subd. 4. [LAKE SUPERIOR, ST. CROIX RIVER, AND MISSISSIPPI RIVER TOUR BOATS; COMMON CARRIERS.] (a) The annual license fee for licensing of Lake Superior, St. Croix river, and Mississippi river tour boats under section 340A.404, subdivision 8, shall be $1,000. The commissioner shall transmit one-half of this fee to the governing body of the city that is the home port of the tour boat, or to the county in which the home port is located if the home port is outside a city.

(b) The annual license fee for common carriers licensed under section 340A.407 is:

(1) $50 for 3.2 percent malt liquor, and $20 for a duplicate license; and

(2) $200 for intoxicating liquor, and $20 for a duplicate license.

Sec. 8. Minnesota Statutes 1994, section 340A.410, is amended by adding a subdivision to read:

Subd. 4b. [NOTICE POSTING.] (a) A premises licensed for the retail sale of alcoholic beverages and a municipal liquor store must post and maintain in a conspicuous place within the licensed premises clearly visible to consumers: one sign 14-1/2 inches wide by 8 inches high as designed by the commissioners of health and public safety, which incorporates the following information: (1) the penalties of driving while under the influence of alcohol; (2) penalties for serving alcoholic beverages to a person who is obviously intoxicated or under 21 years of age; and (3) a warning statement regarding drinking alcohol while pregnant.

(b) The commissioners of health and public safety shall design a sign that complies with this subdivision and shall make the sign available for reproduction. A retail licensee or municipal liquor store may not modify the sign design, but may modify the color.

Sec. 9. Minnesota Statutes 1994, section 340A.413, subdivision 4, is amended to read:

Subd. 4. [EXCLUSIONS FROM LICENSE LIMITS.] On-sale intoxicating liquor licenses may be issued to the following entities by a city, in addition to the number authorized by this section:

(1) clubs, or congressionally chartered veterans organizations;

(2) restaurants located at a racetrack licensed under chapter 240;

(3) establishments that are issued licenses to sell wine under section 340A.404, subdivision 5; and

(4) Lake Superior tour boats that are issued licenses under section 340A.404, subdivision 8; and

(5) theaters that are issued licenses under section 340A.404, subdivision 2.

Sec. 10. Minnesota Statutes 1994, section 340A.418, subdivision 2, is amended to read:

Subd. 2. [TASTINGS AUTHORIZED.] (a) A charitable, religious, or other nonprofit organization may conduct a wine tasting on premises the organization owns or leases or has use donated to it, or on the licensed premises of a holder of an on-sale intoxicating liquor license that is not a temporary license, if the organization holds a temporary

on-sale intoxicating liquor license under section 340A.404, subdivision 10, and complies with this section. An organization holding a temporary license may be assisted in conducting the wine tasting by another nonprofit organization.

(b) An organization that conducts a wine tasting under this section may use the net proceeds from the wine tasting only for:

(1) the organization's primary nonprofit purpose; or

(2) donation to another nonprofit organization assisting in the wine tasting, if the other nonprofit organization uses the donation only for that organization's primary nonprofit purpose.

(c) No wine at a wine tasting under this section may be sold, or orders taken, for off-premise off-premises consumption.

(d) Notwithstanding any other law, an organization may purchase or otherwise obtain wine for a wine tasting conducted under this section from a wholesaler licensed to sell wine, and the wholesaler may sell or give wine to an organization for a wine tasting conducted under this section and may provide personnel to assist in the wine tasting. A wholesaler who sells or gives wine to an organization for a wine tasting under this section must deliver the wine directly to the location where the wine tasting is conducted.

(e) This section does not prohibit or restrict a wine tasting that is:

(1) located on on-sale premises where no charitable organization is participating; or

(2) located on on-sale premises where the proceeds are for a designated charity but where the tasting is primarily for educational purposes.

Sec. 11. Minnesota Statutes 1994, section 340A.510, is amended to read:

340A.510 [SAMPLES.]

Subdivision 1. [SAMPLES AUTHORIZED.] Off-sale licenses and municipal liquor stores may provide samples of malt liquor, wine, liqueurs, and cordials, and distilled spirits which the licensee or municipal liquor store currently has in stock and is offering for sale to the general public without obtaining an additional license, provided the wine, liqueur, and cordial, and distilled spirits samples are dispensed at no charge and consumed on the licensed premises during the permitted hours of off-sale in a quantity less than 100 milliliters of malt liquor per variety per customer, 50 milliliters of wine per variety per customer and, 25 milliliters of liqueur or cordial, and 15 milliliters of distilled spirits per variety per customer.

Subd. 2. [MALT LIQUOR FURNISHED FOR SAMPLING.] (a) Notwithstanding section 340A.308, with respect only to sampling authorized under subdivision 1, a brewer may furnish at no cost to an off-sale retailer malt liquor the brewer manufactures if:

(1) the malt liquor is dispensed by the retailer only for tastings authorized under subdivision 1;

(2) the retailer makes available for return to the brewer any unused malt liquor and empty containers;

(3) the samples are dispensed by an employee of the retailer, or by a sampling service retained by the retailer and not affiliated directly or indirectly with a brewer or malt liquor wholesaler;

(4) the brewer furnishes not more than three cases of malt liquor to the retailer for each sampling;

(5) each sampling continues for not more than eight hours;

(6) the brewer has furnished malt liquor for not more than five samplings for any retailer in any calendar year;

(7) the brewer delivers the malt liquor for the sampling to its exclusive wholesaler for that malt liquor;

(8) the brewer has at least seven days before the sampling filed with the commissioner, on a form the commissioner prescribes, written notice of intent to furnish malt liquor for the sampling, which contains (i) the name and address of the retailer conducting the sampling, (ii) the amount of malt liquor being furnished by the brewer, (iii) the number

of times the brewer has furnished malt liquor to the retailer in the calendar year in which the notice is filed, (iv) the date and time of the sampling, (v) the exclusive wholesaler to whom the brewer will deliver the malt liquor, and (vi) a statement by the brewer to the effect that to the brewer's knowledge all requirements of this section have been or will be complied with; and

(9) the commissioner has not notified the brewer filing the notice under clause (8) that the commissioner disapproves the notice.

(b) For purposes of this subdivision "retailer" means a licensed off-sale retailer of alcoholic beverages and a municipal liquor store that sells at off-sale.

Sec. 12. [340A.511] [CERTAIN SIZES MAY BE SOLD.]

An off-sale retailer of intoxicating liquor may sell distilled spirits in bottles of 50 milliliters.

Sec. 13. [340A.512] [CONTAINERS BROUGHT INTO PREMISES.]

A licensed retailer of alcoholic beverages may prohibit any person from bringing into the licensed premises any container of alcoholic beverages, or from consuming from such a container on the licensed premises, without the licensee's permission.

Sec. 14. Minnesota Statutes 1994, section 340A.601, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY.] A city having a population of not more than 10,000 may establish, own, and operate a municipal liquor store which may sell at retail intoxicating liquor, 3.2 percent malt liquor, tobacco products, ice, soft drinks, beverages for mixing intoxicating liquor, and food for consumption on the premises alcoholic beverages and (1) in the case of a municipal liquor store that sells at off-sale only, all items that may lawfully be sold in an exclusive liquor store under section 340A.412, subdivision 14, or (2) in the case of a municipal liquor store that sells at on-sale only, or at on- and off-sale, any item that may lawfully be sold in an establishment with an on-sale intoxicating liquor license. A municipal liquor store may also offer recorded or live entertainment and make available coin-operated amusement devices.

Sec. 15. Laws 1994, chapter 611, section 32, is amended to read:

Sec. 32. [EAGAN; LICENSES AUTHORIZED.]

The city of Eagan may issue not more than three eight on-sale intoxicating liquor licenses in addition to the number authorized by Minnesota Statutes, section 340A.413. All provisions of Minnesota Statutes, chapter 340A, not inconsistent with this section, apply to the licenses authorized by this section.

Sec. 16. [WEST ST. PAUL; LICENSES AUTHORIZED.]

Notwithstanding any other law, the city of West St. Paul may issue not more than 18 on-sale intoxicating liquor licenses. All provisions of Minnesota Statutes, chapter 340A, not inconsistent with this section, apply to the licenses authorized by this section.

Sec. 17. [WADENA; SEASONAL LICENSES.]

Notwithstanding any other law, the city of Wadena may issue one seasonal on-sale intoxicating liquor license in addition to the number of on-sale intoxicating liquor licenses authorized by law. The license authorized by this section is valid for a period to be determined by the city, not to exceed nine months. Not more than one license may be issued under this section for any one premise during any consecutive 12-month period. All provisions of Minnesota Statutes, chapter 340A, not inconsistent with this section, apply to the license authorized by this section.

Sec. 18. [REPEALER.]

Minnesota Statutes 1994, sections 144.3871; and 340A.410, subdivision 4a, are repealed. Laws 1974, chapter 452, is repealed.

Sec. 19. [EFFECTIVE DATE.]

Sections 4 to 7, 9, and 11 to 14 are effective the day following final enactment. Section 15 is effective on approval by the Eagan city council and compliance with Minnesota Statutes, section 645.021. Section 16 is effective on approval by the West St. Paul city council and compliance with Minnesota Statutes, section 645.021. Section 17 is effective on approval by the Wadena city council and compliance with Minnesota Statutes, section 645.021."

Delete the title and insert:

"A bill for an act relating to alcoholic beverages; modifying eligibility for manufacturer and wholesaler licenses; clarifying requirements for selling or furnishing alcoholic beverages; allowing bed and breakfast facilities to furnish wine to guests without a license under certain circumstances; abolishing state licenses for importation of sacramental wine; exempting certain types of wine tastings from statutory restrictions; allowing off-sale retailers to offer samples of distilled spirits; allowing brewers to furnish beer directly to retailers for tastings; allowing off-sale retailers to sell distilled spirits in 50 milliliter bottles; allowing on-sale retailers to prohibit the carrying of alcoholic beverages onto the licensed premises; specifying items that may be sold in municipal liquor stores; removing references to nonintoxicating malt liquor from statute, rules, and local licenses; authorizing on-sale licenses for tour boats on the St. Croix and Mississippi rivers; requiring establishments selling alcoholic beverages to post certain signs; directing commissioners of public safety and health to design the signs; providing for division of tour boat license fees; authorizing additional on-sale licenses in West St. Paul and Eagan; authorizing seasonal on-sale license in Wadena; repealing special law restricting on-sale licenses in Thief River Falls; amending Minnesota Statutes 1994, sections 340A.301, subdivision 2; 340A.316; 340A.404, subdivision 8; 340A.408, subdivision 4; 340A.410, by adding a subdivision; 340A.413, subdivision 4; 340A.418, subdivision 2; 340A.510; and 340A.601, subdivision 1; Minnesota Statutes 1995 Supplement, sections 340A.401; and 340A.404, subdivision 10; Laws 1994, chapter 611, section 32; proposing coding for new law in Minnesota Statutes, chapter 340A; repealing Minnesota Statutes 1994, sections 144.3871; and 340A.410, subdivision 4a; Laws 1974, chapter 452."

We request adoption of this report and repassage of the bill.

Senate Conferees: Sam G. Solon, Deanna Wiener and Cal Larson.

House Conferees: Jeff Bertram, Walter E. Perlt and Mark Holsten.

Bertram moved that the report of the Conference Committee on S. F. No. 2116 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2116, A bill for an act relating to liquor; allowing persons holding either the proper license or permit to charge for possession; exempting certain types of wine tastings from authorized testings; regulating malt liquor furnished for sampling; providing for authority of the cities of Wadena, Eagan, and West St. Paul to issue on-sale licenses; authorizing certain cities to issue a temporary license for a certain wine auction; amending Minnesota Statutes 1994, sections 340A.418, subdivision 2; and 340A.510; Minnesota Statutes 1995 Supplement, sections 340A.401; and 340A.404, subdivision 10; Laws 1994, chapter 611, section 32; proposing coding for new law in Minnesota Statutes, chapter 340A; repealing Laws 1974, chapter 452.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 123 yeas and 9 nays as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Kelso        Murphy       Smith
Anderson, R. Farrell      Kinkel       Ness         Solberg
Bakk         Finseth      Knoblach     Olson, E.    Stanek
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9223

Bertram      Frerichs     Koppendrayer Opatz        Sviggum
Bettermann   Garcia       Kraus        Orenstein    Swenson, D.
Bishop       Girard       Larsen       Orfield      Swenson, H.
Boudreau     Goodno       Leighton     Osskopp      Sykora
Bradley      Greenfield   Leppik       Osthoff      Tomassoni
Broecker     Greiling     Lieder       Ostrom       Tompkins
Brown        Gunther      Long         Otremba      Trimble
Carlson, L.  Haas         Lourey       Ozment       Tunheim
Carlson, S.  Hackbarth    Luther       Paulsen      Van Dellen
Carruthers   Harder       Lynch        Pawlenty     Van Engen
Clark        Hasskamp     Macklin      Pellow       Vickerman
Commers      Hausman      Mahon        Pelowski     Warkentin
Cooper       Holsten      Mares        Perlt        Weaver
Daggett      Huntley      Mariani      Peterson     Wejcman
Dauner       Jaros        Marko        Pugh         Wenzel
Davids       Jefferson    McCollum     Rest         Winter
Dawkins      Johnson, A.  McElroy      Rhodes       Wolf
Dehler       Johnson, R.  McGuire      Rostberg     Worke
Delmont      Johnson, V.  Milbert      Rukavina     Workman
Dempsey      Kahn         Molnau       Sarna        Sp.Anderson,I
Dorn         Kalis        Mulder       Schumacher   
Entenza      Kelley       Munger       Seagren      

Anderson, B. Krinkie      Olson, M.    Skoglund     Wagenius 
Knight       Lindner      Onnen        Tuma         

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2720.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to elections; permitting simultaneous candidacy for nomination by major and minor parties with their consent under certain conditions; amending Minnesota Statutes 1994, sections 200.02, subdivision 7, and by adding a subdivision; 204B.04, subdivision 2, and by adding a subdivision; 204D.12; and 204D.13, by adding a subdivision; Minnesota Statutes 1995 Supplement, section 204B.06, subdivision 1; repealing Minnesota Statutes 1994, section 204D.10, subdivision 2.

March 26, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2720, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 2720 be further amended as follows:

Page 2, delete section 3 and insert:

"Sec. 3. Minnesota Statutes 1994, section 200.02, is amended by adding a subdivision to read:

Subd. 22. [MINOR POLITICAL PARTY.] (a) "Minor political party" means a political party that is not a major political party as defined by subdivision 7 and that has adopted a state constitution, designated a state party chair, and met the requirements of paragraph (b) or (c), as applicable.

(b) To be considered a minor party in all elections statewide, the political party must have presented at least one candidate for a partisan office voted on statewide at the preceding state general election who received votes in each county that in the aggregate equal at least one percent of the total number of individuals who voted in the election, or its members must have presented to the secretary of state a nominating petition in a form prescribed by the secretary of state containing the signatures of party members in a number equal to at least one percent of the total number of individuals who voted in the preceding state general election.

(c) To be considered a minor party in an election in a legislative district, the political party must have presented at least one candidate for a legislative office in that district who received votes from at least ten percent of the total number of individuals who voted for that office, or its members must have presented to the secretary of state a nominating petition in a form prescribed by the secretary of state containing the signatures of party members in a number equal to at least ten percent of the total number of individuals who voted in the preceding state general election for that legislative office.

(d) Votes cast for a candidate who was the nominee of more than one political party in a state general election are not counted in determining whether a minor political party should remain a minor political party under this subdivision."

Page 5, after line 15, insert:

"The amendments made by this act are suspended during any time that the decision of the eighth circuit court of appeals in Twin Cities Area New Party v. McKenna, No. 94-3417MN, is stayed or the mandate of the court is recalled. If the McKenna decision is reversed, the amendments made by this act expire and the prior law is revived. The purpose of this paragraph is to provide an orderly procedure for complying with the McKenna decision while retaining the prior law prohibiting simultaneous nominations to the extent permitted by the United States Constitution."

We request adoption of this report and repassage of the bill.

Senate Conferees: John Marty, Richard J. Cohen and Gary W. Laidig.

House Conferees: Gene Pelowski, Jr., Richard H. Jefferson and Tim Pawlenty.

Pelowski moved that the report of the Conference Committee on S. F. No. 2720 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2720, A bill for an act relating to elections; permitting simultaneous candidacy for nomination by major and minor parties with their consent under certain conditions; amending Minnesota Statutes 1994, sections 200.02, subdivision 7, and by adding a subdivision; 204B.04, subdivision 2, and by adding a subdivision; 204D.12; and 204D.13, by adding a subdivision; Minnesota Statutes 1995 Supplement, section 204B.06, subdivision 1; repealing Minnesota Statutes 1994, section 204D.10, subdivision 2.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 131 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Onnen        Stanek
Anderson, R. Garcia       Krinkie      Opatz        Sviggum
Bakk         Girard       Larsen       Orenstein    Swenson, D.
Bertram      Goodno       Leighton     Orfield      Swenson, H.
Bettermann   Greenfield   Leppik       Osskopp      Sykora
Bishop       Greiling     Lieder       Osthoff      Tomassoni
Boudreau     Gunther      Lindner      Ostrom       Tompkins
Bradley      Haas         Long         Otremba      Trimble
Broecker     Hackbarth    Lourey       Ozment       Tuma
Brown        Harder       Luther       Paulsen      Tunheim
Carlson, L.  Hasskamp     Lynch        Pawlenty     Van Dellen
Carlson, S.  Hausman      Macklin      Pellow       Van Engen
Carruthers   Holsten      Mahon        Pelowski     Vickerman
Clark        Huntley      Mares        Perlt        Wagenius
Commers      Jaros        Mariani      Peterson     Warkentin
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9225

Cooper       Jefferson    Marko        Pugh         Weaver
Daggett      Johnson, A.  McCollum     Rest         Wejcman
Dauner       Johnson, R.  McElroy      Rhodes       Wenzel
Davids       Johnson, V.  McGuire      Rice         Winter
Dehler       Kahn         Milbert      Rostberg     Wolf
Delmont      Kalis        Molnau       Rukavina     Worke
Dempsey      Kelley       Mulder       Sarna        Workman
Dorn         Kelso        Munger       Schumacher   Sp.Anderson,I
Entenza      Kinkel       Murphy       Seagren      
Erhardt      Knight       Ness         Skoglund     
Farrell      Knoblach     Olson, E.    Smith        
Finseth      Koppendrayer Olson, M.    Solberg      

Anderson, B. Dawkins                   

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1902.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to the council on affairs of Spanish-speaking people, the council on Asian-Pacific Minnesotans, the council on Black Minnesotans, and the Indian affairs council; changing the name of the council on affairs of Spanish-speaking people; changing the composition and certain powers of the councils on affairs of Spanish-speaking people and Asian-Pacific Minnesotans; providing for appointments; changing statutory references; eliminating an expiration date; amending Minnesota Statutes 1994, sections 3.922, subdivisions 3 and 8; 3.9223; 3.9225, subdivision 1; and 3.9226, subdivisions 1, 2, 3, and 5.

March 25, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1902, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 1902 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 3.922, subdivision 3, is amended to read:

Subd. 3. [COMPENSATION; EXPENSES; EXPIRATION.] Compensation of nonlegislator members is as provided in section 15.059, but, because the council performs functions that are not purely advisory, the expiration dates provided in that section do not apply. Expenses of the council shall must be approved by two of any three members

of the council designated by the council and then be paid in the same manner as other state expenses. The executive secretary shall inform the commissioner of finance in writing of the names of the persons authorized to approve expenses.

Sec. 2. Minnesota Statutes 1994, section 3.922, subdivision 8, is amended to read:

Subd. 8. [ADVISORY COUNCIL.] An advisory council on urban Indians is created to shall advise the board on the unique problems and concerns of Minnesota Indians who reside in urban areas of the state. The council shall must be appointed by the board and consist of five Indians residing in the vicinity of Minneapolis, St. Paul, and Duluth. At least one member of the council shall must be a resident of each city. The terms, compensation, and removal of members are as provided in section 15.059, but the expiration dates provided in that section do not apply.

Sec. 3. Minnesota Statutes 1994, section 3.9223, is amended to read:

3.9223 [COUNCIL ON AFFAIRS OF SPANISH-SPEAKING CHICANO/LATINO PEOPLE.]

Subdivision 1. [MEMBERSHIP.] A The state council on affairs of Spanish-speaking Chicano/Latino people is created to consist consists of seven 11 members appointed by the governor, including eight members representing each of the state's congressional districts and three members appointed at large. The demographic composition of the council members shall must accurately reflect the demographic composition of Minnesota's Spanish-speaking Chicano/Latino community, including migrant workers, as determined by the state demographer. Membership, terms, compensation, removal of members, and filling of vacancies are as provided in section 15.0575. Compensation of members is as provided in section 15.059, subdivision 3. Because the council performs functions that are not purely advisory, the council is not subject to the expiration date in section 15.059. Two members of the house of representatives appointed by the speaker and two members of the senate appointed by the subcommittee on committees of the committee on rules and administration shall serve as nonvoting members of the council. The council shall annually elect from its membership a chair and other officers it deems necessary.

Subd. 2. [SPANISH-SPEAKING CHICANO/LATINO PEOPLE.] For purposes of subdivisions 3 to 7, the term "Spanish-speaking Chicano/Latino person" means a person who uses Spanish as a primary method of communication or who is a spouse of a person who does was born in, or whose ancestors are from, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru, Panama, Paraguay, Puerto Rico, Uruguay, or Venezuela.

Subd. 3. [DUTIES.] The council shall:

(a) (1) advise the governor and the legislature on the nature of the issues and disabilities confronting Spanish-speaking Chicano/Latino people in this state, including the unique problems encountered by Spanish-speaking Chicano/Latino migrant agricultural workers;

(b) (2) advise the governor and the legislature on statutes or rules necessary to ensure Spanish-speaking Chicano/Latino people access to benefits and services provided to people in this state;

(c) (3) recommend to the governor and the legislature legislation to improve the economic and social condition of Spanish-speaking Chicano/Latino people in this state;

(d) (4) serve as a conduit to state government for organizations of Spanish-speaking Chicano/Latino people in the state;

(e) (5) serve as a referral agency to assist Spanish-speaking Chicano/Latino people to secure access to state agencies and programs;

(f) (6) serve as a liaison with the federal government, local government units, and private organizations on matters relating to the Spanish-speaking Chicano/Latino people of this state;

(g) (7) perform or contract for the performance of studies designed to suggest solutions to problems of Spanish-speaking Chicano/Latino people in the areas of education, employment, human rights, health, housing, social welfare, and other related programs;

(h) (8) implement programs designed to solve problems of Spanish-speaking Chicano/Latino people when authorized by other statute, rule, or order; and

(i) review data provided by the commissioner of human services under section 257.072, subdivision 5, and present recommendations on the out-of-home placement of children of Hispanic people. Recommendations must be presented to the commissioner and the legislature by February 1, 1990; November 1, 1990; and November 1 of each year thereafter; and

(j) (9) publicize the accomplishments of Spanish-speaking Chicano/Latino people and their contributions to this state.

Subd. 4. [REVIEW AND RECOMMENDATION AUTHORITY.] All applications for the receipt of federal money and proposed rules of a state agency which that will have their primary effect on Spanish-speaking Chicano/Latino people shall must be submitted to the council for review and recommendation at least 15 days before submission to a federal agency or initial publication in the State Register.

Subd. 5. [POWERS.] The council may contract in its own name. Contracts shall must be approved by a majority of the members of the council and executed by the chair and the executive director. The council may apply for, receive, and expend in its own name grants and gifts of money consistent with the power and duties specified in this section.

The council shall appoint, subject to the approval of the governor, an executive director who is experienced in administrative activities and familiar with the problems and needs of Spanish-speaking Chicano/Latino people. The council may delegate to the executive director powers and duties under this section which that do not require council approval. The executive director and council staff serve in the unclassified service. The executive director may be removed at any time by a majority vote of the entire council. The executive director shall recommend to the council the appropriate staffing necessary to carry out its duties. The commissioner of administration shall provide the council with necessary administrative services.

Subd. 6. [STATE AGENCY ASSISTANCE.] Other state agencies shall supply the council upon request with advisory staff services on matters relating to the jurisdiction of the council. The council shall cooperate and coordinate its activities with other state agencies to the highest possible degree.

Subd. 7. [REPORT.] The council shall prepare and distribute a report to the governor and legislature by November 15 of each even-numbered year. The report shall summarize the activities of the council since its last report, list receipts and expenditures, identify the major problems and issues confronting Spanish-speaking Chicano/Latino people, and list the specific objectives which that the council seeks to attain during the next biennium.

Sec. 4. Minnesota Statutes 1994, section 3.9225, subdivision 1, is amended to read:

Subdivision 1. [CREATION.] A state council on Black Minnesotans consists of 11 members appointed by the governor. The members of the council must be broadly representative of the Black community of the state and include at least five males and at least five females. Membership terms, compensation, removal of members, and filling of vacancies for nonlegislative members are as provided in section 15.059 15.0575. Because the council performs functions that are not purely advisory, the council is not subject to the expiration date in section 15.059. Two members of the house of representatives appointed by the speaker and two members of the senate appointed by the subcommittee on committees of the committee on rules and administration shall serve as nonvoting members of the council. The council shall annually elect from its membership a chair and other officers it deems necessary.

Sec. 5. Minnesota Statutes 1994, section 3.9226, subdivision 1, is amended to read:

Subdivision 1. [CREATION MEMBERSHIP.] The state council on Asian-Pacific Minnesotans consists of 15 23 members. Eleven Nineteen members are appointed by the governor and must be broadly representative of the Asian-Pacific community of the state. The governor shall appoint two additional members in 1992, one each representing the communities of people from Malaysia and Sri Lanka, and six more additional members in 1993, one each representing the communities of people from Afghanistan, Bangladesh, Myanmar, Pakistan, Singapore, and Tibet, so that after 1993 the council consists of 23 members with 19 appointed by the governor. Each Asian-Pacific ethnic community from the area described in subdivision 2 may be represented by no more than one council member. In making appointments, the governor shall consider an appointee's proven dedication and commitment to the Asian-Pacific community and any special skills possessed by the appointee that might be beneficial to the council, including at a minimum experience in public policy, legal affairs, social work, business, management, or economics. Terms, compensation, removal, and filling of vacancies for appointed members are as provided in section 15.059 15.0575. Because the council performs functions that are not purely advisory, the council is not subject to the

expiration date in section 15.059. Two members of the house of representatives appointed under the rules of the house of representatives and two members of the senate appointed under the rules of the senate shall serve as nonvoting members of the council. In making legislative appointments, the speaker of the house of representatives and the subcommittee on committees of the committee on rules and administration of the senate shall consult with the council in an effort to select appointees knowledgeable and interested in the affairs of the Asian-Pacific community. The council shall annually elect from its membership a chair and other officers it deems necessary. The council shall encourage Asian-Pacific ethnic communities and organizations to designate persons to serve as liaisons with the council. Liaisons may participate in council meetings, but may not vote, and may serve on council committees.

The council shall adopt rules to implement designation of Asian-Pacific ethnic communities to be represented with seats on the council.

Sec. 6. Minnesota Statutes 1994, section 3.9226, subdivision 2, is amended to read:

Subd. 2. [DEFINITION.] For the purpose of this section, the term Asian-Pacific means a person whose ethnic heritage is from any of the countries in Asia east of, and including, Afghanistan, or the Pacific Islands.

Sec. 7. Minnesota Statutes 1994, section 3.9226, subdivision 3, is amended to read:

Subd. 3. [DUTIES.] The council shall:

(1) advise the governor and the legislature on issues confronting Asian-Pacific people in this state, including the unique problems of non-English-speaking immigrants and refugees;

(2) advise the governor and the legislature of administrative and legislative changes necessary to ensure that Asian-Pacific people have access to benefits and services provided to people in this state;

(3) recommend to the governor and the legislature any revisions in the state's affirmative action program and other steps that are necessary to eliminate underutilization of Asian-Pacific people in the state's work force;

(4) recommend to the governor and the legislature legislation to improve the economic and social condition of Asian-Pacific people in this state;

(5) serve as a conduit to state government for organizations of Asian-Pacific people in the state;

(6) serve as a referral agency to assist Asian-Pacific people to secure access to state agencies and programs;

(7) serve as a liaison with the federal government, local government units, and private organizations on matters relating to the Asian-Pacific people of this state;

(8) perform or contract for the performance of studies designed to suggest solutions to the problems of Asian-Pacific people in the areas of education, employment, human rights, health, housing, social welfare, and other related areas;

(9) implement programs designed to solve the problems of Asian-Pacific people when authorized by other law;

(10) publicize the accomplishments of Asian-Pacific people and their contributions to this state;

(11) work with other state and federal agencies and organizations to develop small business opportunities and promote economic development for Asian-Pacific Minnesotans;

(12) supervise development of an Asian-Pacific trade primer, outlining Asian and Pacific customs, cultural traditions, and business practices, including language usage, for use by Minnesota's export community;

(13) cooperate with other state and federal agencies and organizations to develop improved state trade relations with Asian and Pacific countries; and

(14) review data provided by the commissioner of human services under section 257.072, subdivision 5, and present recommendations on the out-of-home placement of Asian-Pacific children. Recommendations must be presented to the commissioner and the legislature by February 1, 1990; November 1, 1990; and November 1 of each year thereafter assist recent immigrants in adaptation into the culture and promote the study of English as a second language.

Sec. 8. Minnesota Statutes 1994, section 3.9226, subdivision 5, is amended to read:

Subd. 5. [POWERS.] (a) The council may contract in its own name but may not accept or receive a loan or incur indebtedness except as otherwise provided by law. Contracts must be approved by a majority of the members of the council and executed by the chair and the executive director. The council may apply for, receive, and expend in its own name grants and gifts of money consistent with the powers and duties specified in this section.

(b) The council shall appoint an executive director who is experienced in administrative activities and familiar with the problems and needs of Asian-Pacific people. The council may delegate to the executive director powers and duties under this section that do not require council approval. The executive director serves in the unclassified service and may be removed at any time by the council. The executive director shall recommend to the council, and the council may appoint the appropriate staff necessary to carry out the duties of the council. All staff members serve in the unclassified service. The commissioner of administration shall provide the council with necessary administrative services.

Sec. 9. [EFFECTIVE DATE.]

Sections 1 to 8 are effective the day following final enactment."

We request adoption of this report and repassage of the bill.

Senate Conferees: Sandra L. Pappas, Roy W. Terwilliger and Deanna Wiener.

House Conferees: Matt Entenza, Kevin Goodno and Carlos Mariani.

Entenza moved that the report of the Conference Committee on S. F. No. 1902 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1902, A bill for an act relating to the council on affairs of Spanish-speaking people, the council on Asian-Pacific Minnesotans, the council on Black Minnesotans, and the Indian affairs council; changing the name of the council on affairs of Spanish-speaking people; changing the composition and certain powers of the councils on affairs of Spanish-speaking people and Asian-Pacific Minnesotans; providing for appointments; changing statutory references; eliminating an expiration date; amending Minnesota Statutes 1994, sections 3.922, subdivisions 3 and 8; 3.9223; 3.9225, subdivision 1; and 3.9226, subdivisions 1, 2, 3, and 5.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 114 yeas and 19 nays as follows:

Those who voted in the affirmative were:

Abrams       Entenza      Kelley       Molnau       Schumacher
Anderson, R. Farrell      Kelso        Munger       Seagren
Bakk         Finseth      Kinkel       Murphy       Skoglund
Bertram      Garcia       Knoblach     Ness         Smith
Bettermann   Girard       Koppendrayer Olson, E.    Solberg
Bishop       Goodno       Kraus        Opatz        Stanek
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9230

Bradley      Greenfield   Larsen       Orenstein    Swenson, D.
Broecker     Greiling     Leighton     Orfield      Swenson, H.
Brown        Gunther      Leppik       Osthoff      Tomassoni
Carlson, L.  Haas         Lieder       Ostrom       Tompkins
Carlson, S.  Harder       Long         Otremba      Tuma
Carruthers   Hasskamp     Lourey       Ozment       Tunheim
Clark        Hausman      Luther       Pawlenty     Van Engen
Commers      Holsten      Lynch        Pellow       Vickerman
Cooper       Huntley      Macklin      Pelowski     Wagenius
Daggett      Jaros        Mahon        Peterson     Warkentin
Dauner       Jefferson    Mares        Pugh         Wejcman
Davids       Jennings     Mariani      Rest         Wenzel
Dawkins      Johnson, A.  Marko        Rhodes       Winter
Dehler       Johnson, R.  McCollum     Rice         Wolf
Delmont      Johnson, V.  McElroy      Rostberg     Worke
Dempsey      Kahn         McGuire      Rukavina     Sp.Anderson,I
Dorn         Kalis        Milbert      Sarna        

Anderson, B. Hackbarth    Mulder       Paulsen      Van Dellen
Boudreau     Knight       Olson, M.    Perlt        Weaver
Erhardt      Krinkie      Onnen        Sviggum      Workman 
Frerichs     Lindner      Osskopp      Sykora       

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2123.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to children; clarifying the procedures peace officers must follow when deciding where to place a child placed on a health and welfare hold; requiring certain notices; clarifying the duties of related persons receiving a child on a 72-hour health and welfare hold; clarifying the reporting procedures and requirements for the placing officer to notify the county agency and the court; changing certain emergency licensing procedures; authorizing certain petitions and appearances; specifying review in certain cases; amending Minnesota Statutes 1994, sections 257.02; 257.03; 260.015, subdivision 14; 260.165, subdivision 3, and by adding a subdivision; 260.171, subdivision 2; 260.173, subdivision 2; Minnesota Statutes 1995 Supplement, section 245A.035, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 257.

March 21, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2123, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendment and that S. F. No. 2123 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1995 Supplement, section 245A.035, subdivision 2, is amended to read:

Subd. 2. [COOPERATION WITH EMERGENCY LICENSING PROCESS.] (a) A county agency that places a child with a relative who is not licensed to provide foster care must begin the process of securing an emergency license for the relative as soon as possible and must conduct the initial inspection required by subdivision 3, clause (1), whenever possible, prior to placing the child in the relative's home, but no later than three working days after placing the child

in the home. A child placed in the home of a relative who is not licensed to provide foster care must be removed from that home if the relative fails to cooperate with the county agency in securing an emergency foster care license. The commissioner may only issue an emergency foster care license to a relative with whom the county agency wishes to place or has placed a child for foster care, or to a relative with whom a child has been placed by court order.

(b) If a child is to be placed in the home of a relative not licensed to provide foster care, either the placing agency or the county agency in the county in which the relative lives shall conduct the emergency licensing process as required in this section.

Sec. 2. Minnesota Statutes 1994, section 257.02, is amended to read:

257.02 [SURRENDER OF PARENTAL RIGHTS.]

No person other than the parents or relatives may assume the permanent care and custody of a child under 14 years of age unless authorized so to do by an order or decree of court. However, if a parent of a child who is being cared for by a relative dies, or if the parent is not or cannot fulfill parental duties with respect to the child, the relative may bring a petition under section 260.131. Except in proceedings for adoption, no parent may assign or otherwise transfer to another parental rights or duties with respect to the permanent care and custody of a child under 14 years of age. Any such transfer shall be void.

Sec. 3. Minnesota Statutes 1994, section 257.03, is amended to read:

257.03 [NOTICE TO COMMISSIONER OF HUMAN SERVICES.]

Any person not exempted from the requirement for licensure under chapter 245A receiving a child in the person's home:

(1) because of the death, injury, or illness of the child's parent if the person intends to keep the child for more than 30 days; or

(2) with intent to adopt the child or keep the child permanently, except a person receiving a child from an authorized agency, must notify the commissioner of human services in writing within 30 days after the child is received. Notice shall state the true name of the child; the child's last previous address; the name and address of the child's parents or legal guardian and of persons with whom the child last resided; and the names and addresses of persons who placed the child in the home, arranged for, or assisted with arrangements for the child's placement there; and such other facts about the child or the home as the commissioner may require. It is the duty of the commissioner or a designated agent to investigate the circumstances surrounding the child's entry into the home and to take appropriate action to assure for the child, the biological parents, and the foster parents the full protection of all laws of Minnesota relating to custody and foster care of children. Except as provided by section 317A.907, no person shall solicit, receive, or accept any payment, promise of payment, or compensation, for placing a child in foster care or for assisting to place a child in foster care. Nor shall any person pay or promise to pay or in any way compensate any person, for placing or for assisting to place a child in foster care.

Sec. 4. [257.035] [EMERGENCY.]

A relative who acts to protect a child in an emergency or when a parent dies is not a custodian as defined under section 260.015. If the relative is unable or unwilling to provide for the ongoing care, custody, and control of the child, the child may be considered a child in need of protection or services under section 260.015. The relative may report the death or emergency to the local social service agency. Upon receiving the report, the local social service agency shall assess the circumstances and the needs of the child. The agency may place the child in foster care with a relative who meets the licensing standards under chapter 245A, and may pursue court action on behalf of the child.

Sec. 5. Minnesota Statutes 1994, section 260.015, subdivision 14, is amended to read:

Subd. 14. [CUSTODIAN.] "Custodian" means any person who is under a legal obligation to provide care and support for a minor or who is in fact providing care and support for a minor. This subdivision does not impose upon persons who are not otherwise legally responsible for providing a child with necessary food, clothing, shelter, education, or medical care a duty to provide that care. For an Indian child, custodian means any Indian person who has legal custody of an Indian child under tribal law or custom or under state law or to whom temporary physical care, custody, and control has been transferred by the parent of the child, as provided in section 257.351, subdivision 8.

Sec. 6. Minnesota Statutes 1994, section 260.165, subdivision 3, is amended to read:

Subd. 3. [NOTICE TO PARENT OR CUSTODIAN.] Whenever a peace officer takes a child into custody for shelter care or relative placement pursuant to subdivision 1; section 260.135, subdivision 5; or section 260.145, the officer shall give the parent or custodian of the child a list of names, addresses, and telephone numbers of social service agencies that offer child welfare services. If the parent or custodian was not present when the child was removed from the residence, the list shall be left with an adult on the premises or left in a conspicuous place on the premises if no adult is present. If the officer has reason to believe the parent or custodian is not able to read and understand English, the officer must provide a list that is written in the language of the parent or custodian. The list shall be prepared by the commissioner of human services. The commissioner shall prepare lists for each county and provide each county with copies of the list without charge. The list shall be reviewed annually by the commissioner and updated if it is no longer accurate. Neither the commissioner nor any peace officer or the officer's employer shall be liable to any person for mistakes or omissions in the list. The list does not constitute a promise that any agency listed will in fact assist the parent or custodian.

Sec. 7. Minnesota Statutes 1994, section 260.171, subdivision 2, is amended to read:

Subd. 2. (a) If the child is not released as provided in subdivision 1, the person taking the child into custody shall notify the court as soon as possible of the detention of the child and the reasons for detention.

(b) No child may be detained in a juvenile secure detention facility or shelter care facility longer than 36 hours, excluding Saturdays, Sundays, and holidays, after being taken into custody for a delinquent act as defined in section 260.015, subdivision 5, unless a petition has been filed and the judge or referee determines pursuant to section 260.172 that the child shall remain in detention.

(c) No child may be detained in an adult jail or municipal lockup longer than 24 hours, excluding Saturdays, Sundays, and holidays, or longer than six hours in an adult jail or municipal lockup in a standard metropolitan statistical area, after being taken into custody for a delinquent act as defined in section 260.015, subdivision 5, unless:

(1) a petition has been filed under section 260.131; and

(2) a judge or referee has determined under section 260.172 that the child shall remain in detention.

After August 1, 1991, no child described in this paragraph may be detained in an adult jail or municipal lockup longer than 24 hours, excluding Saturdays, Sundays, and holidays, or longer than six hours in an adult jail or municipal lockup in a standard metropolitan statistical area, unless the requirements of this paragraph have been met and, in addition, a motion to refer the child for adult prosecution has been made under section 260.125.

(d) No child taken into custody and placed in a shelter care facility or relative's home by a peace officer pursuant to section 260.165, subdivision 1, clause (a) or (c)(2) may be held in a shelter care facility custody longer than 72 hours, excluding Saturdays, Sundays and holidays, unless a petition has been filed and the judge or referee determines pursuant to section 260.172 that the child shall remain in custody.

(e) If a child described in paragraph (c) is to be detained in a jail beyond 24 hours, excluding Saturdays, Sundays, and holidays, the judge or referee, in accordance with rules and procedures established by the commissioner of corrections, shall notify the commissioner of the place of the detention and the reasons therefor. The commissioner shall thereupon assist the court in the relocation of the child in an appropriate juvenile secure detention facility or approved jail within the county or elsewhere in the state, or in determining suitable alternatives. The commissioner shall direct that a child detained in a jail be detained after eight days from and including the date of the original detention order in an approved juvenile secure detention facility with the approval of the administrative authority of the facility. If the court refers the matter to the prosecuting authority pursuant to section 260.125, notice to the commissioner shall not be required.

Sec. 8. Minnesota Statutes 1994, section 260.173, subdivision 2, is amended to read:

Subd. 2. Notwithstanding the provisions of subdivision 1, if the child had been taken into custody pursuant to section 260.165, subdivision 1, clause (a) or clause (c)(2), and is not alleged to be delinquent, the child shall be detained in the least restrictive setting consistent with the child's health and welfare and in closest proximity to the child's family as possible. Placement may be with a child's relative, or in a shelter care facility. The placing officer shall comply with this section and shall document why a less restrictive setting will or will not be in the best interests of the child for placement purposes."

Delete the title and insert:

"A bill for an act relating to children; clarifying the procedures peace officers must follow when deciding where to place a child placed on a health and welfare hold; requiring certain notices; clarifying the duties of related persons receiving a child on a 72-hour health and welfare hold; clarifying the reporting procedures and requirements for the placing officer to notify the county agency and the court; changing certain emergency licensing procedures; authorizing certain petitions and appearances; specifying review in certain cases; amending Minnesota Statutes 1994, sections 257.02; 257.03; 260.015, subdivision 14; 260.165, subdivision 3; 260.171, subdivision 2; and 260.173, subdivision 2; Minnesota Statutes 1995 Supplement, section 245A.035, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 257."

We request adoption of this report and repassage of the bill.

Senate Conferees: Roy W. Terwilliger, Linda Berglin and Allan H. Spear.

House Conferees: Richard H. Jefferson, Linda Wejcman and Tony Onnen.

Jefferson moved that the report of the Conference Committee on S. F. No. 2123 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2123, A bill for an act relating to children; clarifying the procedures peace officers must follow when deciding where to place a child placed on a health and welfare hold; requiring certain notices; clarifying the duties of related persons receiving a child on a 72-hour health and welfare hold; clarifying the reporting procedures and requirements for the placing officer to notify the county agency and the court; changing certain emergency licensing procedures; authorizing certain petitions and appearances; specifying review in certain cases; amending Minnesota Statutes 1994, sections 257.02; 257.03; 260.015, subdivision 14; 260.165, subdivision 3, and by adding a subdivision; 260.171, subdivision 2; 260.173, subdivision 2; Minnesota Statutes 1995 Supplement, section 245A.035, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 257.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Ness         Smith
Anderson, B. Finseth      Knoblach     Olson, E.    Solberg
Anderson, R. Frerichs     Koppendrayer Olson, M.    Stanek
Bakk         Garcia       Kraus        Onnen        Sviggum
Bertram      Girard       Krinkie      Opatz        Swenson, D.
Bettermann   Goodno       Larsen       Orenstein    Swenson, H.
Bishop       Greenfield   Leighton     Orfield      Sykora
Boudreau     Greiling     Leppik       Osskopp      Tomassoni
Bradley      Gunther      Lieder       Osthoff      Tompkins
Broecker     Haas         Lindner      Ostrom       Trimble
Brown        Hackbarth    Long         Otremba      Tuma
Carlson, L.  Harder       Lourey       Ozment       Tunheim
Carlson, S.  Hasskamp     Luther       Paulsen      Van Dellen
Carruthers   Hausman      Lynch        Pawlenty     Van Engen
Clark        Holsten      Macklin      Pellow       Vickerman
Commers      Huntley      Mahon        Pelowski     Wagenius
Cooper       Jaros        Mares        Perlt        Warkentin
Daggett      Jefferson    Mariani      Peterson     Weaver
Dauner       Jennings     Marko        Pugh         Wejcman
Davids       Johnson, A.  McCollum     Rhodes       Wenzel
Dawkins      Johnson, R.  McElroy      Rice         Winter
Dehler       Johnson, V.  McGuire      Rostberg     Wolf
Delmont      Kahn         Milbert      Rukavina     Worke
Dempsey      Kalis        Molnau       Sarna        Workman
Dorn         Kelley       Mulder       Schumacher   Sp.Anderson,I
Entenza      Kelso        Munger       Seagren      
Erhardt      Kinkel       Murphy       Skoglund     

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2255.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to local government; providing for certain vacancies in the elected offices of mayor or council member in statutory cities, county commissioner, and school board; amending Minnesota Statutes 1994, sections 127.09; 375.101; and 412.02, subdivision 2a, and by adding a subdivision.

March 26, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2255, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate concur in the House amendment and that S. F. No. 2255 be further amended as follows:

Amend the title as follows:

Page 1, line 4, delete the first comma and insert "and" and delete everything after "commissioner"

Page 1, line 5, delete everything before the semicolon

Page 1, line 6, delete "127.09;"

We request adoption of this report and repassage of the bill.

Senate Conferees: Don Betzold, John Marty and Pat Pariseau.

House Conferees: Phil Carruthers, Darlene Luther and Teresa Lynch.

Carruthers moved that the report of the Conference Committee on S. F. No. 2255 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2255, A bill for an act relating to local government; providing for certain vacancies in the elected offices of mayor or council member in statutory cities, county commissioner, and school board; amending Minnesota Statutes 1994, sections 127.09; 375.101; and 412.02, subdivision 2a, and by adding a subdivision.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 134 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Ness         Skoglund
Anderson, B. Finseth      Knoblach     Olson, E.    Smith
Anderson, R. Frerichs     Koppendrayer Olson, M.    Solberg
Bakk         Garcia       Kraus        Onnen        Stanek
Bertram      Girard       Krinkie      Opatz        Sviggum
Bettermann   Goodno       Larsen       Orenstein    Swenson, D.
Bishop       Greenfield   Leighton     Orfield      Swenson, H.
Boudreau     Greiling     Leppik       Osskopp      Sykora
Bradley      Gunther      Lieder       Osthoff      Tomassoni
Broecker     Haas         Lindner      Ostrom       Tompkins
Brown        Hackbarth    Long         Otremba      Trimble
Carlson, L.  Harder       Lourey       Ozment       Tuma
Carlson, S.  Hasskamp     Luther       Paulsen      Tunheim
Carruthers   Hausman      Lynch        Pawlenty     Van Dellen
Clark        Holsten      Macklin      Pellow       Van Engen
Commers      Huntley      Mahon        Pelowski     Vickerman
Cooper       Jaros        Mares        Perlt        Wagenius
Daggett      Jefferson    Mariani      Peterson     Warkentin
Dauner       Jennings     Marko        Pugh         Weaver
Davids       Johnson, A.  McCollum     Rest         Wejcman
Dawkins      Johnson, R.  McElroy      Rhodes       Wenzel
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9235

Dehler       Johnson, V.  McGuire      Rice         Winter
Delmont      Kahn         Milbert      Rostberg     Wolf
Dempsey      Kalis        Molnau       Rukavina     Worke
Dorn         Kelley       Mulder       Sarna        Workman
Entenza      Kelso        Munger       Schumacher   Sp.Anderson,I
Erhardt      Kinkel       Murphy       Seagren      

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 374:

Trimble, Winter and Ozment.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 1800:

Long, Orfield and Larsen.

The following Conference Committee Reports were received:

A bill for an act relating to civil actions; creating a nuisance action by individuals and neighborhood organizations; proposing coding for new law in Minnesota Statutes, chapter 617.

March 27, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2204, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2204 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. [617.88] [DEFINITION.]

(a) The terms used in section 617.89 have the meanings given in this section or section 617.80.

(b) "Nuisance" means:

(1) an act of prostitution;

(2) an act of gambling;

(3) keeping or permitting a disorderly house;

(4) unlawful sale or possession of controlled substances;

(5) unlicensed sale of alcoholic beverages under section 340A.401 or unlawful sale or gift of alcoholic beverages under section 340A.503, subdivision 2, clause (1); or

(6) unlawful use or possession of a firearm in violation of section 609.66, subdivision 1a; 609.67; or 624.713.

(c) "Neighborhood organization" means a nonprofit corporation incorporated under chapter 317A that satisfies clauses (1) and (2).

The corporation shall:

(1) designate in its articles of incorporation or bylaws a specific geographic community to which its activities are limited; and

(2) be formed for the purposes of promoting community safety, crime prevention, and housing quality in a nondiscriminatory manner.

Sec. 2. [617.89] [NUISANCE ACTION.]

Subdivision 1. [ACTION ESTABLISHED.] A nuisance action may be brought under this section for a nuisance as defined in section 617.88. The action may be brought by a resident of a jurisdiction or a neighborhood organization in a jurisdiction where a nuisance has occurred. Upon the request of a resident or neighborhood organization, the prosecuting attorney for the jurisdiction may bring an action under this section. The complaint shall be filed with the court and served on the respondent in the manner provided by the rules of civil procedures.

Subd. 2. [PROOF.] A nuisance may be proved by evidence of:

(1) two or more separate behavioral incidents within the previous 12 months that would constitute a nuisance as defined in section 617.88; or

(2) two or more convictions within the previous 12 months for violating any of the offenses described in section 617.80 or 617.88.

Proof of nuisance under clause (1) exists if each of the elements of the conduct constituting the nuisance is established by clear and convincing evidence. Illegally obtained evidence is not admissible in these actions.

Subd. 3. [REMEDIES.] If, upon a hearing, the court finds proof of a nuisance under this section, it shall permanently enjoin the respondent from engaging in the nuisance activity. The court shall award a prevailing individual or neighborhood organization damages in the amount of actual damages suffered or exemplary damages of $500 per incident, whichever is greater. If the action is brought by the prosecuting attorney, the court shall order the damages, other than actual damages, to be paid to a crime victim witness fund serving the jurisdiction. The court may award a prevailing petitioner reasonable attorney fees and costs.

Subd. 4. [DEFENSES.] It is a defense to a complaint or action brought under this section that:

(1) the individual alleged to be committing a nuisance was coerced, as defined in section 611A.80, subdivision 2, into committing the alleged nuisance; or

(2) the prosecution of the nuisance action was brought on the basis of discrimination based on membership in a protected class under chapter 363.

The defense in clause (1) may be proved without identifying any person who coerced the individual.

Sec. 3. [REPEALER.]

Sections 1 and 2 are repealed August 1, 1999."

We request adoption of this report and repassage of the bill.

House Conferees: Andy Dawkins, Chuck Brown and Steve Smith.

Senate Conferees: Ellen R. Anderson, Sandra L. Pappas and Roy W. Terwilliger.

Dawkins moved that the report of the Conference Committee on H. F. No. 2204 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2204, A bill for an act relating to civil actions; creating a nuisance action by individuals and neighborhood organizations; proposing coding for new law in Minnesota Statutes, chapter 617.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 128 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Olson, E.    Solberg
Anderson, B. Finseth      Knoblach     Olson, M.    Stanek
Anderson, R. Frerichs     Koppendrayer Onnen        Sviggum
Bakk         Garcia       Kraus        Opatz        Swenson, D.
Bertram      Girard       Krinkie      Orenstein    Swenson, H.
Bettermann   Goodno       Larsen       Orfield      Sykora
Bishop       Greenfield   Leighton     Osskopp      Tomassoni
Boudreau     Greiling     Leppik       Osthoff      Tompkins
Bradley      Gunther      Lieder       Ostrom       Trimble
Broecker     Haas         Lindner      Otremba      Tuma
Brown        Hackbarth    Long         Ozment       Tunheim
Carlson, L.  Harder       Lourey       Paulsen      Van Dellen
Carlson, S.  Hasskamp     Luther       Pawlenty     Van Engen
Carruthers   Hausman      Lynch        Pellow       Vickerman
Commers      Holsten      Macklin      Pelowski     Wagenius
Cooper       Huntley      Mares        Peterson     Warkentin
Daggett      Jaros        Marko        Pugh         Weaver
Dauner       Jefferson    McCollum     Rest         Wejcman
Davids       Jennings     McElroy      Rhodes       Wenzel
Dawkins      Johnson, A.  McGuire      Rostberg     Winter
Dehler       Johnson, R.  Milbert      Rukavina     Wolf
Delmont      Johnson, V.  Molnau       Sarna        Worke
Dempsey      Kalis        Mulder       Schumacher   Workman
Dorn         Kelley       Munger       Seagren      Sp.Anderson,I
Entenza      Kelso        Murphy       Skoglund     
Erhardt      Kinkel       Ness         Smith        

Perlt                     

Marko was excused for the remainder of today's session.

A bill for an act relating to occupations and professions; establishing the board of licensed professional counseling; requiring professional counselors to be licensed; requiring certain actions against occupational therapists to be commenced within two years; providing certain exceptions from X-ray operation examination requirements; requiring rulemaking; providing penalties; appropriating money; amending Minnesota Statutes 1994, sections 148A.01, subdivision 5; 541.07; and 609.341, subdivision 17; Minnesota Statutes 1995 Supplement, sections 116J.70, subdivision 2a; 144.121, subdivision 5; 148B.60, subdivision 3; 214.01, subdivision 2; and 214.04, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 148B.

March 26, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 66, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 66 be further amended as follows:

Page 6, delete lines 12 and 13

Page 14, line 33, delete "titles,"

We request adoption of this report and repassage of the bill.

House Conferees: Roger Cooper, Lee Greenfield and Tony Onnen.

Senate Conferees: Sam G. Solon, Pat Piper and Dick Day.

Cooper moved that the report of the Conference Committee on H. F. No. 66 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 66, A bill for an act relating to occupations and professions; establishing the board of licensed professional counseling; requiring professional counselors to be licensed; requiring certain actions against occupational therapists to be commenced within two years; providing certain exceptions from X-ray operation examination requirements; requiring rulemaking; providing penalties; appropriating money; amending Minnesota Statutes 1994, sections 148A.01, subdivision 5; 541.07; and 609.341, subdivision 17; Minnesota Statutes 1995 Supplement, sections 116J.70, subdivision 2a; 144.121, subdivision 5; 148B.60, subdivision 3; 214.01, subdivision 2; and 214.04, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 148B.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 101 yeas and 30 nays as follows:

Those who voted in the affirmative were:

Abrams       Girard       Knoblach     Orenstein    Swenson, D.
Anderson, R. Goodno       Koppendrayer Orfield      Swenson, H.
Bakk         Greenfield   Kraus        Osskopp      Tomassoni
Bertram      Greiling     Leighton     Osthoff      Tompkins
Boudreau     Gunther      Leppik       Ostrom       Trimble
Brown        Haas         Lieder       Otremba      Tuma
Carlson, L.  Harder       Lourey       Ozment       Tunheim
Carlson, S.  Hasskamp     Luther       Pawlenty     Vickerman
Carruthers   Holsten      Lynch        Pelowski     Wagenius
Clark        Huntley      Macklin      Peterson     Warkentin
Cooper       Jaros        Mahon        Pugh         Weaver
Dauner       Jefferson    Mares        Rest         Wejcman
Davids       Jennings     Mariani      Rhodes       Wenzel
Dawkins      Johnson, A.  McCollum     Rostberg     Winter
Delmont      Johnson, R.  McGuire      Rukavina     Worke
Dorn         Johnson, V.  Milbert      Sarna        Workman
Entenza      Kahn         Munger       Schumacher   Sp.Anderson,I
Erhardt      Kalis        Murphy       Skoglund     
Farrell      Kelley       Ness         Smith        
Finseth      Kelso        Olson, E.    Solberg      
Garcia       Kinkel       Opatz        Stanek       

Anderson, B. Dehler       Larsen       Onnen        Van Engen
Bettermann   Dempsey      Lindner      Paulsen      Wolf 
Bishop       Frerichs     Long         Pellow       
Bradley      Hackbarth    McElroy      Seagren      
Broecker     Hausman      Molnau       Sviggum      
Commers      Knight       Mulder       Sykora       
Daggett      Krinkie      Olson, M.    Van Dellen   

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 842.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to occupations and professions; board of psychology; modifying board duties; changing types of licensure; changing licensure provisions; providing for discipline; providing penalties; amending Minnesota Statutes 1994, sections 148.88; 148.881; 148.89, subdivisions 2a and 5; 148.90, subdivisions 1 and 2; 148.905, subdivision 1; 148.911; 148.925; 148.941, subdivisions 2, 4, and by adding subdivisions; 148.96; 148.975; 148.98; 253B.02, subdivision 11; Minnesota Statutes 1995 Supplement, section 147.09; proposing coding for new law in Minnesota Statutes, chapter 148; repealing Minnesota Statutes 1994, sections 148.89, subdivisions 6, 7, and 8; 148.91; 148.93; 148.951; and 148.97; Minnesota Statutes 1995 Supplement, section 148.921.

March 19, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 842, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 842 be further amended as follows:

Page 19, line 26, delete "disciplinary fee" and insert "civil penalty"

Page 19, line 27, delete "disciplinary fee" and insert "penalty"

Page 19, line 29, after "charged" insert ", or to discourage repeated violations"

We request adoption of this report and repassage of the bill.

Senate Conferees: Don Betzold, Dallas C. Sams and Linda Runbeck.

House Conferees: Steve Kelley, Betty McCollum and Peggy Leppik.

Kelley moved that the report of the Conference Committee on S. F. No. 842 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 842, A bill for an act relating to occupations and professions; board of psychology; modifying board duties; changing types of licensure; changing licensure provisions; providing for discipline; providing penalties; amending Minnesota Statutes 1994, sections 148.88; 148.881; 148.89, subdivisions 2a and 5; 148.90, subdivisions 1 and 2; 148.905, subdivision 1; 148.911; 148.925; 148.941, subdivisions 2, 4, and by adding subdivisions; 148.96; 148.975; 148.98; 253B.02, subdivision 11; Minnesota Statutes 1995 Supplement, section 147.09; proposing coding for new law in Minnesota Statutes, chapter 148; repealing Minnesota Statutes 1994, sections 148.89, subdivisions 6, 7, and 8; 148.91; 148.93; 148.951; and 148.97; Minnesota Statutes 1995 Supplement, section 148.921.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 131 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knight       Onnen        Stanek
Anderson, B. Finseth      Knoblach     Opatz        Sviggum
Anderson, R. Frerichs     Koppendrayer Orenstein    Swenson, D.
Bakk         Garcia       Kraus        Orfield      Swenson, H.
Bertram      Girard       Larsen       Osskopp      Sykora
Bettermann   Goodno       Leighton     Osthoff      Tomassoni
Bishop       Greenfield   Leppik       Ostrom       Tompkins
Boudreau     Greiling     Lieder       Otremba      Trimble
Bradley      Gunther      Lindner      Ozment       Tuma
Broecker     Haas         Long         Paulsen      Tunheim
Brown        Hackbarth    Lourey       Pawlenty     Van Dellen
Carlson, L.  Harder       Luther       Pellow       Van Engen
Carlson, S.  Hasskamp     Lynch        Pelowski     Vickerman
Carruthers   Hausman      Macklin      Perlt        Wagenius
Clark        Holsten      Mahon        Peterson     Warkentin
Commers      Huntley      Mares        Pugh         Weaver
Cooper       Jaros        Mariani      Rest         Wejcman
Daggett      Jefferson    McCollum     Rhodes       Wenzel
Dauner       Jennings     McElroy      Rice         Winter
Davids       Johnson, A.  McGuire      Rostberg     Wolf
Dawkins      Johnson, R.  Milbert      Rukavina     Worke
Dehler       Johnson, V.  Molnau       Sarna        Workman
Delmont      Kahn         Mulder       Schumacher   Sp.Anderson,I
Dempsey      Kalis        Munger       Seagren      
Dorn         Kelley       Murphy       Skoglund     
Entenza      Kelso        Ness         Smith        
Erhardt      Kinkel       Olson, E.    Solberg      

Krinkie      Olson, M.                 

Greiling was excused for the remainder of today's session.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2457.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to public employees; regulating the salaries of certain higher education officers; prescribing the form and use of uniform collective bargaining settlement forms; allowing certain students to work for department of transportation for 48 months; ratifying certain labor agreements and compensation plans; appropriating money; amending Minnesota Statutes 1994, sections 3.855, subdivision 4; 43A.08, subdivision 4; 43A.17, subdivision 1; 179A.03, subdivision 4; and 179A.07, by adding a subdivision; Minnesota Statutes 1995 Supplement, sections 15A.081, subdivision 7b; 43A.18, subdivision 2; and 179A.04, subdivision 3.

March 25, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2457, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 2457 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 3.855, subdivision 4, is amended to read:

Subd. 4. [OTHER DUTIES.] The commission shall:

(1) continually monitor the state's civil service system provided for in chapter 43A, rules of the commissioner of employee relations, and the collective bargaining process provided for in chapter 179A, as applied to state employees;

(2) research and analyze the need for improvements in those statutory sections;

(3) adopt rules consistent with this section relating to the scheduling and conduct of commission business and other organizational and procedural matters; and

(4) perform other related functions delegated to it by the legislature; and

(5) adopt changes, as necessary, to the uniform collective bargaining agreement settlement document developed under section 179A.07, subdivision 7. Any modifications to the form approved by the commission must be submitted to the legislature in the same manner as compensation plans under subdivision 3.

Sec. 2. Minnesota Statutes 1995 Supplement, section 15A.081, subdivision 7b, is amended to read:

Subd. 7b. [HIGHER EDUCATION OFFICERS.] The board of trustees of the Minnesota state colleges and universities, state university board, the state board for community colleges, the state board of technical colleges, and the higher education services office council shall set the salary rates for, respectively, the chancellor of the higher education system, the chancellor of the state universities, the chancellor of the community colleges, the chancellor of vocational technical education, Minnesota state colleges and universities and the executive director of the higher education services office. The respective board or the council shall submit the proposed salary increase change to the legislative coordinating commission for approval, modification, or rejection in the manner provided in section 3.855. The salary rates rate for the positions specified in this subdivision chancellor of the Minnesota state colleges and universities may not exceed 95 percent of the salary of the governor under section 15A.082, subdivision 3. For purposes of this subdivision, "the salary rate of the chancellor" does not include:

(1) employee benefits that are also provided for the majority of all other full-time state employees, vacation and sick leave allowances, health and dental insurance, disability insurance, term life insurance, and pension benefits or like benefits the cost of which is borne by the employee or which is not subject to tax as income under the Internal Revenue Code of 1986;

(2) dues paid to organizations that are of a civic, professional, educational, or governmental nature;

(3) reimbursement for actual expenses incurred by the employee that the appointing authority determines to be directly related to the performance of job responsibilities, including any relocation expenses paid during the initial year of employment; or

(4) a housing allowance that is comparable to housing allowances provided to chancellors and university presidents in similar higher education systems nationwide.

The salary of the director of the higher education services office may not exceed the maximum of the salary range for the commissioner of administration. In deciding whether to recommend a salary increase, the governing board or council shall consider the performance of the chancellor or director, including the chancellor's or director's progress toward attaining affirmative action goals.

Sec. 3. Minnesota Statutes 1994, section 43A.08, subdivision 4, is amended to read:

Subd. 4. [LENGTH OF SERVICE FOR STUDENT WORKERS.] A person may not be employed as a student worker in the unclassified service under subdivision 1 for more than 36 months. Employment at a school that a student attends is not counted for purposes of this 36-month limit. Student workers in the Minnesota department of transportation SEEDS program who are actively involved in a four-year degree program preparing for a professional career job in the Minnesota department of transportation may be employed as a student worker for up to 48 months.

Sec. 4. Minnesota Statutes 1994, section 43A.17, subdivision 1, is amended to read:

Subdivision 1. [SALARY LIMITS.] As used in subdivisions 1 to 9, "salary" means hourly, monthly, or annual rate of pay including any lump-sum payments and cost-of-living adjustment increases but excluding payments due to overtime worked, shift or equipment differentials, work out of class as required by collective bargaining agreements or plans established under section 43A.18, and back pay on reallocation or other payments related to the hours or conditions under which work is performed rather than to the salary range or rate to which a class is assigned. For presidents of state universities, "salary" does not include a housing allowance provided through a compensation plan approved under section 43A.18, subdivision 3a.

The salary, as established in section 15A.081, of the head of a state agency in the executive branch is the upper limit of compensation on the salaries of individual employees in the agency. The salary of the commissioner of labor and industry is the upper limit of compensation salaries of employees in the bureau of mediation services. However, if an agency head is assigned a salary that is lower than the current salary of another agency employee, the employee retains the salary, but may not receive an increase in salary as long as the salary is above that of the agency head. The commissioner may grant exemptions from these upper limits as provided in subdivisions 3 and 4.

Sec. 5. Minnesota Statutes 1995 Supplement, section 43A.18, subdivision 2, is amended to read:

Subd. 2. [UNREPRESENTED NONMANAGERIAL EMPLOYEE COMMISSIONER'S PLAN.] Except as provided in section 43A.01, the compensation, terms and conditions of employment for all classified and unclassified employees, except unclassified employees in the legislative and judicial branches, who are not covered by a collective bargaining

agreement and not otherwise provided for in chapter 43A or other law are governed solely by a plan developed by the commissioner. The legislative coordinating commission shall review and approve, reject, or modify the plan under section 3.855, subdivision 2. The plan need not be adopted in accordance with the rulemaking provisions of chapter 14.

Sec. 6. [43A.1815] [VACATION DONATION TO SICK LEAVE ACCOUNT.]

In addition to donations under section 43A.181, a state employee may donate a total of up to 12 hours of accrued vacation leave each fiscal year to the sick leave account of one or more state employees. A state employee may not be paid for more than 80 hours in a payroll period during which the employee uses sick leave credited to the employee's account as a result of a transfer from another state employee's vacation account. The commissioner shall establish procedures under section 43A.04, subdivision 4, for eligibility, duration of need based on individual cases, monitoring and evaluation of individual eligibility status, and other topics related to administration of this program.

Sec. 7. Minnesota Statutes 1994, section 179A.03, subdivision 4, is amended to read:

Subd. 4. [CONFIDENTIAL EMPLOYEE.] "Confidential employee" means any an employee who as part of the employee's job duties:

(1) has access to labor relations information subject to use by the public employer in meeting and negotiating as that term is defined in section 13.37, subdivision 1, paragraph (c); or

(2) actively participates in the meeting and negotiating on behalf of the public employer.

However, for executive branch employees of the state or employees of the regents of the University of Minnesota, "confidential employee" means any employee who:

(a) has access to information subject to use by the public employer in collective bargaining; or

(b) actively participates in collective bargaining on behalf of the public employer.

Sec. 8. Minnesota Statutes 1995 Supplement, section 179A.04, subdivision 3, is amended to read:

Subd. 3. [OTHER DUTIES.] (a) The commissioner shall:

(1) provide mediation services as requested by the parties until the parties reach agreement, and may continue to assist parties after they have submitted their final positions for interest arbitration;

(2) issue notices, subpoenas, and orders required by law to carry out duties under sections 179A.01 to 179A.25;

(3) assist the parties in formulating petitions, notices, and other papers required to be filed with the commissioner;

(4) conduct elections;

(5) certify the final results of any election or other voting procedure conducted under sections 179A.01 to 179A.25;

(6) adopt rules relating to the administration of this chapter and the conduct of hearings and elections;

(7) receive, catalogue, file, and make available to the public all decisions of arbitrators and panels authorized by sections 179A.01 to 179A.25, all grievance arbitration decisions, and the commissioner's orders and decisions;

(8) adopt, subject to chapter 14, a grievance procedure that fulfills the purposes of section 179A.20, subdivision 4, does not provide for the services of the bureau of mediation services and is available to any employee in a unit not covered by a contractual grievance procedure;

(9) maintain a schedule of state employee classifications or positions assigned to each unit established in section 179A.10, subdivision 2;

(10) collect fees established by rule for empanelment of persons on the labor arbitrator roster maintained by the commissioner or in conjunction with fair share fee challenges;

(11) provide technical support and assistance to voluntary joint labor-management committees established for the purpose of improving relationships between exclusive representatives and employers, at the discretion of the commissioner;

(12) provide to the parties a list of arbitrators as required by section 179A.16, subdivision 4; and

(13) maintain a list of up to 60 arbitrators for referral to employers and exclusive representatives for the resolution of grievance or interest disputes. Each person on the list must be knowledgeable about collective bargaining and labor relations in the public sector, well versed in state and federal labor law, and experienced in and knowledgeable about labor arbitration. To the extent practicable, the commissioner shall appoint members to the list so that the list is gender and racially diverse.

(b) The commissioner shall make available uniform baseline determination documents and uniform collective bargaining agreement settlement documents applicable to all negotiations between exclusive representatives of appropriate units of public employees and public employers other than townships and prescribe procedures and instructions for completion of the documents. The commissioner shall, at a minimum, include these individual elements in the uniform baseline determination document: the costs of any increases to the wage schedule; the costs of employees moving through the wage schedule; costs of medical insurance; costs of dental insurance; costs of life insurance; lump sum payments; shift differentials; extracurricular activities; longevity; employer contributions to social security; employer contributions to state or local retirement plans; and contributions to a deferred compensation account. The calculation of the base year must be based on an annualization of the costs provided in the base year contract. The documents must be in the same form as presented by the commissioner to the legislative commission on employee relations on February 17, 1994. A completed uniform collective bargaining agreement settlement document must be presented to the public employer at the time it ratifies a collective bargaining agreement and must be available afterward for inspection during normal business hours at the principal administrative offices of the public employer. The commissioner shall provide training and technical assistance to public employers who request it in completing the uniform baseline determination documents and uniform collective bargaining agreement settlement documents. The commissioner shall at least annually inform public employers of their obligations to complete and post these forms and to submit copies of the completed forms to the legislative commission on employee relations.

(c) From the names provided by representative organizations, the commissioner shall maintain a list of arbitrators to conduct teacher discharge or termination hearings according to section 125.12 or 125.17. The persons on the list must meet at least one of the following requirements:

(1) be a former or retired judge;

(2) be a qualified arbitrator on the list maintained by the bureau;

(3) be a present, former, or retired administrative law judge; or

(4) be a neutral individual who is learned in the law and admitted to practice in Minnesota, who is qualified by experience to conduct these hearings, and who is without bias to either party.

Each year, the Minnesota education association shall provide a list of seven names, the Minnesota federation of teachers a list of seven names, and the Minnesota school boards association a list of 14 names of persons to be on the list. The commissioner may adopt rules about maintaining and updating the list.

Sec. 9. Minnesota Statutes 1994, section 179A.07, is amended by adding a subdivision to read:

Subd. 7. [UNIFORM SETTLEMENT FORM.] (a) A public employer, other than a township, shall complete a uniform collective bargaining agreement settlement document for each collective bargaining agreement or arbitration award. The public employer shall:

(1) present the settlement document to the governing body at the time it ratifies a collective bargaining agreement or arbitration award;

(2) make the settlement document available afterward for inspection during normal business hours at the principal administrative offices of the public employer; and

(3) submit a copy of each settlement document to the department of finance within ten days of the approval by the governing body of the collective bargaining agreement or arbitration award.

(b) The commissioner of finance shall make available uniform baseline determination documents and uniform collective bargaining agreement settlement documents applicable to all negotiations between exclusive representatives of appropriate units of public employees and public employers other than townships and prescribe procedures and instructions for completion of the documents. The commissioner of finance shall, at a minimum, include these individual elements in the uniform baseline determination document: the costs of any increases to the wage schedule; the costs of employees moving through the wage schedule; the costs of medical insurance; the costs of dental insurance; the costs of life insurance; lump-sum payments; shift differentials; extracurricular activities; longevity; employer contributions to social security; employer contributions to state or local retirement plans; and contributions to a deferred compensation account. The calculation of the base year must be based on an annualization of the costs provided in the base year contract. The documents must be in the same form as presented by the commissioner of the bureau of mediation services to the legislative commission on employee relations on February 17, 1994; however, the legislative coordinating commission may modify the form as provided in section 3.855, subdivision 4.

(c) The commissioner of finance shall provide training and technical assistance to public employers who request it in completing the uniform baseline determination documents and uniform collective bargaining agreement settlement documents. The commissioner of finance, at least annually, shall inform public employers of their obligations to complete and post these forms and to submit copies of the completed forms to the department of finance.

Sec. 10. [RATIFICATIONS.]

Subdivision 1. [COUNCIL 6.] The labor agreement between the state of Minnesota and state bargaining units 2, 3, 4, 6, 7, and 8 represented by the American federation of state, county, and municipal employees, Council 6, approved by the legislative coordinating commission joint subcommittee on employee relations on October 23, 1995, is ratified.

Subd. 2. [ADMINISTRATIVE LAW JUDGES; OFFICE OF ADMINISTRATIVE HEARINGS.] The compensation plan for administrative law judges in the office of administrative hearings, as modified and approved by the legislative coordinating commission joint subcommittee on employee relations on October 23, 1995, is ratified.

Subd. 3. [UNREPRESENTED MANAGERS AND CHANCELLOR; MINNESOTA STATE COLLEGES AND UNIVERSITIES.] The compensation plan for excluded administrators of the Minnesota state colleges and universities, as amended and approved by the legislative commission on employee relations on June 7, 1995, is ratified. The salary proposed by the board of trustees of the Minnesota state colleges and universities for the chancellor, approved by the legislative commission on employee relations on June 7, 1995, is ratified. However, the housing allowance included in the compensation plan for presidents of state universities is not ratified.

Subd. 4. [SUPERVISORS.] The labor agreement between the state of Minnesota and the middle management association, approved by the legislative coordinating commission joint subcommittee on employee relations on December 11, 1995, is ratified.

Subd. 5. [ENGINEERS.] The labor agreement between the state of Minnesota and the Minnesota government engineers council, approved by the legislative coordinating commission joint subcommittee on employee relations on December 11, 1995, is ratified.

Subd. 6. [COMMUNITY COLLEGE FACULTY.] The labor agreement between the state of Minnesota and the Minnesota community college faculty association, approved by the legislative coordinating commission joint subcommittee on employee relations on December 11, 1995, is ratified.

Subd. 7. [NURSES.] The labor agreement between the state of Minnesota and the Minnesota nurses association, approved by the legislative coordinating commission joint subcommittee on employee relations on December 11, 1995, is ratified.

Subd. 8. [HIGHER EDUCATION SERVICES OFFICE DIRECTOR.] The proposed salary of the director of the higher education services office, as modified and approved by the legislative coordinating commission joint subcommittee on employee relations on December 11, 1995, is ratified.

Subd. 9. [SPECIAL TEACHERS.] The labor agreement between the state of Minnesota and the state residential schools education association, approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 10. [LAW ENFORCEMENT.] The labor agreement between the state of Minnesota and the Minnesota law enforcement association, approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 11. [STATE UNIVERSITY ADMINISTRATIVE AND SERVICE FACULTY.] The labor agreement between the state of Minnesota and the Minnesota state university association of administrative and service faculty, approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 12. [PROFESSIONAL EMPLOYEES.] The labor agreement between the state of Minnesota and the Minnesota association of professional employees, approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 13. [MANAGERIAL PLAN.] The plan for managerial employees, as amended and approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 14. [UNREPRESENTED, UNCLASSIFIED EMPLOYEES; HIGHER EDUCATION SERVICES OFFICE.] The plan for unrepresented, unclassified employees of the higher education services office, as approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Subd. 15. [COMMISSIONER'S PLAN.] The commissioner's plan, as amended and approved by the legislative coordinating commission joint subcommittee on employee relations on January 12, 1996, is ratified.

Sec. 11. [LEGISLATIVE COMMISSIONS CEASING OPERATIONS ON JULY 1, 1996; EMPLOYEE ELIGIBILITY FOR COMPETITIVE PROMOTIONAL EXAMS.]

An employee of a legislative commission that ceases operations on July 1, 1996, pursuant to Laws 1995, chapter 248, article 2, section 6, is eligible until January 1, 1997, for participation in competitive promotional examinations under Minnesota Statutes, section 43A.10, subdivision 6.

Sec. 12. [APPROPRIATION.]

$50,000 is appropriated to the commissioner of finance for the purpose of carrying out section 9.

Sec. 13. [EFFECTIVE DATE.]

Sections 2 to 7 and 10 are effective the day following final enactment. Sections 1, 8, 9, 11, and 12 are effective July 1, 1996."

Delete the title and insert:

"A bill for an act relating to public employees; regulating the salaries of certain higher education officers; establishing a vacation donation sick leave account; prescribing the form and use of uniform collective bargaining settlement forms; allowing certain students to work for department of transportation for 48 months; ratifying certain labor agreements and compensation plans; appropriating money; amending Minnesota Statutes 1994, sections 3.855, subdivision 4; 43A.08, subdivision 4; 43A.17, subdivision 1; 179A.03, subdivision 4; and 179A.07, by adding a subdivision; Minnesota Statutes 1995 Supplement, sections 15A.081, subdivision 7b; 43A.18, subdivision 2; and 179A.04, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 43A."

We request adoption of this report and repassage of the bill.

Senate Conferees: Carol Flynn, Roger D. Moe and Roy W. Terwilliger.

House Conferees: Loren A. Solberg, Mary Murphy and Harry Mares.

Solberg moved that the report of the Conference Committee on S. F. No. 2457 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2457, A bill for an act relating to public employees; regulating the salaries of certain higher education officers; prescribing the form and use of uniform collective bargaining settlement forms; allowing certain students to work for department of transportation for 48 months; ratifying certain labor agreements and compensation plans; appropriating money; amending Minnesota Statutes 1994, sections 3.855, subdivision 4; 43A.08, subdivision 4; 43A.17, subdivision 1; 179A.03, subdivision 4; and 179A.07, by adding a subdivision; Minnesota Statutes 1995 Supplement, sections 15A.081, subdivision 7b; 43A.18, subdivision 2; and 179A.04, subdivision 3.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 116 yeas and 15 nays as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Kinkel       Onnen        Sviggum
Anderson, B. Farrell      Knoblach     Opatz        Swenson, D.
Anderson, R. Finseth      Koppendrayer Orenstein    Swenson, H.
Bakk         Garcia       Larsen       Osthoff      Sykora
Bertram      Girard       Leighton     Ostrom       Tomassoni
Bettermann   Goodno       Leppik       Otremba      Tompkins
Bishop       Greenfield   Lieder       Ozment       Trimble
Boudreau     Gunther      Long         Pawlenty     Tunheim
Broecker     Hackbarth    Lourey       Pelowski     Van Dellen
Brown        Harder       Luther       Perlt        Van Engen
Carlson, L.  Hasskamp     Lynch        Peterson     Vickerman
Carlson, S.  Hausman      Macklin      Pugh         Wagenius
Carruthers   Holsten      Mahon        Rest         Warkentin
Clark        Huntley      Mares        Rhodes       Weaver
Cooper       Jaros        Mariani      Rice         Wejcman
Daggett      Jefferson    McCollum     Rostberg     Wenzel
Dauner       Jennings     McElroy      Rukavina     Winter
Davids       Johnson, A.  McGuire      Sarna        Wolf
Dawkins      Johnson, R.  Milbert      Schumacher   Worke
Dehler       Johnson, V.  Molnau       Seagren      Sp.Anderson,I
Delmont      Kahn         Munger       Skoglund     
Dempsey      Kalis        Murphy       Smith        
Dorn         Kelley       Ness         Solberg      
Entenza      Kelso        Olson, E.    Stanek       

Bradley      Knight       Mulder       Pellow       
Commers      Kraus        Olson, M.    Tuma         
Frerichs     Krinkie      Osskopp      Workman      
Haas         Lindner      Paulsen      

The following Conference Committee Report was received:

A bill for an act relating to the environment; authorizing establishment of municipal individual sewage treatment system and contaminated well loan programs; proposing coding for new law in Minnesota Statutes, chapter 115.

March 26, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2112, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2112 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 115.55, subdivision 5, is amended to read:

Subd. 5. [INSPECTION.] (a) Except as provided in paragraph (b), after December 31, 1995 (e), a local unit of government may not issue a building permit or variance for new construction or replacement of a system, as defined by agency rule, or for the addition of a bedroom or bathroom on property served by a system unless the system is in compliance with the applicable requirements, as evidenced by a certificate of compliance issued by a licensed inspector or site evaluator or designer. A local unit of government may temporarily waive the certificate of compliance requirement for a building permit or variance for which application is made during the period from November 1 to April 30, provided that an inspection of the system is performed by the following June 1 and the applicant submits a certificate of compliance by the following September 30.

(b) In areas that are not subject to ordinances adopted under subdivision 2, A compliance inspection under this subdivision is required only for all new construction or replacement of a system, as defined by agency rule.

(c) If a system inspected under this subdivision is not in compliance with the applicable requirements, the inspector or site evaluator or designer must issue a notice of noncompliance to the property owner and must provide a copy of the notice to the local unit of government to which application for the building permit or variance was made.

(d) If the inspector or site evaluator or designer finds that the system presents an imminent threat to public health or safety, the inspector or site evaluator or designer must include a statement to this effect in the notice and the property owner must upgrade, replace, or discontinue use of the system within ten months of receipt of the notice.

(e) Except as provided in paragraph (d), if a system installed between May 27, 1989, and January 23, 1996, does not comply with applicable requirements, the property owner has five years from the date of the bedroom building permit to bring the system into compliance.

Sec. 2. Minnesota Statutes 1995 Supplement, section 115.56, subdivision 2, is amended to read:

Subd. 2. [LICENSE REQUIRED.] (a) Except as provided in paragraph (b), after March 31, 1996, a person may not design, install, maintain, pump, or inspect an individual sewage treatment system without a license issued by the commissioner.

(b) A license is not required for a person who complies with the applicable requirements if the person is:

(1) a qualified employee of state or local government who has passed the examination described in paragraph (d) or a similar examination;

(2) an individual who constructs an individual sewage treatment system on land that is owned or leased by the individual and functions solely as the individual's dwelling or seasonal dwelling;

(3) a farmer who pumps and disposes of sewage waste from individual sewage treatment systems, holding tanks, and privies on land that is owned or leased by the farmer; or

(4) an individual who performs labor or services for a person licensed under this section in connection with the design, installation, maintenance, pumping, or inspection of an individual sewage treatment system at the direction and under the personal supervision of a person licensed under this section.

A person constructing an individual sewage treatment system under clause (2) must consult with a site evaluator or designer before beginning construction. In addition, the system must be inspected before being covered and a compliance report must be provided to the local unit of government after the inspection.

(c) The commissioner, in conjunction with the University of Minnesota extension service or another higher education institution, shall ensure adequate training exists for individual sewage treatment system professionals.

(d) The commissioner shall conduct examinations to test the knowledge of applicants for licensing and shall issue documentation of licensing.

(e) Licenses may be issued only upon successful completion of the required examination and submission of proof of sufficient experience, proof of general liability insurance, and a corporate surety bond in the amount of at least $10,000.

(f) Notwithstanding paragraph (e), the examination and proof of experience are not required for an individual sewage treatment system professional who, on the effective date of the rules adopted under subdivision 1, holds a certification attained by examination and experience under a voluntary certification program administered by the agency.

(g) Local units of government may not require additional local licenses for individual sewage treatment system professionals.

(h) A pumper whose annual gross revenue from pumping systems is $9,000 or less and whose gross revenue from pumping systems during the year ending May 11, 1994, was at least $1,000 is not subject to training requirements in rules adopted under subdivision 1, except for any training required for initial licensure.

Sec. 3. Minnesota Statutes 1994, section 115.56, is amended by adding a subdivision to read:

Subd. 2a. [TEMPORARY LICENSE.] The agency may issue, for a fee of $100, a temporary license for an activity listed in subdivision 1, paragraph (a), to a person who:

(1) has submitted to the agency proof of sufficient experience, as determined by the agency, in the activity for which the license is sought; and

(2) has completed training under a voluntary certification program administered by the agency.

A temporary license issued under this subdivision is effective until August 15, 1996.

Sec. 4. [115.57] [INDIVIDUAL SEWAGE TREATMENT SYSTEM OR WATER WELL LOAN PROGRAM.]

Subdivision 1. [PURPOSE.] The legislature finds that a need exists to provide for the creation of a public loan program that assists property owners to finance the site evaluation, design, installation, repair, and replacement of individual sewage treatment systems and to finance the sealing and replacement of wells on privately owned property. Such a public loan program promotes the public health and welfare by furthering the policy of the state of Minnesota to prevent, reduce, and eliminate water pollution. The legislature declares that the actions required to establish and implement a public loan program for the purposes stated in this section are a public purpose and that the execution and financing of such a program is a public purpose.

Subd. 2. [DEFINITIONS.] (a) The terms defined in this subdivision and section 115.55, subdivision 1, apply to this section.

(b) "Improvement" means the site evaluation, design, installation, repair, or replacement of an individual sewage treatment system or sealing or replacement of a well.

(c) "Municipality" means a township, city, county, or any other governmental subdivision of the state responsible by law for the prevention, control, and abatement of water pollution in any area of the state.

(d) "Property owner" means the owner or owners as recorded on the tax roll of the county where the real property on which the individual sewage treatment system or well is installed, repaired, or replaced is located.

(e) "Well" means a well as defined in section 103I.005, subdivision 21:

(1) that is required to be sealed under section 103I.301, subdivision 1; or

(2) the relocation of which is necessary for compliance with applicable requirements as defined in section 115.55, subdivision 1.

Subd. 3. [AUTHORITY.] A municipality may, individually or cooperatively with other municipalities, establish an individual sewage treatment system or well loan program, or both, for the purpose of providing loans to property owners for the site evaluation, design, installation, repair, or replacement of individual sewage treatment systems or

for the sealing or replacement of wells on privately owned property. The governing body of a municipality shall provide for the operation and administration of the program by ordinance. A municipality may appoint an administrator to operate the program.

Subd. 4. [LIMITATIONS.] Loans may not be used to facilitate new building construction. As used in this subdivision, "facilitate new building construction" includes increasing capacity of an individual sewage treatment system beyond what is reasonably required to serve existing buildings and lots in existing recorded plats.

Subd. 5. [FINANCING.] A municipality may issue bonds in accordance with chapter 475 to finance the program, except that an election is not required and the obligations are not subject to the general limit on net debt for the municipality. Financing may also be provided by issuing certificates of indebtedness, securing loans, or transferring available funds that the municipality is not obligated by law to use for some other purpose. Funds procured for the individual sewage treatment system or well loan program shall be dedicated to the program.

Subd. 6. [ASSESSMENTS.] (a) An amount loaned under the program, including accruing interest, shall be a lien against the real property for which the improvement was made and shall be assessed against the property or properties benefited unless the amount is prepaid. An amount loaned under the program and assessed against the property shall be a priority lien only against subsequent liens.

(b) Upon issuing a loan, the municipality shall provide the property owner a notice that states the following information:

(1) the amount to be specially assessed against the property;

(2) the right of the property owner to prepay the entire assessment;

(3) the public official to whom prepayment must be made;

(4) the time within which prepayment must be made without the assessment of interest;

(5) the rate of interest to be accrued if the assessment is not prepaid within the required time period; and

(6) the period of the assessment.

(c) The municipality shall, by ordinance, provide for a right of property owners to prepay the assessment and may establish such other assessment procedures as determined necessary and consistent with the provisions of this section.

Subd. 7. [ORDINANCES; CONSTRUCTION STANDARDS.] A municipality may not establish an individual sewage treatment system loan program unless ordinances pursuant to rules adopted under section 115.55, subdivision 3, are in full force and effect. All repairs and improvements made to individual sewage treatment systems under this section shall be performed by a licensed individual sewage treatment system professional and shall comply with agency rules adopted pursuant to section 115.55, subdivision 3, and other applicable requirements. All improvements to wells under this section must be made by a well contractor or a limited well contractor, as appropriate, licensed under chapter 103I.

Subd. 8. [DISSOLUTION.] The governing body of a municipality may dissolve the program by ordinance. The ordinance shall provide for the collection of all outstanding assessments, repayment of any remaining indebtedness incurred to finance the program, and the final distribution of any money remaining in the loan fund.

Sec. 5. [EFFECTIVE DATE.]

Sections 1 and 3 are effective the day following final enactment. Section 2 is effective March 31, 1996."

Delete the title and insert:

"A bill for an act relating to the environment; authorizing establishment of municipal individual sewage treatment system and well loan programs; specifying compliance requirements for certain existing individual sewage treatment systems; clarifying licensing requirements for sewage system pumpers; providing for certain temporary licenses; amending Minnesota Statutes 1994, sections 115.55, subdivision 5; and 115.56, by adding a subdivision; Minnesota Statutes 1995 Supplement, section 115.56, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 115."

We request adoption of this report and repassage of the bill.

House Conferees: Dave Bishop, Dee Long and Virgil J. Johnson.

Senate Conferees: Steven Morse, Leonard R. Price and Dennis R. Frederickson.

Bishop moved that the report of the Conference Committee on H. F. No. 2112 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2112, A bill for an act relating to the environment; authorizing establishment of municipal individual sewage treatment system and contaminated well loan programs; proposing coding for new law in Minnesota Statutes, chapter 115.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knoblach     Olson, M.    Stanek
Anderson, B. Finseth      Koppendrayer Onnen        Sviggum
Anderson, R. Frerichs     Kraus        Opatz        Swenson, D.
Bakk         Garcia       Krinkie      Orenstein    Swenson, H.
Bertram      Girard       Larsen       Orfield      Sykora
Bettermann   Goodno       Leighton     Osskopp      Tomassoni
Bishop       Greenfield   Leppik       Osthoff      Tompkins
Boudreau     Gunther      Lieder       Ostrom       Trimble
Bradley      Haas         Lindner      Otremba      Tuma
Broecker     Hackbarth    Long         Ozment       Tunheim
Brown        Harder       Lourey       Paulsen      Van Dellen
Carlson, L.  Hasskamp     Luther       Pawlenty     Van Engen
Carlson, S.  Hausman      Lynch        Pellow       Vickerman
Carruthers   Holsten      Macklin      Pelowski     Wagenius
Clark        Huntley      Mahon        Perlt        Warkentin
Commers      Jaros        Mares        Peterson     Weaver
Cooper       Jefferson    Mariani      Pugh         Wejcman
Daggett      Jennings     McCollum     Rest         Wenzel
Dauner       Johnson, A.  McElroy      Rhodes       Winter
Davids       Johnson, R.  McGuire      Rostberg     Wolf
Dawkins      Johnson, V.  Milbert      Rukavina     Worke
Dehler       Kahn         Molnau       Sarna        Workman
Delmont      Kalis        Mulder       Schumacher   Sp.Anderson,I
Dempsey      Kelley       Munger       Seagren      
Dorn         Kelso        Murphy       Skoglund     
Entenza      Kinkel       Ness         Smith        
Erhardt      Knight       Olson, E.    Solberg      

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 2012.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to highways; designating a portion of marked trunk highway No. 22 as Victory Drive; designating a portion of marked trunk highway No. 15 as Veterans Memorial Highway; providing for reimbursement of costs; amending Minnesota Statutes 1994, section 161.14, by adding subdivisions.

March 25, 1996

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 2012, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments.

We request adoption of this report and repassage of the bill.

Senate Conferees: Tracy L. Beckman, James P. Metzen and William V. Belanger, Jr.

House Conferees: Henry J. Kalis, John Dorn and Bob Gunther.

Kalis moved that the report of the Conference Committee on S. F. No. 2012 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 2012, A bill for an act relating to highways; designating a portion of marked trunk highway No. 22 as Victory Drive; designating a portion of marked trunk highway No. 15 as Veterans Memorial Highway; providing for reimbursement of costs; amending Minnesota Statutes 1994, section 161.14, by adding subdivisions.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 129 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Knight       Olson, E.    Smith
Anderson, B. Farrell      Knoblach     Olson, M.    Solberg
Anderson, R. Finseth      Koppendrayer Onnen        Stanek
Bakk         Frerichs     Kraus        Opatz        Sviggum
Bertram      Garcia       Krinkie      Orenstein    Swenson, D.
Bettermann   Girard       Leighton     Orfield      Swenson, H.
Bishop       Goodno       Leppik       Osskopp      Sykora
Boudreau     Greenfield   Lieder       Osthoff      Tomassoni
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9252

Bradley      Gunther      Lindner      Ostrom       Tompkins
Broecker     Haas         Long         Otremba      Trimble
Brown        Hackbarth    Lourey       Ozment       Tuma
Carlson, L.  Harder       Luther       Paulsen      Tunheim
Carlson, S.  Hasskamp     Lynch        Pawlenty     Van Dellen
Carruthers   Holsten      Macklin      Pellow       Van Engen
Clark        Huntley      Mahon        Pelowski     Vickerman
Commers      Jaros        Mares        Peterson     Wagenius
Cooper       Jefferson    Mariani      Pugh         Warkentin
Daggett      Jennings     McCollum     Rest         Weaver
Dauner       Johnson, A.  McElroy      Rhodes       Wejcman
Davids       Johnson, R.  McGuire      Rice         Wenzel
Dawkins      Johnson, V.  Milbert      Rostberg     Winter
Dehler       Kahn         Molnau       Rukavina     Wolf
Delmont      Kalis        Mulder       Sarna        Worke
Dempsey      Kelley       Munger       Schumacher   Workman
Dorn         Kelso        Murphy       Seagren      Sp.Anderson,I
Entenza      Kinkel       Ness         Skoglund     

Hausman                   

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 2059, A bill for an act relating to veterinarians; changing the veterinary practice act; amending Minnesota Statutes 1994, sections 156.001, subdivisions 3 and 6; 156.01, subdivisions 1, 2, 5, and by adding a subdivision; 156.02; 156.04; 156.05; 156.06; 156.07; 156.071; 156.072; 156.081; 156.10; 156.12, subdivisions 2, 3, and 4; 156.16, subdivisions 3 and 14; 156.17; and 156.18, subdivisions 1 and 2; proposing coding for new law in Minnesota Statutes, chapter 156; repealing Minnesota Statutes 1994, section 156.12, subdivision 5.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 2369, A bill for an act relating to financial institutions; regulating consumer credit; modifying rates, fees, and other terms and conditions; providing clarifying and technical changes; providing opportunities for state banks to develop their Minnesota markets through broader intrastate branching; regulating the use of credit cards by institutions; modifying interest rates, fees, and other terms and conditions governing the use of credit cards; providing technical corrections; amending Minnesota Statutes 1994, sections 9.031, subdivision 13; 13.71, by adding a subdivision; 46.041, subdivision 1; 46.044, subdivision 1; 47.10, subdivision 4; 47.101, as amended; 47.201, subdivision 2; 47.51; 47.62, subdivision 1; 48.09; 48.10; 48.185, subdivisions 3 and 4; 48.301; 48.34; 48.845, subdivision 4; 52.131; 53.01; 53.03, subdivision 1; 53.07, subdivision 2; 118.005, subdivision 1; 168.69; 168.705; 168.72, by adding a subdivision; 168.73; 300.025; 332.50, subdivision 2; 334.02; 334.03; Minnesota Statutes 1995 Supplement, sections 46.048, subdivision 2b; 47.20, subdivision 9; 47.52; 47.59, subdivisions 2, 3, 4, 5, 6, and by adding subdivisions; 47.60, subdivision 2; 47.61, subdivision 3; 48.153, subdivision 3a; 48.194; 48.65; 50.1485, subdivision 1; 50.245, subdivision 4; 53.04, subdivision 3a; 53.09, subdivision 2; 56.131, subdivisions 2, 4, and 6; 56.14; 62B.04, subdivisions 1 and 2; Laws 1995, chapter 171, section 70; proposing coding for new law in Minnesota Statutes, chapter 49; repealing Minnesota Statutes 1994, sections 47.201, subdivision 7; 47.27, subdivision 3; 48.185, subdivision 5; 48.94; 51A.01; 51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13; 51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; 51A.57; 53.04, subdivision 3b; Minnesota Statutes 1995 Supplement, sections 51A.02, subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; 51A.58; 53.04, subdivisions 3c and 4a; Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1100; 2655.1200; and 2655.1300.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 2413, A bill for an act relating to cemeteries; clarifying procedures for examination of certain accounts and records by the state auditor; providing for transfer of cemeteries to and from local units of government; amending Minnesota Statutes 1994, sections 149.13, subdivision 5; 306.02, subdivision 2; 306.025; 306.243, by adding a subdivision; and 306.97.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

The following Conference Committee Report was received:

A bill for an act relating to the environment; adopting changes to the Midwest Interstate Compact on Low-Level Radioactive Waste; making conforming changes; amending Minnesota Statutes 1994, sections 116C.831; 116C.832, subdivision 1, and by adding a subdivision; 116C.833, subdivision 2; 116C.834, subdivision 1, and by adding a subdivision; 116C.835, subdivision 6; 116C.836, subdivision 2; and 116C.842, by adding subdivisions; proposing coding for new law in Minnesota Statutes, chapter 116C; repealing Minnesota Statutes 1994, sections 116C.832, subdivisions 2, 7, and 8; 116C.837; 116C.839; 116C.840, subdivision 3; 116C.841; 116C.842, subdivisions 1, 2, and 3; 116C.845; 116C.846; 116C.847; and 116C.848.

March 14, 1996

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 2207, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendment

We request adoption of this report and repassage of the bill.

House Conferees: Steve Trimble, Virgil J. Johnson and Thomas Bakk.

Senate Conferees: Steven G. Novak, Harold R. "Skip" Finn and Steve Dille.

Trimble moved that the report of the Conference Committee on H. F. No. 2207 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2207, A bill for an act relating to the environment; adopting changes to the Midwest Interstate Compact on Low-Level Radioactive Waste; making conforming changes; amending Minnesota Statutes 1994, sections 116C.831; 116C.832, subdivision 1, and by adding a subdivision; 116C.833, subdivision 2; 116C.834, subdivision 1, and by adding a subdivision; 116C.835, subdivision 6; 116C.836, subdivision 2; and 116C.842, by adding subdivisions; proposing coding for new law in Minnesota Statutes, chapter 116C; repealing Minnesota Statutes 1994, sections 116C.832, subdivisions 2, 7, and 8; 116C.837; 116C.839; 116C.840, subdivision 3; 116C.841; 116C.842, subdivisions 1, 2, and 3; 116C.845; 116C.846; 116C.847; and 116C.848.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Knoblach     Olson, M.    Solberg
Anderson, B. Finseth      Koppendrayer Onnen        Stanek
Anderson, R. Frerichs     Kraus        Opatz        Sviggum
Bakk         Garcia       Krinkie      Orenstein    Swenson, D.
Bertram      Girard       Larsen       Orfield      Swenson, H.
Bettermann   Goodno       Leighton     Osskopp      Sykora
Bishop       Greenfield   Leppik       Osthoff      Tomassoni
Boudreau     Gunther      Lieder       Ostrom       Tompkins
Bradley      Haas         Lindner      Otremba      Trimble
Broecker     Hackbarth    Long         Ozment       Tuma
Brown        Harder       Lourey       Paulsen      Tunheim
Carlson, L.  Hasskamp     Luther       Pawlenty     Van Dellen
Carlson, S.  Hausman      Lynch        Pellow       Van Engen
Carruthers   Holsten      Macklin      Pelowski     Vickerman
Clark        Huntley      Mahon        Perlt        Wagenius
Commers      Jaros        Mares        Peterson     Warkentin
Cooper       Jefferson    Mariani      Pugh         Weaver
Daggett      Jennings     McCollum     Rest         Wejcman
Dauner       Johnson, A.  McElroy      Rhodes       Wenzel
Davids       Johnson, R.  McGuire      Rice         Winter
Dawkins      Johnson, V.  Milbert      Rostberg     Wolf
Dehler       Kahn         Molnau       Rukavina     Worke
Delmont      Kalis        Mulder       Sarna        Workman
Dempsey      Kelley       Munger       Schumacher   Sp.Anderson,I
Dorn         Kelso        Murphy       Seagren      
Entenza      Kinkel       Ness         Skoglund     
Erhardt      Knight       Olson, E.    Smith        

Pursuant to rule 1.10, Solberg requested immediate consideration of H. F. No. 532.

H. F. No. 532 was reported to the House.

Krinkie moved to amend H. F. No. 532 as follows:

Page 1, delete lines 22 and 23 and insert:

""Shall the Minnesota Constitution be amended to permit the payment of bonuses to veterans serving during the period of the Persian Gulf war and the levying of taxes for that purpose?"

A roll call was requested and properly seconded.

The question was taken on the Krinkie amendment and the roll was called. There were 42 yeas and 88 nays as follows:

Those who voted in the affirmative were:

Anderson, B. Greenfield   Kraus        Onnen        Swenson, D.
Bakk         Haas         Krinkie      Orfield      Swenson, H.
Boudreau     Hackbarth    Larsen       Ostrom       Tuma
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9255

Bradley      Harder       Lindner      Paulsen      Tunheim
Commers      Johnson, V.  Long         Pellow       Wolf
Dehler       Kahn         Lourey       Perlt        Workman 
Dorn         Knight       McElroy      Seagren      
Frerichs     Knoblach     Molnau       Smith        
Girard       Koppendrayer Olson, M.    Solberg      

Abrams       Entenza      Kinkel       Opatz        Sviggum
Anderson, R. Erhardt      Leighton     Orenstein    Sykora
Bertram      Farrell      Leppik       Osskopp      Tomassoni
Bettermann   Finseth      Lieder       Osthoff      Tompkins
Bishop       Garcia       Luther       Otremba      Trimble
Broecker     Goodno       Lynch        Ozment       Van Dellen
Brown        Gunther      Macklin      Pawlenty     Van Engen
Carlson, L.  Hasskamp     Mahon        Pelowski     Vickerman
Carlson, S.  Hausman      Mares        Peterson     Wagenius
Carruthers   Holsten      Mariani      Pugh         Warkentin
Clark        Huntley      McCollum     Rest         Weaver
Cooper       Jefferson    McGuire      Rhodes       Wejcman
Daggett      Jennings     Milbert      Rostberg     Wenzel
Dauner       Johnson, A.  Mulder       Rukavina     Winter
Davids       Johnson, R.  Munger       Sarna        Worke
Dawkins      Kalis        Murphy       Schumacher   Sp.Anderson,I
Delmont      Kelley       Ness         Skoglund     
Dempsey      Kelso        Olson, E.    Stanek       

H. F. No. 532, A bill for an act relating to veterans; proposing an amendment to the Minnesota Constitution, article XIII, section 8, permitting the payment of a monetary bonus to veterans of the Persian Gulf War.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Kraus        Opatz        Sviggum
Anderson, B. Finseth      Krinkie      Orenstein    Swenson, D.
Anderson, R. Frerichs     Larsen       Orfield      Swenson, H.
Bakk         Garcia       Leighton     Osskopp      Sykora
Bertram      Girard       Leppik       Osthoff      Tomassoni
Bettermann   Goodno       Lieder       Ostrom       Tompkins
Bishop       Gunther      Lindner      Otremba      Trimble
Boudreau     Haas         Long         Ozment       Tuma
Bradley      Hackbarth    Lourey       Paulsen      Tunheim
Broecker     Harder       Luther       Pawlenty     Van Dellen
Brown        Hasskamp     Lynch        Pellow       Van Engen
Carlson, L.  Holsten      Macklin      Pelowski     Vickerman
Carlson, S.  Huntley      Mahon        Perlt        Wagenius
Carruthers   Jaros        Mares        Peterson     Warkentin
Clark        Jefferson    Mariani      Pugh         Weaver
Commers      Jennings     McCollum     Rest         Wejcman
Cooper       Johnson, A.  McElroy      Rhodes       Wenzel
Daggett      Johnson, R.  McGuire      Rice         Winter
Dauner       Johnson, V.  Milbert      Rostberg     Wolf
Davids       Kahn         Molnau       Rukavina     Worke
Dawkins      Kalis        Mulder       Sarna        Workman
Dehler       Kelley       Munger       Schumacher   Sp.Anderson,I
Delmont      Kelso        Murphy       Seagren      
Dempsey      Kinkel       Ness         Skoglund     
Dorn         Knight       Olson, E.    Smith        
Entenza      Knoblach     Olson, M.    Solberg      
Erhardt      Koppendrayer Onnen        Stanek       

Carruthers, from the Committee on Rules and Legislative Administration, pursuant to rule 1.09, designated the following bills as Special Orders to be acted upon today:

S. F. Nos. 2381, 317, 368 and 1888; H. F. No. 2728; and S. F. Nos. 1861 and 1893.

S. F. No. 2381 was reported to the House.

Jennings moved to amend S. F. No. 2381 as follows:

Delete everything after the enacting clause and insert:

"Section 1. [237.80] [INTEREXCHANGE TELEPHONE SERVICE.]

Subdivision 1. [DEFINITION, FINDINGS, AND PURPOSE.] (a) For purposes of this section, "act" means the federal Telecommunications Act of 1996, Public Law Number 104-104.

(b) The act establishes procedures whereby former Bell Operating Companies or their affiliates may obtain Federal Communications Commission authorization to provide intrastate interLATA telecommunications services and to promote the development of fair and reasonable competition. The legislature finds that it is necessary and appropriate, to the extent possible, to maintain consistency between the policy of the state of Minnesota and federal policy as reflected in the act.

(c) The purpose of this section is to facilitate the entry of the former Bell Operating Company into the interLATA market and to further promote the development of fair and reasonable competition in the telecommunications industry in Minnesota.

Subd. 2. [CONSULTATION WITH THE FCC.] Any investigation or proceeding by the Minnesota public utilities commission for the purpose of verifying compliance with the competitive checklist requirements of section 271(c) of the act must be completed by the commission and the resulting certification provided to the Federal Communications Commission within 90 days after receipt of a request for verification from the Federal Communications Commission."

The motion prevailed and the amendment was adopted.

Kelley offered an amendment to S. F. No. 2381, as amended.

Abrams raised a point of order pursuant to rule 3.09 that the Kelley amendment was not in order. The Speaker ruled the point of order well taken and the amendment out of order.

S. F. No. 2381, A bill for an act relating to telecommunications; regulating intrastate interLATA telecommunications services; proposing coding for new law in Minnesota Statutes, chapter 237.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 99 yeas and 31 nays as follows:

Those who voted in the affirmative were:

Abrams       Farrell      Koppendrayer Ness         Solberg
Anderson, B. Finseth      Kraus        Olson, E.    Stanek
JOURNAL OF THE HOUSE - 108th Day - Top of Page 9257

Anderson, R. Frerichs     Krinkie      Olson, M.    Sviggum
Bertram      Girard       Larsen       Onnen        Swenson, D.
Bettermann   Gunther      Leighton     Opatz        Swenson, H.
Bishop       Haas         Leppik       Osskopp      Sykora
Boudreau     Hackbarth    Lieder       Otremba      Tomassoni
Bradley      Harder       Lindner      Ozment       Tompkins
Broecker     Hasskamp     Luther       Paulsen      Tuma
Brown        Holsten      Lynch        Pawlenty     Tunheim
Carlson, L.  Huntley      Macklin      Pellow       Van Dellen
Carruthers   Jefferson    Mahon        Pelowski     Van Engen
Commers      Jennings     Mares        Perlt        Warkentin
Daggett      Johnson, A.  Mariani      Peterson     Weaver
Davids       Johnson, R.  McElroy      Rhodes       Wenzel
Dehler       Johnson, V.  Milbert      Rice         Wolf
Delmont      Kalis        Molnau       Rostberg     Worke
Dempsey      Kinkel       Mulder       Schumacher   Workman
Entenza      Knight       Munger       Seagren      Sp.Anderson,I
Erhardt      Knoblach     Murphy       Smith        

Bakk         Garcia       Kelso        Ostrom       Wagenius
Carlson, S.  Goodno       Long         Pugh         Wejcman
Clark        Greenfield   Lourey       Rest         Winter 
Cooper       Hausman      McCollum     Rukavina     
Dauner       Jaros        McGuire      Sarna        
Dawkins      Kahn         Orenstein    Skoglund     
Dorn         Kelley       Orfield      Vickerman    

S. F. No. 317, A bill for an act relating to cities; permitting cities to close certain unlawful businesses; proposing coding for new law in Minnesota Statutes, chapter 415.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 129 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Knight       Olson, E.    Smith
Anderson, B. Farrell      Knoblach     Olson, M.    Solberg
Anderson, R. Finseth      Koppendrayer Onnen        Stanek
Bakk         Frerichs     Kraus        Opatz        Sviggum
Bertram      Garcia       Larsen       Orenstein    Swenson, D.
Bettermann   Girard       Leighton     Orfield      Swenson, H.
Bishop       Goodno       Leppik       Osskopp      Sykora
Boudreau     Greenfield   Lieder       Osthoff      Tomassoni
Bradley      Gunther      Lindner      Ostrom       Tompkins
Broecker     Haas         Long         Otremba      Trimble
Brown        Harder       Lourey       Ozment       Tuma
Carlson, L.  Hasskamp     Luther       Paulsen      Tunheim
Carlson, S.  Hausman      Lynch        Pawlenty     Van Dellen
Carruthers   Holsten      Macklin      Pellow       Van Engen
Clark        Huntley      Mahon        Pelowski     Vickerman
Commers      Jaros        Mares        Perlt        Wagenius
Cooper       Jefferson    Mariani      Peterson     Warkentin
Daggett      Jennings     McCollum     Pugh         Weaver
Dauner       Johnson, A.  McElroy      Rest         Wejcman
Davids       Johnson, R.  McGuire      Rhodes       Wenzel
Dawkins      Johnson, V.  Milbert      Rostberg     Winter
Dehler       Kahn         Molnau       Rukavina     Wolf
Delmont      Kalis        Mulder       Sarna        Worke
Dempsey      Kelley       Munger       Schumacher   Workman
Dorn         Kelso        Murphy       Seagren      Sp.Anderson,I
Entenza      Kinkel       Ness         Skoglund     

Hackbarth    Krinkie                   

Carruthers moved that the remaining bills on Special Orders for today be continued. The motion prevailed.

Carruthers moved that the bills on General Orders for today be continued. The motion prevailed.

Rest moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, March 27, 1996, when the vote was taken on the repassage of H. F. No. 2125, as amended by the Senate." The motion prevailed.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 2816:

Kelley, Orenstein and Johnson, V.

A roll call was requested and properly seconded.

The question was taken on the Carruthers motion and the roll was called. There were 67 yeas and 65 nays as follows:

Those who voted in the affirmative were:

Anderson, R. Garcia       Kinkel       Opatz        Schumacher
Bakk         Greenfield   Leighton     Orenstein    Skoglund
Bertram      Hasskamp     Lieder       Orfield      Solberg
Brown        Hausman      Long         Osthoff      Tomassoni
Carlson, L.  Huntley      Lourey       Ostrom       Trimble
Carruthers   Jaros        Luther       Otremba      Tunheim
Clark        Jefferson    Mahon        Pelowski     Wagenius
Cooper       Jennings     Mariani      Perlt        Wejcman
Dauner       Johnson, A.  McCollum     Peterson     Wenzel
Dawkins      Johnson, R.  McGuire      Pugh         Winter
Delmont      Kahn         Milbert      Rest         Sp.Anderson,I
Dorn         Kalis        Munger       Rice         
Entenza      Kelley       Murphy       Rukavina     
Farrell      Kelso        Olson, E.    Sarna        

Abrams       Finseth      Krinkie      Ozment       Tuma
Anderson, B. Frerichs     Larsen       Paulsen      Van Dellen
Bettermann   Girard       Leppik       Pawlenty     Van Engen
Bishop       Goodno       Lindner      Pellow       Vickerman
Boudreau     Gunther      Lynch        Rhodes       Warkentin
Bradley      Haas         Macklin      Rostberg     Weaver
Broecker     Hackbarth    Mares        Seagren      Wolf
Carlson, S.  Harder       McElroy      Smith        Worke
Commers      Holsten      Molnau       Stanek       Workman 
Daggett      Johnson, V.  Mulder       Sviggum      
Davids       Knight       Ness         Swenson, D.  
Dehler       Knoblach     Olson, M.    Swenson, H.  
Dempsey      Koppendrayer Onnen        Sykora       
Erhardt      Kraus        Osskopp      Tompkins     

Carruthers moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 10:00 a.m., Friday, March 29, 1996.

Edward A. Burdick, Chief Clerk, House of Representatives

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