Anderson, R.; Hausman; Kelso and Munger were excused.

Dawkins was excused until 1:50 p.m.

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

S. F. No. 259 and H. F. No. 278, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Weaver moved that the rules be so far suspended that S. F. No. 259 be substituted for H. F. No. 278 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 375 and H. F. No. 248, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Solberg moved that the rules be so far suspended that S. F. No. 375 be substituted for H. F. No. 248 and that the House File be indefinitely postponed. The motion prevailed.

Rice from the Committee on Economic Development, Infrastructure and Regulation Finance to which was referred:

H. F. No. 797, A bill for an act relating to drivers' licenses; providing conditions for validity of state contracts; requiring refund of license fee if a qualified applicant does not receive a license, duplicate license, permit, or identification card within six weeks of application; providing for issuance of license without regard to whether the fee has been refunded; requiring legislative audit commission to study driver's license and identification card program; amending Minnesota Statutes 1994, sections 16B.06, subdivision 2; 171.06, by adding a subdivision; and 171.07, subdivisions 1 and 3.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Carlson from the Committee on Education to which was referred:

H. F. No. 1000, A bill for an act relating to education; clarifying certain provisions; amending Minnesota Statutes 1994, sections 124.226, subdivision 9; and 124.2726, subdivision 1; Laws 1993, chapter 224, article 8, section 21, subdivision 1.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 121.904, subdivision 4a, is amended to read:

Subd. 4a. [LEVY RECOGNITION.] (a) "School district tax settlement revenue" means the current, delinquent, and manufactured home property tax receipts collected by the county and distributed to the school district, including distributions made pursuant to section 279.37, subdivision 7, and excluding the amount levied pursuant to section 124.914, subdivision 1.

(b) In June of each year, the school district shall recognize as revenue, in the fund for which the levy was made, the lesser of:

(1) the May, June, and July school district tax settlement revenue received in that calendar year; or

(2) the sum of the state aids and credits enumerated in section 124.155, subdivision 2, which are for the fiscal year payable in that fiscal year plus an amount equal to the levy recognized as revenue in June of the prior year plus 37.4 48 percent for fiscal year 1994 1996 and thereafter of the amount of the levy certified in the prior calendar year according to section 124A.03, subdivision 2, plus or minus auditor's adjustments, not including levy portions that are assumed by the state; or

(3) 37.4 48 percent for fiscal year 1994 1996 and thereafter of the amount of the levy certified in the prior calendar year, plus or minus auditor's adjustments, not including levy portions that are assumed by the state, which remains after subtracting, by fund, the amounts levied for the following purposes:

(i) reducing or eliminating projected deficits in the reserved fund balance accounts for unemployment insurance and bus purchases;

(ii) statutory operating debt pursuant to section 124.914, subdivision 1;

(iii) retirement and severance pay pursuant to sections 122.531, subdivision 9, 124.2725, subdivision 15, 124.4945, 124.912, subdivision 1, and 124.916, subdivision 3, and Laws 1975, chapter 261, section 4;

(iv) amounts levied for bonds issued and interest thereon, amounts levied for debt service loans and capital loans, amounts levied for down payments under section 124.82, subdivision 3, and amounts levied pursuant to section 136C.411; and

(v) amounts levied under section 124.755.

(c) In July of each year, the school district shall recognize as revenue that portion of the school district tax settlement revenue received in that calendar year and not recognized as revenue for the previous fiscal year pursuant to clause (b).

(d) All other school district tax settlement revenue shall be recognized as revenue in the fiscal year of the settlement. Portions of the school district levy assumed by the state, including prior year adjustments and the amount to fund the school portion of the reimbursement made pursuant to section 273.425, shall be recognized as revenue in the fiscal year beginning in the calendar year for which the levy is payable.

Sec. 2. Minnesota Statutes 1994, section 121.904, subdivision 4c, is amended to read:

Subd. 4c. [PROPERTY TAX SHIFT REDUCTION 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 calendar year.

(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 education the levy recognition percent computed under this subdivision by January 5 of each year. The commissioner of education must notify school districts of a change in the levy recognition percent by January 15.

(d) For fiscal years 1994 and 1995, 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 education 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 as provided in this subdivision 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 under Laws 1991, chapter 265, article 1, section 31, or Laws 1992, chapter 499, article 1, section 22 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 education 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. An additional adjustment shall be made on June 30, 1995, for the final payment otherwise due July 1, 1995, under Minnesota Statutes 1992, section 136C.36.

(e) The commissioner of finance shall transfer from the general fund to the education aids appropriations specified by the commissioner of education, 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. 3. Minnesota Statutes 1994, 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 for the entire fiscal year in a program approved by the commissioner and has an individual education plan that requires up to 437 hours of assessment and education services in the fiscal year is counted as one-half of a pupil unit. If the plan requires more than 437 hours of assessment and education services, the pupil is counted as the ratio of the number of hours of assessment and education service to 875 825 with a minimum of 0.28, but not more than one.

(b) A prekindergarten pupil with a disability who is enrolled for less than the entire fiscal year in a program approved by the commissioner is counted as the greater of:

(1) one-half times the ratio of the number of instructional days from the date the pupil is enrolled to the date the pupil withdraws to the number of instructional days in the school year; or

(2) the ratio of the number of hours of assessment and education service required in the fiscal year by the pupil's individual education program plan to 875, but not more than one.

(c) 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 875 825.

(d) (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.

(e) (d)(i) A kindergarten pupil who is not included in paragraph (d) (c) is counted as .515 of a pupil unit for fiscal year 1994 and .53 of a pupil unit for fiscal year 1995 and thereafter.

(ii) A kindergarten pupil or a prekindergarten pupil who is not included in paragraph (b) or (c) counts as .53 pupil units for fiscal years 1996 and later for time spent in a program under section 124.2613.

(f) (e) A pupil who is in any of grades 1 to 6 is counted as 1.03 pupil units for fiscal year 1994 and 1.06 pupil units for fiscal year 1995 and thereafter.

(g) (f) A pupil who is in any of grades 7 to 12 is counted as 1.3 pupil units.

(h) (g) A pupil who is in the post-secondary enrollment options program is counted as 1.3 pupil units.

Sec. 4. Minnesota Statutes 1994, section 124.17, is amended by adding a subdivision to read:

Subd. 1f. [AFDC ENROLLMENT OPTIONS EXCEPTION.] Notwithstanding subdivision 1d, AFDC pupil units for AFDC pupils transferring between a school district with a desegregation plan and another school district under sections 120.062, 120.075 to 120.0752, 124C.45 to 124C.48, and 126.22 shall be computed using the AFDC concentration percentage computed for the pupil's district of residence.

Sec. 5. Minnesota Statutes 1994, section 124.17, subdivision 2f, is amended to read:

Subd. 2f. [PSEO PUPILS.] The average daily membership for a student pupil participating in the post-secondary enrollment options program equals the lesser of

(1) (a) 1.00, or

(2) (b) the greater of

(i) (1) .12, or

(ii) (2) the ratio of (i) the sum of the number of instructional hours the student pupil is enrolled in the secondary school to the product of the number of days required in section 120.101, subdivision 5b, times the minimum length of day required in Minnesota Rules, part 3500.1500, subpart 1 during quarters, trimesters, or semesters during which the pupil participates in PSEO, and hours enrolled in the secondary school during the remainder of the school year, to (ii) the actual number of instructional days in the school year times the length of day in the school.

Sec. 6. Minnesota Statutes 1994, section 124.195, subdivision 10, is amended to read:

Subd. 10. [AID PAYMENT PERCENTAGE.] Except as provided in subdivisions 8, 9, and 11, each fiscal year, all education aids and credits in this chapter and chapters 121, 123, 124A, 124B, 125, 126, 134, and section 273.1392, shall be paid at 90 percent for districts operating a program under section 121.585 for grades 1 to 12 for all students in the district and 85 percent for other districts of the estimated entitlement during the fiscal year of the entitlement, unless a higher rate has been established according to section 121.904, subdivision 4d. Districts operating a program under section 121.585 for grades 1 to 12 for all students in the district shall receive 85 percent of the estimated entitlement plus an additional amount of general education aid equal to five percent of the estimated entitlement. For all districts, the final adjustment payment, according to subdivision 6, shall be the amount of the actual entitlement, after adjustment for actual data, minus the payments made during the fiscal year of the entitlement shall be paid as the final adjustment payment according to subdivision 6.

Sec. 7. Minnesota Statutes 1994, section 124.195, is amended by adding a subdivision to read:

Subd. 14. [EDUCATION AIDS CASH FLOW ACCOUNT.] (a) An education aids cash flow account is established in the state treasury for the purpose of ensuring the timely payment of state aids or credits to school districts as provided in this section. In the event the account balance in any appropriation from the general fund to the department of education for education aids or credits is insufficient to make the next scheduled payment or payments, the commissioner of education is authorized to transfer funds from the education aids cash flow account to the accounts that are insufficient.

(b) For purposes of this subdivision, an account may have an insufficient balance only as a result of some districts being overpaid based on revised estimates for the relevant annual aid or credit entitlements. When the overpayment amounts are recovered from the pertinent districts, the commissioner of education shall transfer those amounts to the education aids cash flow account. The commissioner shall determine when it is not feasible to recover the overpayments in a timely manner from the district's future aid payments and notify the district of the amount that is to be refunded to the state. School districts are encouraged to make such refunds promptly. The commissioner may approve a schedule for making a refund when a district demonstrates that its cash flow is inadequate to promptly make the refund in full.

(c) There is annually appropriated from the general fund to the education aids cash flow account the additional amount necessary to ensure the timely payment of state aids or credits to school districts as provided in this section. For any fiscal year, the appropriation authorized in this subdivision shall not exceed an amount equal to two-tenths of one percent of the total general fund appropriations in that year for education aids and credits. At the close of each fiscal year, the amount of actual transfers plus anticipated transfers required in paragraph (b) shall equal the authorized amounts transferred in paragraph (a) so that the net effect on total general fund spending for education aids and credits is zero.

Sec. 8. Minnesota Statutes 1994, section 124.2139, is amended to read:

124.2139 [REDUCTION OF PAYMENTS TO SCHOOL DISTRICTS.]

The commissioner of revenue shall reduce the sum of the additional transition credit, homestead and agricultural credit aid, and disparity reduction aid payments under section 273.1398 made to school districts by the product of:

(1) the district's fiscal year 1984 payroll for coordinated plan members of the public employees retirement association other than technical college employees, times

(2) the difference between the employer contribution rate in effect prior to July 1, 1984, and the total employer contribution rate in effect after June 30, 1984.

Sec. 9. [124.2613] [KINDERGARTEN PREPAREDNESS PROGRAM.]

Subdivision 1. [PURPOSE.] The purpose of the kindergarten preparedness program is to ensure that every child who enters first grade has the necessary skills and readiness in order to learn. To the extent possible, a kindergarten preparedness program should serve children who are not otherwise receiving sufficient readiness services from Head Start programs, learning readiness programs, community education programs, way-to-grow programs, or half-day kindergarten programs.

Subd. 2. [QUALIFYING DISTRICT.] A school district may receive kindergarten preparedness revenue for qualifying school sites if:

(1) the school board approves a resolution requiring the district to provide services to all children located in a qualifying school site attendance area over the age of 5-1/2 years as of January 1 of the previous year; and

(2) the district's administrative office is located in the seven-county metropolitan area.

Subd. 3. [QUALIFYING SCHOOL SITE.] The commissioner of education shall determine the school site's free and reduced lunch count for the previous year. The commissioner shall rank school sites from highest to lowest free and reduced lunch count, and fund school sites accordingly beginning with the sites with the highest free and reduced lunch counts.

Subd. 4. [NONPARTICIPATION.] A parent or guardian of any child under the age of seven and over the age of 5-1/2 years may request the child not participate in kindergarten preparedness programs. The school district shall allow the child to opt out of the program if the district determines that the child is or will be ready to meet the demands of first grade.

Subd. 5. [PROGRAM.] A qualifying school site must develop its kindergarten preparedness program in consultation with other providers of school readiness and child development services. To the extent possible, kindergarten preparedness programs should be provided to participating children for the full school day. A qualifying school site must work with the county to provide extended day services to as many children as possible.

Subd. 6. [REQUIREMENTS.] The board of a qualifying school district must develop a plan to serve as many children as possible. All revenue received under section 124.917 must be allocated to the qualifying school sites within the district.

Subd. 7. [PREPAREDNESS REVENUE.] A qualifying school district is eligible for kindergarten preparedness revenue equal to the basic formula allowance for that year times the number of pupil units calculated according to section 124.17, subdivision 1, paragraph (d), clause (ii) in each qualifying school site.

Sec. 10. [124.917] [KINDERGARTEN PREPAREDNESS REVENUE.]

Subdivision 1. [LEVY AMOUNT.] For taxes payable in 1996 and subsequent years, the commissioner of education shall certify a levy to fund the kindergarten preparedness program. The amount of the levy shall equal the sum of the tax rates for special school district No. 1, Minneapolis, and the city of Minneapolis for the previous year times the net tax capacity of the property described in section 272.01, subdivision 2, not otherwise subject to school district taxation.

Subd. 2. [LEVY PROCEDURE.] The Hennepin county auditor shall certify the previous year tax rates under subdivision 1 to the commissioners of education and revenue by July 1 of each year. The Hennepin county assessor shall certify the net tax capacity of the property described in subdivision 1 to the commissioner of education and revenue by August 1 of each year. The commissioner of education shall certify the levy imposed under this section to the Hennepin county auditor September 1 of each year. The levy under this section is considered to be a special tax in district levy for the purposes of sections 275.065 and 276.04.

Subd. 3. [LEVY PROCEEDS.] Each year, the Hennepin county treasurer shall pay the amounts collected under subdivision 2 to the qualifying school districts according to the distribution formula established by the commissioner of education under section 124.2613 and through the procedures established in chapter 276.

Subd. 4. [TRANSPORTATION SAVINGS.] The commissioner of education shall calculate the state aid savings in transportation aid to each qualifying school district. The amount of that savings is annually appropriated from the state general fund to the commissioner of education to provide funds for the kindergarten preparedness program according to section 124.2613.

Subd. 5. [DISTRIBUTION OF PROCEEDS.] The amounts collected under this section shall be used to fund the kindergarten preparedness program according to section 124.2613.

Sec. 11. Minnesota Statutes 1994, section 124.918, subdivision 1, is amended to read:

Subdivision 1. [CERTIFY LEVY LIMITS.] By September 1 8, the commissioner shall notify the school districts of their levy limits. The commissioner shall certify to the county auditors the levy limits for all school districts headquartered in the respective counties together with adjustments for errors in levies not penalized pursuant to section 124.918, subdivision 3, as well as adjustments to final pupil unit counts. A school district may require the commissioner to review the certification and to present evidence in support of modification of the certification.

The county auditor shall reduce levies for any excess of levies over levy limitations pursuant to section 275.16. Such reduction in excess levies may, at the discretion of the school district, be spread over two calendar years.

Sec. 12. Minnesota Statutes 1994, section 124.918, subdivision 2, is amended to read:

Subd. 2. [NOTICE TO COMMISSIONER; FORMS.] By September 15 30 of each year each district shall notify the commissioner of education of the proposed levies in compliance with the levy limitations of this chapter and chapters 124A, 124B, 136C, and 136D. By January 15 of each year each district shall notify the commissioner of education of the final levies certified. The commissioner of education 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.03, subdivision 1g, is amended to read:

Subd. 1g. [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal year 1996, a district's referendum equalization levy equals the district's referendum equalization revenue times the lesser of one or the ratio of the district's adjusted net tax capacity per actual pupil unit to 100 percent of the equalizing factor as defined in section 124A.02, subdivision 8.

(b) For fiscal year 1997 and thereafter, a district's referendum equalization levy for a referendum levied against the referendum market value of all taxable property as defined in section 124A.02, subdivision 3b, equals the district's referendum equalization revenue times the lesser of one or the ratio of the district's referendum market value per actual pupil unit to $476,000.

(c) For fiscal year 1997 and thereafter, a district's referendum equalization levy for a referendum levied against the net tax capacity of all taxable property equals the district's referendum equalization revenue times the lesser of one or the ratio of the district's adjusted net tax capacity per actual pupil unit to 100 percent of the equalizing factor for that year.

Sec. 14. Minnesota Statutes 1994, section 124A.03, subdivision 1h, is amended to read:

Subd. 1h. [REFERENDUM EQUALIZATION AID.] (a) A district's referendum equalization aid equals the difference between its referendum equalization revenue and levy.

(b) For fiscal year 1993, a district's referendum equalization aid is equal to one-third of the amount calculated in clause (a).

(c) For fiscal year 1994, a district's referendum equalization aid is equal to two-thirds of the amount calculated in clause (a).

(d) If a district's actual levy for referendum equalization revenue is less than its maximum levy limit, aid shall be proportionately reduced.

Sec. 15. Minnesota Statutes 1994, section 124A.0311, subdivision 4, is amended to read:

Subd. 4. [REFERENDUM.] The school board must prepare and publish in the official legal newspaper of the school district a notice of the public meeting on the district's intent to convert any portion of its referendum levy to market value not less than 30 days before the scheduled date of the meeting. The resolution converting a portion of the district's referendum levy to referendum market value becomes final unless within 30 days after the meeting where the resolution was adopted a petition requesting an election signed by a number of people residing in the district equal to 15 percent of the number of people who voted in the last general election in the school district is filed with the recording officer 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. If a petition is filed, then the school board resolution has no effect and the amount of referendum revenue authority specified in the resolution cancels for taxes payable in the following year and thereafter. The school board shall schedule a referendum under section 124A.03, subdivision 2.

Sec. 16. Minnesota Statutes 1994, section 124A.22, subdivision 2, is amended to read:

Subd. 2. [BASIC REVENUE.] The basic revenue for each district equals the formula allowance times the actual pupil units for the school year. The formula allowance for fiscal years 1993 and 1994 is $3,050. The formula allowance for fiscal year 1995 and subsequent fiscal years is $3,150. The formula allowance for fiscal year 1996 is $3,240. The formula allowance for fiscal year 1997 and subsequent fiscal years is $3,220.

Sec. 17. Minnesota Statutes 1994, 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) (a) negotiates a contract under chapter 179A with teachers, and (ii) (b) is established by, receives state money, or levies under chapters 120 to 129, or 136D, or 268A, or section 136C.411.

(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 board of technical colleges.

(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 must be reduced. However, state aid shall may 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 may 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 may 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 must equal $25 times the number of actual 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 education shall determine the number of full-time equivalent actual pupil units in the programs. The department of education 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 must be returned to the general fund redistributed to districts that sign collective bargaining agreements with their teachers by September 1 of the previous odd-numbered year. The funds must be allocated on a pupil unit basis.

Sec. 18. Minnesota Statutes 1994, section 124A.22, subdivision 4, is amended to read:

Subd. 4. [TRAINING AND EXPERIENCE REVENUE.] (a) The previous formula training and experience revenue for each district equals the greater of zero or the result of the following computation:

(1) subtract 1.6 from the training and experience index;

(2) multiply the result in clause (1) by the product of $700 times the actual pupil units for the school year.

(b) The maximum training and experience revenue for each district equals the greater of zero or the result of the following computation:

(1) subtract .8 from the training and experience index;

(2) multiply the result in clause (1) by the product of $660 times the actual pupil units for the school year.

(c) For fiscal year 1994, the training and experience revenue for each district equals the district's previous formula training and experience revenue plus one-half of the difference between the district's maximum training and experience revenue and the district's previous formula training and experience revenue.

(d) For fiscal year 1995, the training and experience revenue for each district equals the district's previous formula training and experience revenue plus three-fourths of the difference between the district's maximum training and experience revenue and the district's previous formula training and experience revenue.

(e) For fiscal year 1996 and thereafter, the training and experience revenue for each district equals the district's maximum training and experience revenue.

Sec. 19. Minnesota Statutes 1994, section 124A.22, subdivision 4a, is amended to read:

Subd. 4a. [FISCAL YEAR 1996 TRAINING AND EXPERIENCE LEVY.] A district's training and experience levy for fiscal year 1996 equals its training and experience revenue times the lesser of one or the ratio of the district's adjusted net tax capacity per actual pupil unit for the year before the year the levy is certified to the equalizing factor for the school year to which the levy is attributable.

Sec. 20. Minnesota Statutes 1994, section 124A.22, subdivision 4b, is amended to read:

Subd. 4b. [FISCAL YEAR 1996 TRAINING AND EXPERIENCE AID.] A district's training and experience aid for fiscal year 1996 equals its training and experience revenue minus its training and experience levy times the ratio of the actual amount levied to the permitted levy.

Sec. 21. Minnesota Statutes 1994, section 124A.22, subdivision 8a, is amended to read:

Subd. 8a. [SUPPLEMENTAL LEVY.] To obtain supplemental revenue, a district may levy an amount not more than the product of its supplemental revenue for the school year times the lesser of one or the ratio of its general education levy to its general education revenue, excluding training and experience revenue and supplemental revenue, for the same year.

Sec. 22. Minnesota Statutes 1994, section 124A.22, subdivision 9, is amended to read:

Subd. 9. [SUPPLEMENTAL REVENUE REDUCTION.] A district's supplemental revenue allowance is reduced by the sum of:

(1) the sum of one-fourth of the difference of:

(i) the sum of the district's training and experience revenue and compensatory revenue per actual pupil unit for that fiscal year 1996, and

(ii) the sum of district's training and experience revenue and compensatory revenue per actual pupil unit for fiscal year 1994; and

(2) the difference between the formula allowance for the current fiscal year and $3,050 $100.

A district's supplemental revenue allowance may not be less than zero.

Sec. 23. Minnesota Statutes 1994, section 124A.225, subdivision 4, is amended to read:

Subd. 4. [REVENUE USE.] (a) Revenue must be used according to either paragraph (b), or (c), or (d).

(b) Revenue shall be used to reduce and maintain the district's instructor to learner ratios in kindergarten through grade 6 to a level of 1 to 17 on average and maintain them at reduced levels. The district must prioritize the use of the revenue to attain this level initially in kindergarten and grade 1 and then through the subsequent grades as revenue is available.

(c) Notwithstanding paragraph (b), for fiscal year 1995, a district with exceptional need as defined in subdivision 6, paragraph (a), may use the revenue to reduce and maintain the district's instructor-to-learner ratios in kindergarten through grade 6 to a level that is at least 2.0 less than the district's adopted staffing ratio, if the remaining learning and development revenue is used to continue or initiate staffing patterns that meet the needs of a diverse student population. Programs to meet the needs of a diverse student population may include programs for at-risk pupils and learning enrichment programs.

(d) For fiscal year 1995 only, in any school building that meets the characteristics of exceptional need as defined in subdivision 6, paragraph (b), a district may use the revenue to employ education assistants or aides supervised by a learner's regular instructor to assist learners in those school buildings.

(e) The revenue may be used to prepare and use an individualized learning plan for each learner. A district must not increase the district wide instructor-learner ratios in other grades as a result of reducing instructor-learner ratios in kindergarten through grade 6. Revenue may not be used to provide instructor preparation time or to provide the district's share of revenue required under section 124.311. A school district may use a portion of the revenue reserved under this section to employ up to the same number of full-time equivalent education assistants or aides as the district employed during the 1992-1993 school year under Minnesota Statutes 1992, section 124.331, subdivision 2.

Sec. 24. Minnesota Statutes 1994, section 124A.225, subdivision 5, is amended to read:

Subd. 5. [ADDITIONAL REVENUE USE.] If the school board of a school district determines that the district has achieved and is maintaining the instructor-learner ratios specified in subdivision 4 by the school board and is using individualized learning plans, the school board may use the revenue to purchase material and services or provide staff development needed for reduced instructor-learner ratios. If additional revenue remains, the district must use the revenue to improve program offerings, including programs provided through interactive television, throughout the district or other general education purposes.

Sec. 25. Minnesota Statutes 1994, section 124A.23, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION TAX RATE.] The commissioner shall establish the general education tax rate by July 1 of each year for levies payable in the following year. The general education tax capacity rate shall be a rate, rounded up to the nearest tenth of a percent, that, when applied to the adjusted net tax capacity for all districts, raises the amount specified in this subdivision. The general education tax rate shall be the rate that raises $1,044,000,000 for fiscal year 1995 and $1,054,000,000 for fiscal year 1996 and $1,158,000,000 for fiscal year 1997 and later fiscal years. The general education tax rate may not be changed due to changes or corrections made to a district's adjusted net tax capacity after the tax rate has been established.

Sec. 26. Minnesota Statutes 1994, 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 training and experience revenue and supplemental revenue, and the general education levy, times (ii) the ratio of the actual amount levied to the permitted levy;

(2) training and experience aid according to section 124A.22, subdivision 4b;

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

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

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

Sec. 27. Minnesota Statutes 1994, section 124A.24, is amended to read:

124A.24 [GENERAL EDUCATION LEVY EQUITY.]

If a district's general education levy is determined according to section 124A.23, subdivision 3, an amount must be deducted from state aid authorized in this chapter and chapters 124 and 124B, receivable for the same school year, and from other state payments receivable for the same school year authorized in chapter 273. The aid in section 124.646 must not be reduced.

The amount of the deduction equals the difference between:

(1) the general education tax rate, according to section 124A.23, times the district's adjusted net tax capacity used to determine the general education aid for the same school year; and

(2) the district's general education revenue, excluding training and experience revenue and supplemental revenue, for the same school year, according to section 124A.22.

Sec. 28. Minnesota Statutes 1994, section 124A.29, subdivision 1, is amended to read:

Subdivision 1. [STAFF DEVELOPMENT AND PARENTAL INVOLVEMENT REVENUE.] (a) Of a district's basic revenue under section 124A.22, subdivision 2, an amount equal to one percent in fiscal year 1994, two percent in fiscal year 1995, and 2.5 percent in fiscal year 1996 and thereafter times the formula allowance times the number of actual pupil units shall be reserved and may be used only A district is encouraged to use general education revenue for in-service education for programs under section 126.77, subdivision 2, or for staff development plans, including plans for challenging instructional activities and experiences under section 126.70. Districts may expend an additional amount of basic revenue for staff development based on their needs. The school board shall initially allocate 50 percent of the revenue to each school site in the district on a per teacher basis, which shall be retained by the school site until used. The board may retain 25 percent to be used for district wide staff development efforts. The remaining 25 percent of the revenue shall be used to make grants to school sites that demonstrate exemplary use of allocated staff development revenue. A grant may be used for any purpose authorized under section 126.70 or 126.77, subdivision 2, and determined by the site decision-making team. The site decision-making team must demonstrate to the school board the extent to which staff at the site have met the outcomes of the program. The board may withhold a portion of initial allocation of revenue if the staff development outcomes are not being met.

(b) Of a district's basic revenue under section 124A.22, subdivision 2, an amount equal to $5 times the number of actual pupil units must be reserved and may be used only to and provide parental involvement programs that implement section 126.69. Parental involvement programs may include career teacher programs, programs promoting parental involvement in the PER process, coordination of volunteer services, participation in developing, implementing, or evaluating school desegregation/integration plans, and programs designed to encourage community involvement. A district is encouraged to use equipment revenue for technology for staff development and general education revenue for programs designed to improve staff's technological skills.

Sec. 29. Minnesota Statutes 1994, section 275.065, subdivision 1, is amended to read:

Subdivision 1. [PROPOSED LEVY.] (a) Notwithstanding any law or charter to the contrary, on or before September 15, each taxing authority, other than a school district, shall adopt a proposed budget and each taxing authority shall certify to the county auditor the proposed or, in the case of a town, the final property tax levy for taxes payable in the following year.

(b) On or before September 30, each school district may certify to the county auditor the proposed property tax levy for taxes payable in the following year. If a school district does not certify a proposed property tax levy to the county auditor by September 30, the school district shall be deemed to have certified a proposed property tax levy equal to the maximum levy limitation certified by the commissioner of education to the county auditor according to section 124.918, subdivision 1.

(c) If the board of estimate and taxation or any similar board that establishes maximum tax levies for taxing jurisdictions within a first class city certifies the maximum property tax levies for funds under its jurisdiction by charter to the county auditor by September 15, the city shall be deemed to have certified its levies for those taxing jurisdictions.

(d) For purposes of this section, "taxing authority" includes all home rule and statutory cities, towns, counties, school districts, and special taxing districts as defined in section 275.066. Intermediate school districts that levy a tax under chapter 124 or 136D, joint powers boards established under sections 124.491 to 124.495, and common school districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing districts for purposes of this section.

Sec. 30. Minnesota Statutes 1994, section 275.065, subdivision 3, is amended to read:

Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The county auditor shall prepare and the county treasurer shall deliver after November 10 and on or before November 24 each year, by first class mail to each taxpayer at the address listed on the county's current year's assessment roll, a notice of proposed property taxes and, in the case of a town, final property taxes.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each taxing authority other than a town proposes to collect for taxes payable the following year and, for a town, the amount of its final levy. It must clearly state that each taxing authority, including regional library districts established under section 134.201, and including the metropolitan taxing districts as defined in paragraph (i), but excluding all other special taxing districts and towns, will hold a public meeting to receive public testimony on the proposed budget and proposed or final property tax levy, or, in case of a school district, on the current budget and proposed property tax levy. It must clearly state the time and place of each taxing authority's meeting and an address where comments will be received by mail. The notice must include the estimated percentage increase in Minnesota personal income, provided by the commissioner of revenue under section 275.064, in a way to facilitate comparison of the proposed budget and levy increases with the increase in personal income. For 1993, the notice must clearly state that each taxing authority holding a public meeting will describe the increases or decreases of the total budget, including employee and independent contractor compensation in the prior year, current year, and the proposed budget year.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for computing property taxes payable in the following year and for taxes payable in the current year; and, in the case of residential property, whether the property is classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the years to which the market values apply and that the values are final values;

(2) by county, city or town, school district excess referenda levy, state determined education levy defined as the sum of the general education levy, the basic transportation levy, the capital facilities levy, and the equipment levy, remaining school district levy, the sum of the school district levies, regional library district, if in existence, the total of the metropolitan special taxing districts as defined in paragraph (i) and the sum of the remaining special taxing districts, and as a total of the taxing authorities, including all special taxing districts, the proposed or, for a town, final net tax on the property for taxes payable the following year and the actual tax for taxes payable the current year. For the purposes of this subdivision, "school district excess referenda levy" means school district taxes for operating purposes approved at referendums, including those taxes based on net tax capacity as well as those based on market value. "School district excess referenda levy" does not include school district taxes for capital expenditures approved at referendums or school district taxes to pay for the debt service on bonds approved at referenda. In the case of the city of Minneapolis, the levy for the Minneapolis library board and the levy for Minneapolis park and recreation shall be listed separately from the remaining amount of the city's levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax applies, the proposed tax levy on the captured value or the proposed tax levy on the tax capacity subject to the areawide tax must each be stated separately and not included in the sum of the special taxing districts; and

(3) the increase or decrease in the amounts in clause (2) from taxes payable in the current year to proposed or, for a town, final taxes payable the following year, expressed as a dollar amount and as a percentage.

(e) The notice must clearly state that the proposed or final taxes do not include the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including bond referenda, school district levy referenda, and levy limit increase referenda;

(3) amounts necessary to pay cleanup or other costs due to a natural disaster occurring after the date the proposed taxes are certified;

(4) amounts necessary to pay tort judgments against the taxing authority that become final after the date the proposed taxes are certified; and

(5) the contamination tax imposed on properties which received market value reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the county treasurer to deliver the notice as required in this section does not invalidate the proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as nonhomestead and the homeowner provides satisfactory documentation to the county assessor that the property is owned and has been used as the owner's homestead prior to June 1 of that year, the assessor shall reclassify the property to homestead for taxes payable in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special taxing districts" means the following taxing districts in the seven-county metropolitan area that levy a property tax for any of the specified purposes listed below:

(1) metropolitan council under section 473.132, 473.167, 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834;

(2) metropolitan airports commission under section 473.667, 473.671, or 473.672; and

(3) metropolitan mosquito control commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be included with the appropriate county's levy and shall be discussed at that county's public hearing.

The notice must be mailed or posted by the taxpayer by November 27 or within three days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to which the notice must be mailed in order to fulfill the requirements of this paragraph.

Sec. 31. Minnesota Statutes 1994, section 276.04, subdivision 2, is amended to read:

Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer shall provide for the printing of the tax statements. The commissioner of revenue shall prescribe the form of the property tax statement and its contents. The statement must contain a tabulated statement of the dollar amount due to each taxing authority from the parcel of real property for which a particular tax statement is prepared. The dollar amounts due the county, township or municipality, the total of the metropolitan special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), school district excess referenda levy, state determined education levy defined as the sum of the general education levy, the basic transportation levy, the capital facilities levy, and the equipment levy, remaining school district levy, the sum of the school district levies, and the total of other voter approved referenda levies based on market value under section 275.61 must be separately stated. The amounts due all other special taxing districts, if any, may be aggregated. For the purposes of this subdivision, "school district excess referenda levy" means school district taxes for operating purposes approved at referenda, including those taxes based on market value. "School district excess referenda levy" does not include school district taxes for capital expenditures approved at referendums or school district taxes to pay for the debt service on bonds approved at referenda. The amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar amount of any special assessments, may be rounded to the nearest even whole dollar. For purposes of this section whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, must also be listed on the tax statement. The statement shall include the following sentence, printed in upper case letters in boldface print: "THE STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES. THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."

(b) The property tax statements for manufactured homes and sectional structures taxed as personal property shall contain the same information that is required on the tax statements for real property.

(c) Real and personal property tax statements must contain the following information in the order given in this paragraph. The information must contain the current year tax information in the right column with the corresponding information for the previous year in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's taxable market value after reductions under section 273.11, subdivisions 1a and 16;

(3) the property's gross tax, calculated by multiplying the property's gross tax capacity times the total local tax rate and adding to the result the sum of the aids enumerated in clause (3);

(4) a total of the following aids:

(i) education aids payable under chapters 124 and 124A;

(ii) local government aids for cities, towns, and counties under chapter 477A; and

(iii) disparity reduction aid under section 273.1398;

(5) for homestead residential and agricultural properties, the homestead and agricultural credit aid apportioned to the property. This amount is obtained by multiplying the total local tax rate by the difference between the property's gross and net tax capacities under section 273.13. This amount must be separately stated and identified as "homestead and agricultural credit." For purposes of comparison with the previous year's amount for the statement for taxes payable in 1990, the statement must show the homestead credit for taxes payable in 1989 under section 273.13, and the agricultural credit under section 273.132 for taxes payable in 1989;

(6) any credits received under sections 273.119; 273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received under section 273.135 must be separately stated and identified as "taconite tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

The commissioner of revenue shall certify to the county auditor the actual or estimated aids enumerated in clauses (3) and (4) that local governments will receive in the following year. In the case of a county containing a city of the first class, for taxes levied in 1991, and for all counties for taxes levied in 1992 and thereafter, the commissioner must certify this amount by September 1.

Sec. 32. Laws 1994, chapter 647, article 1, section 36, is amended to read:

Sec. 36. [PEQUOT LAKES; DELAY IN FORGIVENESS OF AID REPAYMENT.]

The department of education must allow independent school district No. 186, Pequot Lakes, to repay over a five-year period forgive state aid overpayments of $196,000 for fiscal years 1991 and 1992 due to the property tax revenue recognition shift attributable to independent school district No. 186, Pequot Lakes. Notwithstanding Minnesota Statutes, section 124.155, subdivision 1, aids for independent school district No. 186, Pequot Lakes, shall not be adjusted for fiscal years 1991 and 1992 for pupils transferring into the district under Minnesota Statutes, section 120.062.

Sec. 33. [SUPPLEMENTAL REVENUE REDUCTION.]

For fiscal years 1996 and 1997, a district that qualified for a supplemental revenue reduction exception under Laws 1994, chapter 647, article 1, section 35, shall receive a supplemental revenue reduction adjustment equal to 60 percent of the amount received in 1995. The aid and levy must be provided in the same proportion as it was received in fiscal year 1995.

Sec. 34. [PERMANENT SCHOOL FUND EARNINGS.]

During either fiscal year 1996 or 1997, if the amount to be distributed according to Minnesota Statutes, section 124.09, exceeds $32,500,000, notwithstanding section 124.09, the state board of investment may invest the amount in excess of $32,500,000 in equities with the goal of improving the long-term income from the permanent school fund.

Sec. 35. [LEVY ADJUSTMENT; LE SUEUR-HENDERSON.]

Notwithstanding any law to the contrary, independent school district No. 2397, Le Sueur-Henderson, must not receive a negative levy adjustment for any referendum levy made by independent school district No. 734, Henderson, that was certified for taxes payable in 1992.

Sec. 36. [EQUALIZING FACTOR.]

For fiscal year 1996 only, levies calculated under chapters 124 and 124A shall not be recomputed because of an increase in the formula allowance under Minnesota Statutes, section 124A.22, subdivision 2.

Sec. 37. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [GENERAL AND SUPPLEMENTAL EDUCATION AID.] For general and supplemental education aid:

$2,045,366,000..... 1996

$2,226,563,000..... 1997

The 1996 appropriation includes $301,965,000 for 1995 and $1,743,401,000 for 1996.

The 1997 appropriation includes $329,476,000 for 1996 and $1,897,087,000 for 1997.

Sec. 38. [REPEALER.]

(a) Minnesota Statutes 1994, section 124A.27, subdivision 11, is repealed.

(b) Minnesota Statutes 1994, sections 124.17, subdivision 1b; 124A.04, subdivision 1; 124A.29, subdivision 2; and 124A.291, are repealed.

Section 1. Minnesota Statutes 1994, section 123.3514, subdivision 8, is amended to read:

Subd. 8. [TRANSPORTATION.] A parent or guardian of a pupil enrolled in a course for secondary credit may apply to the pupil's district of residence for reimbursement for transporting the pupil between the secondary school in which the pupil is enrolled or the pupil's home and the post-secondary institution that the pupil attends. The commissioner shall establish guidelines for providing state aid to districts to reimburse the parent or guardian for the necessary transportation costs, which shall be based on financial need. The reimbursement may not exceed the pupil's actual cost of transportation or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for more than 250 miles per week. However, if the nearest post-secondary institution is more than 25 miles from the pupil's resident secondary school, the weekly reimbursement may not exceed the reimbursement rate per mile times the actual distance between the secondary school or the pupil's home and the nearest post-secondary institution times ten. The state shall pay aid to the district according to the guidelines established under this subdivision. Chapter 14 does not apply to the guidelines.

Sec. 2. Minnesota Statutes 1994, 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 12 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 vehicle lane 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 first 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 three four weeks of the first day of attendance. The pupil transportation

safety director in each district must certify to the commissioner of education annually by October 15 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.

(c) (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.

(d) (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.

(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. 3. Minnesota Statutes 1994, section 123.7991, subdivision 3, is amended to read:

Subd. 3. [MODEL TRAINING PROGRAM.] The commissioner of education shall develop a comprehensive model school bus safety training program for pupils who ride the bus that includes bus safety curriculum for both classroom and practical instruction, methods for assessing attainment of school bus safety competencies, and age-appropriate instructional materials. The program must be adaptable for use by students with disabilities.

Sec. 4. Minnesota Statutes 1994, section 123.805, subdivision 1, is amended to read:

Subdivision 1. [COMPREHENSIVE POLICY.] Each school district shall develop and implement a comprehensive, written policy governing pupil transportation safety, including transportation of nonpublic school students, when applicable. The policy shall, at minimum, contain:

(1) provisions for appropriate student bus safety training under section 123.7991;

(2) rules governing student conduct on school buses and in school bus loading and unloading areas;

(3) a statement of parent or guardian responsibilities relating to school bus safety;

(4) provisions for notifying students and parents or guardians of their responsibilities and the rules;

(5) an intradistrict system for reporting school bus accidents or misconduct, a system for dealing with local law enforcement officials in cases of criminal conduct on a school bus, and a system for reporting accidents, crimes, incidents of misconduct, and bus driver dismissals to the department of public safety under section 169.452;

(6) a discipline policy to address violations of school bus safety rules, including procedures for revoking a student's bus riding privileges in cases of serious or repeated misconduct;

(7) a system for integrating school bus misconduct records with other discipline records;

(8) a statement of bus driver duties;

(9) planned expenditures for safety activities under section 123.799 and, where applicable, provisions governing bus monitor qualifications, training, and duties;

(10) rules governing the use and maintenance of type III vehicles, drivers of type III vehicles, qualifications to drive a type III vehicle, qualifications for a type III vehicle and the circumstances under which a student may be transported in a type III vehicle;

(11) operating rules and procedures;

(12) provisions for annual bus driver in-service training and evaluation;

(13) emergency procedures; and

(14) a system for maintaining and inspecting equipment;

(15) requirements of the school district, if any, that exceed state law minimum requirements for school bus operations; and

(16) requirements for basic first aid training, which shall include the Heimlich maneuver and procedures for dealing with obstructed airways, shock, bleeding, and seizures.

School districts are encouraged to use the model policy developed by the Minnesota school boards association, the department of public safety, and the department of education, as well as the current edition of the "National Standards for School Buses and Operations" published by the National Safety Council, in developing safety policies. Each district shall submit a copy of its policy under this subdivision to the school bus safety advisory committee no later than August 1, 1994, and review and make appropriate amendments annually by August 1. Each district shall review its policy annually and make appropriate amendments, which must be submitted to the school bus safety advisory committee within one month of approval by the school board.

Sec. 5. Minnesota Statutes 1994, section 123.805, subdivision 2, is amended to read:

Subd. 2. [SCHOOL TRANSPORTATION SAFETY DIRECTOR.] Each school board shall designate a school transportation safety director to oversee and implement pupil transportation safety policies. The director shall have day-to-day responsibility for pupil transportation safety within the district, including transportation of nonpublic school children when provided by the district.

Sec. 6. Minnesota Statutes 1994, section 124.223, subdivision 7, is amended to read:

Subd. 7. [FARIBAULT STATE ACADEMIES TRANSPORTATION TO AND FROM BOARD AND LODGING FACILITIES.] State transportation aid is authorized for transportation for residents resident pupils with disabilities to and from the Minnesota state academy for the deaf or the Minnesota state academy for the blind board and lodging facilities when the pupil is boarded and lodged for educational purposes.

Sec. 7. Minnesota Statutes 1994, section 124.225, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of this section, the terms defined in this subdivision have the meanings given to them.

(a) "FTE" means a full-time equivalent pupil whose transportation is authorized for aid purposes by section 124.223.

(b) "Authorized cost for regular transportation" means the sum of:

(1) all expenditures for transportation in the regular category, as defined in paragraph (c), clause (1), for which aid is authorized in section 124.223, plus

(2) an amount equal to one year's depreciation on the district's school bus fleet and mobile units computed on a straight line basis at the rate of 15 percent per year for districts operating a program under section 121.585 for grades 1 to 12 for all students in the district and 12-1/2 percent per year for other districts of the cost of the fleet, plus

(3) an amount equal to one year's depreciation on district school buses reconditioned by the department of corrections computed on a straight line basis at the rate of 33-1/3 percent per year of the cost to the district of the reconditioning, plus

(4) an amount equal to one year's depreciation on the district's type three school buses, as defined in section 169.01, subdivision 6, clause (5), which must be used a majority of the time for the purposes in sections 124.223 and 124.226, subdivisions 5, 8, and 9, and were purchased after July 1, 1982, for authorized transportation of pupils, with the prior approval of the commissioner, computed on a straight line basis at the rate of 20 percent per year of the cost of the type three school buses.

(c) "Transportation category" means a category of transportation service provided to pupils as follows:

(1) Regular transportation is transportation services provided during the regular school year under section 124.223, subdivisions 1 and 2, excluding the following transportation services provided under section 124.223, subdivision 1: transportation between schools; noon transportation to and from school for kindergarten pupils attending half-day sessions; transportation of pupils to and from schools located outside their normal attendance areas under the provisions of a plan for desegregation mandated by the state board of education or under court order; and transportation of elementary pupils to and from school within a mobility zone.

(2) Nonregular transportation is transportation services provided under section 124.223, subdivision 1, that are excluded from the regular category and transportation services provided under section 124.223, subdivisions 3, 4, 5, 6, 7, 8, 9, and 10.

(3) Excess transportation is transportation to and from school during the regular school year for secondary pupils residing at least one mile but less than two miles from the public school they could attend or from the nonpublic school actually attended, and transportation to and from school for pupils residing less than one mile from school who are transported because of extraordinary traffic, drug, or crime hazards.

(4) Desegregation transportation is transportation within and outside of the district during the regular school year of pupils to and from schools located outside their normal attendance areas under a plan for desegregation mandated by the state board or under court order.

(5) Handicapped transportation is transportation provided under section 124.223, subdivision 4, for pupils with a disability between home or a respite care facility and school or other buildings where special instruction required by sections 120.17 and 120.1701 is provided.

(d) "Mobile unit" means a vehicle or trailer designed to provide facilities for educational programs and services, including diagnostic testing, guidance and counseling services, and health services. A mobile unit located off nonpublic school premises is a neutral site as defined in section 123.932, subdivision 9.

(e) "Current year" means the school year for which aid will be paid.

(f) "Base year" means the second school year preceding the school year for which aid will be paid.

(g) "Base cost" means the ratio of:

(1) the sum of the authorized cost in the base year for regular transportation as defined in paragraph (b) plus the actual cost in the base year for excess transportation as defined in paragraph (c);

(2) to the sum of the number of weighted FTE's in the regular and excess categories in the base year.

(h) "Pupil weighting factor" for the excess transportation category for a school district means the lesser of one, or the result of the following computation:

(1) Divide the square mile area of the school district by the number of FTE's in the regular and excess categories in the base year.

(2) Raise the result in clause (1) to the one-fifth power.

(3) Divide four-tenths by the result in clause (2).

The pupil weighting factor for the regular transportation category is one.

(i) "Weighted FTE's" means the number of FTE's in each transportation category multiplied by the pupil weighting factor for that category.

(j) "Sparsity index" for a school district means the greater of .005 or the ratio of the square mile area of the school district to the sum of the number of weighted FTE's by the district in the regular and excess categories in the base year.

(k) "Density index" for a school district means the greater of one or the result obtained by subtracting the product of the district's sparsity index times 20 from two.

(l) "Contract transportation index" for a school district means the greater of one or the result of the following computation:

(1) Multiply the district's sparsity index by 20.

(2) Select the lesser of one or the result in clause (1).

(3) Multiply the district's percentage of regular FTE's in the current year using vehicles that are not owned by the school district by the result in clause (2).

(m) "Adjusted predicted base cost" means the predicted base cost as computed in subdivision 3a as adjusted under subdivision 7a.

(n) "Regular transportation allowance" means the adjusted predicted base cost, inflated and adjusted under subdivision 7b.

Sec. 8. Minnesota Statutes 1994, section 124.225, subdivision 3a, is amended to read:

Subd. 3a. [PREDICTED BASE COST.] A district's predicted base cost equals the result of the following computation:

(a) Multiply the transportation formula allowance by the district's sparsity index raised to the one-fourth power. The transportation formula allowance is $447 $477 for the 1991-1992 1993-1994 base year and $463 $491 for the 1992-1993 1994-1995 base year.

(b) Multiply the result in paragraph (a) by the district's density index raised to the 35/100 1/2 power.

(c) Multiply the result in paragraph (b) by the district's contract transportation index raised to the 1/20 power.

Sec. 9. Minnesota Statutes 1994, section 124.225, subdivision 7b, is amended to read:

Subd. 7b. [INFLATION FACTORS.] (a) The adjusted predicted base cost determined for a district under subdivision 7a for the base year must be increased by 2.35 zero percent to determine the district's regular transportation allowance for the 1993-1994 1995-1996 school year and by 3.425 zero percent to determine the district's regular transportation allowance for the 1994-1995 1996-1997 school year, but.

(b) Notwithstanding paragraph (a), the regular transportation allowance for a district for the 1995-1996 school year and the 1996-1997 school year cannot be less than the district's minimum regular transportation allowance according to Minnesota Statutes 1990, section 124.225, subdivision 1, paragraph (t).

(c) Notwithstanding paragraph (a), the regular transportation allowance for a district for the 1997-1998 school year and later cannot be less than the district's regular transportation allowance for the 1996-1997 school year.

Sec. 10. Minnesota Statutes 1994, section 124.225, subdivision 7d, is amended to read:

Subd. 7d. [TRANSPORTATION REVENUE.] Transportation revenue for each district equals the sum of the district's regular transportation revenue and the district's nonregular transportation revenue.

(a) The regular transportation revenue for each district equals the district's regular transportation allowance according to subdivision 7b times the sum of the number of FTE's by the district in the regular, desegregation, and handicapped categories in the current school year.

(b) For the 1992-1993 and later school years 1995-1996 school year, the nonregular transportation revenue for each district equals the lesser of the district's actual cost in the current school year for nonregular transportation services or the product of the district's actual cost in the base year for nonregular transportation services as defined for the current year in subdivision 1, paragraph (c), times the ratio of the district's average daily membership for the current year to the district's average daily membership for the base year according to section 124.17, subdivision 2, times the

nonregular transportation inflation factor for the current year, minus the amount of regular transportation revenue attributable to FTE's in the desegregation and handicapped categories in the current school year, plus the excess nonregular transportation revenue for the current year according to subdivision 7e. The nonregular transportation inflation factor is 1.0435 1.0 for the 1993-1994 1995-1996 school year and 1.03425 for the 1994-1995 school year.

(c) For the 1996-1997 school year, the nonregular transportation revenue for each district equals the lesser of:

(1) the district's actual cost in the current school year for nonregular transportation services, excess transportation services, and late activity transportation services; or

(2) the product of the district's actual cost in the base year for nonregular transportation services as defined for the current year in subdivision 1, paragraph (c),

times the ratio of the district's average daily membership for the current year to the district's average daily membership for the base year according to section 124.17, subdivision 2, times the nonregular transportation inflation factor for the current year, minus the amount of regular transportation revenue attributable to FTE's in the desegregation and handicapped categories in the current school year, plus the excess nonregular transportation revenue for the current year according to subdivision 7e.

The nonregular transportation inflation factor is 1.0 for the 1996-1997 school year.

(d) For the 1997-1998 school year and later, the nonregular transportation revenue for each district equals the lesser of:

(1) the district's actual cost in the current school year for nonregular transportation services, excess transportation services, and late activity transportation services; or

(2) the product of the greater of:

(i) the district's actual cost in the base year for nonregular transportation services as defined for the current year in subdivision 1, paragraph (c); or

(ii) the lesser of the district's actual cost in the base year for nonregular transportation services, excess transportation services, and late activity transportation services or the district's actual cost in the 1994-1995 school year for nonregular transportation services,

times the ratio of the district's average daily membership for the current year to the district's average daily membership for the base year according to section 124.17, subdivision 2, times the nonregular transportation inflation factor for the current year, minus the amount of regular transportation revenue attributable to FTE's in the desegregation and handicapped categories in the current school year, plus the excess nonregular transportation revenue for the current year according to subdivision 7e.

The nonregular transportation inflation factor is 1.0 for the 1997-1998 and later school years.

Sec. 11. Minnesota Statutes 1994, section 124.225, subdivision 7f, is amended to read:

Subd. 7f. [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A district shall reserve an amount equal to the greater of $1,000 $500 or one-half of one percent of the sum of the district's regular transportation revenue according to subdivision 7d, paragraph (a), and nonregular transportation revenue according to subdivision 7d, paragraph (b), for that school year to provide student transportation safety programs under section 123.799.

Sec. 12. Minnesota Statutes 1994, section 124.225, subdivision 8a, is amended to read:

Subd. 8a. [TRANSPORTATION AID.] (a) A district's transportation aid equals the product of:

(1) the difference between the transportation revenue and the sum of:

(i) the maximum basic transportation levy for that school year under section 275.125 124.226, subdivision 5 1, plus

(ii) the maximum nonregular transportation levy for that school year under section 124.226, subdivision 4, plus

(iii) the contracted services aid reduction under subdivision 8k,

(2) times the ratio of the sum of the actual amounts levied under section 124.226, subdivisions 1 and 4, to the sum of the permitted maximum levies under section 124.226, subdivisions 1 and 4.

(b) If the total appropriation for transportation aid for any fiscal year is insufficient to pay all districts the full amount of aid earned, the department of education shall reduce each district's aid in proportion to the number of resident pupils in average daily membership in the district to the state total average daily membership, and shall reduce the transportation levy of off-formula districts in the same proportion.

Sec. 13. Minnesota Statutes 1994, section 124.225, subdivision 8m, is amended to read:

Subd. 8m. [TRANSPORTATION SAFETY AID.] A district's transportation safety aid equals the district's reserved revenue for transportation safety under subdivision 7f for that school year. Failure of a school district to comply with the reporting requirements of section 123.7991, 123.805, 169.452, 169.4582, or 171.321, subdivision 5, may result in a withholding of that district's transportation safety aid for that school year.

Sec. 14. Minnesota Statutes 1994, section 124.226, subdivision 1, is amended to read:

Subdivision 1. [BASIC TRANSPORTATION.] Each year, a school district may levy for school transportation services an amount not to exceed the amount raised by the basic transportation tax rate times the adjusted net tax capacity of the district for the preceding year. The commissioner of education shall establish the basic transportation tax rate by July 1 of each year for levies payable in the following year. The basic transportation tax rate shall be a rate, rounded up to the nearest hundredth of a percent, that, when applied to the adjusted net tax capacity of taxable property for all districts, raises the amount specified in this subdivision. The basic transportation tax rate for transportation shall be the rate that raises $64,300,000 for fiscal year 1993 and $68,000,000 for fiscal year 1994 and subsequent fiscal years. The basic transportation tax rate certified by the commissioner of education must not be changed due to changes or corrections made to a district's adjusted net tax capacity after the tax rate has been certified.

Sec. 15. Minnesota Statutes 1994, section 124.226, subdivision 3, is amended to read:

Subd. 3. [OFF-FORMULA ADJUSTMENT.] In a district if the basic transportation levy under subdivision 1 attributable to that fiscal year is more than the difference between (1) the district's transportation revenue under section 124.225, subdivision 7d, and (2) the sum of the district's maximum nonregular levy under subdivision 4 and the district's contracted services aid reduction under section 124.225, subdivision 8k, and the amount of any reduction due to insufficient appropriation under section 124.225, subdivision 8a, the district's transportation levy in the second year following each fiscal year must be reduced by the difference between the amount of the excess and the amount of the aid reduction for the same fiscal year according to subdivision 3a.

Sec. 16. Minnesota Statutes 1994, section 126.15, subdivision 2, is amended to read:

Subd. 2. [APPOINTMENT OF MEMBERS.] Unless the parents or guardian of a pupil object in writing to the school authorities to the appointment of the pupil on a school safety patrol, it is lawful for any pupil over nine years of age to be appointed and designated as a member thereof, provided that in any school in which there are no pupils who have attained such age any pupil in the highest grade therein may be so appointed and designated. School authorities may also appoint and designate nonpupil adults as members of a school safety patrol on a voluntary or for-hire basis.

Sec. 17. Minnesota Statutes 1994, 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, or 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 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. 18. Minnesota Statutes 1994, section 169.21, subdivision 2, is amended to read:

Subd. 2. [RIGHTS IN ABSENCE OF SIGNALS.] (a) Where traffic-control signals are not in place or in operation the driver of a vehicle shall yield the right-of-way, slowing down or stopping if need be to so yield, to a pedestrian crossing the roadway within a crosswalk but no pedestrian shall suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impossible for the driver to yield. This provision shall not apply under the conditions as otherwise provided in this subdivision.

(b) When any vehicle is stopped at a marked crosswalk or at any unmarked crosswalk at an intersection to permit a pedestrian to cross the roadway, the driver of any other vehicle approaching from the rear shall not overtake and pass the stopped vehicle.

(c) It is unlawful for any person to drive a motor vehicle through a column of school children crossing a street or highway or past a member of a school safety patrol or adult crossing guard, while the member of the school safety patrol or adult crossing guard is directing the movement of children across a street or highway and while the school safety patrol member or adult crossing guard is holding an official signal in the stop position. A person who violates this paragraph is guilty of a misdemeanor. A person who violates this paragraph a second or subsequent time within one year of a previous conviction under this paragraph is guilty of a gross misdemeanor.

Sec. 19. Minnesota Statutes 1994, section 169.444, subdivision 2, is amended to read:

Subd. 2. [VIOLATIONS BY DRIVERS; PENALTIES.] (a) A person who fails to stop a vehicle or to keep it stopped, as required in subdivision 1, is guilty of a misdemeanor punishable by a fine of not less than $300.

(b) A person is guilty of a gross misdemeanor if the person fails to stop a motor vehicle or to keep it stopped, as required in subdivision 1, and commits either or both of the following acts:

(1) passes or attempts to pass the school bus in a motor vehicle on the right-hand, passenger-door side of the bus; or

(2) passes or attempts to pass the school bus in a motor vehicle when a school child is outside of and on the street or highway used by the school bus or on the adjacent sidewalk.

Sec. 20. Minnesota Statutes 1994, section 169.4502, subdivision 4, is amended to read:

Subd. 4. [COLOR.] Fenders may be painted black. The hood may be painted nonreflective black or nonreflective yellow. The grill may be manufacturer's standard color or chrome.

Sec. 21. Minnesota Statutes 1994, section 169.4503, is amended by adding a subdivision to read:

Subd. 10a. [EMERGENCY EQUIPMENT; FIRST AID KITS.] A first aid kit, and a body fluids cleanup kit is required regardless of the age of the vehicle. They must be contained in removable, moisture- and dust-proof containers mounted in an accessible place within the driver's compartment of the school bus and must be marked to indicate their identity and location.

Sec. 22. Minnesota Statutes 1994, section 169.451, is amended by adding a subdivision to read:

Subd. 5. [RANDOM SPOT INSPECTIONS.] In addition to the annual inspection, the Minnesota state patrol has authority to conduct random, unannounced spot inspections of any school bus or Head Start bus being operated within the state at the location where the bus is kept when not in operation to ascertain whether its construction, design, equipment, and color comply with all provisions of law, including the Minnesota school bus equipment standards in sections 169.4501 to 169.4504.

Sec. 23. [169.4511] [SCHOOL BUS ACCIDENTS; REINSPECTION.]

Subdivision 1. [POSTCRASH INSPECTION.] A peace officer responding to an accident involving a school bus or Head Start bus must immediately notify the state patrol if the accident results in death or serious personal injury on the school bus, or property damage to the school bus of an apparent extent of more than $4,400. No person shall drive or knowingly permit or cause to be driven, for the purpose of transporting students, any school bus or Head Start bus after such an accident unless the vehicle:

(1) has been inspected by the Minnesota state patrol and the state patrol has determined that the vehicle may safely be operated; or

(2) a waiver has been granted under subdivision 2.

A violation of this section is a misdemeanor.

Subd. 2. [WAIVER.] A state trooper or designee of the Minnesota state patrol called to the scene of an accident by a responding peace officer under subdivision 1 may waive the inspection requirement of subdivision 1 if the trooper or state patrol designee determines that a postcrash inspection is not needed or cannot be accomplished without unreasonable delay. The trooper or state patrol designee granting a waiver must provide to the driver of the school bus for which the waiver is granted a written statement that the inspection has been waived. The written statement must include the incident report number assigned to the accident by the state patrol.

Sec. 24. Minnesota Statutes 1994, section 169.452, is amended to read:

169.452 [ACCIDENT AND SERIOUS INCIDENT REPORTING.]

The department of public safety shall develop uniform definitions of a school bus accident, an incident of serious misconduct, and an incident that results in personal injury or death. The department shall determine what type of information on school bus accidents and incidents, including criminal conduct, and bus driver dismissals for cause should be collected and develop a uniform accident and incident reporting form to collect those data, including data relating to type III vehicles, statewide. In addition to the form, the department shall have an alternative method of reporting that allows school districts to use computer technology to provide the required information. School districts shall report the information required by the department using either format. A school district must not be charged for reporting forms or reporting procedures under this section. Data collected with this reporting form under this section shall be analyzed to help develop accident, crime, and misconduct prevention programs. This section is not subject to chapter 14.

Sec. 25. Minnesota Statutes 1994, section 169.454, subdivision 5, is amended to read:

Subd. 5. [FIRST AID KIT.] A minimum of a ten-unit first aid kit, and a body fluids cleanup kit is required. The bus They must have a be contained in removable, moisture- and dust-proof first aid kit containers mounted in an accessible place within the driver's compartment and must be marked to indicate its their identity and location.

Sec. 26. Minnesota Statutes 1994, section 169.454, is amended by adding a subdivision to read:

Subd. 13. [EXEMPTION.] When a vehicle otherwise qualifying as a type III vehicle under section 169.01, subdivision 6, paragraph (5), whether owned and operated by a school district or privately owned and operated, is used to transport school children in a nonscheduled situation, it shall be exempt from the vehicle requirements of this section and the licensing requirements of section 171.321, if the vehicle is properly registered and insured and operated by an employee or agent of a school district with a valid driver's license.

Sec. 27. Minnesota Statutes 1994, section 171.01, subdivision 21, is amended to read:

Subd. 21. [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, or a transit bus providing services as defined in section 174.22, subdivision 7, or a vehicle otherwise qualifying as a type III vehicle under section 169.01, subdivision 6, 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.

Sec. 28. Minnesota Statutes 1994, section 171.18, subdivision 1, is amended to read:

Subdivision 1. [OFFENSES.] The commissioner may suspend the license of a driver without preliminary hearing upon a showing by department records or other sufficient evidence that the licensee:

(1) has committed an offense for which mandatory revocation of license is required upon conviction;

(2) has been convicted by a court for violating a provision of chapter 169 or an ordinance regulating traffic and department records show that the violation contributed in causing an accident resulting in the death or personal injury of another, or serious property damage;

(3) is an habitually reckless or negligent driver of a motor vehicle;

(4) is an habitual violator of the traffic laws;

(5) is incompetent to drive a motor vehicle as determined in a judicial proceeding;

(6) has permitted an unlawful or fraudulent use of the license;

(7) has committed an offense in another state that, if committed in this state, would be grounds for suspension;

(8) has committed a violation of section 169.444, subdivision 2, paragraph (a), within five years of a prior conviction under that section;

(9) has committed a violation of section 171.22, except that the commissioner may not suspend a person's driver's license based solely on the fact that the person possessed a fictitious or fraudulently altered Minnesota identification card;

(10) has failed to appear in court as provided in section 169.92, subdivision 4; or

(11) has failed to report a medical condition that, if reported, would have resulted in cancellation of driving privileges.

However, an action taken by the commissioner under clause (2) or (5) must conform to the recommendation of the court when made in connection with the prosecution of the licensee.

Sec. 29. Minnesota Statutes 1994, section 171.321, subdivision 3, is amended to read:

Subd. 3. [STUDY OF APPLICANT.] (a) Before issuing or renewing a school bus endorsement, the commissioner shall conduct a criminal and driver's license records check of the applicant. The commissioner may also conduct the check at any time while a person is so licensed. The check shall consist of a criminal records check of the state

criminal records repository and a check of the driver's license records system. If the applicant has resided in Minnesota for less than five years, the check shall also include a criminal records check of information from the state law enforcement agencies in the states where the person resided during the five years before moving to Minnesota, and of the national criminal records repository including the criminal justice data communications network. The applicant's failure to cooperate with the commissioner in conducting the records check is reasonable cause to deny an application or cancel a school bus endorsement. The commissioner may not release the results of the records check to any person except the applicant.

(b) The commissioner may issue to an otherwise qualified applicant a temporary school bus endorsement, effective for no more than 120 days, upon presentation of (1) an affidavit by the applicant that the applicant has not been convicted of a disqualifying offense and (2) a criminal history check from each state of residence for the previous five years. The criminal history check may be conducted and prepared by any public or private source acceptable to the commissioner.

Sec. 30. Minnesota Statutes 1994, section 171.321, subdivision 4, is amended to read:

Subd. 4. [TRAINING.] No person shall drive a class A, B, C, or D school bus when transporting school children to or from school or upon a school-related trip or activity without having demonstrated sufficient skills and knowledge to transport students in a safe and legal manner. A bus driver must have training or experience that allows the driver to meet at least the following competencies:

(1) safely operate the type of school bus the driver will be driving;

(2) understand student behavior, including issues relating to students with disabilities;

(3) ensure encourage orderly conduct of students on the bus and handle incidents of misconduct appropriately;

(4) know and understand relevant laws, rules of the road, and local school bus safety policies;

(5) handle emergency situations; and

(6) safely load and unload students; and

(7) demonstrate proficiency in first aid and cardiopulmonary resuscitation procedures.

The commissioner of public safety, in conjunction with the commissioner of education, shall develop a comprehensive model school bus driver training program and model assessments for school bus driver training competencies, which are not subject to chapter 14. A school district may use alternative assessments for bus driver training competencies with the approval of the commissioner of public safety.

Sec. 31. Minnesota Statutes 1994, section 171.321, subdivision 5, is amended to read:

Subd. 5. [ANNUAL EVALUATION.] A school district district's pupil transportation safety director, the chief administrator of a nonpublic school, or a private contractor shall evaluate each bus driver certify annually to assure the commissioner of public safety that, at minimum, each school bus driver continues to meet meets the school bus driver training competencies under subdivision 4 and shall report the number of hours of in-service training completed by each driver. A school district, nonpublic school, or private contractor also shall provide at least eight hours of in-service training annually to each school bus driver. As part of the annual evaluation, A district, nonpublic school, or private contractor also shall check the license of each person who transports students for the district with the National Drivers Register or the department of public safety annually. A school district, nonpublic school, or private contractor shall certify annually to the commissioner of public safety that each driver has received eight hours of in-service training and has met the training competencies The school board must approve and forward the competency certification and in-service report to the commissioner of public safety.

Sec. 32. Minnesota Statutes 1994, section 171.3215, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) As used in this section, the following terms have the meanings given them.

(b) "School bus driver" means a person possessing a school bus driver's endorsement on a valid Minnesota driver's license or a person possessing a valid Minnesota driver's license who drives a vehicle with a seating capacity of ten or less persons used as a school bus.

(c) "Disqualifying offense" includes any felony offense, any misdemeanor, gross misdemeanor, or felony violation of chapter 152, or any violation under section 609.3451, 609.746, subdivision 1, or 617.23, or a fourth moving violation within a three-year period violation of section 169.121, 169.129, or a similar statute or ordinance from another state while driving, operating, or being in physical control of a school bus or a Head Start bus.

(d) "Head Start bus driver" means a person possessing a valid Minnesota driver's license:

(1) with a passenger endorsement, who drives a Head Start bus;

(2) with a school bus driver's endorsement, who drives a Head Start bus; or

(3) who drives a vehicle with a seating capacity of ten or fewer persons used as a Head Start bus.

Sec. 33. Minnesota Statutes 1994, section 171.3215, subdivision 2, is amended to read:

Subd. 2. [CANCELLATION FOR DISQUALIFYING OFFENSE.] Within ten days of receiving notice under section 631.40, subdivision 1a, or otherwise receiving notice for a nonresident driver, that a school bus driver has been convicted of a disqualifying offense, the commissioner shall permanently cancel the school bus driver's endorsement on the offender's driver's license and in the case of a nonresident, the driver's privilege to operate a school bus in Minnesota. Within ten days of receiving notice under section 631.40, subdivision 1a, or otherwise receiving notice for a nonresident driver, that a school bus driver has been convicted of a gross misdemeanor, or a violation of section 169.121 or, 169.129, or a similar statute or ordinance from another state, and within ten days of revoking a school bus driver's license under section 169.123, the commissioner shall cancel the school bus driver's endorsement on the offender's driver's license or the nonresident's privilege to operate a school bus in Minnesota for five years. After five years, a school bus driver may apply to the commissioner for reinstatement. Even after five years, cancellation of a school bus driver's endorsement or a nonresident's privilege to operate a school bus in Minnesota for a conviction violation under section 169.121, 169.123, or 169.129, or a similar statute or ordinance from another state, shall remain in effect until the driver provides proof of successful completion of an alcohol or controlled substance treatment program. For a first offense, proof of completion is required only if treatment was ordered as part of a chemical use assessment. Within ten days of receiving notice under section 631.40, subdivision 1a, or otherwise receiving notice for a nonresident driver, that a school bus driver has been convicted of a fourth moving violation in the last three years, the commissioner shall cancel the school bus driver's endorsement on the offender's driver's license or the nonresident's privilege to operate a school bus in Minnesota until one year has elapsed since the last conviction. A school bus driver who has no new convictions after one year may apply for reinstatement. Upon canceling the offender's school bus driver's endorsement, the commissioner shall immediately notify the licensed offender of the cancellation in writing, by depositing in the United States post office a notice addressed to the licensed offender at the licensed offender's last known address, with postage prepaid thereon.

Sec. 34. Minnesota Statutes 1994, section 171.3215, subdivision 3, is amended to read:

Subd. 3. [BACKGROUND CHECK.] Before issuing or renewing a driver's license with a school bus driver's endorsement, the commissioner shall conduct an investigation to determine if the applicant has been convicted of committing a disqualifying offense, four moving violations in the previous three years, a violation of section 169.121 or, 169.129, or a similar statute or ordinance from another state, a gross misdemeanor, or if the applicant's driver's license has been revoked under section 169.123. The commissioner shall not issue a new bus driver's endorsement and shall not renew an existing bus driver's endorsement if the applicant has been convicted of committing a disqualifying offense. The commissioner shall not issue a new bus driver's endorsement and shall not renew an existing bus driver's endorsement if, within the previous five years, the applicant has been convicted of committing a violation of section 169.121 or, 169.129, or a similar statute or ordinance from another state, a gross misdemeanor, or if the applicant's driver's license has been revoked under section 169.123, or if, within the previous three years, the applicant has been convicted of four moving violations. An applicant who has been convicted of violating section 169.121 or, 169.129, or a similar statute or ordinance from another state, or who has had a license revocation under section 169.123 within the previous ten years must show proof of successful completion of an alcohol or controlled substance treatment program in order to receive a bus driver's endorsement. For a first offense, proof of completion is required only if treatment was ordered as part of a chemical use assessment. A school district or contractor that employs a nonresident school bus driver must conduct a background check of the employee's driving record and criminal history in both Minnesota and the driver's state of residence. Convictions for disqualifying offenses, gross misdemeanors, a fourth moving violation within the previous three years, or violations of section 169.121, 169.129, or a similar statute or ordinance in another state, must be reported to the department of public safety.

Sec. 35. [604A.015] [SCHOOL BUS DRIVER IMMUNITY FROM LIABILITY.]

A school bus driver who, while on duty, provides emergency care, advice, or assistance at the scene of an emergency or during transit to a location where professional medical care can be rendered, is not liable in ordinary negligence, for any civil damages as a result of acts or omissions to the person to whom assistance is rendered by the school bus driver in rendering the emergency care, advice, or assistance. For the purposes of this section, the scene of an emergency is an area outside the confines of a hospital or other institution that has hospital facilities, or an office of a person licensed to practice one or more of the healing arts under chapter 147, 148, 150A, or 153.

Sec. 36. Minnesota Statutes 1994, 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, or a violation of section 169.121 or 169.129, 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. 37. [INTERDISTRICT DESEGREGATION TRANSPORTATION.]

Notwithstanding Minnesota Statutes, section 124.225, subdivision 7d, a district's nonregular transporation revenue for interdistrict desegregation transportation for the 1995-1996 and 1996-1997 school years equals the district's actual cost in the current year for interdistrict desegregation transportation minus the amount of regular transportation revenue attributable to FTE's in the desegregation category transported outside of the district in the current school year.

Sec. 38. [PAY 1994 LEVY RECOGNITION.]

Notwithstanding Minnesota Statutes, sections 121.904 and 124.226, subdivision 9, 50 percent of the levy certified for taxes payable in 1994 under Minnesota Statutes, section 124.226, subdivision 9, shall be recognized as revenue for the fiscal year in which the levy was certified.

Sec. 39. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [TRANSPORTATION AID.] For transportation aid according to Minnesota Statutes, section 124.225:

$146,262,000..... 1996

$155,395,000 ..... 1997

The 1996 appropriation includes $21,038,000 for 1995 and $125,224,000 for 1996.

The 1997 appropriation includes $22,098,000 for 1996 and $133,297,000 for 1997.

Subd. 3. [TRANSPORTATION AID FOR POST-SECONDARY ENROLLMENT OPTIONS.] For transportation of pupils attending post-secondary institutions according to Minnesota Statutes, section 123.3514:

$72,000.....1996

$80,000.....1997

Subd. 4. [TRANSPORTATION AID FOR ENROLLMENT OPTIONS.] For transportation of pupils attending nonresident districts according to Minnesota Statutes, section 120.0621:

$20,000.....1996

$22,000.....1997

Subd. 5. [TRANSFER AUTHORITY.] If the appropriation in subdivision 3 or 4 for either year exceeds the amount needed to pay the state's obligation for that year under that subdivision, the excess amount may be used to make payments for that year under the other subdivision.

Subd. 6. [TRANSPORTATION SAFETY.] For student transportation safety aid according to Minnesota Statutes, section 124.225, subdivision 8m:

$1,447,000 ..... 1996

$1,327,000 ..... 1997

The 1996 appropriation includes $368,000 for 1995 and $1,079,000 for 1996.

The 1997 appropriation includes $190,000 for 1996 and $1,137,000 for 1997.

Sec. 40. [EFFECTIVE DATE.]

Section 15 (124.226, subdivision 3) is effective beginning with taxes payable in 1996 for fiscal year 1997. Sections 2 to 5 and 17 to 36 (school bus safety sections) are effective the day following final enactment. Section 38 (pay 1994 levy) is effective retroactive to July 1, 1993, and applies for fiscal years 1994 and 1995.

Section 1. Minnesota Statutes 1994, section 120.062, subdivision 7, is amended to read:

Subd. 7. [BASIS FOR DECISIONS.] The school board must adopt, by resolution, specific standards for acceptance and rejection of applications. Standards may include the capacity of a program, class, grade level, or school building or a previous disciplinary proceeding that resulted in the expulsion or exclusion of a student for being willfully engaged in dangerous or assaultive behavior; or for being convicted of or adjudicated for committing a felony. Standards may not include previous academic achievement, athletic or other extracurricular ability, disabling conditions, or proficiency in the English language, or previous disciplinary proceedings.

Sec. 2. Minnesota Statutes 1994, 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 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. 3. Minnesota Statutes 1994, 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 parties may use an individual presently listed on the Minnesota Supreme Court, Rule 114 list of individuals trained in alternative dispute resolution to assist the parties, provided there is no charge to the parent. The department of education may reimburse districts for the reasonable costs actually incurred of a third party assisting the parties, so long as that individual is on the Rule 114 list, or is otherwise approved by the department of education. The reimbursement must not exceed the costs for similar services through the office of administrative hearings. The department of education 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.

At least five calendar Within five business days before 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 and, 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 hearing officer, the school board shall request the commissioner to appoint a hearing officer who is satisfactorily current on department of education training. 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. A hearing officer may grant specific extensions of time beyond the 45-day period at the request of either party. The decision of the hearing officer shall be binding on all parties unless appealed to the hearing review officer by the parent, guardian, or the school board of the district where the child resides pursuant to clause (g).

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;

(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 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.

If the decision is appealed, a written transcript of the hearing shall be made by the school district and shall be accessible to the parties involved within five calendar days of the filing of the appeal. The hearing review officer shall 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. 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.

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 court of appeals. The judicial review shall be in accordance with chapter 14.

(i) The commissioner of education 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 state department of education, the state board of education, or a parent 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 state board of education 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.

Sec. 4. Minnesota Statutes 1994, section 120.17, is amended by adding a subdivision to read:

Subd. 3d. [INTERAGENCY SERVICES.] If at the time of initial referral for an educational assessment, or a reassessment, the school district determines that a child with disabilities who is age three through 21 may be eligible for interagency services, the district may request that the county of residence provide a representative to the first individual education plan team meeting following the assessment or reassessment. The district may also request to have a county representative attend other individual education plan team meetings when it is necessary to facilitate coordination between district and county provided services. Upon request from a school district, the resident county may provide a representative to assist the individual education plan team in determining the child's eligibility for existing health, mental health, or other support services administered or provided by the county and if the county provides a representative, the individual education plan team and the county representative shall develop an

interagency plan of care for an eligible child and the child's family to coordinate services required under the child's individual education plan with county services. The interagency plan of care shall include appropriate family information with the consent of the family, a description of how services will be coordinated between the district and county, a description of case management responsibilities and services, and a description of activities for obtaining third-party payment for eligible services, including medical assistance payments.

Sec. 5. Minnesota Statutes 1994, section 120.185, is amended to read:

120.185 [ACCOMMODATING STUDENTS WITH DISABILITIES; OPTIONS PLUS PILOT PROGRAM.]

Subdivision 1. [ACCOMMODATIONS; MODIFICATIONS.] A school or school district shall provide a student who is an "individual with a disability" under Section 504 of the Rehabilitation Act of 1973, United States Code, title 29, section 794, or under the Americans with Disabilities Act, Public Law Number 101-336, with reasonable accommodations or modifications in programs.

Subd. 2. [FINDINGS; PURPOSE.] The legislature finds that there is a critical need to support general education classroom teachers who teach children with specific learning disabilities. The legislature recognizes the right of these children to participate in noncategorical programming designed to encourage their maximum potential, maintain their self-esteem, and demonstrate results in measurable educational outcomes. In addition, the legislature finds that there is a need to demonstrate alternatives to special education that focus on children's educational progress and results, respond to the individual child, are efficient and cost-effective, and ensure the rights of eligible children and their families to speedy due process. Further, the intent of this legislation is to increase general education's ability to educate in a manner that decreases the need for pull-out programs for students with specific learning disabilities and implement alternative approaches to conflict resolution. Therefore, the legislature establishes an Options Plus pilot program for children with specific learning disabilities within general education designed to demonstrate that when these children receive accommodations, modifications, and personalized instruction they make progress toward graduation outcomes.

Subd. 3. [OPTIONS PLUS PILOT PROGRAM.] (a) A five-year pilot program is established to allow six school districts to develop and evaluate an Options Plus program for eligible children. An Options Plus applicant must be a school district or districts that cooperate for a particular purpose. To be eligible for Options Plus funding, a district or districts must meet all the criteria described in this section. Pilot programs will be approved to ensure geographic and cultural representation, variety in school district size, and age groups served. No applicant may offer Options Plus at the elementary level only.

(b) To obtain authorization to establish an Options Plus pilot program, a district or districts must submit an application to the commissioner of education in the form and manner prescribed by the commissioner. The application must describe:

(1) how the applicant will ensure that eligible children receive accommodations, modifications, and personalized instruction;

(2) the methods to be used to evaluate individual progress and outcomes and cumulative results including parent satisfaction;

(3) the projected number of students annually participating in Options Plus; and

(4) the current and projected level of educator competency at each district site where Options Plus will be established and the amount of start-up funds the district will need to implement teacher training prior to project implementation.

(c) School districts must provide assessment and determine eligibility for students with specific learning disabilities in accordance with Minnesota Rules, parts 3525.1325 to 3525.1347.

(d) The commissioner may require additional information from an applicant to the extent that the additional information documents the effectiveness of the Options Plus program to improve general education outcomes for eligible children.

Subd. 4. [DEFINITIONS.] For the purposes of this section, the terms defined in this subdivision have the meanings given them.

(a) "Accommodation" means any technique that alters the educational setting to enable the child to reach the child's maximum potential and to demonstrate more accurately the child's knowledge and educational progress. Accommodations may include, but are not limited to: preferential seating, paraphrasing of information, instructions, practice activities and directions provided in a manner consistent with the child's learning style, opportunity for increased response time, more frequent opportunity for review, extended time to complete assignments and tests, larger print for assignments or tests, special study sheets, extended or untimed tests, oral testing and answering, and use of assistive technology within and outside the educational environment.

(b) "Assistive technology" means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve functional capabilities.

(c) "Competency" means a documented and demonstrated attitude, skill, or knowledge base resulting in an ability of general education personnel to provide accommodations, modifications, and personalized instruction, according to the eligible child's individual learning styles, within general education environments.

(d) "Eligible children" means those children who have specific learning disabilities or conditions related to these disabilities according to recognized professional standards and documented by appropriately licensed personnel, including children eligible for accommodations and modifications under subdivision 1.

(e) "Learner plan" means a concise written plan that is based on the eligible child's documented specific learning disabilities and needs; includes the eligible child's strengths that may compensate for those differences and needs; provides the child, the child's parent, and all general education personnel responsible for direct instruction with information that results in clear understanding and subsequent use of accommodations, modifications, and personalized instruction; and includes methods of evaluating the child's progress that are consistent with learning differences, needs, strengths, modifications, and accommodations, and are at intervals identical to the student population of the school in which the child participating in Options Plus is enrolled.

(f) "Modification" means any technique that alters the school work required, makes it different from the school work required of other students in the same course, and encourages the eligible child to reach the child's maximum potential and facilitate educational success. Modifications may include, but are not limited to: copies of teacher notes and lesson plans, assisted note taking, reduced or altered assignments, increased assignments in areas of strength, alternative test formats, modified testing, peer assistance, cooperative learning, and modified grading such as documentation of progress and results.

(g) "Parent" means a parent, guardian, or person acting as a parent of a child.

(h) "Personalized instruction" means direct instruction (1) designed with knowledge of the child's learning style, strengths, and differences, to assist the child to gain in skill areas, so the child demonstrates progress toward and outcomes necessary to become a successful citizen; and (2) provided in general education settings consistent with the child's class schedule and course content and that does not interfere with attendance in any regularly scheduled class or academic activity.

Subd. 5. [DISTRICT COMPLIANCE WITH IDEA.] Districts participating in Options Plus shall comply with sections 120.03 and 120.17, Minnesota Rules, chapter 3525, the Individuals with Disabilities Education Act (IDEA), United States Code, title 20, section 1400 et seq., and Code of Federal Regulations, title 34, part 300, except that with documented parent approval, districts need not develop Individual Education Plans (IEPs) as required by section 120.17, subdivision 3a, clause (1), Minnesota Rules, part 3425.2900, United States Code, title 20, sections 1401(a) and 1412(4), and related federal regulations requiring an IEP. Districts shall continue to have an accounting procedure to document that federal special education money is expended for child find, identification, and evaluation consistent with the IDEA. The district shall not include children participating in Options Plus in special education child counts or funding formulas.

Subd. 6. [DISTRICT RESPONSIBILITIES.] (a) Districts shall develop a learner plan as defined in subdivision 4, paragraph (e), for each child participating in Options Plus. The learner plan shall be developed by one of the child's general education teachers, the parent, and child, if appropriate, in consultation with other general and special education personnel as is needed. The district shall document that the parent, in consultation with the child as appropriate, chose Options Plus after being fully informed of their rights. The district shall ensure that all education

personnel with direct instruction responsibility for the child participating in Options Plus are informed of the accommodations and modifications necessary to ensure success in their area of instruction. The district shall develop a method to revise the learner plan in a timely manner at the request of the parent or education personnel.

(b) If a dispute arises, of which the district is notified in writing by the parent:

(1) the learner plan shall remain in effect until a new learner plan is approved by the parent and child, as appropriate, unless the parent requests a reinstatement of the last agreed upon IEP;

(2) the district shall ensure that upon written request of the parent any child may withdraw from Options Plus;

(3) within 15 days of the date the district receives written notification of the dispute from the parent, the district shall:

(i) provide the parent and child, if appropriate, with a list that includes the names, addresses, and telephone numbers of all known individuals and organizations that offer individual advocate services within Minnesota;

(ii) inform the parent and child, as appropriate, of all procedural safeguards and dispute resolution alternatives available under the Individuals with Disabilities Education Act (IDEA), United States Code, title 20, section 1400 et seq., American with Disabilities Act of 1990 (ADA), United States Code, title 42, section 12101 et seq., Rehabilitation Act of 1973, United States Code, title 29, section 794, and applicable state law. Consistent with the intent of the Americans with Disabilities Act of 1990 (ADA), United States Code, title 42, section 12212, this legislation encourages the use of alternative means of dispute resolution including settlement negotiations, conciliations, facilitation, mediation, fact finding, minitrials, and arbitration; and

(iii) notify the department of education of the dispute and the potential need for alternative dispute resolution; and

(4) within 30 days of the date the department of education received notification of a dispute, the district shall offer the parent alternative dispute resolution through the department. The dispute shall be heard by the department and the department shall make a recommendation for resolution of the dispute.

If the child was previously served through an IEP, the parent shall retain the option to immediately reinstate the last agreed upon IEP.

Subd. 7. [REPORT TO LEGISLATURE.] The commissioner of education, together with the commissioner of finance, shall annually report to the respective committees of the legislature on the educational impact and cost-effectiveness of Options Plus. Each report shall include evaluation information on all aspects of Options Plus referred to in subdivisions 3 to 6. The initial report is due February 1997.

Sec. 6. Minnesota Statutes 1994, section 123.3514, subdivision 7, is amended to read:

Subd. 7. [FEES; TEXTBOOKS; MATERIALS.] A post-secondary institution that receives reimbursement for a pupil under subdivision 6 may not charge that pupil for fees, textbooks, materials, support services as defined in section 135A.16, or other necessary costs of the course or program in which the pupil is enrolled if the charge would be prohibited under section 120.74, except for equipment purchased by the pupil that becomes the property of the pupil. An institution may require the pupil to pay for fees, textbooks, and materials for a course taken for post-secondary credit.

Sec. 7. Minnesota Statutes 1994, section 123.3514, is amended by adding a subdivision to read:

Subd. 7b. [SUPPORT SERVICES.] The post-secondary institution shall inform the pupil of the support services available at that institution.

If the student has an individual education plan that provides general education support and accommodations, the school district shall be responsible for those support services. The district and the post-secondary institution shall develop an agreement on the rate to be charged for the services. Nothing in this section shall prevent the student from enrolling while the agreement is being developed. If the parties cannot agree on the services, on application of either party, the commissioner shall resolve the dispute in the same manner the commissioner fixes tuition rates under section 120.17, subdivision 4. The commissioner's decision is binding on both parties.

Sec. 8. Minnesota Statutes 1994, section 124.273, is amended by adding a subdivision to read:

Subd. 1c. [REVENUE.] A district's limited English proficiency programs 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 year 1995.

Sec. 9. Minnesota Statutes 1994, section 124.273, is amended by adding a subdivision to read:

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

(1) 68 percent of the salaries paid limited English proficiency program teachers; 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. 10. Minnesota Statutes 1994, section 124.273, is amended by adding a subdivision to read:

Subd. 1e. [AID.] A district's limited English proficiency aid for fiscal year 1996 or later equals the aid percentage factor under section 124.3201, subdivision 1, times the district's limited English proficiency revenue.

Sec. 11. Minnesota Statutes 1994, section 124.32, subdivision 10, is amended to read:

Subd. 10. [SUMMER SCHOOL.] The state shall pay aid for summer school programs for children with a disability on the basis of subdivisions 1b, 1d, and 5 for the current school year. The state shall also pay to the Minnesota state academy for the deaf or the Minnesota state academy for the blind a part 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. By March 15 of each year, districts shall submit separate applications for program and budget approval for summer school programs. The review of these applications shall be as provided in subdivision 7. By May 1 of each year, the commissioner shall approve, disapprove or modify the applications and notify the districts of the action and of the estimated amount of aid for the summer school programs.

Sec. 12. Minnesota Statutes 1994, section 124.32, subdivision 12, is amended to read:

Subd. 12. [ALLOCATION FROM COOPERATIVE CENTERS, EDUCATIONAL COOPERATIVE SERVICE UNITS, EDUCATION DISTRICTS, AND INTERMEDIATE DISTRICTS.] For purposes of this section, a special education cooperative, educational cooperative service unit, education district, or an intermediate district shall allocate its approved expenditures for special education programs among participating school districts. Special education aid for services provided by a cooperative, educational cooperative service unit, education district, or intermediate district shall be paid to the participating school districts or to a special education cooperative, educational cooperative service unit, education district, or intermediate district if designated by a participating school district.

Sec. 13. [124.3201] [SPECIAL EDUCATION REVENUE.]

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 means fiscal year 1995. 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 70 percent for fiscal year 1996, 80 percent for fiscal year 1997, 90 percent for fiscal year 1998, and 100 percent for fiscal years 1999 and later.

(g) "Levy percentage factor" means 100 minus the aid percentage factor for that year.

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; and

(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.

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.

Subd. 4. [STATE TOTAL SPECIAL EDUCATION REVENUE.] The state total special education revenue for fiscal year 1996 equals $331,000,000. The state total special education revenue for fiscal year 1997 equals $347,000,000. The state total special education revenue for later fiscal years equals:

(1) the state total special education 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.

Subd. 5. [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] A school district's special education revenue for fiscal year 1996 and later equals the state total special education revenue 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 education shall annually increase each district's special education revenue by the amount necessary to compensate for the increased service requirements.

Subd. 6. [SPECIAL EDUCATION AID.] A school district's special education aid for fiscal year 1996 and later equals the district's special education revenue times the aid percentage factor for that year.

Subd. 7. [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 aid for services provided by a cooperative or intermediate district shall be paid to the participating school districts unless the district has requested that aid be paid directly to the cooperative or intermediate district under section 124.32, subdivision 12.

Sec. 14. [124.3202] [SPECIAL EDUCATION SUMMER PROGRAM REVENUE.]

Subdivision 1. [SUMMER PROGRAM BASE REVENUE.] The summer program base revenue 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, 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 $7,253,000. The state total summer program revenue for fiscal year 1997 equals $7,604,000. The state total summer program revenue for later fiscal years equals:

(1) the state total summer program 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.

Subd. 4. [SCHOOL DISTRICT SUMMER PROGRAM REVENUE.] A school district's summer program revenue for fiscal year 1996 and later equals the state total summer program revenue times the ratio of the district's adjusted summer program base revenue to the state total adjusted summer program base revenue.

Subd. 5. [SPECIAL EDUCATION SUMMER PROGRAM AID.] A school district's special education summer program aid for fiscal year 1996 and later 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 unless the district has requested that aid be paid directly to the cooperative or intermediate district under section 124.32, subdivision 12.

Sec. 15. Minnesota Statutes 1994, section 124.321, subdivision 1, is amended to read:

Subdivision 1. [LEVY EQUALIZATION REVENUE.] (a) For fiscal years 1996 and later, special education levy equalization revenue for a school district, excluding an intermediate school district, equals the sum of the following amounts:

(1) 68 percent of the salaries paid to essential personnel in that district minus the amount of state aid and any federal aid, if applicable, paid to that district for salaries of these essential personnel under section 124.32, subdivisions 1b and 10, for the year to which the levy is attributable, plus

(2) 68 percent of the salaries paid to essential personnel in that district minus the amount of state aid and any federal aid, if applicable, paid to that district for salaries of those essential personnel under section 124.574, subdivision 2b, for the year to which the levy is attributable, plus

(3) 68 percent of the salaries paid to limited English proficiency program teachers in that district minus the amount of state aid and any federal aid, if applicable, paid to that district for salaries of these teachers under section 124.273, subdivision 1b, for the year to which the levy is attributable, plus

(4) the alternative delivery levy revenue determined according to section 124.322, subdivision 4, plus

(5) the amount allocated to the district by special education cooperatives or intermediate districts in which it participates according to subdivision 2.

A district that receives alternative delivery levy revenue according to section 124.322, subdivision 4, shall not receive levy equalization revenue under clause (1) or subdivision 2, clause (1), for the same fiscal year.

(1) the levy percentage factor for that year times the district's special education revenue under section 124.3201; plus

(2) the levy percentage factor for that year times the district's special education summer program revenue under section 124.3202; plus

(3) the levy percentage factor for that year times the district's special education excess cost revenue under section 124.323; plus

(4) the levy percentage factor for that year times the district's secondary vocational education for children with a disability revenue under section 124.574; plus

(5) the levy percentage factor for that year times the district's limited English proficiency programs revenue under section 124.273.

Sec. 16. Minnesota Statutes 1994, section 124.321, subdivision 2, is amended to read:

Subd. 2. [REVENUE ALLOCATION FROM COOPERATIVES AND INTERMEDIATE DISTRICTS STATE ACADEMIES.] (a) For purposes of this section, a special education cooperative or an intermediate district shall allocate to participating school districts the sum of the following amounts:

(1) 68 percent of the salaries paid to essential personnel in that cooperative or intermediate district minus the amount of state aid and any federal aid, if applicable, paid to that cooperative or intermediate district for salaries of these essential personnel under section 124.32, subdivisions 1b and 10, for the year to which the levy is attributable, plus

(2) 68 percent of the salaries paid to essential personnel in that district minus the amount of state aid and any federal aid, if applicable, paid to that district for salaries of those essential personnel under section 124.574, subdivision 2b, for the year to which the levy is attributable, plus

(3) 68 percent of the salaries paid to limited English proficiency program teachers in that cooperative or intermediate district minus the amount of state aid and any federal aid, if applicable, paid to that cooperative or intermediate district for salaries of these teachers under section 124.273, subdivision 1b, for the year to which the levy is attributable.

(b) A special education cooperative or an intermediate district that allocates amounts to participating school districts under this subdivision must report the amounts allocated to the department of education.

(c) For purposes of this subdivision section, the Minnesota state academy for the deaf or the Minnesota state academy for the blind each year shall allocate an amount equal to 68 percent of salaries paid to instructional aides in either academy minus the amount of state aid and any federal aid, if applicable, paid to either academy for salaries of these instructional aides under sections 124.32, subdivisions 1b and 10, the levy percentage factor for that year times their special education revenue under section 124.3201 and their special education summer program revenue under section 124.3202 for the year to each school district that assigns a child with an individual education plan requiring an instructional aide to attend either academy. The school districts that assign a child who requires an instructional aide may make a levy in the amount of the costs allocated to them by either academy.

(d) (b) When the Minnesota state academy for the deaf or the Minnesota state academy for the blind allocates unreimbursed portions of salaries of instructional aides revenue among school districts that assign a child who requires an instructional aide, for purposes of the districts making a levy under this subdivision, the academy shall provide information to the department of education on the amount of unreimbursed costs of salaries revenue it allocated to the school districts that assign a child who requires an instructional aide.

Sec. 17. Minnesota Statutes 1994, section 124.322, is amended to read:

124.322 [ALTERNATIVE DELIVERY BASE REVENUE ADJUSTMENT.]

Subdivision 1. [ELIGIBILITY.] A district is eligible for an alternative delivery base revenue adjustment if the commissioner of education has approved the application of the district according to section 120.173.

Subd. 1a. [DEFINITIONS BASE REVENUE ADJUSTMENT.] In this section, the definitions in this subdivision apply.

(a) "Base revenue" means the following:

(1) for the first fiscal year after approval of the district's application, base revenue means the sum of the district's revenue for the preceding fiscal year for its special education program under sections 124.32, subdivisions 1b, 1d, 2, 5, and 10, and 124.321, subdivision 1;

(2) for the second fiscal year after approval of a district's application, base revenue means the sum of the district's revenue for the second prior fiscal year for its special education program under sections 124.32, subdivisions 1b, 1d, 2, 5, and 10, and 124.321, subdivision 1; and

(3) For the third fiscal year after approval of a district's application, and thereafter, the special education base revenue under section 124.3201, subdivision 1, and the summer program base revenue means the sum of the revenue a district would have been entitled to in the second prior fiscal year for its special education program under sections 124.32, subdivisions 1b, 1d, 2, 5, and 10, and 124.321, subdivision 1, under section 124.3202, subdivision 1, shall be computed based on activities defined as reimbursable under state board rules for special education and nonspecial education students, and additional activities as detailed and approved by the commissioner of education.

(b) "Base aid" means the following:

(1) for the first fiscal year after approval of a district's application, base aid means the sum of the district's gross aid for the preceding fiscal year for its special education program under section 124.32, subdivisions 1b, 1d, 2, 5, and 10;

(2) for the second fiscal year after approval of a district's application, base aid means the sum of the district's gross aid for the second prior fiscal year for its special education program under section 124.32, subdivisions 1b, 1d, 2, 5, and 10; and

(3) for the third fiscal year after approval of a district's application and thereafter, base aid means the sum of the gross aid the district would have been entitled to in the second prior fiscal year for its special education program under section 124.32, subdivisions 1b, 1d, 2, 5, and 10, based on activities defined as reimbursable under state board of education rules for special education and nonspecial education students, and additional activities as detailed and approved by the commissioner of education in the application plan.

(c) Notwithstanding paragraphs (a) and (b), base revenue and base aid for 1995 and later fiscal years must not include revenue and aid under section 124.32, subdivision 5.

(d) "Alternative delivery revenue inflator" means:

(1) for the first fiscal year after approval of a district's application, the greater of 1.017 or the ratio of (i) the statewide average special education revenue under sections 124.32 and 124.321 per pupil in average daily membership for the current fiscal year, to (ii) the statewide average special education revenue per pupil in average daily membership for the previous fiscal year.

(2) for the second and later fiscal years, the greater of 1.034 or the ratio of (i) the statewide average special education revenue under sections 124.32 and 124.321 per pupil in average daily membership for the current fiscal year, to (ii) the statewide average special education revenue per pupil in average daily membership for the second prior fiscal year.

(e) The commissioner of education shall adjust each district's base revenue and base aid to reflect any changes in special education services required by rule or statute.

Subd. 2. [AMOUNT OF ALTERNATIVE DELIVERY REVENUE.] For the first fiscal year after approval of an application, a district's alternative delivery revenue equals its base revenue multiplied by the product of the alternative delivery revenue inflator times the ratio of the district's average daily membership for the current fiscal year to the district's average daily membership for the immediately preceding fiscal year. For the second and later fiscal years a district's alternative delivery revenue equals its base revenue multiplied by the product of the alternative delivery revenue inflator times the ratio of the district's average daily membership for the current fiscal year to the district's average daily membership for the second preceding fiscal year.

Subd. 3. [ALTERNATIVE DELIVERY AID.] For the first fiscal year after approval of an application, a district's alternative delivery aid equals its base aid multiplied by the product of 1.017 times the ratio of the district's average daily membership for the current fiscal year to the district's average daily membership for the preceding fiscal year. For the second and later fiscal years a district's alternative delivery aid equals its base aid multiplied by the product of 1.034 times the ratio of the district's average daily membership for the current fiscal year to the district's average daily membership for the second preceding fiscal year. A district that receives aid under this subdivision shall not receive aid under section 124.32, subdivisions 1b, 1d, 2, 5, and 10, for the same fiscal year.

Subd. 4. [ALTERNATIVE DELIVERY LEVY REVENUE.] A district shall receive alternative delivery levy revenue equal to the difference between the alternative delivery revenue and the alternative delivery aid. If the alternative delivery aid for a district is prorated, the alternative delivery levy revenue shall be increased by the amount not paid by the state due to proration. The alternative delivery levy revenue shall be included under section 124.321, subdivision 1, for purposes of computing the special education levy under section 124.321, subdivision 3, and the special education levy equalization aid under section 124.321, subdivision 4.

Subd. 5. [USE OF REVENUE.] Revenue under this section sections 124.3201 and 124.3202 shall be used to implement the approved program.

Sec. 18. Minnesota Statutes 1994, 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 124.32, subdivisions 1b, 1d, 2, and 10, and 124.322, subdivision 2 124.3201, 124.3202, and 124.321; plus

(2) expenditures for tuition bills received under section 120.17; minus

(3) revenue for teachers' salaries, contracted services, supplies, and equipment under sections 124.32, subdivisions 1b, 1d, 2, and 10; 124.321, subdivision 1, clause (1); and 124.322, subdivision 2 124.3201, 124.3202, and 124.321; minus

(4) tuition receipts under section 120.17.

(b) "General revenue" means the sum of the general education revenue according to section 124A.22, subdivision 1, plus the total referendum revenue according to section 124A.03, subdivision 1e.

Sec. 19. Minnesota Statutes 1994, section 124.323, subdivision 2, is amended to read:

Subd. 2. [EXCESS COST AID REVENUE.] For 1995 1996 and later fiscal years, a district's special education excess cost aid revenue equals the product of:

(1) 70 percent of the difference between (i) the district's unreimbursed special education cost per actual pupil unit and (ii) six percent of the district's general revenue per actual pupil unit, times

(2) the district's actual pupil units for that year.

Sec. 20. Minnesota Statutes 1994, section 124.323, is amended by adding a subdivision to read:

Subd. 3. [EXCESS COST AID.] For 1996 and later fiscal years, a district's special education excess cost aid equals the district's special education excess cost revenue times the aid percentage factor for that year.

Sec. 21. Minnesota Statutes 1994, section 124.573, subdivision 2e, is amended to read:

Subd. 2e. [ALLOCATION FROM COOPERATIVE CENTERS AND INTERMEDIATE DISTRICTS.] For purposes of subdivisions 2b, paragraph (b), and 2f, paragraph (b), a cooperative center or an intermediate district shall allocate its approved expenditures for secondary vocational education programs among participating school districts. For purposes of subdivision 2f, paragraph (a), a cooperative center or an intermediate district shall allocate its secondary vocational aid for fiscal year 1994 among participating school districts. For 1995 and later fiscal years, secondary vocational aid for services provided by a cooperative center or an intermediate district shall be paid to the participating school district or to a vocational cooperative, education district, or intermediate district if designated by a participating school district.

Sec. 22. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2c. [DEFINITIONS.] For the purposes of this section and section 124.321, the definitions in this subdivision apply.

(a) "Base year" for fiscal year 1996 means fiscal year 1995. 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) "Average daily membership" has the meaning given it in section 124.17.

(d) "Program growth factor" means 1.00 for fiscal year 1998 and later.

(e) "Aid percentage factor" means 70 percent for fiscal year 1996, 80 percent for fiscal year 1997, 90 percent for fiscal year 1998, and 100 percent for fiscal years 1999 and later.

Sec. 23. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2d. [BASE REVENUE.] The secondary vocational disabled program base revenue equals the sum of the following amounts computed using base year data:

(1) 68 percent of the salary of each essential licensed person who provides direct instructional services to students employed during that fiscal year for services rendered in that district's secondary vocational education programs for children with a disability;

(2) 47 percent of the costs of necessary equipment for secondary vocational education programs for children with a disability;

(3) 47 percent of the costs of necessary travel between instructional sites by secondary vocational education teachers of children with a disability but not including travel to and from local, regional, district, state, or national vocational student organization meetings;

(4) 47 percent of the costs of necessary supplies for secondary vocational education programs for children with a disability but not to exceed an average of $47 in any one school year for each child with a disability receiving these services;

(5) for secondary vocational education programs for children with disabilities provided by a contract approved by the commissioner with public, private, or voluntary agencies other than a Minnesota school district or cooperative center, in place of programs 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;

(6) for secondary vocational education programs for children with disabilities provided by a contract approved by the commissioner with public, private, or voluntary agencies other than a Minnesota school district or cooperative center, that are supplementary to a full educational program provided by the school district, 52 percent of the amount of the contract; and

(7) for a contract approved by the commissioner with another Minnesota school district or cooperative center for vocational evaluation services for children with a disability for children that are not yet enrolled in grade 12, 52 percent of the amount of the contract.

Sec. 24. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2e. [ADJUSTED SECONDARY VOCATIONAL-DISABLED BASE REVENUE.] For fiscal year 1996 and later, a district's adjusted secondary vocational-disabled base revenue equals the district's secondary vocational-disabled 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.

Sec. 25. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2f. [STATE TOTAL SECONDARY VOCATIONAL-DISABLED REVENUE.] The state total secondary vocational-disabled revenue for fiscal year 1996 equals $7,720,000. The state total secondary vocational-disabled revenue for fiscal year 1997 equals $8,118,000. 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. 26. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2g. [SCHOOL DISTRICT SECONDARY VOCATIONAL-DISABLED REVENUE.] A school district's secondary vocational-disabled revenue for fiscal year 1996 and later equals the state total secondary vocational-disabled revenue times the ratio of the district's adjusted secondary vocational-disabled base revenue to the state total adjusted secondary vocational-disabled base revenue.

Sec. 27. Minnesota Statutes 1994, section 124.574, is amended by adding a subdivision to read:

Subd. 2h. [SCHOOL DISTRICT SECONDARY VOCATIONAL-DISABLED AID.] A school district's secondary vocational-disabled aid for fiscal year 1996 and later equals the district's secondary vocational-disabled revenue times the aid percentage factor for that year.

Sec. 28. Minnesota Statutes 1994, section 124.574, subdivision 9, is amended to read:

Subd. 9. [REVENUE ALLOCATION FROM COOPERATIVE CENTERS AND INTERMEDIATE DISTRICTS.] For purposes of this section and section 124.321, a cooperative center or an intermediate district shall allocate its approved expenditures for secondary vocational programs for children with a disability among participating school districts. Aid for secondary vocational programs for children with a disability for services provided by a cooperative or intermediate district shall be paid to the participating school districts or to a vocational cooperative, education district, or intermediate district if designated by a participating school district.

Sec. 29. Minnesota Statutes 1994, section 125.62, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] A grant program is established to assist American Indian people to become teachers and to provide additional education for American Indian teachers. The state board may award a joint grant to each of the following:

(1) the Duluth campus of the University of Minnesota and independent school district No. 709, Duluth;

(2) Bemidji state university and independent school district No. 38, Red Lake;

(3) Moorhead state university and one of the school districts located within the White Earth reservation; and

(4) Augsburg college, independent school district No. 625, St. Paul, and special school district No. 1, Minneapolis.

Sec. 30. Minnesota Statutes 1994, section 125.62, subdivision 7, is amended to read:

Subd. 7. [LOAN FORGIVENESS.] The loan may be forgiven if the recipient is employed as a teacher, as defined in section 125.12 or 125.17, in an eligible school or program in Minnesota. One-fifth One-fourth of the principal of the outstanding loan amount shall be forgiven for each year of eligible employment, or a pro rata amount for eligible employment during part of a school year, part-time employment as a substitute teacher, or other eligible part-time teaching. Loans for $2,500 or less may be forgiven at the rate of up to $1,250 per year. The following schools and programs are eligible for the purposes of loan forgiveness:

(1) a school or program operated by a school district;

(2) a tribal contract school eligible to receive aid according to section 124.86;

(3) a head start program;

(4) an early childhood family education program; or

(5) a program providing educational services to children who have not entered kindergarten; or

(6) a program providing educational enrichment services to American Indian students in grades kindergarten through 12.

If a person has an outstanding loan obtained through this program, the duty to make payments of principal and interest may be deferred during any time period the person is enrolled at least one-half time in an advanced degree program in a field that leads to employment by a school district. To defer loan obligations, the person shall provide written notification to the state board of education and the recipients of the joint grant that originally authorized the loan. Upon approval by the state board and the joint grant recipients, payments shall be deferred.

The loan forgiveness program, loan deferral, and procedures to administer the program shall be approved by the higher education coordinating board.

Sec. 31. Minnesota Statutes 1994, section 126.49, is amended by adding a subdivision to read:

Subd. 2a. [RESOLUTION OR LETTER.] All persons applying for a license under this section must submit to the board a resolution or letter of support signed by an American Indian tribal government or its designee. All persons holding a license under this section on the effective date of this section must have on file or file with the board a resolution or letter of support signed by a tribal government or its designee by January 1, 1996, or the next renewal date of the license thereafter.

Sec. 32. Minnesota Statutes 1994, section 127.30, subdivision 2, is amended to read:

Subd. 2. (a) A written notice containing the grounds for suspension, a brief statement of the facts, a description of the testimony, a readmission plan, and a copy of sections 127.26 to 127.39, shall be personally served upon the pupil at or before the time the suspension is to take effect, and upon the pupil's parent or guardian by certified mail within 48 hours of the conference. In the event a pupil is suspended without an informal administrative conference on the grounds that the pupil will create an immediate and substantial danger to surrounding persons or property, the

written notice shall be served either personally or by certified mail upon the pupil and the pupil's parent or guardian within 48 hours of the suspension. Service by certified mail is complete upon mailing.

(b) If a custodial parent or guardian of a suspended pupil has officially filed, during the school year of the suspension, a telephone number with the principal's office of the pupil's school, a school official must try at least once to reach or leave a message for that parent or guardian at that telephone number before releasing the pupil to begin the suspension.

Sec. 33. [127.392] [INCARCERATED STUDENTS.]

Notwithstanding sections 127.26 to 127.39, a student released from a correctional institution or a juvenile services program may be diverted from the general school population to a substantive alternative instruction program for up to one year if the school district, after consultation with the student's parole officer, determines that the student poses a direct threat to the safety of students or school personnel. The school district shall provide information to the pupil on the processes available to appeal a decision to be diverted from the general school program.

Sec. 34. Laws 1994, chapter 587, article 3, section 19, subdivision 1, is amended to read:

Subdivision 1. [SPECIAL EDUCATION AID.] $17,500,000 is appropriated in fiscal year 1994 from the general fund to the department of education for special education aid to school districts. This appropriation is available until June 30, 1995. This amount is added to the appropriations for aid for special education programs contained in Laws 1993, chapter 224, article 3, section 38, subdivisions 2, 4, 8, 11, and 14. The individual appropriations shall be increased by the commissioner of finance in the amounts determined by the commissioner of education. This amount is appropriated to eliminate the fiscal year 1993 deficiencies and reduce the fiscal year 1994 and 1995 deficiencies in the appropriations in those subdivisions. The department must reduce a school district's payable 1995 and payable 1996 levy limitations by the full amount of the aid payments made to the school district according to this subdivision. This appropriation shall not be included in determining the amount of a deficiency in the special education programs for fiscal year 1995 for the purpose of allocating any excess appropriations to aid or grant programs with insufficient appropriations as provided in Minnesota Statutes, section 124.14, subdivision 7. Notwithstanding Minnesota Statutes, section 124.195, subdivision 10, 100 percent of this appropriation must be paid in fiscal years 1994 and 1995. This appropriation is not to be included in a base budget for future fiscal years.

Sec. 35. [HOMESTEAD AND AGRICULTURAL CREDIT ADJUSTMENT.]

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

(b) Prior to the computation of homestead and agricultural aid for taxes payable in 1996, the commissioner of revenue shall reduce the school district's homestead and agricultural aid by an amount equal to the lessor of: (1) 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 the computation of homestead and agricultural aid for taxes payable in 1997, the commissioner of revenue shall reduce a school district's homestead and agricultural aid by an amount equal to the lesser of: (1) the amount of the district's homestead and agricultural aid for calendar year 1996; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

(d) Prior to the computation of homestead and agricultural aid for taxes payable in 1998, the commissioner of revenue shall reduce a school district's homestead and agricultural aid by an amount equal to the lesser of: (1) the amount of the district's homestead and agricultural aid for calendar year 1997; or (2) an amount equal to one percent times the district's adjusted net tax capacity for assessment year 1994.

Sec. 36. [MEXICAN ORIGIN EDUCATION PILOT GRANT PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] A Mexican origin education pilot grant program is established to assist school districts and communities in meeting the educational and culturally related academic needs of students of Mexican origin.

Subd. 2. [EXPECTED OUTCOMES.] Grant recipients shall use the funds for programs designed to improve the school success of students of Mexican origin. Grant proceeds may be used for curriculum and staff development, tutoring, mentoring, parent involvement, and other programs that are designed to:

(1) improve student achievement and reduce dropout rates;

(2) increase student knowledge and understanding of Mexican history;

(3) improve instruction by developing the cultural competence skills of teachers and other staff; and

(4) increase parent involvement in education and the school community.

Subd. 3. [GRANT ELIGIBILITY, APPLICATIONS, AND AWARDS.] The commissioner of education shall prescribe the form and manner of applications and may award grants to the applicants likely to meet the outcomes in subdivision 2. The commissioner shall give preference to grant proposals that provide collaboration with community resources.

Sec. 37. [THIRD PARTY NEUTRALS.]

Money allocated by the department of education in fiscal year 1995 to the bureau of mediation services to run the department's mediation program under Minnesota Statutes, section 120.17, subdivision 3b, paragraph (d), must also be made available in fiscal years 1996 and 1997 to reimburse school districts for third party neutrals as provided in Minnesota Statutes, section 120.17, subdivision 3b, paragraph (c).

Sec. 38. [STATE VOCATIONAL SCHOOL PLANNING PROCESS.]

Subdivision 1. [PLANNING COMMITTEE.] A planning committee is established to develop a preliminary plan for a state-of-the-art vocational high school in Minnesota to serve the needs of students with special vocational interests and talents, and to serve as a demonstration site for vocational education. The committee shall consist of 21 members. The governor, speaker of the house of representatives, and the majority leader of the senate shall each appoint seven members. The governor's appointments must include the commissioners of education and human services or their designees. Members also must include potential students and their parents, imaginative practicing teachers, high school administrators, representatives of business and labor, and community representatives. The committee is subject to Minnesota Statutes, section 15.059.

Subd. 2. [PURPOSES.] The purposes of the planning committee are to:

(1) evaluate the need for a vocational high school, including the needs of Minnesota students for vocational training and the needs of private sector employers for skilled, vocationally trained employees;

(2) determine the capacity of Minnesota's secondary schools to meet this need;

(3) identify the challenges and opportunities for vocational education;

(4) develop a preliminary plan for a vocational high school to meet the identified needs;

(5) develop a learning signature for a vocational high school based on its focus, including educational goals, learning organization, anticipated learner results, and staffing and staff development;

(6) describe the anticipated partnerships of the vocational school with other secondary educational institutions, post-secondary institutions, business and labor, community organizations, and students' families;

(7) develop a technology and equipment plan for the proposed school; and

(8) develop preliminary cost estimates for a vocational school.

Subd. 3. [APPOINTMENTS; MEETINGS.] The planning committee must be appointed by July 1, 1995. The committee must begin meeting in July 1995. At least some of the committee meetings must be held outside the metropolitan area as defined in Minnesota Statutes, section 473.121, subdivision 2.

Subd. 4. [REPORT.] The planning committee shall make a report of its work to the education committees of the legislature in February 1996.

Subd. 5. [STAFF; OFFICE SPACE.] The planning committee may appoint staff as necessary to assist in its work. The staff are members of the unclassified service of the state. The commissioner of education shall provide office space for the committee staff.

Sec. 39. [REPORT; COMMON DEFINITIONS.]

The department of education and the department of human services must analyze the current programs, definitions, assessment procedures, diagnostic practices, and case management procedures used by the education and human services systems to provide services for children. These agencies must report to the legislature by January 15, 1996, on recommendations that will allow children to receive services from both systems under a common set of definitions, procedure, and practices and on ways to eliminate any duplication of services and programs. The report must include any necessary changes in Minnesota Statutes and Minnesota Rules to implement the recommendations.

Sec. 40. [GRANTS; OPTIONS PLUS PILOT PROGRAM.]

In fiscal year 1996, the commissioner of education shall award up to six grants for necessary staff development to eligible school districts or groups of school districts authorized to participate in the Options Plus pilot program according to Minnesota Statutes, section 120.185.

Sec. 41. [RESTRICTING BEHAVIORAL CRITERIA.]

Within 90 days after the effective date of sections 1 (120.062, subdivision 7), 32 (127.30, subdivision 2), and 33 (127.392), the state board of education must adopt an amendment to Minnesota Rules, part 3525.1329, so that its definitions and criteria conform with, but do not exceed, the minimal requirements of Code of Federal Regulations, title 34, section 300.7, paragraph (b), clause (9), for students having the disability defined as "serious emotional disturbance."

Sec. 42. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund or other named fund to the department of education for the fiscal years designated.

Subd. 2. [SPECIAL EDUCATION AID.] For special education aid according to Minnesota Statutes, section 124.32:

$225,211,000..... 1996

$270,761,000..... 1997

The 1996 appropriation includes $28,230,000 for 1995 and $196,981,000 for 1996.

The 1997 appropriation includes $34,761,000 for 1996 and $236,000,000 for 1997.

Subd. 3. [SPECIAL PUPIL AID.] For special education aid according to Minnesota Statutes, section 124.32, subdivision 6, for pupils with handicaps placed in residential facilities within the district boundaries for whom no district of residence can be determined:

$470,000.....1996

$479,000.....1997

If the appropriation for either year is insufficient, the appropriation for the other year is available. If the appropriations for both years are insufficient, the appropriation for special education aid may be used to meet the special pupil obligations.

Subd. 4. [SUMMER SPECIAL EDUCATION AID.] For special education summer program aid according to Minnesota Statutes, section 124.32, subdivision 10:

$5,078,000 ..... 1996

$6,084,000 ..... 1997

The 1996 appropriation is for 1995 summer programs.

The 1997 appropriation is for 1996 summer programs.

Subd. 5. [TRAVEL FOR HOME-BASED SERVICES.] For aid for teacher travel for home-based services according to Minnesota Statutes, section 124.32, subdivision 2b:

$77,000.....1996

$80,000.....1997

The 1996 appropriation includes $11,000 for 1995 and $66,000 for 1996.

The 1997 appropriation includes $11,000 for 1996 and $69,000 for 1997.

Subd. 6. [SPECIAL EDUCATION EXCESS COST AID.] For excess cost aid:

$6,700,000 ..... 1996

$12,256,000 ..... 1997

The 1996 appropriation includes $760,000 for 1995 and $5,940,000 for 1996.

The 1997 appropriation includes $1,048,000 for 1996 and $11,248,000 for 1997.

Subd. 7. [LIMITED ENGLISH PROFICIENCY PUPILS PROGRAM AID.] For aid to educational programs for pupils of limited English proficiency according to Minnesota Statutes, section 124.273:

$8,367,000 ..... 1996

$10,904,000 ..... 1997

The 1996 appropriation includes $945,000 for 1995 and $7,422,000 for 1996.

The 1997 appropriation includes $1,309,000 for 1996 and $9,595,000 for 1997.

Subd. 8. [SECONDARY VOCATIONAL; STUDENTS WITH DISABILITIES.] For aid for secondary vocational education for pupils with disabilities according to Minnesota Statutes, section 124.574:

$5,184,000 ..... 1996

$6,330,000 ..... 1997

The 1996 appropriation includes $590,000 for 1995 and $4,594,000 for 1996.

The 1997 appropriation includes $810,000 for 1996 and $5,520,000 for 1997.

Subd. 9. [SPECIAL PROGRAMS EQUALIZATION AID.] For special education levy equalization aid according to Minnesota Statutes, section 124.321:

$19,182,000 ..... 1996

$13,194,000 ..... 1997

The 1996 appropriation includes $2,584,000 for 1995 and $16,598,000 for 1996.

The 1997 appropriation includes $2,928,000 for 1996 and $10,266,000 for 1997.

Subd. 10. [AMERICAN INDIAN POST-SECONDARY PREPARATION GRANTS.] For American Indian post-secondary preparation grants according to Minnesota Statutes, section 124.481:

$857,000.....1996

$857,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 11. [AMERICAN INDIAN LANGUAGE AND CULTURE PROGRAMS.] For grants to American Indian language and culture education programs according to Minnesota Statutes, section 126.54, subdivision 1:

$591,000.....1996

$591,000.....1997

The 1996 appropriation includes $88,000 for 1995 and $503,000 for 1996.

The 1997 appropriation includes $88,000 for 1996 and $503,000 for 1997.

Any balance in the first year does not cancel but is available in the second year.

Subd. 12. [AMERICAN INDIAN SCHOLARSHIPS.] For American Indian scholarships according to Minnesota Statutes, section 124.48:

$1,600,000 ..... 1996

$1,600,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 13. [AMERICAN INDIAN EDUCATION.] (a) For certain American Indian education programs in school districts:

$175,000.....1996

$175,000.....1997

The 1996 appropriation includes $26,000 for 1995 and $149,000 for 1996.

The 1997 appropriation includes $26,000 for 1996 and $149,000 for 1997.

(b) These appropriations are available for expenditure with the approval of the commissioner of the department of education.

(c) The commissioner must not approve the payment of any amount to a school district or school under this subdivision unless that school district or school is in compliance with all applicable laws of this state.

(d) Up to the following amounts may be distributed to the following schools and school districts for each fiscal year: $54,800, Pine Point School; $9,800 to independent school district No. 166, Cook county; $14,900 to independent school district No. 432, Mahnomen; $14,200 to independent school district No. 435, Waubun; $42,200 to independent school district No. 707, Nett Lake; and $39,100 to independent school district No. 38, Red Lake. These amounts must be spent only for the benefit of American Indian pupils and to meet established state educational standards or statewide requirements.

(e) Before a district or school can receive money under this subdivision, the district or school must submit, to the commissioner, evidence that it has complied with the uniform financial accounting and reporting standards act, Minnesota Statutes, sections 121.904 to 121.917.

Subd. 14. [INDIAN TEACHER PREPARATION GRANTS.] (a) For joint grants to assist Indian people to become teachers:

$190,000.....1996

$190,000.....1997

(b) Up to $70,000 each year is for a joint grant to the University of Minnesota at Duluth and the Duluth school district.

(c) Up to $40,000 each year is for a joint grant to each of the following:

(1) Bemidji state university and the Red Lake school district;

(2) Moorhead state university and a school district located within the White Earth reservation; and

(3) Augsburg college, independent school district No. 625, St. Paul, and the Minneapolis school district.

(d) Money not used for students at one location may be transferred for use at another location.

(e) Any balance in the first year does not cancel but is available in the second year.

Subd. 15. [TRIBAL CONTRACT SCHOOLS.] For tribal contract school aid according to Minnesota Statutes, section 124.86:

$238,000.....1996

$361,000.....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 for 1997.

Subd. 16. [EARLY CHILDHOOD PROGRAMS AT TRIBAL SCHOOLS.] For early childhood family education programs at tribal contract schools:

$68,000.....1996

$68,000.....1997

Subd. 17. [SECONDARY VOCATIONAL EDUCATION AID.] For secondary vocational education aid according to Minnesota Statutes, section 124.573:

$11,874,000 ..... 1996

$11,596,000 ..... 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 for 1997.

Subd. 18. [ASSURANCE OF MASTERY.] For assurance of mastery aid according to Minnesota Statutes, section 124.311:

$13,534,000 ..... 1996

$13,751,000 ..... 1997

The 1996 appropriation includes $1,979,000 for 1995 and $11,555,000 for 1996.

The 1997 appropriation includes $2,039,000 for 1996 and $11,712,000 for 1997.

Subd. 19. [AMERICAN SIGN LANGUAGE; TEACHER EDUCATION HEARING.] To assist school districts in educating teachers in American sign language:

$13,000.....1996

$12,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 20. [SCHOOL INTERPRETERS.] For grants for school interpreters to upgrade their interpreting/transliterating skills and obtain certification:

$150,000.....1996

Up to five percent of this amount may be used for administration of this program.

This appropriation is available until June 30, 1997.

Subd. 21. [MEXICAN ORIGIN EDUCATION GRANTS.] For grants for a Mexican origin education pilot grant program:

$50,000.....1996

This appropriation is available until June 30, 1997.

Subd. 22. [LAY ADVOCATES.] To pay or reimburse lay advocates for their time and expense as provided in Minnesota Statutes, section 120.17:

$10,000.....1996

This appropriation is available until June 30, 1997.

Subd. 23. [PART H.] For the department of education's share of the state's obligation under Part H:

$ -0-.....1996

$400,000.....1997

This appropriation assumes that the departments of health and human services will contribute $1,635,000 for the state share of Part H costs.

Subd. 24. [VOCATIONAL SCHOOL PLANNING.] For staff costs and related expenses for the vocational school planning committee:

$100,000.....1996

Subd. 25. [OPTIONS PLUS.] For Options Plus grants under section 40:

$50,000.....1996

This appropriation is available until June 30, 1997.

Recipients are encouraged to use other staff development resources if available.

Sec. 43. [REPEALER.]

Minnesota Statutes 1994, sections 124.273, subdivisions 1b and 2c; 124.32, subdivisions 1b, 1c, 1d, 1f, 2, and 3a; and 124.574, subdivisions 2b, 3, 4, and 4a, are repealed.

Sec. 44. [EFFECTIVE DATE.]

(a) Sections 34 (special education aid), 35 (homestead and agricultural credit adjustment), 38 (vocational school planning), and 42, subdivision 24 (vocational school planning appropriation), are effective the day following final enactment.

(b) Section 43 (repealer) is effective July 1, 1995.

Section 1. Minnesota Statutes 1994, section 116J.655, is amended to read:

116J.655 [YOUTH ENTREPRENEURSHIP EDUCATION PROGRAM.]

The commissioner of trade and economic development shall establish a youth entrepreneurship education program to improve the academic and entrepreneurial skills of students and aid in their transition from school to business creation. The program shall strengthen local economies by creating jobs that enable citizens to remain in their communities and to foster cooperation among educators, economic development professionals, business leaders, and representatives of labor. Assistance under this section shall be available to new or existing student-operated or school-operated businesses that have an educational purpose, and provide service or products for customers or clients who do not attend or work at the sponsoring school. The commissioner may require an equal local match for assistance under this section up to the maximum grant amount of $20,000.

Sec. 2. Minnesota Statutes 1994, section 121.702, is amended by adding a subdivision to read:

Subd. 10. [COUNCIL.] "Council" means the governor's workforce development council.

Sec. 3. Minnesota Statutes 1994, section 121.705, is amended to read:

121.705 [YOUTH WORKS GRANTS.]

Subdivision 1. [APPLICATION.] An eligible organization interested in receiving a grant under sections 121.704 to 121.709 may prepare and submit to the commission and beginning January 1, 1997, the council an application that complies with section 121.706.

Subd. 2. [GRANT AUTHORITY.] The commission and beginning January 1, 1997, the council shall use any state appropriation and any available federal funds, including any grant received under federal law, to award grants to establish programs for youth works meeting the requirements of section 121.706. At least one grant each must be available for a metropolitan proposal, a rural proposal, and a statewide proposal. If a portion of the suburban metropolitan area is not included in the metropolitan grant proposal, the statewide grant proposal must incorporate at least one suburban metropolitan area. In awarding grants, the commission and beginning January 1, 1997 the council may select at least one residential proposal and one nonresidential proposal, provided the proposals meet or exceed the criteria in section 121.706.

Sec. 4. Minnesota Statutes 1994, section 121.706, is amended to read:

121.706 [GRANT APPLICATIONS.]

Subdivision 1. [APPLICATIONS REQUIRED.] An organization seeking federal or state grant money under sections 121.704 to 121.709 shall prepare and submit to the commission and beginning January 1, 1997, the council an application that meets the requirements of this section. The commission and beginning January 1, 1997, the council shall develop, and the applying organizations shall comply with, the form and manner of the application.

Subd. 2. [APPLICATION CONTENT.] An applicant on its application shall:

(1) propose a program to provide participants the opportunity to perform community service to meet specific unmet community needs, and participate in classroom, work-based, and service learning;

(2) assess the community's unmet educational, human, environmental, and public safety needs, the resources and programs available for meeting those needs, and how young people participated in assessing community needs;

(3) describe the educational component of the program, including classroom hours per week, classroom time for participants to reflect on the program experience, and anticipated academic outcomes related to the service experience;

(4) describe the work to be performed, the ratio of youth participants to crew leaders and mentors, and the expectations and qualifications for crew leaders and mentors;

(5) describe local funds or resources available to meet the match requirements of section 121.709;

(6) describe any funds available for the program from sources other than the requested grant;

(7) describe any agreements with local businesses to provide participants with work-learning opportunities and mentors;

(8) describe any agreement with local post-secondary educational institutions to offer participants course credits for their community service learning experience;

(9) describe any agreement with a local high school or an alternative learning center to provide remedial education, credit for community service work and work-based learning, or graduate equivalency degrees;

(10) describe any pay for service or other program delivery mechanism that will provide reimbursement for benefits conferred or recover costs of services participants perform;

(11) describe how local resources will be used to provide support and assistance for participants to encourage them to continue with the program, fulfill the terms of the contract, and remain eligible for any postservice benefit;

(12) describe the arbitration mechanism for dispute resolution required under section 121.707, subdivision 2;

(13) describe involvement of community leaders in developing broad-based support for the program;

(14) describe the consultation and sign-off process to be used with any local labor organization representing employees in the area engaged in work similar to that proposed for the program to ensure that no current employees or available employment positions will be displaced by program participants;

(15) certify to the commission and beginning January 1, 1997, the council and to any certified bargaining representatives representing employees of the applying organization that the project will not decrease employment opportunities that would be available without the project; will not displace current employees including any partial displacement in the form of reduced hours of work other than overtime, wages, employment benefits, or regular seasonal work; will not impair existing labor agreements; and will not result in the substitution of project funding for preexisting funds or sources of funds for ongoing work;

(16) describe the length of the required service period, which may not be less than six months or more than two years, a method to incorporate a participant's readiness to advance or need for postservice financial assistance into individual service requirements, and any opportunity for participating part time or in another program;

(17) describe a program evaluation plan that contains cost-effectiveness measures, measures of participant success including educational accomplishments, job placements, community contributions, and ongoing volunteer activities, outcome measures based on a preprogram and postprogram survey of community rates of arrest, incarceration, teenage pregnancy, and other indicators of youth in trouble, and a list of local resources dedicated to reducing these rates;

(18) describe a three-year financial plan for maintaining the program;

(19) describe the role of local youth in developing all aspects of the grant proposal; and

(20) describe the process by which the local private industry council participated in, and reviewed the grant application.

Sec. 5. Minnesota Statutes 1994, section 121.707, subdivision 4, is amended to read:

Subd. 4. [USES OF POSTSERVICE BENEFITS.] (a) A postservice benefit for a participant provided under subdivision 3, paragraph (a), (b), or (c), must be available for seven years after completing the program and may only be used for:

(1) paying a student loan;

(2) costs of attending an institution of higher education; or

(3) expenses incurred by a student in an approved youth apprenticeship program under chapter 126B, or in a registered apprenticeship program approved by the department of labor and industry.

Financial assistance provided under this subdivision must be in the form of vendor payments whenever possible. Any postservice benefits provided by federal funds or vouchers may be used as a downpayment on, or closing costs for, purchasing a first home.

(b) Postservice benefits are to be used to develop skills required in occupations where numbers of jobs are likely to increase. The commission, in consultation with the education and employment transitions and beginning January 1, 1997, the council, shall determine how the benefits may be used in order to best prepare participants with skills that build on their service learning and equip them for meaningful employment.

(c) The postservice benefit shall not be included in determining financial need when establishing eligibility or award amounts for financial assistance programs under chapter 136A.

Sec. 6. Minnesota Statutes 1994, section 121.707, subdivision 6, is amended to read:

Subd. 6. [PROGRAM TRAINING.] (a) The commission and beginning January 1, 1997, the council shall, within available resources, ensure an opportunity for each participant to have three weeks of training in a residential setting. If offered, each training session must:

(1) orient each participant in the nature, philosophy, and purpose of the program;

(2) build an ethic of community service through general community service training; and

(3) provide additional training as it determines necessary.

(b) Each grantee organization shall also train participants in skills relevant to the community service opportunity.

Sec. 7. Minnesota Statutes 1994, section 121.707, subdivision 7, is amended to read:

Subd. 7. [TRAINING AND EDUCATION REQUIREMENTS.] Each grantee organization shall assess the educational level of each entering participant. Each grantee shall work to enhance the educational skills of each participant. The commission and beginning January 1, 1997, the council may coordinate or contract with educational institutions or other providers for educational services and evaluation. All grantees shall give priority to educating and training participants who do not have a high school diploma or its equivalent, or who cannot afford post-secondary training and education.

Sec. 8. Minnesota Statutes 1994, section 121.708, is amended to read:

121.708 [PRIORITY.]

The commission and beginning January 1, 1997, the council shall give priority to an eligible organization proposing a program that meets the goals of sections 121.704 to 121.707, and that:

(1) involves youth in a meaningful way in all stages of the program, including assessing community needs, preparing the application, and assuming postservice leadership and mentoring responsibilities;

(2) serves a community with significant unmet needs;

(3) provides an approach that is most likely to reduce arrest rates, incarceration rates, teenage pregnancy, and other indicators of troubled youth;

(4) builds linkages with existing, successful programs; and

(5) can be operational quickly.

Sec. 9. Minnesota Statutes 1994, section 121.709, is amended to read:

121.709 [MATCH REQUIREMENTS.]

Youth works grant funds must be used for the living allowance, cost of employer taxes under sections 3111 and 3301 of the Internal Revenue Code of 1986, workers' compensation coverage, and health benefits for each program participant. Applicant resources, from sources and in a form determined by the commission and beginning January 1, 1997, the council, must be used to provide for all other program operating costs, including such costs as supplies, materials, transportation, and salaries and benefits of those staff directly involved in the operation, internal monitoring, and evaluation of the program. Administrative expenses must not exceed five percent of total program costs.

Sec. 10. Minnesota Statutes 1994, section 121.710, is amended to read:

121.710 [EVALUATION AND REPORTING REQUIREMENTS.]

Subdivision 1. [GRANTEE ORGANIZATIONS.] Each grantee organization shall report to the commission and beginning January 1, 1997, the council at the time and on the matters requested by the commission and beginning January 1, 1997, the council.

Subd. 2. [INTERIM REPORT.] The commission and beginning January 1, 1997, the council shall report semiannually to the legislature with interim recommendations to change the program.

Subd. 3. [FINAL REPORT.] The commission and beginning January 1, 1997, the council shall present a final report to the legislature by January 1, 1998, summarizing grantee evaluations, reporting on individual participants and participating grantee organizations, and recommending any changes to improve or expand the program.

Sec. 11. Minnesota Statutes 1994, section 121.885, subdivision 1, is amended to read:

Subdivision 1. [SERVICE LEARNING AND WORK-BASED LEARNING PROGRAMS STUDY.] The Minnesota commission on national and community service, established in section 121.703, governor's workforce development council shall assist the commissioner of education in studying how to combine community service activities and service learning with work-based learning programs.

Sec. 12. Minnesota Statutes 1994, section 121.885, subdivision 4, is amended to read:

Subd. 4. [PROGRAMS FOLLOWING YOUTH COMMUNITY SERVICE.] (a) The Minnesota commission on national and community service established in section 121.703 governor's workforce development council, in cooperation with the commissioner and the higher education coordinating board, shall provide for those participants who successfully complete youth community service under sections 121.703 121.704 to 121.709, the following:

(1) for those who have a high school diploma or its equivalent, an opportunity to participate in a youth apprenticeship program at a community or technical college; and

(2) for those who are post-secondary students, an opportunity to participate in an educational program that supplements post-secondary courses leading to a degree or a statewide credential of academic and occupational proficiency.

(b) Participants who successfully complete a youth community service program under sections 121.704 to 121.710 are eligible to receive an education voucher as provided under section 121.707, subdivision 4. The voucher recipient may apply the voucher toward the cost of the recipient's tuition and other education-related expenses at a post-secondary school under paragraph (a).

(c) The Minnesota commission on national and community service governor's workforce development council, in cooperation with the state board of technical colleges, shall establish a mechanism to transfer credit earned in a youth apprenticeship program between the technical colleges and other post-secondary institutions offering applied associate degrees.

Sec. 13. Minnesota Statutes 1994, section 121.912, subdivision 1b, is amended to read:

Subd. 1b. [TRA AND FICA TRANSFER.] (a) Notwithstanding subdivision 1, a district shall may transfer money from the general fund to the community service fund for the employer contributions for teacher retirement and FICA for employees who are members of a teacher retirement association and who are paid from the community service fund.

(b) A district shall not transfer money under paragraph (a) for employees who are paid with money other than normal operating funds, as defined in section 354.05, subdivision 27.

Sec. 14. Minnesota Statutes 1994, section 124.2711, subdivision 2a, is amended to read:

Subd. 2a. [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To obtain early childhood family education revenue, a district may levy an amount equal to the tax rate of .626 .609 percent times the adjusted tax capacity of the district for the year preceding the year the levy is certified. If the amount of the early childhood family education levy would exceed the early childhood family education revenue, the early childhood family education levy shall equal the early childhood family education revenue.

Sec. 15. Minnesota Statutes 1994, section 124.2713, subdivision 6, is amended to read:

Subd. 6. [COMMUNITY EDUCATION LEVY.] To obtain community education revenue, a district may levy the amount raised by a tax rate of 1.13 1.1 percent for fiscal year 1995 and thereafter, times the adjusted net tax capacity of the district. If the amount of the community education levy would exceed the community education revenue, the community education levy shall be determined according to subdivision 6a.

Sec. 16. Minnesota Statutes 1994, section 124C.45, subdivision 1, is amended to read:

Subdivision 1. [GOVERNANCE.] A school district may establish an area learning center either by itself or in cooperation with other districts, an ECSU, an intermediate school district, a local education and employment transitions partnership, public and private secondary and post-secondary institutions, public agencies, businesses, and foundations. Except for a district located in a city of the first class, a center must serve the geographic area of at least two districts.

Sec. 17. Minnesota Statutes 1994, section 124C.46, subdivision 2, is amended to read:

Subd. 2. [PEOPLE TO BE SERVED.] A center shall provide programs for secondary pupils and adults, giving priority to serving persons between 16 and 21 years of age. Secondary pupils to be served are those who are chemically dependent, not likely to graduate from high school, need assistance in vocational and basic skills, can benefit from employment experiences, and need assistance in transition from school to employment. Adults to be served are dislocated homemakers and workers and others who need basic educational and social services. In addition to offering programs, the center shall coordinate the use of other available educational services, social services, and post-secondary institutions in the community. The center may also provide programs, including work-based and applied learning opportunities developed in collaboration with a local education and employment transitions partnership, for elementary and secondary pupils who are not attending the center to assist them in completing high school.

Sec. 18. Minnesota Statutes 1994, section 124C.48, subdivision 1, is amended to read:

Subdivision 1. [OUTSIDE SOURCES.] A center may accept:

(1) resources and services from post-secondary institutions serving center pupils;

(2) resources from job training partnership act programs, including funding for jobs skills training for various groups and the percentage reserved for education;

(3) resources from the department of human services and county welfare funding; or

(4) resources from a local education and employment transitions partnership; or

(5) private resources, foundation grants, gifts, corporate contributions, and other grants.

Sec. 19. Minnesota Statutes 1994, section 126B.01, is amended to read:

126B.01 [PURPOSE EDUCATION AND EMPLOYMENT TRANSITIONS SYSTEM.]

Subdivision 1. [PURPOSE.] To better prepare all learners to make transitions between education and employment, a comprehensive education and employment transitions system is established to that is driven by multisector partnerships and takes a lifelong approach to workforce development. The statewide education and employment transitions system shall:

(1) assist individuals learners in developing the skills necessary to gain greater levels of self-sufficiency through education, training, and work;

(2) facilitate workforce development by providing assistance to learners in planning their futures by providing through improved career counseling and information about career opportunities and vocational education programs;

(2) (3) integrate opportunities for work-based learning, and other applied learning methods including but not limited to occupation-specific apprenticeship programs and community service programs, into the elementary, secondary, and post-secondary curriculum and any graduation standards that are developed;

(3) (4) increase awareness and exploration of and participation in employment opportunities and demonstrate the relationship between education and employment at the elementary, secondary, and post-secondary education levels;

(5) promote the efficient use of public and private resources by coordinating elementary, secondary, and post-secondary education with related government programs; and

(4) (6) expand educational options available to students all learners through collaborative efforts between secondary institutions school districts, post-secondary institutions, business, industry employers, organized labor, workers, learners, parents, community-based organizations, and other interested parties.;

(7) encourage women, minorities, and at-risk learners to fully participate in work-based learning, developing strategies for the system to meet the needs of learners with disabilities;

(8) establish rigorous industry and occupational skill standards that are generally recognized throughout the industry; and

(9) develop systems to support the education and employment transitions system including a unified labor market information system, a centralized quality assurance system with information on learner achievement, employer satisfaction and measurable system outcomes, a statewide marketing system to promote the importance of lifework development, a comprehensive professional development system for public and private sector partners, and a comprehensive system for providing technical support to local partnerships for education and employment transitions.

Subd. 2. [FUNDING.] Work-based learning programs incorporating post-secondary instruction implemented under this chapter shall provide for student funding according to section 123.3514.

Subd. 3. [WORKFORCE DEVELOPMENT COUNCIL.] The governor's workforce development council shall coordinate the development, implementation, and evaluation of the statewide education and employment transitions system.

Subd. 4. [PARTNERSHIP GRANTS.] The council shall award grants to implement local education and employment transition systems to local education and employment transition partnerships established under section 126B.10. Grants under this section may be used for the local education and employment transitions system, youth apprenticeship and other work-based learning programs, youth employer programs, youth entrepreneurship programs, and other programs and purposes the council determines fulfill the purposes of the education and employment transitions system. The council shall establish criteria for evaluating grant proposals. The criteria must include the elements of the local plan described in section 126B.10, subdivision 4. The council shall develop and publicize the grant application process and review and comment on the proposals submitted. Priority in awarding grants must be given to local partnerships that include multiple communities and a viable base of educational, work-based learning, and employment opportunities.

Subd. 5. [ANNUAL REVIEW.] The council shall review the activities of each local education and employment transitions partnership annually to ensure that the local partnership is adequately meeting the system standards under section 126B.10 and state quality assurance standards established as part of the quality assurance system developed by the council.

Subd. 6. [REPORT.] The council shall annually publish a report summarizing the data submitted by each local education and employment transitions partnership. The report shall be published no later than September 1 of the year following the year in which the data was collected.

Sec. 20. Minnesota Statutes 1994, section 126B.03, subdivision 2, is amended to read:

Subd. 2. [ACADEMIC INSTRUCTION AND WORK-RELATED LEARNING.] (a) A The comprehensive youth apprenticeship program and other work-based learning programs under the education and employment transitions system must integrate academic instruction and work-related learning in the classroom and at the workplace. Schools, in collaboration with students' learners' employers, must use competency-based measures to evaluate students' learners' progress in the program. Students Learners who successfully complete the program must receive academic and occupational credentials from the participating school.

(b) The academic instruction provided as part of a comprehensive youth apprenticeship program and other work-based learning programs must:

(1) meet applicable secondary and post-secondary education requirements;

(2) enable the students learners to attain academic proficiency in at least the areas of English, mathematics, history, science, and geography; and

(3) where appropriate, modify existing secondary and post-secondary curricula to accommodate the changing needs of the workplace.

(c) Work-based learning provided as part of the program must:

(1) supply students learners with knowledge, skills, and abilities based on appropriate, nationally accepted standards in the specific industries and occupations for which the students learners are trained;

(2) offer students learners structured job training at the worksite, including high quality supervised learning opportunities;

(3) foster interactive, team-based learning;

(4) encourage sound work habits and behaviors;

(5) develop workplace skills, including the ability to manage resources, work productively with others, acquire and use information, understand and master systems, and work with technologies; and

(6) where feasible, offer students learners the opportunity to participate in community service and service learning activities; and

(7) meet applicable labor standards.

(d) Worksite learning and experience provided as part of the program must:

(1) help youth apprentices achieve the program's academic and work-based learning requirements;

(2) pay apprentices for their work; and

(3) assist employers to fulfill their commitment to youth apprentices.

Sec. 21. Minnesota Statutes 1994, section 126B.03, subdivision 3, is amended to read:

Subd. 3. [PROGRAM COMPONENTS PARTICIPANT DUTIES.] (a) A comprehensive youth apprenticeship program must require representatives of secondary and post-secondary school systems, affected local businesses, industries, occupations and labor, as well as the local community, to be actively and collaboratively involved in advising and managing the program and ensuring, in consultation.

(b) The entities participating in a program must consult with local private industry councils to ensure, that the youth apprenticeship program meets local labor market demands and, provides student apprentices with the high skill training necessary for career advancement within an occupation.

(c) The program must meet, meets applicable state education requirements and labor standards, provide and provides support services to program participants, and accommodate the integrating of work-related learning and academic instruction through flexible schedules for students and teachers and appropriately modified curriculum.

(d) (b) Local employers, collaborating with labor organizations where appropriate, must assist the program by analyzing workplace needs, creating work-related curriculum, employing and adequately paying youth apprentices engaged in work-related learning in the workplace, training youth apprentices to become skilled in an occupation, providing student apprentices with a workplace mentor, periodically informing the school of an apprentice's progress, and making a reasonable effort to employ youth apprentices who successfully complete the program.

(e) (c) A student participating in a comprehensive youth apprenticeship program must sign a youth apprenticeship agreement with participating entities that obligates youth apprentices, their parents or guardians, employers, and schools to meet program requirements; indicates how academic instruction, work-based learning, and worksite learning and experience will be integrated; ensures that successful youth apprentices will receive a recognized credential of academic and occupational proficiency; and establishes the wage rate and other benefits for which youth apprentices are eligible while employed during the program.

(f) (d) Secondary school principals or, counselors or business mentors familiar with the demonstration project education to employment transitions system must inform entering secondary school students about available occupational and career opportunities and the option of entering a youth apprenticeship program or other work-based learning programs to obtain post-secondary academic and occupational credentials.

Sec. 22. [126B.10] [EDUCATION AND EMPLOYMENT TRANSITIONS PARTNERSHIPS.]

Subdivision 1. [LOCAL PARTNERSHIPS; ESTABLISHMENT.] Local education and employment transitions partnerships may be established to implement local education and employment transitions systems. Local partnerships shall represent multiple sectors in the community, including, at a minimum, representatives of employers, primary, secondary, and post-secondary education, labor and professional organizations, workers, learners, parents, and community-based organizations.

Subd. 2. [BOARD.] (a) A local education and employment transitions partnership shall establish a governing board for planning and implementing work-based and other applied learning programs. The board shall consist of at least one representative from each member of the education and employment transitions partnership. A majority of the board must consist of representatives of local or regional employers.

(b) A private industry council, an educational cooperative service unit, or another local or regional organization may serve as the governing board of a local education and employment transitions partnership. If a local or regional organization serving as the governing board does not represent all of the groups in subdivision 1, then the local or regional organization and the local partners must provide for substantial input from representatives of the groups required for a local education and employment transitions partnership.

Subd. 3. [DUTIES.] A local education and employment transitions partnership shall assess the needs of employers, employees, and learners, and develop a plan for implementing a local or regional education and employment transitions system. The specific duties of the local partnership board shall include:

(1) evaluating the educational programs and curriculum of elementary, secondary, and post-secondary schools, and the work site, for their effectiveness in preparing students in the skills and knowledge needed to be successful in the workplace;

(2) identifying barriers to providing effective integrated applied learning or work-based curriculum;

(3) developing methods for integrating work-based or other forms of applied learning into the curriculum and instructional practices of local school districts and post-secondary institutions;

(4) identifying and enlisting local and regional employers who can effectively provide work-based or service learning opportunities, including, but not limited to, apprenticeships, internships, and mentorships;

(5) identifying community and workplace mentors including peers, parents, employers and employed individuals from the community, and employers of high school students;

(6) identifying current and emerging educational, training, and employment needs of the area or region, especially within industries with potential for job growth;

(7) evaluating the effectiveness of local vocational and job training programs, including vocational education, adult basic education, technical preparation, apprenticeship, service learning, youth entrepreneur, youth training and employment programs administered by the commissioner of economic security, and local job training programs under the Job Training Partnership Act, United States Code, title 29, section 1501, et seq., and making recommendations for improving the coordination and efficiency of these programs;

(8) identifying and applying for federal, state, local, and private sources of funding for vocational or applied learning programs;

(9) developing systems to provide students with current information and counseling about career opportunities, potential employment, educational opportunities in post-secondary institutions, workplaces, and the community, and the skills and knowledge necessary to succeed;

(10) identifying local or regional private and public employers, post-secondary education institutions, and other community organizations to plan, implement, and evaluate all aspects of a local education and employment transitions system;

(11) identifying educational technology, including interactive television networks and other distance learning methods, to ensure access to a broad variety of work-based learning opportunities;

(12) identifying strategies to include students with disabilities in a district's vocational or applied learning program and ways to serve at-risk learners through collaboration with area learning centers under sections 124C.45 to 124C.49, or other alternative programs; and

(13) incorporating all relevant information into the local plan.

Subd. 4. [LOCAL PLAN.] A local partnership's education and employment transitions plan must address the following:

(1) all information necessary to carry out the duties of the local board under subdivision 3;

(2) opportunities to apply academic knowledge and skills, including skills needed in the workplace, in local settings which include the school, school-based enterprises, the workplace, and the community;

(3) instruction and learner outcomes for students in kindergarten through grade 12 designed to introduce the world of work and to explore career opportunities, including nontraditional career opportunities;

(4) integration of the core academic curriculum of elementary, secondary, and post-secondary schools with the applied learning opportunities established by the local partnership;

(5) applied instruction in the use of technology commonly found in the workplace;

(6) applied instruction in the attitudes and skills essential for success in the workplace, including cooperative working, leadership, problem-solving, and respect for diversity;

(7) staff development for vocational guidance counselors, teachers, and other appropriate staff in the importance of preparing learners for the transition to work and in methods of providing instruction that incorporate applied learning, work-based learning, and service learning experiences;

(8) a system for program assessment and accountability that includes the follow-up studies; and

(9) a warranty to employers, post-secondary education programs, and other post-secondary training programs, that learners completing a high school work-based or applied learning program will be able to apply the knowledge and work skills included in the program outcomes or graduation requirements. The warranty shall require education and training programs to continue to work with those learners that need additional skill development until they can demonstrate achievement of the program outcomes or graduation requirements.

Subd. 5. [ANNUAL REPORT.] A local education and employment transitions partnership shall annually publish a report and collect and submit information to the council as required. The report shall summarize any information collected to fulfill the requirements of the council for a statewide assessment. The report shall be available to the public in the communities served by the local education and employment transitions partnership. The report shall be published no later than September 1 of the year following the year in which the data was collected.

Sec. 23. [127.282] [EXPULSION FOR POSSESSION OF FIREARM.]

Notwithstanding the time limitation in section 127.27, subdivision 5, a school board must expel for a period of at least one year a pupil who is determined to have brought a firearm to school except the board may modify this expulsion requirement for a pupil on a case-by-case basis. For the purposes of this section, firearm is as defined in United States Code, title 18, section 921.

Sec. 24. [MINNESOTA COMMISSION ON NATIONAL AND COMMUNITY SERVICE; TRANSFER OF RESPONSIBILITY.]

If the governor's workforce development council meets federal requirements for the commission on national and community service, the duties of the Minnesota commission on national and community service under Minnesota Statutes, sections 121.703 to 121.710, shall transfer to the governor's workforce development council on January 1, 1997. If, by that date, the workforce development council does not meet federal requirements, the Minnesota commission on national and community service shall continue to perform the duties assigned to it.

Sec. 25. [YOUTH EMPLOYER GRANT PROGRAM.]

Subdivision 1. [YOUTH EMPLOYER GRANTS.] The governor's workforce development council shall establish a pilot program for improving the work-based learning experience of school-aged youth who are employed. An employer, in partnership with a local education and employment transitions partnership, may apply for a youth employer grant to the governor's workforce development council. The council shall determine application procedures and criteria for approving grant awards. To be eligible, an employer must have employed at least five youth during the preceding calendar year who were at least 16 years of age and enrolled in high school.

Subd. 2. [GRANT APPLICATION.] A grant application shall include a plan describing how the applicant will:

(1) enhance the work experience of employed youth by integrating appropriate academic and work skills components;

(2) develop an applied learning plan for each employed youth that outlines the academic and work skills outcomes to be achieved by the work-based learning experience and describes how these outcomes apply toward attainment of high school graduation requirements;

(3) provide training and support to the employer in developing a work experience for meeting the goals of the applied learning plan and for assessing student achievement; and

(4) evaluate the effectiveness of the work-based learning program.

Subd. 3. [GRANT AWARDS.] The governor's workforce development council may award youth employer grants to applicants eligible under subdivision 1. Grant recipients should be geographically distributed throughout the state. Grant proceeds may be used for the costs of planning, materials, and training. The school district, school, or post-secondary education institution partner shall be the fiscal agent for the grant.

Sec. 26. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund or other named fund to the department of education for the fiscal years designated.

Subd. 2. [ADULT BASIC EDUCATION AID.] For adult basic education aid according to Minnesota Statutes, sections 124.26 in fiscal year 1996 and 124.2601 in fiscal year 1997:

$8,374,000 ..... 1996

$8,374,000 ..... 1997

The 1996 appropriation includes $1,256,000 for 1995 and $7,118,000 for 1996.

The 1997 appropriation includes $1,256,000 for 1996 and $7,118,000 for 1997.

Up to $275,000 each year may be used for contracts with private, nonprofit organizations for approved programs.

Subd. 3. [ADULTS WITH DISABILITIES PROGRAM AID.] For adults with disabilities programs according to Minnesota Statutes, section 124.2715:

$670,000.....1996

$670,000.....1997

Any balance in the first year does not cancel and is available for the second year.

Subd. 4. [ADULT GRADUATION AID.] For adult graduation aid:

$2,245,000 ..... 1996

$2,245,000 ..... 1997

The 1996 appropriation includes $336,000 for 1995 and $1,909,000 for 1996.

The 1997 appropriation includes $336,000 for 1996 and $1,909,000 for 1997.

Subd. 5. [ALCOHOL-IMPAIRED DRIVER.] (a) For grants with funds received under Minnesota Statutes, section 171.29, subdivision 2, paragraph (b), clause (4):

$514,000.....1996

$514,000.....1997

(b) These appropriations are from the alcohol-impaired driver account of the special revenue fund. Any funds credited for the department of education to the alcohol-impaired driver account of the special revenue fund in excess of the amounts appropriated in this subdivision are appropriated to the department of education and available in fiscal year 1996 and fiscal year 1997.

(c) Up to $226,000 each year may be used by the department of education to contract for services to school districts stressing the dangers of driving after consuming alcohol. No more than five percent of this amount may be used for administrative costs by the contract recipients.

(d) Up to $88,000 each year may be used for grants to support student-centered programs to discourage driving after consuming alcohol.

(e) Up to $200,000 and any additional funds each year may be used for chemical abuse prevention grants.

Subd. 6. [COMMUNITY EDUCATION AID.] For community education aid according to Minnesota Statutes, section 124.2713:

$2,826,000 ..... 1996

$2,574,000 ..... 1997

The 1996 appropriation includes $499,000 for 1995 and $2,327,000 for 1996.

The 1997 appropriation includes $410,000 for 1996 and $2,164,000 for 1997.

Subd. 7. [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early childhood family education aid according to Minnesota Statutes, section 124.2711:

$14,224,000 ..... 1996

$13,832,000 ..... 1997

The 1996 appropriation includes $2,086,000 for 1995 and $12,138,000 for 1996.

The 1997 appropriation includes $2,140,000 for 1996 and $11,692,000 for 1997.

$10,000 each year may be spent for evaluation of early childhood family education programs.

Subd. 8. [EDUCATION AND EMPLOYMENT TRANSITIONS PROGRAM GRANTS.] For local education and employment transitions program grants:

$1,300,000....... 1996

(a) Of this amount, $100,000 for 1996, and $100,000 for 1997 is for the governor's workforce development council.

(b) Of this amount, $100,000 is for development of a labor-management information system to support education to employment transitions programs.

Appropriations under this subdivision do not cancel but are available until June 30, 1997.

Subd. 9. [EXTENDED DAY AID.] For extended day aid:

$381,000.....1996

$374,000.....1997

The 1996 appropriation includes $58,000 for 1995 and $323,000 for 1996.

The 1997 appropriation includes $56,000 for 1996 and $318,000 for 1997.

Subd. 10. [FAMILY COLLABORATIVES.] For family collaborative grants according to Minnesota Statutes, section 121.8355:

$1,500,000 ..... 1996

$1,500,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 11. [GED TESTS.] For payment of 60 percent of the costs of GED tests:

$126,000.....1996

$126,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 12. [GED COORDINATION.] For GED coordination:

$50,000.....1996

$50,000.....1997

Subd. 13. [HEALTH AND DEVELOPMENTAL SCREENING AID.] For health and developmental screening aid according to Minnesota Statutes, sections 123.702 and 123.7045:

$1,550,000 ..... 1996

$1,550,000 ..... 1997

The 1996 appropriation includes $232,000 for 1995 and $1,318,000 for 1996.

The 1997 appropriation includes $232,000 for 1996 and $1,318,000 for 1997.

Any balance in the first year does not cancel but is available in the second year.

Subd. 14. [HEARING IMPAIRED ADULTS.] For programs for hearing impaired adults according to Minnesota Statutes, section 121.201:

$70,000.....1996

$70,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 15. [LEARNING READINESS PROGRAM REVENUE.] For revenue for learning readiness programs:

$9,506,000 ..... 1996

$9,505,000 ..... 1997

The 1996 appropriation includes $1,424,000 for 1995 and $8,082,000 for 1996.

The 1997 appropriation includes $1,424,000 for 1996 and $8,081,000 for 1997.

$10,000 each year may be spent for evaluation of learning readiness programs.

Subd. 16. [OMBUDSPERSONS.] For ombudspersons:

$33,000.....1996

$33,000.....1997

The appropriation is made to the office of ombudspersons for families for purposes of funding the activities of the ombudsperson authorized by Minnesota Statutes, sections 257.0755 to 257.0768. Any balance in the first year does not cancel but is available in the second year.

Subd. 17. [VIOLENCE PREVENTION EDUCATION GRANTS.] For violence prevention education grants:

$1,500,000 ..... 1996

$1,500,000 ..... 1997

Of the amount each year, $50,000 is for program administration.

Any balance in the first year does not cancel but is available in the second year.

Subd. 18. [WAY TO GROW.] For grants for existing way to grow programs according to Minnesota Statutes, section 121.835:

$425,000.....1996

$425,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 19. [YOUTH APPRENTICESHIP PROGRAM GRANTS.] For youth apprenticeship program grants:

$500,000.....1996

$500,000.....1997

Youth apprenticeship program grants may only be awarded to local education and employment transitions partnerships or to a youth apprenticeship program that previously received a youth apprenticeship demonstration program grant according to Laws 1993, chapter 335, section 7.

Any unexpended balance remaining in the first year does not cancel but is available in the second year.

Subd. 20. [YOUTH EMPLOYER GRANTS.] For youth employer grants according to section 25:

$400,000.....1996

$500,000.....1997

Any unexpended balance remaining in the first year does not cancel but is available in the second year.

Subd. 21. [YOUTHWORKS.] For funding youthworks programs according to Minnesota Statutes, sections 121.70 to 121.710:

$1,813,000 ..... 1996

$1,813,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 22. [YOUTHWORKS PROGRAM.] For implementing youthworks programs:

$50,000.....1996

$50,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Sec. 27. [APPROPRIATIONS; TRADE AND ECONOMIC DEVELOPMENT.]

The following amount is appropriated from the general fund to the commissioner of trade and economic development for the fiscal year indicated for the purposes of the youth entrepreneurship education program under section 116J.655:

$100,000.....1996

The entire amount of this appropriation must be used for grants to new or existing student-operated or school-operated businesses. Appropriations under this section do not cancel but are available until June 30, 1997.

Sec. 28. [REVISOR INSTRUCTIONS.]

In the next and subsequent editions of Minnesota Statutes, the revisor shall change the title of Minnesota Statutes, chapter 126B, from "YOUTH APPRENTICESHIP SYSTEM" to "EDUCATION AND EMPLOYMENT TRANSITIONS SYSTEM."

In the next and subsequent editions of Minnesota Statutes and Minnesota Rules, the revisor shall substitute the term "workforce development council" for "governor's job training council" wherever it appears in statutes and rules.

In the next and subsequent editions of Minnesota Statutes and Minnesota Rules, the revisor shall change the term "service learning" to "service-learning" wherever it appears in statutes and rules.

Sec. 29. [REPEALER.]

(a) Minnesota Statutes 1994, section 124.2714, is repealed.

(b) Minnesota Statutes 1994, sections 121.702, subdivision 9; and 121.703, are repealed.

(c) Minnesota Statutes 1994, sections 126B.02; 126B.03; 126B.04; 126B.05; and 268.9755, are repealed.

Sec. 30. [EFFECTIVE DATE.]

(a) Section 29, paragraph (a) (repeal of 124.2714), is effective July 1, 1996.

(b) Section 29, paragraph (b) (repeal of 121.702, subdivision 9; and 121.703), is effective July 1, 1997, if the governor's workforce development council meets all federal requirements for the commission on national and community service.

(c) Tax rate changes in sections 14 (124.2711, subdivision 2a) and 15 (124.2713, subdivision 6) are effective beginning with taxes payable in 1996.

Section 1. Minnesota Statutes 1994, section 121.912, subdivision 1, is amended to read:

Subdivision 1. [LIMITATIONS.] (a) Except as provided in this subdivision, sections 121.9121, 123.36, 124.243, 475.61, and 475.65, a school district may not permanently transfer money from (1) an operating fund to a nonoperating fund; (2) a nonoperating fund to another nonoperating fund; or (3) a nonoperating fund to an operating fund.

(b) Permanent transfers may be made from any fund to any other fund to correct for prior fiscal years' errors discovered after the books have been closed for that year.

(c) Permanent transfers may be made from the general fund to any other operating funds according to section 123.7045 or if the resources of the other fund are not adequate to finance approved expenditures from that other fund.

(d) Permanent transfers may also be made from the general fund to eliminate deficits in another fund when that other fund is being discontinued.

(e) When a district discontinues operation of a district-owned bus fleet or a substantial portion of a fleet, permanent transfers must be made, on June 30 of the fiscal year that the operation is discontinued, from the fund balance account entitled "pupil transportation fund reserved for bus purchases" to the capital expenditure fund. The sum of the levies authorized pursuant to sections 124.243, 124.244, and 124.83 shall be reduced by an amount equal to the amount transferred.

(f) Any school district may transfer any amount from the undesignated fund balance account in its transportation fund to any other operating fund or to the reserved fund balance account for bus purchases in its transportation fund.

(g) Permanent transfers may be made from the unreserved balance in the general fund to the reserved account for equipment if the resources of the equipment account are not adequate to finance approved expenditures from that account.

Sec. 2. Minnesota Statutes 1994, section 124.14, is amended by adding a subdivision to read:

Subd. 8. [HEALTH AND SAFETY AID TRANSFER.] The commissioner of education, with the approval of the commissioner of finance, annually may transfer an amount from the appropriation for health and safety aid to the appropriation for debt service aid for the same fiscal year. The amount of the transfer equals the amount necessary to fund any shortage in the debt service aid appropriation created by a data correction that occurs between November 1 and June 30 of the preceding fiscal year.

Sec. 3. Minnesota Statutes 1994, section 124.243, subdivision 2, is amended to read:

Subd. 2. [CAPITAL EXPENDITURE FACILITIES REVENUE.] (a) For fiscal years 1994 and 1995, Capital expenditure facilities previous formula revenue for a district equals $128 $123 times its actual pupil units for the school year.

(b) For fiscal years 1996 and later, capital expenditure facilities revenue for a district equals $100 $96 times the district's maintenance cost index times its actual pupil units for the school year.

(c) A district's capital expenditure facilities revenue for a school year shall be reduced if the unreserved balance in the capital expenditure facilities account on June 30 of the prior school year exceeds $675 times the fund balance pupil units in the prior year as defined in section 124A.26, subdivision 1. If a district's capital expenditure facilities revenue is reduced, the reduction equals the lesser of (1) the amount that the unreserved balance in the capital expenditure facilities account on June 30 of the prior year exceeds $675 times the fund balance pupil units in the prior year, or (2) the capital expenditure facilities revenue for that year.

(d) For 1996 and later fiscal years, the previous formula revenue equals the amount of revenue computed for the district according to section 124.243 for fiscal year 1995.

(e) (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.

(f) (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.

(g) (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.

(h) (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. 4. Minnesota Statutes 1994, section 124.243, subdivision 8, is amended to read:

Subd. 8. [FUND TRANSFERS.] (a) Money in the account for capital expenditure facilities revenue must not be transferred into any other account or fund, except as specified in this subdivision.

(b) The school board may, by resolution, transfer money into the debt redemption fund to pay the amounts needed to meet, when due, principal and interest payments on certain obligations issued according to chapter 475.

(c) Each fiscal year, if a district does not have any obligations outstanding under chapter 475, has not levied under section 124.239, subdivision 3 or 5, and has not received revenue under section 124.83, a school board may use up to one-third of its capital expenditure facilities revenue for equipment uses under section 124.244.

(d) Notwithstanding paragraph (c), a school board may transfer all or a part of its capital expenditure facilities revenue to its capital expenditure equipment account if:

(1) the district has only one facility and that facility is less than ten years old; or

(2) the district receives approval from the commissioner to make the transfer.

(e) In considering approval of a transfer under paragraph (d), clause (2), the commissioner must consider the district's facility needs.

Sec. 5. Minnesota Statutes 1994, section 124.244, subdivision 1, is amended to read:

Subdivision 1. [REVENUE AMOUNT.] (a) For fiscal year 1995, the capital expenditure equipment revenue for each district equals $66 times its actual pupil units for the school year.

(b) For fiscal years 1996 and later, the capital expenditure equipment revenue for each district equals $69 $68 times its actual pupil units for the school year.

(c) Of a district's capital expenditure equipment revenue, $3 times its actual pupil units for the school year shall be reserved and used according to subdivision 4, paragraph (b).

Sec. 6. Minnesota Statutes 1994, section 124.244, subdivision 4, is amended to read:

Subd. 4. [USES OF REVENUE.] (a) Capital expenditure Equipment revenue may be used only for the following purposes:

(1) to pay capital expenditure equipment related assessments of any entity formed under a cooperative agreement between two or more districts;

(2) to purchase or lease computers and related materials, copying machines, telecommunications equipment, and other noninstructional equipment;

(3) to purchase or lease assistive technology or equipment for instructional programs;

(4) to purchase textbooks;

(5) to purchase new and replacement library books; and

(6) to purchase vehicles except those for which a levy is authorized under section 124.226, subdivision 6.; and

(b) The reserved capital expenditure equipment revenue shall only be used (7) to purchase or lease telecommunications equipment, computers, and related equipment for integrated information management systems for:

(1) (i) managing and reporting learner outcome information for all students under a results-oriented graduation rule;

(2) (ii) managing student assessment, services, and achievement information required for students with individual education plans; and

(3) (iii) other classroom information management needs.

(c) The equipment obtained with reserved revenue shall be utilized, to the greatest extent possible given available funding, on a per instructor or per classroom basis. A school district may supplement its reserved revenue with other capital expenditure equipment revenue, and cash and in-kind grants from public and private sources.

Sec. 7. Minnesota Statutes 1994, section 124.244, is amended by adding a subdivision to read:

Subd. 5. [RESERVED ACCOUNT.] A school district must establish a reserved account in the general fund called "reserved for equipment." Revenue received under this section must be deposited in that account.

Sec. 8. Minnesota Statutes 1994, 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 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.

(e) Notwithstanding paragraph (d), 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. All the other provisions and limitation of paragraph (d) apply.

Sec. 9. Minnesota Statutes 1994, section 124.83, subdivision 4, is amended to read:

Subd. 4. [HEALTH AND SAFETY LEVY.] To receive health and safety revenue, a district may levy an amount equal to the district's health and safety revenue as defined in subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by dividing the adjusted net tax capacity of the district for the year preceding the year the levy is certified by the actual pupil units in the district for the school year to which the levy is attributable, to 50 percent of the equalizing factor $4,707.50.

Sec. 10. Minnesota Statutes 1994, section 124.84, subdivision 3, is amended to read:

Subd. 3. [LEVY AUTHORITY.] The district may levy up to $300,000 under this section, as approved by the commissioner. The approved amount may be levied over five eight or fewer years.

Sec. 11. Minnesota Statutes 1994, section 124.95, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY.] (a) The following portions of a district's debt service levy qualify for debt service equalization:

(1) debt service for repayment of principal and interest on bonds issued before July 2, 1992;

(2) debt service for bonds refinanced after July 1, 1992, if the bond schedule has been approved by the commissioner and, if necessary, adjusted to reflect a 20-year maturity schedule; and

(3) debt service for bonds issued after July 1, 1992, for construction projects that have received a positive review and comment according to section 121.15, if the commissioner has determined that the district has met the criteria under section 124.431, subdivision 2, and if the bond schedule has been approved by the commissioner and, if necessary, adjusted to reflect a 20-year maturity schedule.

(b) The criterion in section 124.431, subdivision 2, paragraph (a), clause (2), shall be considered to have been met if the district in the fiscal year in which the bonds are authorized at an election conducted under chapter 475 or in the prior fiscal year:

(i) serves an average of at least 66 pupils per grade in the grades to be served by the facility; or

(ii) is eligible for sparsity revenue.

(c) The criterion described in section 124.431, subdivision 2, paragraph (a), clause (9), does not apply to bonds authorized by elections held before July 1, 1992.

(d) Districts identified in Laws 1990, chapter 562, article 11, section 8, do not need to meet the criteria of section 124.431, subdivision 2, to qualify.

Sec. 12. Minnesota Statutes 1994, section 124.95, subdivision 4, is amended to read:

Subd. 4. [EQUALIZED DEBT SERVICE LEVY.] To obtain debt service equalization revenue, a district must levy an amount not to exceed the district's debt service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the year before the year the levy is certified by the actual pupil units in the district for the school year ending in the year prior to the year the levy is certified; to

(2) 50 percent of the equalizing factor as defined in section 124A.02, subdivision 8, for the year to which the levy is attributable $4,707.50.

Sec. 13. Minnesota Statutes 1994, section 124.95, subdivision 6, is amended to read:

Subd. 6. [DEBT SERVICE EQUALIZATION AID PAYMENT SCHEDULE.] Debt service equalization aid must be paid as follows: one-third 30 percent before September 15, one-third 30 percent before December 15, and one-third 25 percent before March 15 of each year, and a final payment of 15 percent by July 15 of the subsequent fiscal year.

Sec. 14. Minnesota Statutes 1994, section 124.961, is amended to read:

124.961 [DEBT SERVICE APPROPRIATION.]

(a) $17,000,000 in fiscal year 1994, $26,000,000 in fiscal year 1995, and $31,600,000 $30,054,000 in fiscal year 1996, $27,370,000 in fiscal year 1997, and $32,200,000 in fiscal year 1998 and each year thereafter is appropriated from the general fund to the commissioner of education for payment of debt service equalization aid under section 124.95. The 1994 1998 appropriation includes $3,000,000 for 1993 and $14,000,000 for 1994 $4,830,000 for 1997 and $27,370,000 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. 15. [ASKOV CAPITAL LOAN.]

The liability for the capital loan granted to independent school district No. 588, Askov, in 1982, if not repaid at the end of 30 years, is satisfied and discharged and interest on the loan ceases.

Sec. 16. [ALTERNATIVE DEBT SERVICE PLAN.]

Notwithstanding the procedures for dealing with outstanding debt in Minnesota Statutes, section 122.23, subdivision 16, independent school district Nos. 789, Clarissa, and 790, Eagle Bend, may develop an alternative plan for meeting debt service for bonds outstanding at the time of reorganization. That plan may provide for the obligation of paying bonds outstanding at the time of reorganization to remain with the district that originally issued the bonds except that the plan may provide for independent school district No. 790, Eagle Bend, when its outstanding debt is paid off, to continue making a debt levy and contribute the proceeds of that levy towards the outstanding debt of independent school district No. 789, Clarissa. This debt plan must be approved by the commissioner of education as in Minnesota Statutes, section 122.23, subdivision 6. Any contributions toward the debt of independent school district No. 789, Clarissa, by independent school district No. 790, Eagle Bend, under this section must not be considered in the calculation of debt equalization aid for independent school district Nos. 790, Eagle Bend, or 789, Clarissa.

Sec. 17. [LITCHFIELD LEASE LEVY.]

Notwithstanding the instructional purposes limitation of Minnesota Statutes, section 124.91, subdivision 1, independent school district No. 465, Litchfield, may apply to the commissioner of education 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 already vacated for instructional purposes.

Sec. 18. [JOINT ELEMENTARY FACILITY.]

Subdivision 1. [APPLICATION.] This section applies to independent school district Nos. 622, North St. Paul-Maplewood-Oakdale; 833, South Washington county; and 834, Stillwater, and to the joint elementary facility to be operated by the districts.

Subd. 2. [JOINT POWERS AGREEMENT.] Notwithstanding Minnesota Statutes, section 123.35, subdivision 19a, the districts may obligate themselves to participate in and to provide financial support for a joint powers agreement to govern the administration, financing, and operation of the joint elementary facility during the period when the obligations issued to finance the joint elementary facility remain outstanding.

Subd. 3. [LEASING LEVY.] Notwithstanding any contrary provision of Minnesota Statutes, section 124.91, each district annually may levy the amount necessary to pay its proportionate share of its obligations under the lease or a lease with option to purchase agreement for the joint elementary facility during the term of that agreement. The

agreement is not required to include a nonappropriation clause on the part of the districts. An election is not required in connection with the execution of the lease or lease with option to purchase agreement and the obligation created by the agreement does not constitute debt and must not be included in the calculation of net debt for any of the districts.

Subd. 4. [FACILITY BELONGS TO EACH DISTRICT; ENROLLMENT.] The joint elementary facility shall be considered a facility of each of the three districts and students attending the facility from the three districts shall be treated for all purposes as resident pupils attending a school in their home district.

Subd. 5. [KINDERGARTEN.] The joint elementary facility shall offer an all-day, five-day kindergarten in conjunction with the year-round school option of its comprehensive education program. Notwithstanding Minnesota Statutes, section 124.17, pupils enrolled in these all-day, five-day programs at the joint elementary facility shall be counted the same as pupils enrolled in grades 1 to 6 for pupil unit purposes.

Sec. 19. [DEBT EQUALIZATION DETERMINATION.]

Notwithstanding the plan adopted by independent school district No. 233, Preston-Fountain, and independent school district No. 228, Harmony, according to Minnesota Statutes, section 122.242, subdivision 9, for revenue for fiscal year 1996 only, the department of education shall determine debt service equalization aid according to Minnesota Statutes, section 124.95, as though preexisting debt remained the responsibility of the preexisting school districts.

Sec. 20. [INSTRUCTION TO THE REVISOR.]

In the next and subsequent editions of Minnesota Statutes, the revisor shall change the words "capital expenditure equipment" and "capital equipment" wherever they appear in Minnesota Statutes, chapters 120 to 128B, to "equipment."

Sec. 21. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [CAPITAL EXPENDITURE FACILITIES AID.] For capital expenditure facilities aid according to Minnesota Statutes, section 124.243, subdivision 5:

$73,985,000 ..... 1996

$73,055,000 ..... 1997

The 1996 appropriation includes $11,214,000 for 1995 and $62,771,000 for 1996.

The 1997 appropriation includes $11,077,000 for 1996 and $61,978,000 for 1997.

Subd. 3. [EQUIPMENT AID.] For equipment aid according to Minnesota Statutes, section 124.244, subdivision 3:

$40,456,000 ..... 1996

$40,339,000 ..... 1997

The 1996 appropriation includes $5,782,000 for 1995 and $34,674,000 for 1996.

The 1997 appropriation includes $6,118,000 for 1996 and $34,221,000 for 1997.

Subd. 4. [HEALTH AND SAFETY AID.] (a) For health and safety aid according to Minnesota Statutes, section 124.83, subdivision 5:

$15,185,000 ..... 1996

$12,220,000 ..... 1997

The 1996 appropriation includes $2,606,000 for 1995 and $12,579,000 for 1996.

The 1997 appropriation includes $2,138,000 for 1996 and $10,082,000 for 1997.

(b) $400,000 in each year is for health and safety management assistance contracts under Minnesota Statutes, section 124.83.

(c) $60,000 of each year's appropriation shall be used to contract with the state fire marshal to provide services under Minnesota Statutes, section 121.1502.

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 ..... 1997

The 1996 appropriation includes $0 for 1995 and $30,054,000 for 1996.

The 1997 appropriation includes $0 for 1996 and $27,370,000 for 1997.

Subd. 6. [PLANNING GRANT.] For a grant to 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:

$40,000.....1996

The grant is to cover costs associated with continued planning for facility needs for a combined district or for sharing facilities with any neighboring school districts. The districts must consult with independent school district Nos. 177, Windom; 324, Jackson; and 518, Worthington, in the facility planning process. If a combined facility is planned, the facility must provide for the location of a significant number of noneducational student and community service programs within the facility.

This appropriation is available until June 30, 1997.

Sec. 22. [REPEALER.]

(a) Laws 1991, chapter 265, article 5, section 23, as amended by Laws 1992, chapter 499, article 5, section 25; and Minnesota Statutes 1994, section 124.962, are repealed July 1, 1995.

(b) Minnesota Statutes 1994, section 124.243, subdivision 2a, is repealed July 1, 1996.

(c) Minnesota Statutes 1994, section 124.243, subdivision 9, is repealed July 1, 1995, effective for taxes payable in 1996 for fiscal year 1997.

Sec. 23. [EFFECTIVE DATE.]

(a) Section 3 (124.243, subd. 2) is effective July 1, 1995, except that the repeal of the reduction of the capital expenditure facilities revenue in the stricken paragraph (c) is effective for fiscal year 1997 and thereafter.

Section 1. Minnesota Statutes 1994, section 121.912, subdivision 6, is amended to read:

Subd. 6. [ACCOUNT TRANSFER FOR REORGANIZING DISTRICTS.] (a) A school district that has reorganized according to section 122.22, 122.23, or sections 122.241 to 122.248 and has conducted a successful referendum on the question of combination under section 122.243, subdivision 2, or consolidation under section 122.23, subdivision 13, may make permanent transfers between any of the funds in the newly created or enlarged district with the exception of the debt redemption fund, food service fund, and health and safety account of the capital expenditure fund. Fund transfers under this section may be made only for up to one year prior to the effective date of combination or consolidation and during the year following the effective date of reorganization.

(b) A district that has conducted a successful referendum on the question of combination under section 122.243, subdivision 2, may make permanent transfers between any of the funds in the district with the exception of the debt redemption fund, food service fund, and health and safety account of the capital expenditure fund for up to one year prior to the effective date of combination under sections 122.241 to 122.248.

Sec. 2. Minnesota Statutes 1994, section 122.21, subdivision 4, is amended to read:

Subd. 4. Within six months of the time when the petition was filed, the county board shall issue its order either granting or denying the petition, unless all or part of the land area described in the petition is included in a plat for consolidation or combination which has been approved by the state board commissioner of education in which event, no order may be issued while consolidation or combination proceedings are pending. No order shall be issued which results in attaching to a district any territory not adjoining that district, as defined in subdivision 1(a). No order shall be issued which reduces the size of any district to less than four sections unless the district is not operating a school within the district. The order may be made effective at a deferred date not later than July 1 next following its issuance. If the petition be granted, the auditor shall transmit a certified copy to the commissioner. Failure to issue an order within six months of the filing of the petition or termination of proceedings upon an approved consolidation plat, whichever is later, is a denial of the petition.

Sec. 3. Minnesota Statutes 1994, section 122.23, subdivision 2, is amended to read:

Subd. 2. (a) Upon a resolution of a school board in the area proposed for consolidation or upon receipt of a petition therefor executed by 25 percent of the voters resident in the area proposed for consolidation or by 50 such voters, whichever is lesser, the county auditor of the county which contains the greatest land area of the proposed new district shall forthwith cause a plat to be prepared. The resolution or petition shall show the approximate area proposed for consolidation.

(b) The resolution or petition may propose the following:

(1) that (i) the bonded debt of the component districts will be paid according to the levies previously made for that debt under chapter 475, or that the taxable property in the newly created district will be taxable for the payment of all or a portion of the bonded debt previously incurred by any component district as provided in subdivision 16, and (ii) that the portion of homestead and agricultural credit aid attributable to the debt service for the outstanding bonds will be attributed to either the debt levies remaining in the component districts or attributable to the total levy in the newly created district;

(2) that obligations for a capital loan or an energy loan made according to section 216C.37 or sections 298.292 to 298.298 outstanding in a preexisting district as of the effective date of consolidation remain solely with the preexisting district that obtained the loan, or that all or a portion of the loan obligations will be assumed by the newly created or enlarged district and paid by the newly created or enlarged district on behalf of the preexisting district that obtained the loan;

(3) that referendum levies previously approved by voters of the component districts pursuant to section 124A.03, subdivision 2, or its predecessor provision, be combined as provided in section 122.531, subdivision 2a or 2b, or that the referendum levies be discontinued;

(4) that the board of the newly created district consist of the number of members determined by the component districts, which may be six or seven members elected according to subdivision 18, or any number of existing school board members of the component districts, and a method to gradually reduce the membership to six or seven; or

(5) that separate election districts from which school board members will be elected, the boundaries of these election districts, and the initial term of the member elected from each of these election districts be established.

A group of districts that operates a cooperative secondary facility funded under section 124.494 may also propose a temporary school board structure as specified in section 124.494, subdivision 7.

If a county auditor receives more than one request for a plat and the requests involve parts of identical districts, the auditor shall forthwith prepare a plat which in the auditor's opinion best serves the educational interests of the inhabitants of the districts or areas affected.

(c) The plat shall show:

(1) Boundaries of the proposed district, as determined by the county auditor, and present district boundaries,

(2) The location of school buildings in the area proposed as a new district and the location of school buildings in adjoining districts,

(3) The boundaries of any proposed separate election districts, and

(4) Other pertinent information as determined by the county auditor.

Sec. 4. Minnesota Statutes 1994, section 122.242, subdivision 9, is amended to read:

Subd. 9. [FINANCES.] The plan must state:

(1) whether (i) debt service for the bonds outstanding at the time of combination remains solely with the district that issued the bonds or whether all or a portion of the debt service for the bonds will be assumed by the combined district and paid by the combined district on behalf of the district that issued the bonds, and (ii) that the portion of homestead and agricultural credit aid attributable to the debt service for the outstanding bonds will be attributed to either the debt levies remaining in the component districts or attributable to the total levy in the newly created district;

(2) whether obligations for a capital loan or energy loan made according to section 216C.37 or sections 298.292 to 298.298 outstanding at the time of combination remain solely with the district that obtained the loan, or whether all or a portion of all the loan obligations will be assumed by the combined district and paid by the combined district on behalf of the district that obtained the loan;

(3) the treatment of debt service levies, down payment levies under section 124.82, and referendum levies;

(4) whether the cooperating or combined district will levy for reorganization operating debt according to section 121.915, clause (1); and

(5) two- and five-year projections, prepared by the department of education upon the request of any district, of revenues, expenditures, and property taxes for each district if it cooperated and combined and if it did not.

Sec. 5. Minnesota Statutes 1994, section 122.895, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For the purposes of this section, the terms defined in this subdivision have the meanings given them.

(a) "Teacher" means a teacher as defined in section 125.12, subdivision 1, who is employed by a district or center listed in subdivision 2, except that it does not include a superintendent.

(b) "Cooperative" means any district or center to which this section applies.

(c) "Withdrawal" means a school district's removal of its students from a program of instruction, counseling, or evaluation provided by a cooperative in order to provide the same educational services by other means.

(d) "Education support position" means a position not requiring a teaching license in which an employee assists a teacher by providing instructional, counseling, or evaluative support services directly to students.

(e) "Education support employee" means an employee holding an education support position.

Sec. 6. Minnesota Statutes 1994, section 122.895, subdivision 8, is amended to read:

Subd. 8. [NONLICENSED EMPLOYEES UPON DISSOLUTION.] (a) A nonlicensed employee who is terminated by a cooperative that dissolves shall be appointed by a district that is a member of the dissolved cooperative to a position that is created within 12 36 months of the dissolution of the cooperative and is created as a result of the dissolution of the cooperative. A position shall be offered to a nonlicensed employee, who fulfills the qualifications for that position, in order of the employee's seniority within the dissolved cooperative.

(b) When an education support employee is terminated by a cooperative that dissolves, a district that is a member of the dissolved cooperative shall appoint the employee to an education support position if the position is created within 36 months of the dissolution of the cooperative as a result of the dissolution. An education support position shall be offered to an education support employee, who fulfills the qualifications for that position, in order of the employee's seniority within the dissolved cooperative.

(c) An employee appointed according to this subdivision shall receive credit for the employee's:

(1) continuous years of service with the cooperative on the appointing district's compensation schedule and seniority list; and

(2) unused sick leave accumulated while employed by the cooperative.

(d) Notwithstanding section 179A.12 or Minnesota Rules, part 5510.0510, subparts 1 to 4, a representation petition seeking the exclusive representation of a unit of education support employees employed by a district formerly a member of a dissolved cooperative may be considered by the commissioner of the bureau of mediation services at any time within 11 months of the dissolution of the cooperative.

Sec. 7. Minnesota Statutes 1994, section 122.895, subdivision 9, is amended to read:

Subd. 9. [NONLICENSED EMPLOYEES UPON WITHDRAWAL.] (a) A nonlicensed employee of a cooperative whose position active employment is discontinued or reduced as a result of the withdrawal of a member district from the cooperative shall be appointed by the withdrawing member district to a position that is created within 12 36 months of the withdrawal and is created as a result of the withdrawal of the member district. A position shall be offered to a nonlicensed employee, who fulfills the qualifications for that position, in order of the employee's seniority within the cooperative from which a member district withdraws.

(b) When an education support employee of a cooperative has active employment discontinued or reduced as a result of the withdrawal of a member district from the cooperative, the withdrawing member district shall appoint the employee to an education support position if the position is created within 36 months of the withdrawal as a result of the withdrawal of the member district. An education support position shall be offered to an education support employee, who meets the qualifications for that position, in order of the employee's seniority within the cooperative from which a member district withdraws.

(c) An employee appointed according to this subdivision shall receive credit for the employee's:

(1) continuous years of service with the cooperative on the appointing district's compensation schedule and seniority list; and

(2) unused sick leave accumulated while employed by the cooperative.

(d) Notwithstanding section 179A.12 or Minnesota Rules, part 5510.0510, subparts 1 to 4, a representation petition seeking the exclusive representation of a unit of education support employees employed by a member district which has withdrawn from a cooperative may be considered by the commissioner of the bureau of mediation services at any time within 11 months of the district's withdrawal from the cooperative.

Sec. 8. Minnesota Statutes 1994, section 124.2725, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY.] A school district is eligible for cooperation and combination revenue if it has a plan approved by the commissioner according to section 122.243 and it levied under subdivision 3 for taxes payable in 1995.

Sec. 9. Minnesota Statutes 1994, section 124.2725, subdivision 3, is amended to read:

Subd. 3. [COOPERATION AND COMBINATION LEVY.] To obtain cooperation and combination revenue, a district may levy an amount equal to the cooperation and combination revenue multiplied by the lesser of one or the following ratio:

(1) the quotient derived by dividing the adjusted net tax capacity for the district in the year preceding the year the levy is certified by the actual pupil units in the district for the year to which the levy is attributable, to

(2) the percentage, amount specified in subdivision 4, of the equalizing factor for the school year to which the levy is attributable.

Sec. 10. Minnesota Statutes 1994, section 124.2725, subdivision 4, is amended to read:

Subd. 4. [INCREASING LEVY.] (a) For districts that did not enter into an agreement under section 122.541 at least three years before the date of a successful referendum held under section 122.243, subdivision 2, and that combine without cooperating, the percentage amount in subdivision 3, clause (2), shall be:

(1) 50 percent $4,707.50 for the first year of combination; and

(2) 25 percent $2,353.75 for the second year of combination.

(b) For districts that entered into an agreement under section 122.541 at least three years before the date of a successful referendum held under section 122.243, subdivision 2, and combine without cooperating, the percentages in subdivision 3, clause (2), shall be:

(1) 100 percent $9,415 for the first year of combination;

(2) 75 percent $7,061.25 for the second year of combination;

(3) 50 percent $4,707.50 for the third year of combination; and

(4) 25 percent $2,353.75 for the fourth year of combination.

(c) For districts that combine after one year of cooperation, the percentage in subdivision 3, clause (2), shall be:

(1) 100 percent $9,415 for the first year of cooperation;

(2) 75 percent $7,061.25 for the first year of combination;

(3) 50 percent $4,707.50 for the second year of combination; and

(4) 25 percent $2,353.75 for the third year of combination.

(d) For districts that combine after two years of cooperation, the percentage in subdivision 3, clause (2), shall be:

(1) 100 percent $9,415 for the first year of cooperation;

(2) 75 percent $7,061.25 for the second year of cooperation;

(3) 50 percent $4,707.50 for the first year of combination; and

(4) 25 percent $2,353.75 for the second year of combination.

Sec. 11. Minnesota Statutes 1994, section 124.2725, subdivision 15, is amended to read:

Subd. 15. [RETIREMENT AND SEVERANCE LEVY.] A cooperating or combined district that levied under subdivision 3 for taxes payable in 1995 may levy for severance pay or early retirement incentives for licensed and nonlicensed employees who retire early as a result of the cooperation or combination.

Sec. 12. Minnesota Statutes 1994, section 124.2726, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY AND USE.] A school district that has been reorganized after June 30, 1994, under section 122.23 and has not received revenue under section 124.2725 is eligible for consolidation transition revenue. Revenue is equal to the sum of aid under subdivision 2 and levy under subdivision 3. Consolidation transition revenue may only be used according to this section. Revenue must initially be used for the payment of district costs for the early retirement incentives granted by the district under section 122.23, subdivision 20. Any revenue under subdivision 2 remaining after the payment of district costs for the early retirement incentives must be used to reduce operating debt as defined in section 121.915. Any additional aid remaining after the reduction of operating debt must be deposited in the district's general fund. Revenue received under this section shall not be included in the determination of the reduction under section 124A.26, subdivision 1.

Sec. 13. [LAC QUI PARLE VALLEY JOINT DISTRICT.]

Subdivision 1. [FUND TRANSFER.] Notwithstanding Minnesota Statutes, section 121.912, or any other law to the contrary, independent school district No. 377, Madison, may transfer $1,000,000 from its capital expenditure fund to the trust and agency fund of joint powers school district No. 6011, Lac qui Parle Valley.

Subd. 2. [BALLOT ISSUES.] Notwithstanding Minnesota Statutes, sections 122.531 and 124A.03, the referendum held in the member districts of joint school district No. 6011, Lac qui Parle Valley, may, as part of the ballot question to approve the plan to combine the districts, include a reference to the referendum revenue amount that will result in not more than $315 per pupil unit of revenue in the combined district.

Subd. 3. [LEVY REDUCTION.] Beginning with taxes certified in 2004 payable in 2005, the tax levy on the property that was in independent school district No. 2153, Madison-Marietta-Nassau, on June 30, 1996, is reduced by $100,000 per year for a ten-year period. In each fiscal year for which this levy that would have been attributed, the amounts necessary to make up for the levy reduction are transferred from the trust and agency fund of the successor district to joint district No. 6011, Lac qui Parle Valley, to the appropriate funds as necessary to replace the levy reduction. Any funds remaining in the trust and agency fund as a result of the transfer authorized in subdivision 1 after the ten-year period are transferred to the capital expenditure fund or its successor fund of the district.

Subd. 4. [REORGANIZATION OPERATING DEBT LEVY.] Independent school district No. 128, Milan, and its successor district may certify the levy for reorganization operating debt authorized in Minnesota Statutes, section 122.531, subdivision 4a, beginning in the year of a successful vote to combine. The levy must be certified according to Minnesota Statutes, section 122.531, subdivision 4a, paragraph (a), clause (1), except that the levy may be certified over less than five years. The reorganization operating debt levy is reduced by the amount of any state grant for the same purpose.

Sec. 14. [ALLOCATION FOR COMBINED DISTRICTS.]

A district that has reorganized after June 30, 1990, and that made the decision at the time of reorganization to keep its debt service for bonds outstanding at the time of the reorganization separate may elect to reallocate any portion of its homestead and agricultural credit aid to the debt service levies of the component districts.

Sec. 15. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund or other named fund to the department of education for the fiscal years designated.

Subd. 2. [CAPITAL FACILITY GRANTS FOR COOPERATION AND COMBINATION.] For competitive grants under Minnesota Statutes, section 124C.60:

$ 408,000 ..... 1996

$ -0-.....1997

Subd. 3. [CONSOLIDATION TRANSITION AID.] For districts consolidating under Minnesota Statutes, section 124.2726:

$ 908,000 ..... 1996

$1,092,000 ..... 1997

The 1996 appropriation includes $75,000 for 1995 and $833,000 for 1996.

The 1997 appropriation includes $146,000 for 1996 and $946,000 for 1997.

Any balance in the first year does not cancel but is available in the second year.

Subd. 4. [COOPERATION AND COMBINATION AID.] For aid for districts that cooperate and combine according to Minnesota Statutes, section 124.2725:

$3,297,000 ..... 1996

$1,973,000 ..... 1997

The 1996 appropriation includes $542,000 for 1995 and $2,755,000 for 1996.

The 1997 appropriation includes $486,000 for 1996 and $1,487,000 for 1997.

Any balance in the first year does not cancel but is available in the second year.

Subd. 5. [DISTRICT COOPERATION REVENUE.] For district cooperation revenue aid:

$13,485,000 ..... 1996

$12,143,000 ..... 1997

The 1996 appropriation includes $2,115,000 for 1995 and $11,370,000 for 1996.

The 1997 appropriation includes $2,006,000 for 1996 and $10,137,000 for 1997.

Subd. 6. [SPECIAL CONSOLIDATION AID.] For special consolidation aid under Minnesota Statutes, section 124.2728:

$ 75,000 ..... 1996

$ 40,000 ..... 1997

The 1996 appropriation includes $12,000 for 1995 and $63,000 for 1996.

The 1997 appropriation includes $9,000 for 1996 and $31,000 for 1997.

Any balance in the first year does not cancel but is available in the second year.

Subd. 7. [INFORMATION SUPPORT.] For information reporting support and software:

$ 750,000 ..... 1996

$ 500,000 ..... 1997

The department must support school districts in preparing information required by the state and ensure that data reported to the state is accurate. Data reported to the state must meet state reporting standards. Up to $150,000 in fiscal year 1996 is for additional Internet support in school districts. Up to $300,000 each year is for development, maintenance, and support of software for data reporting to the state.

Subd. 8. [MILAN REORGANIZATION OPERATING DEBT.] For a grant to independent school district No. 128, Milan, to retire operating debt:

$ 36,000 ..... 1996

$ 36,000 ..... 1997

Sec. 16. [EFFECTIVE DATE.]

Sections 3 to 7 (122.23, subdivision 2; 122.242, subdivision 9; 122.895, subdivisions 1, 8, and 9) and section 13 (Lac qui Parle), subdivision 2, are effective the day following final enactment. Section 13 (Lac qui Parle), subdivisions 3 and 4, and section 15, subdivision 8 (Milan, appropriation) are effective following the successful vote to consolidate effective July 1, 1996, by all the members of joint district No. 6011, Lac qui Parle Valley. Section 13 (Lac qui Parle), subdivision 1, is effective retroactive to January 1, 1989. Section 14 (allocation for consolidate) is effective July 1, 1995.

Section 1. Minnesota Statutes 1994, 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.

(c) The content of the graduation rule must differentiate between minimum competencies and rigorous standards.

(d) Notwithstanding section 15.53, subdivision 2, the commissioner may immediately renew, once only, for up to 24 months, a contract with a school district for the services of an educator to work in the development, implementation, or both, of the graduation rule.

(e) The state board shall periodically review and report on the assessment process with the expectation of expanding high school graduation requirements.

(e) (f) The state board shall report to the legislature annually by January 15 on its progress in developing and implementing the graduation requirements until such time as all the graduation requirements are implemented.

(g) The department shall continue piloting the graduation rule in the 1995-1996 and 1996-1997 school years. The commissioner shall evaluate all available data from the pilot sites and report the results to the education committees of the legislature by March 1, 1996. The report must also include complete and detailed answers to the following questions:

(1) What is the cost of specific mechanisms districts will use to monitor student progress?

(2) What kinds of staff development training are required, with what costs?

(3) What financial resources are required to implement graduation outcomes statewide, as well as locally, including the specific costs for each stage of implementation?

(4) What is the educational and financial impact of a high stakes graduation rule on students and districts?

The commissioner and state board shall also report to the education committee of the legislature by March 1, 1996, with a current estimate of the detailed costs to the state and to school districts for statewide implementation, remediation, and technology needs for the graduation standards.

No rule implementing the reading and mathematics basic requirements and assessments of the graduation standards may be adopted under section 14.05 to 14.36 until at least 30 days following the end of the 1996 or later session at which the board reports its readiness to implement them. By March 1 of the same session the draft of the rule that is proposed to be adopted must be presented to the education committees of the legislature. No other standards may be implemented by rule until after the mathematics and reading standards have been implemented and at least an initial evaluation of their impact has been made by the commissioner and the state board to the education committees during a regular session.

The state board shall continue to develop and field test the successor of statewide, results-oriented graduation standards based on pilot project assessment data of the graduation standards and make a report to the commissioner and the legislature before proceeding to implement the profile of learning or imposing further regulatory control of schools' local autonomy to design and implement their curriculum and school improvement plans. The state board shall propose to the commissioner and legislature by February 1, 1997, standardized assessment tests to measure student achievement in reading, mathematics, writing, science, government, physical health and safety, and geography, with alternative forms of these tests, for schools to use in reporting student achievement data that is comparable district to district and to state norms, to enable the stakeholders to understand the educational progress of students.

Sec. 2. Minnesota Statutes 1994, section 123.3514, is amended by adding a subdivision to read:

Subd. 4f. [DISTRICT OFFERING ADVANCED PLACEMENT OR INTERNATIONAL BACCALAUREATE PROGRAMS.] If a school district offers courses as part of an advanced placement or international baccalaureate program, a pupil must not enroll in comparable courses at a post-secondary institution except with the consent of the school board or the superintendent. Notwithstanding this provision, a student may enroll in the post-secondary institution if the course is unavailable in the student's high school.

If there is a disagreement concerning the comparability of courses, a panel must determine if the course is comparable. The panel must consist of a person designated by the school district, a person designated by the post-secondary institution, and a third person selected by the first two.

Sec. 3. Minnesota Statutes 1994, section 123.3514, subdivision 5, is amended to read:

Subd. 5. [CREDITS.] (a) A pupil may enroll in a course under this section for either secondary credit or post-secondary credit. At the time a pupil enrolls in a course, the pupil shall designate whether the course is for secondary or post-secondary credit. A pupil taking several courses may designate some for secondary credit and some for post-secondary credit. A nonacademic, activity course may be designated for secondary credit or post-secondary credit, but not both. A nonacademic, activity course designated for secondary credit may not later be counted for post-secondary credit under paragraph (d). A pupil must not audit a course under this section.

(b) A school district shall grant academic credit to a pupil enrolled in a course for secondary credit if the pupil successfully completes the course. Seven quarter or four semester college credits equal at least one full year of high school credit. Fewer college credits may be prorated. A school district shall also grant academic credit to a pupil enrolled in a course for post-secondary credit if secondary credit is requested by a pupil. If no comparable course is offered by the district, the district shall, as soon as possible, notify the commissioner, which shall determine the number of credits that shall be granted to a pupil who successfully completes a course. If a comparable course is offered by the district, the school board shall grant a comparable number of credits to the pupil. If there is a dispute between the district and the pupil regarding the number of credits granted for a particular course, the pupil may appeal the school board's decision to the commissioner. The commissioner's decision regarding the number of credits shall be final.

(c) The secondary credits granted to a pupil shall be counted toward the graduation requirements and subject area requirements of the school district. Evidence of successful completion of each course and secondary credits granted shall be included in the pupil's secondary school record. A pupil must provide the school with a copy of the pupil's grade in each course taken for secondary credit under this section. Upon the request of a pupil, the pupil's secondary school record shall also include evidence of successful completion and credits granted for a course taken for post-secondary credit. In either case, the record shall indicate that the credits were earned at a post-secondary institution.

(d) If a pupil enrolls in a post-secondary institution after leaving secondary school, the post-secondary institution shall award post-secondary credit for any course successfully completed for secondary credit at that institution. Other post-secondary institutions may award, after a pupil leaves secondary school, post-secondary credit for any courses successfully completed under this section. An institution may not charge a pupil for the award of credit.

Sec. 4. Laws 1993, chapter 224, article 12, section 32, as amended by Laws 1993, chapter 374, section 22, is amended to read:

Sec. 32. [REPEALER.]

(a) Minnesota Statutes 1992, sections 120.095; 120.101, subdivision 5a; 120.75, subdivision 2; 120.80, subdivision 2; 121.11, subdivisions 6 and 13; 121.165; 121.19; 121.49; 121.883; 121.90; 121.901; 121.902; 121.904, subdivisions 5, 6, 8, 9, 10, 11a, and 11c; 121.908, subdivision 4; 121.9121, subdivisions 3 and 5; 121.931, subdivisions 6, 6a, 7, and 8; 121.934; 121.936 subdivisions 1, 2, and 3; 121.937; 121.94; 121.941; 121.942; 121.943; 123.33, subdivisions 10, 14, 15, and 16; 123.35, subdivision 14; 123.352; 123.36, subdivisions 2, 3, 4, 4a, 6, 8, 9, and 12; 123.40, subdivisions 4 and 6; 123.61; 123.67; 123.709; 123.744; 124.615; 124.62; 124.64; 124.645; 124.67; 124.68; 124.69; 124.79; 125.12, subdivisions 3a and 4a; 125.17, subdivisions 2a and 3a; 126.09; 126.111; 126.112; 126.20, subdivision 4; 126.24; and 126.268, are repealed.

(b) Minnesota Statutes 1992, section 121.11, subdivision 15, is repealed.

(c) Minnesota Statutes 1992, sections 120.101, subdivision 5b; 121.11, subdivision 16; 121.585, subdivision 3; 124.19, subdivisions 1, 1b, 6, and 7; 126.02; 126.025; 126.031; 126.06; 126.08; 126.12, subdivision 2; 126.661; 126.662; 126.663; 126.664; 126.665; 126.666; 126.67; 126.68; 126A.01; 126A.02; 126A.04; 126A.05; 126A.07; 126A.08; 126A.09; 126A.10; 126A.11; and 126A.12, are repealed.

Sec. 5. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [SCIENCE-MATHEMATICS GRANT.] For continuation of systemic change in science and mathematics education programs:

$1,292,000 ..... 1996

$1,292,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 3. [GRADUATION STANDARDS AND ASSESSMENTS.] For accelerated development of the state board of education graduation rule:

$4,000,000 ..... 1996

$3,500,000 of this amount is for piloting of the graduate rule in schools including assessment development.

This appropriation is available until June 30, 1997.

Subd. 4. [EDUCATIONAL EFFECTIVENESS.] For educational effectiveness programs according to Minnesota Statutes, sections 121.602 and 121.608:

$749,000.....1996

$749,000.....1997

Subd. 5. [ACADEMIC EXCELLENCE FOUNDATION.] (a) For the academic excellence foundation according to Minnesota Statutes, section 121.612:

$555,000.....1996

$555,000.....1997

(b) 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 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.

(c) $30,000 each year is for the south central Minnesota talented youth program.

Subd. 6. [ADVANCED PLACEMENT AND INTERNATIONAL BACCALAUREATE PROGRAMS.] For the state advanced placement and international baccalaureate programs, including training programs, support programs, and examination fee subsidies:

$900,000.....1996

$900,000.....1997

Of this amount $200,000 each year is for training and support programs under Minnesota Statutes, section 126.239, and the balance is for examination fee subsidies. Notwithstanding Minnesota Statutes, section 126.239, subdivision 3, in each year, the commissioner shall pay the fee for one advanced placement or international baccalaureate examination for the first examination each student takes. The commissioner shall pay 50 percent of the fee for each additional examination a student takes or more than 50 percent if the student meets the low-income guidelines established by the commissioner. If this amount is not adequate, the commissioner may pay less than 50 percent for the additional examinations.

Any balance in the first year does not cancel but is available in the second year.

Subd. 7. [SCHOOL RESTRUCTURING GRANTS.] For school restructuring:

$300,000.....1996

$300,000.....1997

This appropriation is for a grant to a nonstate organization to develop systemic site decision-making models and implement systemic site decision-making in school districts.

Any balance in the first year does not cancel but is available in the second year.

Sec. 6. [REPEALER.]

Minnesota Statutes 1994, sections 121.602, subdivision 5; 124A.292; 125.138, subdivisions 6, 7, 8, 9, 10, and 11; and 126.019, are repealed.

Laws 1992, chapter 499, article 7, section 27, is repealed.

Section 1. [124.177] [PSEO REPLACEMENT AID.]

Subdivision 1. [ELIGIBILITY.] A school district that meets the following criteria is eligible for PSEO replacement aid:

(1) the number of pupils or portions of pupils in average daily membership using the post-secondary enrollment options program exceeds four percent of the district's enrollment in grades 11 and 12;

(2) the enrollment in average daily membership in the district is less in the current year than it was five years previous; and

(3) the district is adjacent to at least two districts that are eligible for elementary or secondary sparsity revenue.

Subd. 2. [AID AMOUNT.] PSEO replacement aid equals:

(1) the number of pupils or portions of pupils in average daily membership using the post-secondary enrollment options program for the portion of time not attending the school district, minus

(2) the number of pupils in average daily membership in grades 11 and 12 in the district multiplied by four percent, multiplied by

(3) the secondary pupil weighting of 1.3, multiplied by

(4) the basic formula allowance for the fiscal year.

The PSEO replacement aid is not less than zero.

Sec. 2. Minnesota Statutes 1994, section 124.214, subdivision 2, is amended to read:

Subd. 2. [ABATEMENTS.] Whenever by virtue of chapter 278, sections 270.07, 375.192, or otherwise, the net tax capacity of any school district for any taxable year is changed after the taxes for that year have been spread by the county auditor and the local tax rate as determined by the county auditor based upon the original net tax capacity is applied upon the changed net tax capacities, the county auditor shall, prior to February 1 of each year, certify to the commissioner of education the amount of any resulting net revenue loss that accrued to the school district during the preceding year. Each year, the commissioner shall pay an abatement adjustment to the district in an amount calculated according to the provisions of this subdivision. This amount shall be deducted from the amount of the levy authorized by section 124.912, subdivision 9. The amount of the abatement adjustment shall be the product of:

(1) the net revenue loss as certified by the county auditor, times

(2) the ratio of:

(a) the sum of the amounts of the district's certified levy in the preceding year according to the following:

(i) section 124A.23 if the district receives received general education aid according to that section for the second preceding year, or section 124B.20, if the education district of which the district is a member receives general education aid according to that section;

(ii) section 124.226, subdivisions 1 and 4, if the district receives received transportation aid according to section 124.225 for the second preceding year;

(iii) section 124.243, if the district receives received capital expenditure facilities aid according to that section for the second preceding year;

(iv) section 124.244, if the district receives received capital expenditure equipment aid according to that section for the second preceding year;

(v) section 124.83, if the district receives received health and safety aid according to that section for the second preceding year;

(vi) sections 124.2713, 124.2714, and 124.2715, if the district receives received aid for community education programs according to any of those sections for the second preceding year;

(vii) section 124.2711, subdivision 2a, if the district receives received early childhood family education aid according to section 124.2711 for the second preceding year;

(viii) section 124.321, subdivision 3, if the district receives received special education levy equalization aid according to that section for the second preceding year;

(ix) section 124A.03, subdivision 1g, if the district receives received referendum equalization aid according to that section for the second preceding year; and

(x) section 124A.22, subdivision 4a, if the district receives received training and experience aid according to that section for the second preceding year;

(b) to the total amount of the district's certified levy in the preceding October, plus or minus auditor's adjustments.

Sec. 3. Minnesota Statutes 1994, section 124.214, subdivision 3, is amended to read:

Subd. 3. [EXCESS TAX INCREMENT.] If a return of excess tax increment is made to a school district pursuant to section 469.176, subdivision 2, or upon decertification of a tax increment district, the school district's aid and levy limitations must be adjusted for the fiscal year in which the excess tax increment is paid under the provisions of this subdivision.

(a) An amount must be subtracted from the school district's aid for the current fiscal year equal to the product of:

(1) the amount of the payment of excess tax increment to the school district, times

(2) the ratio of:

(A) the sum of the amounts of the school district's certified levy for the fiscal year in which the excess tax increment is paid according to the following:

(i) section 124A.23, if the district receives received general education aid according to that section, or section 124B.20, if the education district of which the district is a member receives general education aid according to that section for the second preceding year;

(ii) section 124.226, subdivisions 1 and 4, if the school district receives received transportation aid according to section 124.225 for the second preceding year;

(iii) section 124.243, if the district receives received capital expenditure facilities aid according to that section for the second preceding year;

(iv) section 124.244, if the district receives received capital expenditure equipment aid according to that section for the second preceding year;

(v) section 124.83, if the district receives received health and safety aid according to that section for the second preceding year;

(vi) sections 124.2713, 124.2714, and 124.2715, if the district receives received aid for community education programs according to any of those sections for the second preceding year;

(vii) section 124.2711, subdivision 2a, if the district receives received early childhood family education aid according to section 124.2711 for the second preceding year;

(viii) section 124.321, subdivision 3, if the district receives received special education levy equalization aid according to that section for the second preceding year;

(ix) section 124A.03, subdivision 1g, if the district receives received referendum equalization aid according to that section for the second preceding year; and

(x) section 124A.22, subdivision 4a, if the district receives received training and experience aid according to that section for the second preceding year;

(B) to the total amount of the school district's certified levy for the fiscal year, plus or minus auditor's adjustments.

(b) An amount must be subtracted from the school district's levy limitation for the next levy certified equal to the difference between:

(1) the amount of the distribution of excess increment, and

(2) the amount subtracted from aid pursuant to clause (a).

If the aid and levy reductions required by this subdivision cannot be made to the aid for the fiscal year specified or to the levy specified, the reductions must be made from aid for subsequent fiscal years, and from subsequent levies. The school district shall use the payment of excess tax increment to replace the aid and levy revenue reduced under this subdivision.

This subdivision applies only to the total amount of excess increments received by a school district for a calendar year that exceeds $25,000.

Sec. 4. Minnesota Statutes 1994, section 124.916, subdivision 2, is amended to read:

Subd. 2. [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes payable in 1994 and 1995 only, A school district may levy an amount up to the amount the district is required by the collective bargaining agreement in effect on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for licensed and nonlicensed employees who have terminated services in the employing district and withdrawn from active teaching service or other active service, as applicable, before July 1, 1992. The total amount of the levy each year may not exceed $300,000.

Notwithstanding section 121.904, 50 percent of the proceeds of this levy shall be recognized in the fiscal year in which it is certified.

Sec. 5. [125.612] [RETIREMENT INCENTIVE.]

(a) A school board may offer early retirement incentives to licensed and nonlicensed staff of the school district who are under the age of 65. The early retirement incentive that the board may offer is the employer payment of the premiums for continued health insurance coverage under paragraph (b). This incentive may only be offered to employees who agree to terminate active employment with the school district. The board must determine the staff to whom the incentive is offered. Unilateral implementation of this section by a school board is not an unfair labor practice under chapter 179A.

(b) The board may offer a former employee who is at least age 50 continued employer-paid individual or dependent health insurance coverage. To be eligible for employer-paid health insurance under this section, the former employee must agree not to return to work in any capacity for the district that will provide the insurance coverage or any other district, except as a substitute teacher. Coverage may not extend beyond the age of 65 or the end of the first month in which the employee is eligible for employer-paid health insurance coverage from a new employer. For purposes of this section, "employer-paid health insurance coverage" means medical, hospitalization, or health insurance coverage provided through an insurance company that is licensed to do business in the state.

Sec. 6. Minnesota Statutes 1994, section 125.623, subdivision 2, is amended to read:

Subd. 2. [GRANTS.] The commissioner of education in consultation with the multicultural advisory committee established in section 126.82 desegregation/integration advisory board established in section 121.1601, subdivision 3, shall award grants for professional development programs to recruit and educate people of color in the field of

education, including early childhood and parent education. Grant applicants must be a school district with a growing minority population working in collaboration with a state institution of higher education with an approved teacher licensure program or an approved early childhood or parent education licensure program.

Sec. 7. Minnesota Statutes 1994, section 126.70, subdivision 2a, is amended to read:

Subd. 2a. [STAFF DEVELOPMENT OUTCOMES.] (a) The staff development committee shall adopt a staff development plan for improving student achievement of education outcomes. The plan must be consistent with education outcomes that the school board determines. The plan shall include activities that enhance staff skills for achieving the following outcomes:

(1) foster readiness for learning for all pupils;

(2) increase pupils' educational progress by using appropriate outcomes and personal learning goals and by encouraging pupils and their parents to assume responsibility for their education;

(3) meet pupils' individual needs by using alternative instructional opportunities, accommodations, modifications, after-school child care programs, and family and community resources;

(4) effectively meet the needs of children with disabilities within the regular classroom and other settings by improving the knowledge of school personnel about the legal and programmatic requirements affecting students with disabilities, and by improving staff ability to collaborate, consult with one another, and resolve conflicts; and

(5) provide equal educational opportunities for all students that are consistent with the school desegregation/integration and inclusive education policies adopted by school districts and approved by the state.

(b) The staff development committee is strongly encouraged to include in its plan activities for achieving the following outcomes:

(1) facilitate organizational changes by enabling a site-based team composed of pupils, parents, school personnel, representatives of children with disabilities, and community members who generally reflect the racial composition of the school to address the pupils' needs;

(2) evaluate the effectiveness of education policies, processes, and products through appropriate evaluation procedures that include multiple criteria and indicators;

(3) provide effective mentorship oversight and peer review of probationary, continuing contract, and nonprobationary teachers;

(4) assist elementary and secondary students in learning to resolve conflicts in effective, nonviolent ways;

(5) effectively teach and model violence prevention policy and curricula that address issues of sexual, racial, and religious harassment; and

(6) provide challenging instructional activities and experiences, including advanced placement and international baccalaureate programs, that recognize and cultivate students' advanced abilities and talents; and

(7) in consultation with the American Indian parent committee established under section 126.51, design and implement programs, provide in-service training for teachers, and develop and disseminate appropriate, corresponding materials to increase teacher and student knowledge of American Indian tribal government, history, and culture.

Sec. 8. Minnesota Statutes 1994, section 128B.10, subdivision 1, is amended to read:

Subdivision 1. [EXTENSION.] This chapter is repealed July 1, 1995 1999.

Sec. 9. Laws 1993, chapter 224, article 12, section 39, 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; 8700.6410; 8700.6800; 8700.7100; 8700.9000; 8700.9010; 8700.9020; and 8700.9030, are repealed.

(b) Minnesota Rules, parts 3520.1600; 3520.2400; 3520.2500; 3520.2600; 3520.2800; 3520.2900; 3520.3000; 3520.3100; 3520.3200; 3520.3400; 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; 3520.5920; 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; and 3530.7800, are repealed.

(c) Minnesota Rules, parts 3500.1400; 3500.3700; 3510.0100; 3510.0200; 3510.0300; 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; 3510.8100; 3510.8200; 3510.8300; 3510.8400; 3510.8500; 3510.8600; 3510.8700; 3510.9000; 3510.9100; chapters 3515, 3517.0100; 3517.0120; 3517.3150; 3517.3170; 3517.3420; 3517.3450; 3517.3500; 3517.3650; 3517.4000; 3517.4100; 3517.4200; 3517.8500; 3517.8600;, and 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; 8700.6900; 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; 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; 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. 10. Laws 1993, chapter 224, article 12, section 41, 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, 1996.

Sec. 11. Laws 1994, chapter 647, article 7, section 15, is amended to read:

Sec. 15. [TEACHER PREPARATION CURRICULUM.]

(a) Consistent with Laws 1993, chapter 224, article 12, section 34, the state board of teaching, with the assistance of organizations representing diverse cultures and the state American Indian education committee, shall decide whether or not to include in the human relations curriculum, in staff development in-service training, or, as may be appropriate, in continuing education, for preparing all beginning social studies teachers, a study of anthropology that encompasses a study of the indigenous people of the midwest, and a study of the history of the indigenous people that encompasses a study of the Minnesota area in precolonial times through the twentieth century, government, and culture of Minnesota-based American Indian tribes and other diverse cultures in Minnesota.

(b) Consistent with Laws 1993, chapter 224, article 12, section 34, the state board of teaching shall ensure that the human relations curriculum of all teacher preparation programs includes components of American Indian language, history, government, and culture.

Sec. 12. [TASK FORCE ON PREPROFESSIONAL SKILLS TEST.]

Subdivision 1. [ESTABLISHMENT; MEMBERSHIP.] The board of teaching shall establish a task force to review the preprofessional skills test and possible options for prospective elementary and secondary teachers. The task force shall be composed of 11 members as follows: four members shall be from, and appointed by, the Minnesota association of colleges of teacher education, including at least one member from the University of Minnesota, one from the private colleges, and one from the state universities; four members shall be from, and appointed by, the board of teaching; and one member each shall be from, and appointed by, the Minnesota education association, the Minnesota federation of teachers and the inter faculty organization.

Subd. 2. [CHARGE.] The task force shall develop options to the preprofessional skills test. One of the options shall be an index that combines test scores and grade point averages, and for which the task force recommends a minimum passing score. The board of teaching shall use these options as a pilot for applicable students at one member institution of the Minnesota association of colleges of teacher education in the 1996-1997 academic year, including licensing otherwise qualified teachers who use the alternative. The board shall convene the task force to review the results of the pilot and make any recommendations for change. The task force may use the assistance of an independent expert in tests and measurement chosen by the task force.

Subd. 3. [SUPPORT.] The board of teaching shall convene the first meeting and shall provide the staffing necessary for the task force during its work.

Subd. 4. [SUNSET.] The task force shall expire on September 30, 1997.

Sec. 13. [ADULT BASIC EDUCATION LICENSE.]

Notwithstanding other law or rule, the board of teaching must continue to require adult basic education teachers to have a separate license.

Sec. 14. [ADDITIONAL DEBT SERVICE EQUALIZATION AID.]

Subdivision 1. [INTENT.] It is the intent of the legislature to give those school districts that received maximum effort capital loans prior to the enactment of the debt service equalization aid program the opportunity to make the same choices, regarding which programs features best fulfill local needs, as those districts who seek maximum effort loans after the enactment of debt service equalization.

Subd. 2. [SARTELL.] For independent school district No. 748, Sartell, the portion of the debt levy required to restore the maximum effort tax rate to the rate required under Minnesota Statutes, section 124.38, qualifies for debt service equalization aid on the same basis as other eligible debt service revenue. The capital loan must be fully repaid and is not forgiven after 50 years under Minnesota Statutes, section 124.431, subdivision 12.

Sec. 15. [UNRECOVERED RAILROAD AID.]

Unrecovered railroad aid payments pursuant to Laws 1984, chapter 502, article 9, section 5, shall be adjusted from the school district's aid in fiscal year 1997. If the aid reduction required by this section cannot be made to the aid for fiscal year 1997, the reduction must be made from aid for subsequent fiscal years.

Sec. 16. [FUND TRANSFERS.]

Subdivision 1. [CONDITIONS.] (a) Fund transfers authorized in this section that involve transferring funds in a disabled access account or a health and safety account may be made by the district only after the commissioner has approved the five-year facilities plan that the district is required to prepare according to Minnesota Statutes, section 124.243, subdivision 1.

(b) A district that transfers revenue from a health and safety account or a disabled access account may not, at a later date, receive health and safety revenue or disabled access revenue for the same project as the project for which the transferred revenue was received. The transfer request must identify the project that generated the balance to be transferred.

(c) Disabled access revenue that is transferred according to this section is included in the district's disabled access revenue limit established in Minnesota Statutes, section 124.84, subdivision 3.

(d) Amounts transferred from the health and safety account according to this section shall be considered to be approved health and safety expenditures for the purpose of computing a district's health and safety revenue according to Minnesota Statutes, section 124.83, subdivision 3.

(e) A district that transfers funds from its bus purchase account according to this section may not certify a bus purchase levy according to Minnesota Statutes, section 124.226, subdivision 6, for the next three years following the transfer.

Subd. 2. [PELICAN RAPIDS.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 548, Pelican Rapids, may permanently transfer an amount not to exceed $200,000 from its general fund to its capital expenditure fund for technology integration.

Subd. 3. [PINE RIVER-BACKUS.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 2174, Pine River-Backus, may permanently transfer an amount not to exceed $200,000 from its general fund to its capital expenditure fund for technology integration.

Subd. 4. [DETROIT LAKES.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 22, Detroit Lakes, may permanently transfer an amount not to exceed $325,000 from its general fund to its capital expenditure fund for acquiring computers and related technology needs.

Subd. 5. [ST. CLOUD.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, each year for fiscal years 1996, 1997, 1998, and 1999, independent school district No. 742, St. Cloud, may permanently transfer up to $500,000 of referendum revenue received under Minnesota Statutes, section 124A.03, from its general fund to its capital expenditure fund for purchasing technology for instructional use.

Subd. 6. [LITTLE FALLS.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, each year for fiscal years 1996 through 2005, independent school district No. 482, Little Falls, may permanently transfer up to $233 per actual pupil unit of referendum revenue received under Minnesota Statutes, section 124A.03, from its general fund to its capital expenditure fund for technology.

Subd. 7. [MILACA.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, each year for fiscal years 1996 through 2005, independent school district No. 912, Milaca, may permanently transfer up to $200 per actual pupil unit of referendum revenue received under Minnesota Statutes, section 124A.03, from its general fund to its capital expenditure fund for technology.

Subd. 8. [RUSH CITY.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 139, Rush City, may permanently transfer up to $100,000 from its transportation fund to its capital expenditure fund.

Subd. 9. [MENTOR.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 604, Mentor, may permanently transfer up to $160,000 from the facilities account in its capital expenditure fund to its general fund.

Subd. 10. [GRANADA-HUNTLEY-EAST CHAIN.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 2536, Granada-Huntley-East Chain, may permanently transfer up to $100,000 from the facilities and equipment accounts in its capital expenditure fund to its general fund.

Subd. 11. [CHATFIELD.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 277, Chatfield, may permanently transfer up to $50,000 from the facilities account to the equipment account in its capital expenditure fund.

Subd. 12. [MEDFORD.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 123.36, subdivision 13, independent school district No. 763, Medford, may deposit the proceeds from a sale of approximately nine acres of land adjacent to and east of its football/baseball complex in Medford into its general fund.

Subd. 13. [EAST GRAND FORKS.] Notwithstanding Minnesota Statutes, section 124.243, subdivision 6, clause (2), in fiscal years 1995 and 1996, independent school district No. 595, East Grand Forks, may use up to $1,400,000 in capital expenditure facilities revenue to acquire and construct buildings for school purposes.

Subd. 14. [BYRON.] Notwithstanding Minnesota Statutes, section 121.912, subdivision 1, if independent school district No. 531, Byron, discontinues operation of its bus fleet, or a portion of the fleet, and transfers the account balance from the transportation fund, the district may spread the required levy reduction for capital levies according to Minnesota Statutes, sections 124.243, 124.244 and 124.83, over a five-year period beginning with 1995 levies payable in 1996.

Subd. 15. [SWANVILLE.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 486, Swanville, may permanently transfer up to $100,000 from the bus purchase account in its transportation fund to its general fund without making a levy reduction.

Subd. 16. [TRUMAN.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 458, Truman, may permanently transfer up to $100,000 from the bus purchase account in its transportation fund to its general fund without making a levy reduction.

Subd. 17. [MONTEVIDEO.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 129, Montevideo, may permanently transfer up to $100,000 from the bus purchase account in its transportation fund to its general fund without making a levy reduction.

Subd. 18. [EDINA.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 273, Edina, may permanently transfer up to $482,432 from the bus purchase account to the undesignated fund balance account in its transportation fund.

Subd. 19. [GARY.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, independent school district No. 523, Gary, may permanently transfer the balance in its bonded indebtedness fund and the disabled access account in its capital expenditure fund to the general fund of the successor school district of independent school district Nos. 526, Twin Valley, and 523, Gary.

Subd. 20. [TWIN VALLEY.] Notwithstanding Minnesota Statutes, sections 121.912, 121.9121, and 124.243, subdivision 8, independent school district No. 526, Twin Valley, may permanently transfer the balances in the health and safety account in its capital expenditure fund and the disabled access account in its capital expenditure fund to the general fund of the successor school district of independent school district Nos. 526, Twin Valley, and 523, Gary.

Subd. 21. [FISHER.] Notwithstanding Minnesota Statutes, section 124.83, subdivision 6, or 124.84, independent school district No. 600, Fisher, may use capital expenditure health and safety revenue or disabled access revenue, or both, to purchase portable classrooms. Any proceeds from the sale of portable classrooms purchased with the revenue shall be placed in the appropriate account in the capital expenditure fund and used to adjust revenue in that account.

Subd. 22. [GOODRIDGE.] Notwithstanding Minnesota Statutes, section 124.83, subdivision 6, independent school district No. 561, Goodridge, may use capital expenditure health and safety revenue or disabled access revenue to purchase portable classrooms. Any proceeds from the sale of portable classrooms purchased with the revenue shall be placed in the health and safety account in the capital expenditure fund and used to adjust health and safety revenue.

Subd. 23. [NEW PRAGUE.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 721, New Prague, may permanently transfer an amount not to exceed $70,000 from its general fund to its capital expenditure fund for technology integration.

Subd. 24. [GLENCOE.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 422, Glencoe, may permanently transfer up to $125,000 from its debt redemption fund to its capital expenditure fund without making a levy reduction.

Subd. 25. [PIPESTONE.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1995, independent school district No. 583, Pipestone, may permanently transfer up to $190,000 from its debt redemption fund to its capital expenditure fund without making a levy reduction.

Sec. 17. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums in this section are appropriated, unless otherwise indicated, from the general fund to the department of education for the fiscal years designated.

Subd. 2. [ABATEMENT AID.] For abatement aid according to Minnesota Statutes, section 124.214:

$22,541,000 ..... 1996

$ 9,605,000 ..... 1997

The 1996 appropriation includes $1,135,000 for 1995 and $21,406,000 for 1996.

The 1997 appropriation includes $3,777,000 for 1996 and $5,828,000 for 1997.

Subd. 3. [INTEGRATION GRANTS.] (a) For grants to districts implementing desegregation plans mandated by the state board:

$18,844,000 ..... 1996

$18,844,000 ..... 1997

(b) $1,385,000 each year must be allocated to independent school district No. 709, Duluth; $9,368,300 each year must be allocated to special school district No. 1, Minneapolis; and $8,090,700 each year must be allocated to independent school district No. 625, St. Paul. 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.

Subd. 4. [NONPUBLIC PUPIL AID.] For nonpublic pupil education aid according to Minnesota Statutes, sections 123.931 to 123.947:

$9,686,000 ..... 1996

$9,686,000 ..... 1997

The 1996 appropriation includes $1,452,000 for 1995 and $8,234,000 for 1996.

The 1997 appropriation includes $1,452,000 for 1996 and $8,234,000 for 1997.

Subd. 5. [SCHOOL LUNCH AND FOOD STORAGE AID.] (a) For school lunch aid according to Minnesota Statutes, section 124.646, and Code of Federal Regulations, title 7, section 210.17, and for food storage and transportation costs for United States Department of Agriculture donated commodities; and for a temporary transfer to the commodity processing revolving fund to provide cash flow to permit schools and other recipients of donated commodities to take advantage of volume processing rates and for school milk aid according to Minnesota Statutes, section 124.648:

$7,644,000 ..... 1996

$7,839,000 ..... 1997

(b) Any unexpended balance remaining from the appropriations in this subdivision shall be prorated among participating schools based on the number of free, reduced, and fully paid federally reimbursable student lunches served during that school year.

(c) If the appropriation amount attributable to either year is insufficient, the rate of payment for each fully paid student lunch shall be reduced and the aid for that year shall be prorated among participating schools so as not to exceed the total authorized appropriation for that year.

(d) Any temporary transfer processed in accordance with this subdivision to the commodity processing fund will be returned by June 30 in each year so that school lunch aid and food storage costs can be fully paid as scheduled.

(e) Not more than $800,000 of the amount appropriated each year may be used for school milk aid.

Subd. 6. [SUMMER FOOD SERVICE.] For summer food service:

$15,000.....1996

$15,000.....1997

Subd. 7. [SCHOOL BREAKFAST.] To operate the school breakfast program:

$514,000.....1996

$530,000.....1997

If the appropriation amount attributable to either year is insufficient, the rate of payment for each fully paid student breakfast shall be reduced and the aid for that year shall be prorated among participating schools so as not to exceed the total authorized appropriation for that year. Any unexpected balance remaining shall be used to subsidize the payments made for school lunch aid per Minnesota Statutes, section 124.646.

Up to one percent of the program funding can be used by the department of education for technical and administrative assistance.

Subd. 8. [PILOT BREAKFAST GRANTS.] For grants for free breakfast to elementary school children which began under Laws 1994, chapter 647, article 8, section 35:

$104,000.....1996

$ 88,000.....1997

$18,000 in 1996 is for evaluation of the program.

Any balance in the first year does not cancel but is available in the second year.

These grants must be made to independent school districts No. 271, Bloomington, for the Oak Grove elementary school; 378, Dawson-Boyd, for the elementary school; 402, Hendricks, and 403, Ivanhoe, for the elementary school; and special school district No. 1, Minneapolis, for the Hans Christian Anderson elementary school.

The department is encouraged to solicit private funds to continue the two additional pilot sites added in December 1994.

Subd. 9. [DESEGREGATION OFFICE-MDE.] For desegregation office-MDE aid:

$129,000.....1996

$129,000.....1997

Subd. 10. [MAGNET SCHOOL GRANTS.] For magnet school and program grants:

$1,500,000 ..... 1996

$1,500,000 ..... 1997

These amounts must be used for planning and developing magnet schools and magnet programs.

Subd. 11. [INTEGRATION PROGRAMS.] For grants according to: minority fellowship grants according to Laws 1994, chapter 647, article 8, section 29; minority teacher incentives according to Minnesota Statutes, section 124.278; teachers of color grants according to Minnesota Statutes, section 125.623; and cultural exchange grants according to Minnesota Statutes, section 126.43:

$1,000,000 ..... 1996

$1,000,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

In awarding teacher of color grants, priority must be given to districts that have students who are currently in the process of completing their academic program.

Subd. 12. [TEACHER EDUCATION IMPROVEMENT.] For board of teaching responsibilities relating to the development of a restructured teacher licensure program:

$276,000.....1996

$272,000.....1997

The department must transmit this appropriation to the board of teaching. Any balance in the first year does not cancel but is available in the second year.

Up to $76,000 in 1996 and $72,000 in 1997 are for costs related to the development of an alternative preprofessional skill test.

Subd. 13. [MALE RESPONSIBILITY AND FATHERING GRANTS.] For male responsibility and fathering grants:

$100,000.....1996

This appropriation is available until June 30, 1997.

The commissioner of education may enter into cooperative agreements with the commissioner of human services to access federal money for child support and paternity education programs.

Subd. 14. [ITV GRANT; FLOODWOOD.] For a grant to independent school district No. 698, Floodwood:

$125,000.....1996

This appropriation is available until June 30, 1997.

The grant must be used to construct an interactive television transmission line and an electronic data access line. This appropriation is only available to the extent it is matched by the district with local and nonlocal sources. The district may levy up to $50,000 to provide its share of local sources. School district No. 698, Floodwood, is not eligible for a minimum connection grant under Minnesota Statutes, section 124C.74.

Subd. 15. [ITV GRANT; CROMWELL.] For a grant to independent school district No. 95, Cromwell:

$125,000.....1996

This appropriation is available until June 30, 1997.

The grant must be used to construct an interactive television transmission line and an electronic data access line. This appropriation is only available to the extent it is matched by the district with local and nonlocal sources. The district may levy up to $50,000 to provide its share of local sources. School district No. 95, Cromwell, is not eligible for a minimum connection grant under Minnesota Statutes, section 124C.74. The appropriation and levy authorized in this subdivision are reduced by any amounts received according to Laws 1994, chapter 647, article 6, section 41, subdivision 8. School district No. 95, Cromwell, is not eligible for a minimum connection grant under Minnesota Statutes, section 124C.74.

Subd. 16. [APPROPRIATIONS FOR SCHOOL DISTRICTS.] For grants to certain school districts:

$62,000.....1996

$62,000.....1997

$32,000 in 1996 and $32,000 in 1997 are for grants to independent school district No. 707, Nett Lake, to pay insurance premiums under Minnesota Statutes, section 466.06.

$30,000 in 1996 and $30,000 in 1997 are for grants to independent school district No. 707, Nett Lake, for the payment of obligations of the school district for unemployment compensation. The appropriation must be paid to the appropriate state agency for such purposes in the name of the school district.

Subd. 17. [MODEL SCHOOL FOR CHRONIC TRUANTS.] For the model school for truants located in the law enforcement center in Mankato:

$20,000.....1996

$20,000.....1997

Subd. 18. [ONE ROOM SCHOOLHOUSE.] For a grant to independent school district No. 690, Warroad, to operate the Angle Inlet School:

$15,000.....1996

$15,000.....1997

Subd. 19. [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 ..... 1997

Subd. 20. [PSEO REPLACEMENT AID.] For PSEO replacement aid:

$104,000.....1996

$122,000.....1997

The 1996 appropriation includes $0 for 1995 and $104,000 for 1996.

The 1997 appropriation includes $19,000 for 1996 and $103,000 for 1997.

Sec. 18. [REPEALER.]

Minnesota Statutes 1994, sections 124.912, subdivision 8; and 124.914, subdivisions 2, 3, and 4; and Laws 1992, chapter 499, article 7, sections 16 and 17, are repealed.

Sec. 19. [EFFECTIVE DATE.]

Section 14 (debt service equalization aid) is effective for taxes payable in 1996 and later.

Section 16 (fund transfers) is effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 120.064, subdivision 4, is amended to read:

Subd. 4. [FORMATION OF SCHOOL.] (a) A sponsor may authorize one or more licensed teachers under section 125.05, subdivision 1, to operate an outcome-based school subject to approval by the state board of education. If a

school board elects not to sponsor an outcome-based school, the applicant may appeal the school board's decision to the state board of education if two members of the school board voted to sponsor the school. If the state board authorizes the school, the state board shall sponsor the school according to this section. The school shall be organized and operated as a cooperative under chapter 308A or nonprofit corporation under chapter 317A.

(b) Before the operators may form and operate a school, the sponsor must file an affidavit with the state board of education stating its intent to authorize an outcome-based school. The affidavit must state the terms and conditions under which the sponsor would authorize an outcome-based school. The state board must approve or disapprove the sponsor's proposed authorization within 30 60 days of receipt of the affidavit. Failure to obtain state board approval precludes a sponsor from authorizing the outcome-based school that was the subject of the affidavit.

(c) The operators authorized to organize and operate a school shall hold an election for members of the school's board of directors in a timely manner after the school is operating. Any staff members who are employed at the school, including teachers providing instruction under a contract with a cooperative, and all parents of children enrolled in the school may participate in the election. Licensed teachers employed at the school, including teachers providing instruction under a contract with a cooperative, must be a majority of the members of the board of directors. A provisional board may operate before the election of the school's board of directors. Board of director meetings must comply with section 471.705.

Sec. 2. Minnesota Statutes 1994, section 120.101, subdivision 5c, is amended to read:

Subd. 5c. [EDUCATION RECORDS.] A school district from which a student is transferring must transmit the student's educational records, within ten five business days of the date the student withdraws a request, to the school district in which the student is enrolling. School districts must make reasonable efforts to determine the school district in which a transferring student is next enrolling in order to comply with this subdivision.

Sec. 3. Minnesota Statutes 1994, 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:

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

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

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

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

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

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

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

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

(i) (9) locker rentals;

(j) (10) transportation of pupils (1) (i) for which state transportation aid is authorized pursuant to section 124.223 or (2) (ii) for which a levy is authorized under 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. 4. Minnesota Statutes 1994, section 120.75, subdivision 1, is amended to read:

Subdivision 1. Prior to the initiation of any fee not authorized or prohibited by sections 120.73 and 120.74, the local school board shall hold a public hearing within the district upon three weeks published notice in the district's official newspaper. The local school board shall notify the commissioner of any fee it proposes to initiate under this section.

If within 45 days of this notification, the commissioner does not disapprove the proposed fee, the local school board may initiate the proposed fee, or such notice as is otherwise required for a regular school board meeting given three weeks prior to the hearing on the proposed adoption of the policy.

Sec. 5. Minnesota Statutes 1994, section 123.70, subdivision 8, is amended to read:

Subd. 8. The administrator or other person having general control and supervision of the elementary or secondary school shall file a report with the commissioner of education on all persons enrolled in the school, except that the superintendent of each school district shall file a report with the commissioner of education for all persons within the district receiving instruction in a home school in compliance with sections 120.101 and 120.102. The parent of persons receiving instruction in a home school shall submit the statements as required by subdivisions 1, 2, 3, and 4 to the superintendent of the school district in which the person resides by October 1 of each school year. The school report shall be prepared on forms developed jointly by the commissioner of health and the commissioner of education and be distributed to the local school districts by the commissioner of health and shall state the number of persons attending the school, the number of persons who have not been immunized according to subdivision 1 or 2, and the number of persons who received an exemption under subdivision 3, clause (c) or (d). The school report shall be filed with the commissioner of education within 60 days of the commencement of each new school term. Upon request, a district shall be given a 60-day extension for filing the school report. The commissioner of education shall forward the report, or a copy thereof, to the commissioner of health who shall provide summary reports to boards of health as defined in section 145A.02, subdivision 2. The administrator or other person having general control and supervision of the child care facility shall file a report with the commissioner of human services on all persons enrolled in the child care facility. The child care facility report must be prepared on forms developed jointly by the commissioner of health and the commissioner of human services and be distributed to child care facilities by the commissioner of health and must state the number of persons enrolled in the facility, the number of persons with no immunizations, the number of persons who received an exemption under subdivision 3, clause (c) or (d), and the number of persons with partial or full immunization histories. The child care facility report shall be filed with the commissioner of human services by November 1 of each year. The commissioner of human services shall forward the report, or a copy thereof, to the commissioner of health who shall provide summary reports to boards of health as defined in section 145A.02, subdivision 2. The report required by this subdivision is not required of a family child care or group family child care facility, for prekindergarten children enrolled in any elementary or secondary school provided services according to section 120.17, subdivision 2, nor for child care facilities in which at least 75 percent of children in the facility participate on a one-time only or occasional basis to a maximum of 45 hours per child, per month.

Sec. 6. Minnesota Statutes 1994, section 122.91, subdivision 1, is amended to read:

Subdivision 1. [PURPOSE.] The purpose of an education district is to increase educational opportunities for learners by increasing cooperation and coordination among school districts, other public agencies, and post-secondary institutions, and to replace other existing cooperative structures.

Sec. 7. Minnesota Statutes 1994, section 122.91, subdivision 2, is amended to read:

Subd. 2. [AGREEMENT.] School boards meeting the requirements of subdivision 3 may enter into a written agreement to establish an education district. Once established, cities, counties, and other public or governmental agencies may become members of the education district. The agreement and subsequent amendments must be adopted by majority vote of the full membership of each board.

Sec. 8. Minnesota Statutes 1994, section 122.91, subdivision 2a, is amended to read:

Subd. 2a. [AGREEMENT; SPECIAL PROVISIONS.] The education district agreement may contain a special provision adopted by the vote of a majority of the full membership of each of the boards of the member school districts to allow a post-secondary institution or cities, counties, and other public or governmental agencies to become a member of the education district.

Sec. 9. Minnesota Statutes 1994, section 122.92, subdivision 1, is amended to read:

Subdivision 1. [SCHOOL DISTRICT REPRESENTATION.] The education district board shall be composed of at least one representative appointed by the school board or governing board of each member district. Each representative must be a member of the appointing school or governing board. Each representative shall serve at the pleasure of the appointing school board and may be recalled by a majority vote of the appointing school board. Each

representative shall serve for the term that is specified in the agreement. The board shall select its officers from among its members and shall determine the terms of the officers. The board shall adopt bylaws for the conduct of its business. The board may conduct public meetings via interactive television if the board complies with section 471.705 in each location where board members are present.

Sec. 10. Minnesota Statutes 1994, section 122.93, subdivision 1, is amended to read:

Subdivision 1. [COORDINATION.] An education district board shall coordinate the programs and services of the education district according to the terms of the written agreement. The board shall implement the agreement for delivering educational services defined in section 123.582, subdivisions 8 and 9, needed in the education district.

Sec. 11. Minnesota Statutes 1994, section 122.94, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] An education district board shall adopt a comprehensive agreement for continuous learning. The agreement must address methods to improve the educational opportunities available in the education district. It must be submitted for review by the educational cooperative service unit within which the majority of the education district membership lies. The education district board shall review the agreement annually and propose necessary amendments to the member districts.

Sec. 12. Minnesota Statutes 1994, section 123.35, subdivision 19b, is amended to read:

Subd. 19b. [WITHDRAWING FROM COOPERATIVE.] If a school district withdraws from a cooperative unit defined in paragraph (d), the distribution of assets and assignment of liabilities to the withdrawing district shall be determined according to this subdivision.

(a) The withdrawing district remains responsible for its share of debt incurred by the cooperative unit according to subdivision 19a. The school district and cooperative unit may mutually agree, through a board resolution by each, to terms and conditions of the distribution of assets and the assignment of liabilities.

(b) If the cooperative unit and the school district cannot agree on the terms and conditions, the commissioner of education shall resolve the dispute by determining the district's proportionate share of assets and liabilities based on the district's enrollment, financial contribution, usage, or other factor or combination of factors determined appropriate by the commissioner. The assets shall be disbursed to the withdrawing district in a manner that minimizes financial disruption to the cooperative unit.

(c) Assets related to an insurance pool shall not be disbursed to a member district under paragraph (b).

(d) For the purposes of this section, a cooperative unit is:

(1) an education district organized under sections 122.91 to 122.95;

(2) a cooperative vocational center organized under section 123.351;

(3) an intermediate district organized under chapter 136D;

(4) an educational cooperative service unit organized under section 123.58 a service cooperative organized under section 123.582; or

(5) a regional management information center organized under section 121.935 or as a joint powers district according to section 471.59.

Sec. 13. Minnesota Statutes 1994, section 123.351, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] Two or more independent school districts may enter into an agreement to establish a cooperative center to provide for vocational education and other educational services upon the vote of a majority of the full membership of each of the boards of the districts entering into the agreement. The agreement may also provide for membership by cities, counties, and other public or governmental agencies. When a resolution approving this action has been adopted by the board of a district, the resolution shall be published once in a newspaper of general circulation in the district. If a petition for referendum on the question of the district entering into the agreement, containing signatures of qualified voters of the district equal to five percent of the number of

voters at the last school district general election, is filed with the clerk of the board within 60 days after publication of the resolution, the board shall not enter into the agreement until the question has been submitted to the voters of the district at a special election. This election shall be conducted and canvassed in the same manner as school district general elections. If a majority of the total number of votes cast on the question within the district is in favor of the proposition, the board may enter into an agreement to establish the center for purposes described in this section.

Sec. 14. Minnesota Statutes 1994, section 123.351, subdivision 3, is amended to read:

Subd. 3. [GOVERNING BOARD.] (a) The center shall be operated by a center board of not less than five members which shall consist of members from school boards of each of the participating school districts within the center and member cities, counties, and other public or governmental agencies, appointed by their respective school boards. Each participating school district shall have at least one member on the board. The board shall choose an administrative officer to administer board policy and directives who shall serve as an ex officio member of the board but shall not have a vote.

(b) The terms of office of the first members of the board shall be determined by lot as follows: one-third of the members for one year, one-third for two years, and the remainder for three years, all terms to expire on June 30 of the appropriate year; provided that if the number of members is not evenly divisible by three, the membership will be as evenly distributed as possible among one, two and three year terms with the remaining members serving the three year term. Thereafter the terms shall be for three years commencing on July 1 of each year. If a vacancy occurs on the center board, it shall be filled by the appropriate school board within 90 days. A person appointed to the center board shall qualify as a board member by filing with the chair a written certificate of appointment from the appointing school board.

(c) The first meeting of a center board shall be at a time mutually agreed upon by board members. At this meeting, the center board shall choose its officers and conduct any other necessary organizational business. Thereafter the center board shall meet on the first of July of each year or as soon thereafter as practicable pursuant to notice sent to all center board members by the chief executive officer of the center.

(d) The officers of the center board shall be a chair, vice-chair, clerk and treasurer, no two of whom when possible shall be from the same school district. The chair shall preside at all meetings of the center board except in the chair's absence the vice-chair shall preside. The clerk shall keep a complete record of the minutes of each meeting and the treasurer shall be the custodian of the funds of the center. Insofar as applicable, sections 123.33 and 123.34, shall apply to the board and officers of the center.

(e) Each participating school district shall have equal voting power with at least one vote. A majority of the center board shall be a quorum. Any motion other than adjournment shall pass only upon receiving a majority of the votes of the entire center board.

Sec. 15. Minnesota Statutes 1994, section 123.351, subdivision 4, is amended to read:

Subd. 4. [POWERS AND DUTIES.] (a) The center board shall have the general charge of the business of the center and the ownership of facilities. Where applicable, section 123.36, shall apply. The center board may not issue bonds in its behalf. Each participating district may issue its bonds for the purpose of acquisition and betterment of center facilities in the amount certified by the center board to such participating district in accordance with chapter 475.

(b) The center board (1) may furnish vocational offerings to any eligible person residing in any participating district; (2) may provide special education for the handicapped and disadvantaged; and (3) may provide any other educational programs or services defined in section 123.582, subdivisions 8 and 9, agreed upon by the participating districts members. Academic offerings shall be provided only under the direction of properly licensed academic supervisory personnel.

(c) In accordance with subdivision 5, clause (b), the center board shall certify to each participating district the amount of funds assessed to the district as its proportionate share required for the conduct of the educational programs, payment of indebtedness, and all other proper expenses of the center.

(d) The center board shall employ and contract with necessary qualified teachers and administrators and may discharge the same for cause pursuant to section 125.12. The authority for selection and employment of a director shall be vested in the center board. Notwithstanding the provisions of section 125.12, subdivision 6a or 6b, no individual shall have a right to employment as a director based on seniority or order of employment by the center. The board may employ and discharge other necessary employees and may contract for other services deemed necessary.

(e) The center board may provide an educational program for secondary and adult vocational phases of instruction. The high school phase of its educational program shall be offered as a component of the comprehensive curriculum offered by each of the participating school districts. Graduation shall be from the student's resident high school district. Insofar as applicable, sections 123.35 to 123.40, shall apply.

(f) The center board may prescribe rates of tuition for attendance in its programs by adults and nonmember district secondary students.

Sec. 16. Minnesota Statutes 1994, section 123.351, subdivision 5, is amended to read:

Subd. 5. [FINANCING.] (a) Any center board established pursuant to this section is a public corporation and agency and may receive and disburse federal, state, and local funds made available to it. No participating school district or member shall have any additional individual liability for the debts or obligations of the center except that assessment which has been certified as its proportionate share in accordance with subdivision 5, clause (b) and subdivision 4, clauses (a) and (c). A member of the center board shall have such liability as is applicable to a member of an independent school district board. Any property, real or personal, acquired or owned by the center board for its purposes shall be exempt from taxation by the state or any of its political subdivisions.

(b) The center board may, in each year, for the purpose of paying any administrative, planning, operating, or capital expenses incurred or to be incurred, assess and certify to each participating school district its proportionate share of any and all expenses. This share shall be based upon an equitable distribution formula agreed upon by the participating districts. Each participating district shall remit its assessment to the center board within 30 days after receipt. The assessments shall be paid within the maximum levy limitations of each participating district.

Sec. 17. [123.582] [SERVICE COOPERATIVES.]

Subdivision 1. [DECLARATION OF POLICY.] It is declared to be a policy of the state to make general and uniform opportunities available to all member agencies in the state. In striving toward this equalizing of opportunity, the policy of the state shall be to encourage cooperation in making available to all member agencies those programs and services which may most efficiently and economically be provided by a consortium effort of several public or governmental agencies.

Subd. 2. [ESTABLISHMENT OF SERVICE COOPERATIVES.] (a) In furtherance of this policy, ten service cooperatives, hereafter designated as a SC, are established. Geographical boundaries for each SC shall coincide with those identified in governor's executive orders 8, dated September 1, 1971, and 59, dated May 29, 1973, issued pursuant to the regional development act of 1969, Minnesota Statutes, sections 462.381 to 462.397, with the following exceptions:

(1) development regions one and two shall be combined to form a single SC;

(2) development regions six east and six west shall be combined to form a single SC; and

(3) development regions seven east and seven west shall be combined to form a single SC.

(b) The SC shall cooperate with the regional development commission for the region with which its boundaries coincide but shall not be responsible to nor governed by that regional development commission.

(c) Two or more identified SCs may, upon approval by a majority of the members in each affected SC, be combined and administered as a single SC.

Subd. 3. [PURPOSE OF SC.] The primary purposes of designation as a SC shall be to perform planning on a regional basis and to assist in meeting specific needs of clients in participating public or governmental agencies which could be better provided by a SC than by the members themselves. The SC shall provide those programs and services which are determined, pursuant to subdivision 8, to be priority needs of the particular region and shall assist in meeting special needs which arise from fundamental constraints upon individual members.

Subd. 4. [MEMBERSHIP AND PARTICIPATION.] Full membership in a SC shall be limited to public school districts, cities, counties, and other public or governmental agencies of the state but nonvoting memberships shall be available to nonpublic school administrative units and other partnership agencies or organizations within the SC. A school district, city, county, or other public or governmental agency or nonprofit organization may belong to one or

more SCs. Participation in programs and services provided by the SC shall be discretionary. No school district, city, county, or other public or governmental agency shall be compelled to participate in these services under authority of this section. Nonpublic school students and personnel are encouraged to participate in programs and services to the extent allowed by law.

Subd. 5. [GOVERNING BOARD.] (a) The care, management, and control of a SC shall be vested in a board of directors composed of not less than six nor more than 15 members. A majority of the members of the SC board of directors shall be current members of school boards of participating public school districts. Election of the school board members to the SC board of directors shall be by vote of all current school board members of participating public school districts with each school board member having one vote. The remaining board members may be representatives at large appointed by the board members or elected as representatives by other participating agencies, such as cities, counties, or other public or governmental agencies.

(b) The election timeline shall be compatible with those for school board members and shall be addressed within the bylaws of each SC.

(c) A vacancy on the SC board which results in an unexpired term may be filled by appointment by the SC board of directors until such vacancy can be filled at the next board election.

(d) At the organizational meeting, the SC board shall choose its officers and conduct any other necessary organizational business. The SC board may, at its discretion, appoint up to three members at large to the SC board as ex officio, nonvoting members of the board and shall encourage the advisory participation of a cross-section of school and agency personnel within the SC to the extent allowed by law.

(e) The officers of the SC board shall be a chair, vice-chair, clerk, and treasurer, no two of whom, when possible, shall be from the same agency.

(f) A member of the SC board shall have the same liability applicable to a member of an independent school board or other elected governmental officials.

Subd. 6. [DUTIES AND POWERS OF SC BOARD OF DIRECTORS.] The board of directors shall have authority to maintain and operate a SC. Subject to the availability of necessary resources, the powers and duties of this board shall include the following:

(a) The board of directors shall submit, by June 1 of each year to each participating member, an annual plan which describes the objectives and procedures to be implemented in assisting in resolution of the needs of the SC.

(b) The SC board of directors shall provide adequate office, service center, and administrative facilities by lease, purchase, gift, or otherwise.

(c) The SC board of directors shall employ a central administrative staff and other personnel as necessary to provide and support the agreed upon programs and services. The board may discharge staff and personnel pursuant to applicable provisions of law. SC staff and personnel may participate in retirement programs and any other programs available to public school staff and personnel.

(d) The SC board of directors may appoint special advisory committees composed of superintendents, central office personnel, building principals, teachers, parents, lay persons, and representatives from cities, counties, and other public or governmental agencies.

(e) The SC board of directors may employ service area personnel pursuant to licensure and certification standards developed by the appropriate state agency such as the state board and the state board of teaching.

(f) The SC board of directors may enter into contracts with school boards of local districts including school districts outside the SC area.

(g) The SC board of directors may enter into contracts with other public and private agencies and institutions to provide administrative staff and other personnel as necessary to furnish and support the agreed upon programs and services.

(h) The SC board of directors shall exercise all powers and carry out all duties delegated to it by members under provisions of the SC bylaws. The SC board of directors shall be governed, when not otherwise provided, by applicable laws of the state.

(i) The SC board of directors shall submit an annual evaluation report of the effectiveness of programs and services to the members by September 1 of each year following the previous June 30 in which the programs and services were provided.

(j) The SC board is encouraged to establish cooperative, working relationships and partnerships with post-secondary educational institutions, other public agencies, business, and industry.

Subd. 7. [APPOINTMENT OF AN ADVISORY COUNCIL.] There may be advisory councils selected to give advice and counsel to the SC board of directors. The councils may be composed of representatives from public and nonpublic schools, cities, counties, and other public or governmental agencies.

Subd. 8. [EDUCATIONAL PROGRAMS AND SERVICES.] The board of directors of each SC shall submit annually a plan to the members. The plan shall identify the programs and services which are suggested for implementation by the SC during the following year and shall contain components of long-range planning determined by the SC. These programs and services may include, but are not limited to, the following areas:

(1) administrative services;

(2) curriculum development;

(3) data processing;

(4) distance learning and other telecommunication services;

(5) evaluation and research;

(6) staff development;

(7) media and technology centers;

(8) publication and dissemination of materials;

(9) pupil personnel services;

(10) planning;

(11) secondary, post-secondary, community, adult, and adult vocational education;

(12) teaching and learning services, including services for students with special talents and special needs;

(13) employee personnel services;

(14) vocational rehabilitation;

(15) health, diagnostic, and child development services and centers;

(16) leadership or direction in early childhood and family education;

(17) community services;

(18) shared time programs;

(19) fiscal services and risk management programs;

(20) technology planning, training, and support services;

(21) health and safety services;

(22) student academic challenges; and

(23) cooperative purchasing services.

Subd. 9. [TECHNICAL ASSISTANCE.] Insofar as possible, service cooperatives shall make technical assistance for long-range planning available to school districts upon request and shall establish a common database for local and regional decision making.

Subd. 10. [FINANCIAL SUPPORT FOR THE SERVICE COOPERATIVES.] (a) Financial support for SC programs and services shall be provided by participating members with private, state, and federal financial support supplementing as available. The SC board of directors may, in each year, for the purpose of paying any administrative, planning, operating, or capital expenses incurred or to be incurred, assess and certify to each participating school district, nonpublic school administrative unit, city, county, and other public or governmental agency its proportionate share of all expenses. This share shall be based upon the extent of participation by each school district, nonpublic school administrative unit, city, county, or other public or governmental agency and shall be in the form of a service fee. Each participating school district, nonpublic school administrative unit, city, county, or other public or governmental agency shall remit its assessment to the SC board as provided in the SC bylaws. The assessments shall be paid within the maximum levy limitations of each participating member. No participating member shall have any additional liability for the debts or obligations of the SC except that assessment which has been certified as its proportionate share and any other liability the member assumes under section 123.35, subdivision 19b.

(b) Any property acquired by the SC board is public property to be used for essential public and governmental purposes which shall be exempt from all taxes and special assessments levied by a city, county, state, or political subdivision thereof. If the SC is dissolved, its property must be distributed to the members at the time of the dissolution.

(c) A member may elect to withdraw participation in the SC by a majority vote of its full board membership and upon compliance with the applicable withdrawal provisions of the SC organizational agreement. The withdrawal shall be effective on the June 30 following receipt by the board of directors of written notification of the withdrawal by February 1 of the same year. Notwithstanding the withdrawal, the proportionate share of any expenses already certified to the withdrawing member for the SC shall be paid to the SC board.

(d) The SC is a public corporation and agency and its board of directors may make application for, accept, and expend private, state, and federal funds that are available for programs of the members. The commissioner shall not distribute special state aid or federal aid directly to a SC in lieu of distribution to a school district within the SC which would otherwise qualify for and be entitled to this aid without the consent of the school board of that district.

(e) The SC is a public corporation and agency and, as such, no earnings or interests of the SC may inure to the benefit of an individual or private entity.

Subd. 11. [JOINT POWERS ACT.] Nothing in this section shall restrict the authority granted to school district boards of education by section 471.59.

Subd. 12. [ANNUAL MEETING.] Each SC shall conduct a meeting at least annually for its members.

Sec. 18. Minnesota Statutes 1994, section 124.193, is amended to read:

124.193 [PROHIBITED AID AND LEVIES.]

Unless specifically permitted in the provision authorizing an aid or a levy, cooperative units of government defined in section 123.35, subdivision 19b, paragraph (d), are prohibited from making a property tax levy or qualifying for or receiving any form of state aid except that a cooperative unit may apply for and receive a grant on behalf of its members.

Sec. 19. Minnesota Statutes 1994, section 126.031, subdivision 1, is amended to read:

Subdivision 1. [INSTRUCTION REQUIRED PERMITTED.] Every public elementary and secondary school shall may provide an instructional program in chemical abuse and the prevention of chemical dependency. The school districts shall involve parents, students, health care professionals, state department staff, and other members of the community with a particular interest in chemical dependency prevention in developing the curriculum.

Sec. 20. [136D.93] [OTHER MEMBERSHIP AND POWERS.]

In addition to the districts listed in sections 136D.21, 136D.71, and 136D.81, the agreement of an intermediate school district established under this chapter may provide for the membership of other school districts and cities, counties, and other public or governmental agencies. In addition to the powers listed in sections 136D.25, 136D.73, and 136D.84, an intermediate school board may provide the services defined in

Sec. 21. Laws 1993, chapter 224, article 12, section 32, as amended by Laws 1993, chapter 374, section 22, is amended to read:

Sec. 32. [REPEALER.]

(a) Minnesota Statutes 1992, sections 120.095; 120.101, subdivision 5a; 120.75, subdivision 2; 120.80, subdivision 2; 121.11, subdivisions 6 and 13; 121.165; 121.19; 121.49; 121.883; 121.90; 121.901; 121.902; 121.904, subdivisions 5, 6, 8, 9, 10, 11a, and 11c; 121.908, subdivision 4; 121.9121, subdivisions 3 and 5; 121.931, subdivisions 6, 6a, 7, and 8; 121.934; 121.936 subdivisions 1, 2, and 3; 121.937; 121.94; 121.941; 121.942; 121.943; 123.33, subdivisions 10, 14, 15, and 16; 123.35, subdivision 14; 123.352; 123.36, subdivisions 2, 3, 4, 4a, 6, 8, 9, and 12; 123.40, subdivisions 4 and 6; 123.61; 123.67; 123.709; 123.744; 124.615; 124.62; 124.64; 124.645; 124.67; 124.68; 124.69; 124.79; 125.12, subdivisions 3a and 4a; 125.17, subdivisions 2a and 3a; 126.09; 126.111; 126.112; 126.20, subdivision 4; 126.24; and 126.268, are repealed.

(b) Minnesota Statutes 1992, section 121.11, subdivision 15, is repealed.

(c) Minnesota Statutes 1992, sections 120.101, subdivision 5b; 121.11, subdivision 16; 121.585, subdivision 3; 124.19, subdivisions 1, 1b, 6, and 7; 126.02; 126.025; 126.031; 126.06; 126.08; 126.12, subdivision 2; 126.661; 126.662; 126.663; 126.664; 126.665; 126.666; 126.67; 126.68; 126A.01; 126A.02; 126A.04; 126A.05; 126A.07; 126A.08; 126A.09; 126A.10; 126A.11; and 126A.12, are repealed.

Sec. 22. Laws 1994, chapter 647, article 3, section 25, is amended to read:

Sec. 25. [REPORTS OF INCIDENTS OF MISBEHAVIOR IN SCHOOLS.]

(a) For the 1994-1995 and 1995-1996 school years, each school district shall use a standardized form or alternative aggregate reporting format developed by the commissioner of education to report to the commissioner all incidents of misbehavior that result in the suspension or expulsion of students under Minnesota Statutes, sections 127.26 to 127.39. The standardized reporting form, which the commissioner may coordinate with the reporting form required under Minnesota Statutes, section 121.207, shall include the following information:

(1) a description of each incident of misbehavior that leads to the suspension or expulsion of the student including, where appropriate, a description of the dangerous weapon as defined in Minnesota Statutes, section 609.02, subdivision 6, involved in the incident;

(2) information about the suspended or expelled student, other than the student's name, including the student's age, whether the student is a student of color, and the number of times the student has been suspended or expelled previously and for what misbehavior;

(3) whether the student has or had an individualized learning plan (IEP) under Minnesota Statutes, section 120.17, and, if the student has or had an IEP, whether the misbehavior resulting in suspension or expulsion was a manifestation of the student's disabling condition;

(4) the actions taken by school officials to respond to the incident of misbehavior; and

(5) the duration of the suspension or expulsion.

(b) School districts shall use the standardized form or alternative aggregate reporting format to transmit the information described in paragraph (a) to the commissioner biannually by February 1 and July 1, beginning February 1, 1995, and ending July 1, 1996. The commissioner shall compile and analyze the data and present to the education committees of the legislature an interim report by January 1, 1996, and a final report by February 1, 1997.

(c) Based on the data collected, the department shall make recommendations to the legislature by March 15, 1995, for changes in the pupil fair dismissal act.

Sec. 23. [SUCCESSOR TO ECSUS.]

Each service cooperative established under section 17 is a continuation of the ECSU it replaces. The service cooperative is the legal successor in all respects of the ECSU, without need of further proceedings of any kind. The personnel of the ECSU become personnel of the service cooperative, retaining all their rights and benefits. All property, obligations, assets, and liabilities of the ECSU become the property, obligations, assets, and liabilities of the service cooperative.

Sec. 24. [REPORT.]

The state board of teaching, the state department of education, and the state board of education shall review teacher licensure requirements to determine in what instances it would be appropriate to provide for continuous licensure of teachers, after an initial or entrance license, if all other requirements are met including continuing education requirements. The three entities shall jointly and briefly report their findings and recommendations to the legislature by January 15, 1996.

Sec. 25. [REPEALER.]

Minnesota Statutes 1994, section 123.58, is repealed.

Section 1. Minnesota Statutes 1994, section 134.155, is amended to read:

134.155 [LIBRARIANS OF COLOR PROGRAM.]

Subdivision 1. [DEFINITION.] For purposes of this section, "people of color" means permanent United States residents who are African-American, American Indian or Alaskan native, Asian or Pacific Islander, or Hispanic.

Subd. 2. [GRANTS.] The commissioner of education, in consultation with the multicultural advisory committee established in section 126.82, shall award grants for professional development programs to recruit and educate people of color in the field of library science or information management. Grant applicants must be a public library jurisdiction with a growing minority population working in collaboration with an accredited institution of higher education with a library education program in the state of Minnesota.

Subd. 3. [PROGRAM REQUIREMENTS.] (a) A grant recipient shall recruit people of color to be librarians library staff in public libraries and provide support in linking program participants with jobs in the recipient's library jurisdiction.

(b) A grant recipient shall establish an advisory council composed of representatives of communities of color.

(c) A grant recipient, with the assistance of the advisory council, shall recruit high school students, undergraduate students, or other persons; support them through the higher education application and admission process; advise them while enrolled; and link them with support resources in the college or university and the community.

(d) A grant recipient shall award stipends to people of color enrolled in an accredited a library education program to help cover the costs of tuition, student fees, supplies, and books. Stipend awards must be based upon a student's financial need and students must apply for any additional financial aid for which they are eligible to supplement this program. No more than ten percent of the grant may be used for costs of administering the program. Students must agree to work in the grantee library jurisdiction for at least two years after graduation if the student acquires a master's degree and at least three years after graduation if the student acquires both a bachelor's and a master's degree while participating in the program. If no full-time position is available in the library jurisdiction, the student may fulfill the work requirement in another Minnesota public library.

(e) The commissioner of education shall consider the following criteria in awarding grants:

(1) whether the program is likely to increase the recruitment and retention of persons of color in librarianship;

(2) whether grant recipients will establish or have a mentoring program for persons of color; and

(3) whether grant recipients will provide a library internship for persons of color while participating in this program.

Sec. 2. Minnesota Statutes 1994, section 134.34, subdivision 4a, is amended to read:

Subd. 4a. [SUPPORT GRANTS.] In state fiscal years 1993, 1994, and 1995, and 1996, a regional library basic system support grant also may be made to a regional public library system for a participating city or county which meets the requirements under paragraph (a) or (b).

(a) The city or county decreases the dollar amount provided by it for operating purposes of public library service if the amount provided by the city or county is not less than the amount provided by the city or county for such purposes in the second preceding year.

(b)(1) The city or county provided for operating purposes of public library services an amount exceeding 125 percent of the state average percentage of the adjusted net tax capacity or 125 percent of the state average local support per capita; and

(2) the local government aid distribution for the current calendar year under chapter 477A has been reduced below the originally certified amount for payment in the preceding calendar year, if the dollar amount of the reduction from the previous calendar year in support for operating purposes of public library services is not greater than the dollar amount by which support for operating purposes of public library service would be decreased if the reduction in support were in direct proportion to the local government aid reduction as a percentage of the previous calendar year's revenue base as defined in section 477A.011, subdivision 27. Determination of a grant under paragraph (b) shall be based on the most recent calendar year for which data are available.

The city or county shall file a report with the department of education indicating the dollar amount and percentage of reduction in public library operating funds.

Sec. 3. Minnesota Statutes 1994, section 134.351, subdivision 4, is amended to read:

Subd. 4. [GOVERNANCE.] (a) In any area where the boundaries of a proposed multicounty, multitype library system coincide with the boundaries of the regional library system or district, the regional library system or district board shall be designated as the governing board for the multicounty, multitype library system. In any area where a proposed multicounty, multitype library system encompasses more than one regional library system or district, the governing board of the multicounty, multitype library system shall consist of nine members appointed by the cooperating regional library system or district boards from their own membership in proportion to the population served by each cooperating regional library system or district. In each multicounty, multitype library system there shall be established an advisory committee consisting of two representatives of public libraries, two representatives of school media services, one representative of special libraries, one representative of public supported academic libraries, and one representative of private academic libraries. The advisory committee shall recommend needed policy to the system governing board.

(b) Upon recommendation from its advisory committee, a multitype library cooperation system governing board may choose to reconstitute the governance of the multitype system by the creation of a combined board which replaces the previous governing board and advisory committee. A combined board shall consist of five or seven citizens, not employed in library or information services, and four library or information service workers. The constituent regional public library system boards shall select the citizen members from the at-large population of the region. In any area where a multicounty, multitype library system encompasses more than one regional public library system, cooperating regional system boards shall appoint citizen members of the combined board members in proportion to the population of each cooperating regional system. The combined board members who are library and information workers shall be selected, one from each type of library: academic, public, school, and special. Governing board members of the combined board shall serve two-year terms for no more than three successive terms with the members of the first combined board serving one- and two-year terms as determined by lot with a simple majority serving for two years. Elections shall be pursuant to the adopted bylaws of the multitype system and may provide additional requirements to those in this section. New combined governing boards shall take effect at the beginning of the fiscal year, July 1, and shall continue the authority, ownership, and obligations of the previously constituted multitype system in its region.

Sec. 4. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [BASIC SUPPORT GRANTS.] For basic support grants according to Minnesota Statutes, sections 134.32 to 134.35:

$7,819,000 ..... 1996

$7,819,000 ..... 1997

The 1996 appropriation includes $1,172,000 for 1995 and $6,647,000 for 1996.

The 1997 appropriation includes $1,172,000 for 1996 and $6,647,000 for 1997.

Subd. 3. [LIBRARIANS OF COLOR.] For the librarians of color program according to Minnesota Statutes, section 134.155:

$55,000.....1996

$55,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 4. [CHILDREN'S LIBRARY SERVICES GRANTS.] For grants for collaborative programs to strengthen library services to children, young people, and their families:

$50,000.....1996

$50,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 5. [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For grants according to Minnesota Statutes, sections 134.353 and 134.354, to multicounty, multitype library systems:

$527,000.....1996

$527,000.....1997

The 1996 appropriation includes $79,000 for 1995 and $448,000 for 1996.

The 1997 appropriation includes $79,000 for 1996 and $448,000 for 1997.

Section 1. Minnesota Statutes 1994, section 124C.07, is amended to read:

124C.07 [COMPREHENSIVE ARTS PLANNING PROGRAM.]

The department of education Minnesota center for arts education shall prescribe the form and manner of application by one or more school districts to be designated as a site to participate in the comprehensive arts planning program. Up to 30 sites may be selected. The department of education center shall designate sites in consultation with the Minnesota alliance for arts in education, the Minnesota center for arts education, and the Minnesota state arts board.

Sec. 2. Minnesota Statutes 1994, section 124C.08, subdivision 2, is amended to read:

Subd. 2. [CRITERIA.] The center, in consultation with the comprehensive arts planning program state steering committee, shall establish criteria for site selection. Criteria shall include at least the following:

(1) a willingness by the district or group of districts to designate a program chair for comprehensive arts planning with sufficient authority to implement the program;

(2) a willingness by the district or group of districts to create a committee comprised of school district and community people whose function is to promote comprehensive arts education in the district;

(3) commitment on the part of committee members to participate in training offered by the department of education;

(4) a commitment of the committee to conduct a needs assessment of arts education;

(5) commitment by the committee to evaluate its involvement in the program;

(6) a willingness by the district to adopt a long-range plan for arts education in the district;

(7) no previous involvement of the district in the comprehensive arts planning program, unless that district has joined a new group of districts; and

(8) (7) location of the district or group of districts to assure representation of urban, suburban, and rural districts and distribution of sites throughout the state.

Sec. 3. Minnesota Statutes 1994, section 128A.02, subdivision 1, is amended to read:

Subdivision 1. [TO MANAGE GOVERN.] The state board of education must manage shall govern the state academy for the deaf and the state academy for the blind.

Sec. 4. Minnesota Statutes 1994, section 128A.02, subdivision 3, is amended to read:

Subd. 3. [MOST BENEFICIAL, LEAST RESTRICTIVE.] The state board must do what is necessary to provide the most beneficial and least restrictive program of education for each pupil at the academies who is handicapped by visual disability or hearing impairment deafness.

Sec. 5. Minnesota Statutes 1994, section 128A.02, is amended by adding a subdivision to read:

Subd. 3b. [PLANNING, EVALUATION, AND REPORTING.] The state board must establish a process for the academies to include parent and community input in the planning, evaluation, and reporting of curriculum and pupil achievement.

Sec. 6. Minnesota Statutes 1994, section 128A.02, subdivision 5, is amended to read:

Subd. 5. [ADVISORY COUNCIL SITE COUNCILS.] The state board must have shall establish, and appoint members to, an advisory council on management policies at the state academies a site council at each academy. The site councils shall exercise power and authority granted by the state board. The state board must appoint to each site council the exclusive representative's employee designee from each exclusive representative at the academies.

Sec. 7. Minnesota Statutes 1994, section 128A.021, is amended to read:

128A.021 [RESOURCE CENTER: HEARING AND VISUALLY IMPAIRED CENTERS; DEAF OR HARD OF HEARING AND BLIND OR VISUALLY IMPAIRED.]

Subdivision 1. [ALSO FOR MULTIPLY DISABLED.] A resource center Resource centers for the hearing-impaired, visually impaired, and deaf or hard of hearing, and the blind or visually impaired, each also serving multiply disabled pupils is established at, are transferred to the state academies department of education.

Subd. 2. [PROGRAMS.] The resource center centers must offer summer institutes and like programs throughout the state for hearing-impaired, visually impaired deaf or hard of hearing, blind or visually impaired, and multiply disabled pupils. The resource center centers must also offer workshops for teachers, and leadership development for teachers.

A program offered through the resource center centers must promote and develop education programs offered by school districts or other organizations. The program must assist school districts or other organizations to develop innovative programs.

Subd. 3. [PROGRAMS BY NONPROFITS.] The resource center centers may contract to have nonprofit organizations provide programs through the resource center centers.

Subd. 4. [ADVISORY COUNCIL COMMITTEES.] The advisory council for the academies is the advisory council for the resource center. The special education advisory council shall establish an advisory committee for each resource center. The advisory committees shall develop recommendations regarding the resource centers.

Sec. 8. Minnesota Statutes 1994, section 128A.022, subdivision 1, is amended to read:

Subdivision 1. [PERSONNEL.] The state board of education may employ central administrative staff members and other personnel necessary to provide and support programs and services in at each academy.

Sec. 9. Minnesota Statutes 1994, section 128A.022, subdivision 6, is amended to read:

Subd. 6. [STUDENT TEACHERS AND PROFESSIONAL TRAINEES.] (a) The state board may enter into agreements with teacher-preparing teacher preparation institutions for student teachers to get practical experience at the academies. A licensed teacher must provide appropriate supervision of each student teacher.

(b) The state board may enter into agreements with accredited higher education institutions for certain student trainees to get practical experience at the academies. The students must be preparing themselves in a professional field that provides special services to children with a disability in school programs. To be a student trainee in a field, a person must have completed at least two years of an approved program in the field. A person who is licensed or registered in the field must provide appropriate supervision of each student trainee.

Sec. 10. Minnesota Statutes 1994, section 128A.024, subdivision 4, is amended to read:

Subd. 4. [EDUCATION WITH PUPILS WITHOUT A DISABILITY.] The academies must provide opportunities for their pupils to be educated with pupils without a disability. A pupil's opportunities must be consistent with the pupil's individual education plan or individual family service plan and assessment.

Sec. 11. Minnesota Statutes 1994, section 128A.025, subdivision 1, is amended to read:

Subdivision 1. [ACADEMIES' ADMINISTRATOR.] The position of the residential academies' chief administrator at each academy is in the unclassified service.

Sec. 12. Minnesota Statutes 1994, section 128A.025, subdivision 2, is amended to read:

Subd. 2. [TEACHER STANDARDS.] A teacher or administrator at the academies is subject to the licensure standards of the board of teaching and or the state board of education.

Sec. 13. Minnesota Statutes 1994, section 128A.026, is amended to read:

128A.026 [STATE BOARD RULES ADOPTED PROCEDURES.]

Subdivision 1. [SUBJECTS.] The rules of the state board of education authorized in section 128A.02 must establish procedures for:

(1) admission, including short-term admission, to the academies;

(2) discharge from the academies;

(3) decisions on a pupil's program at the academies; and

(4) evaluation of a pupil's progress at the academies.

Subd. 2. [MINIMUM CONTENT.] The discharge procedures must include reasonable notice to the child's district of residence. The procedures set out in the rules must guarantee a pupil and the pupil's parent or guardian appropriate safeguards. The safeguards must include a review of the placement determination made under sections 120.17 and 128A.05 and the right to participate in educational program decisions.

Subd. 3. [NOT CONTESTED CASE.] A proceeding about admission to or discharge from the academies or about a pupil's program or progress at the academies is not a contested case under section 14.02. The proceeding is governed instead by the rules of the state board described in this section governing special education.

Sec. 14. Minnesota Statutes 1994, section 128A.05, subdivision 1, is amended to read:

Subdivision 1. [TWO KINDS.] There are two kinds of admission to the academies.

(a) A pupil who is deaf or hearing-impaired, hard of hearing, or blind-deaf, may be admitted to the academy for the deaf. A pupil who is visually blind or visually impaired, blind-deaf, or multiply handicapped may be admitted to the academy for the blind. For a pupil to be admitted, two decisions must be made under section 120.17.

(1) It must be decided by the individual education planning team that education in regular or special education classes in the pupil's district of residence cannot be achieved satisfactorily because of the nature and severity of the hearing deafness or visual blindness or visual impairment respectively.

(2) It must be decided by the individual education planning team that the academy provides the most appropriate placement within the least restrictive alternative for the pupil.

(b) A deaf or hearing-impaired hard of hearing child or a visually impaired pupil may be admitted to get socialization skills or on a short-term basis for skills development.

Sec. 15. Minnesota Statutes 1994, section 128A.05, subdivision 2, is amended to read:

Subd. 2. [MULTIPLY HANDICAPPED.] This section does not prevent a pupil with handicaps in addition to being

(1) deaf or hearing-impaired hard of hearing, or

(2) blind or visually impaired

from attending the academy for the deaf or the academy for the blind, respectively.

Sec. 16. Laws 1993, chapter 224, article 8, section 21, subdivision 1, is amended to read:

Subdivision 1. [ARTS CENTER.] The sums indicated in this section are appropriated from the general fund to the Minnesota center for arts education in the fiscal year designated:

$387,000 ..... 1994

$421,000 ..... 1995

Of the fiscal year 1994 appropriation, $225,000 is to fund artist and arts organization participation in the education residency project, $75,000 is for school support for the residency project, and $87,000 is for further development of the partners: arts and school for students (PASS) program, including pilots. Of the fiscal year 1995 appropriation, $215,000 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.

Sec. 17. Laws 1992, chapter 499, article 11, section 9, as amended by Laws 1994, chapter 647, article 5, section 17, is amended to read:

Sec. 9. [LAND TRANSFER.]

Subdivision 1. [PERMITTED.] (a) Notwithstanding Minnesota Statutes, chapters 94 and 103F or any other law to the contrary, the state of Minnesota may convey the land described in paragraph (b) to independent school district No. 656, Faribault.

(b) The land which may be conveyed under paragraph (a) is legally described in general as follows:

All that part of the Southeast Quarter of the Southwest Quarter (SE 1/4 of SW 1/4) and all that part of the Southwest Quarter of the Southeast Quarter (SW 1/4 of SE 1/4), all in Section 29, Township 110 North, Range 20 West, in the City of Faribault, Rice County, Minnesota, owned by the state of Minnesota or any department or division thereof.

or

All that part of the Northwest Quarter of the Southwest Quarter (NW 1/4 of SW 1/4) of Section 28, and of the Northeast Quarter of the Southeast Quarter (NE 1/4 of SE 1/4) of Section 29, all in Township 110 North, Range 20 West, Rice County, Minnesota, owned by the State of Minnesota or any department or division thereof.

(c) A more precise legal description in substantial conformance with the description in paragraph (b) must be provided by the grantee in the instruments of conveyance. Because of the topography of the site, and the need to relocate Parshall street, Faribault, to accommodate the construction of a new elementary school, independent school district No. 656, Faribault, may sell or exchange two small parcels, 2.5 to 4.5 acres each, of the land described in paragraph (b) for parcels of comparable value, contiguous to the land. In addition, independent school district No. 656, Faribault, is purchasing a parcel of about 4.7 acres immediately south of the land described in paragraph (b). A portion of the land is to be dedicated for the relocation of Parshall street.

(d) The state may convey the land described in paragraph (b), without reverter, to independent school district No. 656, Faribault, so that the land transfers may occur. Once the transfers have occurred and there is a unified parcel for the new elementary school, independent school district No. 656, Faribault, shall convey the entire parcel back to the state, and, the state shall convey this unified parcel back to independent school district No. 656, Faribault.

(e) Both the precise legal descriptions and the instruments of conveyance must be approved as to form by the attorney general.

Subd. 2. [CONSIDERATION.] The consideration for the conveyance permitted by subdivision 1 is the amount of $1.

Subd. 3. [PURPOSE.] The land permitted to be conveyed under subdivision 1 is to be used as part of a site for an elementary school.

Subd. 4. [TITLE REVERTS TO STATE.] If the lands described in subdivision 1 are If the unified parcel in subdivision 1, paragraph (d), conveyed by the state to independent school district No. 656, Faribault, is not used for a public purpose, or upon discontinuance of such use, the title for the property shall revert to the state.

Sec. 18. [REPORT ON SCHOOL DISTRICT CAPITAL EXPENDITURES.]

The commissioner of education shall review the projected capital investment required and the state's commitment for school district capital expenditures for construction and repair of district facilities to the year 2000. 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 report shall be submitted to the education committees of the legislature by February 15, 1996.

Sec. 19. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund, unless otherwise indicated, to the department of education for the fiscal years designated.

Subd. 2. [AGENCY OPERATIONS.] For operation of the department:

$14,411,000 ..... 1996

$14,444,000 ..... 1997

Any balance in the first year does not cancel but is available in the second year.

$21,000 each year is from the trunk highway fund.

$101,000 each year is for the academic excellence foundation.

$204,000 each year is for the state board of education.

$207,000 each year is for the board of teaching.

$200,000 each year is for contracting with the state fire marshal to provide the services required according to Minnesota Statutes, section 121.1502.

The expenditures of federal grants and aids as shown in the biennial budget document are approved and appropriated and shall be spent as indicated.

The department need not apply for funds from the federal government or any other source when the cost associated with administering those funds is estimated to be in excess of 50 percent of those funds.

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 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.

The department of education 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 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 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 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.

Subd. 3. [CHARTER SCHOOL EVALUATION.] For the state board of education to evaluate the performance of charter schools authorized according to Minnesota Statutes, section 120.064:

$50,000.....1996

$50,000.....1997

The state board must review and comment on the evaluation, by the chartering school district, of the performance of a charter school before that charter school's contract is renewed. The state board may provide assistance to a school district in evaluating a charter school that has been chartered by that school board. The board must report annually to the education committees of the legislature on the results of its evaluations.

Sec. 20. [APPROPRIATIONS; FARIBAULT ACADEMIES.]

The sums indicated in this section are appropriated from the general fund to the department of education for the Faribault academies for the fiscal years designated:

$8,075,000 ..... 1996

$8,075,000 ..... 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. 21. [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:

$4,867,000 ..... 1996

$4,867,000 ..... 1997

Any balance 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. 22. [REPEALER.]

Minnesota Statutes 1994, sections 128A.02, subdivisions 2 and 4; and 128A.03, are repealed.

Sec. 23. [EFFECTIVE DATE.]

Sections 16 (Arts Center) and 17 (Faribault land sale) are effective the day following final enactment.

Section 1. [124.2448] [TECHNOLOGY REVENUE.]

Subdivision 1. [REVENUE AMOUNT.] For fiscal years 1997 and later, the technology revenue for each school district equals the greater of $9 times its actual pupil units for the school year or $35,000.

Subd. 2. [TECHNOLOGY LEVY.] To obtain technology revenue, a district may levy the amount raised by a tax rate of 0.2 percent times the adjusted net tax capacity of the district for the year preceding the year the levy is certified. If the amount of the technology levy would exceed the technology revenue, the technology levy shall equal the technology revenue.

Subd. 3. [TECHNOLOGY AID.] A district's technology aid is the difference between its technology revenue and its technology levy. If the district does not levy the entire amount permitted, the technology aid shall be reduced in proportion to the actual amount levied.

Subd. 4. [USES OF REVENUE.] (a) Technology revenue may be used only for the following purposes:

(1) the construction, maintenance, and lease cost of an interactive television system for instructional purposes;

(2) the construction, maintenance, and lease costs of data access connections, including Internet connections to and among school buildings in the district;

(3) the purchase, support and maintenance of technology, including computer hardware and software to improve learning for students;

(4) the costs of technical support for a district's technology investments, including technical support personnel, contracted services for technical support, and training; and

(5) the purchases, support and maintenance of technology to track student assessment data and other information relating to the graduation standards.

(b) The revenue in this subdivision for a district that has reorganized under section 122.22, 122.23, or 122.241 to 122.247 is increased by the difference between the initial revenue and ITV lease costs for leases that had been entered into by the preexisting districts on the effective date of the consolidation or combination and with a term not exceeding ten years. This increased revenue is only available for the remaining term of the lease. However, in no case shall the revenue exceed the amount available had the preexisting districts received revenue separately.

Subd. 5. [ITV GUARANTEE REVENUE.] A district that levied for interactive television revenue under section 124.91 for taxes payable in 1995 shall receive the same amount of revenue under this section as the district received in fiscal year 1995. The district may levy for the difference between the 1995 revenue and the revenue according to the formula in subdivision 1.

Subd. 6. [ACCOUNTING.] Instructional technology revenue must be placed in the equipment account.

Sec. 2. Minnesota Statutes 1994, section 124.91, subdivision 5, is amended to read:

Subd. 5. [INTERACTIVE TELEVISION.] (a) A school district with its central administrative office located within economic development region one, two, three, four, five, six, seven, eight, nine, and ten may apply to the commissioner of education for ITV revenue up to the greater of .5 percent of the adjusted net tax capacity of the district or $25,000 for the construction, maintenance, and lease costs of an interactive television system for instructional purposes. The approval by the commissioner of education and the application procedures set forth in subdivision 1 shall apply to the revenue in this subdivision. In granting the approval, the commissioner must consider whether the district is maximizing efficiency through peak use and off-peak use pricing structures.

(b) To obtain ITV revenue, a district may levy an amount not to exceed the district's ITV revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the year before the year the levy is certified by the actual pupil units in the district for the year to which the levy is attributable; to

(2) 100 percent of the equalizing factor as defined in section 124A.02, subdivision 8, for the year to which the levy is attributable.

(c) A district's ITV aid is the difference between its ITV revenue and the ITV levy.

(d) The revenue in the first year after reorganization for a district that has reorganized under section 122.22, 122.23, or 122.241 to 122.247 shall be the greater of:

(1) the revenue computed for the reorganized district under paragraph (a), or

(2)(i) for two districts that reorganized, 75 percent of the revenue computed as if the districts involved in the reorganization were separate, or

(ii) for three or more districts that reorganized, 50 percent of the revenue computed as if the districts involved in the reorganization were separate.

(e) The revenue in paragraph (d) is increased by the difference between the initial revenue and ITV lease costs for leases that had been entered into by the preexisting districts on the effective date of the consolidation or combination and with a term not exceeding ten years. This increased revenue is only available for the remaining term of the lease. However, in no case shall the revenue exceed the amount available had the preexisting districts received revenue separately.

Sec. 3. [124C.74] [TELECOMMUNICATIONS ACCESS GRANTS.]

Subdivision 1. [ESTABLISHMENT; PURPOSE.] A telecommunications access grant program is established to connect each school district and public library to enhance educational telecommunications and interactive television networks statewide. The purpose of the grant is to improve learning, expand access to information, improve distance cooperative learning opportunities, and promote the exchange of ideas among students, parents, teachers, media generalists, librarians, and the public. In addition, through the development of this statewide telecommunications network emphasizing cost-effective, competitive connections, all Minnesotans will benefit by enhancing access to telecommunications technology throughout the state. Network connections for school districts and public libraries will be coordinated and fully integrated into the existing state telecommunications and interactive television networks to achieve comprehensive and efficient interconnectivity of school districts and libraries to higher education institutions, state agencies, other governmental units, agencies, and institutions throughout Minnesota. A school district may apply to the commissioner for a grant under subdivision 2, and a regional public library may apply under subdivision 3.

Subd. 2. [SCHOOL DISTRICT TELECOMMUNICATIONS GRANT.] (a) A school district may apply for a grant under this subdivision to: (1) establish a connection between the school district 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 connectivity are a 56 kilobyte data line and 768 kilobyte ITV connection. To ensure coordination among school districts, a school district must submit its grant application to the commissioner through an organization that coordinates the applications and connections of at least ten school districts.

(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;

(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, 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 so that school districts throughout the state are connected in as seamless a manner as technically possible.

A school district may include, in its grant application, telecommunications 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.

(c) The commissioner shall consult with the higher education telecommunications council in developing the grant criteria. The commissioner shall establish priorities for awarding grants. The highest priority shall be to bring school districts up to the minimum connectivity standards. 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 outcome-based schools under section 120.064. All grants under this subdivision shall be made directly to a school district.

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; (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;

(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.

Subd. 4. [AWARD OF GRANTS.] The commissioner shall develop application forms and procedures for school district minimum connectivity grants, enhanced telecommunications grants, and regional library telecommunication access grants. The commissioner shall review and consider all grant applications and promptly notify any applicant that is found not to be qualified. If appropriations are insufficient to fund all applications, the commissioner shall first fully fund the minimum connectivity grants. Unsuccessful applicants may reapply for a grant.

Sec. 4. [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 .01 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 .01 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 1994, section 237.065, is amended to read:

237.065 [RATES FOR SPECIAL SERVICE TO SCHOOLS.]

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 public 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.

Sec. 6. [ELECTRONIC COST REDUCTION.]

The commissioner of education shall identify methods to reduce the costs of Internet access for school districts. The commissioner shall work in conjunction with MNet, the department of administration, and the telecommunication industry to provide Internet access and long distance phone service at a favorable group rate.

Sec. 7. [FEDERAL MATCHING FUNDS.]

Appropriations under section 8 for telecommunications access grants for school districts and regional public library systems may be counted as matching funds for federal grants to provide telecommunication access.

Sec. 8. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF EDUCATION.] The sums indicated in this section are appropriated from the general fund to the department of education for the fiscal years designated.

Subd. 2. [INTERACTIVE TELEVISION (ITV) OR TECHNOLOGY AID.] For interactive television (ITV) aid or technology aid under section 124.91, subdivision 5, or 124.2448:

$3,282,000 ..... 1996

$9,816,000 ..... 1997

The 1996 appropriation includes $473,000 for 1995 ITV aid and $2,809,000 for 1996 ITV aid.

The 1997 appropriation includes $495,000 for 1996 ITV aid and $9,321,000 for 1997 technology aid.

Subd. 3. [INTERNET; INFORMNS.] For reducing cost of school district access to Internet:

$200,000.....1996

$200,000.....1997

Any balance in the first year does not cancel but is available in the second year.

Subd. 4. [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For grants to regional public libraries to support electronic data access according to section 134.46:

$1,200,000 ..... 1996

This appropriation is available until June 30, 1997.

Subd. 5. [TELECOMMUNICATION ACCESS GRANTS.] For grants to school districts and regional public library systems to establish connections to MNet according to section 124C.74:

$4,500,000 ..... 1996

This appropriation is available until June 30, 1997.

Sec. 9. [REPEALER.]

Minnesota Statutes 1994, section 124.91, subdivision 5, is repealed.

Sec. 10. [EFFECTIVE DATE.]

The repeal of the levy authority under section 124.91, subdivision 5, is effective beginning with taxes payable in 1996. The repeal of the aid under section 124.91, subdivision 5, is effective July 1, 1996.

Section 1. Minnesota Statutes 1994, 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, educational service cooperative service unit as defined in section 123.58 123.582, intermediate district as defined in section 136C.02, subdivision 7, 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) [PLAN.] "Plan" means the statewide public employees insurance plan created by subdivision 3.

Sec. 2. Minnesota Statutes 1994, section 62L.08, subdivision 7a, is amended to read:

Subd. 7a. [PARTIAL EXEMPTION; POLITICAL SUBDIVISIONS.] (a) Health coverage provided by a political subdivision of the state to its employees, officers, retirees, and their dependents, by participation in group purchasing of health plan coverage by or through an association of political subdivisions or by or through an educational a service cooperative service unit created under section 123.58 123.582 or by participating in a joint self-insurance pool authorized under section 471.617, subdivision 2, is subject to this subdivision. Coverage that is subject to this subdivision may have separate index rates and separate premium rates, based upon data specific to the association, educational cooperative service unit, or pool, so long as the rates, including the rating bands, otherwise comply with this chapter. The association, educational cooperative service unit, or pool is not required to offer the small employer plans described in section 62L.05 and is not required to comply with this chapter for employers that are not small employers or that are not eligible for coverage through the association, educational cooperative service unit, or pool. A health carrier that offers a health plan only under this subdivision need not offer that health plan to other small employers on a guaranteed issue basis.

(b) An association, educational cooperative service unit, or pool described in paragraph (a) may elect to be treated under paragraph (a) by filing a notice of the election with the commissioner of commerce no later than January 1, 1995. The election remains in effect for three years and applies to all health coverage provided to members of the group. It may be renewed for subsequent three-year periods. An entity eligible for treatment under paragraph (a) that forms after January 1, 1995, must make the election prior to provision of coverage, and the election remains in effect until January 1, 1998, or if filed after that date, until the next regular renewal date.

Sec. 3. Minnesota Statutes 1994, section 121.935, subdivision 1, is amended to read:

Subdivision 1. [CREATION.] Any group of two or more independent, special or common school districts may with the approval of the state board pursuant to sections 121.931 and 121.936 create a regional management information center pursuant to section 123.58 123.582 or 471.59 to provide computer services to school districts. A regional management information center shall not come into existence until the first July 1 after its creation is approved by the state board or until it can be accommodated by state appropriations, whichever occurs first. Each member of the board of a center created after June 30, 1991, shall be a current member of a member school board."

Delete the title and insert:

"A bill for an act relating to education; prekindergarten through grade 12; providing for general education revenue; transportation; special programs; community education; facilities; organization and cooperation; education excellence; other programs; miscellaneous provisions; libraries; state agencies; technology; conforming amendments; appropriating money; amending Minnesota Statutes 1994, sections 43A.316, subdivision 2; 62L.08, subdivision 7a; 116J.655; 120.062, subdivision 7; 120.064, subdivision 4; 120.101, subdivision 5c; 120.17, subdivisions 3a, 3b, and by adding a subdivision; 120.185; 120.74, subdivision 1; 120.75, subdivision 1; 121.11, subdivision 7c; 121.702, by adding a subdivision; 121.705; 121.706; 121.707, subdivisions 4, 6, and 7; 121.708; 121.709; 121.710; 121.885, subdivisions 1 and 4; 121.904, subdivisions 4a and 4c; 121.912, subdivisions 1, 1b, and 6; 121.935, subdivision 1; 122.21, subdivision 4; 122.23, subdivision 2; 122.242, subdivision 9; 122.895, subdivisions 1, 8, and 9; 122.91, subdivisions 1, 2, and 2a; 122.92, subdivision 1; 122.93, subdivision 1; 122.94, subdivision 1; 123.35, subdivision 19b; 123.351, subdivisions 1, 3, 4, and 5; 123.3514, subdivisions 5, 7, 8, and by adding subdivisions; 123.70, subdivision 8; 123.7991, subdivisions 2 and 3; 123.805, subdivisions 1 and 2; 124.14, by adding a subdivision; 124.17, subdivisions 1, 2f, and by adding a subdivision; 124.193; 124.195, subdivision 10, and by adding a subdivision; 124.2139; 124.214, subdivisions 2 and 3; 124.223, subdivision 7; 124.225, subdivisions 1, 3a, 7b, 7d, 7f, 8a, and 8m; 124.226, subdivisions 1 and 3; 124.243, subdivisions 2 and 8; 124.244, subdivisions 1, 4, and by adding a subdivision; 124.2455; 124.2711, subdivision 2a; 124.2713, subdivision 6; 124.2725, subdivisions 1, 3, 4, and 15; 124.2726, subdivision 1; 124.273, by adding subdivisions; 124.32, subdivisions 10 and 12; 124.321, subdivisions 1 and 2; 124.322; 124.323, subdivisions 1, 2, and by adding a subdivision; 124.573, subdivision 2e; 124.574, subdivision 9, and by adding subdivisions; 124.83, subdivision 4; 124.84, subdivision 3; 124.91, subdivision 5; 124.916, subdivision 2; 124.918, subdivisions 1 and 2; 124.95, subdivisions 2, 4, and 6; 124.961; 124A.03, subdivisions 1g and 1h; 124A.0311, subdivision 4; 124A.22, subdivisions 2, 2a, 4, 4a, 4b, 8a, and 9; 124A.225, subdivisions 4 and 5; 124A.23, subdivisions 1 and 4; 124A.24; 124A.29, subdivision 1; 124C.07; 124C.08, subdivision 2; 124C.45, subdivision 1; 124C.46, subdivision 2; 124C.48, subdivision 1; 125.62, subdivisions 1 and 7; 125.623, subdivision 2; 126.031, subdivision 1; 126.15, subdivision 2; 126.49, by adding a subdivision; 126.70, subdivision 2a; 126B.01; 126B.03, subdivisions 2 and 3; 127.30, subdivision 2; 128A.02, subdivisions 1, 3, 5, and by adding a subdivision; 128A.021; 128A.022, subdivisions 1 and 6; 128A.024, subdivision 4; 128A.025, subdivisions 1 and 2; 128A.026; 128A.05, subdivisions 1 and 2; 128B.10, subdivision 1; 134.155; 134.34, subdivision 4a; 134.351, subdivision 4; 169.01, subdivision 6; 169.21, subdivision 2; 169.444, subdivision 2; 169.4502, subdivision 4; 169.4503, by adding a subdivision; 169.451,

by adding a subdivision; 169.452; 169.454, subdivision 5, and by adding a subdivision; 171.01, subdivision 21; 171.18, subdivision 1; 171.321, subdivisions 3, 4, and 5; 171.3215, subdivisions 1, 2, and 3; 237.065; 275.065, subdivisions 1 and 3; 276.04, subdivision 2; 631.40, subdivision 1a; Laws 1992, chapter 499, article 11, section 9, as amended; Laws 1993, chapter 224, article 8, section 21, subdivision 1; Laws 1993, chapter 224, article 12, section 32, as amended; Laws 1993, chapter 224, article 12, sections 39, and 41; Laws 1994, chapter 587, article 3, section 19, subdivision 1; Laws 1994 chapter 647, article 1, section 36; Laws 1994, chapter 647, article 3, section 25; Laws 1994, chapter 647, article 7, section 15; proposing coding for new law in Minnesota Statutes, chapters 123; 124; 124C; 125; 126B; 127; 134; 136D; 169; 604A; repealing Minnesota Statutes 1994, sections 121.602, subdivision 5; 121.702, subdivision 9; 121.703; 123.58; 124.17, subdivision 1b; 124.243, subdivisions 2a and 9; 124.2714; 124.273, subdivisions 1b and 2c; 124.32, subdivisions 1b, 1c, 1d, 1f, 2, and 3a; 124.574, subdivisions 2b, 3, 4, and 4a; 124.91, subdivision 5; 124.912, subdivision 8; 124.914, subdivisions 2, 3, and 4; 124A.04, subdivision 1; 124A.27, subdivision 11; 124A.29, subdivision 2; 124A.291; 124A.292; 125.138, subdivisions 6, 7, 8, 9, 10, and 11; 126.019; 126B.02; 126B.03; 126B.04; 126B.05; 128A.02, subdivisions 2 and 4; 128A.03; 268.9755; Laws 1991, chapter 265, article 5, section 23, as amended; Laws 1992, chapter 499, article 7, sections 16, 17, and 27."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Taxes.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 1040, A bill for an act relating to retirement; higher education supplemental retirement and individual retirement plans; revising laws governing certain faculty in the state university and community college systems who return to teaching part time after retirement; part-time faculty program participation; investment options; amending Minnesota Statutes 1994, sections 136.90; 354.445; 354.66, by adding a subdivision; 354B.05, subdivisions 2 and 3; 354B.07, subdivisions 1 and 2; and 354B.08, subdivision 2.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [125.615] [RETURN TO FULL-TIME WORK.]

A teacher with 20 or more years of allowable service credit under chapter 354 or 354A who was assigned to a part-time position under section 354.66 or 354A.094 after June 30, 1994, must be given the option of returning to full-time employment if the employer does not make the full employer contribution to the applicable pension fund under section 354.66, subdivision 4, or 354A.094, subdivision 4, after July 1, 1995. If an employer decides not to make the full employer contribution to the pension fund after July 1, 1995, it must notify any affected part-time teacher of this decision in writing within 30 days of the employer's decision. A teacher receiving this notice who wishes to return to work full time must notify the employer of intent to return to full-time employment within 30 days of receiving notice from the employer, and must return to full-time employment by the beginning of the next school year.

Sec. 2. Minnesota Statutes 1994, section 136.90, is amended to read:

136.90 [EMPLOYER-PAID HEALTH INSURANCE.]

(a) This section applies to a person who:

(1) retires from the state university system or the community college system, or from a successor system employing state university or community college faculty, with at least ten years of combined service credit in the a system from which the person retires under the jurisdiction of the higher education board;

(2) was employed on a full-time basis immediately preceding retirement as a state university or community college faculty member or as an unclassified administrator in one of these systems;

(3) begins drawing an annuity from the teachers retirement association; and

(4) returns to work on not less than a one-third time basis and not more than a two-thirds time basis in the system from which the person retired under an agreement in which the person may not earn a salary of more than $35,000 in a calendar year from employment after retirement in the system from which the person retired.

(b) Initial participation, the amount of time worked, and the duration of participation under this section must be mutually agreed upon by the employer and the employee. The employer may require up to one-year notice of intent to participate in the program as a condition of participation under this section. The employer shall determine the time of year the employee shall work.

(c) For a person eligible under paragraphs (a) and (b), the employing board shall make the same employer contribution for hospital, medical, and dental benefits as would be made if the person were employed full time.

(d) For work under paragraph (a), a person must receive a percentage of the person's salary at the time of retirement that is equal to the percentage of time the person works compared to full-time work.

(e) If a collective bargaining agreement covering a person provides for an early retirement incentive that is based on age, the incentive provided to the person must be based on the person's age at the time employment under this section ends. However, the salary used to determine the amount of the incentive must be the salary that would have been paid if the person had been employed full time for the year immediately preceding the time employment under this section ends.

Sec. 3. Minnesota Statutes 1994, section 352.01, subdivision 13, is amended to read:

Subd. 13. [SALARY.] "Salary" means the periodical wages, or other periodic compensation, paid to any an employee before deductions for deferred compensation, supplemental retirement plans, or other voluntary salary reduction programs. It also means wages and includes net income from fees. Lump sum sick leave payments, severance payments, lump sum annual leave payments and overtime payments made at the time of separation from state service, payments in lieu of any employer-paid group insurance coverage, including the difference between single and family rates that may be paid to an employee with single coverage, and payments made as an employer-paid fringe benefit and, workers' compensation payments, employer contributions to a deferred compensation or tax sheltered annuity program, and amounts contributed under a benevolent vacation and sick leave donation program are not salary.

Sec. 4. Minnesota Statutes 1994, section 354.445, is amended to read:

354.445 [NO ANNUITY REDUCTION.]

(a) The annuity reduction provisions of section 354.44, subdivision 5, do not apply to a person who:

(1) retires from the state university system or the community college system, or from a successor system employing state university or community college faculty, with at least ten years of combined service credit in the system from which the person retires a system under the jurisdiction of the higher education board;

(2) was employed on a full-time basis immediately preceding retirement as a state university or community college faculty member or as an unclassified administrator in one of these systems;

(3) begins drawing an annuity from the teachers retirement association; and

(4) returns to work on not less than a one-third time basis and not more than a two-thirds time basis in the system from which the person retired under an agreement in which the person may not earn a salary of more than $35,000 in a calendar year from employment after retirement in the system from which the person retired.

(b) Initial participation, the amount of time worked, and the duration of participation under this section must be mutually agreed upon by the employer and the employee. The employer may require up to one-year notice of intent to participate in the program as a condition of participation under this section. The employer shall determine the time of year the employee shall work.

(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a) and (b) may not earn further service credit in the teachers retirement association and is not eligible to participate in the individual retirement account plan or the supplemental retirement plan established in chapter 354B as a result of service under this section. No employer or employee contribution to any of these plans may be made on behalf of such a person.

(d) For a person eligible under paragraphs (a) and (b) who earns more than $35,000 in a calendar year from employment after retirement in the system from which the person retired, the annuity reduction provisions of section 354.44, subdivision 5, apply only to income over $35,000.

Sec. 5. Minnesota Statutes 1994, section 354.66, subdivision 4, is amended to read:

Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any provision to the contrary in this chapter relating to the salary figure to be used for the determination of contributions or the accrual of service credit, a teacher assigned to a part-time position under this section shall continue to make employee contributions to and to accrue allowable service credit in the retirement fund during the period of part-time employment on the same basis and in the same amounts as would have been paid and accrued if the teacher had been employed on a full-time basis provided that, prior to June 30 each year, or within 30 days after notification by the association of the amount due, whichever is later, the member and the employing board make that portion of the required employer contribution to the retirement fund, in any proportion which they may agree upon, that is based on the difference between the amount of compensation that would have been paid if the teacher had been employed on a full-time basis and the amount of compensation actually received by the teacher for the services rendered in the part-time assignment. The employing unit shall make that portion of the required employer contributions to the retirement fund on behalf of the teacher that is based on the amount of compensation actually received by the teacher for the services rendered in the part-time assignment in the manner described in section 354.43, subdivision 3. If the teacher has 20 years or more of allowable service in the fund or 20 years or more of full-time teaching service, the employer shall make the full employer contribution to the fund based on the compensation that would have been paid if the teacher had been employed on a full-time basis. The employee and employer contributions shall be based upon the rates of contribution prescribed by section 354.42. Full accrual of allowable service credit and employee contributions for part-time teaching service pursuant to this section and section 354A.094 shall not continue for a period longer than ten years.

Sec. 6. Minnesota Statutes 1994, section 354A.094, subdivision 4, is amended to read:

Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any provision to the contrary in this chapter or the articles of incorporation or bylaws of an association relating to the salary figure to be used for the determination of contributions or the accrual of service credit, a teacher assigned to a part-time position under this section shall continue to make employee contributions to and to accrue allowable service credit in the applicable association during the period of part-time employment on the same basis and in the same amounts as would have been paid and accrued if the teacher had been employed on a full-time basis provided that, prior to June 30 each year the member and the employing board make that portion of the required employer contribution to the applicable association in any proportion which they may agree upon, that is based on the difference between the amount of compensation that would have been paid if the teacher had been employed on a full-time basis and the amount of compensation actually received by the teacher for services rendered in the part-time assignment. The employer contributions to the applicable association on behalf of the teacher shall be based on the amount of compensation actually received by the teacher for the services rendered in the part-time assignment in the manner described in section 354.43, subdivision 3. If the teacher has 20 years or more of allowable service in the association or 20 years or more of full-time teaching service, the employer shall make the full employer contribution to the fund, based on the compensation that would have been paid if the teacher had been employed on a full-time basis. The employee and employer contributions shall be based upon the rates of contribution prescribed by section 354A.12. Full membership, accrual of allowable service credit and employee contributions for part-time teaching service by a teacher pursuant to this section and section 354.66 shall not continue for a period longer than ten years.

Sec. 7. Minnesota Statutes 1994, section 354B.05, subdivision 2, is amended to read:

Subd. 2. [PURCHASE OF CONTRACTS.] The state university board and the community college higher education board shall arrange for the purchase of annuity contracts, fixed, variable, or a combination of fixed and variable, or custodial accounts from financial institutions selected by the state board of investment under subdivision 3, to provide retirement benefits to members of the plan. The contracts or accounts must be purchased with contributions under section 354B.04 or money or assets otherwise provided by law or by authority of the state university board or community college higher education board and acceptable by the financial institutions from which the contracts or accounts are purchased.

Sec. 8. Minnesota Statutes 1994, section 354B.05, subdivision 3, is amended to read:

Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] The supplemental investment fund administered by the state board of investment is one of the investment options for the plan. The state board of investment may select up to five other financial institutions to provide annuity products. In making their selections, the board shall consider at least these criteria:

(1) the experience and ability of the financial institution to provide retirement and death benefits suited to the needs of the covered employees;

(2) the relationship of the benefits to their cost; and

(3) the financial strength and stability of the institution.

The state board of investment must periodically review at least every three years each financial institution selected by the state board of investment. The state board of investment may retain consulting services to assist in the periodic review, may establish a budget for its costs in the periodic review process, and may charge a proportional share of those costs to each financial institution selected by the state board of investment. All contracts must be approved by the state board of investment before execution by the state university board and the community college higher education board. The state board of investment shall also establish policies and procedures under section 11A.04, clause (2), to carry out this subdivision.

The chancellor of the state university system and the chancellor of the state community college higher education system shall redeem all shares in the accounts of the Minnesota supplemental investment fund held on behalf of personnel in the supplemental plan who elect an investment option other than the supplemental investment fund, except that shares in the fixed interest account attributable to any guaranteed investment contract as of July 1, 1994, must not be redeemed until the expiration dates for the guaranteed investment contracts. The chancellors chancellor shall transfer the cash realized to the financial institutions selected by the state university board and the community college board under this section 354B.05.

Sec. 9. Minnesota Statutes 1994, section 354B.07, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT AND ELIGIBILITY.] (a) [REGULAR UNCLASSIFIED EMPLOYEES.] The supplemental retirement plan for personnel employed by the state university board, the state board for community colleges, the higher education board, and effective July 1, 1995, the technical colleges, who are in the unclassified service of the state commencing July 1 following the completion of the second year of their full-time contract is governed by this section. Once a person qualifies for participation in the supplemental plan, all subsequent service by the person as an unclassified employee of the state university board, the state board for community colleges, the higher education board, or the technical colleges is covered by the supplemental plan.

(b) [CETA UNCLASSIFIED EMPLOYEES.] An unclassified employee employed by the state university board or the state board for community colleges in subsidized on-the-job training, work experience, or public service employment as an enrollee under the federal Comprehensive Employment and Training Act is not included in the supplemental retirement plan provided for in this section after March 30, 1978, unless the unclassified employee has as of the later of March 30, 1978, or the date of employment sufficient service credit in the retirement fund providing primary retirement coverage to meet the minimum vesting requirements for a deferred retirement annuity, or the board agrees in writing to make the employer contribution required by this section on account of that unclassified employee from revenue sources other than funds provided under the federal Comprehensive Employment and Training Act, or the unclassified employee agrees in writing to make the employer contribution required by this section in addition to the member contribution.

Sec. 10. Minnesota Statutes 1994, section 354B.07, subdivision 2, is amended to read:

Subd. 2. [REDEMPTIONS.] The chancellor of the state university system and the chancellor of the state community college higher education system shall redeem all shares in the accounts of the Minnesota supplemental investment fund held on behalf of personnel in the supplemental plan who elect an investment option other than the supplemental investment fund, except that shares in the fixed interest account attributable to any guaranteed investment contract as of July 1, 1994, may not be redeemed until the expiration dates for the guaranteed investment contracts. The chancellors chancellor shall transfer the cash realized to the financial institutions selected by the state university board and the community college board under section 354B.05.

Sec. 11. Minnesota Statutes 1994, section 354B.08, subdivision 2, is amended to read:

Subd. 2. [ADMINISTRATION.] (a) The chancellor of the state university system and the chancellor of the state community college higher education system shall administer the supplemental retirement plan for their employees. The chancellors chancellor shall invest contributions made under this section, less amounts used for administrative expenses, as authorized by law. The retirement contributions and death benefits provided by annuity contracts or custodial accounts purchased by the chancellors chancellor are owned by the plan and must be paid in accordance with the annuity contracts or custodial accounts.

(b) Effective July 1, 1995, administration of the plan must transfer to the higher education board.

Sec. 12. Minnesota Statutes 1994, section 356.30, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) Notwithstanding any provisions to the contrary of the laws governing the funds enumerated in subdivision 3, a person who has met the qualifications of clause (2) may elect to receive a retirement annuity from each fund in which the person has at least six months allowable service, based on the allowable service in each fund, subject to the provisions of clause (3).

(2) A person may receive upon retirement a retirement annuity from each fund in which the person has at least six months allowable service, and augmentation of a deferred annuity calculated under the laws governing each public pension plan or fund named in subdivision 3, from the date the person terminated all public service if:

(a) the person has allowable service totaling an amount that allows the person to receive an annuity in any two or more of the enumerated funds; and

(b) the person has not begun to receive an annuity from any enumerated fund or the person has made application for benefits from all funds and the effective dates of the retirement annuity with each fund under which the person chooses to receive an annuity are within a one-year period.

(3) The retirement annuity from each fund must be based upon the allowable service in each fund, except that:

(a) The laws governing annuities must be the law in effect on the date of termination from the last period of public service under a covered fund with which the person earned a minimum of one-half year of allowable service credit during that employment.

(b) The "average salary" on which the annuity from each covered fund in which the employee has credit in a formula plan shall be based on the employee's highest five successive years of covered salary during the entire service in covered funds.

(c) The formula percentages to be used by each fund must be those percentages prescribed by each fund's formula as continued for the respective years of allowable service from one fund to the next, recognizing all previous allowable service with the other covered funds.

(d) Allowable service in all the funds must be combined in determining eligibility for and the application of each fund's provisions in respect to actuarial reduction in the annuity amount for retirement prior to normal retirement.

(e) The annuity amount payable for any allowable service under a nonformula plan of a covered fund must not be affected but such service and covered salary must be used in the above calculation.

(f) This section shall not apply to any person whose final termination from the last public service under a covered fund is prior to May 1, 1975.

(g) For the purpose of computing annuities under this section the formula percentages used by any covered fund, except the basic program of the teachers retirement association, the public employees police and fire fund, must not exceed 2-1/2 percent per year of service for any year of service or fraction thereof. The formula percentage used by the public employees police and fire fund must not exceed 2.65 percent per year of service for any year of service or fraction thereof. The formula percentage used by the teachers retirement association must not exceed 2.63 percent per year of basic program service for any year of basic program service or fraction thereof.

(h) Any period of time for which a person has credit in more than one of the covered funds must be used only once for the purpose of determining total allowable service.

(i) If the period of duplicated service credit is more than six months, or the person has credit for more than six months with each of the funds, each fund shall apply its formula to a prorated service credit for the period of duplicated service based on a fraction of the salary on which deductions were paid to that fund for the period divided by the total salary on which deductions were paid to all funds for the period.

(j) If the period of duplicated service credit is less than six months, or when added to other service credit with that fund is less than six months, the service credit must be ignored and a refund of contributions made to the person in accord with that fund's refund provisions.

Sec. 13. [356.305] [PARTIAL PAYMENT OF PENSION PLAN REFUND.]

(a) Notwithstanding any provision of law to the contrary, a member of a pension plan listed in section 356.30, subdivision 3, with at least two years of forfeited service taken from a single pension plan may repay a portion of all refunds. A partial refund repayment must comply with this section.

(b) The minimum portion of a refund repayment is one-third of the total service credit period of all refunds taken from a single plan.

(c) The cost of the partial refund repayment is the product of the cost of the total repayment multiplied by the ratio of the restored service credit to the total forfeited service credit. The total repayment amount includes interest at the annual rate of 8.5 percent, compounded annually, from the refund date to the date repayment is received.

(d) The restored service credit is allocated based on the relationship the restored service bears to the total service credit period for all refunds taken from a single pension plan.

(e) This section does not authorize a public pension plan member to repay a refund if the law governing the plan does not authorize the repayment of a refund of member contributions.

Sec. 14. Minnesota Statutes 1994, section 356.611, is amended to read:

356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION PURPOSES.]

Subdivision 1. [STATE SALARY LIMITATIONS.] (a) Notwithstanding any provision of law, bylaws, articles or of incorporation, retirement and disability allowance plan agreements, or retirement plan contracts to the contrary, the covered salary for pension purposes for a plan participant of a covered retirement fund under section 356.30, subdivision 3, may not exceed 95 percent of the salary established for the governor under section 15A.082 at the time the person received the salary.

(b) This section does not apply to a salary paid:

(1) to the governor;

(2) to an employee of a political subdivision in a position that is excluded from the limit as specified under section 43A.17, subdivision 9; or

(3) to a state employee in a position for which the commissioner of employee relations has approved a salary rate that exceeds 95 percent of the governor's salary.

(c) The limited covered salary determined under this section must be used in determining employee and employer contributions and in determining retirement annuities and other benefits under the respective covered retirement fund and under this chapter.

Subd. 2. [FEDERAL COMPENSATION LIMITS.] For members first contributing to a pension plan covered under section 356.30, subdivision 3, on or after July 1, 1995, compensation in excess of the limitation set forth in Internal Revenue Code 401(a)(17) shall not be included for contribution and benefit computation purposes. The compensation limit set forth in Internal Revenue Code 401(a)(17) on June 30, 1993, shall apply to members first contributing before July 1, 1995.

Sec. 15. [RETROACTIVE PROVISIONS.]

(a) A teacher who had at least three years of allowable service credit under Minnesota Statutes, chapter 354 or 354A, on July 1, 1994, and who worked part-time between July 1, 1994, and June 30, 1995, may be allowed to make contributions to and accrue allowable service credit in the applicable retirement fund, as if the teacher had been working full time, as provided in Minnesota Statutes, sections 354.66, subdivision 4, and 354A.094, subdivision 4, for service after July 1, 1994, and before June 30, 1995. If a teacher described in this paragraph wishes to obtain allowable service credit as if the teacher had been working full time for the period from July 1, 1994, to June 30, 1995, the teacher must:

(1) make a lump sum payment to the applicable pension fund within 60 days after the effective date of this section of the difference between the amount of the employer and employee contributions to the pension fund that would have been paid if the teacher had been working full time, and that amount that was actually paid for part-time service during that period; and

(2) submit to the association a letter or other document from the board of the teacher's employing district stating that the board would have agreed to the teacher's participation in the part-time mobility program during the 1994-1995 school year but for the requirement then in effect that the district make the full employer contribution to the retirement fund for teachers with 20 or more years of service, based on the compensation that would have been paid if the teacher had been employed on a full-time basis.

(b) An employer of a teacher covered by paragraph (a) must notify the teacher of the option available under paragraph (a) in writing within 30 days of the effective date of this section.

Sec. 16. [EARLY RETIREMENT INCENTIVE.]

The metropolitan council, a metropolitan agency as defined by Minnesota Statutes, section 473.121, subdivision 5a, or the Minnesota historical society may offer its eligible employees the early retirement incentive provided in sections 16 to 24.

Sec. 17. [ELIGIBILITY.]

An employee of a public employer specified in section 16 is eligible to receive the early retirement incentive if the employee:

(1) has at least 25 years of combined service credit in any covered fund or funds listed in Minnesota Statutes, section 356.30, subdivision 3, or for purposes of the incentive in section 18, subdivision 2 only, is at least 65 years old and has at least one year of combined service credit in these covered funds;

(2) upon retirement is immediately eligible for a retirement annuity from a defined benefit plan, if the person is a member of a defined benefit plan;

(3) is at least 55 years of age; and

(4) retires on or after May 23, 1995, and before January 31, 1996.

Sec. 18. [EARLY RETIREMENT INCENTIVE.]

Subdivision 1. [CHOICE.] An eligible employee may not choose both the incentive in subdivision 2 and the incentive in subdivision 3. The public employers specified in section 16 that choose to offer the early retirement incentive must offer included employees eligible for both incentives a choice between the incentive in subdivision 2 or 3.

Subd. 2. [FORMULA INCREASE OPTION.] For an employee covered by a retirement plan established in Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30, or chapter 354 or 422A, who selects the incentive under this subdivision, the multiplier percentage used to calculate the retirement annuity must be increased for each year of service credit up to 30 years. The amount of the increase is:

(1) .25 for each year of service credit calculated under Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30, or chapter 422A; and

(2) .10 for each year of service credit calculated under Minnesota Statutes, chapter 354 or 354A.

If an employee has more than 30 years of service credit, the increased multiplier applies only to the first 30 years.

Subd. 3. [INSURANCE OPTION.] For an employee who selects the incentive under this subdivision, the employer must pay for hospital, medical, and dental insurance under the following conditions and limitations. An employee is eligible for this employer-paid insurance only if the person:

(1) is eligible for employer-paid insurance under a collective bargaining agreement or personnel plan in effect on the day before the effective date of sections 16 to 24;

(2) has at least as many months of service with the current employer as the number of months younger than age 65 the person is at the time of retirement; and

(3) is under age 65.

Sec. 19. [LIMIT ON REHIRING.]

A public employer may not rehire an employee who retires under sections 16 to 24.

Sec. 20. [RETIREMENT.]

For purposes of sections 16 to 24, an employee retires when the employee terminates active employment and applies for retirement benefits.

Sec. 21. [CONDITIONS; INSURANCE COVERAGE.]

A retired employee is eligible for single and dependent insurance coverages and employer payments to which the employee was entitled immediately before retirement, subject to any changes in coverage and employer and employee payments through collective bargaining or personnel plans for employees in positions equivalent to the position from which the employee retired. The retired employee is not eligible for employer-paid life insurance. Eligibility ceases when the retired employee attains the age of 65, chooses not to receive the retirement benefits for which the employee has applied, or becomes eligible for employer-paid health insurance from a new employer. Coverages must be coordinated with relevant health insurance benefits provided through the federally sponsored Medicare program.

Sec. 22. [INCLUSION.]

A public employer that offers incentives under sections 16 to 24 shall designate the positions or group of positions affected by downsizing or restructuring that will qualify for participation in its early retirement plan and may exclude otherwise eligible employees.

Sec. 23. [PAYMENT OF COST OF EARLY RETIREMENT INCENTIVE.]

(a) A public employer referenced in section 16 which offers an early retirement incentive under section 18 must make an additional employer contribution to the applicable retirement plan from which an employee retired under the incentive program.

(b) The additional employer contribution is an amount equal to the difference in the amount of the reserve transfer under Minnesota Statutes, section 11A.18, or 422A.06, subdivision 8, with the early retirement incentive under section 18, subdivision 2, and without the early retirement incentive. The additional employer contribution must be paid prior to July 1, 1997. The public employer shall also pay compound interest on the additional employer contribution at an annual rate of 8.5 percent from the effective date of the retirement to the date of the payment of the additional employer contribution.

Sec. 24. [APPLICATION OF OTHER LAWS.]

Unilateral implementation of sections 16 to 24 by a public employer is not an unfair labor practice for purposes of Minnesota Statutes, chapter 179A. The requirement in sections 16 to 24 for an employer to pay health insurance coverage costs for certain retired employees is not subject to the limits in Minnesota Statutes, section 179A.20, subdivision 2a.

Sec. 25. [REPEALER.]

Minnesota Statutes 1994, sections 3A.10, subdivision 2, and 352.021, subdivision 5, are repealed.

Sec. 26. [EFFECTIVE DATE.]

(a) Sections 1, 9, and 14 are effective on July 1, 1995.

(b) Sections 3 and 15 are effective on the day following final enactment.

(c) Sections 5 and 6 are effective on July 1, 1995 and apply to teaching service rendered after that date.

(d) Section 12 is effective retroactively to May 16, 1994.

(e) Sections 16 to 24 are effective on the day after final enactment.

(f) Section 25 is effective on July 1, 1995 and is not intended to reduce the service credit of a legislator for service recorded by the Minnesota state retirement system before July 1, 1995.

(g) Section 13 is effective on January 1, 1996.

Section 1. Minnesota Statutes 1994, section 124.916, subdivision 3, is amended to read:

Subd. 3. [RETIREMENT LEVIES.] (1) In addition to the excess levy authorized in 1976 any district within a city of the first class which was authorized in 1975 to make a retirement levy under Minnesota Statutes 1974, section 275.127 and chapter 422A may levy an amount per pupil unit which is equal to the amount levied in 1975 payable 1976, under Minnesota Statutes 1974, section 275.127 and chapter 422A, divided by the number of pupil units in the district in 1976-1977.

(2) In 1979 and each year thereafter, any district which qualified in 1976 for an extra levy under clause (1) shall be allowed to levy the same amount as levied for retirement in 1978 under this clause reduced each year by ten percent of the difference between the amount levied for retirement in 1971 under Minnesota Statutes 1971, sections 275.127 and 422.01 to 422.54 and the amount levied for retirement in 1975 under Minnesota Statutes 1974, section 275.127 and chapter 422A.

(3) In 1991 and each year thereafter, a district to which this subdivision applies may levy an additional amount required for contributions to the Minneapolis employees retirement fund as a result of the maximum dollar amount limitation on state contributions to the fund imposed under section 422A.101, subdivision 3. The additional levy shall not exceed the most recent amount certified by the board of the Minneapolis employees retirement fund as the district's share of the contribution requirement in excess of the maximum state contribution under section 422A.101, subdivision 3.

(4) For taxes payable in 1994 and thereafter, special school district No. 1, Minneapolis, and independent school district No. 625, St. Paul, may levy for the increase in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5, section 1. Notwithstanding section 121.904, the entire amount of this levy may be recognized as revenue for the fiscal year in which the levy is certified. This levy shall not be considered in computing the aid reduction under section 124.155.

(5) If the employer retirement fund contributions under section 354A.12, subdivision 2a, are increased for fiscal year 1994 or later fiscal years, special school district No. 1, Minneapolis, and independent school district No. 625, St. Paul, may levy in payable 1994 or later an amount equal to the amount derived by applying the net increase in the employer retirement fund contribution rate of the respective teacher retirement fund association between fiscal year 1993 and the fiscal year beginning in the year after the levy is certified to the total covered payroll of the applicable teacher retirement fund association. Notwithstanding section 121.904, the entire amount of this levy may be recognized as revenue for the fiscal year in which the levy is certified. This levy shall not be considered in computing the aid reduction under section 124.155. If an applicable school district levies under this paragraph, they may not levy under paragraph (4).

(6) In addition to the levy authorized under paragraph (5), special school district No. 1, Minneapolis, may also levy payable in 1996 or later an amount equal to the supplemental contributions under section 354A.12, subdivision 2c, and may also levy in payable 1994 or later an amount equal to the state aid contribution under section 354A.12, subdivision 3b. Notwithstanding section 121.904, the entire amount of this levy these levies may be recognized as revenue for the fiscal year in which the levy is certified. This levy These levies shall not be considered in computing the aid reduction under section 124.155.

Sec. 2. Minnesota Statutes 1994, section 354A.12, subdivision 1, is amended to read:

Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution required to be paid by each member of a teachers retirement fund association shall not be less than the percentage of total salary specified below for the applicable association and program:

Association and Program Percentage of Total Salary

Duluth teachers retirement association

old law and new law coordinated programs4.5 5.5 percent

Minneapolis teachers retirement association

basic program 8.5 percent

coordinated program 4.5 percent

St. Paul teachers retirement association

basic program 8 percent

coordinated program 4.5 percent

Contributions shall be made by deduction from salary and must be remitted directly to the respective teachers retirement fund association at least once each month.

Sec. 3. Minnesota Statutes 1994, section 354A.12, subdivision 2, is amended to read:

Subd. 2. [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except as provided in subdivision subdivisions 2c and 3b, paragraph (d), with respect to the city of Minneapolis and special school district No. 1, notwithstanding any law to the contrary, levies for teachers retirement fund associations in cities of the first class, including levies for any employer social security taxes for teachers covered by the Duluth teachers retirement fund association or the Minneapolis teachers retirement fund association or the St. Paul teachers retirement fund association, are disallowed.

Sec. 4. Minnesota Statutes 1994, section 354A.12, is amended by adding a subdivision to read:

Subd. 2c. [SCHOOL DISTRICT SUPPLEMENTAL CONTRIBUTIONS TO MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.] (a) Beginning in fiscal year 1996, and annually thereafter, special school district No. 1 shall pay supplemental contributions in the following amounts to the Minneapolis teachers retirement fund association to reduce the unfunded actuarial accrued liability of the Minneapolis teachers retirement fund association according to the actuarial valuation of the fund prepared by the commission-retained actuary pursuant to section 356.215:

(1) an amount equal to the difference between the total 1995 financial requirements and the total current year financial requirements of the Minneapolis employees retirement fund payable by the city of Minneapolis pursuant to section 422A.101, subdivision 1a. The amount payable shall be determined according to the most recent actuarial valuation of the Minneapolis employees retirement fund prepared by the actuary retained by the legislative commission on pensions and retirement; and

(2) an amount equal to the difference between the total 1995 employer contributions and the total current year employer contributions payable under section 422A.101, subdivision 2, paragraph (c), on behalf of employees of special

school district No. 1 who are covered by the Minneapolis employees retirement fund. The amount payable shall be determined according to the most recent actuarial valuation of the Minneapolis employees retirement fund prepared by the actuary retained by the legislative commission on pensions and retirement.

(b) Special school district No. 1 may levy for supplemental contributions to the Minneapolis teachers retirement fund association under this subdivision only to the extent permitted pursuant to section 124.916, subdivision 3.

Sec. 5. Minnesota Statutes 1994, section 354A.27, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY POSTRETIREMENT ADJUSTMENT MODIFICATION.] A person receiving a retirement annuity, disability benefit, or surviving spouse benefit or annuity from the Duluth teachers retirement fund association who has received the annuity or benefit for at least one year may be entitled to receive a lump sum postretirement adjustment under subdivision 2, in the discretion of the board of trustees under subdivision 3. Any postretirement adjustment payable from the Duluth teachers retirement fund association must be computed and paid according to this section.

Sec. 6. Minnesota Statutes 1994, section 354A.27, is amended by adding a subdivision to read:

Subd. 5. [CALCULATION OF POSTRETIREMENT ADJUSTMENTS.] (a) Annually, after June 30, the board of trustees determines the amount of any postretirement adjustment using the procedures in this subdivision and subdivision 6.

(b) Each person who has been receiving an annuity or benefit under the articles of incorporation, bylaws, or under this section for at least 12 months as of the date of the postretirement adjustment shall be eligible for a postretirement adjustment. The postretirement adjustment shall be payable each January 1. The postretirement adjustment shall be equal to two percent of the annuity or benefit to which the person is entitled one month prior to the payment of the postretirement adjustment.

Sec. 7. Minnesota Statutes 1994, section 354A.27, is amended by adding a subdivision to read:

Subd. 6. [ADDITIONAL INCREASE.] (a) In addition to the postretirement increases granted under subdivision 5, an additional percentage increase must be computed and paid under this subdivision.

(b) The board of trustees shall determine the number of annuitants or benefit recipients who have been receiving an annuity or benefit for at least 12 months as of the current June 30. These recipients are entitled to receive the surplus investment earnings additional postretirement increase.

(c) Annually, as of each June 30, the board shall determine the five-year annualized rate of return attributable to the assets of the Duluth teachers retirement fund association under the formula or formulas specified in section 11A.04, clause (11).

(d) The board shall determine the amount of excess five-year annualized rate of return over the preretirement interest assumption as specified in section 356.215.

(e) The additional percentage increase must be determined by multiplying the quantity one minus the rate of contribution deficiency, as specified in the most recent actuarial report of the actuary retained by the legislative commission on pensions and retirement, times the rate of return excess as determined in paragraph (d).

(f) The additional increase is payable to all eligible annuitants or benefit recipients on the following January 1.

Sec. 8. Minnesota Statutes 1994, section 354A.31, subdivision 4, is amended to read:

Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision applies to the coordinated programs of the Minneapolis teachers retirement fund association and the St. Paul teachers retirement fund association.

(b) The normal coordinated retirement annuity shall be an amount equal to a retiring coordinated member's average salary multiplied by the retirement annuity formula percentage. Average salary for purposes of this section shall mean an amount equal to the average salary upon which contributions were made for the highest five successive years of service credit, but which shall not in any event include any more than the equivalent of 60 monthly salary payments. Average salary must be based upon all years of service credit if this service credit is less than five years.

(b) (c) This paragraph, in conjunction with subdivision 6, applies to a person who first became a member or a member in a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (c) (d), in conjunction with subdivision 7, produces a higher annuity amount, in which case paragraph (c) (d) will apply. The retirement annuity formula percentage for purposes of this paragraph is one percent per year for each year of coordinated service for the first ten years and 1.5 percent for each year of coordinated service thereafter.

(c) (d) This paragraph applies to a person who has become at least 55 years old and who first becomes a member after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity amount, when calculated under this paragraph and in conjunction with subdivision 7 is higher than it is when calculated under paragraph (b) (c), in conjunction with the provisions of subdivision 6. The retirement annuity formula percentage for purposes of this paragraph is 1.5 percent for each year of coordinated service.

Sec. 9. Minnesota Statutes 1994, section 354A.31, is amended by adding a subdivision to read:

Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies to the new law coordinated program of the Duluth teachers retirement fund association.

(b) The normal coordinated retirement annuity is an amount equal to a retiring coordinated member's average salary multiplied by the retirement annuity formula percentage. "Average salary," for purposes of this section, means an amount equal to the average salary upon which contributions were made for the highest five successive years of service credit, but must not in any event include any more than the equivalent of 60 monthly salary payments. Average salary must be based upon all years of service credit if this service credit is less than five years.

(c) This paragraph, in conjunction with subdivision 6, applies to a person who first became a member or a member in a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a higher annuity amount, in which case paragraph (d) will apply. The retirement annuity formula percentage for purposes of this paragraph is 1.16 percent per year for each year of coordinated service for the first ten years and 1.66 percent for each year of coordinated service thereafter.

(d) This paragraph applies to a person who has become at least 55 years old and who first becomes a member after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity amount, when calculated under this paragraph in conjunction with subdivision 7 is higher than it is when calculated under paragraph (c), in conjunction with subdivision 6. The retirement annuity formula percentage for purposes of this paragraph is 1.66 percent for each year of coordinated service.

Sec. 10. Minnesota Statutes 1994, section 422A.05, is amended by adding a subdivision to read:

Subd. 8. [HEALTH INSURANCE.] The retirement board may authorize the executive director or the executive director's designee to:

(1) offer the beneficiaries of the fund the option of having their health insurance premiums deducted automatically from their monthly benefit amounts and paid to a designated insurer; and

(2) provide beneficiaries information about available group health insurance plan options.

Sec. 11. Minnesota Statutes 1994, section 422A.09, subdivision 2, is amended to read:

Subd. 2. The contributing class shall consist of all employees not included in the exempt class, who become prospective beneficiaries of the fund created by sections 422A.01 to 422A.25.

A member of the contributing class who is granted a leave of absence without pay by the member's employer to serve as an employee or agent of a labor union primarily representing members of the contributing class may continue as a member of the contributing class during the period of such leave of absence by depositing each month with the fund the amount of the contribution of the employee as required by sections 422A.01 to 422A.25 which amount shall be the normal employee contribution.

The contributions referred to in this subdivision shall be based on the salary for the position or its equivalent held by the member immediately prior to such leave of absence subject to any adjustment thereof during the period of such leave.

Sec. 12. Minnesota Statutes 1994, section 422A.101, subdivision 1a, is amended to read:

Subd. 1a. [CITY CONTRIBUTIONS.] Prior to August 31 of each year, the retirement board shall prepare an itemized statement of the financial requirements of the fund payable by the city for the succeeding fiscal year, and a copy of the statement shall be submitted to the board of estimate and taxation and to the city council by September 15. The financial requirements of the fund payable by the city shall be calculated as follows:

(a) a regular employer contribution of an amount equal to the percentage rounded to the nearest two decimal places of the salaries and wages of all employees covered by the retirement fund which equals the difference between the level normal cost plus administrative cost as reported in the annual actuarial valuation prepared by the commission-retained actuary and the employee contributions provided for in section 422A.10 less any amounts contributed toward the payment of the balance of the normal cost not paid by employee contributions by any city owned public utility, improvement project, other municipal activities supported in whole or in part by revenues other than real estate taxes, any public corporation, any employing unit of metropolitan government, or by special school district No. 1 pursuant to subdivision 2;

(b) an additional employer contribution of an amount equal to the percent specified in section 353.27, subdivision 3a, clause (a), multiplied by the salaries and wages of all employees covered by the retirement fund less any amounts contributed toward amortization of the unfunded actuarial accrued liability by June 30, 2020, attributable to their respective covered employees by any city owned public utility, improvement project, other municipal activities supported in whole or in part by revenues other than real estate taxes, any public corporation, any employing unit of metropolitan government, or by special school district No. 1 pursuant to subdivision 2; and

(c) a proportional share of an additional employer amortization contribution of an amount equal to $3,900,000 annually until June 30, 2020, based upon the share of the fund's unfunded actuarial accrued liability attributed to the city as disclosed in the annual actuarial valuation prepared by the commission-retained actuary.

The city council shall, in addition to other taxes levied by the city, annually levy a tax equal to the amount of the financial requirements of the fund which are payable by the city for fiscal year 1995. The tax, when levied, shall be extended upon the county lists and shall be collected and enforced in the same manner as other taxes levied by the city. If the city does not levy a tax sufficient to meet the requirements of this subdivision, the retirement board shall submit the tax levy statement directly to the county auditor, who shall levy the tax. The tax, when levied, shall be extended upon the county lists and shall be collected and paid into the city treasury to the credit of the retirement fund. Any amount to the credit of the retirement fund, and shall constitute a special fund and shall to be used only for the payment of obligations authorized pursuant to section 354A.12, subdivision 2c, and this chapter. In 1996 and succeeding years, the amount of such special fund equal to the annual financial requirements of the fund which are payable by the city under this subdivision shall be credited to the retirement fund and the excess shall be paid to special school district No. 1.

Sec. 13. [INITIAL ADJUSTMENT.]

Subdivision 1. [LUMP-SUM POSTRETIREMENT ADJUSTMENT TRANSITION.] For all annuitants and beneficiaries of the association who previously received a lump-sum postretirement adjustment, before calculation of the first postretirement adjustment under sections 5 and 6, their annual retirement annuity or benefit shall be permanently increased by the amount of their previous lump-sum postretirement adjustment.

Subd. 2. [ANNUITIZED POSTRETIREMENT ADJUSTMENT TRANSITION.] For all annuitants and beneficiaries of the association who chose to annuitize previous lump-sum postretirement adjustments, before calculation of the first postretirement adjustment under sections 5 and 6, their annual retirement annuity or benefit shall include the benefits supported by the accumulated annuitized value due to annuitizing their previous lump-sum postretirement adjustments.

Sec. 14. [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO INCREASE FORMULAS.] In accordance with Minnesota Statutes, section 354A.12, subdivision 4, approval is granted for the Duluth teachers retirement fund association to amend their articles of incorporation or bylaws by increasing the formula percentage used in computing annuities for old law coordinated program members in the Duluth teachers retirement fund association to 1.41 percent for each year of service.

Sec. 15. [DULUTH OLD PLAN BYLAWS.]

In accordance with Minnesota Statutes, section 354A.12, subdivision 4, the Duluth teachers retirement fund association shall amend its articles of incorporation or bylaws to conform to sections 2, 5, 6, 7, and 13.

Sec. 16. [REPEALER.]

Minnesota Statutes 1994, section 354A.27, subdivisions 2, 3, and 4, are repealed.

Sec. 17. [EFFECTIVE DATE.]

(a) Sections 1, 3, 4, and 12 are effective upon approval of all of these sections by both the Minneapolis city council and the board of special school district No. 1, and upon compliance with Minnesota Statutes, section 645.021, subdivision 3, by both groups.

(b) Section 2 is effective on the first day of the first payroll period beginning after July 1, 1995.

(c) Sections 5, 6, 7, 13, 15, and 16 are effective November 1, 1995.

(d) Sections 8, 9, and 14 are effective May 15, 1995.

(e) Sections 10 and 11 are effective on the day following final enactment.

Section 1. Minnesota Statutes 1994, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a. [MEMBER CONTRIBUTIONS.] Each member shall pay a sum equal to 8.5 8.92 percent of the member's salary, which shall constitute the member contribution to the fund.

Sec. 2. Minnesota Statutes 1994, section 352B.08, subdivision 2, is amended to read:

Subd. 2. [NORMAL RETIREMENT ANNUITY.] The annuity must be paid in monthly installments. The annuity shall be equal to the amount determined by multiplying the average monthly salary of the member by 2-1/2 2.65 percent for each year and pro rata for completed months of service.

Sec. 3. Minnesota Statutes 1994, section 352B.10, subdivision 1, is amended to read:

Subdivision 1. [INJURIES, PAYMENT AMOUNTS.] Any member who becomes disabled and physically or mentally unfit to perform duties as a direct result of an injury, sickness, or other disability incurred in or arising out of any act of duty, shall receive disability benefits while disabled. The benefits must be paid in monthly installments equal to the member's average monthly salary multiplied by 50 53 percent, plus an additional 2-1/2 2.65 percent for each year and pro rata for completed months of service in excess of 20 years, if any.

Sec. 4. Minnesota Statutes 1994, section 353.651, subdivision 4, is amended to read:

Subd. 4. [EARLY RETIREMENT.] Any police officer or firefighter member who has become at least 50 years old and who has at least three years of allowable service is entitled upon application to a retirement annuity equal to the normal annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial equivalent of the annuity that would be payable to the member if the member deferred receipt of the annuity from the day the annuity begins to accrue until the member attains age 55 by two-tenths of one percent for each month that the member is under age 55 at the time of retirement.

Sec. 5. Minnesota Statutes 1994, section 356.30, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) Notwithstanding any provisions to the contrary of the laws governing the funds enumerated in subdivision 3, a person who has met the qualifications of clause (2) may elect to receive a retirement annuity from each fund in which the person has at least six months allowable service, based on the allowable service in each fund, subject to the provisions of clause (3).

(2) A person may receive upon retirement a retirement annuity from each fund in which the person has at least six months allowable service, and augmentation of a deferred annuity calculated under the laws governing each public pension plan or fund named in subdivision 3, from the date the person terminated all public service if:

(a) the person has allowable service totaling an amount that allows the person to receive an annuity in any two or more of the enumerated funds; and

(b) the person has not begun to receive an annuity from any enumerated fund or the person has made application for benefits from all funds and the effective dates of the retirement annuity with each fund under which the person chooses to receive an annuity are within a one-year period.

(3) The retirement annuity from each fund must be based upon the allowable service in each fund, except that:

(a) The laws governing annuities must be the law in effect on the date of termination from the last period of public service under a covered fund with which the person earned a minimum of one-half year of allowable service credit during that employment.

(b) The "average salary" on which the annuity from each covered fund in which the employee has credit in a formula plan shall be based on the employee's highest five successive years of covered salary during the entire service in covered funds.

(c) The formula percentages to be used by each fund must be those percentages prescribed by each fund's formula as continued for the respective years of allowable service from one fund to the next, recognizing all previous allowable service with the other covered funds.

(d) Allowable service in all the funds must be combined in determining eligibility for and the application of each fund's provisions in respect to actuarial reduction in the annuity amount for retirement prior to normal retirement.

(e) The annuity amount payable for any allowable service under a nonformula plan of a covered fund must not be affected but such service and covered salary must be used in the above calculation.

(f) This section shall not apply to any person whose final termination from the last public service under a covered fund is prior to May 1, 1975.

(g) For the purpose of computing annuities under this section the formula percentages used by any covered fund, except the public employees police and fire fund, and the state patrol retirement fund, must not exceed 2-1/2 percent per year of service for any year of service or fraction thereof. The formula percentage used by the public employees police and fire fund and the state patrol retirement fund must not exceed 2.65 percent per year of service for any year of service or fraction thereof.

(h) Any period of time for which a person has credit in more than one of the covered funds must be used only once for the purpose of determining total allowable service.

(i) If the period of duplicated service credit is more than six months, or the person has credit for more than six months with each of the funds, each fund shall apply its formula to a prorated service credit for the period of duplicated service based on a fraction of the salary on which deductions were paid to that fund for the period divided by the total salary on which deductions were paid to all funds for the period.

(j) If the period of duplicated service credit is less than six months, or when added to other service credit with that fund is less than six months, the service credit must be ignored and a refund of contributions made to the person in accord with that fund's refund provisions.

Sec. 6. Laws 1994, chapter 499, section 2, is amended to read:

Sec. 2. [EFFECTIVE DATE.]

Section 1 is effective on the first of the month next following:

(1) receipt of an affirmative written determination from the Secretary of the federal Department of Health and Human Services Social Security Administration of ineligibility for coverage under the federal old age, survivors, and disability insurance; and

(2) approval by the Hennepin county board and compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, except that for section 1 to be deemed approved, a certificate of approval must be filed within the year following receipt of the written affirmative determination from the Social Security Administration, or before January 1, 1998, whichever is earlier.

Sec. 7. [EFFECTIVE DATE.]

(a) Section 1 is effective on the first day of the first full pay period occurring after July 1, 1995.

(b) Sections 2, 3, 4, and 5 are effective on July 1, 1995.

(c) Section 6 is effective on the day following final enactment.

Section 1. Minnesota Statutes 1994, section 353.65, subdivision 7, is amended to read:

Subd. 7. [EXCESS CONTRIBUTIONS HOLDING ACCOUNT.] (a) The excess contributions holding account is established in the public employees retirement association. Excess contributions established by section 69.031, subdivision 5, paragraphs (2), clauses (b) and (c), and (3) must be deposited in the account. These contributions and all investment earnings associated with them must be regularly transferred as provided in paragraph (b).

(b) From the amount of the excess contributions and associated investment earnings:

(1) $1,000,000 must be transferred annually to the ambulance service personnel longevity award and incentive suspense account established by section 144C.03, subdivision 2; and

(2) any remaining balance, after deduction of the police officer stress reduction program appropriation under paragraph (c) and after deduction of the additional amortization aid allocation, if any, under paragraph (d), must be transferred to the general fund.

(c) If a law is enacted creating a police officer stress reduction program, and money is appropriated for the program, an amount equal to the appropriation must be transferred from the excess contributions holding account to the stress reduction program before money is transferred to the general fund allocated under paragraph (b), clause (2).

(d) On October 1, 1996, the balance of money in the excess contributions holding account under paragraph (b), clause (2), collected during the period July 1, 1995, through June 30, 1996, must be allocated by the commissioner of revenue to all local police or salaried firefighter relief associations governed by and in full compliance with section 69.77 that had an unfunded actuarial accrued liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of December 31, 1995, and to all local police or salaried firefighter consolidation accounts governed by chapter 353A that have an additional municipal contribution amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented section 353A.083, if the effective date of the consolidation preceded May 24, 1993, on the basis of the relief association or consolidation account's proportional share of the total unfunded actuarial accrued liability of all recipient relief associations and consolidation accounts as of December 31, 1993, or June 30, 1994, whichever applies.

Sec. 2. [EFFECTIVE DATE.]

Section 1 is effective on the day following enactment.

Section 1. [STATE COLLEGE AND UNIVERSITY EARLY RETIREMENT INCENTIVES.]

Subdivision 1. [INTENT.] To avoid the disruptive effects of employee layoffs due to campus consolidations, mergers, and budget reductions resulting in downsizing within the Minnesota state colleges and universities, an employer-funded early retirement incentive is made available in this section to employees of the state universities, community colleges, technical colleges, and the existing system central offices.

Subd. 2. [EMPLOYER PARTICIPATION.] The early retirement incentives provided in this section may be offered to eligible employees in the state university, community college, technical college systems, and the higher education board. The incentives apply to personnel in any state university, community college, or technical college department being downsized or where a reduction in force has been declared by the president of the institution, or in the case of personnel in the chancellor's office, a reduction in force shall be declared by the chancellor or the chancellor's designee. Positions that are not assigned to a specific department or support positions that are assigned campus-wide or to a specific department are considered to be campus-wide in jurisdiction and eligible for this incentive as part of the reduction-in-force declaration.

Subd. 3. [ELIGIBILITY.] A person identified in this section is eligible to receive the incentives if the person:

(1) has at least 15 years of combined service credit in any Minnesota public pension plans governed by Minnesota Statutes, section 356.30, subdivision 3, and the plan governed by Minnesota Statutes, chapter 354B;

(2) upon retirement is immediately eligible for a retirement annuity from a defined benefit plan if the person is a member of a defined benefit plan;

(3) is at least 55 years of age; and

(4) retires prior to January 31, 1996.

Subd. 4. [INCENTIVE.] Persons who retire under this section shall receive employer-paid hospital, medical, and dental insurance, subject to the conditions in subdivision 5 and at the level and under conditions existing at the time of retirement.

Subd. 5. [LIMITS ON REHIRING.] Persons retiring under the provisions of this section may not be reemployed by the state or hired under a professional technical contract in any capacity except:

(1) under conditions of a stated emergency, and then only if the rehire or contract is approved by the higher education board under procedures adopted by the board; and

(2) if rehired as adjunct faculty as defined in the appropriate bargaining agreement, or, if rehired by another executive branch agency of state government, if the retired employee works only on a seasonal, temporary, or intermittent basis as defined in Minnesota Statutes, section 43A.02, subdivision 23, or 179A.03, subdivision 14, clause (f), for no more than 1,044 hours in any consecutive 12-month period.

Subd. 6. [CONDITIONS; INSURANCE COVERAGE.] A retired employee is eligible for single and dependent insurance coverages and employer payments to which the person was entitled immediately before retirement, subject to any changes in coverage and employer and employee payments through collective bargaining or personnel plans, for employees in positions equivalent to the position from which the employee retired. The retired employee is not eligible for employer-paid life insurance. Eligibility ceases when the retired employee attains the age of 65, or when the person chooses not to receive the retirement benefits for which the person has applied, or when the person is eligible for employer-paid health insurance from a new employer. Coverages must be coordinated with relevant health insurance benefits provided through the federally sponsored Medicare program.

Subd. 7. [APPLICATION OF OTHER LAWS.] Unilateral implementation of this section by a public employer is not an unfair labor practice for the purposes of Minnesota Statutes, chapter 179A. The requirement in this section for an employer to pay health insurance costs for certain retired employees is not subject to the limits in Minnesota Statutes, section 179A.20, subdivision 2a.

Sec. 2. [NOTIFICATION OF SUBSEQUENT HEALTH COVERAGE; PENALTY FOR NOTIFICATION FAILURE.]

(a) An employee who accepts the early retirement incentive benefit under section 1 agrees as a condition of receipt of the incentive to notify the higher education board within 30 days of the event that the person is eligible for employer-paid health insurance from subsequent employment.

(b) Failure to make the notification required in paragraph (a) obligates the person to reimburse the higher education board for any insurance premiums that it paid since the person attained eligibility for the subsequent employment health insurance coverage.

Sec. 3. [EFFECTIVE DATE.]

Sections 1 and 2 are effective on the day following final enactment."

Delete the title and insert:

"A bill for an act relating to retirement; providing various benefit increases and related modifications; amending Minnesota Statutes 1994, sections 124.916, subdivision 3; 136.90; 352.01, subdivision 13; 352B.02, subdivision 1a; 352B.08, subdivision 2; 352B.10, subdivision 1; 353.65, subdivision 7; 353.651, subdivision 4; 354.445; 354.66, subdivision 4; 354A.094, subdivision 4; 354A.12, subdivisions 1, 2, and by adding a subdivision; 354A.27, subdivision 1, and by adding subdivisions; 354A.31, subdivision 4, and by adding a subdivision; 354B.05, subdivisions 2 and 3; 354B.07, subdivisions 1 and 2; 354B.08, subdivision 2; 356.30, subdivision 1; 356.611; 422A.05, by adding a subdivision; 422A.09, subdivision 2; and 422A.101, subdivision 1a; Laws 1994, chapter 499, section 2; proposing coding for new law in Minnesota Statutes, chapters 125; and 356; repealing Minnesota Statutes 1994, sections 3A.10, subdivision 2; 352.021, subdivision 5; and 354A.27, subdivisions 2, 3, and 4."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Rice from the Committee on Economic Development, Infrastructure and Regulation Finance to which was referred:

H. F. No. 1073, A bill for an act relating to metropolitan government; authorizing financing for transit and paratransit facilities and equipment; removing the limitation on metro mobility funding for capital costs; amending Minnesota Statutes 1994, section 473.39, subdivision 1b, and by adding a subdivision.

Reported the same back with the following amendments:

Page 2, after line 12, insert:

"Sec. 3. [BUS SECURITY MEASURES.]

The metropolitan council shall spend not less than $354,000 of the proceeds of bonds issued under Minnesota Statutes, section 473.39, subdivision 1c, for security measures on transit vehicles, including, but not limited to, plexiglas enclosures for drivers and on-bus surveillance cameras."

Page 2, line 21, delete "3" and insert "4"

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 5, after the semicolon, insert "providing for portion of bond proceeds to be spent on bus security measures;"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Taxes.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 1478, A bill for an act relating to state government; requiring notice to the commissioner of agriculture and certain other actions before an agency adopts or repeals rules that affect farming operations; amending Minnesota Statutes 1994, sections 14.11, by adding a subdivision; and 116.07, subdivision 4.

Reported the same back with the following amendments:

Page 1, line 12, delete the colon

Page 1, line 13, delete the paragraph coding and delete "(1)" and delete "and a"

Page 1, delete line 14

Page 1, line 15, delete "45" and insert "60"

Page 1, line 16, delete "; and" and insert a period

Page 1, delete lines 17 to 21, and insert:

"A rule may not be invalidated for failure to comply with this subdivision if an agency has made a good faith effort to comply.

Sec. 2. Minnesota Statutes 1994, section 14.14, is amended by adding a subdivision to read:

Subd. 1b. [FARMING OPERATIONS.] When a public hearing is conducted on a proposed rule that affects farming operations, at least one public hearing must be conducted in an agricultural area of the state."

Page 1, line 22, delete "2" and insert "3"

Page 4, after line 19, insert:

"Sec. 4. [EFFECTIVE DATE.]

Sections 1 and 2 apply to rules for which notice of intent to adopt a rule is published after the effective date of those sections."

Amend the title as follows:

Page 1, line 6, after the semicolon, insert "14.14, by adding a subdivision;"

With the recommendation that when so amended the bill pass.

The report was adopted.

Rice from the Committee on Economic Development, Infrastructure and Regulation Finance to which was referred:

H. F. No. 1483, A bill for an act relating to recreational vehicles; increasing fees that may be retained by commissioner of natural resources, registrar, or deputy registrar for processing registration of recreational vehicles and watercraft and licensing of watercraft; amending Minnesota Statutes 1994, sections 84.788, subdivision 3; 84.798, subdivision 3; 84.82, subdivision 2; 84.922, subdivision 2; 86B.415, subdivision 8; and 86B.870, subdivision 1.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

H. F. Nos. 797, 1478 and 1483 were read for the second time.

S. F. Nos. 259 and 375 were read for the second time.

The following House Files were introduced:

Solberg, for the Committee on Ways and Means, introduced:

H. F. No. 1837, A bill for an act relating to the organization and operation of state government; reducing 1995 appropriations.

The bill was read for the first time and laid over one day.

Ostrom, Rest, Onnen and Luther introduced:

H. F. No. 1838, A bill for an act relating to taxation; income; adopting federal adjusted gross income as the tax base; providing for personal exemptions and dependent credits; appropriating money; amending Minnesota Statutes 1994, sections 290.01, subdivisions 19, 19a, and 19b; and 290.06, subdivisions 2c and 2d; proposing coding for new law in Minnesota Statutes, chapter 290; repealing Minnesota Statutes 1994, sections 290.067; 290.0671; and 290.091.

The bill was read for the first time and referred to the Committee on Taxes.

Wenzel; Winter; Anderson, I.; Kalis and Girard introduced:

H. F. No. 1839, A bill for an act relating to local government aids; modifying the aid formula for cities with a population of less than 2,500; amending Minnesota Statutes 1994, sections 477A.011, subdivisions 34 and 37; and 477A.013, subdivisions 8 and 9; repealing Minnesota Statutes 1994, section 477A.011, subdivision 33.

The bill was read for the first time and referred to the Committee on Taxes.

Wenzel; Winter; Anderson, I.; Kalis and Girard introduced:

H. F. No. 1840, A bill for an act relating to local government aids; changing the method for calculating aid reductions; amending Minnesota Statutes 1994, section 477A.0132, subdivision 2.

The bill was read for the first time and referred to the Committee on Taxes.

Johnson, V., introduced:

H. F. No. 1841, A bill for an act relating to the environment; modifying matching money for environmental learning centers; amending Laws 1994, chapter 643, section 23, subdivision 28.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources Finance.

Solberg and Lourey introduced:

H. F. No. 1842, A bill for an act relating to waste management; establishing the Aitkin area resource recovery authority; proposing coding for new law as Minnesota Statutes, chapter 116T.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

Pugh introduced:

H. F. No. 1843, A bill for an act relating to uniform laws; enacting uniform land security interest act to regulate real estate security in excess of $500,000; proposing coding for new law as Minnesota Statutes, chapter 506.

The bill was read for the first time and referred to the Committee on Judiciary.

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. 413, A bill for an act relating to highways; designating the Veterans Memorial Highway; amending Minnesota Statutes 1994, section 161.14, by adding a subdivision.

Patrick E. Flahaven, Secretary of the Senate

Wenzel moved that the House refuse to concur in the Senate amendments to H. F. No. 413, 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. 544, A bill for an act relating to courts; requiring the state court administrator to prepare a guide to informal probate.

Patrick E. Flahaven, Secretary of the Senate

Hasskamp moved that the House concur in the Senate amendments to H. F. No. 544 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 544, A bill for an act relating to courts; requiring the state court administrator to prepare a guide to informal probate.

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

The question was taken on the repassage of the bill and the roll was called. There were 120 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Garcia       Leighton     Orenstein    Sviggum
Anderson, B. Girard       Leppik       Orfield      Swenson, D.
Bakk         Goodno       Lieder       Osskopp      Swenson, H.
Bertram      Greenfield   Lindner      Osthoff      Sykora
Bettermann   Greiling     Long         Ostrom       Tomassoni
Bishop       Haas         Lourey       Otremba      Tompkins
Boudreau     Hackbarth    Luther       Paulsen      Trimble
Bradley      Harder       Lynch        Pawlenty     Tuma
Broecker     Hasskamp     Macklin      Pellow       Tunheim
Brown        Holsten      Mahon        Pelowski     Van Dellen
Carlson      Jaros        Mares        Perlt        Van Engen
Carruthers   Jefferson    Mariani      Peterson     Vickerman
Clark        Jennings     Marko        Pugh         Warkentin
Cooper       Johnson, A.  McCollum     Rest         Weaver
Daggett      Johnson, R.  McElroy      Rhodes       Wejcman
Dauner       Johnson, V.  McGuire      Rice         Wenzel
JOURNAL OF THE HOUSE - 40th Day - Top of Page 2045

Davids       Kahn         Milbert      Rostberg     Wolf
Dehler       Kalis        Molnau       Rukavina     Worke
Delmont      Kelley       Mulder       Sarna        Workman
Dempsey      Kinkel       Murphy       Schumacher   Sp.Anderson,I
Dorn         Knight       Ness         Seagren      
Entenza      Knoblach     Olson, E.    Skoglund     
Farrell      Koppendrayer Olson, M.    Smith        
Finseth      Kraus        Onnen        Solberg      
Frerichs     Larsen       Opatz        Stanek       

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. 859, A bill for an act relating to the city of Minneapolis; authorizing the city to determine the method for the sale of unclaimed property; repealing Laws 1919, chapter 396.

Patrick E. Flahaven, Secretary of the Senate

Clark moved that the House concur in the Senate amendments to H. F. No. 859 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 859, A bill for an act relating to cities; authorizing cities to conduct private sales of unclaimed property through nonprofit organizations; repealing archaic language; amending Minnesota Statutes 1994, section 471.195; repealing Laws 1919, chapter 396.

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

The question was taken on the repassage of the bill and the roll was called. There were 108 yeas and 17 nays as follows:

Those who voted in the affirmative were:

Abrams       Goodno       Leppik       Osskopp      Stanek
Bakk         Greenfield   Lieder       Osthoff      Sviggum
Bertram      Greiling     Lindner      Ostrom       Swenson, D.
Bettermann   Hackbarth    Long         Otremba      Swenson, H.
Bishop       Harder       Lourey       Ozment       Sykora
Boudreau     Hasskamp     Luther       Paulsen      Tomassoni
Bradley      Holsten      Lynch        Pawlenty     Tompkins
Brown        Hugoson      Macklin      Pelowski     Trimble
Carlson      Jaros        Mahon        Perlt        Tuma
Carruthers   Jefferson    Mares        Peterson     Tunheim
Clark        Jennings     Mariani      Pugh         Van Dellen
Commers      Johnson, A.  Marko        Rest         Van Engen
Cooper       Johnson, R.  McCollum     Rhodes       Vickerman
Daggett      Kahn         McGuire      Rice         Warkentin
Dauner       Kalis        Milbert      Rostberg     Weaver
Delmont      Kelley       Molnau       Rukavina     Wejcman
Dempsey      Kinkel       Murphy       Sarna        Wenzel
Dorn         Knoblach     Ness         Schumacher   Winter
Entenza      Koppendrayer Olson, E.    Seagren      Worke
Farrell      Kraus        Opatz        Skoglund     Sp.Anderson,I
Garcia       Larsen       Orenstein    Smith        
Girard       Leighton     Orfield      Solberg      

Anderson, B. Finseth      Knight       Olson, M.    Workman 
Broecker     Frerichs     Krinkie      Onnen        
Davids       Haas         McElroy      Pellow       
Dehler       Johnson, V.  Mulder       Wolf         

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. 823, A bill for an act relating to local government; authorizing Hennepin county to lease hospital or nursing home facilities under certain conditions; proposing coding for new law in Minnesota Statutes, chapter 383B.

Patrick E. Flahaven, Secretary of the Senate

Abrams moved that the House concur in the Senate amendments to H. F. No. 823 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 823, A bill for an act relating to hospitals; removing an exception for certain cities and counties from certain hospital financing activities; amending Minnesota Statutes 1994, section 447.45, subdivision 1.

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

The question was taken on the repassage of the bill and the roll was called. There were 126 yeas and 1 nay as follows:

Those who voted in the affirmative were:

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

Pellow                    

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 1536, 1570, 704, 1022, 58 and 317.

Patrick E. Flahaven, Secretary of the Senate

S. F. No. 1536, A bill for an act relating to the organization and operation of state government; appropriating money for the department of transportation and other agencies with certain conditions.

The bill was read for the first time and referred to the Committee on Economic Development, Infrastructure and Regulation Finance.

S. F. No. 1570, A bill for an act relating to taxes; freezing property tax values, levies, and rates for taxes payable in 1996; limiting increases in property tax values, levies, and rates for taxes payable in 1997; appropriating money; repealing Minnesota Statutes 1994, sections 124.01; 124.05; 124.06; 124.07; 124.76; 124.82; 124.829; 124.83; 124.84; 124.85; 124.86; 124.90; 124.91; 124.912; 124.914; 124.916; 124.918; 124.95; 124.961; 124.962; 124.97; 124A.02, subdivisions 16, 23, and 24; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 124A.0311; 124A.032; 124A.04; 124A.22, subdivisions 1, 2, 3, 4, 4a, 4b, 6, 6a, 8, and 9; 124A.23; 124A.24; 124A.26, subdivisions 1, 2, and 3; 124A.27; 124A.28; 124A.29, subdivision 2; 273.13; 273.135; 273.136; 273.1391; 473F.001; 473F.01; 473F.02; 473F.03; 473F.05; 473F.06; 473F.07; 473F.08; 473F.09; 473F.10; 473F.11; 473F.13; 477A.011; 477A.012; 477A.0121; 477A.0122; 477A.013; 477A.0132; 477A.014; 477A.015; 477A.016; 477A.017; 477A.03; 477A.11; 477A.12; 477A.13; 477A.14; and 477A.15; Laws 1991, chapter 265, article 7, section 35.

The bill was read for the first time and referred to the Committee on Taxes.

S. F. No. 704, A bill for an act relating to insurance; prohibiting zip code rating in homeowner's and automobile insurance; amending Minnesota Statutes 1994, section 72A.20, subdivisions 13 and 23.

The bill was read for the first time and referred to the Committee on Financial Institutions and Insurance.

S. F. No. 1022, A bill for an act relating to state lands; authorizing public sale of certain tax-forfeited land that borders public water in Koochiching county.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

S. F. No. 58, A bill for an act relating to insurance; extending eligibility for certain elective individual paid insurance and benefits; amending Minnesota Statutes 1994, section 43A.27, subdivision 2.

The bill was read for the first time and referred to the Committee on Governmental Operations.

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 first time.

Haas moved that S. F. No. 317 and H. F. No. 379, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

H. F. No. 265, A bill for an act relating to gambling; making technical amendments to eliminate references to teleracing facilities; regulating testing facilities for the testing of gambling devices; regulating bingo and lawful purpose expenditures, and credit and sales to delinquent organizations; providing for contributions to certain compulsive gambling programs; amending Minnesota Statutes 1994, sections 240.01, subdivisions 18 and 23; 240.10; 240.19; 240.23; 240.27, subdivisions 2, 3, 4, and 5; 299L.01, subdivision 1; 299L.03, subdivision 1; 299L.07,

subdivisions 1, 2, 4, 5, 6, and by adding a subdivision; 349.12, subdivision 25, and by adding a subdivision; 349.17, subdivision 1; 349.191, subdivision 1a; and 349.211, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 299L; repealing Minnesota Statutes 1994, section 240.01, subdivisions 17 and 21.

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 122 yeas and 7 nays as follows:

Those who voted in the affirmative were:

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

Anderson, B. Lindner      Osskopp      Workman 
Knight       Olson, M.    Smith        

S. F. No. 91, A bill for an act relating to gambling; providing eligibility for participation as a provider in the state compulsive gambling program; amending Minnesota Statutes 1994, section 245.98, subdivision 2.

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 128 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams       Frerichs     Kraus        Onnen        Solberg
JOURNAL OF THE HOUSE - 40th Day - Top of Page 2049

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

S. F. No. 1209 was reported to the House.

There being no objection, S. F. No. 1209 was continued on the Consent Calendar.

S. F. No. 839 was reported to the House.

Cooper moved to amend S. F. No. 839, the unofficial engrossment, as follows:

Page 5, line 26, after "a" insert "farm" and after "vehicle" insert "as defined in Code of Federal of Regulations, title 49, section 390.5,"

Page 5, after line 29, insert:

"Sec. 8. [EFFECTIVE DATE.]

This act is effective the day after final enactment."

The motion prevailed and the amendment was adopted.

S. F. No. 839, A bill for an act relating to agriculture; modifying pesticide posting requirements; changing certain pesticide dealer requirements; changing expiration of pesticide applicator certifications; requiring consideration of passive bioremediation in certain cases; changing classification and endorsement requirements to operate a vehicle carrying liquid fertilizer; amending Minnesota Statutes 1994, sections 18B.07, subdivision 3; 18B.31; 18B.36, subdivision 2; 18D.105, subdivision 3a; and 171.02, subdivision 2a.

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 112 yeas and 17 nays as follows:

Those who voted in the affirmative were:

Abrams       Finseth      Knoblach     Onnen        Stanek
Anderson, B. Frerichs     Koppendrayer Opatz        Sviggum
Bakk         Garcia       Kraus        Orfield      Swenson, D.
Bertram      Girard       Krinkie      Osskopp      Swenson, H.
Bettermann   Goodno       Larsen       Osthoff      Sykora
Bishop       Greiling     Leighton     Ostrom       Tomassoni
Boudreau     Haas         Leppik       Ozment       Tompkins
Bradley      Hackbarth    Lieder       Paulsen      Tuma
Broecker     Harder       Lindner      Pawlenty     Tunheim
Brown        Hasskamp     Long         Pellow       Van Dellen
Carlson      Holsten      Lourey       Pelowski     Van Engen
Carruthers   Hugoson      Luther       Perlt        Vickerman
Commers      Huntley      Lynch        Peterson     Warkentin
Cooper       Jefferson    Macklin      Pugh         Weaver
Daggett      Jennings     Mahon        Rest         Wenzel
Dauner       Johnson, A.  Mares        Rhodes       Winter
Davids       Johnson, R.  McElroy      Rostberg     Wolf
Dehler       Johnson, V.  Milbert      Sarna        Worke
Delmont      Kahn         Molnau       Schumacher   Workman
Dempsey      Kalis        Mulder       Seagren      Sp.Anderson,I
Dorn         Kelley       Murphy       Simoneau     
Entenza      Kinkel       Ness         Smith        
Erhardt      Knight       Olson, M.    Solberg      

Clark        Jaros        McGuire      Rukavina     Wejcman 
Dawkins      Mariani      Orenstein    Skoglund     
Farrell      Marko        Otremba      Trimble      
Greenfield   McCollum     Rice         Wagenius     

S. F. No. 577, A bill for an act relating to health; modifying provisions relating to nursing home administrators; amending Minnesota Statutes 1994, section 144A.04, by adding a subdivision.

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

S. F. No. 299, A bill for an act relating to vocational rehabilitation; changing references to visually disabled persons; making changes of a technical and housekeeping nature; amending Minnesota Statutes 1994, sections 248.011; 248.07, subdivisions 1, 2, 3, 4, 5, 13, 14a, and 16; 248.10; 248.11; 268A.02, subdivision 2; 268A.03; and 268A.11, subdivisions 1 and 3; repealing Minnesota Statutes 1994, section 268A.12.

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

H. F. No. 54 was reported to the House.

Kahn moved to amend H. F. No. 54 as follows:

Page 4, after line 31, insert:

"Sec. 3. [STUDY OF SUBMERGED LANDS.]

(a) Pursuant to applicable federal and state law under which Minnesota was admitted to the union on equal footing with the original 13 states, navigable waters and their beds located within the exterior boundaries of the state are owned by the state.

(b) In the discharge of their official duties, the governor, attorney general, other constitutional officers, and other public officials, such as the commissioner of natural resources, shall vigorously assert and defend, in all forums, the state's ownership of and jurisdiction over the navigable waters and their beds, the natural resources related to these lands, waters, and beds, and the associated rights of the state and its citizens arising from the state's ownership and jurisdictional interests in these lands, waters, and beds.

(c) The state owns millions of acres of land that is submerged by the navigable waters of the state for which there has not been a program of management. In furtherance of the policies set out in paragraphs (a) and (b), the division of waters of the department of natural resources shall conduct a study that:

(1) inventories the land throughout the state that is submerged by navigable waters, identifying places where the location of navigable waters has changed since statehood and establishes a process for incorporating existing maps and other data into the department's geographical information systems database;

(2) identifies areas where the ownership of lands may be in question and establishes a process for determining the rightful owner and resolving public and private conflicts that may result from newly identified ownership; and

(3) establishes a submerged land management program that identifies priorities for areas to be brought under management and to be publicly and privately developed and establishes a proposed fee structure for public use of the lands that takes into account potential revenue, local economic impact, and preexisting uses and uses subsequent to the inventory.

(d) The study shall be submitted to the environment and natural resources and finance committees of the senate and the environment and natural resources, environment and natural resources finance and ways and means committees of the house of representatives by July 1, 1997."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Kahn amendment and the roll was called. There were 15 yeas and 111 nays as follows:

Those who voted in the affirmative were:

Clark        Jaros        Mariani      Skoglund     
Dawkins      Kahn         McGuire      Wagenius     
Greenfield   Long         Orfield      Wejcman      
Greiling     Lourey       Simoneau     

Abrams       Farrell      Kraus        Orenstein    Swenson, D.
Anderson, B. Finseth      Krinkie      Osskopp      Swenson, H.
Bakk         Frerichs     Larsen       Ostrom       Sykora
Bertram      Garcia       Leighton     Otremba      Tomassoni
Bettermann   Girard       Leppik       Ozment       Tompkins
Bishop       Goodno       Lieder       Paulsen      Trimble
Boudreau     Haas         Lindner      Pawlenty     Tuma
Bradley      Hackbarth    Luther       Pellow       Tunheim
Broecker     Harder       Lynch        Pelowski     Van Dellen
Brown        Hasskamp     Macklin      Perlt        Van Engen
Carlson      Holsten      Mahon        Peterson     Vickerman
Carruthers   Hugoson      Mares        Pugh         Warkentin
Commers      Huntley      Marko        Rest         Weaver
Cooper       Jefferson    McElroy      Rhodes       Wenzel
Daggett      Jennings     Milbert      Rostberg     Winter
Dauner       Johnson, R.  Molnau       Rukavina     Wolf
Davids       Johnson, V.  Mulder       Sarna        Worke
Dehler       Kalis        Murphy       Schumacher   Workman
Delmont      Kelley       Ness         Seagren      Sp.Anderson,I
Dempsey      Kinkel       Olson, E.    Smith        
Dorn         Knight       Olson, M.    Solberg      
Entenza      Knoblach     Onnen        Stanek       
Erhardt      Koppendrayer Opatz        Sviggum      

H. F. No. 54, A bill for an act relating to state government; directing the governor, attorney general, and other public officers to perform certain duties in regard to certain waters and public lands; proposing coding for new law in Minnesota Statutes, chapters 1 and 84B.

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 96 yeas and 31 nays as follows:

Those who voted in the affirmative were:

Abrams       Finseth      Kraus        Osskopp      Sviggum
Anderson, B. Frerichs     Krinkie      Osthoff      Swenson, D.
Bakk         Garcia       Larsen       Ostrom       Swenson, H.
Bertram      Girard       Lieder       Otremba      Sykora
Bettermann   Goodno       Lindner      Paulsen      Tomassoni
Bishop       Hackbarth    Luther       Pawlenty     Tunheim
Boudreau     Harder       Lynch        Pellow       Van Dellen
Bradley      Hasskamp     Macklin      Pelowski     Van Engen
Brown        Holsten      Mahon        Perlt        Vickerman
Carlson      Hugoson      Mares        Peterson     Warkentin
Carruthers   Jefferson    Marko        Pugh         Weaver
Commers      Jennings     McElroy      Rest         Wenzel
Cooper       Johnson, A.  Milbert      Rostberg     Winter
Daggett      Johnson, R.  Molnau       Rukavina     Worke
Dauner       Johnson, V.  Mulder       Sarna        Workman
Davids       Kalis        Murphy       Schumacher   Sp.Anderson,I
Dehler       Kinkel       Ness         Simoneau     
Delmont      Knight       Olson, E.    Smith        
Dorn         Knoblach     Onnen        Solberg      
Farrell      Koppendrayer Orenstein    Stanek       

Broecker     Haas         Long         Orfield      Wagenius
Clark        Huntley      Lourey       Ozment       Wejcman
Dempsey      Jaros        Mariani      Rhodes       Wolf 
Entenza      Kahn         McCollum     Seagren      
Erhardt      Kelley       McGuire      Skoglund     
Greenfield   Leighton     Olson, M.    Tompkins     
Greiling     Leppik       Opatz        Tuma         

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 immediately preceding General Orders for today, Thursday, April 13, 1995:

H. F. Nos. 787 and 1573; S. F. Nos. 1023, 381 and 155; H. F. Nos. 1450 and 1184; and S. F. No. 644.

H. F. No. 787 was reported to the House.

There being no objection, H. F. No. 787 was continued on Special Orders.

H. F. No. 1573 was reported to the House.

Kelley moved that H. F. No. 1573 be continued on Special Orders. The motion prevailed.

S. F. No. 1023, A bill for an act relating to public lands; notice requirements for sales of tax-forfeited lands; leasing of tax-forfeited lands; roads used by counties on tax-forfeited lands; amending Minnesota Statutes 1994, sections 282.02; and 282.04, subdivision 1, and by adding a subdivision.

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 124 yeas and 0 nays as follows:

Those who voted in the affirmative were:

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

S. F. No. 381, A bill for an act relating to the military; providing greater flexibility in appointment of members of the armory building commission; authorizing the state armory building commission to use funds for construction; clarifying which municipalities may provide sites for armories; changing provisions for disposal of unused armory sites; clarifying authority for levying taxes for armory construction; clarifying the authority for conveyance of armories to the state; amending Minnesota Statutes 1994, sections 193.142, subdivisions 1, 2, and 3; 193.143; 193.144, subdivisions 1, 2, and 6; 193.145, subdivisions 2, 4, and 5; and 193.148.

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 128 yeas and 0 nays as follows:

Those who voted in the affirmative were:

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

S. F. No. 155 was reported to the House.

Tunheim moved to amend S. F. No. 155, the unofficial engrossment, as follows:

Page 2, after line 1, insert:

"Sec. 3. [EFFECTIVE DATE.]

Sections 1 and 2 are effective the day following final enactment."

The motion prevailed and the amendment was adopted.

Ozment moved to amend S. F. No. 155, the unofficial engrossment, as amended, as follows:

Page 1, line 9, after "(a)" strike the language through the comma

Page 1, line 17, after "a" insert "Swedish goshawk, bal-chartin, or verbail leg-hold"

Page 1, line 18, strike "prescribed" and insert "described"

Page 1, line 19, after the period, insert "Persons trapping under this paragraph may receive appropriate information on the permitted traps through the commissioner."

Page 1, line 21, delete "shall" and insert "must"

Page 1, line 22, after the period, insert "Persons releasing uninjured birds must notify the commissioner or a conservation officer on when the owl was released and where."

The motion did not prevail and the amendment was not adopted.

S. F. No. 155, A bill for an act relating to wild animals; authorizing poultry farmers to trap great horned owls; amending Minnesota Statutes 1994, section 97B.705.

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 82 yeas and 45 nays as follows:

Those who voted in the affirmative were:

Anderson, B. Garcia       Koppendrayer Ostrom       Sykora
Bertram      Girard       Kraus        Otremba      Tompkins
Bettermann   Goodno       Lieder       Ozment       Tuma
Bishop       Haas         Lindner      Paulsen      Tunheim
Boudreau     Hackbarth    Lourey       Pawlenty     Van Engen
Bradley      Harder       Lynch        Pellow       Vickerman
Brown        Hasskamp     Macklin      Pelowski     Warkentin
Commers      Holsten      Mahon        Perlt        Wejcman
Cooper       Hugoson      Marko        Peterson     Wenzel
Daggett      Jefferson    McElroy      Rostberg     Winter
Dauner       Jennings     Molnau       Sarna        Wolf
Davids       Johnson, R.  Mulder       Seagren      Worke
Dehler       Johnson, V.  Ness         Smith        Workman
Dempsey      Kalis        Olson, E.    Solberg      Sp.Anderson,I
Dorn         Kinkel       Olson, M.    Sviggum      
Finseth      Knight       Onnen        Swenson, D.  
Frerichs     Knoblach     Osskopp      Swenson, H.  

Abrams       Farrell      Leighton     Murphy       Schumacher
Broecker     Greiling     Leppik       Opatz        Simoneau
Carlson      Huntley      Long         Orenstein    Skoglund
Carruthers   Jaros        Luther       Orfield      Stanek
Clark        Johnson, A.  Mares        Osthoff      Tomassoni
Dawkins      Kahn         Mariani      Pugh         Trimble
Delmont      Kelley       McCollum     Rest         Van Dellen
Entenza      Krinkie      McGuire      Rhodes       Wagenius
Erhardt      Larsen       Milbert      Rukavina     Weaver 

H. F. No. 1450, A bill for an act relating to health; organ donations; amending the living will form to include provisions for organ donations; allowing a durable power of attorney for health care to include provisions for organ donations; amending Minnesota Statutes 1994, sections 145B.04; and 145C.05, subdivision 2.

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 127 yeas and 0 nays as follows:

Those who voted in the affirmative were:

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

H. F. No. 1184 was reported to the House.

Jennings moved that H. F. No. 1184 be continued on Special Orders. The motion prevailed.

S. F. No. 644, A bill for an act relating to state lands; modifying the provisions of a land sale to the city of Anoka; amending Laws 1991, chapter 185, section 2.

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 118 yeas and 1 nay as follows:

Those who voted in the affirmative were:

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

Hasskamp                  

S. F. No. 144 was reported to the House.

Krinkie moved to amend S. F. No. 144 as follows:

Page 4, delete section 4

Amend the title accordingly

The motion did not prevail and the amendment was not adopted.

S. F. No. 144, A bill for an act relating to traffic regulations; limiting access to data on holders of disabled parking certificates; modifying provisions governing display and use of certificates; amending Minnesota Statutes 1994, sections 13.69, subdivision 1; and 169.345, subdivisions 1, 3, and 4.

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 0 nays as follows:

Those who voted in the affirmative were:

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

H. F. No. 1645 was reported to the House.

Olson, M., moved to amend H. F. No. 1645, the first engrossment, as follows:

Page 3, line 28, after "EXTERIOR" insert "WOOD"

Page 3, line 29, after "exterior" insert "wood"

The motion prevailed and the amendment was adopted.

Rukavina, Bakk and Johnson, R., moved to amend H. F. No. 1645, the first engrossment, as amended, as follows:

Page 4, after line 2, insert:

"Notwithstanding other provisions of the code or this paragraph to the contrary, the decking surface and upper portions of ground level exterior wood decks, patios, and balconies of owner-occupied single family houses may be constructed of any kind of wood. A person who sells a house with a deck, patio, or balcony any part of which is built of wood that does not comply with the requirements of the building code or clauses (1) to (3) must notify the buyer of the noncompliance and of the kinds of wood used in the deck, patio, or balcony."

The motion did not prevail and the amendment was not adopted.

H. F. No. 1645, A bill for an act relating to commerce; specifying kinds of wood for certain exterior construction applications; amending Minnesota Statutes 1994, section 16B.61, subdivision 3.

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 109 yeas and 20 nays as follows:

Those who voted in the affirmative were:

Abrams       Erhardt      Larsen       Olson, M.    Solberg
Anderson, B. Farrell      Leighton     Onnen        Stanek
Bertram      Finseth      Leppik       Opatz        Sviggum
Bettermann   Frerichs     Lieder       Orenstein    Swenson, D.
Bishop       Girard       Lindner      Orfield      Swenson, H.
Boudreau     Goodno       Long         Osskopp      Sykora
Bradley      Greenfield   Lourey       Osthoff      Trimble
Broecker     Greiling     Luther       Ostrom       Tuma
Brown        Haas         Lynch        Otremba      Tunheim
Carlson      Hackbarth    Macklin      Ozment       Van Dellen
Carruthers   Harder       Mahon        Paulsen      Van Engen
Clark        Holsten      Mares        Pawlenty     Vickerman
Commers      Hugoson      Mariani      Pellow       Wagenius
Cooper       Jennings     McCollum     Pelowski     Warkentin
Daggett      Johnson, V.  McElroy      Peterson     Weaver
Davids       Kahn         McGuire      Pugh         Wejcman
Dawkins      Kelley       Milbert      Rhodes       Wenzel
Dehler       Knight       Molnau       Rostberg     Winter
Delmont      Knoblach     Mulder       Schumacher   Wolf
Dempsey      Koppendrayer Murphy       Seagren      Worke
Dorn         Kraus        Ness         Simoneau     Workman 
Entenza      Krinkie      Olson, E.    Skoglund     

Bakk         Jaros        Kinkel       Sarna        
Dauner       Jefferson    Marko        Smith        
Garcia       Johnson, A.  Perlt        Tomassoni    
Hasskamp     Johnson, R.  Rest         Tompkins     
Huntley      Kalis        Rukavina     Sp.Anderson,I

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 name of Stanek be added as an author on H. F. No. 266. The motion prevailed.

Pawlenty moved that his name be stricken as an author on H. F. No. 641. The motion prevailed.

Milbert moved that the name of Dehler be added as an author on H. F. No. 953. The motion prevailed.

Greiling moved that the name of McGuire be added as an author on H. F. No. 1246. The motion prevailed.

Knoblach moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Tuesday, April 11, 1995, when the vote was taken on the final passage of H. F. No. 1567, as amended." The motion prevailed.

Marko moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 12, 1995, when the vote was taken on the final passage of H. F. No. 1678." The motion prevailed.

Milbert moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Wednesday, April 12, 1995, when the vote was taken on the final passage of S. F. No. 172." The motion prevailed.

Carruthers moved that H. F. No. 797, now on Technical General Orders, be re-referred to the Committee on Ways and Means. The motion prevailed.

Solberg moved that H. F. No. 1483, now on Technical General Orders, be re-referred to the Committee on Ways and Means. The motion prevailed.

Solberg moved that S. F. No. 526, now on General Orders, be re- referred to the Committee on Rules and Legislative Administration. The motion prevailed.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 413:

Wenzel, Lieder and Johnson, V.

Carruthers moved that when the House adjourns today it adjourn until 2:30 p.m., Tuesday, April 18, 1995. The motion prevailed.

Carruthers moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 2:30 p.m., Tuesday, April 18, 1995.

Edward A. Burdick, Chief Clerk, House of Representatives

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