Section 1. [120B.01] [DEFINITIONS.]

For purposes of this chapter, the words defined in section 120.02 have the same meaning.

Sec. 2. Minnesota Statutes 1996, 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 a charter school subject to approval by the state board of education. If a school board elects not to sponsor a charter 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 must sponsor the school according to this section. The school shall must 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 a charter school. The affidavit must state the terms and conditions under which the sponsor would authorize a charter school. The state board must approve or disapprove the sponsor's proposed authorization within 60 days of receipt of the affidavit. Failure to obtain state board approval precludes a sponsor from authorizing the charter school that was the subject of the affidavit.

(c) The operators authorized to organize and operate a school shall must 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.

(d) The granting or renewal of a charter by a sponsoring entity shall must not be conditioned upon the bargaining unit status of the employees of the school.

Sec. 3. Minnesota Statutes 1996, section 120.064, subdivision 4a, is amended to read:

Subd. 4a. [CONVERSION OF EXISTING SCHOOLS.] A school board may convert one or more of its existing schools to charter schools under this section if 90 percent of the full-time teachers at the school sign a petition seeking conversion. The conversion must occur at the beginning of an academic year.

Sec. 4. Minnesota Statutes 1996, section 120.064, subdivision 5, is amended to read:

Subd. 5. [CONTRACT.] The sponsor's authorization for a charter school shall must be in the form of a written contract signed by the sponsor and the board of directors of the charter school. The contract for a charter school shall must be in writing and contain at least the following:

(1) a description of a program that carries out one or more of the purposes in subdivision 1;

(2) specific outcomes pupils are to achieve under subdivision 10;

(3) admission policies and procedures;

(4) management and administration of the school;

(6) how the school will comply with subdivisions 8, 13, 15, and 21;

(7) assumption of liability by the charter school;

(8) types and amounts of insurance coverage to be obtained by the charter school; and

(9) the term of the contract, which may be up to three years.

Sec. 5. Minnesota Statutes 1996, section 120.064, subdivision 7, is amended to read:

Subd. 7. [PUBLIC STATUS; EXEMPTION FROM STATUTES AND RULES.] A charter school is a public school and is part of the state's system of public education. Except as provided in this section, a charter school is exempt from all statutes and rules applicable to a school, a school board, or a school district, although it may elect to comply with one or more provisions of statutes or rules.

Sec. 6. Minnesota Statutes 1997 Supplement, section 120.064, subdivision 8, is amended to read:

Subd. 8. [REQUIREMENTS.] (a) A charter school shall meet all applicable state and local health and safety requirements.

(b) A school sponsored by a school board may be located in any district, unless the school board of the district of the proposed location disapproves by written resolution. If such a school board denies a request to locate within its boundaries a charter school sponsored by another school board, the sponsoring school board may appeal to the state board of education. If the state board authorizes the school, the state board shall must sponsor the school.

(c) A charter school must be nonsectarian in its programs, admission policies, employment practices, and all other operations. A sponsor may not authorize a charter school or program that is affiliated with a nonpublic sectarian school or a religious institution.

(d) Charter schools shall must not be used as a method of providing education or generating revenue for students who are being home-schooled.

(e) The primary focus of a charter school must be to provide a comprehensive program of instruction for at least one grade or age group from five through 18 years of age. Instruction may be provided to people younger than five years and older than 18 years of age.

(f) A charter school may not charge tuition.

(g) A charter school is subject to and shall must comply with chapter 363 and section 126.21.

(h) A charter school is subject to and shall must comply with The Pupil Fair Dismissal Act, sections 127.26 to 127.39, and the Minnesota public school fee law, sections 120.71 to 120.76.

(i) A charter school is subject to the same financial audits, audit procedures, and audit requirements as a school district. The audit must be consistent with the requirements of sections 121.904 to 121.917, except to the extent deviations are necessary because of the program at the school. The department of children, families, and learning, state auditor, or legislative auditor may conduct financial, program, or compliance audits.

(j) A charter school is a school district for the purposes of tort liability under chapter 466.

Sec. 7. Minnesota Statutes 1996, section 120.064, subdivision 9, is amended to read:

Subd. 9. [ADMISSION REQUIREMENTS.] A charter school may limit admission to:

(2) people who are eligible to participate in the graduation incentives program under section 126.22; or

(3) residents of a specific geographic area where the percentage of the population of non-Caucasian people of that area is greater than the percentage of the non-Caucasian population in the congressional district in which the geographic area is located, and as long as the school reflects the racial and ethnic diversity of the specific area.

A charter school shall enroll an eligible pupil who submits a timely application, unless the number of applications exceeds the capacity of a program, class, grade level, or building. In this case, pupils shall must be accepted by lot.

A charter school may not limit admission to pupils on the basis of intellectual ability, measures of achievement or aptitude, or athletic ability.

Sec. 8. Minnesota Statutes 1997 Supplement, section 120.064, subdivision 10, is amended to read:

Subd. 10. [PUPIL PERFORMANCE.] A charter school must design its programs to at least meet the outcomes adopted by the state board of education for public school students. In the absence of state board requirements, the school must meet the outcomes contained in the contract with the sponsor. The achievement levels of the outcomes contained in the contract may exceed the achievement levels of any outcomes adopted by the state board for public school students.

Sec. 9. Minnesota Statutes 1996, section 120.064, subdivision 11, is amended to read:

Subd. 11. [EMPLOYMENT AND OTHER OPERATING MATTERS.] A charter school shall must employ or contract with necessary teachers, as defined by section 125.03, subdivision 1, who hold valid licenses to perform the particular service for which they are employed in the school. The school may employ necessary employees who are not required to hold teaching licenses to perform duties other than teaching and may contract for other services. The school may discharge teachers and nonlicensed employees.

The board of directors also shall decide matters related to the operation of the school, including budgeting, curriculum and operating procedures.

Sec. 10. Minnesota Statutes 1996, section 120.064, subdivision 12, is amended to read:

Subd. 12. [PUPILS WITH A DISABILITY.] A charter school must comply with sections 120.03 and 120.17 and rules relating to the education of pupils with a disability as though it were a school district.

Sec. 11. Minnesota Statutes 1996, section 120.064, subdivision 13, is amended to read:

Subd. 13. [LENGTH OF SCHOOL YEAR.] A charter school shall must provide instruction each year for at least the number of days required by section 120.101, subdivision 5. It may provide instruction throughout the year according to sections 120.59 to 120.67 or 121.585.

Sec. 12. Minnesota Statutes 1996, section 120.064, subdivision 14, is amended to read:

Subd. 14. [REPORTS.] A charter school must report at least annually to its sponsor and the state board of education the information required by the sponsor or the state board. The reports are public data under chapter 13.

Sec. 13. Minnesota Statutes 1997 Supplement, section 120.064, subdivision 14a, is amended to read:

Sec. 14. Minnesota Statutes 1996, section 120.064, subdivision 15, is amended to read:

Subd. 15. [TRANSPORTATION.] (a) By July 1 of each year, a charter school shall must notify the district in which the school is located and the department of children, families, and learning if it will provide transportation for pupils enrolled at in the school for the fiscal year.

(b) If a charter school elects to provide transportation for pupils, the transportation shall must be provided by the charter school within the district in which the charter school is located. The state shall must pay transportation aid to the charter school according to section 124.248, subdivision 1a.

For pupils who reside outside the district in which the charter school is located, the charter school is not required to provide or pay for transportation between the pupil's residence and the border of the district in which the charter school is located. A parent may be reimbursed by the charter school for costs of transportation from the pupil's residence to the border of the district in which the charter school is located if the pupil is from a family whose income is at or below the poverty level, as determined by the federal government. 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.

At the time a pupil enrolls in a charter school, the charter school shall must provide the parent or guardian with information regarding the transportation.

(c) If a charter school does not elect to provide transportation, transportation for pupils enrolled at the school shall must be provided by the district in which the school is located, according to sections 120.062, subdivision 9, and 123.39, subdivision 6, for a pupil residing in the same district in which the charter school is located. Transportation may be provided by the district in which the school is located, according to sections 120.062, subdivision 9, and 123.39, subdivision 6, for a pupil residing in a different district.

Sec. 15. Minnesota Statutes 1996, section 120.064, subdivision 17, is amended to read:

Subd. 17. [INITIAL COSTS.] A sponsor may authorize a charter school before the applicant has secured its space, equipment, facilities, and personnel if the applicant indicates the authority is necessary for it to raise working capital. A sponsor may not authorize a school before the state board of education has approved the authorization.

Sec. 16. Minnesota Statutes 1996, section 120.064, subdivision 19, is amended to read:

Subd. 19. [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a teacher employed by a school district makes a written request for an extended leave of absence to teach at a charter school, the school district must grant the leave. The school district must grant a leave for any number of years requested by the teacher, and must extend the leave at the teacher's request. The school district may require that the request for a leave or extension of leave be made up to 90 days before the teacher would otherwise have to report for duty. Except as otherwise provided in this subdivision and except for section 125.60, subdivision 6a, the leave is governed by section 125.60, including, but not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.

During a leave, the teacher may continue to aggregate benefits and credits in the teachers' retirement association account by paying both the employer and employee contributions based upon the annual salary of the teacher for the last full pay period before the leave began. The retirement association may impose reasonable requirements to efficiently administer this subdivision.

Sec. 17. Minnesota Statutes 1996, section 120.064, subdivision 20, is amended to read:

Sec. 18. Minnesota Statutes 1997 Supplement, section 120.064, subdivision 20a, is amended to read:

Subd. 20a. [TEACHER AND OTHER EMPLOYEE RETIREMENT.] (a) Teachers in a charter school shall must be public school teachers for the purposes of chapters 354 and 354a.

(b) Except for teachers under paragraph (a), employees in a charter school shall must be public employees for the purposes of chapter 353.

Sec. 19. Minnesota Statutes 1996, section 120.064, subdivision 21, is amended to read:

Subd. 21. [CAUSES FOR NONRENEWAL OR TERMINATION.] (a) The duration of the contract with a sponsor shall must be for the term contained in the contract according to subdivision 5. The sponsor may or may not renew a contract at the end of the term for any ground listed in paragraph (b). A sponsor may unilaterally terminate a contract during the term of the contract for any ground listed in paragraph (b). At least 60 days before not renewing or terminating a contract, the sponsor shall notify the board of directors of the charter school of the proposed action in writing. The notice shall state the grounds for the proposed action in reasonable detail and that the charter school's board of directors may request in writing an informal hearing before the sponsor within 14 days of receiving notice of nonrenewal or termination of the contract. Failure by the board of directors to make a written request for a hearing within the 14-day period shall be treated as acquiescence to the proposed action. Upon receiving a timely written request for a hearing, the sponsor shall give reasonable notice to the charter school's board of directors of the hearing date. The sponsor shall conduct an informal hearing before taking final action. The sponsor shall take final action to renew or not renew a contract by the last day of classes in the school year. If the sponsor is a local school board, the school's board of directors may appeal the sponsor's decision to the state board of education.

(b) A contract may be terminated or not renewed upon any of the following grounds:

(1) failure to meet the requirements for pupil performance contained in the contract;

(2) failure to meet generally accepted standards of fiscal management;

(3) for violations of law; or

(4) other good cause shown.

If a contract is terminated or not renewed, the school shall must be dissolved according to the applicable provisions of chapter 308A or 317A.

Sec. 20. Minnesota Statutes 1996, section 120.064, subdivision 22, is amended to read:

Subd. 22. [PUPIL ENROLLMENT.] If a contract is not renewed or is terminated according to subdivision 21, a pupil who attended the school, siblings of the pupil, or another pupil who resides in the same place as the pupil may enroll in the resident district or may submit an application to a nonresident district according to section 120.062 at any time. Applications and notices required by section 120.062 shall must be processed and provided in a prompt manner. The application and notice deadlines in section 120.062 do not apply under these circumstances.

Sec. 21. Minnesota Statutes 1996, section 120.064, subdivision 24, is amended to read:

Sec. 22. Minnesota Statutes 1996, section 120.17, subdivision 1, is amended to read:

Subdivision 1. [SPECIAL INSTRUCTION FOR CHILDREN WITH A DISABILITY.] Every district shall must provide special instruction and services, either within the district or in another district, for children with a disability who are residents of the district and who are disabled as set forth in section 120.03. Notwithstanding any age limits in laws to the contrary, special instruction and services must be provided from birth until September 1 after the child with a disability becomes 22 years old but shall not extend beyond secondary school or its equivalent, except as provided in section 126.22, subdivision 2. Local health, education, and social service agencies shall must refer children under age five who are known to need or suspected of needing special instruction and services to the school district. Districts with less than the minimum number of eligible children with a disability as determined by the state board shall must cooperate with other districts to maintain a full range of programs for education and services for children with a disability. This subdivision does not alter the compulsory attendance requirements of section 120.101.

Sec. 23. Minnesota Statutes 1996, section 120.17, subdivision 1b, is amended to read:

Subd. 1b. [HIGH SCHOOL DIPLOMA.] Upon completion of secondary school or the equivalent, a pupil with a disability who satisfactorily attains the objectives in the pupil's individual education plan shall must be granted a high school diploma that is identical to the diploma granted to a pupil without a disability.

Sec. 24. Minnesota Statutes 1996, section 120.17, subdivision 2, is amended to read:

Subd. 2. [METHOD OF SPECIAL INSTRUCTION.] (a) Special instruction and services for children with a disability must be based on the assessment and individual education plan. The instruction and services may be provided by one or more of the following methods:

(1) in connection with attending regular elementary and secondary school classes;

(2) establishment of special classes;

(3) at the home or bedside of the child;

(4) in other districts;

(5) instruction and services by special education cooperative centers established under this section, or in another member district of the cooperative center to which the resident district of the child with a disability belongs;

(6) in a state residential school or a school department of a state institution approved by the commissioner;

(7) in other states;

(8) by contracting with public, private, or voluntary agencies;

(9) for children under age five and their families, programs and services established through collaborative efforts with other agencies;

(10) for children under age five and their families, programs in which children with a disability are served with children without a disability; and

(11) any other method approved by the commissioner.

(b) Preference shall be given to providing special instruction and services to children under age three and their families in the residence of the child with the parent or primary caregiver, or both, present.

and services shall must notify the child's district of residence before the child's individual education plan is developed and shall must provide the district of residence an opportunity to participate in the plan's development. The district of residence must inform the parents of the child about the methods of instruction that are available.

(d) Paragraphs (e) to (i) may be cited as the "Blind Persons' Literacy Rights and Education Act."

(e) The following definitions apply to paragraphs (f) to (i).

"Blind student" means an individual who is eligible for special educational services and who:

(1) has a visual acuity of 20/200 or less in the better eye with correcting lenses or has a limited field of vision such that the widest diameter subtends an angular distance of no greater than 20 degrees; or

(2) has a medically indicated expectation of visual deterioration.

"Braille" means the system of reading and writing through touch commonly known as standard English Braille.

"Individualized education plan" means a written statement developed for a student eligible for special education and services pursuant to this section and section 602(a)(20) of part A of the Individuals with Disabilities Education Act, United States Code, title 20, section 1401(a).

(f) In developing an individualized education plan for each blind student the presumption must be that proficiency in Braille reading and writing is essential for the student to achieve satisfactory educational progress. The assessment required for each student must include a Braille skills inventory, including a statement of strengths and deficits. Braille instruction and use are not required by this paragraph if, in the course of developing the student's individualized education program, team members concur that the student's visual impairment does not affect reading and writing performance commensurate with ability. This paragraph does not require the exclusive use of Braille if other special education services are appropriate to the student's educational needs. The provision of other appropriate services does not preclude Braille use or instruction. Instruction in Braille reading and writing shall must be available for each blind student for whom the multidisciplinary team has determined that reading and writing is appropriate.

(g) Instruction in Braille reading and writing must be sufficient to enable each blind student to communicate effectively and efficiently with the same level of proficiency expected of the student's peers of comparable ability and grade level.

(h) The student's individualized education plan must specify:

(1) the results obtained from the assessment required under paragraph (f);

(2) how Braille will be implemented through integration with other classroom activities;

(3) the date on which Braille instruction will begin;

(4) the length of the period of instruction and the frequency and duration of each instructional session;

(5) the level of competency in Braille reading and writing to be achieved by the end of the period and the objective assessment measures to be used; and

(6) if a decision has been made under paragraph (f) that Braille instruction or use is not required for the student:

(i) a statement that the decision was reached after a review of pertinent literature describing the educational benefits of Braille instruction and use; and

(i) Instruction in Braille reading and writing is a service for the purpose of special education and services under this section.

(j) Paragraphs (e) to (i) shall must not be construed to supersede any rights of a parent or guardian of a child with a disability under federal or state law.

Sec. 25. Minnesota Statutes 1996, section 120.17, subdivision 3, is amended to read:

Subd. 3. [RULES OF THE STATE BOARD.] (a) The state board shall promulgate must adopt rules relative to qualifications of essential personnel, courses of study, methods of instruction, pupil eligibility, size of classes, rooms, equipment, supervision, parent consultation, and any other rules it deems necessary for instruction of children with a disability. These rules shall must provide standards and procedures appropriate for the implementation of and within the limitations of subdivisions 3a and 3b. These rules shall must also provide standards for the discipline, control, management, and protection of children with a disability. The state board shall must not adopt rules for pupils served in level 1, 2, or 3, as defined in Minnesota Rules, part 3525.2340, establishing either case loads or the maximum number of pupils that may be assigned to special education teachers. The state board, in consultation with the departments of health and human services, shall must adopt permanent rules for instruction and services for children under age five and their families. These rules are binding on state and local education, health, and human services agencies. The state board shall must adopt rules to determine eligibility for special education services. The rules shall must include procedures and standards by which to grant variances for experimental eligibility criteria. The state board shall must, according to section 14.05, subdivision 4, notify a district applying for a variance from the rules within 45 calendar days of receiving the request whether the request for the variance has been granted or denied. If a request is denied, the board shall must specify the program standards used to evaluate the request and the reasons for denying the request.

(b) The state's regulatory scheme should support schools by assuring that all state special education rules adopted by the state board of education result in one or more of the following outcomes:

(1) increased time available to teachers for educating students through direct and indirect instruction;

(2) consistent and uniform access to effective education programs for students with disabilities throughout the state;

(3) reduced inequalities, conflict, and court actions related to the delivery of special education instruction and services for students with disabilities;

(4) clear expectations for service providers and for students with disabilities;

(5) increased accountability for all individuals and agencies that provide instruction and other services to students with disabilities;

(6) greater focus for the state and local resources dedicated to educating students with disabilities; and

(7) clearer standards for evaluating the effectiveness of education and support services for students with disabilities.

Sec. 26. Minnesota Statutes 1996, section 120.17, subdivision 3a, is amended to read:

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

as possible within the community. By grade 9 or age 14, the plan shall must address the student's needs for transition from secondary services to post-secondary education and training, employment, community participation, recreation, and leisure and home living. The plan must include a statement of the needed transition services, including a statement of the interagency responsibilities or linkages or both before secondary services are concluded;

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

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

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

(5) in accordance with recognized professional standards, testing and evaluation materials, and procedures utilized used 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. 27. Minnesota Statutes 1996, section 120.17, subdivision 3b, is amended to read:

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

(a) Parents and guardians shall must 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 must 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 paragraph (e) at the district's initiative;.

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

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

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

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

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

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

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

The hearing shall must take place before an impartial hearing officer mutually agreed to by the school board and the parent or guardian. Within four business days of the receipt of the request for the hearing, if the parties have not agreed on the hearing officer, the school board shall must request the commissioner to appoint a hearing officer. The school board shall must include with the request the name of the person requesting the hearing, the name of the student, the attorneys involved, if any, and the date the hearing request was received. The hearing officer shall must 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 that 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 must be at district expense. The proceedings shall must 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 paragraph (e) shall be rendered not more than 45 calendar days from the date of the receipt of the request for the hearing, except that hearing officers are encouraged to accelerate the timeline to 30 days for children birth through two whose needs change rapidly and require quick resolution of complaints. A hearing officer may not grant specific extensions of time beyond the 45-day period unless requested by either party for good cause shown on the record. The decision of the hearing officer shall be is binding on all parties unless appealed to the commissioner by the parent; guardian; school board of the district where the child resides pursuant to clause paragraph (g); and also in the case of children birth through two, by the county board.

The local decision shall must:

(1) be in writing;

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

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

If the decision is appealed, a written transcript of the hearing shall must be made by the school district and provided by the district to the parties involved and the hearing review officer within five calendar days of the filing of the appeal. The hearing review officer shall must conduct an appellate review and issue a final independent decision based on an impartial review of the local decision and the entire record within 30 calendar days after the filing of the appeal. However, the hearing review officer shall must 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 must be an impartial due process hearing but shall be is deemed not to be a contested case hearing for purposes of chapter 14. The hearing review officer may grant specific extensions of time beyond the 30-day period at the request of any party for good cause shown on the record.

The final decision shall must:

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

(i) The commissioner of children, families, and learning shall must 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;

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

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

(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 must remain in the child's current educational placement and shall must not be denied initial admission to school.

(l) The child's school district of residence, a resident district, and providing district shall must 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 must schedule and hold a prehearing conference. At that conference, or later, the hearing officer may take any appropriate action that a court might may 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 is deemed to be an employee of the state under section 3.732 for the purposes of section 3.736 only.

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

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

Sec. 28. Minnesota Statutes 1996, section 120.17, subdivision 3d, is amended 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 3 through 21 may be eligible for interagency services, the district may request that the county of residence provide a representative to the initial assessment or reassessment team meeting or the first individual education plan team meeting following the assessment or reassessment. The district may 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 shall 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. The individual education plan team and the county representative shall must 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 must 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 service coordinator responsibilities and services, and a description of activities for obtaining third-party payment for eligible services, including medical assistance payments.

Sec. 29. Minnesota Statutes 1996, section 120.17, subdivision 4, is amended to read:

When a district provides instruction and services in a day program outside the district of residence, the district of residence shall be is responsible for providing transportation. When a district provides instruction and services requiring board and lodging or placement in a residential program outside the district of residence, the nonresident district in which the child is placed shall be is responsible for providing transportation. Transportation costs shall be paid by the district responsible for providing transportation and the state shall pay transportation aid to that district.

For the purposes of this section, any school district may enter into an agreement, upon mutually agreed upon terms and conditions which are mutually agreed upon, to provide special instruction and services for children with a disability. In that event, one of the participating units may employ and contract with necessary qualified personnel to offer services in the several districts. Each participating unit shall must reimburse the employing unit a proportionate amount of the actual cost of providing the special instruction and services, less the amount of state special education aid, which shall be claimed in full by the employing district.

Sec. 30. Minnesota Statutes 1996, section 120.17, subdivision 4a, is amended to read:

Subd. 4a. [ATTENDANCE IN ANOTHER DISTRICT.] No resident of a district who is eligible for special instruction and services pursuant to this section shall may be denied provision of this instruction and service because of attending a public school in another school district pursuant to section 123.39, subdivision 5, if the attendance is not subject to section 120.075, 120.0751, or 120.0752. If the pupil attends a public school located in a contiguous district and the district of attendance does not provide special instruction and services, the district of residence shall must provide necessary transportation for the pupil between the boundary of the district of residence and the educational facility where special instruction and services are provided within the district of residence. The district of residence may provide necessary transportation for the pupil between its boundary and the school attended in the contiguous district, but shall must not pay the cost of transportation provided outside the boundary of the district of residence.

Sec. 31. Minnesota Statutes 1996, section 120.17, subdivision 5, is amended to read:

Subd. 5. [SCHOOL OF PARENTS' CHOICE.] Nothing in this chapter shall must be construed as preventing parents of a child with a disability from sending such the child to a school of their choice, if they so elect, subject to admission standards and policies adopted according to chapter 128A, and all other provisions of chapters 120 to 129.

Sec. 32. Minnesota Statutes 1996, section 120.17, subdivision 5a, is amended to read:

Subd. 5a. [SUMMER PROGRAMS.] A district may provide summer programs for children with a disability living within the district and nonresident children temporarily placed in the district pursuant to subdivision 6 or 7. Prior to March 31 or 30 days after the child with a disability is placed in the district, whichever is later, the providing district shall give notice to the district of residence of any nonresident children temporarily placed in the district pursuant to subdivision 6 or 7, of its intention to provide these programs. Notwithstanding any contrary provisions in subdivisions 6 and 7, the school district providing the special instruction and services shall must apply for special education aid for the summer program. The unreimbursed actual cost of providing the program for nonresident children with a disability, including the cost of board and lodging, may be billed to the district of the child's residence and shall must be paid by the resident district. Transportation costs shall must be paid by the district responsible for providing transportation pursuant to subdivision 6 or 7 and transportation aid shall must be paid to that district.

Sec. 33. Minnesota Statutes 1996, section 120.17, subdivision 6, is amended to read:

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

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

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

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

Sec. 34. Minnesota Statutes 1996, section 120.17, subdivision 7, is amended to read:

Subd. 7. [PLACEMENT IN STATE INSTITUTION; RESPONSIBILITY.] (a) Responsibility for special instruction and services for a child with a disability placed in a state institution on a temporary basis shall must be determined in the following manner:

(a) (1) the legal residence of such the child shall be is the school district in which the child's parent resides, if living, or the child's guardian.; and

(b) (2) when the educational needs of such the child can be met through the institutional program, the costs for such the instruction shall must be paid by the department to which the institution is assigned.

(c) (b) When it is determined that such the child can benefit from public school enrollment, provision for such the instruction shall be made in the following manner:

(1) determination of eligibility for special instruction and services shall must be made by the commissioner of children, families, and learning and the commissioner of the department responsible for the institution;

(2) the school district where the institution is located shall be is responsible for providing transportation and an appropriate educational program for the child and shall must make a tuition charge to the child's district of residence for the actual cost of providing the program; and

(3) the district of the child's residence shall pay the tuition and other program costs excluding transportation costs and may claim general education aid for the child. Transportation costs shall must be paid by the district where the institution is located and the state shall must pay transportation aid to that district.

Sec. 35. Minnesota Statutes 1996, section 120.17, subdivision 7a, is amended to read:

Subd. 7a. [ATTENDANCE AT SCHOOL FOR THE DISABLED.] Responsibility for special instruction and services for a visually disabled or hearing impaired child attending the Minnesota state academy for the deaf or the Minnesota state academy for the blind shall must be determined in the following manner:

(b) When it is determined pursuant to section 128A.05, subdivision 1 or 2, that the child is entitled to attend either school, the state board shall must provide the appropriate educational program for the child. The state board shall must make a tuition charge to the child's district of residence for the cost of providing the program. The amount of tuition charged shall must not exceed the basic revenue of the district for that child, for the amount of time the child is in the program. For purposes of this subdivision, "basic revenue" has the meaning given it in section 124A.22, subdivision 2. The district of the child's residence shall must pay the tuition and may claim general education aid for the child. Tuition received by the state board, except for tuition received under clause paragraph (c), shall must be deposited in the state treasury as provided in clause paragraph (g).

(c) In addition to the tuition charge allowed in clause paragraph (b), the academies may charge the child's district of residence for the academy's unreimbursed cost of providing an instructional aide assigned to that child, if that aide is required by the child's individual education plan. Tuition received under this clause paragraph must be used by the academies to provide the required service.

(d) When it is determined that the child can benefit from public school enrollment but that the child should also remain in attendance at the applicable school, the school district where the institution is located shall must provide an appropriate educational program for the child and shall must make a tuition charge to the state board for the actual cost of providing the program, less any amount of aid received pursuant to section 124.32. The state board shall must pay the tuition and other program costs including the unreimbursed transportation costs. Aids for children with a disability shall must be paid to the district providing the special instruction and services. Special transportation shall must be provided by the district providing the educational program and the state shall must reimburse such that district within the limits provided by law.

(e) Notwithstanding the provisions of clauses paragraphs (b) and (d), the state board may agree to make a tuition charge for less than the amount specified in clause paragraph (b) for pupils attending the applicable school who are residents of the district where the institution is located and who do not board at the institution, if that district agrees to make a tuition charge to the state board for less than the amount specified in clause paragraph (d) for providing appropriate educational programs to pupils attending the applicable school.

(f) Notwithstanding the provisions of clauses paragraphs (b) and (d), the state board may agree to supply staff from the Minnesota state academy for the deaf and the Minnesota state academy for the blind to participate in the programs provided by the district where the institutions are located when the programs are provided to students in attendance at the state schools.

(g) On May 1 of each year, the state board shall count the actual number of Minnesota resident kindergarten and elementary students and the actual number of Minnesota resident secondary students enrolled and receiving education services at the Minnesota state academy for the deaf and the Minnesota state academy for the blind. The state board shall deposit in the state treasury an amount equal to all tuition received less:

(1) the total number of students on May 1 less 175, times the ratio of the number of kindergarten and elementary students to the total number of students on May 1, times the general education formula allowance; plus

(2) the total number of students on May 1 less 175, times the ratio of the number of secondary students on May 1 to the total number of students on May 1, times 1.3, times the general education formula allowance.

(h) The sum provided by the calculation in clause paragraph (g), subclauses clauses (1) and (2), must be deposited in the state treasury and credited to the general operation account of the academy for the deaf and the academy for the blind.

(i) There is annually appropriated to the department of children, families, and learning for the Faribault academies the tuition amounts received and credited to the general operation account of the academies under this section. A balance in an appropriation under this paragraph does not cancel but is available in successive fiscal years.

Sec. 36. Minnesota Statutes 1996, section 120.17, subdivision 8a, is amended to read:

Subd. 8a. [RESIDENCE OF CHILD UNDER SPECIAL CONDITIONS.] The legal residence of a child with a disability placed in a foster facility for care and treatment when:

(2) parent or guardian is not living within the state;

(3) no other school district residence can be established; or

(4) parent or guardian having legal custody of the child is an inmate of a Minnesota correctional facility or is a resident of a halfway house under the supervision of the commissioner of corrections;

shall be is the school district in which the child resides. The school board of the district of residence shall must provide the same educational program for such the child as it provides for all resident children with a disability in the district.

Sec. 37. Minnesota Statutes 1996, section 120.17, subdivision 9, is amended to read:

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

Sec. 38. Minnesota Statutes 1996, section 120.17, subdivision 10, is amended to read:

Subd. 10. [NONRESIDENT EDUCATION; BILLING.] All tuition billing for the education of nonresident children pursuant to this section shall must be done on uniform forms prescribed by the commissioner. The billing shall contain an itemized statement of costs which that are being charged to the district of residence. One copy of each such billing shall must be filed with the commissioner.

Sec. 39. Minnesota Statutes 1996, section 120.17, subdivision 16, is amended to read:

Subd. 16. [COMMUNITY TRANSITION INTERAGENCY COMMITTEE.] A district, group of districts, or special education cooperative, in cooperation with the county or counties in which the district or cooperative is located, shall must establish a community transition interagency committee for youth with disabilities, beginning at grade 9 or age equivalent, and their families. Members of the committee shall must consist of representatives from special education;, vocational and regular education;, community education;, post-secondary education and training institutions;, adults with disabilities who have received transition services if such persons are available;, parents of youth with disabilities;, local business or industry;, rehabilitation services;, county social services;, health agencies;, and additional public or private adult service providers as appropriate. The committee shall must elect a chair and shall must meet regularly. The committee shall must:

(1) identify current services, programs, and funding sources provided within the community for secondary and post-secondary aged youth with disabilities and their families;

(2) facilitate the development of multiagency teams to address present and future transition needs of individual students on their individual education plans;

(3) develop a community plan to include mission, goals, and objectives, and an implementation plan to assure that transition needs of individuals with disabilities are met;

(4) recommend changes or improvements in the community system of transition services;

(6) following procedures determined by the commissioner, prepare a yearly summary assessing the progress of transition services in the community including follow-up of individuals with disabilities who were provided transition services to determine postschool outcomes. The summary must be disseminated to all adult services agencies involved in the planning and to the commissioner of children, families, and learning by October 1 of each year.

Sec. 40. Minnesota Statutes 1996, section 120.17, subdivision 18, is amended to read:

Subd. 18. [AGENCY ACCESS TO NONPUBLIC DATA.] The commissioner of administration shall must prepare a form and disseminate guidelines for state agencies, political subdivisions, and other responsible authorities to use to enable a responsible authority to allow another responsible authority access to data about a child with a disability that is classified as not public. The form and guidelines must be consistent with section 13.05, subdivision 9, and federal law, and are not subject to the rulemaking requirements under chapter 14.

Sec. 41. Minnesota Statutes 1996, section 120.17, subdivision 19, is amended to read:

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

Sec. 42. Minnesota Statutes 1996, section 120.1701, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] For the purposes of this section the following terms have the meaning meanings given them.

(a) "Coordinate" means to provide ready access to a community's services and resources to meet child and family needs.

(b) "Core early intervention services" means services that are available at no cost to children and families. These services include:

(1) identification and referral;

(2) screening;

(3) evaluation;

(4) assessment;

(5) service coordination;

(6) special education and related services provided under section 120.17, subdivision 3a, and United States Code, title 20, section 1401; and

(7) protection of parent and child rights by means of procedural safeguards.

(c) "County board" means a county board established under chapter 375.

(d) "Early intervention record" means any personally identifiable information about a child or the child's family that is generated by the early intervention system, and that pertains to evaluation and assessment, development of an individualized family service plan, and the delivery of early intervention services.

(f) "Early intervention system" means the total effort in the state to meet the needs of eligible children and their families, including, but not limited to:

(1) any public agency in the state that receives funds under the Individuals with Disabilities Education Act, United States Code, title 20, sections 1471 to 1485 (Part H, Public Law Number 102-119);

(2) other state and local agencies administering programs involved in the provision of early intervention services, including, but not limited to:

(i) the Maternal and Child Health program under title V of the Social Security Act, United States Code, title 42, sections 701 to 709;

(ii) the Individuals with Disabilities Education Act, United States Code, title 20, sections 1411 to 1420 (Part B);

(iii) medical assistance under the Social Security Act, United States Code, title 42, section 1396 et seq.;

(iv) the Developmental Disabilities Assistance and Bill of Rights Act, United States Code, title 42, sections 6021 to 6030 (Part B); and

(v) the Head Start Act, United States Code, title 42, sections 9831 to 9852; and

(3) services provided by private groups or third-party payers in conformity with an individualized family service plan.

(g) "Eligibility for Part H" means eligibility for early childhood special education under section 120.03 and Minnesota Rules, part 3525.2335, subpart 1, items A and B.

(h) "Facilitate payment" means helping families access necessary public or private assistance that provides payment for services required to meet needs identified in a service plan, individual education plan (IEP), individual service plan (ISP), or individualized family service plan (IFSP), according to time frames required by the plan. This may also include activities to collect fees for services provided on a sliding fee basis, where permitted by state law.

(i) "Individualized family service plan" or "IFSP" means a written plan for providing services to a child and the child's family.

(j) "Interagency child find systems" means activities developed on an interagency basis with the involvement of interagency early intervention committees and other relevant community groups to actively seek out, identify, and refer infants and young children with, or at risk of, disabilities, and their families.

(k) "Local primary agency" means the agency designated jointly by the school and county board under subdivision 4.

(l) "Parent" means the biological parent with parental rights, adoptive parent, legal guardian, or surrogate parent.

(m) "Part H state plan" means the annual state plan application approved by the federal government under the Individuals with Disabilities Education Act, United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119).

(n) "Pay for" means using federal, state, local, and private dollars available for early intervention services.

(o) "Respite" means short-term, temporary care provided to a child with a disability due to the temporary absence or need for relief of the family member or members or primary caregiver, normally providing the care.

(p) "State lead agency" means the state agency receiving federal funds under the Individuals with Disabilities Education Act, United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119).

Sec. 43. Minnesota Statutes 1997 Supplement, section 120.1701, subdivision 3, is amended to read:

Subd. 3. [STATE INTERAGENCY COORDINATING COUNCIL.] An interagency coordinating council of at least 17, but not more than 25 members is established, in compliance with Public Law Number 102-119, section 682. The members shall must be appointed by the governor. Council members shall must elect the council chair. The representative of the commissioner of children, families, and learning may not serve as the chair. The council shall must be composed of at least five parents, including persons of color, of children with disabilities under age 12, including at least three parents of a child with a disability under age seven, five representatives of public or private providers of services for children with disabilities under age five, including a special education director, county social service director, and a community health services or public health nursing administrator, one member of the senate, one member of the house of representatives, one representative of teacher preparation programs in early childhood-special education or other preparation programs in early childhood intervention, at least one representative of advocacy organizations for children with disabilities under age five, one physician who cares for young children with special health care needs, one representative each from the commissioners of commerce, children, families, and learning, health, human services, and economic security, and a representative from Indian health services or a tribal council. Section 15.059, subdivisions 2 to 5, apply to the council. The council shall must meet at least quarterly.

The council shall must address methods of implementing the state policy of developing and implementing comprehensive, coordinated, multidisciplinary interagency programs of early intervention services for children with disabilities and their families.

The duties of the council include recommending policies to ensure a comprehensive and coordinated system of all state and local agency services for children under age five with disabilities and their families. The policies must address how to incorporate each agency's services into a unified state and local system of multidisciplinary assessment practices, individual intervention plans, comprehensive systems to find children in need of services, methods to improve public awareness, and assistance in determining the role of interagency early intervention committees.

Each year By June 1, the council shall must recommend to the governor and the commissioners of children, families, and learning, health, human services, commerce, and economic security policies for a comprehensive and coordinated system.

Notwithstanding any other law to the contrary, the state interagency coordinating council shall expire expires on June 30, 2001.

Sec. 44. Minnesota Statutes 1996, section 120.1701, subdivision 4, is amended to read:

Subd. 4. [RESPONSIBILITIES OF COUNTY BOARDS AND SCHOOL BOARDS.] (a) It is the joint responsibility of county boards and school boards to coordinate, provide, and pay for appropriate services, and to facilitate payment for services from public and private sources. Appropriate services for children eligible under section 120.03 must be determined in consultation with parents, physicians, and other educational, medical, health, and human services providers. The services provided must be in conformity with an IFSP for each eligible infant and toddler from birth through age two and its family, or an individual education plan (IEP) or individual service plan (ISP) for each eligible child ages three through four.

(b) Appropriate services include family education and counseling, home visits, occupational and physical therapy, speech pathology, audiology, psychological services, special instruction, nursing, respite, nutrition, assistive technology, transportation and related costs, social work, vision services, case management including service coordination under subdivision 8, medical services for diagnostic and evaluation purposes, early identification, and screening, assessment, and health services necessary to enable children with disabilities to benefit from early intervention services.

(c) School and county boards shall coordinate early intervention services. In the absence of agreements established according to subdivision 13, service responsibilities for children birth through age two are as follows:

(2) county boards are required to must provide, pay for, and facilitate payment for noneducational services of social work, psychology, transportation and related costs, nursing, respite, and nutrition services not required under clause (1).

(d) School and county boards may develop an interagency agreement according to subdivision 13 to establish agency responsibility that assures that early intervention services are coordinated, provided, paid for, and that payment is facilitated from public and private sources.

(e) County and school boards shall must jointly determine the primary agency in this cooperative effort and must notify the commissioner of the state lead agency of their decision.

Sec. 45. Minnesota Statutes 1996, section 120.1701, subdivision 5, is amended to read:

Subd. 5. [INTERAGENCY EARLY INTERVENTION COMMITTEES.] (a) A school district, group of districts, or special education cooperative, in cooperation with the health and human service agencies located in the county or counties in which the district or cooperative is located, shall must establish an interagency early intervention committee for children with disabilities under age five and their families. Committees shall must include representatives of local and regional health, education, and county human service agencies;, county boards;, school boards;, early childhood family education programs;, parents of young children with disabilities under age 12;, current service providers;, and may also include representatives from other private or public agencies. The committee shall must elect a chair from among its members and shall must meet at least quarterly.

(b) The committee shall must develop and implement interagency policies and procedures concerning the following ongoing duties:

(1) develop public awareness systems designed to inform potential recipient families of available programs and services;

(2) implement interagency child find systems designed to actively seek out, identify, and refer infants and young children with, or at risk of, disabilities and their families;

(3) establish and evaluate the identification, referral, child and family assessment systems, procedural safeguard process, and community learning systems to recommend, where necessary, alterations and improvements;

(4) assure the development of individualized family service plans for all eligible infants and toddlers with disabilities from birth through age two, and their families, and individual education plans and individual service plans when necessary to appropriately serve children with disabilities, age three and older, and their families and recommend assignment of financial responsibilities to the appropriate agencies. Agencies are encouraged;

(5) encourage agencies to develop individual family service plans for children with disabilities, age three and older;

(5) (6) implement a process for assuring that services involve cooperating agencies at all steps leading to individualized programs;

(6) (7) facilitate the development of a transitional plan if a service provider is not recommended to continue to provide services;

(7) (8) identify the current services and funding being provided within the community for children with disabilities under age five and their families;

(8) (9) develop a plan for the allocation and expenditure of additional state and federal early intervention funds under United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119) and United States Code, title 20, section 631, et seq. (Chapter I, Public Law Number 89-313); and

(c) The local committee shall also:

(1) participate in needs assessments and program planning activities conducted by local social service, health and education agencies for young children with disabilities and their families;

(2) review and comment on the early intervention section of the total special education system for the district, the county social service plan, the section or sections of the community health services plan that address needs of and service activities targeted to children with special health care needs, and the section of the maternal and child health special project grants that address needs of and service activities targeted to children with chronic illness and disabilities; and

(3) prepare a yearly summary on the progress of the community in serving young children with disabilities, and their families, including the expenditure of funds, the identification of unmet service needs identified on the individual family services plan and other individualized plans, and local, state, and federal policies impeding the implementation of this section.

(d) The summary must be organized following a format prescribed by the commissioner of the state lead agency and must be submitted to each of the local agencies and to the state interagency coordinating council by October 1 of each year.

The departments of children, families, and learning, health, and human services must provide assistance to the local agencies in developing cooperative plans for providing services.

Sec. 46. Minnesota Statutes 1996, section 120.1701, subdivision 6, is amended to read:

Subd. 6. [LOCAL PRIMARY AGENCY.] (a) The local primary agency shall must:

(1) facilitate the development of annual fund requests that identify arrangements with other local and regional agencies providing services as part of the state's early childhood intervention system and that result in service availability on a year-round basis, as necessary;

(2) administer funds received through the annual fund request;

(3) provide oversight for data collection efforts;

(4) facilitate completion of interagency early intervention committee duties as indicated in subdivision 5;

(5) request mediation from the state lead agency, if necessary;

(6) request assistance from the state lead agency when disputes between agencies cannot be resolved within 20 calendar days; and

(7) receive written requests from parents for matters that may be resolved through due process hearings.

(b) When the local primary agency is not an education agency, resources distributed under the early intervention fund shall must be transferred from a local educational agency to a noneducation agency using a state provided contract. A local primary agency may budget for indirect costs at an amount not to exceed five percent of the amount allocated from the early intervention fund.

Sec. 47. Minnesota Statutes 1996, section 120.1701, subdivision 7, is amended to read:

Subd. 7. [INDIVIDUALIZED FAMILY SERVICE PLAN.] (a) A team must participate in IFSP meetings to develop the individualized family service plan IFSP. The team shall include:

(1) a parent or parents of the child;

(3) an advocate or person outside of the family, if the parent requests that the person participate;

(4) the service coordinator who has been working with the family since the initial referral, or who has been designated by the public agency to be responsible for implementation of the IFSP; and

(5) a person or persons involved in conducting evaluations and assessments.

(b) The IFSP must include:

(1) information about the child's developmental status;

(2) family information, with the consent of the family;

(3) major outcomes expected to be achieved by the child and the family, that include the criteria, procedures, and timelines;

(4) specific early intervention services necessary to meet the unique needs of the child and the family to achieve the outcomes;

(5) payment arrangements, if any;

(6) medical and other services that the child needs, but that are not required under the Individual with Disabilities Education Act, United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119) including funding sources to be used in paying for those services and the steps that will be taken to secure those services through public or private sources;

(7) dates and duration of early intervention services;

(8) name of the service coordinator;

(9) steps to be taken to support a child's transition from early intervention services to other appropriate services; and

(10) signature of the parent and authorized signatures of the agencies responsible for providing, paying for, or facilitating payment, or any combination of these, for early intervention services.

Sec. 48. Minnesota Statutes 1996, section 120.1701, subdivision 8, is amended to read:

Subd. 8. [SERVICE COORDINATION.] (a) The team developing the individualized family service plan IFSP under subdivision 7 shall must select a service coordinator to carry out service coordination activities on an interagency basis. Service coordination must actively promote a family's capacity and competency to identify, obtain, coordinate, monitor, and evaluate resources and services to meet the family's needs. Service coordination activities include:

(1) coordinating the performance of evaluations and assessments;

(2) facilitating and participating in the development, review, and evaluation of individualized family service plans;

(3) assisting families in identifying available service providers;

(4) coordinating and monitoring the delivery of available services;

(5) informing families of the availability of advocacy services;

(6) coordinating with medical, health, and other service providers;

(8) managing the early intervention record and submitting additional information to the local primary agency at the time of periodic review and annual evaluations; and

(9) notifying a local primary agency when disputes between agencies impact service delivery required by an individualized family service plan IFSP.

(b) A service coordinator must be knowledgeable about children and families receiving services under this section, requirements of state and federal law, and services available in the interagency early childhood intervention system.

Sec. 49. Minnesota Statutes 1996, section 120.1701, subdivision 8a, is amended to read:

Subd. 8a. [EARLY INTERVENTION RESPITE.] The provision of respite services for an eligible child and family shall must be determined in the context of the IFSP development based on the individual needs of the child and family and with consideration given to the following criteria:

(1) severity of the child's disability and needs;

(2) potential risk of out-of-home placement for the child if respite services are not provided;

(3) parental lack of access to informal support systems, including, but not limited to, extended family, supportive friends, and community supports;

(4) presence of factors known to increase family stress, including, but not limited to, family size and presence of another child or family member with a disability;

(5) the availability of other public services provided to the family which that assist the parent or primary caretaker in obtaining relief from caretaking responsibilities; and

(6) the perceived and expressed level of need for respite services by the parent.

Counties are encouraged to make a variety of respite service models available, which may include in or out-of-home respite, family reimbursement programs, and parent-to-parent respite projects.

Sec. 50. Minnesota Statutes 1996, section 120.1701, subdivision 9, is amended to read:

Subd. 9. [EARLY INTERVENTION FLOW-THROUGH DOLLARS.] (a) The state lead agency shall must administer the early intervention account which that consists of federal allocations. The Part H state plan shall must state the amount of federal resources in the early intervention account available for use by local agencies. The state lead agency shall must distribute the funds to the local primary agency based on a December 1 count of the prior year of Part H eligible children for the following purposes:

(1) as provided in Code of Federal Regulations, title 34, part 303.425, to arrange for payment for early intervention services not elsewhere available, or to pay for services during the pendency of a conflict procedure, including mediation, complaints, due process hearings, and interagency disputes; and

(2) to support interagency child find system activities.

(b) The priority purpose for this fund is paragraph (a), clause (1). The local primary agency shall must reallocate resources from the early intervention fund as necessary in order to meet this priority.

(d) Each county board must continue to spend for early intervention services under subdivision 2, paragraph (e), an amount equal to the total county expenditure during the period from January 1, 1993, to December 31, 1993, for these same services. The commissioner of human services, in consultation with the commissioner of health and the association of Minnesota counties, shall must establish a process for determining base year 1993 expenditures.

(e) County boards that have submitted base year 1993 expenditures as required under paragraph (d) are not required to pay any increased cost over the base year 1993 for early intervention services resulting from implementing the early intervention system. Increased costs to county boards may be paid for with early intervention flow-through dollars.

(f) School boards are not required to pay for services defined in subdivision 4, paragraph (c), clause (2).

Sec. 51. Minnesota Statutes 1996, section 120.1701, subdivision 10, is amended to read:

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

Sec. 52. Minnesota Statutes 1996, section 120.1701, subdivision 11, is amended to read:

Subd. 11. [PAYOR OF LAST RESORT.] (a) For fiscal years 1995 and 1996, the state lead agency shall must establish a reserve account from federal sources to pay for services in dispute or to pay for early intervention services when local agencies have exhausted all other public and private funds available for Part H eligible children.

(b) The lead agency shall must report to the legislature by January 1, 1996, regarding county board expenditures for early intervention services and the continuing need and funding of the reserve account.

Sec. 53. Minnesota Statutes 1996, section 120.1701, subdivision 12, is amended to read:

Subd. 12. [MAINTENANCE OF EFFORT.] A county human services agency or county board shall must continue to provide services set forth in their county social service agency plan. The county human services agency or county board shall must serve children with disabilities under age five, and their families, or as specified in the individualized family service plan IFSP for children with disabilities, birth through age two, or the individual service plan of each child. Special instruction and related services for which a child with a disability is eligible under this section are the responsibility of the local school board. It is the joint responsibility of county boards and school boards to coordinate, provide, and pay for all appropriate services required in subdivision 11b and to facilitate payment for services from public and private sources.

Sec. 54. Minnesota Statutes 1996, section 120.1701, subdivision 15, is amended to read:

Subd. 15. [BENEFITS COORDINATION.] The department of health shall must provide technical assistance in a timely manner to service coordinators, parents of children with disabilities, and agencies in situations requiring the coordination of health insurance benefits, or the identification of third-party payor responsibilities to provide necessary health benefits.

Sec. 55. Minnesota Statutes 1996, section 120.1701, subdivision 17, is amended to read:

Subd. 17. [MEDIATION PROCEDURE.] The commissioner of the state lead agency shall must use federal funds to provide mediation for the activities in paragraphs (a) and (b).

(b) The local primary agency may request mediation on behalf of involved agencies when there are disputes between agencies regarding responsibilities to coordinate, provide, pay for, or facilitate payment for early intervention services.

Sec. 56. Minnesota Statutes 1996, section 120.1701, subdivision 19, is amended to read:

Subd. 19. [INTERAGENCY DISPUTE PROCEDURE.] (a) A dispute between a school board and a county board that is responsible for implementing the provisions of subdivision 4 regarding early identification, child and family assessment, service coordination, and IFSP development and implementation shall must be resolved according to this subdivision when the dispute involves services provided to children and families eligible under the Individuals with Disabilities Education Act, United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119).

(b) A dispute occurs when the school board and county board are unable to agree as to who is responsible to coordinate, provide, pay for, or facilitate payment for services from public and private sources.

(c) Written and signed disputes shall must be filed with the local primary agency.

(d) The local primary agency shall have attempted must attempt to resolve the matter with the involved school board and county board and may request mediation from the commissioner of the state lead agency for this purpose.

(e) When interagency disputes have not been resolved within 30 calendar days, the local primary agency shall must request the commissioner of the state lead agency to review the matter with the commissioners of health and human services and make a decision. The commissioner shall must provide a consistent process for reviewing those procedures. The commissioners' decision is binding subject to the right of an aggrieved party to appeal to the state court of appeals.

(f) The local primary agency shall must ensure that eligible children and their families receive early intervention services during resolution of a dispute. While a local dispute is pending, the local primary agency shall must either assign financial responsibility to an agency or pay for the service from the early intervention account under subdivision 9. If in resolving the dispute, it is determined that the assignment of financial responsibility was inappropriate, the responsibility for payment must be reassigned to the appropriate agency and the responsible agency shall must make arrangements for reimbursing any expenditures incurred by the agency originally assigned financial responsibility.

Sec. 57. Minnesota Statutes 1996, section 120.1701, subdivision 20, is amended to read:

Subd. 20. [DUE PROCESS HEARINGS.] The procedures for due process hearings and appeals shall must be the same as those in section 120.17, subdivision 3b. The responsibility for payment of costs and conducting due process hearings and appeals shall be allocated to the appropriate agency in accordance with subdivisions 5, 13, and 16.

Sec. 58. Minnesota Statutes 1996, section 120.1701, subdivision 21, is amended to read:

Subd. 21. [DATA COLLECTION.] By July 1, 1994, the departments of children, families, and learning, health, and human services shall must develop a plan to collect data about which early intervention services are being provided to children and families eligible under the Individuals with Disabilities Education Act, United States Code, title 20, section 1471 et seq. (Part H, Public Law Number 102-119) and sources of payment for those services.

Sec. 59. Minnesota Statutes 1996, section 120.1701, subdivision 22, is amended to read:

(b) The state interagency agreement shall must outline at a minimum the conditions, procedures, purposes, and responsibilities of the participating state and local agencies for the following:

(1) membership, roles, and responsibilities of a state interagency committee for the oversight of priorities and budget allocations under Part H, Public Law Number 102-119, and other state allocations for this program;

(2) child find;

(3) establishment of local interagency agreements;

(4) review by a state interagency committee of the allocation of additional state and federal early intervention funds by local agencies;

(5) fiscal responsibilities of the state and local agencies;

(6) intraagency and interagency dispute resolution;

(7) payor of last resort;

(8) maintenance of effort;

(9) procedural safeguards, including mediation;

(10) complaint resolution;

(11) quality assurance;

(12) data collection;

(13) an annual summary to the state interagency coordinating council regarding conflict resolution activities including disputes, due process hearings, and complaints; and

(14) other components of the state and local early intervention system consistent with Public Law Number 102-119.

Written materials must be developed for parents, IEIC's, and local service providers that describe procedures developed under this section as required by Code of Federal Regulations, title 34, section 303.

Sec. 60. Minnesota Statutes 1996, section 120.172, subdivision 2, is amended to read:

Subd. 2. [STATE PLAN.] The state board of education shall not adopt any provision in the state plan for special education which that reduces the opportunities for parents and school districts to resolve their differences through conciliation.

Sec. 61. Minnesota Statutes 1996, section 120.173, subdivision 1, is amended to read:

Sec. 62. Minnesota Statutes 1996, section 120.173, subdivision 3, is amended to read:

Subd. 3. [EVALUATION.] The application shall must also set forth the review and evaluation procedures to be used by the district addressing at least the following:

(1) the number of pupils with and without a disability served;

(2) the impact of the program on the academic progress and social adjustment of the pupils;

(3) the level of satisfaction teachers, parents, and pupils have with the program;

(4) the effect of the program on the number of referrals for special education, federal chapter 1, and other programs;

(5) the amount of time spent by teachers on procedural activities;

(6) the increased amount of time the pupil is in a regular education classroom; and

(7) cost implications.

Sec. 63. Minnesota Statutes 1996, section 120.173, subdivision 4, is amended to read:

Subd. 4. [REVIEW FOR EXCESS EXPENDITURES.] The commissioner shall must review each application to determine whether the personnel, equipment, supplies, residential aid, and summer school are necessary to meet the district's obligation to provide special instruction and services to children with a disability according to section 120.17. The commissioner shall may not approve revenue for any expenditures determined to be unnecessary.

Sec. 64. Minnesota Statutes 1996, section 120.173, subdivision 6, is amended to read:

Subd. 6. [PUPIL RIGHTS.] A pupil participating in the program must be individually evaluated according to the pupil's actual abilities and needs. A pupil who is eligible for services under section 120.17 is entitled to procedural protections provided under Public Law Number 94-142 in any matter that affects the identification, evaluation, placement, or change in placement of a pupil. The district must ensure the protection of a pupil's civil rights, provide equal educational opportunities, and prohibit discrimination. Failure to comply with this subdivision will at least cause a district to become ineligible to participate in the program. Notwithstanding rules of the state board of education, a pupil's rights under this section cannot be waived by the state board.

Sec. 65. Minnesota Statutes 1997 Supplement, section 120.181, is amended to read:

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

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

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

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

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

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

Sec. 66. Minnesota Statutes 1996, section 120.1811, is amended to read:

120.1811 [RESIDENTIAL TREATMENT FACILITIES; EDUCATION.]

Subdivision 1. [EDUCATIONAL SCREENING.] Secure and nonsecure residential treatment facilities licensed by the department of human services or the department of corrections shall must screen each juvenile who is held in a facility for at least 72 hours, excluding weekends or holidays, using an educational screening tool identified by the department of children, families, and learning, unless the facility determines that the juvenile has a current individual education plan and obtains a copy of it. The department of children, families, and learning shall must develop or identify an education screening tool for use in residential facilities. The tool must include a life skills development component.

Subd. 2. [RULEMAKING.] The state board of education may, in consultation with the commissioners of corrections and human services, make or amend rules relating to education programs in residential treatment facilities, if necessary, to implement this section.

Sec. 67. Minnesota Statutes 1996, section 120.182, is amended to read:

120.182 [SPECIAL EDUCATION DIRECTOR.]

The authority for the selection and employment of the director of a special education cooperative established pursuant to section 120.17 or 471.59 shall be is vested in the governing board of the cooperative. 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 cooperative.

Sec. 68. Minnesota Statutes 1996, section 120.183, is amended to read:

120.183 [INTERAGENCY OFFICE ON TRANSITION SERVICES.]

The commissioner of children, families, and learning shall must establish an interagency office on transition services to:

(1) gather and coordinate data on transition services for secondary age pupils with a disability;

(3) assist agencies in establishing local interagency agreements to assure the necessary services for efficient and appropriate transition from school to work or post-secondary training programs; and

(4) assist regions and local areas in planning interagency in-service training to develop and improve transition services.

Sec. 69. Minnesota Statutes 1996, section 120.185, is amended to read:

120.185 [ACCOMMODATING STUDENTS WITH DISABILITIES.]

A school or school district shall must 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.

Sec. 70. Minnesota Statutes 1996, section 120.188, is amended to read:

120.188 [PURCHASING GUIDELINES.]

Subdivision 1. [RIGHTS OF SCHOOL DISTRICTS TO PURCHASE SCHOOL-OWNED ASSISTIVE TECHNOLOGY.] (a) When a child with a disability exits a school district and enters a new school district, the child's new school district may purchase any assistive technology devices that the child's former school district has purchased on the child's behalf. The child's new school district must notify, in writing, the child's former school district of the intent to purchase the device. The child's new school district must complete a purchase agreement according to section 120.1701, subdivision 10. The child's former school district must respond, in writing, to the request to purchase within 30 days.

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

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

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

Sec. 71. Minnesota Statutes 1996, section 120.189, is amended to read:

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

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

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

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

Sec. 72. Minnesota Statutes 1996, section 120.190, is amended to read:

120.190 [PURCHASE AGREEMENT; PRICE FORMULA.]

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

Sec. 73. Minnesota Statutes 1996, section 120.80, is amended to read:

120.80 [EARLY GRADUATION.]

Subdivision 1. Notwithstanding any law to the contrary, any secondary school student who has completed all required courses may, with the approval of the student, the student's parent or guardian, and local school officials, graduate prior to before the completion of the school year. General education revenue attributable to the student must be paid as though the student was in attendance for the entire year.

Sec. 74. Minnesota Statutes 1996, section 123.3513, is amended to read:

123.3513 [ADVANCED ACADEMIC CREDIT.]

A school district shall must grant academic credit to a pupil attending an accelerated or advanced academic course offered by a higher education institution or a nonprofit public agency other than the district, if the pupil successfully completes the course attended and passes an examination approved by the district. If no comparable course is offered by the district, the commissioner shall determine the number of credits which shall be granted to a pupil who successfully completes and passes the course. If a comparable course is offered by the district, the school board shall must 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.

The 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 class and credits granted shall be included in the pupil's secondary school record.

Sec. 75. Minnesota Statutes 1996, section 123.3514, subdivision 3, is amended to read:

Subd. 3. [DEFINITIONS.] For purposes of this section, an the following terms have the meanings given to them.

(a) "Eligible institution" means a Minnesota public post-secondary institution, a private, nonprofit two-year trade and technical school granting associate degrees, an opportunities industrialization center accredited by the North Central Association of Colleges and Schools, or a private, residential, two-year or four-year, liberal arts, degree-granting college or university located in Minnesota. "Course" means a course or program.

(b) "Course" means a course or program.

Sec. 76. Minnesota Statutes 1997 Supplement, section 123.3514, subdivision 4, is amended to read:

The notice shall must indicate the course and hours of enrollment of that pupil. If the pupil enrolls in a course for post-secondary credit, the institution shall must notify the pupil about payment in the customary manner used by the institution.

Sec. 77. Minnesota Statutes 1997 Supplement, section 123.3514, subdivision 4a, is amended to read:

Subd. 4a. [COUNSELING.] To the extent possible, the school or school district shall must provide counseling services to pupils and their parents or guardian before the pupils enroll in courses under this section to ensure that the pupils and their parents or guardian are fully aware of the risks and possible consequences of enrolling in post-secondary courses. The school or school district shall must provide information on the program including who may enroll, what institutions and courses are eligible for participation, the decision-making process for granting academic credits, financial arrangements for tuition, books and materials, eligibility criteria for transportation aid, available support services, the need to arrange an appropriate schedule, consequences of failing or not completing a course in which the pupil enrolls, the effect of enrolling in this program on the pupil's ability to complete the required high school graduation requirements, and the academic and social responsibilities that must be assumed by the pupils and their parents or guardian. The person providing counseling shall encourage pupils and their parents or guardian to also use available counseling services at the post-secondary institutions before the quarter or semester of enrollment to ensure that anticipated plans are appropriate.

Prior to enrolling in a course, the pupil and the pupil's parents or guardian must sign a form that must be provided by the school or school district and may be obtained from a post-secondary institution stating that they have received the information specified in this subdivision and that they understand the responsibilities that must be assumed in enrolling in this program. The department of children, families, and learning shall must, upon request, provide technical assistance to a school or school district in developing appropriate forms and counseling guidelines.

Sec. 78. Minnesota Statutes 1996, section 123.3514, subdivision 4b, is amended to read:

Subd. 4b. [DISSEMINATION OF INFORMATION; NOTIFICATION OF INTENT TO ENROLL.] By March 1 of each year, a school district shall must provide general information about the program to all pupils in grades 10 and 11. To assist the district in planning, a pupil shall inform the district by March 30 of each year of the pupil's intent to enroll in post-secondary courses during the following school year. A pupil is not bound by notifying or not notifying the district by March 30.

Sec. 79. Minnesota Statutes 1996, section 123.3514, subdivision 4d, is amended to read:

Subd. 4d. [ENROLLMENT PRIORITY.] A post-secondary institution shall give priority to its post-secondary students when enrolling 11th and 12th grade pupils in its courses. A post-secondary institution may provide information about its programs to a secondary school or to a pupil or parent, but it may not advertise or otherwise recruit or solicit the participation on financial grounds, secondary pupils to enroll in its programs. An institution shall must not enroll secondary pupils, for post-secondary enrollment options purposes, in remedial, developmental, or other courses that are not college level. Once a pupil has been enrolled in a post-secondary course under this section, the pupil shall not be displaced by another student.

Sec. 80. Minnesota Statutes 1997 Supplement, section 123.3514, subdivision 4e, is amended to read:

Subd. 4e. [COURSES ACCORDING TO AGREEMENTS.] An eligible pupil, according to subdivision 4, may enroll in a nonsectarian course taught by a secondary teacher or a post-secondary faculty member and offered at a secondary school, or another location, according to an agreement between a public school board and the governing body of an eligible public post-secondary system or an eligible private post-secondary institution, as defined in subdivision 3. All provisions of this section shall apply to a pupil, public school board, school district, and the governing body of a post-secondary institution, except as otherwise provided.

Sec. 81. Minnesota Statutes 1996, section 123.3514, subdivision 5, is amended to read:

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 must 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 must, as soon as possible, notify the commissioner, which who 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.

The secondary credits granted to a pupil shall must 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 must be included in the pupil's secondary school record. A pupil must shall 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 must also include evidence of successful completion and credits granted for a course taken for post-secondary credit. In either case, the record shall must indicate that the credits were earned at a post-secondary institution.

If a pupil enrolls in a post-secondary institution after leaving secondary school, the post-secondary institution shall must 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. 82. Minnesota Statutes 1996, section 123.3514, subdivision 6, is amended to read:

Subd. 6. [FINANCIAL ARRANGEMENTS.] For a pupil enrolled in a course under this section, the department of children, families, and learning shall must make payments according to this subdivision for courses that were taken for secondary credit.

The department shall must not make payments to a school district or post-secondary institution for a course taken for post-secondary credit only. The department shall must not make payments to a post-secondary institution for a course from which a student officially withdraws during the first 14 days of the quarter or semester or who has been absent from the post-secondary institution for the first 15 consecutive school days of the quarter or semester and is not receiving instruction in the home or hospital.

A post-secondary institution shall receive the following:

(1) for an institution granting quarter credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the formula allowance, multiplied by 1.3, and divided by 45; or

(2) for an institution granting semester credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the general revenue formula allowance, multiplied by 1.3, and divided by 30.

The department of children, families, and learning shall must pay to each post-secondary institution 100 percent of the amount in clause (1) or (2) within 30 days of receiving initial enrollment information each quarter or semester. If changes in enrollment occur during a quarter or semester, the change shall be reported by the post-secondary institution at the time the enrollment information for the succeeding quarter or semester is submitted. At any time the department of children, families, and learning notifies a post-secondary institution that an overpayment has been made, the institution shall promptly remit the amount due.

Sec. 83. Minnesota Statutes 1996, section 123.3514, subdivision 6b, is amended to read:

The department must not make payments to a school district or post-secondary institution for a course taken for post-secondary credit only. The department shall must not make payments to a post-secondary institution for a course from which a student officially withdraws during the first 14 days of the quarter or semester or who has been absent from the post-secondary institution for the first 15 consecutive school days of the quarter or semester and is not receiving instruction in the home or hospital.

A post-secondary institution shall receive the following:

(1) for an institution granting quarter credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the formula allowance, multiplied by 1.3, and divided by 45; or

(2) for an institution granting semester credit, the reimbursement per credit hour shall be an amount equal to 88 percent of the product of the general revenue formula allowance multiplied by 1.3, and divided by 30.

The department of children, families, and learning shall must pay to each post-secondary institution 100 percent of the amount in clause (1) or (2) within 30 days of receiving initial enrollment information each quarter or semester. If changes in enrollment occur during a quarter or semester, the change shall be reported by the post-secondary institution at the time the enrollment information for the succeeding quarter or semester is submitted. At any time the department of children, families, and learning notifies a post-secondary institution that an overpayment has been made, the institution shall promptly remit the amount due.

A school district shall receive:

(1) for a pupil who is not enrolled in classes at a secondary program, 12 percent of the general education formula allowance times .65, times 1.3; or

(2) for a pupil who attends classes at a secondary program part time, the general education formula allowance times .65, times 1.3, times the ratio of the total number of hours the pupil is in membership for courses taken by the pupil for credit to 1020 hours.

Sec. 84. Minnesota Statutes 1997 Supplement, section 123.3514, subdivision 6c, is amended to read:

Subd. 6c. [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED ACCORDING TO AGREEMENTS.] (a) The agreement between a public school board and the governing body of a public post-secondary system or private post-secondary institution shall set forth the payment amounts and arrangements, if any, from the public school board to the post-secondary institution. No payments shall be made by the department of children, families, and learning according to subdivision 6 or 6b. For the purpose of computing state aids for a school district, a pupil enrolled according to subdivision 4e shall be counted in the average daily membership of the school district as though the pupil were enrolled in a secondary course that is not offered in connection with an agreement. Nothing in this subdivision shall be construed to prohibit a public post-secondary system or private post-secondary institution from receiving additional state funding that may be available under any other law.

(b) If a course is provided under subdivision 4e, offered at a secondary school, and taught by a secondary teacher, the post-secondary system or institution must not require a payment from the school board that exceeds the cost to the post-secondary institution that is directly attributable to providing that course.

Sec. 85. Minnesota Statutes 1996, section 123.3514, subdivision 7a, is amended to read:

Subd. 7a. [TEXTBOOKS; MATERIALS.] All textbooks and equipment provided to a pupil, and paid for under subdivision 6, are the property of the pupil's school district of residence. Each pupil is required to return all textbooks and equipment to the school district after the course has ended.

Sec. 86. Minnesota Statutes 1996, section 123.3514, subdivision 7b, is amended to read:

the post-secondary institution and the district shall negotiate 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. 87. Minnesota Statutes 1997 Supplement, 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 state shall provide state aid to a district in an amount sufficient to reimburse the parent or guardian for the necessary transportation costs when the family's or guardian's income is at or below the poverty level, as determined by the federal government. The reimbursement shall be 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 must pay aid to the district according to this subdivision.

Sec. 88. Minnesota Statutes 1996, section 124.227, is amended to read:

124.227 [INTERDISTRICT DESEGREGATION OR INTEGRATION TRANSPORTATION GRANTS.]

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

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

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

Sec. 89. Minnesota Statutes 1996, section 124.248, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION REVENUE.] General education revenue shall must be paid to a charter school as though it were a school district. The general education revenue for each pupil unit is the state average general education revenue per pupil unit minus $170, calculated without compensatory revenue, transportation sparsity revenue, and the transportation portion of the transition revenue adjustment, plus compensatory revenue as though the school were a school district.

Sec. 90. Minnesota Statutes 1996, section 124.248, subdivision 1a, is amended to read:

Subd. 1a. [TRANSPORTATION REVENUE.] Transportation revenue shall must be paid to a charter school that provides transportation services according to section 120.064, subdivision 15, according to this subdivision. Transportation aid shall equal transportation revenue.

(b) For the first two years that a charter school is providing transportation services, the special programs transportation revenue equals the charter school's actual cost in the current school year for transportation services for children with disabilities under section 124.223, subdivisions 4, 5, 7, and 8. For the third year of transportation services and later fiscal years, the special programs transportation revenue shall be computed according to section 124.225, subdivision 14.

Sec. 91. Minnesota Statutes 1997 Supplement, section 124.248, subdivision 3, is amended to read:

Subd. 3. [SPECIAL EDUCATION AID.] Except as provided in subdivision 1a, paragraph (b), special education aid shall must be paid to a charter school according to section 124.3201, as though it were a school district. The charter school may charge tuition to the district of residence as provided in section 120.17, subdivision 4. The charter school shall allocate its special education levy equalization revenue to the resident districts of the pupils attending the charter school. The districts of residence shall levy as though they were participating in a cooperative, as provided in section 124.321, subdivision 3.

Sec. 92. Minnesota Statutes 1997 Supplement, section 124.248, subdivision 4, is amended to read:

Subd. 4. [OTHER AID, GRANTS, REVENUE.] (a) A charter school is eligible to receive other aids, grants, and revenue according to chapters 120 to 129, as though it were a school district except that, notwithstanding section 124.195, subdivision 3, the payments shall must be of an equal amount on each of the 23 payment dates unless a charter school is in its first year of operation in which case it shall receive on its first payment date ten percent of its cumulative amount guaranteed for the year and 22 payments of an equal amount thereafter the sum of which shall be 90 percent of the cumulative amount guaranteed. However, it may not receive aid, a grant, or revenue if a levy is required to obtain the money, except as otherwise provided in this section. Federal aid received by the state must be paid to the school, if it qualifies for the aid as though it were a school district.

(b) A charter school may receive money from any source for capital facilities needs. In the year-end report to the state board of education, the charter school shall report the total amount of funds received from grants and other outside sources.

Sec. 93. Minnesota Statutes 1996, section 124.273, subdivision 3, is amended to read:

Subd. 3. [PARTICIPATION OF NONPUBLIC SCHOOL PUPILS.] In counting the number of pupils of limited English proficiency for purposes of this section, districts may include pupils of limited English proficiency who attend nonpublic schools in the district. A district which counts those pupils and receives aid pursuant to this section shall must offer those pupils the same programs on the same terms that it offers to pupils of limited English proficiency who attend the public school. A program provided for a nonpublic school pupil pursuant to this subdivision shall must be provided at a public school or a neutral site as defined in section 123.932, subdivision 9. Nonpublic school pupils served by a district's educational program for pupils of limited English proficiency shall must be counted for average daily membership pursuant to sections 124A.02, subdivisions 20 to 22, and 124A.034, subdivisions 1 to 2.

Sec. 94. Minnesota Statutes 1996, section 124.273, subdivision 4, is amended to read:

Subd. 4. [APPLICATION DATES.] To obtain aid for limited English proficiency programs, a district shall must submit information required by the department to implement this section.

Sec. 95. Minnesota Statutes 1996, section 124.273, subdivision 6, is amended to read:

Subd. 6. [RECORDS; AUDIT.] A district which applies for aid pursuant to this section shall must maintain records which support the information contained in all of its applications. The commissioner of children, families, and learning may audit these records upon request. A district which receives aid pursuant to this section shall must keep such additional records in the manner prescribed by the commissioner to ensure that an educational program for pupils of limited English proficiency is implemented and operated in accordance with sections 126.261 to 126.269.

Sec. 96. Minnesota Statutes 1996, section 124.273, subdivision 7, is amended to read:

Sec. 97. Minnesota Statutes 1996, section 124.311, subdivision 1, is amended to read:

Subdivision 1. [INSTRUCTION.] A school district may receive assurance of mastery revenue to provide direct instructional services to eligible pupils.

Sec. 98. Minnesota Statutes 1996, section 124.32, is amended to read:

124.32 [CHILDREN WITH A DISABILITY.]

Subd. 2b. [TRAVEL AID.] The state shall must pay each district one-half of the sum actually expended by a district for necessary travel of essential personnel providing home-based services to children with a disability under age five and their families.

Subd. 4. [AID PAYMENT.] The aids provided for children with a disability shall must be paid to the district providing the special instruction and services. General education aid shall must be paid to the district of the pupil's residence. The total amount of aid paid may not exceed the amount expended for children with a disability in the year for which the aid is paid.

Subd. 6. [FULL STATE PAYMENT.] The state shall must pay each district the actual cost incurred in providing instruction and services for a child with a disability whose district of residence has been determined by section 120.17, subdivision 8a, and who is temporarily placed in a state institution or a licensed residential facility for care and treatment. This section does not apply to a child placed in a foster home or a foster group home.

Upon following the procedure specified by the commissioner of children, families, and learning, the district may bill the state the actual cost incurred in providing the services including transportation costs and a proportionate amount of capital expenditures and debt service, minus the amount of the basic revenue, as defined in section 124A.22, subdivision 2, of the district for the child and the special education aid, transportation aid, and any other aid earned on behalf of the child. The limit set forth in subdivision 4 shall apply applies to aid paid pursuant to this subdivision.

To the extent possible, the commissioner shall obtain reimbursement from another state for the cost of serving any child whose parent or guardian resides in that state. The commissioner may contract with the appropriate authorities of other states to effect reimbursement. All money received from other states shall must be paid to the state treasury and placed in the general fund.

Subd. 8. [REGULAR CLASSROOM PROGRAMS.] When planning programs for the education of children with a disability in the regular classroom, school districts are encouraged to consider the size of the regular class and to provide the support services necessary to insure ensure successful mainstreaming.

Subd. 10. [SUMMER SCHOOL.] By March 15 of each year, districts shall must submit separate applications for program and budget approval for summer school programs. The review of these applications shall must be reviewed 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.

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

Sec. 99. Minnesota Statutes 1996, section 124.3201, subdivision 5, is amended to read:

Subd. 5. [SCHOOL DISTRICT SPECIAL EDUCATION REVENUE.] (a) A school district's special education revenue for fiscal year 1996 and later equals the state total special education revenue, minus the amount determined under paragraph (b), times the ratio of the district's adjusted special education base revenue to the state total adjusted special education base revenue. If the state board of education modifies its rules for special education in a manner that increases a school district's special education obligations or service requirements, the commissioner of children, families, and learning shall annually increase each district's special education revenue by the amount necessary to compensate for the increased service requirements. The additional revenue equals the cost in the current year attributable to rule changes not reflected in the computation of special education base revenue, multiplied by the appropriate percentages from subdivision 2.

(b) Notwithstanding paragraph (a), if the special education base revenue for a district equals zero, the special education revenue equals the amount computed according to subdivision 2 using current year data.

Sec. 100. Minnesota Statutes 1996, section 124.3201, subdivision 6, is amended to read:

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.

Sec. 101. Minnesota Statutes 1996, section 124.3201, subdivision 7, is amended to read:

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 must allocate its approved expenditures for special education programs among participating school districts.

Sec. 102. Minnesota Statutes 1997 Supplement, section 124.321, subdivision 1, is amended to read:

Subdivision 1. [LEVY EQUALIZATION REVENUE.] (a) For fiscal year 1999, special education levy equalization revenue for a school district, excluding an intermediate school district, equals the sum of the following amounts:

(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 excess cost revenue under section 124.323; plus

Sec. 103. Minnesota Statutes 1997 Supplement, section 124.321, subdivision 2, is amended to read:

Subd. 2. [REVENUE ALLOCATION FROM STATE ACADEMIES.] (a) For purposes of this section, the Minnesota state academy for the deaf or the Minnesota state academy for the blind each year shall must allocate an amount equal to the levy percentage factor for that year times their special education revenue under section 124.3201 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.

(b) When the Minnesota state academy for the deaf or the Minnesota state academy for the blind allocates 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 must provide information to the department of children, families, and learning on the amount of revenue it allocated to the school districts that assign a child who requires an instructional aide.

Sec. 104. Minnesota Statutes 1996, section 124.322, subdivision 1, is amended to read:

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

Sec. 105. Minnesota Statutes 1997 Supplement, section 124.322, subdivision 1a, is amended to read:

Subd. 1a. [BASE REVENUE ADJUSTMENT.] 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, shall must 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 children, families, and learning.

Sec. 106. Minnesota Statutes 1997 Supplement, section 124.323, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] In For the purposes of 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, equipment, and transportation services eligible for revenue under section 124.3201; plus

(2) expenditures for tuition bills received under section 120.17 for services eligible for revenue under sections 124.3201, subdivision 2, and 124.3202, subdivision 1; minus

(3) revenue for teachers' salaries, contracted services, supplies, and equipment under sections 124.3201 and 124.3202; minus

(4) tuition receipts under section 120.17 for services eligible for revenue under sections 124.3201, subdivision 2, and 124.3202, subdivision 1.

(b) "General revenue," for fiscal year 1996, means for fiscal year 1996, the sum of the general education revenue according to section 124A.22, subdivision 1, as adjusted according to section 124A.036, subdivision 5, plus the total referendum revenue according to section 124A.03, subdivision 1e. For fiscal years 1997 and later, "general revenue" means the sum of the general education revenue according to section 124A.22, subdivision 1, as adjusted according to section 124A.036, subdivision 5, plus the total referendum revenue minus transportation sparsity revenue minus total operating capital revenue.

Sec. 107. Minnesota Statutes 1996, section 124.48, as amended by Laws 1997, chapter 192, section 20, is amended to read:

124.48 [INDIAN SCHOLARSHIPS.]

to benefit from further education. Scholarships shall must be for advanced or specialized education in accredited or approved colleges or in business, technical or vocational schools. Scholarships shall be used to defray the total cost of education including tuition, incidental fees, books, supplies, transportation, other related school costs and the cost of board and room and shall be paid directly to the college or school concerned. The total cost of education includes all tuition and fees for each student enrolling in a public institution and the portion of tuition and fees for each student enrolling in a private institution that does not exceed the tuition and fees at a comparable public institution. Each student shall be awarded a scholarship based on the total cost of the student's education and a standardized need analysis. The amount and type of each scholarship shall be determined through the advice and counsel of the Minnesota Indian scholarship committee.

When an Indian student satisfactorily completes the work required by a certain college or school in a school year the student is eligible for additional scholarships, if additional training is necessary to reach the student's educational and vocational objective. Scholarships may not be given to any Indian student for more than five years of study without special approval of the Minnesota Indian scholarship committee.

Subd. 3. [INDIAN SCHOLARSHIP COMMITTEE.] The Minnesota Indian scholarship committee is established. Members shall be appointed by The state board must appoint members with the assistance of the Indian affairs council as provided in section 3.922, subdivision 6. Members shall be reimbursed for expenses as provided in section 15.059, subdivision 6. The state board shall determine the membership terms and duration of the committee, which expires no later than June 30, 2001. The committee shall provide advice to the state board in awarding scholarships to eligible American Indian students and in administering the state board's duties regarding awarding of American Indian post-secondary preparation grants to school districts.

Sec. 108. Minnesota Statutes 1997 Supplement, section 124.481, is amended to read:

124.481 [INDIAN POST-SECONDARY PREPARATION GRANTS.]

The state board of education, with the advice of the Minnesota Indian scholarship committee, may make grants to school districts or tribal grant or contract schools to support post-secondary preparation for secondary pupils who are of one-fourth or more Indian ancestry and who, in the opinion of the superintendent, have the capabilities to benefit from higher education. Distribution of the grants must be in accordance with a plan prepared by the state board, with the advice of the Minnesota Indian scholarship committee, that describes the objectives and methods of implementing the grant program, including the manner in which grants will be distributed in proportion to the geographical distribution of the Indian population of the state.

Sec. 109. Minnesota Statutes 1996, section 124.573, subdivision 2, is amended to read:

Subd. 2. [LIMIT.] The commissioner may withhold all or any portion of the aid paid under this section for a secondary vocational education program which receives funds from any other source. In no event shall A district or center must not receive a total amount of state aid pursuant to this section which, when added to funds from other sources, will provide the program an amount for salaries and travel which exceeds 100 percent of the amount of its expenditures for salaries and travel in the program.

Sec. 110. Minnesota Statutes 1996, section 124.573, subdivision 2b, is amended to read:

Subd. 2b. [SECONDARY VOCATIONAL AID.] A district's secondary vocational education aid for a fiscal year equals the lesser of:

(a) $80 times the district's average daily membership in grades 10 to 12; or

(b) 25 percent of approved expenditures for the following:

(1) salaries paid to essential, licensed personnel providing direct instructional services to students in that fiscal year for services rendered in the district's approved secondary vocational education programs;

(3) necessary travel between instructional sites by licensed secondary vocational education personnel;

(4) necessary travel by licensed secondary vocational education personnel for vocational student organization activities held within the state for instructional purposes;

(5) curriculum development activities that are part of a five-year plan for improvement based on program assessment;

(6) necessary travel by licensed secondary vocational education personnel for noncollegiate credit bearing professional development; and

(7) specialized vocational instructional supplies.

(c) Up to ten percent of a district's secondary vocational aid may be spent on equipment purchases. Districts using secondary vocational aid for equipment purchases must report to the department of children, families, and learning on the improved learning opportunities for students that result from the investment in equipment.

Sec. 111. Minnesota Statutes 1996, 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 must 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 must 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.

Sec. 112. Minnesota Statutes 1996, section 124.573, subdivision 2f, is amended to read:

Subd. 2f. [AID GUARANTEE.] Notwithstanding subdivision 2b, the secondary vocational education aid for a school district is not less than the lesser of:

(a) 95 percent of the secondary vocational education aid the district received for the previous fiscal year; or

(b) 40 percent of the approved expenditures for secondary vocational programs included in subdivision 2b, paragraph (b).

Sec. 113. Minnesota Statutes 1996, section 124.573, subdivision 3, is amended to read:

withhold aid under this section without proceeding under section 124.15 at any time. To do so, the commissioner must determine that the program does not comply with rules of the state board or that any facts concerning the program or its budget differ from the facts in the district's approved application.

Sec. 114. Minnesota Statutes 1996, section 124.573, subdivision 3a, is amended to read:

Subd. 3a. [AID FOR CONTRACTED SERVICES.] In addition to the provisions of subdivisions 2 and 3, a school district or cooperative center may contract with a public or private agency other than a Minnesota school district or cooperative center for the provision of secondary vocational education services. The state board shall must promulgate rules relating to program approval procedures and criteria for these contracts and aid shall must be paid only for contracts approved by the commissioner of children, families, and learning. For the purposes of subdivision 4, The district or cooperative center contracting for these services shall must be construed to be providing the services.

Sec. 115. Minnesota Statutes 1996, section 124.573, subdivision 5a, is amended to read:

Subd. 5a. [DISTRICT REPORTS.] Each district or cooperative center shall must report data to the department for all secondary vocational education programs as required by the department to implement the secondary vocational aid formula.

Sec. 116. Minnesota Statutes 1997 Supplement, 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 must allocate its approved expenditures for school-to-work programs for children with a disability among participating school districts. Aid for school-to-work programs for children with a disability for services provided by a cooperative or intermediate district shall be paid to the participating school districts.

Sec. 117. Minnesota Statutes 1996, section 124.86, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] (a) Each year each American Indian-controlled tribal contract or grant school authorized by the United States Code, title 25, section 450f, that is located on a reservation within the state is eligible to receive tribal contract or grant school aid subject to the requirements in this subdivision paragraphs (b) to (d).

(a) (b) The school must plan, conduct, and administer an education program that complies with the requirements of either this chapter and chapters 120, 121, 122, 123, 124A, 124C, 125, 126, 129, and 268A or Code of Federal Regulations, title 25, sections 31.0 to 45.80.

(b) (c) The school must comply with all other state statutes governing independent school districts or their equivalent in the Code of Federal Regulations, title 25.

(c) (d) The state tribal contract or grant school aid must be used to supplement, and not to replace, the money for American Indian education programs provided by the federal government.

Sec. 118. Minnesota Statutes 1997 Supplement, section 124.86, subdivision 2, is amended to read:

Subd. 2. [REVENUE AMOUNT.] An American Indian-controlled tribal contract or grant school that is located on a reservation within the state and that complies with the requirements in subdivision 1 is eligible to receive tribal contract or grant school aid. The amount of aid is derived by:

(1) multiplying the formula allowance under section 124A.22, subdivision 2, less $170, times the difference between (a) (i) the actual pupil units as defined in section 124A.02, subdivision 15, in average daily membership, excluding section 124.17, subdivision 2f, and (b) (ii) the number of pupils for the current school year, weighted according to section 124.17, subdivision 1, receiving benefits under section 123.933 or 123.935 or for which the school is receiving reimbursement under section 126.23;

(3) subtracting from the result in clause (2) the amount of money allotted to the school by the federal government through Indian School Equalization Program of the Bureau of Indian Affairs, according to Code of Federal Regulations, title 25, part 39, subparts A to E, for the basic program as defined by section 39.11, paragraph (b), for the base rate as applied to kindergarten through twelfth grade, excluding small school adjustments and additional weighting, but not money allotted through subparts F to L for contingency funds, school board training, student training, interim maintenance and minor repair, interim administration cost, prekindergarten, and operation and maintenance, and the amount of money that is received according to section 126.23;

(4) dividing the result in clause (3) by the sum of the actual pupil units in average daily membership, excluding section 124.17, subdivision 2f, plus the tribal contract compensation revenue pupil units; and

(5) multiplying the sum of the actual pupil units, including section 124.17, subdivision 2f, in average daily membership plus the tribal contract compensation revenue pupil units by the lesser of $1,500 or the result in clause (4).

Sec. 119. Minnesota Statutes 1996, section 124.86, subdivision 3, is amended to read:

Subd. 3. [WAIVER.] Notwithstanding subdivision 1, paragraphs (a) (b) and (b) (c), a tribal contract or grant school:

(1) is not subject to the Minnesota election law;

(2) has no authority under this section to levy for property taxes, issue and sell bonds, or incur debt; and

(3) may request through its managing tribal organization a recommendation of the state board of education, for consideration of the legislature, that a tribal contract or grant school not be subject to specified statutes related to independent school districts.

Sec. 120. Minnesota Statutes 1996, section 124.86, subdivision 4, is amended to read:

Subd. 4. [EARLY CHILDHOOD FAMILY EDUCATION REVENUE.] A school receiving aid under this section is eligible to receive early childhood family education revenue to provide early childhood family education programs for parents and children who are enrolled or eligible for enrollment in a federally recognized tribe. The revenue equals 1.5 times the statewide average expenditure per participant under section 124.2711, times the number of children and parents participating full time in the program. The program shall must comply with section 121.882, except that the school is not required to provide a community education program or establish a community education advisory council. The program shall must be designed to improve the skills of parents and promote American Indian history, language, and culture. The school shall must make affirmative efforts to encourage participation by fathers. Admission may not be limited to those enrolled in or eligible for enrollment in a federally recognized tribe.

Sec. 121. Minnesota Statutes 1996, section 124.90, is amended to read:

124.90 [MEDICAL ASSISTANCE PAYMENTS TO SCHOOL DISTRICTS.]

Subdivision 1. [ELIGIBILITY.] A school district may enroll as a provider in the medical assistance program and receive medical assistance payments for covered special education services provided to persons eligible for medical assistance under chapter 256B. To receive medical assistance payments, the school district must comply with relevant provisions of state and federal statutes and regulations governing the medical assistance program.

Subd. 2. [FUNDING.] A school district that provides a covered service to an eligible person and complies with relevant requirements of the medical assistance program shall be is entitled to receive payment for the service provided, including that portion of the payment that will subsequently be reimbursed by the federal government, in the same manner as other medical assistance providers. The school district is not required to provide matching funds or pay part of the costs of the service, as long as the rate charged for the service does not exceed medical assistance limits that apply to all medical assistance providers.

Subd. 4. [PRIVATE INSURERS.] A school district may enroll as a provider for insurance companies to provide covered special education services to eligible persons. To receive payments, the district must comply with relevant state and federal statutes. A district may contract for services, and may contract with a third party agency to assist in administering and billing for these services.

Subd. 5. [NO REDUCTION IN REVENUE.] A school district's revenue for special education programs shall must not be reduced by any payments for medical assistance or insurance received according to this section.

Sec. 122. Minnesota Statutes 1997 Supplement, section 126.22, subdivision 2, is amended to read:

Subd. 2. [ELIGIBLE PUPILS.] The following pupils are eligible to participate in the graduation incentives program:

(a) any pupil under the age of 21 who:

(1) performs substantially below the performance level for pupils of the same age in a locally determined achievement test; or

(2) is at least one year behind in satisfactorily completing coursework or obtaining credits for graduation; or

(3) is pregnant or is a parent; or

(4) has been assessed as chemically dependent; or

(5) has been excluded or expelled according to sections 127.26 to 127.39; or

(6) has been referred by a school district for enrollment in an eligible program or a program pursuant to section 126.23; or

(7) is a victim of physical or sexual abuse; or

(8) has experienced mental health problems; or

(9) has experienced homelessness sometime within six months before requesting a transfer to an eligible program; or

(10) speaks English as a second language or has limited English proficiency; or

(11) has withdrawn from school or has been chronically truant; or

(b) any person who is at least 21 years of age and who:

(1) has received fewer than 14 years of public or nonpublic education, beginning at age 5;

(2) has not completed the requirements for a high school diploma; and

(3) at the time of application, (i) is eligible for reemployment insurance benefits or has exhausted the benefits, (ii) is eligible for, or is receiving income maintenance and support services, as defined in section 268.0111, subdivision 5, or (iii) is eligible for services under the displaced homemaker program, state wage-subsidy program, or any programs under the federal Jobs Training Partnership Act or its successor.

Sec. 123. Minnesota Statutes 1997 Supplement, section 126.22, subdivision 3a, is amended to read:

Sec. 124. Minnesota Statutes 1996, section 126.22, subdivision 5, is amended to read:

Subd. 5. [DISSEMINATION OF INFORMATION.] A school district shall must disseminate information, developed by the department of children, families, and learning, about the graduation incentives program to residents in the district who are under the age of 21.

Sec. 125. Minnesota Statutes 1996, section 126.22, subdivision 6, is amended to read:

Subd. 6. [DESEGREGATION PLANS.] Notwithstanding any provision to the contrary, students may not enroll in a nonresident district under this section if their enrollment in another school district would result in a violation of a district's desegregation plan, as mandated and approved by the state board of education.

Sec. 126. Minnesota Statutes 1997 Supplement, section 126.22, subdivision 8, is amended to read:

Subd. 8. [ENROLLMENT VERIFICATION.] (a) For a pupil attending an eligible program full time under subdivision 3, paragraph (d), the department of children, families, and learning shall must pay 90 percent of the district's average general education revenue less compensatory revenue to the eligible program and ten percent of the district's average general education revenue less compensatory revenue to the resident district within 30 days after the eligible program verifies enrollment using the form provided by the department. For a pupil attending an eligible program part time, revenue shall be reduced proportionately, according to the amount of time the pupil attends the program, and the payments to the eligible program and the resident district shall be reduced accordingly. A pupil for whom payment is made according to this section may not be counted by any district for any purpose other than computation of general education revenue. If payment is made for a pupil under this subdivision, a school district shall not reimburse a program under section 126.23 for the same pupil. Compensatory revenue shall be paid according to section 124A.22, subdivision 3.

(b) The department of children, families, and learning shall must pay up to 100 percent of the revenue to the eligible program if there is an agreement to that effect between the school district and the eligible program.

Sec. 127. Minnesota Statutes 1997 Supplement, section 126.23, subdivision 1, is amended to read:

Subdivision 1. [AID.] If a pupil enrolls in an alternative program, eligible under section 126.22, subdivision 3, paragraph (d), or subdivision 3a, operated by a private organization that has contracted with a school district to provide educational services for eligible pupils under section 126.22, subdivision 2, the district contracting with the private organization must reimburse the provider an amount equal to at least 90 percent of the district's average general education less compensatory revenue per pupil unit times the number of pupil units for pupils attending the program. Compensatory revenue must be allocated according to section 124A.28, subdivision 1a. For a pupil attending the program part time, the revenue paid to the program shall must be reduced proportionately, according to the amount of time the pupil attends the program, and revenue paid to the district shall be reduced accordingly. Pupils for whom a district provides reimbursement may not be counted by the district for any purpose other than computation of general education revenue. If payment is made to a district or program for a pupil under this section, the department of children, families, and learning shall must not make a payment for the same pupil under section 126.22, subdivision 8.

Sec. 128. Minnesota Statutes 1996, section 126.235, is amended to read:

126.235 [EDUCATIONAL PROGRAM FOR PREGNANT MINORS AND MINOR PARENTS.]

Upon request, a school district must make available to a pregnant minor or a minor custodial parent an educational program to enable the minor to earn a high school diploma. The department of children, families, and learning shall must develop program designs and provide districts with technical assistance. A district's educational program must use appropriate community services and must recognize each pupil's individual needs and parental responsibilities. The district shall must designate at least one person to review quarterly each pupil's progress in the program.

Sec. 129. Minnesota Statutes 1996, section 126.239, subdivision 1, is amended to read:

Subdivision 1. [TRAINING PROGRAMS FOR TEACHERS.] A secondary teacher assigned by a school district to teach an advanced placement or international baccalaureate course may participate in a training program offered by the college board or International Baccalaureate North America, Inc. The state may pay a portion of the tuition, room, and board costs a teacher incurs in participating in a training program. The commissioner of children, families, and learning shall determine application procedures and deadlines, and select teachers to participate in the training program. The procedures determined by the commissioner shall, to the extent possible, ensure that advanced placement and international baccalaureate courses become available in all parts of the state and that a variety of course offerings are available in school districts. This subdivision does not prevent teacher participation in training programs offered by the college board or International Baccalaureate North America, Inc., when tuition is paid by a source other than the state.

Sec. 130. Minnesota Statutes 1996, section 126.262, subdivision 3, is amended to read:

Subd. 3. [ESSENTIAL INSTRUCTIONAL PERSONNEL.] "Essential instructional personnel" means the following:

(a) A teacher licensed by the state board of teaching to teach bilingual education or English as a second language;

(b) A teacher with an exemption from a teaching license requirement pursuant to section 126.266 who is employed in a school district's English as a second language or bilingual education program;

(c) Any teacher as defined in section 125.03 who holds a valid license from the state board of teaching, if the district assures the department of children, families, and learning that the teacher will obtain the preservice and in-service training the department considers necessary to enable the teacher to provide appropriate service to pupils of limited English proficiency.

Sec. 131. Minnesota Statutes 1996, section 126.262, subdivision 6, is amended to read:

Subd. 6. [PRIMARY LANGUAGE.] "Primary language" is means a language other than English which is the language normally used by the child or the language which is spoken in the child's home environment.

Sec. 132. Minnesota Statutes 1996, section 126.264, is amended to read:

126.264 [RIGHTS OF PARENTS.]

Subdivision 1. [NOVICE.] No later than Within ten days after the enrollment of any pupil in an instructional program for limited English proficient students, the school district in which the pupil resides shall must notify the parent or guardian by mail. This notice shall must:

(a) Be in writing in English and in the primary language of the pupil's parents;

(b) Inform the parents that their child has been enrolled in an instructional program for limited English proficient students;

(c) Contain a simple, nontechnical description of the purposes, method and content of the program;

(d) Inform the parents that they have the right to visit the educational program for limited English proficient students in which their child is enrolled;

(e) Inform the parents of the time and manner in which to request and receive a conference for the purpose of explaining the nature and purpose of the program; and

(f) Inform the parents of their rights to withdraw their child from an educational program for limited English proficient students and the time and manner in which to do so.

Subd. 2. [WITHDRAWAL FROM PROGRAM.] Any parent whose child is enrolled in an educational program for limited English proficient students shall have the right, either at the time of the original notification of enrollment or at the close of any semester thereafter, to withdraw the child from the program by providing written notice of this intent to the principal of the school in which the child is enrolled or to the superintendent of the school district in which the child resides. Nothing herein in this section shall preclude a parent from reenrolling a child of limited English proficiency in an educational program for limited English proficient students.

Subd. 3. [PARENTAL INVOLVEMENT.] A district which receives moneys pursuant to section 124.273 shall must encourage involvement of parents of pupils enrolled in the educational program for limited English proficient students in this program. The district shall solicit the views of parents about the program and its effects upon their children.

Sec. 133. Minnesota Statutes 1996, section 126.265, is amended to read:

126.265 [GENERAL REQUIREMENTS FOR PROGRAMS.]

A district which receives aid pursuant to section 124.273 shall must comply with the following program requirements:

(a) To the extent possible, the district shall must avoid isolating children of limited English proficiency for a substantial part of the school day; and

(b) In predominantly nonverbal subjects, such as art, music, and physical education, pupils of limited English proficiency shall be permitted to participate fully and on an equal basis with their contemporaries in public school classes provided for these subjects. To the extent possible, the school district shall must assure to pupils enrolled in a program for limited English proficient students an equal and meaningful opportunity to participate fully with other pupils in all extracurricular activities.

Sec. 134. Minnesota Statutes 1996, section 126.266, subdivision 1, is amended to read:

Subdivision 1. [EXEMPTIONS.] The commissioner of children, families, and learning may grant an exemption from the licensure requirement in the hiring of teachers of English as a second language or bilingual education teachers to a school district if the commissioner finds that compliance would impose a hardship upon the district in the securing of teachers for its educational programs for limited English proficient students. The commissioner of children, families, and learning shall notify the board of teaching of any exemptions granted pursuant to this section.

Sec. 135. Minnesota Statutes 1996, section 126.267, is amended to read:

126.267 [TECHNICAL ASSISTANCE.]

The commissioner shall provide technical assistance to school districts receiving aid pursuant to section 124.273 and to post-secondary institutions for preservice and in-service training for bilingual education teachers and English as a second language teachers employed in educational programs for limited English proficient students, teaching methods, curriculum development, testing and testing mechanisms, and the development of instructional materials for these educational programs.

Sec. 136. Minnesota Statutes 1996, section 126.43, subdivision 1, is amended to read:

Subdivision 1. [CULTURAL EXCHANGE PROGRAM GOALS.] (a) A cultural exchange grant program is established to develop and create opportunities for children and staff of different ethnic, racial, and other cultural backgrounds to experience educational and social exchange. Student and staff exchanges under this section may only take place between a district with a desegregation plan approved by the state board of education and a district without a desegregation plan. Participating school districts shall offer summer programs for credit with the goals set forth in paragraphs (a) (b) to (d) (e).

(a) (b) The program shall must develop curriculum reflective of particular ethnic, racial, and other cultural aspects of various demographic groups in the state.

(c) (d) The program shall must create opportunities for students from across the state to enroll in summer programs in school districts other than the one of residence, or in other schools within their district of residence.

(d) (e) The program shall must create opportunities for staff exchanges on a cultural basis.

Sec. 137. Minnesota Statutes 1996, section 126.43, subdivision 2, is amended to read:

Subd. 2. [CULTURAL EXCHANGE GRANTS.] A school district together with a group of school districts, a cooperative governmental unit, the center for arts and education, or a post-secondary institution may apply for cultural exchange grants. The commissioner of children, families, and learning shall determine grant recipients and may adopt application guidelines. The grants must be competitively determined and applicants must demonstrate:

(1) the capacity to develop a focused curriculum that reflects the particular ethnic, racial, and other cultural aspects of the community in which the school where the program is offered is located;

(2) the capacity to develop immersion programs coordinated with the curriculum developed in clause (1);

(3) the capacity to coordinate a cultural exchange program with other curriculum programs to assure continuity in a pupil's education;

(4) the capacity to maximize diversity of ethnic, racial, and other cultural backgrounds of participants;

(5) that the application is jointly developed by participants; and

(6) that the outcomes of the exchange program are clearly articulated.

Sec. 138. Minnesota Statutes 1996, section 126.48, subdivision 1, is amended to read:

Subdivision 1. [PROGRAM DESCRIBED.] American Indian language and culture education programs shall be are programs in elementary and secondary schools enrolling American Indian children designed:

(1) to make the curriculum more relevant to the needs, interests, and cultural heritage of American Indian pupils;

(2) to provide positive reinforcement of the self-image of American Indian pupils; and

(3) to develop intercultural awareness among pupils, parents, and staff. Program components may include: instruction in American Indian language, literature, history, and culture; development of support components for staff, including in-service training and technical assistance in methods of teaching American Indian pupils; research projects, including experimentation with and evaluation of methods of relating to American Indian pupils; provision of personal and vocational counseling to American Indian pupils; modification of curriculum, instructional methods, and administrative procedures to meet the needs of American Indian pupils; and establishment of cooperative liaisons with nonsectarian nonpublic, community, tribal or alternative schools offering curricula which reflect American Indian culture. Districts offering programs may make contracts for the provision of program components by nonsectarian nonpublic, community, tribal or alternative schools. These programs may also be provided as components of early childhood and family education programs.

Sec. 139. Minnesota Statutes 1996, section 126.48, subdivision 2, is amended to read:

Subd. 2. [VOLUNTARY ENROLLMENT.] Enrollment in American Indian language and culture education programs shall must be voluntary. School districts and participating schools shall must make affirmative efforts to encourage participation. They shall encourage parents to visit classes or come to school for a conference explaining the nature of the program and provide visits by school staff to parents' homes to explain the nature of the program.

Sec. 140. Minnesota Statutes 1996, section 126.48, subdivision 3, is amended to read:

may acquire an understanding of the cultural heritage of the American Indian children for whom that particular program is designed. However, in determining eligibility to participate in a program, priority shall must be given to American Indian children. American Indian children and other children enrolled in an existing nonpublic school system may be enrolled on a shared time basis in American Indian language and culture education programs.

Sec. 141. Minnesota Statutes 1996, section 126.48, subdivision 4, is amended to read:

Subd. 4. [LOCATION OF PROGRAMS.] American Indian language and culture education programs shall must be located in facilities in which regular classes in a variety of subjects are offered on a daily basis.

Sec. 142. Minnesota Statutes 1996, section 126.48, subdivision 5, is amended to read:

Subd. 5. [ASSIGNMENT OF STUDENTS.] No A school district or participating school shall must not, in providing these programs , assign students to schools in a way which will have the effect of promoting segregation of students by race, sex, color, or national origin.

Sec. 143. Minnesota Statutes 1996, section 126.49, subdivision 1, is amended to read:

Subdivision 1. [AMERICAN INDIAN LANGUAGE AND CULTURE EDUCATION LICENSES.] The board of teaching shall must grant initial and continuing teaching licenses in American Indian language and culture education that bear the same duration as other initial and continuing licenses. The board shall must grant licenses to persons who present satisfactory evidence that they:

(a) Possess competence in an American Indian language or possess unique qualifications relative to or knowledge and understanding of American Indian history and culture; or

(b) Possess a bachelor's degree or other academic degree approved by the board or meet such requirements as to course of study and training as the board may prescribe, or possess such relevant experience as the board may prescribe.

This evidence may be presented by affidavits, resolutions, or by such other methods as the board may prescribe. Individuals may present applications for licensure on their own behalf or these applications may be submitted by the superintendent or other authorized official of a school district, participating school, or an American Indian school.

Sec. 144. Minnesota Statutes 1996, section 126.49, subdivision 5, is amended to read:

Subd. 5. [PERSONS ELIGIBLE FOR EMPLOYMENT; EXEMPTIONS.] Any person licensed under this section shall be eligible for employment by a school board or a participating school as a teacher in an American Indian language and culture education program in which the American Indian language or culture in which the person is licensed is taught. A school district or participating school may prescribe only those additional qualifications for teachers licensed under this section as are approved by the board of teaching. Any school board or participating school upon request may be exempted from the licensure requirements of this section in the hiring of one or more American Indian language and culture education teachers for any school year in which compliance would, in the opinion of the commissioner of children, families, and learning, create a hardship in the securing of the teachers.

Sec. 145. Minnesota Statutes 1996, section 126.49, subdivision 6, is amended to read:

Sec. 146. Minnesota Statutes 1996, section 126.49, subdivision 8, is amended to read:

Subd. 8. [AFFIRMATIVE EFFORTS IN HIRING.] In hiring for all positions in these programs, school districts and participating schools shall give preference to and make affirmative efforts to seek, recruit, and employ persons who share the culture of the American Indian children who are enrolled in the program. The district or participating school shall provide procedures for the involvement of the parent advisory committees in designing the procedures for the recruitment, screening and selection of applicants, provided that nothing herein. This subdivision shall not be construed to limit the school board's authority to hire and discharge personnel.

Sec. 147. Minnesota Statutes 1996, section 126.50, is amended to read:

126.50 [TEACHERS AIDES; COMMUNITY COORDINATORS.]

In addition to employing American Indian language and culture education teachers, each district or participating school providing programs pursuant to sections 126.45 to 126.55 may employ teachers' aides. Teachers' aides shall must not be employed for the purpose of supplanting American Indian language and culture education teachers.

Any district or participating school which conducts American Indian language and culture education programs pursuant to sections 126.45 to 126.55 shall must employ one or more full- time or part-time community coordinators if there are 100 or more students enrolled in the program. Community coordinators shall promote communication understanding, and cooperation between the schools and the community and shall visit the homes of children who are to be enrolled in an American Indian language and culture education program in order to convey information about the program.

Sec. 148. Minnesota Statutes 1996, section 126.501, is amended to read:

126.501 [RECRUITING AND RETAINING INDIAN TEACHERS.]

This section applies to a school board of a school district in which there are at least ten American Indian children enrolled. The school board shall must actively recruit teacher applicants who are American Indian from the time it is reasonably expected that a position will become available until the position is filled or September 1, whichever is earlier. Notwithstanding section 125.12, subdivision 4, 6a, or 6b, 125.17, subdivisions 3 and 11, any other law to the contrary, or any provision of a contract entered into after May 7, 1988, to the contrary, when placing a teacher on unrequested leave of absence, the board may retain a probationary teacher or a teacher with less seniority in order to retain an American Indian teacher.

Sec. 149. Minnesota Statutes 1997 Supplement, section 126.51, subdivision 1, is amended to read:

Subdivision 1. [PARENT COMMITTEE.] School boards and American Indian schools shall must provide for the maximum involvement of parents of children enrolled in education programs, including language and culture education programs, programs for elementary and secondary grades, special education programs, and support services. Accordingly, the school board of a school district in which there are ten or more American Indian children enrolled and each American Indian school shall must establish a parent committee. If a committee whose membership consists of a majority of parents of American Indian children has been or is established according to federal, tribal, or other state law, that committee may serve as the committee required by this section and shall be is subject to, at least, the requirements of this subdivision and subdivision 1a.

Sec. 150. Minnesota Statutes 1996, section 126.51, subdivision 1a, is amended to read:

Subd. 1a. [RESOLUTION OF CONCURRENCE.] Each year by Prior to December 1, the school board or American Indian school shall must submit to the department of children, families, and learning a copy of a resolution adopted by the parent committee. The copy must be signed by the chair of the committee and must state whether the committee concurs with the educational programs for American Indian children offered by the school board or American Indian school. If the committee does not concur with the educational programs, the reasons for nonconcurrence and recommendations shall be submitted with the resolution. By resolution, the school board shall must respond, in cases of nonconcurrence, to each recommendation made by the committee and state its reasons for not implementing the recommendations.

Sec. 151. Minnesota Statutes 1996, section 126.51, subdivision 2, is amended to read:

Subd. 2. [MEMBERSHIP.] The committee shall must be composed of parents of children eligible to be enrolled in American Indian education programs; secondary students eligible to be served; American Indian language and culture education teachers and aides; American Indian teachers; counselors; adult American Indian people enrolled in educational programs; and representatives from community groups. A majority of each committee shall must be parents of children enrolled or eligible to be enrolled in the programs. The number of parents of American Indian and non-American Indian children shall reflect approximately the proportion of children of those groups enrolled in the programs.

Sec. 152. Minnesota Statutes 1996, section 126.52, subdivision 5, is amended to read:

Subd. 5. [COMMUNITY INVOLVEMENT.] The state board shall must provide for the maximum involvement of the state committees on American Indian education, parents of American Indian children, secondary students eligible to be served, American Indian language and culture education teachers, American Indian teachers, teachers' aides, representatives of community groups, and persons knowledgeable in the field of American Indian education, in the formulation of policy and procedures relating to the administration of sections 126.45 to 126.55.

Sec. 153. Minnesota Statutes 1996, section 126.52, subdivision 8, is amended to read:

Subd. 8. [TECHNICAL ASSISTANCE.] The commissioner shall provide technical assistance to school districts, schools and post-secondary institutions for preservice and in-service training for American Indian education teachers and teacher's aides, teaching methods, curriculum development, testing and testing mechanisms, and the development of materials for American Indian education programs.

Sec. 154. Minnesota Statutes 1996, section 126.531, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The state board of education shall create one or more American Indian education committees. Members shall must include representatives of tribal bodies, community groups, parents of children eligible to be served by the programs, American Indian administrators and teachers, persons experienced in the training of teachers for American Indian education programs, persons involved in programs for American Indian children in American Indian schools, and persons knowledgeable in the field of American Indian education. Members shall be appointed so as to be representative of significant segments of the population of American Indians.

Sec. 155. Minnesota Statutes 1997 Supplement, section 126.531, subdivision 3, is amended to read:

Subd. 3. [EXPENSES.] Each committee shall must be reimbursed for expenses according to section 15.059, subdivision 6. The state board shall must determine the membership terms and the duration of each committee, which expire no later than June 30, 2001.

Sec. 156. Minnesota Statutes 1996, section 126.54, subdivision 1, is amended to read:

Proposals may provide for contracts for the provision of program components by nonsectarian nonpublic, community, tribal, or alternative schools. The commissioner shall prescribe the form and manner of application for grants, and no grant shall be made for a proposal not complying with the requirements of sections 126.45 to 126.55. The state board shall must submit all proposals to the state advisory task force on American Indian language and culture education programs for its recommendations concerning approval, modification, or disapproval and the amounts of grants to approved programs.

Sec. 157. Minnesota Statutes 1996, section 126.54, subdivision 2, is amended to read:

Subd. 2. [PLANS.] Each school district or participating school submitting a proposal under subdivision 1 shall must develop and submit with the proposal a plan which shall:

(a) Identify the measures to be used to meet the requirements of sections 126.45 to 126.55;

(b) Identify the activities, methods and programs to meet the identified educational needs of the children to be enrolled in the program;

(c) Describe how district goals and objectives as well as the objectives of sections 126.45 to 126.55 are to be achieved;

(d) Demonstrate that required and elective courses as structured do not have a discriminatory effect within the meaning of section 126.48, subdivision 5;

(e) Describe how each school program will be organized, staffed, coordinated, and monitored; and

(f) Project expenditures for programs under sections 126.45 to 126.55.

Sec. 158. Minnesota Statutes 1996, section 126.54, subdivision 3, is amended to read:

Subd. 3. [ADDITIONAL REQUIREMENTS.] Each school district receiving a grant under this section shall must each year conduct a count of American Indian children in the schools of the district; test for achievement; identify the extent of other educational needs of the children to be enrolled in the American Indian language and culture education program; and classify the American Indian children by grade, level of educational attainment, age and achievement. Participating schools shall must maintain records concerning the needs and achievements of American Indian children served.

Sec. 159. Minnesota Statutes 1996, section 126.54, subdivision 4, is amended to read:

Subd. 4. [NONDISCRIMINATION; TESTING.] In accordance with recognized professional standards, all testing and evaluation materials and procedures utilized for the identification, testing, assessment and classification of American Indian children shall must be selected and administered so as not to be racially or culturally discriminatory and shall must be valid for the purpose of identifying, testing, assessing, and classifying American Indian children.

Sec. 160. Minnesota Statutes 1996, section 126.54, subdivision 5, is amended to read:

Subd. 5. [RECORDS.] Participating schools and school districts shall keep records and afford access to them as the commissioner finds necessary to ensure that American Indian language and culture education programs are implemented in conformity with sections 126.45 to 126.55. Each school district or participating school shall must keep accurate, detailed, and separate revenue and expenditure accounts for pilot American Indian language and culture education programs funded under this section.

Sec. 161. Minnesota Statutes 1996, section 126.54, subdivision 6, is amended to read:

Sec. 162. Minnesota Statutes 1996, section 126.56, subdivision 6, is amended to read:

Subd. 6. [INFORMATION.] The higher education services office, in cooperation with the academic excellence foundation, shall must assemble and distribute information about scholarships and eligible programs.

Sec. 163. [REPEALER.]

(a) Minnesota Statutes 1996, sections 124C.55; 124C.56; 124C.57; and 124C.58, are repealed.

(b) Minnesota Statutes 1996, section 124.312, as amended by Laws 1997, First Special Session chapter 4, article 2, sections 13 and 14; Minnesota Statutes 1997 Supplement, sections 124.313; and 124.314, are repealed effective for revenue for fiscal year 1999.

Sec. 164. [INSTRUCTION TO REVISOR.]

The revisor of statutes shall renumber each section of Minnesota Statutes listed in column A with the number listed in column B. The revisor shall also make necessary cross-reference changes consistent with the renumbering.

Column A Column B

120.03, subd. 1 120B.02, subd. 1

subd. 5 subd. 2

120.17, subd. 1 120B.03, subd. 1

subd. 1b subd. 2

subd. 2 subd. 3

subd. 3 subd. 4

subd. 3a subd. 5

subd. 3b subd. 6

subd. 3d subd. 7

subd. 4 subd. 8

subd. 4a subd. 9

subd. 5 subd. 10

subd. 5a subd. 11

subd. 6 subd. 12

subd. 7 subd. 13

subd. 7a subd. 14

subd. 8a subd. 15

subd. 9 subd. 16

subd. 10 subd. 17

subd. 11 subd. 18

subd. 15 subd. 19

subd. 16 subd. 20

subd. 18 subd. 21

subd. 19 subd. 22

120.1701, subd. 1 120B.04, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 4 subd. 4

subd. 5 subd. 5

subd. 6 subd. 6

subd. 7 subd. 7

subd. 8 subd. 8

subd. 8a subd. 9

subd. 9 subd. 10

subd. 11 subd. 12

subd. 12 subd. 13

subd. 13 subd. 14

subd. 14 subd. 15

subd. 15 subd. 16

subd. 16 subd. 17

subd. 17 subd. 18

subd. 18 subd. 19

subd. 19 subd. 20

subd. 20 subd. 21

subd. 21 subd. 22

subd. 22 subd. 23

120.172 120B.08

120.173 120B.09

120.181 120B.10

120.1811 120B.11

120.182 120B.12

120.183 120B.13

120.185 120B.14

126.237 120B.15

124.32, subd. 2b 120B.20, subd. 1

subd. 4 subd. 2

subd. 6 subd. 3

subd. 7 subd. 4

subd. 8 subd. 5

subd. 10 subd. 6

subd. 12 subd. 7

124.3201 120B.21

124.321 120B.22

124.322, subd. 1 120B.23, subd. 1

subd. 1a subd. 2

subd. 5 subd. 3

124.323 120B.24

124.90 120B.26

120.187 120B.30

120.188 120B.31

120.189 120B.32

120.190 120B.33

126.261 120B.40

126.262 120B.41

126.264 120B.42

126.265 120B.43

126.266 120B.44

126.267 120B.45

126.269 120B.46

124.273, subd. 1c 120B.47, subd. 1

subd. 1d subd. 2

subd. 1e subd. 3

subd. 1f subd. 4

subd. 1g subd. 5

subd. 3 subd. 6

subd. 4 subd. 7

subd. 5 subd. 8

subd. 6 subd. 9

124.3111 120B.50

124.311 120B.51

126.22, subd. 1 120B.57, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 3a subd. 4

subd. 4 subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

subd. 7 subd. 8

subd. 8 subd. 9

subd. 9 subd. 10

126.23 120B.58

124.225 120B.59

126.235 120B.61

124.573, subd. 1 120B.66, subd. 1

subd. 2 subd. 2

subd. 2b subd. 3

subd. 2e subd. 4

subd. 2f subd. 5

subd. 3 subd. 6

subd. 3a subd. 7

subd. 5a subd. 8

124.574, subd. 1 120B.67, subd. 1

subd. 2c subd. 2

subd. 2d subd. 3

subd. 2e subd. 4

subd. 2f subd. 5

subd. 2g subd. 6

subd. 2h subd. 7

subd. 5 subd. 8

subd. 6 subd. 9

subd. 7 subd. 10

subd. 9 subd. 11

126.45 120B.70

126.46 120B.71

126.47 120B.72

126.48 120B.73

126.49, subd. 1 120B.74, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 3 subd. 4

subd. 4 subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

subd. 7 subd. 8

subd. 8 subd. 9

126.50 120B.75

126.501 120B.76

126.51, subd. 1 120B.77, subd. 1

subd. 1a subd. 2

subd. 2 subd. 3

subd. 4 subd. 4

126.52, subd. 5 120B.78, subd. 1

subd. 8 subd. 2

126.531 120B.79

126.54 120B.80

126.55 120B.81

124.86 120B.82

124.48, subd. 1 120B.83, subd. 1

subd. 3 subd. 2

124.481 120B.84

126.43 120B.86

124.315 120B.88

124.227 120B.89

120.064, subd. 1 129B.90, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 4 subd. 4

subd. 4a subd. 5

subd. 5 subd. 6

subd. 7 subd. 7

subd. 8 subd. 8

subd. 9 subd. 9

subd. 10 subd. 10

subd. 11 subd. 11

subd. 12 subd. 12

subd. 13 subd. 13

subd. 14 subd. 14

subd. 14a subd. 15

subd. 15 subd. 16

subd. 16 subd. 17

subd. 17 subd. 18

subd. 18 subd. 19

subd. 19 subd. 20

subd. 20 subd. 21

subd. 20a subd. 22

subd. 21 subd. 23

subd. 22 subd. 24

subd. 23 subd. 25

subd. 24 subd. 26

124.248, subd. 1 120B.91, subd. 1

subd. 1a subd. 2

subd. 2 subd. 3

subd. 2a subd. 4

subd. 3 subd. 5

subd. 4 subd. 6

subd. 5 subd. 7

subd. 6 subd. 8

126.239 120B.92

123.3513 120B.93

123.3514, subd. 1 120B.94, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 3a subd. 4

subd. 4 subd. 5

subd. 4a subd. 6

subd. 4b subd. 7

subd. 4c subd. 8

subd. 4e subd. 10

subd. 5 subd. 11

subd. 6 subd. 12

subd. 6a subd. 13

subd. 6b subd. 14

subd. 6c subd. 15

subd. 6d subd. 16

subd. 6e subd. 17

subd. 7 subd. 18

subd. 7a subd. 19

subd. 7b subd. 20

subd. 8 subd. 21

subd. 9 subd. 22

subd. 10 subd. 23

subd. 11 subd. 24

subd. 11a subd. 25

120.80 120B.95

126.56, subd. 1 120B.96, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 4 subd. 4

subd. 4a subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

subd. 7 subd. 8

Section 1. [120C.01] [DEFINITIONS.]

For the purposes of this chapter, the words defined in section 120.02 have the same meaning.

Sec. 2. Minnesota Statutes 1996, section 121.201, is amended to read:

121.201 [HEARING IMPAIRED EDUCATIONAL SUPPORT SERVICES.]

Subdivision 1. [RESPONSIBILITY OF COMMISSIONER.] The commissioner shall coordinate and may pay for support services for hearing impaired persons to assure access to educational opportunities. Services may be provided to adult students who are hearing impaired and (a) (1) have been denied access to educational opportunities because of the lack of support services or (b) (2) are presently enrolled or (c) (3) are contemplating enrollment in an educational program and would benefit from support services. The commissioner shall also be responsible for conducting in-service training for public and private agencies regarding the needs of hearing impaired persons in the adult education system.

Subd. 2. [SUPPORT SERVICES.] The state board may pay school districts or public or private community agencies for the following support services:

(a) (1) interpreter services to provide translation for an individual or a group of students; or

Subd. 3. [PROGRAMS INCLUDED.] Support services may be provided for:

(a) (1) local school district adult education programs;

(b) (2) adult technical college programs; and

(c) (3) avocational education programs sponsored by public or private community agencies.

Sec. 3. Minnesota Statutes 1996, section 121.203, subdivision 1, is amended to read:

Subdivision 1. [AIDS PROGRAM.] The commissioner of children, families, and learning, in consultation with the commissioner of health, shall assist districts in developing and implementing a program to prevent and reduce the risk of acquired immune deficiency syndrome. Each district shall must have a program that includes at least:

(1) planning materials, guidelines, and other technically accurate and updated information;

(2) a comprehensive, technically accurate, and updated curriculum;

(3) cooperation and coordination among districts and SCs;

(4) a targeting of adolescents, especially those who may be at high risk of contracting AIDS, for prevention efforts;

(5) involvement of parents and other community members;

(6) in-service training for appropriate district staff and school board members;

(7) collaboration with state agencies and organizations having an AIDS prevention or AIDS risk reduction program;

(8) collaboration with local community health services, agencies and organizations having an AIDS prevention or AIDS risk reduction program; and

(9) participation by state and local student organizations.

The department may provide assistance at a neutral site to a nonpublic school participating in a district's program. District programs must not conflict with the health and wellness curriculum developed under Laws 1987, chapter 398, article 5, section 2, subdivision 7.

If a district fails to develop and implement a program to prevent and reduce the risk of AIDS, the department shall must assist the SC in the region serving that district to develop or implement the program.

Sec. 4. Minnesota Statutes 1997 Supplement, section 121.615, subdivision 2, is amended to read:

Subd. 2. [CREATION OF FOUNDATION.] There is created the Minnesota school-to-work student organization foundation. The purpose of the foundation shall be is to promote vocational student organizations and applied leadership opportunities in Minnesota public and nonpublic schools through public-private partnerships. The foundation shall be is a nonprofit organization. The board of directors of the foundation and activities of the foundation are under the direction of the state board of education.

Sec. 5. Minnesota Statutes 1997 Supplement, section 121.615, subdivision 3, is amended to read:

Subd. 3. [BOARD OF DIRECTORS.] The board of directors of the school-to-work student organization foundation shall consist consists of:

(2) seven members from business, industry, and labor appointed by the governor to staggered terms and chosen so that each represents one of the following career areas: agriculture, family and consumer sciences, service occupations, health occupations, marketing, business, and technical/industrial;

(3) five students or alumni of school-to-work student organizations representing diverse career areas, three from secondary student organizations, and two from post-secondary student organizations. The students or alumni shall be appointed by the criteria and process agreed upon by the executive directors of the student-to-work organizations; and

(4) four members from education appointed by the governor to staggered terms and chosen so that each represents one of the following groups: school district level administrators, secondary school administrators, middle school administrators, and post-secondary administrators.

Executive directors of vocational education student organizations are ex officio, nonvoting members of the board.

Sec. 6. Minnesota Statutes 1997 Supplement, section 121.615, subdivision 9, is amended to read:

Subd. 9. [PRIVATE FUNDING.] The foundation shall must seek private resources to supplement the available public money. Individuals, businesses, and other organizations may contribute to the foundation in any manner specified by the board of directors. All money received shall be administered by the board of directors.

Sec. 7. Minnesota Statutes 1997 Supplement, section 121.615, subdivision 10, is amended to read:

Subd. 10. [REPORT.] The board of directors of the foundation shall must submit an annual report on the progress of its activities to the state board of education and to the board of trustees of the Minnesota state colleges and universities. The annual report shall contain a financial report for the preceding year. The foundation shall submit a biennium report to the legislature before February 15, in the odd-numbered year.

Sec. 8. Minnesota Statutes 1996, section 121.615, subdivision 11, is amended to read:

Subd. 11. [APPROPRIATION.] There is annually appropriated to the foundation All the amounts received by the foundation pursuant to this section are annually appropriated to the foundation.

Sec. 9. Minnesota Statutes 1996, section 121.704, is amended to read:

121.704 [YOUTH WORKS PROGRAM.]

The youth works program is established to fulfill the purposes of section 121.701. The youth works program shall must supplement existing programs and services. The program shall must not displace existing programs and services, existing funding of programs or services, or existing employment and employment opportunities. No eligible organization may terminate, layoff, or reduce the hours of work of an employee to place or hire a program participant. No eligible organization may place or hire an individual for a project if an employee is on layoff from the same or a substantially equivalent position.

Sec. 10. Minnesota Statutes 1996, section 121.705, subdivision 2, is amended to read:

Sec. 11. Minnesota Statutes 1996, 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 must develop, and the applying organizations shall must comply with, the form and manner of the application.

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

(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;

(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. 12. Minnesota Statutes 1996, section 121.707, subdivision 3, is amended to read:

Subd. 3. [POSTSERVICE BENEFIT.] (a) Each eligible organization shall must agree to provide to every participant who fulfills the terms of a contract under section 121.707, subdivision 2, a nontransferable postservice benefit. The benefit must be not less than $4,725 per year of full-time service or prorated for part-time service or for partial service of at least 900 hours. Upon signing a contract under section 121.707, subdivision 2, each eligible organization shall must deposit funds to cover the full amount of postservice benefits obligated, except for national education awards that are deposited in the national service trust fund. Funds encumbered in fiscal years 1994 and 1995 for postservice benefits shall must be available until the participants for whom the funds were encumbered are no longer eligible to draw benefits.

(b) Nothing in this subdivision prevents a grantee organization from using funds from nonfederal or nonstate sources to increase the value of postservice benefits above the value described in paragraph (a).

(c) The higher education services office shall must establish an account for depositing funds for postservice benefits received from eligible organizations. If a participant does not complete the term of service or, upon successful completion of the program, does not use a postservice benefit according to subdivision 4 within seven years, the amount of the postservice benefit shall must be refunded to the eligible organization or, at the organization's discretion, dedicated to another eligible participant. Interest earned on funds deposited in the postservice benefit account is appropriated to the higher education services office for the costs of administering the postservice benefits accounts.

(d) The state shall must provide an additional postservice benefit to any participant who successfully completes the program. The benefit must be a credit of five points to be added to the competitive open rating of a participant who obtains a passing grade on a civil service examination under chapter 43A. The benefit is available for five years after completing the community service.

Sec. 13. Minnesota Statutes 1996, 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.

(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 workforce development council, and beginning January 1, 1997, the workforce development council, shall must 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 must not be included in determining financial need when establishing eligibility or award amounts for financial assistance programs under chapter 136A.

Sec. 14. Minnesota Statutes 1996, section 121.707, subdivision 5, is amended to read:

Subd. 5. [LIVING ALLOWANCE.] (a) A participant in a full-time community service program shall receive a monthly stipend of not less than $500. An eligible organization may provide participants with additional amounts from nonstate sources. The amount of the living allowance may be prorated for part-time participants.

(b) Nothing in this subdivision requires an existing program to decrease any stipend, salary, or living allowance provided to a participant under the program.

(c) In addition to the living allowance provided under paragraph (a), a grantee organization shall provide health and child care coverage to each participant in a full-time youth works program who does not otherwise have access to health or child care coverage. The state shall must include the cost of group health and child care coverage in the grant to the eligible organization.

Sec. 15. Minnesota Statutes 1996, section 121.707, subdivision 6, is amended to read:

Subd. 6. [PROGRAM TRAINING.] (a) The commission and, beginning January 1, 1997, the council shall must, 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. 16. Minnesota Statutes 1996, section 121.707, subdivision 7, is amended to read:

Subd. 7. [TRAINING AND EDUCATION REQUIREMENTS.] Each grantee organization shall must 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. 17. Minnesota Statutes 1996, section 121.708, is amended to read:

121.708 [PRIORITY.]

The commission and, beginning January 1, 1997, the council shall must 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;

(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. 18. Minnesota Statutes 1996, section 121.710, subdivision 2, is amended to read:

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

Sec. 19. Minnesota Statutes 1996, section 121.710, subdivision 3, is amended to read:

Subd. 3. [FINAL REPORT.] The commission and, beginning January 1, 1997, the council shall must 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. 20. Minnesota Statutes 1997 Supplement, section 121.831, subdivision 3, is amended to read:

Subd. 3. [PROGRAM ELIGIBILITY.] A learning readiness program shall must include the following:

(1) a comprehensive plan to anticipate and meet the needs of participating families by coordinating existing social services programs and by fostering collaboration among agencies or other community-based organizations and programs that provide a full range of flexible, family-focused services to families with young children;

(2) a development and learning component to help children develop appropriate social, cognitive, and physical skills, and emotional well-being;

(3) health referral services to address children's medical, dental, mental health, and nutritional needs;

(4) a nutrition component to meet children's daily nutritional needs;

(5) parents' involvement in meeting children's educational, health, social service, and other needs;

(6) community outreach to ensure participation by families who represent the racial, cultural, and economic diversity of the community;

(7) community-based staff and program resources, including interpreters, that reflect the racial and ethnic characteristics of the children participating in the program; and

(8) a literacy component to ensure that the literacy needs of parents are addressed through referral to and cooperation with adult basic education programs and other adult literacy programs.

Sec. 21. Minnesota Statutes 1996, section 121.831, subdivision 6, is amended to read:

Subd. 6. [COORDINATION WITH OTHER PROVIDERS.] (a) The district shall must coordinate the learning readiness program with existing community-based social services providers and foster collaboration among agencies and other community-based organizations and programs that provide flexible, family-focused services to families with children. The district shall must actively encourage greater sharing of responsibility and accountability among service providers and facilitate children's transition between programs.

Sec. 22. Minnesota Statutes 1996, section 121.831, subdivision 7, is amended to read:

Subd. 7. [ADVISORY COUNCIL.] Each learning readiness program shall must have an advisory council composed of members of existing early education-related boards, parents of participating children, child care providers, culturally specific service organizations, local resource and referral agencies, and representatives of early childhood service providers. The council shall must advise the school board in creating and administering the program and shall must monitor the progress of the program. The council shall must ensure that children at greatest risk receive appropriate services. If the school board is unable to appoint to the advisory council members of existing early education-related boards, it shall must appoint parents of children enrolled in the program who represent the racial, cultural, and economic diversity of the district and representatives of early childhood service providers as representatives to an existing advisory council.

Sec. 23. Minnesota Statutes 1996, section 121.831, subdivision 8, is amended to read:

Subd. 8. [PRIORITY CHILDREN.] The district shall must give greatest priority to providing services to eligible children identified, through a means such as the early childhood screening process, as being developmentally disadvantaged or experiencing risk factors that could impede their learning readiness.

Sec. 24. Minnesota Statutes 1996, section 121.831, subdivision 9, is amended to read:

Subd. 9. [CHILD RECORDS.] (a) A record of a child's progress and development shall must be maintained in the child's cumulative record while enrolled in the learning readiness program. The cumulative record shall must be used for the purpose of planning activities to suit individual needs and shall become part of the child's permanent record. The cumulative record is private data under chapter 13. Information in the record may be disseminated to an educator or service provider only to the extent that that person has a need to know the information.

(b) An educator or service provider may transmit information in the child's cumulative record to an educator or service provider in another program for young children when the child applies to enroll in that other program.

Sec. 25. Minnesota Statutes 1996, section 121.831, subdivision 10, is amended to read:

Subd. 10. [SUPERVISION.] A program provided by a school board shall must be supervised by a licensed early childhood teacher, a certified early childhood educator, or a licensed parent educator. A program provided according to a contract between a school district and a nonprofit organization or another private organization shall must be supervised and staffed according to the terms of the contract.

Sec. 26. Minnesota Statutes 1996, section 121.831, subdivision 11, is amended to read:

Subd. 11. [DISTRICT STANDARDS.] The school board of the district shall must develop standards for the learning readiness program that reflect the eligibility criteria in subdivision 3. The board shall must consider including in the standards the program characteristics in subdivision 4.

Sec. 27. Minnesota Statutes 1996, section 121.831, subdivision 12, is amended to read:

Subd. 12. [PROGRAM FEES.] A district may adopt a sliding fee schedule based on a family's income but shall must waive a fee for a participant unable to pay. The fees charged must be designed to enable eligible children of all socioeconomic levels to participate in the program.

Sec. 28. Minnesota Statutes 1996, section 121.835, subdivision 4, is amended to read:

Subd. 4. [DISTRIBUTION.] The commissioner of children, families, and learning shall give priority to funding existing programs.

Sec. 29. Minnesota Statutes 1996, section 121.835, subdivision 5, is amended to read:

Subd. 5. [APPLICATIONS.] Each grant application must propose a five-year program designed to accomplish the purposes of this section. The application must be submitted on forms provided by the commissioner of children, families, and learning. The grant application must include:

(1) a description of the specific neighborhoods that will be served under the program and the name, address, and a description of each community agency or agencies with which the applicant intends to contract to provide services using grant money;

(2) a letter of intent from each community agency identified in clause (1) that indicates the agency's willingness to participate in the program and approval of the proposed program structure and components;

(3) a detailed description of the structure and components of the proposed program and an explanation of how each component will contribute to accomplishing the purposes of this section;

(4) a description of how public and private resources, including schools, health care facilities, government agencies, neighborhood organizations, and other resources, will be coordinated and made accessible to families in target neighborhoods, including letters of intent from public and private agencies indicating their willingness to cooperate with the program;

(5) a detailed, proposed budget that demonstrates the ability of the program to accomplish the purposes of this section using grant money and other available resources, including funding sources other than a grant; and

(6) a comprehensive evaluation plan for measuring the success of the program in meeting the objectives of the overall grant program and the individual grant project, including an assessment of the impact of the program in terms of at least three of the following criteria:

(i) utilization rates of community services;

(ii) availability of support systems for families;

(iii) birth weights of newborn babies;

(iv) child accident rates;

(v) utilization rates of prenatal care;

(vi) reported rates of child abuse;

(vii) rates of health screening and evaluation; and

(viii) school readiness of way to grow participants compared to nonparticipants.

Sec. 30. Minnesota Statutes 1996, section 121.835, subdivision 7, is amended to read:

Sec. 31. Minnesota Statutes 1996, section 121.835, subdivision 8, is amended to read:

Subd. 8. [REPORT.] The advisory committee shall must report to the education committee of the legislature by January 15, 1993, on the evaluation required in subdivision 5, clause (6), and shall make recommendations for establishing successful way to grow programs in unserved areas of the state.

Sec. 32. Minnesota Statutes 1996, section 121.8355, subdivision 2, is amended to read:

Subd. 2. [DUTIES.] (a) Each collaborative shall must:

(1) establish, with assistance from families and service providers, clear goals for addressing the health, developmental, educational, and family-related needs of children and youth and use outcome-based indicators to measure progress toward achieving those goals;

(2) establish a comprehensive planning process that involves all sectors of the community, identifies local needs, and surveys existing local programs;

(3) integrate service funding sources so that children and their families obtain services from providers best able to anticipate and meet their needs;

(4) coordinate families' services to avoid duplicative and overlapping assessment and intake procedures;

(5) focus primarily on family-centered services;

(6) encourage parents and volunteers to actively participate by using flexible scheduling and actively recruiting volunteers;

(7) provide services in locations that are readily accessible to children and families;

(8) use new or reallocated funds to improve or enhance services provided to children and their families;

(9) identify federal, state, and local institutional barriers to coordinating services and suggest ways to remove these barriers; and

(10) design and implement an integrated local service delivery system for children and their families that coordinates services across agencies and is client centered. The delivery system shall provide a continuum of services for children birth to age 18, or birth through age 21 for individuals with disabilities. The collaborative shall describe the community plan for serving pregnant women and children from birth to age six.

(b) The outcome-based indicators developed in paragraph (a), clause (1), may include the number of low birth weight babies, the infant mortality rate, the number of children who are adequately immunized and healthy, require out-of-home placement or long-term special education services, and the number of minor parents.

Sec. 33. Minnesota Statutes 1996, section 121.8355, subdivision 3, is amended to read:

Subd. 3. [INTEGRATED LOCAL SERVICE DELIVERY SYSTEM.] A collaborative shall must design an integrated local service delivery system that coordinates funding streams and the delivery of services between existing agencies. The integrated local service delivery system may:

(1) improve outreach and early identification of children and families in need of services and intervene across service systems on behalf of families;

(2) offer an inclusive service system that supports all families within a community;

(4) improve access to services by coordinating transportation services;

(5) provide initial outreach to all new mothers and periodic family visits to children who are potentially at risk;

(6) coordinate assessment across systems to determine which children and families need coordinated multiagency services and supplemental services;

(7) include multiagency service plans and coordinate unitary case management; and

(8) integrate funding of services.

Sec. 34. Minnesota Statutes 1996, section 121.8355, subdivision 5, is amended to read:

Subd. 5. [LOCAL PLANS.] The collaborative plan shall must describe how the collaborative will carry out the duties and implement the integrated local services delivery system required under this section. The plan shall must include a list of the collaborative participants, a copy of the agreement required under subdivision 1, the amount and source of resources each participant will contribute to the integrated fund, and methods for increasing local participation in the collaborative, involving parents and other community members in implementing and operating the collaborative, and providing effective outreach services to all families with young children in the community. The plan shall must also include specific goals that the collaborative intends to achieve and methods for objectively measuring progress toward meeting the goals.

Sec. 35. Minnesota Statutes 1996, section 121.8355, subdivision 6, is amended to read:

Subd. 6. [PLAN APPROVAL BY THE CHILDREN'S CABINET.] (a) The children's cabinet shall must approve local plans for collaboratives. In approving local plans, the children's cabinet shall must give highest priority to a plan that provides:

(1) early intervention and family outreach services;

(2) family visitation services;

(3) a continuum of services for children from birth to age 18;

(4) family preservation services;

(5) culturally sensitive approaches for delivering services and utilizing culturally specific organizations;

(6) clearly defined outcomes and valid methods of assessment;

(7) effective service coordination;

(8) participation by the maximum number of jurisdictions and local, county, and state funding sources;

(9) integrated community service providers and local resources;

(10) integrated transportation services;

(11) integrated housing services; and

(12) coordinated services that include a children's mental health collaborative authorized by law.

Sec. 36. Minnesota Statutes 1996, section 121.88, subdivision 2, is amended to read:

Subd. 2. [ADVISORY COUNCIL.] Each board shall must provide for an advisory council to consist of members who represent: various service organizations; churches; public and nonpublic schools; local government including elected officials; public and private nonprofit agencies serving youth and families; parents; youth; park, recreation or forestry services of municipal or local government units located in whole or in part within the boundaries of the school district; and any other groups participating in the community education program in the school district.

Sec. 37. Minnesota Statutes 1996, section 121.88, subdivision 3, is amended to read:

Subd. 3. [COOPERATION.] The council shall must function in cooperation with the community education director in an advisory capacity in the interest of promoting the goals and objectives of sections 121.85 to 121.88.

Sec. 38. Minnesota Statutes 1996, section 121.88, subdivision 4, is amended to read:

Subd. 4. [DUPLICATION POLICY.] Each council shall must adopt a policy to reduce and eliminate program duplication within the district.

Sec. 39. Minnesota Statutes 1996, section 121.88, subdivision 6, is amended to read:

Subd. 6. [PROGRAMS FOR ADULTS WITH DISABILITIES.] A school board may offer, as part of a community education program, a program for adults with disabilities. Boards are encouraged to offer programs cooperatively with other districts and organizations. Programs may not be limited to district residents. Programs may include:

(1) services enabling the adults to participate in community activities or community education classes;

(2) classes specifically for adults with disabilities;

(3) outreach activities to identify adults needing service;

(4) activities to increase public awareness of the roles of people with disabilities;

(5) activities to enhance the role of people with disabilities in the community; and

(6) other direct and indirect services and activities benefiting adults with disabilities.

Sec. 40. Minnesota Statutes 1996, section 121.88, subdivision 7, is amended to read:

Subd. 7. [PROGRAM APPROVAL.] To be eligible for revenue for the program for adults with disabilities, a program and budget must receive approval from the community education section in the department of children, families, and learning. Approval may be for five years. During that time, a school board must report any significant changes to the department for approval. For programs offered cooperatively, the request for approval must include an agreement on the method by which local money is to be derived and distributed. A request for approval must include all of the following:

(1) characteristics of the people to be served;

(2) description of the program services and activities;

(3) program budget and amount of aid requested;

(4) participation by adults with disabilities in developing the program;

(5) assessment of the needs of adults with disabilities; and

Sec. 41. Minnesota Statutes 1996, section 121.88, subdivision 9, is amended to read:

Subd. 9. [YOUTH SERVICE PROGRAMS.] A school board may offer, as part of a community education program with a youth development program, a youth service program that provides young people with meaningful opportunities to become involved in their community, develop individual capabilities, make career connections, seek support networks and services, become active citizens, and address community needs through youth service. The school board may award up to one credit, or the equivalent, toward graduation for a pupil who completes the youth service requirements of the district. The community education advisory council, after considering the results of the commissioner's study under section 121.885, subdivision 1, shall must design the program in cooperation with the district planning, evaluating and reporting committee and local organizations that train volunteers or need volunteers' services. Programs must include:

(1) preliminary training for pupil volunteers conducted, when possible, by organizations experienced in such training;

(2) supervision of the pupil volunteers to ensure appropriate placement and adequate learning opportunity;

(3) sufficient opportunity, in a positive setting for human development, for pupil volunteers to develop general skills in preparation for employment, to enhance self-esteem and self-worth, and to give genuine service to their community;

(4) integration of academic learning with the service experience; and

(5) integration of youth community service with elementary and secondary curriculum.

Youth service projects include, but are not limited to, the following:

(1) human services for the elderly, including home care and related services;

(2) tutoring and mentoring;

(3) training for and providing emergency services;

(4) services at extended day programs;

(5) environmental services; and

(6) service-learning programs in which schools, including post-secondary schools, and employers work together with young people to provide them with meaningful opportunities for community service and with the academic and technical skills that employers require.

The commissioner shall maintain a list of acceptable projects with a description of each project. A project that is not on the list must be approved by the commissioner.

A youth service project must have a community sponsor that may be a governmental unit or nonprofit organization. To assure that pupils provide additional services, each sponsor must assure that pupil services do not displace employees or reduce the workload of any employee.

The commissioner must shall assist districts in planning youth service programs, implementing programs, and developing recommendations for obtaining community sponsors.

Sec. 42. Minnesota Statutes 1997 Supplement, section 121.88, subdivision 10, is amended to read:

Subd. 10. [EXTENDED DAY PROGRAMS.] (a) A school board may offer, as part of a community education program, an extended day program for children from kindergarten through grade 6 for the purpose of expanding students' learning opportunities. A program must include the following:

(1) adult supervised programs while school is not in session;

(3) partnerships with the K-12 kindergarten through grade 12 system, and other public, private, or nonprofit entities; and

(4) opportunities for trained secondary school pupils to work with younger children in a supervised setting as part of a community service program.

(b) The district may charge a sliding fee based upon family income for extended day programs. The district may receive money from other public or private sources for the extended day program. The school board of the district shall must develop standards for school age child care programs. Districts with programs in operation before July 1, 1990, must adopt standards before October 1, 1991. All other districts must adopt standards within one year after the district first offers services under a program authorized by this subdivision. The state board of education may not adopt rules for extended day programs.

(c) The district shall maintain a separate account within the community services fund for all funds related to the extended day program.

Sec. 43. Minnesota Statutes 1996, section 121.882, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] A district that provides a community education program under sections 121.85 to 121.88 may establish an early childhood family education program. Two or more districts, each of which provides a community education program, may cooperate to jointly provide an early childhood family education program.

Sec. 44. Minnesota Statutes 1997 Supplement, section 121.882, subdivision 2, is amended to read:

Subd. 2. [PROGRAM CHARACTERISTICS.] Early childhood family education programs are programs for children in the period of life from birth to kindergarten, for the parents of such children, and for expectant parents. The programs may include the following:

(1) programs to educate parents about the physical, mental, and emotional development of children;

(2) programs to enhance the skills of parents in providing for their children's learning and development;

(3) learning experiences for children and parents that promote children's development;

(4) activities designed to detect children's physical, mental, emotional, or behavioral problems that may cause learning problems;

(5) activities and materials designed to encourage self-esteem, skills, and behavior that prevent sexual and other interpersonal violence;

(6) educational materials which may be borrowed for home use;

(7) information on related community resources;

(8) programs to prevent child abuse and neglect;

(9) other programs or activities to improve the health, development, and learning readiness of children; or

(10) activities designed to maximize development during infancy.

Sec. 45. Minnesota Statutes 1996, section 121.882, subdivision 2b, is amended to read:

Subd. 2b. [HOME VISITING PROGRAM.] (a) The commissioner of children, families, and learning shall include as part of the early childhood family education programs a parent education component to prevent child abuse and neglect. This parent education component must include:

(1) expanding statewide the home visiting component of the early childhood family education programs;

(2) training parent educators, child educators, community outreach workers, and home visitors in the dynamics of child abuse and neglect and positive parenting and discipline practices; and

(3) developing and disseminating education and public information materials that promote positive parenting skills and prevent child abuse and neglect.

(b) The parent education component must:

(1) offer to isolated or at-risk families home visiting parent education services that at least address parenting skills, a child's development and stages of growth, communication skills, managing stress, problem-solving skills, positive child discipline practices, methods of improving parent-child interactions and enhancing self-esteem, using community support services and other resources, and encouraging parents to have fun with and enjoy their children;

(2) develop a risk assessment tool to determine the family's level of risk;

(3) establish clear objectives and protocols for home visits;

(4) determine the frequency and duration of home visits based on a risk-need assessment of the client, with home visits beginning in the second trimester of pregnancy and continuing, based on client need, until a child is six years old;

(5) encourage families to make a transition from home visits to site-based parenting programs to build a family support network and reduce the effects of isolation;

(6) develop and distribute education materials on preventing child abuse and neglect that may be used in home visiting programs and parent education classes and distributed to the public;

(7) initially provide at least 40 hours of training and thereafter ongoing training for parent educators, child educators, community outreach workers, and home visitors that covers the dynamics of child abuse and neglect, domestic violence and victimization within family systems, signs of abuse or other indications that a child may be at risk of being abused or neglected, what child abuse and neglect are, how to properly report cases of child abuse and neglect, respect for cultural preferences in child rearing, what community resources, social service agencies, and family support activities and programs are available, child development and growth, parenting skills, positive child discipline practices, identifying stress factors and techniques for reducing stress, home visiting techniques, and risk assessment measures;

(8) provide program services that are community-based, accessible, and culturally relevant; and

(9) foster collaboration among existing agencies and community-based organizations that serve young children and their families.

(c) Home visitors should reflect the demographic composition of the community the home visitor is serving to the extent possible.

Sec. 46. Minnesota Statutes 1996, section 121.882, subdivision 3, is amended to read:

Sec. 47. Minnesota Statutes 1996, section 121.882, subdivision 7, is amended to read:

Subd. 7. [DISTRICT ADVISORY COUNCILS.] The school board shall must appoint an advisory council from the area in which the program is provided. A majority of the council shall must be parents participating in the program. The council shall must assist the board in developing, planning, and monitoring the early childhood family education program. The council shall must report to the school board and the community education advisory council.

Sec. 48. Minnesota Statutes 1996, section 121.882, subdivision 7a, is amended to read:

Subd. 7a. [ALTERNATIVE COUNCIL.] A school board may direct the community education council, required according to section 121.88, subdivision 2, to perform the functions of the advisory council for early childhood family education.

Sec. 49. Minnesota Statutes 1996, section 121.882, subdivision 8, is amended to read:

Subd. 8. [TEACHERS.] A school board shall must employ necessary qualified teachers for its early childhood family education programs.

Sec. 50. Minnesota Statutes 1996, section 121.882, subdivision 9, is amended to read:

Subd. 9. [ASSISTANCE.] The department of children, families, and learning shall must provide assistance to districts with programs described in this section. The department must establish guidelines that list barriers to learning and development affecting children served by early childhood family education programs.

Sec. 51. Minnesota Statutes 1996, section 121.885, subdivision 1, is amended to read:

Subdivision 1. [SERVICE-LEARNING AND WORK-BASED LEARNING PROGRAMS STUDY.] The governor's workforce development council shall must assist the commissioner of children, families, and learning in studying how to combine community service activities and service-learning with work-based learning programs.

Sec. 52. Minnesota Statutes 1996, 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 in cooperation with the governor's workforce development council, the commissioner and the higher education services office, shall provide for those participants who successfully complete youth community service under sections 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).

Sec. 53. Minnesota Statutes 1997 Supplement, section 123.35, subdivision 8, is amended to read:

Subd. 8. [EVENING SCHOOLS; ADULT AND CONTINUING EDUCATION.] The board may establish and maintain public evening schools and adult and continuing education programs and such. The evening schools and adult and continuing education programs when so maintained shall by the board must be available to all persons over 16 years of age who, from any cause, are unable to attend the full-time elementary or secondary schools of such district.

Sec. 54. Minnesota Statutes 1996, section 123.70, subdivision 2, is amended to read:

Subd. 2. [SCHEDULE OF IMMUNIZATIONS.] No person who has commenced a treatment schedule of immunization pursuant to subdivision 1, clause (2), may remain enrolled in any child care facility, elementary, or secondary school in this state after 18 months of enrollment unless there is submitted to the administrator, or other person having general control and supervision of the school or child care facility, a statement from a physician or a public clinic which provides immunizations that the person has completed the primary schedule of immunizations for diphtheria, tetanus, pertussis, and polio and in which the month and year of each additional immunization received is included. The statement must include the month and year of each additional immunization received. For a child less than seven years of age, a primary schedule of immunizations shall consist of four doses of vaccine for diphtheria, tetanus, and pertussis and three doses of vaccine for poliomyelitis. For a child seven years of age or older, a primary schedule of immunizations shall consist of three doses of vaccine for diphtheria, tetanus, and polio.

Sec. 55. Minnesota Statutes 1996, section 123.70, subdivision 4, is amended to read:

Subd. 4. [SUBSTITUTE IMMUNIZATION STATEMENT.] A person who is enrolling or enrolled in an elementary or secondary school or child care facility may substitute a statement from the emancipated person or a parent or guardian if the person is a minor child in lieu of the statement from a physician or public clinic which provides immunizations. If the statement is from a parent or guardian or emancipated person, the statement shall must indicate the month and year of each immunization given. In order for the statement to be acceptable for a person who is enrolling in an elementary school and who is six years of age or younger, it must indicate that the following was given: no less than one dose of vaccine each for measles, mumps, and rubella given separately or in combination, and no less than four doses of vaccine for poliomyelitis, unless the third dose was given after the fourth birthday, then three doses are minimum, and no less than five doses of vaccine for diphtheria, tetanus, and pertussis, unless the fourth dose was given after the fourth birthday, then four are minimum. In order for the statement to be acceptable for a person who is enrolling in an elementary or secondary school and is age seven through age 19, the statement must indicate that the person has received no less than one dose of vaccine each for measles, mumps, and rubella given separately or in combination and consistent with subdivision 10, and no less than three doses of vaccine for poliomyelitis, diphtheria, and tetanus.

Sec. 56. Minnesota Statutes 1996, section 123.70, subdivision 8, is amended to read:

Subd. 8. [REPORT.] The administrator or other person having general control and supervision of the elementary or secondary school shall file a report with the commissioner of children, families, and learning on all persons enrolled in the school, except that. The superintendent of each school district shall file a report with the commissioner of children, families, and learning 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 must be prepared on forms developed jointly by the commissioner of health and the commissioner of children, families, and learning and be distributed to the local school districts by the commissioner of health and shall. The school report must 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 must be filed with the commissioner of children, families, and learning within 60 days of the commencement of each new school term. Upon request, a district shall must be given a 60-day extension for filing the school report. The commissioner of children, families, and learning 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. The child care facility report 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 must 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. 57. Minnesota Statutes 1996, section 123.702, subdivision 1, is amended to read:

Subdivision 1. [EARLY CHILDHOOD DEVELOPMENTAL SCREENING.] Every school board shall must provide for a mandatory program of early childhood developmental screening for children once before school entrance, targeting children who are between 3-1/2 and four years old. This screening program shall must be established either by one board, by two or more boards acting in cooperation, by service cooperatives, by early childhood family education programs, or by other existing programs. This screening examination is a mandatory requirement for a student to continue attending kindergarten or first grade in a public school. A child need not submit to developmental screening provided by a school board if the child's health records indicate to the school board that the child has received comparable developmental screening from a public or private health care organization or individual health care provider. The school Districts are encouraged to reduce the costs of preschool developmental screening programs by utilizing volunteers in implementing the program.

Sec. 58. Minnesota Statutes 1996, section 123.702, subdivision 1b, is amended to read:

also inform the parent or guardian that a child need not submit to the school district screening program if the child's health records indicate to the school that the child has received comparable developmental screening performed within the preceding 365 days by a public or private health care organization or individual health care provider. The notice shall must be given to a parent or guardian at the time the district initially provides information to the parent or guardian about screening and shall must be given again at the screening location.

(b) All screening components shall be consistent with the standards of the state commissioner of health for early developmental screening programs. No A developmental screening program shall must not provide laboratory tests or a physical examination to any child. The school district shall must request from the public or private health care organization or the individual health care provider the results of any laboratory test or physical examination within the 12 months preceding a child's scheduled screening.

(c) If a child is without health coverage, the school district shall must refer the child to an appropriate health care provider.

(d) A school board may offer additional components such as nutritional, physical and dental assessments, review of family circumstances that might affect development, blood pressure, laboratory tests, and health history.

(e) If a statement signed by the child's parent or guardian is submitted to the administrator or other person having general control and supervision of the school that the child has not been screened because of conscientiously held beliefs of the parent or guardian, the screening is not required.

Sec. 59. Minnesota Statutes 1996, section 123.702, subdivision 2, is amended to read:

Subd. 2. [FOLLOW-UP SCREENING.] If any child's screening indicates a condition which requires diagnosis or treatment, the child's parents shall be notified of the condition and the school board shall ensure that an appropriate follow-up and referral process is available.

Sec. 60. Minnesota Statutes 1996, section 123.702, subdivision 3, is amended to read:

Subd. 3. [DEVELOPMENTAL SCREENING PROGRAM INFORMATION.] The school board shall must inform each resident family with a child eligible to participate in the developmental screening program about the availability of the program and the state's requirement that a child receive developmental screening not later than 30 days after the first day of attending kindergarten in a public school.

Sec. 61. Minnesota Statutes 1996, section 123.702, subdivision 4, is amended to read:

Subd. 4. [DEVELOPMENTAL SCREENING SERVICES.] A school board may contract with or purchase service from an approved early developmental screening program in the area. Developmental screening must be conducted by either an individual who is licensed as, or has training that is similar to a special education teacher, school psychologist, kindergarten teacher, prekindergarten teacher, school nurse, public health nurse, registered nurse, or physician. The individual may be a volunteer.

Sec. 62. Minnesota Statutes 1996, section 123.702, subdivision 4a, is amended to read:

Subd. 4a. [SCREENING RECORD.] The school district shall must provide the parent or guardian of the child screened with a record indicating the month and year the child received developmental screening and the results of the screening. The district shall must keep a duplicate copy of the record of each child screened.

Sec. 63. Minnesota Statutes 1996, section 123.702, subdivision 5, is amended to read:

Sec. 64. Minnesota Statutes 1996, section 123.702, subdivision 6, is amended to read:

Subd. 6. [HEALTH CARE PROVIDER SOCIETIES.] A school board may consult with local societies of health care providers.

Sec. 65. Minnesota Statutes 1996, section 123.702, subdivision 7, is amended to read:

Subd. 7. [PRIORITY TO VOLUNTEERS.] In selecting personnel to implement the screening program, the school district shall must give priority first to qualified volunteers.

Sec. 66. Minnesota Statutes 1996, section 123.704, is amended to read:

123.704 [DATA USE.]

Data on individuals collected in screening programs established pursuant to section 123.702 is private, as defined by section 13.02, subdivision 12. Individual and summary data shall must be reported to the school district by the health provider who performs the screening services, for the purposes of developing appropriate educational programs to meet the individual needs of children and designing appropriate health education programs for the district; provided,. No data on an individual shall be disclosed to the district without the consent of that individual's parent or guardian.

Sec. 67. Minnesota Statutes 1996, section 123.7045, is amended to read:

123.7045 [DEVELOPMENTAL SCREENING AID.]

Each school year, the state shall must pay a school district $25 for each child screened according to the requirements of section 123.702. If this amount of aid is insufficient, the district may permanently transfer from the general fund an amount that, when added to the aid, is sufficient.

Sec. 68. Minnesota Statutes 1996, section 124.255, is amended to read:

124.255 [SCHOOL ENRICHMENT PARTNERSHIP PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] The school enrichment partnership program is established. The purpose of the program is to encourage school districts to expand the involvement of the private sector in the delivery of academic programs. The program will provide matching state funds for those provided by the private sector.

Subd. 2. [REVENUE ELIGIBILITY.] A school district or group of school districts is eligible to receive state aid under this program. Districts may enter into joint agreements to provide programs or make expenditures under this section. The limitations under this subdivision shall apply to these programs or expenditures as if they were operated by a single district. A district may receive $1 of state aid for each $2 raised from the private sector. The private match must be in the form of cash. Specific types of noncash support may be considered for the private match. State aid is limited to the lesser of $75,000 or $10 per pupil unit per district.

Subd. 3. [REVENUE MANAGEMENT.] The use of the state and private funds provided under this section is under the general control of the school board. The board may establish, without using state funds or public employees, a separate foundation to directly manage the funds. The private funds must be used to acquire instructional or noninstructional academic materials of a capital nature including, but not limited to, textbooks, globes, maps, and other academic material. The funds may shall not be used for salaries or other employee benefits.

Subd. 5. [RESULTS-ORIENTED CHARTER SCHOOLS.] Notwithstanding section 124.248, subdivision 4, paragraph (b), a results-oriented charter school is eligible to participate in the program under this section as if it were a school district.

Sec. 69. Minnesota Statutes 1996, section 124.26, subdivision 1c, is amended to read:

Subd. 1c. [PROGRAM APPROVAL.] (a) To receive aid under this section, a district, a consortium of districts, or a private nonprofit organization must submit an application by June 1 describing the program, on a form provided by the department. The program must be approved by the commissioner according to the following criteria:

(1) how the needs of different levels of learning will be met;

(2) for continuing programs, an evaluation of results;

(3) anticipated number and education level of participants;

(4) coordination with other resources and services;

(5) participation in a consortium, if any, and money available from other participants;

(6) management and program design;

(7) volunteer training and use of volunteers;

(8) staff development services;

(9) program sites and schedules; and

(10) program expenditures that qualify for aid.

(b) The commissioner may grant adult basic education funds to a private, nonprofit organization to provide services that are not offered by a district or that are supplemental to a district's program. The program provided under this provision must be approved and funded according to the same criteria used for district programs.

(c) Adult basic education programs may be approved under this subdivision for up to five years. Five-year program approval shall must be granted to an applicant who has demonstrated the capacity to:

(1) offer comprehensive learning opportunities and support service choices appropriate for and accessible to adults at all basic skill need levels;

(2) provide a participatory and experiential learning approach based on the strengths, interests, and needs of each adult, that enables adults with basic skill needs to:

(i) identify, plan for, and evaluate their own progress toward achieving their defined educational and occupational goals;

(ii) master the basic academic reading, writing, and computational skills, as well as the problem-solving, decision making, interpersonal effectiveness, and other life and learning skills they need to function effectively in a changing society;

(iii) locate and be able to use the health, governmental, and social services and resources they need to improve their own and their families' lives; and

(3) plan, coordinate, and develop cooperative agreements with community resources to address the needs that the adults have for support services, such as transportation, flexible course scheduling, convenient class locations, and child care;

(4) collaborate with business, industry, labor unions, and employment-training agencies, as well as with family and occupational education providers, to arrange for resources and services through which adults can attain economic self-sufficiency;

(5) provide sensitive and well trained adult education personnel who participate in local, regional, and statewide adult basic education staff development events to master effective adult learning and teaching techniques;

(6) participate in regional adult basic education peer program reviews and evaluations; and

(7) submit accurate and timely performance and fiscal reports.

Sec. 70. Minnesota Statutes 1997 Supplement, section 124.26, subdivision 2, is amended to read:

Subd. 2. [ACCOUNTS; REVENUE; AID.] Each district, group of districts, or private nonprofit organization providing adult basic education programs shall must establish and maintain accounts separate from all other district accounts for the receipt and disbursement of all funds related to these programs. All revenue received pursuant to this section shall must be utilized solely for the purposes of adult basic education programs. In no case shall Federal and state aid plus levy must not equal more than 100 percent of the actual cost of providing these programs.

Sec. 71. Minnesota Statutes 1997 Supplement, section 124.2601, subdivision 6, is amended to read:

Subd. 6. [AID GUARANTEE.] (a) For fiscal year 1994, any adult basic education program that receives less state aid under subdivisions 3 and 7 than from the aid formula for fiscal year 1992 shall must receive the amount of aid it received in fiscal year 1992.

(b) For 1995, 1996, and 1997 fiscal years, an adult basic education program that receives aid shall must receive at least the amount of aid it received in fiscal year 1992 under subdivisions 3 and 7, plus aid equal to the amount of revenue that would have been raised for taxes payable in 1994 under Minnesota Statutes 1992, section 124.2601, subdivision 4, minus the amount raised under subdivision 4.

(c) For fiscal year 1998, any adult basic education program that receives less state aid than in fiscal year 1997 shall receive additional aid equal to 80 percent of the difference between its 1997 aid and the amount of aid under subdivision 5. For fiscal year 1999 and later, additional aid under this paragraph must be reduced by 20 percent each year.

Sec. 72. Minnesota Statutes 1996, section 124.2601, subdivision 7, is amended to read:

Subd. 7. [PRORATION.] If the total appropriation for adult basic education aid is insufficient to pay all approved programs the full amount of aid earned, the department of children, families, and learning shall must proportionately reduce each approved program's aid.

Sec. 73. Minnesota Statutes 1996, section 124.2605, is amended to read:

124.2605 [GED TEST FEES.]

The commissioner of children, families, and learning shall pay 60 percent of the fee that is charged to an eligible individual for the full battery of a GED test, but not more than $20 for an eligible individual.

Sec. 74. Minnesota Statutes 1997 Supplement, section 124.2615, subdivision 2, is amended to read:

(b) For fiscal year 1998 and thereafter, a district shall must receive learning readiness aid equal to:

(1) the number of eligible four-year old children in the district times the ratio of 50 percent of the total learning readiness aid for that year to the total number of eligible four-year old children reported to the commissioner for that year; plus

(2) the number of pupils enrolled in the school district from families eligible for the free or reduced school lunch program times the ratio of 50 percent of the total learning readiness aid for that year to the total number of pupils in the state from families eligible for the free or reduced school lunch program.

Sec. 75. Minnesota Statutes 1996, section 124.2615, subdivision 4, is amended to read:

Subd. 4. [SEPARATE ACCOUNTS.] The district shall must deposit learning readiness aid in a separate account within the community education fund.

Sec. 76. Minnesota Statutes 1996, section 124.2711, as amended by Laws 1997, chapter 162, article 1, sections 6 and 7, is amended to read:

124.2711 [EARLY CHILDHOOD FAMILY EDUCATION REVENUE.]

Subdivision 1. [REVENUE.] The revenue for early childhood family education programs for a school district equals $101.25 for 1998 and $113.50 for 1999 and later fiscal years times the greater of:

(1) 150; or

(2) the number of people under five years of age residing in the school district on October 1 of the previous school year.

Subd. 2. [POPULATION.] For the purposes of subdivision 1, data reported to the department of children, families, and learning may be used to determine the number of people under five years of age residing in the district. The commissioner, with the assistance of the state demographer, shall review the number reported by any district operating an early childhood family education program. If requested, the district shall submit to the commissioner an explanation of its methods and other information necessary to document accuracy. If the commissioner determines that the district has not provided sufficient documentation of accuracy, the commissioner may request the state demographer to prepare an estimate of the number of people under five years of age residing in the district and may use this estimate for the purposes of subdivision 1.

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 .653 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 must equal the early childhood family education revenue.

Subd. 3. [EARLY CHILDHOOD FAMILY EDUCATION AID.] If a district complies with the provisions of section 121.882, it shall must receive early childhood family education aid equal to the difference between the early childhood family education revenue and the early childhood family education levy. If the district does not levy the entire amount permitted, the early childhood family education aid shall must be reduced in proportion to the actual amount levied.

Subd. 4. [USE OF REVENUE RESTRICTED.] Early childhood family education revenue may be used only for early childhood family education programs. Not more than five percent of early childhood family education revenue may be used to administer early childhood family education programs. The increase in revenue for fiscal years 1992 and 1993 shall must be used to:

(1) increase participation of families so that the total participation in early childhood family education programs in the district more nearly reflects the demographic, racial, cultural, and ethnic diversity of the district; and

Subd. 5. [HOME VISITING LEVY.] A school district that enters into a collaborative agreement to provide education services and social services to families with young children may levy an amount equal to $1.60 times the number of people under five years of age residing in the district on September 1 of the last school year. Levy revenue under this subdivision shall must not be included as revenue under subdivision 1. The revenue shall must be used for home visiting programs under section 121.882, subdivision 2b.

Subd. 6. [RESERVE ACCOUNT.] Early childhood family education revenue, which includes aids, levies, fees, grants, and all other revenues received by the school district for early childhood family education programs, must be maintained in a reserve account within the community service fund.

Sec. 77. Minnesota Statutes 1996, section 124.2712, is amended to read:

124.2712 [ADDITIONAL ECFE REVENUE.]

In addition to the revenue in section 124.2711, subdivision 1, in fiscal year 1994 a district is eligible for aid equal to $1.60 times the greater of 150 or the number of people under five years of age residing in the school district on September 1 of the last school year. This amount may be used only for in-service education for early childhood family education parent educators, child educators, and home visitors for violence prevention programs and for home visiting programs under section 126.77. A district that uses revenue under this paragraph for home visiting programs shall must provide home visiting program services through its early childhood family education program or shall contract with a public or nonprofit organization to provide such services. A district may establish a new home visiting program only where no existing, reasonably accessible home visiting program meets the program requirements in section 126.77.

Sec. 78. Minnesota Statutes 1996, section 124.2713, subdivision 7, is amended to read:

Subd. 7. [COMMUNITY EDUCATION AID.] A district's community education aid is the difference between its community education revenue and the community education levy. If the district does not levy the entire amount permitted, the community education aid shall must be reduced in proportion to the actual amount levied.

Sec. 79. Minnesota Statutes 1997 Supplement, section 124.2713, subdivision 8, is amended to read:

Subd. 8. [USES OF GENERAL REVENUE.] (a) General community education revenue may be used for:

(1) nonvocational, recreational, and leisure time activities and programs;

(2) programs for adults with disabilities, if the programs and budgets are approved by the department of children, families, and learning;

(3) adult basic education programs, according to section 124.26;

(4) summer programs for elementary and secondary pupils;

(5) implementation of a youth development plan;

(6) implementation of a youth service program;

(7) early childhood family education programs, according to section 121.882; and

(8) extended day programs, according to section 121.88, subdivision 10.

(9) In addition to money from other sources, a district may use up to ten percent of its community education revenue for equipment that is used exclusively in community education programs. This revenue may be used only for the following purposes:

(ii) to purchase or lease equipment for instructional programs; and

(iii) to purchase textbooks and library books.

(b) General community education revenue must not be used to subsidize the direct activity costs for adult enrichment programs. Direct activity costs include, but are not limited to, the cost of the activity leader or instructor, cost of materials, or transportation costs.

Sec. 80. Minnesota Statutes 1996, section 124.2715, subdivision 3, is amended to read:

Subd. 3. [LEVY.] A district may levy for a program for adults with disabilities an amount up to the amount designated in subdivision 2. In the case of a program offered by a group of districts, the levy amount shall must be apportioned among the districts according to the agreement submitted to the department of children, families, and learning.

Sec. 81. Minnesota Statutes 1996, section 124.2716, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY.] A school district that offers an extended day program according to section 121.88, subdivision 10, is eligible for extended day revenue for the additional costs of providing services to children with disabilities or to children experiencing family or related problems of a temporary nature who participate in the extended day program.

Sec. 82. Minnesota Statutes 1996, section 124.2716, subdivision 2, is amended to read:

Subd. 2. [EXTENDED DAY REVENUE.] The extended day revenue for an eligible school district equals the approved additional cost of providing services to children with disabilities or children experiencing family or related problems of a temporary nature who participate in the extended day program.

Sec. 83. Minnesota Statutes 1996, section 124.276, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY.] A school district that has a family connections program, according to sections 125.70 to 125.705, for one or more of its teachers is eligible for aid to extend the teaching contract of a family connections teacher.

Sec. 84. Minnesota Statutes 1996, section 124.276, subdivision 3, is amended to read:

Subd. 3. [COMMISSIONER APPROVAL.] The commissioner may approve plans and applications for districts throughout the state for family connections aid. Application procedures and deadlines shall be established by The commissioner shall establish application procedures and deadlines.

Sec. 85. Minnesota Statutes 1996, section 124C.12, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY.] An applicant for revenue may be any one of the following:

(1) a school district located in a city of the first class offering a program in cooperation with other districts or by itself, in one or more areas in the district or in the entire district;

(2) at least two cooperating school districts located in the seven-county metropolitan area but not located in a city of the first class;

(3) a group of school districts that are all members of the same education district;

(4) an education district;

(5) a group of cooperating school districts none of which are members of any education district; or

Sec. 86. Minnesota Statutes 1996, section 125.702, is amended to read:

125.702 [PROGRAM SELECTION.]

Subdivision 1. [AUTHORIZATION.] A school district or group of districts may establish an improved learning program.

Subd. 2. [RULES AND RIGHTS.] The state board of education may waive school district compliance with its rules which would prevent implementation of an improved learning program. Participation in an improved learning program as a principal-teacher, counselor-teacher, or career teacher shall must not affect seniority in the district or rights under the applicable collective bargaining agreement.

Subd. 3. [ADDITIONAL FUNDING.] A school district providing an improved learning program may receive funds for the program from private sources and governmental agencies, including state or federal funds.

Sec. 87. Minnesota Statutes 1996, section 125.703, is amended to read:

125.703 [ADVISORY COUNCIL.]

The school board of a district providing a family connections program shall must appoint an advisory council. Council members shall must be selected from the school attendance area in which programs are provided. Members of the council may include students, teachers, principals, administrators and community members. A majority of the members shall must be parents with children participating in the local program. The local advisory council shall must advise the school board in the development, coordination, supervision, and review of the career teacher program. The council shall must meet at least two times each year with any established community education advisory council in the district. Members of the council may be members of the community education advisory council. The council shall must report to the school board.

Sec. 88. Minnesota Statutes 1996, section 125.704, subdivision 1, is amended to read:

Subdivision 1. [MANDATORY COMPONENTS.] A family connections program shall must include:

(1) participation by a designated individual as a career teacher, principal-teacher, or counselor teacher;

(2) an emphasis on each individual child's unique learning and development needs;

(3) procedures to give the career teacher a major responsibility for leadership of the instructional and noninstructional activities of each child beginning with early childhood family education;

(4) procedures to involve parents in the learning and development experiences of their children;

(5) procedures to implement outcome based education by focusing on the needs of the learner;

(6) procedures to coordinate and integrate the instructional program with all community education programs;

(7) procedures to concentrate career teacher programs at sites that provide early childhood family education and subsequent learning and development programs; and

(8) procedures for the district to fund the program.

Sec. 89. Minnesota Statutes 1996, section 125.705, subdivision 1, is amended to read:

Sec. 90. Minnesota Statutes 1996, section 125.705, subdivision 3, is amended to read:

Subd. 3. [STAFF/STUDENT RATIO.] (a) Except as provided in clause (b), one career teacher, principal-teacher, or counselor teacher shall be assigned for every 125 students. For each special education student included in the assignment, the 1:125 ratio shall must be reduced by one.

(b) One principal-teacher shall be assigned for every 50 students when the principal-teacher is also the principal of the school.

Sec. 91. Minnesota Statutes 1996, section 125.705, subdivision 4, is amended to read:

Subd. 4. [SELECTION; RENEWAL.] (a) The school board shall must establish procedures for teachers, principals, and counselors to apply for the position of career teacher, principal-teacher, or counselor teacher. The authority for selection of career teachers, principal-teachers, and counselor teachers shall be is vested in the board and no individual shall have a right to employment as a career teacher, principal-teacher, or counselor teacher based on seniority or order of employment in the district.

(b) Employment of the career teacher, principal-teacher, and counselor teacher may be on a 12-month basis with vacation time negotiated individually with the board. The annual contract of a career teacher, principal-teacher, or counselor teacher may not be renewed, as the board shall see fit; provided, however,. The board shall must give any such teacher whose contract as a career teacher, principal-teacher, or counselor teacher it declines to renew for the following year written notice to that effect before April 15. If the board fails to renew the contract of a career teacher, principal-teacher, or counselor teacher, that individual shall must be reinstated to another position in the district if eligible pursuant to section 125.12 or 125.17.

Sec. 92. Minnesota Statutes 1996, section 125.705, subdivision 5, is amended to read:

Subd. 5. [DUTIES.] The career teacher, principal-teacher, and counselor teacher shall be is responsible for:

(1) the overall education, learning, and development plan of assigned students. This plan shall be designed by The career teacher, principal-teacher, and counselor teacher must design this plan with the student, parents, and other faculty, and shall must seek to maximize the learning and development potential and maturation level of each pupil;

(2) measuring the proficiency of the assigned students and assisting other staff in identifying pupil needs and making appropriate educational and subject groupings;

(3) when part of the district's plan, taking responsibility for the parent and early childhood education of assigned students;

(4) designing and being responsible for program components which meet special learning needs of high potential and talented students;

(5) coordinating the ongoing, year-to-year learning and development program for assigned students; and

(6) developing learning and development portfolios.

Sec. 93. Minnesota Statutes 1997 Supplement, section 126.77, subdivision 1, is amended to read:

(b) Each district is encouraged to integrate into its existing curriculum a program for violence prevention that includes at least:

(1) a comprehensive, accurate, and age appropriate curriculum on violence prevention, nonviolent conflict resolution, sexual, racial, and cultural harassment, and student hazing that promotes equality, respect, understanding, effective communication, individual responsibility, thoughtful decision making, positive conflict resolution, useful coping skills, critical thinking, listening and watching skills, and personal safety;

(2) planning materials, guidelines, and other accurate information on preventing physical and emotional violence, identifying and reducing the incidence of sexual, racial, and cultural harassment, and reducing child abuse and neglect;

(3) a special parent education component of early childhood family education programs to prevent child abuse and neglect and to promote positive parenting skills, giving priority to services and outreach programs for at-risk families;

(4) involvement of parents and other community members, including the clergy, business representatives, civic leaders, local elected officials, law enforcement officials, and the county attorney;

(5) collaboration with local community services, agencies, and organizations that assist in violence intervention or prevention, including family-based services, crisis services, life management skills services, case coordination services, mental health services, and early intervention services;

(6) collaboration among districts and SCs service cooperatives;

(7) targeting early adolescents for prevention efforts, especially early adolescents whose personal circumstances may lead to violent or harassing behavior;

(8) opportunities for teachers to receive in-service training or attend other programs on strategies or curriculum designed to assist students in intervening in or preventing violence in school and at home; and

(9) administrative policies that reflect, and a staff that models, nonviolent behaviors that do not display or condone sexual, racial, or cultural harassment or student hazing.

(c) The department may provide assistance at a neutral site to a nonpublic school participating in a district's program.

Sec. 94. Minnesota Statutes 1996, section 126.78, subdivision 4, is amended to read:

Subd. 4. [GRANT PROCEEDS.] A successful applicant shall must use the grant money to develop and implement or to continue a violence prevention program according to the terms of the grant application.

Sec. 95. Minnesota Statutes 1996, section 126.84, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The commissioner of children, families, and learning, in consultation with the commissioner of human services, shall make male responsibility and fathering grants to youth or parenting programs that collaborate with school districts to educate young people, particularly males ages ten to 21, on the responsibilities of parenthood.

Sec. 96. Minnesota Statutes 1996, section 126.84, subdivision 3, is amended to read:

Subd. 3. [EXPECTED OUTCOMES.] Grant recipients shall must use the funds for programs designed to prevent teen pregnancy and to prevent crime in the long term. Recipient programs must assist youth to:

(1) understand the connection between sexual behavior, adolescent pregnancy, and the roles and responsibilities of marriage and parenting;

(3) understand the importance of fathers in the lives of children;

(4) acquire parenting skills and knowledge of child development; and

(5) find community support for their roles as fathers and nurturers of children.

Sec. 97. Minnesota Statutes 1996, section 126.84, subdivision 4, is amended to read:

Subd. 4. [GRANT APPLICATIONS.] (a) An application for a grant may be submitted by a youth or parenting program whose purpose is to reduce teen pregnancy or teach child development and parenting skills in collaboration with a school district. Each grant application must include a description of the program's structure and components, including collaborative and outreach efforts; an implementation and evaluation plan to measure the program's success; a plan for using males as instructors and mentors; and a cultural diversity plan to ensure that staff or teachers will reflect the cultural backgrounds of the population served and that the program content is culturally sensitive.

(b) Grant recipients must, at a minimum, provide education in responsible parenting and child development, responsible decision-making related to marriage and relationships, and the legal implications of paternity. Grant recipients also must provide public awareness efforts in the collaborating school district. Grant recipients may offer support groups, health and nutrition education, and mentoring and peer teaching.

(c) A grant applicant must establish an advisory committee to assist the applicant in planning and implementation of a grant. The advisory committee must include student representatives, adult males from the community, representatives of community organizations, teachers, parent educators, and representatives of family social service agencies.

Sec. 98. Minnesota Statutes 1996, section 126.84, subdivision 5, is amended to read:

Subd. 5. [ADMINISTRATION.] The commissioner of children, families, and learning shall administer male responsibility and fathering grants. The commissioner shall establish a grant review committee composed of teachers and representatives of community organizations, student organizations, and education or family social service agencies that offer parent education programs.

Sec. 99. Minnesota Statutes 1996, section 126A.01, is amended to read:

126A.01 [ENVIRONMENTAL EDUCATION GOALS AND PLAN.]

The environmental education program described in this chapter section and section 126A.06 has these goals for the pupils and other citizens of this state:

(a) Pupils and citizens should be able to apply informed decision-making processes to maintain a sustainable lifestyle. In order to do so, citizens should:

(1) understand ecological systems;

(2) understand the cause and effect relationship between human attitudes and behavior and the environment;

(3) be able to evaluate alternative responses to environmental issues before deciding on alternative courses of action; and

(4) understand the effects of multiple uses of the environment.

(b) Pupils and citizens shall have access to information and experiences needed to make informed decisions about actions to take on environmental issues.

Sec. 100. Minnesota Statutes 1996, section 126B.01, subdivision 2, is amended to read:

Subd. 2. [FUNDING.] Work-based learning programs incorporating post-secondary instruction implemented under this chapter section and sections 126B.03 to 126B.10 shall provide for student funding according to section 123.3514.

Sec. 101. Minnesota Statutes 1996, section 126B.01, subdivision 4, is amended to read:

Subd. 4. [PARTNERSHIP GRANTS.] The council shall must 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 must evaluate grant proposals on the basis of the elements required in the local plan described in section 126B.10, subdivision 3. The council shall must 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.

Sec. 102. Minnesota Statutes 1996, section 126B.10, is amended to read:

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 must represent multiple sectors in the community, including, at a minimum, representatives of employers, primary and secondary education, labor and professional organizations, workers, learners, parents, community-based organizations, and to the extent possible, post-secondary education.

Subd. 2. [BOARD.] A local education and employment transitions partnership shall must establish a governing board for planning and implementing work-based and other applied learning programs. The board shall must 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.

Subd. 3. [LOCAL EDUCATION AND EMPLOYMENT TRANSITIONS SYSTEMS.] A local education and employment transitions partnership shall must assess the needs of employers, employees, and learners, and develop a plan for implementing and achieving the objectives of a local or regional education and employment transitions system. The plan shall must provide for a comprehensive local system for assisting learners and workers in making the transition from school to work or for retraining in a new vocational area. The objectives of a local education and employment transitions system include:

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

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

(3) eliminating barriers to providing effective integrated applied learning, service-learning, or work-based curriculum;

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

(5) increasing applied instruction in the attitudes and skills essential for success in the workplace, including cooperative working, leadership, problem-solving, and respect for diversity;

(7) 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;

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

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

(10) improving the coordination and effectiveness of local vocational and job training programs, including vocational education, adult basic education, tech prep, 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.;

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

(12) providing 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;

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

(14) including 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

(15) providing a warranty to employers, post-secondary education programs, and other post-secondary training programs, that learners successfully 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. 4. [ANNUAL REPORTS.] A local education and employment transitions partnership shall must annually publish a report and submit information to the council as required. The report shall must include information required by the council for the statewide system performance assessment. The report shall must be available to the public in the communities served by the local education and employment transitions partnership. The report shall must be published no later than September 1 of the year following the year in which the data was collected.

Sec. 103. [REPEALER.]

Minnesota Statutes 1996, section 126.84, subdivision 6, is repealed.

Sec. 104. [INSTRUCTION TO REVISOR.]

The revisor of statutes shall renumber each section of Minnesota Statutes listed in column A with the number listed in column B. The revisor shall also make necessary cross-reference changes consistent with the renumbering.

Column A Column B

126A.01 115A.073

126A.06 115A.074

123.70 120C.05

123.702, subd. 1 120C.07, subd. 1

subd. 1a subd. 2

subd. 1b subd. 3

subd. 2 subd. 4

subd. 3 subd. 5

subd. 4 subd. 6

subd. 4a subd. 7

subd. 5 subd. 8

subd. 6 subd. 9

subd. 7 subd. 10

123.704 120C.08

123.7045 120C.09

123.35, subd. 17 120C.11

126.202 120C.12

121.203 120C.13

121.831 120C.20

124.2615 120C.21

121.835 120C.22

121.882, subd. 1 120C.25, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 2b subd. 4

subd. 3 subd. 5

subd. 4 subd. 6

subd. 5 subd. 7

subd. 6 subd. 8

subd. 7 subd. 9

subd. 7a subd. 10

subd. 8 subd. 11

subd. 9 subd. 12

124.2711, subd. 1 120C.26, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 3 subd. 4

subd. 4 subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

124.2712 120C.27

121.85 120C.30

121.88, subd. 1 120C.31, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 3 subd. 4

subd. 4 subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

subd. 7 subd. 8

subd. 8 subd. 9

subd. 9 subd. 10

subd. 10 subd. 11

124.2713, subd. 1 120C.32, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 5 subd. 4

subd. 6a subd. 6

subd. 6b subd. 7

subd. 7 subd. 8

subd. 8 subd. 9

subd. 9 subd. 10

subd. 10 subd. 11

124.2714 120C.33

124.2716 120C.34

121.8355, subd. 1 120C.35, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 3 subd. 4

subd. 3a subd. 5

subd. 4 subd. 6

subd. 5 subd. 7

subd. 6 subd. 8

subd. 7 subd. 9

125.70 120C.37

125.701 120C.38

125.702 120C.39

125.703 120C.40

125.704 120C.41

125.705 120C.42

125.276, subd. 1 120C.43, subd. 1

subd. 2a subd. 2

subd. 3 subd. 3

subd. 4 subd. 4

124A.291 120C.44

126.77 120C.45

126.78 120C.46

126.79 120C.47

126.84 120C.48

121.615 120C.50

121.70 120C.51

121.701 120C.52

121.702 120C.53

121.704 120C.54

121.705 120C.55

121.706 120C.56

121.707 120C.57

121.708 120C.58

121.709 120C.59

121.710 120C.60

126B.01 120C.62

126B.03, subd. 2 120C.63, subd. 1

subd. 3 subd. 2

126B.06 120C.64

126B.10 120C.65

121.885 120C.67

123.35, subd. 8 120C.70

124.26, subd. 1b 120C.71, subd. 1

subd. 1c subd. 2

subd. 2 subd. 3

124.2601 120C.72

124.2605 120C.74

124.2715 120C.76

121.201 120C.77

121.612 120C.82

124.255 120C.84

124C.10 120C.86

124C.11 120C.87

124C.12 120C.88

Section 1. Minnesota Statutes 1996, section 121.1115, subdivision 1, is amended to read:

Subdivision 1. [EDUCATIONAL ACCOUNTABILITY AND PUBLIC REPORTING.] Consistent with the state board of education process to adopt a results-oriented graduation rule under section 121.11, subdivision 7c, the state board of education and the department of children, families, and learning, in consultation with education and other system stakeholders, shall must establish a coordinated and comprehensive system of educational accountability and public reporting that promotes higher academic achievement.

Sec. 2. Minnesota Statutes 1996, section 121.1115, subdivision 2, is amended to read:

Subd. 2. [STATISTICAL ADJUSTMENTS.] In developing policies and assessment processes to hold schools and school districts accountable for high levels of academic standards, including the profile of learning, the commissioner shall aggregate student data over time to report student performance levels measured at the school district, regional, or statewide level. When collecting and reporting the data, the commissioner shall: (1) acknowledge the impact of significant demographic factors such as residential instability, the number of single parent families, parents' level of education, and parents' income level on school outcomes; and (2) organize and report the data so that state and local policymakers can understand the educational implications of changes in districts' demographic profiles over time. Any report the commissioner disseminates containing summary data on student performance must integrate student performance and the demographic factors that strongly correlate with that performance.

Sec. 3. Minnesota Statutes 1996, section 124.078, is amended to read:

124.078 [PERMANENT SCHOOL FUND ADVISORY COMMITTEE.]

A state permanent school fund advisory committee is established to advise the department of natural resources on the management of permanent school fund land, which is held in trust for the school districts of the state. The advisory committee shall must consist of the following persons or their designees: the chairs of the education committees of the legislature, the chairs of the senate committee on finance and house committee on ways and means, the commissioner of children, families, and learning, one superintendent from a nonmetropolitan district, and one superintendent from a metropolitan area district. The school district superintendents shall be appointed by the commissioner of children, families, and learning.

The advisory committee shall review the policies of the department of natural resources on management of school trust fund lands and shall recommend necessary changes in policy and implementation in order to ensure provident utilization of the permanent school fund lands.

Sec. 4. Minnesota Statutes 1996, section 124.08, is amended to read:

124.08 [SCHOOL ENDOWMENT FUND,; DESIGNATION.]

The school endowment fund shall consist of the income from the permanent school fund. The commissioner of children, families, and learning may accept for and on behalf of the permanent school fund a donation of cash, marketable securities, or other personal property. A noncash donation, other than a donation of marketable securities, must be disposed of for cash as soon as the commissioner can obtain fair market value for the donation. Marketable securities may be disposed of at the discretion of the state board of investment consistent with sections 11A.16 and 11A.24. A cash donation and the cash receipts from a donation disposed of for cash must be credited immediately to the permanent school fund. Earnings from marketable securities are earnings of the permanent school fund.

Sec. 5. Minnesota Statutes 1996, section 124.09, is amended to read:

124.09 [SCHOOL ENDOWMENT FUND,; APPORTIONMENT.]

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

Sec. 6. Minnesota Statutes 1996, section 124.10, subdivision 1, is amended to read:

Subdivision 1. [COPY TO COMMISSIONER OF FINANCE.] The commissioner shall furnish a copy of the apportionment of the school endowment fund shall be furnished by the commissioner to the commissioner of finance, who thereupon shall draw warrants on the state treasury, payable to the several districts, for the amount due each district. There is hereby annually appropriated from the school endowment fund the amount of such apportionments.

Sec. 7. Minnesota Statutes 1996, section 124.10, subdivision 2, is amended to read:

Subd. 2. [APPORTIONMENTS TO DISTRICTS.] The county auditor each year shall apportion to the school districts within the county the amount received from power line taxes under section 273.42, liquor licenses, fines, estrays, and other sources belonging to the general fund. The apportionments shall must be made in proportion to each district's net tax capacity within the county in the prior year. The apportionments shall must be made and amounts distributed to the school districts at the times provided for the settlement and distribution of real and personal property taxes under sections 276.09, 276.11, and 276.111, except that all of the power line taxes apportioned to a school district from the county school fund shall must be included in the first half distribution of property taxes to the school district. No district shall receive any part of the money received from liquor licenses unless all sums paid for such licenses in such district are apportioned to the county school fund.

Sec. 8. Minnesota Statutes 1996, section 124.12, is amended to read:

124.12 [MANNER OF PAYMENT OF STATE AIDS.]

Subd. 2. It shall be the duty of the commissioner of children, families, and learning to deliver to the commissioner of finance a certificate for each district entitled to receive state aid under the provisions of this chapter. Upon the receipt of such certificate, it shall be the duty of the commissioner of finance to draw a warrant upon the state treasurer in favor of the district for the amount shown by each certificate to be due to the district. The commissioner of finance shall transmit such warrants to the district together with a copy of the certificate prepared by the commissioner.

Sec. 9. Minnesota Statutes 1996, section 124.14, subdivision 2, is amended to read:

to sections 121.904 to 121.917. Notwithstanding the fiscal years designated by the appropriation, on determining that the amount of an aid paid is less than the school district's entitlement, the commissioner is authorized to increase such aid from the current appropriation.

Sec. 10. Minnesota Statutes 1996, section 124.14, subdivision 3, is amended to read:

Subd. 3. [AUDITS.] The commissioner shall establish procedures for conducting and shall conduct audits of school district records and files for the purpose of verifying school district pupil counts, levy limitations, and aid entitlements. The commissioner shall establish procedures for selecting and shall select districts to be audited. Disparities, if any, between pupil counts, levy limitations, or aid entitlements determined by audit of school district records and files and data reported by school districts in reports, claims and other documents shall be reviewed by the commissioner who shall order increases or decreases accordingly. Whenever possible, the commissioner shall audit at least 25 districts each year pursuant to this subdivision.

Sec. 11. Minnesota Statutes 1996, section 124.14, subdivision 3a, is amended to read:

Subd. 3a. [LESS THAN 25 DISTRICTS AUDITED.] If the commissioner audits fewer than 25 school districts in a fiscal year pursuant to subdivision 3, the commissioner shall report the reasons for the number audited to the following legislative committees: house education, house appropriations, senate education, and senate finance.

Sec. 12. Minnesota Statutes 1996, section 124.14, subdivision 4, is amended to read:

Subd. 4. [FINAL DECISION AND RECORDS.] A reduction of aid under this section may be appealed to the state board of education and its decision shall be final. Public schools shall at all times be open to the inspection of the commissioner, and. The accounts and records of any district shall must be open to inspection by the state auditor, the state board, or the commissioner for the purpose of audits conducted under this section. Each district shall keep for a minimum of three years at least the following: (1) identification of the annual session days held, together with a record of the length of each session day, (2) a record of each pupil's daily attendance, with entrance and withdrawal dates, and (3) identification of the pupils transported who are reported for transportation aid.

Sec. 13. Minnesota Statutes 1996, section 124.14, subdivision 6, is amended to read:

Subd. 6. [ADJUSTMENT APPROPRIATION.] There is annually appropriated from the general fund to the department of children, families, and learning any additional amounts necessary for the adjustments made pursuant to section 124.155, subdivision 1.

Sec. 14. Minnesota Statutes 1996, section 124.14, subdivision 7, is amended to read:

Subd. 7. [APPROPRIATION TRANSFERS.] If a direct appropriation from the general fund to the department of children, families, and learning for any education aid or grant authorized in this chapter and chapters 121, 123, 124A, 124C, 125, 126, and 134 exceeds the amount required, the commissioner of children, families, and learning may transfer the excess to any education aid or grant appropriation that is insufficient. However, section 124A.032 applies to a deficiency in the direct appropriation for general education aid. Excess appropriations shall must be allocated proportionately among aids or grants that have insufficient appropriations. The commissioner of finance shall make the necessary transfers among appropriations according to the determinations of the commissioner of children, families, and learning. If the amount of the direct appropriation for the aid or grant plus the amount transferred according to this subdivision is insufficient, the commissioner shall prorate the available amount among eligible districts. The state is not obligated for any additional amounts.

Sec. 15. Minnesota Statutes 1996, section 124.14, subdivision 8, is amended to read:

Sec. 16. Minnesota Statutes 1996, section 124.15, subdivision 2, is amended to read:

Subd. 2. [VIOLATIONS OF LAW.] The commissioner shall reduce the district's special state aid for any school year whenever the board of the district authorizes or permits within the district violations of law within the district by:

(1) employment in a public school of the district of employing a teacher who does not hold a valid teaching license or permit, or in a public school;

(2) noncompliance with a mandatory rule of general application promulgated by the state board in accordance with statute in the absence of, unless special circumstances making make enforcement thereof inequitable, contrary to the best interest of, or imposing impose an extraordinary hardship on, the district affected, or, or the rule is contrary to the district's best interests;

(3) the district's continued performance by the district of a contract made for the rental of rooms or buildings for school purposes or for the rental of any facility owned or operated by or under the direction of any private organization, which if the contract has been disapproved where, the time for review of the determination of disapproval has expired, and no proceeding for review is pending, or;

(4) any practice which is a violation of sections 1 and 2 of article 13 of the Constitution of the state of Minnesota, or;

(5) failure to provide reasonably provide for the a resident pupil's school attendance to which a resident pupil is entitled under Minnesota Statutes,; or

(6) noncompliance with state laws prohibiting discrimination because of race, color, creed, religion, national origin, sex, age, marital status, status with regard to public assistance or disability, as defined in section 363.03,.

the special state aid to which a district is otherwise entitled for any school year shall be reduced The reduction must be made in the amount and upon the procedure provided in this section or, in the case of the violation stated in clause (1), upon the procedure provided in section 124.19, subdivision 3.

Sec. 17. Minnesota Statutes 1996, section 124.15, subdivision 2a, is amended to read:

Subd. 2a. [ASSURANCE OF COMPLIANCE.] After consultation with the commissioner of human rights, the state board of education shall adopt rules in conformance with chapter 14 which. The rules must direct school districts to file with the commissioner of children, families, and learning assurances of compliance with state and federal laws prohibiting discrimination and which specify the information required to be submitted in support of the assurances. The commissioner of children, families, and learning shall provide copies of the assurances and the supportive information to the commissioner of human rights. If, after reviewing the assurances and the supportive information it appears that one or more violations of the Minnesota human rights act are occurring in the district, the commissioner of human rights shall notify the commissioner of children, families, and learning of the violations, and the commissioner of children, families, and learning may then proceed pursuant to subdivision 3.

Sec. 18. Minnesota Statutes 1996, section 124.15, subdivision 3, is amended to read:

Subd. 3. [NOTICE TO BOARD.] When it appears that one or more of the violations an enumerated violation is occurring in a district, the commissioner shall forthwith notify the board of that district in writing thereof. Such The notice shall must specify the violations, set a reasonable time within which the district shall must correct the specified violations, describe the correction required, and advise that if the correction is not made within the time allowed, special state aids to the district will be reduced. The time allowed for correction may be extended by the commissioner if there is reasonable ground therefor.

Sec. 19. Minnesota Statutes 1996, section 124.15, subdivision 4, is amended to read:

The board must give the commissioner written notice of the decision. If the commissioner, after such further investigation as the commissioner deems necessary, adheres to the previous notice, such the board shall be entitled to a hearing by the state board , in which event a. The state board must set a hearing time and place shall be set therefor and notice and the board of the district must be given notice by mail to the board of the district. The state board shall must adopt rules governing the proceedings for hearings which shall. The hearings must be designed to give a full and fair hearing and permit interested parties an opportunity to produce evidence relating to the issues involved. Such The rules may provide that any question of fact to be determined upon such review at the hearing may be referred to one or more members of the board or to an employee of the state board acting as a referee to hear evidence and report to the state board the testimony taken to the state board. The state board, or any a person designated to receive evidence upon a review under this act at a hearing, shall have the same right to issue subpoenas and administer oaths and parties to the review hearing shall have the same right to subpoenas issued as are accorded with respect to allowed for proceedings before the industrial commission. There shall be A stenographic record must be made of all testimony given and other proceedings during such the hearing, and as far as. If practicable, rules governing reception of evidence in courts shall obtain apply to the hearing. The decision of the state board shall must be in writing and the controlling facts upon which the decision is made shall must be stated in sufficient detail to apprise the parties and the reviewing court the basis and reason of the decision. The decision shall must be confined to whether or not the specified violations or any of them existed at the date of the commissioner's first notice, whether such the violations as did exist were corrected within the time permitted, and whether such the violations require reduction of the state aids under this section.

Sec. 20. Minnesota Statutes 1996, section 124.15, subdivision 5, is amended to read:

Subd. 5. [VIOLATION; AID REDUCTION.] The commissioner shall not reduce state aids payable to the district if the violation specified is corrected within the time permitted, or if the commissioner on being notified of the district board's decision to dispute decides the violation does not exist, or if the state board decides after hearing no violation specified in the commissioner's notice existed at the time of it the notice, or that any that existed the violations were corrected within the time permitted, there shall be no reduction of state aids payable to the school district. Otherwise state aids payable to the district for the year in which the violation occurred shall be reduced as follows: The total amount of state aids to which the district may be entitled shall be reduced in the proportion that the period during which a specified violation continued, computed from the last day of the time permitted for correction, bears to the total number of days school is held in the district during the year in which a violation exists, multiplied by 60 percent of the basic revenue, as defined in section 124A.22, subdivision 2, of the district for that year.

Sec. 21. Minnesota Statutes 1996, section 124.15, subdivision 6, is amended to read:

Subd. 6. [REDUCTION IN AIDS PAYABLE.] Reductions in aid under this section and section 124.19 shall must be from general education aid. If there is not sufficient general education aid remaining to be paid for the school year in which the violation occurred, the reduction shall be from the other aids listed in section 124.155, subdivision 2, that are payable to the district for that year in the order in which the aids are listed in section 124.155, subdivision 2. If there is not a sufficient amount of state aids remaining payable to the district for the school year in which the violation occurred to permit the full amount of reduction required, that part of the required reduction not taken from that school year's aids will be taken from the state aids payable to the district for the next school year, and the reduction will be made from the various aids payable for the next year in the order above specified.

Sec. 22. Minnesota Statutes 1996, section 124.15, subdivision 8, is amended to read:

Sec. 23. Minnesota Statutes 1997 Supplement, section 124.155, subdivision 1, is amended to read:

Subdivision 1. [AMOUNT OF ADJUSTMENT.] Each year state aids and credits enumerated in subdivision 2 payable to any school district for that fiscal year shall be adjusted, in the order listed, by an amount equal to (1) the amount the district recognized as revenue for the prior fiscal year pursuant to section 121.904, subdivision 4a, clause (b), minus (2) the amount the district recognizes as revenue for the current fiscal year pursuant to section 121.904, subdivision 4a, clause (b). For the purposes of making the aid adjustment under this subdivision, the amount the district recognizes as revenue for either the prior fiscal year or the current fiscal year pursuant to section 121.904, subdivision 4a, clause (b), shall not include any amount levied pursuant to sections 124.315, subdivision 4, 124.912, subdivisions 1, paragraph (2), 2, and 3, 124.916, subdivisions 1, 2, and 3, paragraphs 4, 5, and 6, 124.918, subdivision 6, and 124A.03, subdivision 2. Payment from the permanent school fund shall not be adjusted pursuant to this section. The school district shall be notified of the amount of the adjustment made to each payment pursuant to this section.

Sec. 24. Minnesota Statutes 1997 Supplement, section 124.155, subdivision 2, is amended to read:

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

(1) general education aid authorized in section 124A.23;

(2) secondary vocational aid authorized in section 124.573;

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

(4) school-to-work program aid for children with a disability authorized in section 124.574;

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

(6) transportation aid authorized in section 124.225;

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

(8) adult education aid authorized in section 124.26;

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

(10) capital expenditure aid authorized in section 124.83;

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

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

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

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

(15) alternative delivery aid authorized in section 124.322;

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

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

(19) cooperation-combination aid authorized in section 124.2725.

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

Sec. 25. Minnesota Statutes 1996, section 124.195, subdivision 1, is amended to read:

Subdivision 1. [APPLICABILITY.] This section applies to all aids or credits paid by the commissioner of children, families, and learning from the general fund to school districts.

Sec. 26. Minnesota Statutes 1997 Supplement, section 124.195, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] (a) The term "other district receipts" means payments by county treasurers pursuant to section 276.10, apportionments from the school endowment fund pursuant to section 124.09, apportionments by the county auditor pursuant to section 124.10, subdivision 2, and payments to school districts by the commissioner of revenue pursuant to chapter 298.

(b) The term "cumulative amount guaranteed" means the sum of the following:

(1) one-third of the final adjustment payment according to subdivision 6; plus

(2) the product of

(i) the cumulative disbursement percentage shown in subdivision 3; times

(ii) the sum of

90 percent of the estimated aid and credit entitlements paid according to subdivision 10; plus

100 percent of the entitlements paid according to subdivisions 8 and 9; plus

the other district receipts; plus

the final adjustment payment according to subdivision 6.

(c) The term "payment date" means the date on which state payments to school districts are made by the electronic funds transfer method. If a payment date falls on a Saturday, a Sunday, or a weekday which is a legal holiday, the payment shall be made on the immediately following business day. The commissioner of children, families, and learning may make payments on dates other than those listed in subdivision 3, but only for portions of payments from any preceding payment dates which could not be processed by the electronic funds transfer method due to documented extenuating circumstances.

Sec. 27. Minnesota Statutes 1996, section 124.195, subdivision 3, is amended to read:

Subd. 3. [PAYMENT DATES AND PERCENTAGES.] The commissioner of children, families, and learning shall pay to a school district on the dates indicated an amount computed as follows: the cumulative amount guaranteed minus the sum of (a) the district's other district receipts through the current payment, and (b) the aid and credit payments through the immediately preceding payment. For purposes of this computation, the payment dates and the cumulative disbursement percentages are as follows:

Payment date Percentage

Payment 1 July 15: 2.25

Payment 3 August 15:the greater of (a) the finaladjustment

for the prior fiscal year for the state paid property

tax credits established in section 273.1392, or

(b) the amount needed to provide 6.75 percent

Payment 4 August 30: 9.0

Payment 5 September 15: 12.75

Payment 6 September 30: 16.50

Payment 7 October 15: the greater of (a) one-half of the final

adjustment for the prior fiscal year for all aid

entitlements except state paid property tax credits,

or (b) the amount needed to provide 20.75 percent

Payment 8 October 30: the greater of (a) one-half of the final

adjustment for the prior fiscal year for all aid

entitlements except state paid property tax credits,

or (b) the amount needed to provide 25.0 percent

Payment 9 November 15: 31.0

Payment 10 November 30: 37.0

Payment 11 December 15: 40.0

Payment 12 December 30: 43.0

Payment 13 January 15: 47.25

Payment 14 January 30: 51.5

Payment 15 February 15: 56.0

Payment 16 February 28: 60.5

Payment 17 March 15: 65.25

Payment 18 March 30: 70.0

Payment 19 April 15: 73.0

Payment 20 April 30: 79.0

Payment 21 May 15: 82.0

Payment 22 May 30: 90.0

Payment 23 June 20: 100.0

Sec. 28. Minnesota Statutes 1996, section 124.195, subdivision 3a, is amended to read:

Sec. 29. Minnesota Statutes 1996, section 124.195, subdivision 3b, is amended to read:

Subd. 3b. [CASH FLOW ADJUSTMENT.] During each year in which the cash flow low points for August, September, and October estimated by the commissioner of finance for invested treasurer's cash exceeds $360,000,000, the commissioner of children, families, and learning shall increase the cumulative disbursement percentages established in subdivision 3 to the following amounts:

Payment 3 August 15: 12.75 percent

Payment 4 August 30: 15.00 percent

Payment 5 September 15: 17.25 percent

Payment 6 September 30: 19.50 percent

Payment 7 October 15: 21.75 percent

Sec. 30. Minnesota Statutes 1996, section 124.195, subdivision 4, is amended to read:

Subd. 4. [PAYMENT LIMIT.] Subdivision 3 does not authorize the commissioner of children, families, and learning to pay to a district's operating funds an amount of state general fund cash that exceeds the sum of:

(a) its estimated aid and credit payments for the current year according to subdivision 10;

(b) its actual aid payments according to subdivisions 8 and 9; and

(c) the final adjustment payment for the prior year.

Sec. 31. Minnesota Statutes 1996, section 124.195, subdivision 5, is amended to read:

Subd. 5. [COMMISSIONER'S ASSUMPTIONS.] For purposes of determining the amount of state general fund cash to be paid to school districts pursuant to subdivision 3, the commissioner of children, families, and learning shall:

(a) (1) assume that the payments to school districts by the county treasurer of revenues accruing to the fiscal year of receipt pursuant to section 276.11 are made in the following manner:

(1) (i) 50 percent within seven business days of each due date; and

(2) (ii) 100 percent within 14 business days of each due date;

(b) (2) assume that the payments to school districts by the county treasurer of revenues accruing to the fiscal year of receipt pursuant to section 276.111 are made in the following manner:

(1) (i) 50 percent within seven business days of the October 15 due date;

(2) (ii) 100 percent within 14 business days of the October 15 due date; and

(3) (iii) 100 percent within ten business days of the November 15 due date.; and

(c) (3) assume that the payments to school districts by county auditors pursuant to section 124.10, subdivision 2, are made at the end of the months indicated in that subdivision.

Sec. 32. Minnesota Statutes 1996, section 124.195, subdivision 6, is amended to read:

payment shall must be made as specified in subdivision 3. In the event actual data are not available, the final adjustment payment may be computed based on estimated data. A corrected final adjustment payment shall must be made when actual data are available.

Sec. 33. Minnesota Statutes 1997 Supplement, section 124.195, subdivision 7, is amended to read:

Subd. 7. [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each fiscal year state general fund payments for a district nonoperating fund shall must be made at 90 percent of the estimated entitlement during the fiscal year of the entitlement. This amount shall be paid in 12 equal monthly installments. The amount of the actual entitlement, after adjustment for actual data, minus the payments made during the fiscal year of the entitlement shall must be paid prior to October 31 of the following school year. The commissioner may make advance payments of homestead and agricultural credit aid for a district's debt service fund earlier than would occur under the preceding schedule if the district submits evidence showing a serious cash flow problem in the fund. The commissioner may make earlier payments during the year and, if necessary, increase the percent of the entitlement paid to reduce the cash flow problem.

Sec. 34. Minnesota Statutes 1997 Supplement, 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, 124D, 125, 126, 134, and section 273.1392, shall be paid at 90 percent of the estimated entitlement during the fiscal year of the entitlement. The final adjustment payment, according to subdivision 6, shall must be the amount of the actual entitlement, after adjustment for actual data, minus the payments made during the fiscal year of the entitlement.

Sec. 35. Minnesota Statutes 1996, section 124.195, subdivision 14, is amended 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 children, families, and learning for education aids or credits is insufficient to make the next scheduled payment or payments, the commissioner of children, families, and learning 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 children, families, and learning 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 must 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 must 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. 36. Minnesota Statutes 1996, section 124.196, is amended to read:

124.196 [CHANGE IN PAYMENT OF AIDS AND CREDITS.]

remain in effect until no later than May 30 of that same fiscal year. In calculating the payment to a school district pursuant to section 124.195, subdivision 3, the commissioner may subtract the sum specified in that subdivision, plus an additional amount no greater than the following:

(1) the net cash balance in the district's four operating funds on June 30 of the preceding fiscal year; minus

(2) the product of $150 times the number of actual pupil units in the preceding fiscal year; minus

(3) the amount of payments made by the county treasurer during the preceding fiscal year, pursuant to section 276.11, which is considered revenue for the current school year. However, no additional amount shall be subtracted if the total of the net unappropriated fund balances in the district's four operating funds on June 30 of the preceding fiscal year, is less than the product of $350 times the number of actual pupil units in the preceding fiscal year. The net cash balance shall must include all cash and investments, less certificates of indebtedness outstanding, and orders not paid for want of funds.

A district may appeal the payment schedule established by this section according to the procedures established in section 124.195, subdivision 3a.

Sec. 37. Minnesota Statutes 1996, section 124.2131, subdivision 1, is amended to read:

Subdivision 1. [ADJUSTED NET TAX CAPACITY.] (a) [COMPUTATION.] The department of revenue shall must annually conduct an assessment/sales ratio study of the taxable property in each school district in accordance with the procedures in paragraphs (b) and (c). Based upon the results of this assessment/sales ratio study, the department of revenue shall must determine an aggregate equalized net tax capacity for the various classes of taxable property in each school district, which tax capacity shall be designated as the adjusted net tax capacity. The adjusted net tax capacities shall be determined using the net tax capacity percentages in effect for the assessment year following the assessment year of the study. The department of revenue shall must make whatever estimates are necessary to account for changes in the classification system. The department of revenue may incur the expense necessary to make the determinations. The commissioner of revenue may reimburse any county or governmental official for requested services performed in ascertaining the adjusted net tax capacity. On or before March 15 annually, the department of revenue shall file with the chair of the tax committee of the house of representatives and the chair of the committee on taxes and tax laws of the senate a report of adjusted net tax capacities. On or before June 15 annually, the department of revenue shall file its final report on the adjusted net tax capacities established by the previous year's assessments and the current year's net tax capacity percentages with the commissioner of children, families, and learning and each county auditor for those school districts for which the auditor has the responsibility for determination of local tax rates. A copy of the report so filed shall be mailed to the clerk of each district involved and to the county assessor or supervisor of assessments of the county or counties in which each district is located.

(b) [METHODOLOGY.] In making its annual assessment/sales ratio studies, the department of revenue shall must use a methodology consistent with the most recent Standard on Assessment Ratio Studies published by the assessment standards committee of the International Association of Assessing Officers. The commissioner of revenue shall supplement this general methodology with specific procedures necessary for execution of the study in accordance with other Minnesota laws impacting the assessment/sales ratio study. The commissioner shall document these specific procedures in writing and shall publish the procedures in the State Register, but these procedures will not be considered "rules" pursuant to the Minnesota Administrative Procedure Act. For purposes of this section, sections 270.12, subdivision 2, clause (8), and 278.05, subdivision 4, the commissioner of revenue shall exclude from the assessment/sales ratio study the sale of any nonagricultural property which does not contain an improvement, if (1) the statutory basis on which the property's taxable value as most recently assessed is less than market value as defined in section 273.11, or (2) the property has undergone significant physical change or a change of use since the most recent assessment.

(c) [AGRICULTURAL LANDS.] For purposes of determining the adjusted net tax capacity of agricultural lands for the calculation of adjusted net tax capacities, the market value of agricultural lands shall must be the price for which the property would sell in an arms length transaction.

(e) [STIPULATED VALUES AND ABATEMENTS.] The estimated market value to be used in calculating sales ratios shall must be the value established by the assessor before any stipulations resulting from appeals by property owners and before any abatement unless the abatement was granted for the purpose of correcting mere clerical errors.

(f) [SALES OF INDUSTRIAL PROPERTY.] Separate sales ratios shall must be calculated for commercial property and for industrial property. These two classes shall be combined only in jurisdictions in which there is not an adequate sample of sales in each class.

Sec. 38. Minnesota Statutes 1996, section 124.2131, subdivision 2, is amended to read:

Subd. 2. [ADJUSTED NET TAX CAPACITY; GROWTH LIMIT.] In the calculation of adjusted net tax capacities for 1987 and each year thereafter, the commissioner of revenue shall not increase the adjusted net tax capacity of taxable property for any school district over the adjusted net tax capacity established and filed with the commissioner of children, families, and learning for the immediately preceding year by more than the greater of (1) 19 percent of the certified adjusted net tax capacity established and filed with the commissioner of children, families, and learning for the year immediately preceding, or (2) 40 percent of the difference between the district's total adjusted net tax capacity for the current year calculated without the application of this subdivision and the district's certified adjusted net tax capacity established and filed with the commissioner of children, families, and learning for the immediately preceding year.

Sec. 39. Minnesota Statutes 1996, section 124.2131, subdivision 3a, is amended to read:

Subd. 3a. [CAPTURED TAX CAPACITY ADJUSTMENT.] In calculating adjusted net tax capacity, the commissioner of revenue shall increase the adjusted net tax capacity of a school district containing a tax increment financing district for which an election is made under section 469.1782, subdivision 1, clause (1). The amount of the increase equals the captured net tax capacity of the tax increment financing district in the year preceding the first taxes payable year in which the special law permits collection beyond that permitted by the general law duration limit that otherwise would apply. The addition applies beginning for aid and levy for the first taxes payable year in which the special law permits collection of increment beyond that permitted by the general law duration limit that otherwise would apply. The addition continues to apply for each taxes payable year the district remains in effect.

Sec. 40. Minnesota Statutes 1996, section 124.2131, subdivision 5, is amended to read:

Subd. 5. [ADJUSTED NET TAX CAPACITY; APPEALS.] Should any If a district, within 30 days after receipt of a copy of a report filed with the commissioner of children, families, and learning made pursuant to subdivision 1 or 3, be is of the opinion that the commissioner of revenue has made an error in the determination of the school district's market value, it may appeal from the report or portion thereof relating to the school district to the commissioner of revenue for a review and determination of the matters contained in the appeal. The commissioner of revenue shall advise the school district of the determination within 30 days. If the school district wishes to appeal the determination of the commissioner, it must file a notice of appeal with the tax court, as provided in subdivisions 6 to 11 within ten days of the notice of determination from the commissioner.

Sec. 41. Minnesota Statutes 1996, section 124.2131, subdivision 6, is amended to read:

Subd. 6. [NOTICE OF APPEAL.] The school district shall must file with the court administrator of the tax court a notice of appeal from the determination of the commissioner of revenue fixing the market value of the school district, and such notice shall must show the basis of the alleged error. A copy of such the notice of appeal shall must be served upon the commissioner of revenue, and proof of service shall must be filed with the court administrator.

Sec. 42. Minnesota Statutes 1996, section 124.2131, subdivision 7, is amended to read:

the tax court are set and heard, except that an appeal filed under subdivision 5 shall must take precedence over other appeals pending before the court. The attorney general shall represent the commissioner of revenue. The Administrative Procedure Act, sections 14.09 to 14.28, 14.38, 14.44 to 14.45, and 14.57 to 14.69, shall apply to hearings insofar as it is applicable.

Sec. 43. Minnesota Statutes 1996, section 124.2131, subdivision 8, is amended to read:

Subd. 8. [TAX COURT DETERMINATION.] The tax court shall hear, consider, and determine such appeal, de novo upon the issues made by the notice of appeal, if a hearing has been granted thereon. At the conclusion of the hearing, the court shall must: (1) file findings of fact, or (2) refer the issues to the commissioner of revenue with instructions and recommendations for a determination and correction of the market value of the appealing school district. The decision of the tax court, if it decides the matter de novo, shall have the same force and effect as a determination by the commissioner of revenue in the first instance under this section, and the commissioner of revenue shall must be notified thereof. If the matter is rereferred to the commissioner of revenue, a redetermination by the commissioner of revenue in accordance with the recommendations of the tax court shall must likewise have the same force and effect as a determination by it in the first instance under this section.

Sec. 44. Minnesota Statutes 1996, section 124.2131, subdivision 9, is amended to read:

Subd. 9. [HEARING EXAMINER.] In addition to the powers and duties of the tax court as prescribed by chapter 271, and any act amendatory thereof, any hearing ordered pursuant to the provisions hereunder this section may be heard by a hearing examiner in lieu of one or more judges of the tax court. If a hearing is conducted by a hearing examiner, such hearing examiner shall exercise the same powers conferred by law upon one or more judges of the tax court. The hearing examiner shall report to the court. The court is authorized to make findings of fact based on the report of the hearing examiner in the same manner as is required by these provisions when the hearing is conducted by the court. The tax court may employ hearing examiners upon such terms and conditions as it shall prescribe. A hearing examiner so appointed shall be in the unclassified service of the state.

Sec. 45. Minnesota Statutes 1996, section 124.2131, subdivision 11, is amended to read:

Subd. 11. [AIDS PENDING APPEALS.] During the pendency of any appeal from the commissioner of revenue evaluation, state aids to the appealing district so appealing shall must be paid on the basis of the evaluation subject to adjustment upon final determination of the appeal.

Sec. 46. Minnesota Statutes 1996, section 124.214, is amended to read:

124.214 [AID ADJUSTMENTS.]

Subdivision 1. [OMISSIONS.] No adjustments to any aid payments made pursuant to this chapter or chapter 124A, resulting from omissions in school district reports, except those adjustments determined by the legislative auditor, shall be made for any school year after December 30 of the next school year, unless otherwise specifically provided by law.

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 children, families, and learning 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 must be the product of:

(1) the net revenue loss as certified by the county auditor, times

(2) the ratio of:

(a) (i) the sum of the amounts of the district's certified levy in the preceding year according to the following:

(ii) (B) section 124.226, subdivisions 1 and 4, if the district received transportation aid according to section 124.225 for the second preceding year;

(iii) (C) section 124.243, if the district received capital expenditure facilities aid according to that section for the second preceding year;

(iv) (D) section 124.244, if the district received capital expenditure equipment aid according to that section for the second preceding year;

(v) (E) section 124.83, if the district received health and safety aid according to that section for the second preceding year;

(vi) (F) sections 124.2713, 124.2714, and 124.2715, if the district received aid for community education programs according to any of those sections for the second preceding year;

(vii) (G) section 124.2711, subdivision 2a, if the district received early childhood family education aid according to section 124.2711 for the second preceding year;

(viii) (H) section 124.321, subdivision 3, if the district received special education levy equalization aid according to that section for the second preceding year;

(ix) (I) section 124A.03, subdivision 1g, if the district received referendum equalization aid according to that section for the second preceding year; and

(x) (J) section 124A.22, subdivision 4a, if the district received training and experience aid according to that section for the second preceding year; to

(b) to (ii) the total amount of the district's certified levy in the preceding October, plus or minus auditor's adjustments.

Subd. 3. [EXCESS TAX INCREMENT.] (a) 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) (b) 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) (i) 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) (A) section 124A.23, if the district received general education aid according to that section for the second preceding year;

(ii) (B) section 124.226, subdivisions 1 and 4, if the school district received transportation aid according to section 124.225 for the second preceding year;

(iii) (C) section 124.243, if the district received capital expenditure facilities aid according to that section for the second preceding year;

(iv) (D) section 124.244, if the district received capital expenditure equipment aid according to that section for the second preceding year;

(vi) (F) sections 124.2713, 124.2714, and 124.2715, if the district received aid for community education programs according to any of those sections for the second preceding year;

(vii) (G) section 124.2711, subdivision 2a, if the district received early childhood family education aid according to section 124.2711 for the second preceding year;

(viii) (H) section 124.321, subdivision 3, if the district received special education levy equalization aid according to that section for the second preceding year;

(ix) (I) section 124A.03, subdivision 1g, if the district received referendum equalization aid according to that section for the second preceding year; and

(x) (J) section 124A.22, subdivision 4a, if the district received training and experience aid according to that section for the second preceding year; to

(B) to (ii) the total amount of the school district's certified levy for the fiscal year, plus or minus auditor's adjustments.

(b) (c) 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 must use the payment of excess tax increment to replace the aid and levy revenue reduced under this subdivision.

(d) 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. 47. Minnesota Statutes 1996, section 124.625, is amended to read:

124.625 [VETERANS TRAINING.]

The commissioner shall continue the veterans training program. All receipts to the veterans training revolving fund for the veterans training program are appropriated to the commissioner to pay the necessary expenses of operation of the program. The department of children, families, and learning shall must act as the state agency for approving educational institutions for purposes of United States Code, title 38, chapter 36, relating to educational benefits for veterans and other persons. The state board may adopt rules to fulfill its obligations as the state approving agency. All federal money received for purposes of the veterans training program shall must be deposited in the veterans training revolving fund and is appropriated to the department for those purposes.

Sec. 48. Minnesota Statutes 1996, section 124A.036, as amended by Laws 1997, chapter 7, article 1, section 65, is amended to read:

124A.036 [PAYMENTS TO RESIDENT AND NONRESIDENT DISTRICTS.]

Subdivision 1. [AID TO DISTRICT OF RESIDENCE.] General education aid shall must be paid to the district of residence unless otherwise specifically provided by law.

Subd. 2. [DISTRICT WITHOUT SCHOOLS.] Except as otherwise provided in law, any district not maintaining classified elementary or secondary schools shall must pay the tuition required in order to enable resident pupils to attend school in another district when necessary, and shall must receive general education aid on the same basis as other districts. The aid shall must be computed as if the pupils were enrolled in the district of residence.

Subd. 3. [NOTIFICATION OF RESIDENT DISTRICT.] A district educating a pupil who is a resident of another district shall must notify the district of residence within 60 days of the date the pupil is determined by the district to be a nonresident, but not later than August 1 following the end of the school year in which the pupil is educated. If the district of residence does not receive a notification from the providing district pursuant to this subdivision, it shall is not be liable to that district for any tuition billing received after August 1 of the next school year.

Subd. 4. [STATE AGENCY AND COURT PLACEMENTS.] If a state agency or a court of the state desires to place a child in a school district which that is not the child's district of residence, that agency or court shall must, prior to before placement, allow the district of residence an opportunity to participate in the placement decision and notify the district of residence, the district of attendance and the commissioner of children, families, and learning of the placement decision. When a state agency or court determines that an immediate emergency placement is necessary and that time does not permit district participation in the placement decision or notice to the districts and the commissioner of children, families, and learning of the placement decision prior to before the placement, the agency or court may make the decision and placement without that participation or prior notice. The agency or court shall must notify the district of residence, the district of attendance and the commissioner of children, families, and learning of an emergency placement within 15 days of the placement.

Subd. 5. [ALTERNATIVE ATTENDANCE PROGRAMS.] The general education aid for districts must be adjusted for each pupil attending a nonresident district under sections 120.062, 120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22. The adjustments must be made according to this subdivision.

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

(b) General education aid paid to a district serving a pupil in programs listed in this subdivision shall must be increased by an amount equal to the general education revenue exclusive of compensatory revenue attributable to the pupil in the nonresident district.

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

(d) The district of residence shall must pay tuition to a district or an area learning center, operated according to paragraph (e), providing special instruction and services to a pupil with a disability, as defined in section 120.03, or a pupil, as defined in section 120.181, who is enrolled in a program listed in this subdivision. The tuition shall must be equal to (1) the actual cost of providing special instruction and services to the pupil, including a proportionate amount for debt service and for capital expenditure facilities and equipment, and debt service but not including any amount for transportation, minus (2) the amount of general education aid and special education aid, attributable to that pupil, that is received by the district providing special instruction and services.

(e) An area learning center operated by a service cooperative, intermediate district, education district, or a joint powers cooperative may elect through the action of the constituent boards to charge tuition for pupils rather than to calculate general education aid adjustments under paragraph (a), (b), or (c). The tuition must be equal to the greater of the average general education revenue per pupil unit attributable to the pupil, or the actual cost of providing the instruction, excluding transportation costs, if the pupil meets the requirements of section 120.03 or 120.181.

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

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

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

Sec. 49. [INSTRUCTION TO REVISOR.]

The revisor of statutes shall renumber each section of Minnesota Statutes listed in column A with the number listed in column B. The revisor shall also make necessary cross-reference changes consistent with the renumbering.

Column A Column B

121.01 121A.01

121.81 121A.02

121.82 121A.03

121.02, subd. 1 121A.04, subd. 1

subd. 2a subd. 2

subd. 3 subd. 3

subd. 4 subd. 4

121.03 121A.05

121.04 121A.06

121.05 121A.07

121.06 121A.08

121.14 121A.09

121.11, subd. 7 121A.10, subd. 1

subd. 7b subd. 2

subd. 9 subd. 3

subd. 11 subd. 4

subd. 7c 121A.11

121.1113 121A.12

121.1115, subd. 1 121A.13, subd. 1

subd. 1a subd. 2

subd. 2 subd. 3

126.685 121A.15

121.48 121A.17

121.1601, subd. 1 121A.19, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

121.11, subd. 7d subd. 4

126.82 121A.20

121.16, subd. 1 121A.22, subd. 1

subd. 3 subd. 2

121.161 121A.23

121.162 121A.24

121.163 121A.25

121.175 121A.27

121.15, subd. 1 121A.31, subd. 1

subd. 1a subd. 2

subd. 1b subd. 3

subd. 2 subd. 4

subd. 4 subd. 6

subd. 5 subd. 7

subd. 6 subd. 8

subd. 7 subd. 9

subd. 7a subd. 10

subd. 8 subd. 11

subd. 9 subd. 12

121.1501 121A.32

121.1502 121A.33

121.931, subd. 1 121A.36, subd. 1

subd. 2 subd. 2

subd. 5 subd. 3

121.932, subd. 2 121A.37, subd. 1

subd. 3 subd. 2

subd. 4 subd. 3

subd. 4a subd. 4

subd. 4b subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

121.933, subd. 1 121A.38

121.95 121A.39

121.498 121A.41

121.496, subd. 2 121A.43, subd. 1

subd. 3 subd. 2

121.11, subd. 5 121A.50

121.918 121A.51

121.919 121A.52

124.078 121A.54

124.079 121A.55

124.08 121A.56

124.09 121A.57

124.10 121A.58

124.12 121A.60

124.14, subd. 1 121A.61, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 3a subd. 4

subd. 4 subd. 5

subd. 6 subd. 6

subd. 7 subd. 7

subd. 8 subd. 8

124.15, subd. 1 121A.62, subd. 1

subd. 2 subd. 2

subd. 2a subd. 3

subd. 3 subd. 4

subd. 4 subd. 5

subd. 5 subd. 6

subd. 6 subd. 7

subd. 7 subd. 8

subd. 8 subd. 9

124.155 121A.63

124.18 121A.65

124.195, subd. 1 121A.67, subd. 1

subd. 2 subd. 2

subd. 3a subd. 4

subd. 3b subd. 5

subd. 3c subd. 6

subd. 4 subd. 7

subd. 5 subd. 8

subd. 6 subd. 9

subd. 7 subd. 10

subd. 8 subd. 11

subd. 9 subd. 12

subd. 10 subd. 13

subd. 11 subd. 14

subd. 14 subd. 15

subd. 15 subd. 16

124.196 121A.68

124A.036 121A.69

124.2131, subd. 1 121A.70, subd. 1

subd. 2 subd. 2

subd. 3 subd. 3

subd. 3a subd. 4

subd. 5 subd. 5

subd. 6 subd. 6

subd. 7 subd. 7

subd. 8 subd. 8

subd. 9 subd. 9

subd. 10 subd. 10

subd. 11 subd. 11

124.214 121A.72

124.2141 121A.73

126.256 121A.80

126.115 121A.82

124.625 121A.84

Section 1. Minnesota Statutes 1996, section 121.155, is amended to read:

121.155 [JOINT POWERS AGREEMENTS FOR FACILITIES.]

Subd. 2. [SHARED FACILITIES.] A group of governmental units may form a joint powers district under section 471.59 representing all participating units to build or acquire a facility. The joint powers board must submit the project for review and comment under section 121.15. The joint powers board must hold a hearing on the proposal. The joint powers district must submit the question of authorizing the borrowing of funds for the project to the voters of the joint powers district at a special election. The question submitted shall state the total amount of funding needed from all sources. The joint powers board may issue the bonds according to chapter 475 and certify the levy required by section 475.61 only if a majority of those voting on the question vote in the affirmative and only after the boards of each member unit have adopted a resolution pledging the full faith and credit of that unit. The resolution must irrevocably commit that unit to pay an agreed upon share of any debt levy shortages that, together with other funds available, would allow the joint powers board to pay the principal and interest on the obligations. The clerk of the joint powers board must certify the vote of the bond election to the commissioner of children, families, and learning.

Sec. 2. Minnesota Statutes 1996, section 122.01, is amended to read:

122.01 [DEFINITIONS.]

Subdivision 1. [DEFINITIONS.] For purposes of this chapter, the words defined in section 120.02, have the same meaning.

Subd. 2. [TEACHER.] For purposes of this chapter, "teacher" means a teacher as defined in section 125.12, subdivision 1.

Sec. 3. Minnesota Statutes 1996, section 122.02, is amended to read:

122.02 [CLASSES, NUMBER.]

School Districts shall be classified as common, independent, or special districts, each of which is a public corporation. Each district shall be known by its classification and each shall be assigned a number by the commissioner so that its title will be .......... school district number ..... .

Sec. 4. Minnesota Statutes 1996, section 122.03, is amended to read:

122.03 [ASSIGNMENT OF IDENTIFICATION NUMBERS.]

Subdivision 1. [ASSIGNMENT.] The commissioner of children, families, and learning shall, by order, assign an identification number to each district. The assignment shall be made so that each classified district has an exclusive identification number which is exclusive to it in its classification.

Subd. 2. [NOTIFICATION.] Upon making the assignment of an identification number, the commissioner of children, families, and learning shall forthwith notify the clerk of the district and the county auditors of the counties in which any part of the district lies of the identification number assigned. A certified copy of the order may be recorded in the office of the county recorder to show the new legal name of the district.

Subd. 3. [LEGAL IDENTIFICATION.] From and after the making of the order, The legal identification of the district shall become and be as assigned the assigned identification number. All records, correspondence, reports and references to the district shall must thereafter refer to the district by its proper title as assigned.

Sec. 5. Minnesota Statutes 1996, section 122.21, is amended to read:

122.21 [DETACHMENT AND ANNEXATION OF LAND.]

Subdivision 1. [DETACHMENT AND ANNEXATION.] The owner of land which adjoins any independent district, and whose land is not in a special district may petition the county board of the county in which the greater part of the area proposed for detachment and annexation lies to detach all or any part of the land together with the intervening lands as defined in subparagraph paragraph (b) below, from the district it now is in, and to attach it, together with such intervening land, to the adjoining district. For purpose of this section, land is adjoining a school district if:

(a) The boundary of the area proposed for detachment and annexation is the same as the district boundary to which attachment is sought at any point, including corners, or

(b) The area proposed for detachment and annexation is separated at any point from the district to which annexation is sought by not more than one-half mile and the intervening land is vacant and unoccupied or is owned by one or more of the following: The United States, or the state of Minnesota or any of its political subdivisions, or an owner who is unknown or cannot be found or

(c) The area proposed by a land owner for detachment and annexation is adjoining, (as defined in subparagraphs paragraphs (a) and (b) above), any land proposed for detachment from and annexation to the same district in another pending petition.

Subd. 2. [PETITION.] The petition shall must contain:

(a) A correct description of the area proposed for detachment and annexation, together with such including supporting data with regard to regarding location and title to land as will establish facts conformable to subdivision 1 to establish that the land is adjoining a district.

(b) The reasons for the proposed change with facts showing that the granting of the petition will not reduce the size of any district to less than four sections, unless the district is not operating a school within the district.

(c) Consent to the petition, endorsed thereon at any time before the hearing by the board of the district from which the area is to be removed, if, at the time of the filing of the petition, any part of the area proposed for detachment is part of a district which maintains and operates a secondary school within the district. Before the hearing, the consent of the board of the district in which the area proposed for detachment lies must be endorsed on the petition.

(d) An identification of the district to which annexation is sought.

(e) Such Other information as the petitioners may desire to affix.

(f) An acknowledgment by the petitioner.

Subd. 3. [FILING PETITION.] The petition shall must be filed with the auditor who shall present it to the county board at its next meeting. At the meeting, the county board shall must fix a time and place for hearing the petition, which time. The hearing shall be not more than 60 nor less than ten days from the date of the meeting. The auditor shall forthwith serve notice of the hearing on each district directly affected by the petition, by mail addressed to the clerk. If any area affected by the petition is in another county, the auditor shall mail a notice of hearing to the auditor of such county and shall also give one week's published notice of the hearing in the county wherein in which the hearing is to be held, and ten days' posted notice in each school district affected. Such posted and published notice may combine pending petitions. At the hearing on the petition, the county board shall must receive and hear any evidence for or against the petition. The hearing may be adjourned from time to time.

families, and learning in which event, then 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 have a deferred effective date not later than July 1 next immediately following its issuance. If the petition be is 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.

Subd. 5. [MODIFICATION OF RECORDS.] Upon receipt of the order, the commissioner shall forthwith modify the records and any plats and petitions and proceedings involving districts affected by such order presently before the commissioner for action or record, to conform to the order.

Subd. 6. [TAXABLE PROPERTY.] Upon the effective date of the order, the detachment and annexation ordered therein is effected. All taxable property in the area so detached and annexed remains taxable for payment of any school purpose obligations theretofore authorized by or on that date outstanding already authorized by or outstanding on the effective date of the order against the district from which detached. Such property is not by virtue of the order relieved The order does not relieve such property from the obligation of any bonded debt theretofore already incurred to which it was subject prior to the order. All taxable property in the area so detached and annexed is taxable for payment of any school district obligations authorized on or subsequent to the effective date of the order by the district to which annexation is made.

Sec. 6. Minnesota Statutes 1996, section 122.22, subdivision 1, is amended to read:

Subdivision 1. [DISSOLUTION.] Any district may be dissolved and the territory be attached to other districts by proceeding in accordance with this section.

Sec. 7. Minnesota Statutes 1996, section 122.22, subdivision 4, is amended to read:

Subd. 4. [PETITION.] A petition executed pursuant to subdivision 2(b) shall be filed with the auditor. It shall The petition must contain the following:

(a) A statement that petitioners desire proceedings instituted leading to dissolution of the district and other provisions made for the education of the inhabitants of the territory and that petitioners are eligible voters of the district;

(b) An identification of the district; and

(c) The reasons supporting the petition which may include recommendations as to disposition of territory to be dissolved. The recommendations are advisory in nature only and are not binding on any petitioners or county board for any purpose.

The persons circulating the petition shall attach their affidavit swearing or affirming that the persons executing the petition are eligible voters, as defined in section 201.014, of the district and that they signed in the presence of one of the circulators.

The auditor shall present the petition to the county board at its next meeting. At that meeting, the county board shall must determine a date for a hearing. The hearing shall be not less than 20 nor more than 60 days from the date of that meeting.

Sec. 8. Minnesota Statutes 1996, section 122.22, subdivision 5, is amended to read:

Subd. 5. [CERTIFICATION.] Certification executed pursuant to subdivision 2(c) shall must be filed with the auditor. It shall The certification must contain the following:

(a) A copy of the resolution initiating the election;

(b) A copy of the notice of election with an affidavit of publication or posting;

(d) The results of the election by number of votes cast for and number against the question; and

(e) If an advisory ballot is taken on annexation, the question voted on and number of ballots cast for and against the proposal.

The auditor shall present the certification to the county board at its next meeting. At that meeting, the county board shall must determine a date for a hearing. The hearing shall be not less than 20 nor more than 60 days from the date of that meeting.

Sec. 9. Minnesota Statutes 1996, section 122.22, subdivision 6, is amended to read:

Subd. 6. [HEARING.] When a hearing is ordered under this section, the auditor shall have give ten days' posted notice of the hearing in the district proposed for dissolution, one week's published notice in the county, and ten days' mailed notice to the clerk of the district proposed for dissolution and to the clerk of each adjoining district and to the commissioner. If all or any part of the district proposed for dissolution or any adjoining district lies in another county, the auditor shall forthwith upon establishment of the hearing date, mail notice of the hearing to the auditor of each county so situated upon establishment of the hearing date.

Sec. 10. Minnesota Statutes 1996, section 122.22, subdivision 7a, is amended to read:

Subd. 7a. [INFORMATION TO COUNTY AUDITOR.] (a) Before the day of a hearing ordered pursuant to this section, each district adjoining the district proposed for dissolution shall must provide the following information and resolution to the county auditor of the county containing the greatest land area of the district proposed for dissolution:

(1) The outstanding bonded debt, outstanding energy loans made according to section 216C.37 or sections 298.292 to 298.298, and the capital loan obligation of the district;

(2) The net tax capacity of the district;

(3) The most current school tax rates for the district, including any referendum, discretionary, or other optional levies being assessed currently and the expected duration of the levies;

(4) A resolution passed by the school board of the district stating that if taxable property of the dissolved district is attached to it, one of the following requirements is imposed:

(i) the taxable property of the dissolving district which is attached to its district shall not be liable for the bonded debt, outstanding energy loans made according to section 216C.37 or sections 298.292 to 298.298, or the capital loan obligation of the district which existed as of the time of the attachment;

(ii) the taxable property of the dissolving district which is attached to its district shall be liable for the payment of the bonded debt, outstanding energy loans made according to section 216C.37 or sections 298.292 to 298.298, or the capital loan obligation of the district which existed as of the time of the attachment in the proportion which the net tax capacity of that part of the dissolving district which is included in the newly enlarged district bears to the net tax capacity of the entire district as of the time of attachment; or

(iii) the taxable property of the dissolving district which is attached to its district shall be liable for some specified portion of the amount that could be requested pursuant to subclause (ii).

(b) An apportionment pursuant to paragraph (a), clause (4), subclause (ii) or (iii), shall be made by the county auditor of the county containing the greatest land area of the district proposed for transfer.

Sec. 11. Minnesota Statutes 1996, section 122.22, subdivision 9, is amended to read:

Subd. 9. [ORDER FOR DISSOLUTION.] (a) An order issued under subdivision 8, clause (b), shall must contain the following:

(1) A statement that the district is dissolved unless the results of an election held pursuant to subdivision 11 provide otherwise;

(2) A description by words or plat or both showing the disposition of territory in the district to be dissolved;

(3) The outstanding bonded debt, outstanding energy loans made according to section 216C.37 or sections 298.292 to 298.298, and the capital loan obligation of the district to be dissolved;

(4) A statement requiring the fulfillment of the requirements imposed by each adjoining district to which territory in the dissolving district is to be attached regarding the assumption of its outstanding preexisting bonded indebtedness by any territory from the dissolving district which is attached to it;

(5) An effective date for the order. The effective date shall be July 1 of an odd-numbered year unless the school board and the exclusive representative of the teachers in each affected district agree to an effective date of July 1 of an even-numbered year. The agreement must be in writing and submitted to the commissioner of children, families, and learning; and

(6) Other information the county board may desire to include.

(b) The auditor shall within ten days from its issuance serve a copy of the order by mail upon the clerk of the district to be dissolved and upon the clerk of each district to which the order attaches any territory of the district to be dissolved and upon the auditor of each other county in which all or any part of the district to be dissolved or any district to which the order attaches territory lies, and upon the commissioner.

Sec. 12. Minnesota Statutes 1996, section 122.22, subdivision 13, is amended to read:

Subd. 13. [ELECTION DATE.] If an election is required under subdivision 11, then before the expiration of a 45 day period after the date of the order for dissolution and attachment, the auditor shall set a date and call the election by filing a written order therefor for the election and serving a copy thereof of the order personally or by mail on the clerk of the district in which the election is to be held. The date shall be not less than 15 nor more than 30 days after the date of the order, upon which date a special election shall be held in the district proposed for dissolution. The auditor shall cause post and publish notice of the election to be posted and published according to law. Upon receipt of the notice, the board shall conduct the election.

Sec. 13. Minnesota Statutes 1996, section 122.22, subdivision 14, is amended to read:

Subd. 14. [ELECTION RESULTS.] The board must certify the results of the election shall be certified by the board to the auditor. If a majority of all votes cast on the question at the election approve the order, the order becomes final and effective as of the date specified in the order. Each person served with the order shall be so notified. If a majority of all votes cast on the question disapprove the order, the proceedings are dismissed, and the order becomes void.

Sec. 14. Minnesota Statutes 1996, section 122.22, subdivision 18, is amended to read:

Subd. 18. [BONDED DEBT.] The bonded debt of a district dissolved under provisions of this section shall must be paid according to levies made therefor for that debt under provision of chapter 475. The obligation of the taxable property in the dissolved district with reference to the payment of such bonded debt is not affected by this section.

Sec. 15. Minnesota Statutes 1996, section 122.22, subdivision 20, is amended to read:

district to be dissolved is divided by the order of dissolution and attachment, the commissioner shall, within 30 days after the order is issued, issue an order for the distribution of its current assets and liabilities, real and personal. If the commissioner's order provides for the transfer of an interest in real estate to a district, this order may also impose a dollar amount as a claim against that district in favor of other districts, and this claim shall be paid and enforced in the manner provided by law for the payment of judgments against a district. The obligations of districts to the teachers employed by the dissolved district shall be governed by the provisions of section 122.532.

Sec. 16. Minnesota Statutes 1996, section 122.22, subdivision 21, is amended to read:

Subd. 21. [LEVIES.] (a) In the year prior to the effective date of the dissolution of a district, the school board of a district to which all of the dissolving district is to be attached may adopt a resolution directing the school board of the dissolving district to certify levies for general education, basic transportation, and capital expenditure equipment and facilities in an amount not to exceed the maximum amount authorized for the dissolving district for taxes payable in the year the dissolution is effective. If the dissolving district is to be attached to more than one school district, the boards of the districts to which the dissolving district is to be attached may adopt a joint resolution that accomplishes the purpose in this paragraph.

(b) Notwithstanding any other law to the contrary, upon receipt of a resolution under paragraph (a), the board of the dissolving district must certify levies in the amounts specified in the resolution for taxes payable in the year the dissolution is effective.

Sec. 17. Minnesota Statutes 1996, section 122.23, subdivision 2, is amended to read:

Subd. 2. [RESOLUTION.] (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 less, 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 prepare a plat. The resolution or petition shall must show the approximate area proposed for consolidation.

(b) The resolution or petition may propose the following:

(1) that 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;

(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.

The resolution must provide for election of board members from one of the following options: single-member districts; multimember districts; at large; or a combination of these options. The resolution must include a plan for the orderly transition to the option chosen.

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 must 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. 18. Minnesota Statutes 1996, section 122.23, subdivision 2b, is amended to read:

Subd. 2b. [ORDERLY REDUCTION PLAN.] As part of the resolution required by subdivision 2, the school board must prepare a plan for the orderly reduction of the membership of the board to six or seven members and a plan for the establishment or dissolution of election districts. The plan must be submitted to the secretary of state for review and comment.

Sec. 19. Minnesota Statutes 1996, section 122.23, subdivision 3, is amended to read:

Subd. 3. [SUPPORTING STATEMENT.] The county auditor shall prepare a supporting statement to accompany the plat shall be prepared by the county auditor. The statement shall must contain:

(a) The adjusted net tax capacity of property in the proposed district,

(b) If a part of any district is included in the proposed new district, the adjusted net tax capacity of the property and the approximate number of pupils residing in the part of the district included shall be shown separately and the adjusted net tax capacity of the property and the approximate number of pupils residing in the part of the district not included shall also be shown,

(c) The reasons for the proposed consolidation, including a statement that at the time the plat is submitted to the state board of education, no proceedings are pending to dissolve any district involved in the plat unless all of the district to be dissolved and all of each district to which attachment is proposed is included in the plat,

(d) A statement showing that the jurisdictional fact requirements of subdivision 1 are met by the proposal,

(e) Any proposal contained in the resolution or petition regarding the disposition of the bonded debt, outstanding energy loans made according to section 216C.37 or sections 298.292 to 298.298, capital loan obligations, or referendum levies of component districts,

(f) Any other information the county auditor desires to include, and

(g) The signature of the county auditor.

Sec. 20. Minnesota Statutes 1996, section 122.23, subdivision 6, is amended to read:

notice to the affected districts and county boards if requested within 20 days after submission of the plat. Such a hearing may be requested by The board of any affected district, a county board of commissioners, or the petition of 20 resident voters living within the area proposed for consolidation may request such a hearing. The commissioner shall endorse on the plat action regarding any proposal for the disposition of the bonded debt of component districts and the reasons for these actions and. Within 60 days of the date of the receipt of the plat, the commissioner shall return it to the county auditor who submitted it. The commissioner shall furnish a copy of that plat, and the supporting statement and its endorsement to the auditor of each county containing any land area of the proposed new district. If land area of a particular county was included in the plat, as submitted by the county auditor, and all of such land area is excluded in the plat as modified and approved, the commissioner shall also furnish a copy of the modified plat, supporting statement, and any endorsement to the auditor of such county.

Sec. 21. Minnesota Statutes 1996, section 122.23, subdivision 7, is amended to read:

Subd. 7. [NOTICE TO BOARD.] Upon receipt of an approved plat, the county auditor shall forthwith notify the board of any district, all or part of whose land is included in the proposed new district.

Sec. 22. Minnesota Statutes 1996, section 122.23, subdivision 8, is amended to read:

Subd. 8. [BOARD ADOPTION.] The board of any independent district maintaining a secondary school, the board of any common district maintaining a secondary school, all or part of whose land is included in the proposed new district, shall must, within 45 days of the approval of the plat by the commissioner, either adopt or reject the plan as proposed in the approved plat. If the board of any such district entitled to act on the petition rejects the proposal, the proceedings are terminated and dismissed. If any board fails to act on the plat within the time allowed, the proceedings are terminated.

Sec. 23. Minnesota Statutes 1996, section 122.23, subdivision 9, is amended to read:

Subd. 9. [MULTIPLE DISTRICTS; APPROVAL.] If the approved plat contains land area in more than one independent district maintaining a secondary school, or common district maintaining a secondary school, and if each board entitled to act on the plat approves the plat, each board shall cause publish notice of its action to be published at least once in its official newspaper. If all of the school boards entitled to act on the plat call, by resolution, for an election on the question, or if five percent of the eligible voters of any such district petition the clerk of the district, within 30 days after the publication of the notice, for an election on the question, the consolidation shall not become effective until approved by a majority vote in the district at an election held in the manner provided in subdivisions 11, 12, and 13.

Sec. 24. Minnesota Statutes 1996, section 122.23, subdivision 10, is amended to read:

Subd. 10. [APPROVAL BY RESIDENTS.] If an approved plat contains land area in any district not entitled to act on approval or rejection of the plat by action of its board, the plat may be approved by the residents of the land area within 60 days of approval of plat by the commissioner in the following manner:

A petition calling upon the county auditor to call and conduct an election on the question of adoption or rejection of the plat may be circulated in the land area by any person residing in the area. Upon the filing of the petition with the county auditor, executed by at least 25 percent of the eligible voters in each district or part of a district contained in the land area, the county auditor shall forthwith call and conduct a special election of the electors resident in the whole land area on the question of adoption of the plat. For the purposes of this section, the term "electors resident in the whole land area" means any person residing on any remaining portion of land, a part of which is included in the consolidation plat. Any eligible voter owning land included in the plat who lives upon land adjacent or contiguous to that part of the voter's land included in the plat shall be included and counted in computing the 25 percent of the eligible voters necessary to sign the petition and shall also be qualified to sign the petition. Failure to file the petition within 60 days of approval of the plat by the commissioner terminates the proceedings.

Sec. 25. Minnesota Statutes 1996, section 122.23, subdivision 11, is amended to read:

Sec. 26. Minnesota Statutes 1996, section 122.23, subdivision 12, is amended to read:

Subd. 12. [ELECTION.] The school board shall determine the date of the election, the number of boundaries of voting precincts, and the location of the polling places where voting shall be conducted, and the hours the polls will be open. The school board shall also provide official ballots which shall must be used exclusively and shall be in the following form:

For consolidation ....

Against consolidation ....

The school board shall must appoint election judges who shall act as clerks of election. The ballots and results shall must be certified to the school board who shall canvass and tabulate the total vote cast for and against the proposal.

Sec. 27. Minnesota Statutes 1996, section 122.23, subdivision 13, is amended to read:

Subd. 13. [EFFECTIVE DATE.] If a majority of the votes cast on the question at the election approve the consolidation, and if the necessary approving resolutions of boards entitled to act on the plat have been adopted, the school board shall must, within ten days of the election, notify the county auditor who shall, within ten days of the notice or of the expiration of the period during which an election can be called, issue an order setting a date for the effective date of the change. The effective date shall must be July 1 of the year determined by the school board in the original resolution adopted under subdivision 2. The auditor shall mail or deliver a copy of such order to each auditor holding a copy of the plat and to the clerk of each district affected by the order and to the commissioner. The school board shall must similarly notify the county auditor if the election fails. The proceedings are then terminated and the county auditor shall so notify the commissioner and the auditors and the clerk of each school district affected.

Sec. 28. Minnesota Statutes 1996, section 122.23, subdivision 14, is amended to read:

Subd. 14. [IDENTIFICATION NUMBER.] Upon receipt of the order creating a new district, the commissioner shall forthwith, by order, assign an identification number to the new district and shall mail a copy of the order to the county auditor and to each auditor who holds a copy of the plat. If all of the territory in one and only one independent district maintaining a secondary school is included in the new independent district created pursuant to consolidation, and if the commissioner finds that it is more practical and reasonable and in the interest of efficiency and economy of operation to so do, the commissioner may assign to the new district the same number as previously held by the included independent district.

Sec. 29. Minnesota Statutes 1996, section 122.23, subdivision 16, is amended to read:

Subd. 16. [BONDED DEBT.] As of the effective date of the consolidation, the bonded debt of all component districts shall must be paid according to the plan for consolidation proposed in the approved plat and according to this subdivision.

(a) If the plan for consolidation so provides, the bonded debt of all component districts shall must be paid according to levies previously made for that debt under chapter 475. In this case, the obligation of the taxable property in the component districts with reference to the payment of such bonded debt is not affected by the consolidation.

(b) If the plan for consolidation makes no provision for the disposition of bonded debt, all the taxable property in the newly created district is taxable for the payment of any bonded debt incurred by any component district in the proportion which the net tax capacity of that part of a preexisting district which is included in the newly created district bears to the net tax capacity of the entire preexisting district as of the time of the consolidation.

(c) If the plan for consolidation so provides, all the taxable property in the newly created district will be taxable for a portion of the bonded debt incurred by any component district prior to the consolidation.

Sec. 30. Minnesota Statutes 1996, section 122.23, subdivision 16c, is amended to read:

Subd. 16c. [BONDS; ELECTION.] The board of the newly created district, when constituted as provided in subdivision 17, may provide for an election of that district on the issuance of bonds. It may issue and sell bonds authorized at the election, or bonds authorized at an election previously held in any preexisting district wholly included within the newly created district, or bonds for a purpose for which an election is not required by law. The actions may be taken at any time after the date of the county auditor's order issued under subdivision 13, and before or after the date upon which the consolidation becomes effective for other purposes, and taxes for the payment of the bonds shall be levied upon all taxable property in the newly created district. No bonds shall be delivered to purchasers until 30 days after the date of the county auditor's order. If within this period a notice of appeal from the county auditor's order to the district court is filed in accordance with section 127.25, no bonds shall be delivered by the newly created district to purchasers unless:

(1) the county auditor's order is affirmed by final order of the district court in the special proceeding, and a period of 30 days from the service of the final order expires without an appeal being commenced; or,

(2) if an appeal is taken, the order is affirmed and the time for petitioning for further review has expired; except that. Notwithstanding the pendency of the appeal, if all of the territory of one and only one independent district maintaining a secondary school is included in the newly created district, and if the net tax capacity of taxable property in the territory comprises 90 percent or more of the net tax capacity of all taxable property in the newly created district, then the board may issue, sell, and deliver any bonds voted by the preexisting independent district and any bonds voted or otherwise authorized by the newly created district, notwithstanding the pendency of the appeal, and the bonds shall must be paid by the levy of taxes upon the property within the territory of the preexisting independent district and within the other areas, if any, that are finally determined to be properly included within the newly created district. In any election held in the newly created district as authorized in the preceding sentence, all qualified electors residing within the area of that district as defined in the county auditor's order shall be entitled to vote, but the votes cast by residents of former districts or portions of former districts included in the area, other than the independent district maintaining the secondary school, shall be received and counted separately. The bonds shall must not be issued and sold unless authorized by a majority of the votes cast thereon by electors of the independent district maintaining the secondary school, and also by a majority of the votes cast thereon by electors residing within the entire area of the newly created district.

Sec. 31. Minnesota Statutes 1996, section 122.23, subdivision 18, is amended to read:

Subd. 18. [BOARD ELECTION; DUTIES.] (a) The county auditor shall determine a date, not less than 30 nor more than 60 days from the date that the order setting the effective date of the consolidation according to subdivision 13 was issued, upon which date shall be held to hold a special election in the district for the purpose of electing a board of six members for terms of four years and until a successor is elected and qualifies according to provisions of law governing the election of board members in independent districts. Notwithstanding the foregoing, three members of the first board must be elected to terms that expire on the first Monday in January following the first regularly scheduled school district general election that occurs more than six months after the election of the first board and three members must be elected to terms that expire on the first Monday in January following the second school district general election that occurs more than six months after the election of the first board. If the first board consists of seven members, then four members may be elected at either the first or second regularly scheduled school district general election following the election of the first board. If the resolution or petition for consolidation pursuant to subdivision 2 proposed the establishment of separate election districts, these members shall be elected from separate election districts according to the provisions of that resolution or petition and of chapter 205A.

(b) The county auditor shall give ten days' posted notice of election in the area in which the election is to be held and also if there be a newspaper is published in the proposed new district, one weeks' published notice shall be given. The notice shall must specify the time, place, and purpose of the election.

(d) The county auditor shall prepare, at the expense of the county, necessary ballots for the election of officers, placing thereon the names of the proposed candidates for each office. The ballots shall must be marked and signed as official ballots and shall be used exclusively at the election. The county auditor shall determine the number of voting precincts and the boundaries of each. The county auditor shall determine the location of polling places and the hours the polls shall be open and shall appoint three election judges for each polling place who shall act as clerks of election. Election judges shall certify ballots and results to the county auditor for tabulation and canvass.

(e) After making a canvass and tabulation, the county auditor shall issue a certificate of election to the candidate for each office who received the largest number of votes cast for the office. The county auditor shall deliver such certificate to the person entitled thereto to a certificate by certified mail, and each person so certified shall file an acceptance and oath of office with the county auditor within 30 days of the date of mailing of the certificate. A person who fails to qualify prior to the time specified shall be deemed to have refused to serve, but such filing may be made at any time before action to fill vacancy has been taken.

(f) The board of each district included in the new enlarged district shall continue to maintain school the schools therein until the effective date of the consolidation. Such boards shall have power and authority only to make such contracts, to do such things as are necessary to maintain properly maintain the schools for the period prior to that date, and to certify to the county auditor according to levy limitations applicable to the component districts the taxes collectible in the calendar year when the consolidation becomes effective.

(g) It shall be the immediate duty of The newly elected board of the new enlarged district has the immediate duty, when after the members thereof have qualified and the board has been organized, to plan for the maintenance of the school or schools of the new district for the next school year, to enter into the necessary negotiations and contracts for the employment of personnel, purchase of equipment and supplies, and other acquisition and betterment purposes, when authorized by the voters to issue bonds under the provisions of chapter 475; and. On the effective date of the consolidation to, the newly elected board must assume the full duties of the care, management and control of the new enlarged district. The board of the new enlarged district shall must give due consideration to the feasibility of maintaining such existing attendance centers and of establishing such other attendance centers, especially in rural areas, as will afford equitable and efficient school administration and assure the convenience and welfare of the pupils residing in the enlarged district. The obligations of the new board to teachers employed by component districts shall be governed by the provisions of section 122.532. The obligations of the new board to nonlicensed employees employed by component districts is governed by subdivision 18a.

Sec. 32. Minnesota Statutes 1996, section 122.23, subdivision 18a, is amended to read:

Subd. 18a. [NONLICENSED EMPLOYEES.] (a) As of the effective date of a consolidation of two or more districts or parts of them, each nonlicensed employee employed by an affected district must be assigned to the newly created district.

(b) As of the effective date of a consolidation, any employee organization may petition the commissioner of the bureau of mediation services for a certification election under chapter 179A. An organization certified as the exclusive representative for nonlicensed employees in a particular preexisting district continues as the exclusive representative for those particular employees for a period of 90 days from the effective date of a consolidation. If a petition for representation of nonlicensed employees is filed within 90 days, an exclusive representative for those particular nonlicensed employees continues as the exclusive representative until the bureau of mediation services certification proceedings are concluded.

(d) The date of first employment in the newly created district is the date on which services were first performed by the employee in the preexisting district. Any sick leave, vacation time, or severance pay benefits accumulated under policies of the preexisting district or contracts between the exclusive representatives and the board of the preexisting district continue to apply in the newly created district to the employees of the preexisting districts, subject to any maximum accumulation limitations negotiated in a successor contract. Future leaves of absence, vacations, or other benefits to be accumulated in the newly created district are governed by board policy or by contract between the exclusive representative of an appropriate unit of employees and the board of the newly created district. The board of the newly created district shall must provide, to transferred nonlicensed employees, open enrollment in all insurance plans with no limit on preexisting conditions.

Sec. 33. Minnesota Statutes 1996, section 122.23, subdivision 20, is amended to read:

Subd. 20. [RETIREMENT INCENTIVES.] (a) For consolidations effective July 1, 1994, and thereafter, a school board of a district may offer early retirement incentives to licensed and nonlicensed staff. The early retirement incentives that the board may offer are:

(1) the payment of employer pension plan contributions for a specified period of allowable service credit for district employees who have at least ten years of allowable service credit in the applicable pension plan under paragraph (b);

(2) an extended leave of absence for an eligible employee under section 125.60;

(3) severance payment incentives under paragraph (c); and

(4) the employer payment of the premiums for continued health insurance coverage under paragraph (d).

These incentives may only be offered to employees who terminate active employment with the school district or who enter into an extended leave of absence as a result of the consolidation, whichever applies. The board may determine the staff to whom the incentives are offered. Unilateral implementation of this section by a school board is not an unfair labor practice under chapter 179A.

(b) An employee with at least ten years of allowable service credit in the applicable pension plan who is offered an early retirement incentive under paragraph (a), clause (1), may purchase up to five additional years of allowable service credit from the applicable pension plan. To do so, the former employee must pay the member contributions to the pension plan annually in a manner and in accord with a schedule specified by the executive director of the applicable fund. If the former employee makes the member contribution, the board shall must make the applicable employer contribution. The salary used to determine these contributions is the salary of the person in the last year that the former employee was employed by the district. During the period of continuing member and employer contributions, the person is not considered to be an active member of the applicable pension plan, is not eligible for any active member disability or survivorship benefit coverage, and is not included in any postemployment termination benefit plan changes unless the applicable benefit legislation provides otherwise. Continued eligibility to purchase service credit under this paragraph expires if the person is subsequently employed during the service purchase period by a public employer with retirement coverage under a pension plan specified in section 356.30, subdivision 3.

(c) Severance payment incentives must conform with sections 465.72, 465.721, and 465.722.

(d) The board may offer a former employee continued employer-paid health insurance coverage. Coverage may not extend beyond age 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 subdivision, "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 and for which the employing unit pays more than one-half of the cost of the insurance premiums.

Sec. 34. Minnesota Statutes 1996, section 122.241, is amended to read:

122.241 [COOPERATION AND COMBINATION.]

Subdivision 1. [SCOPE.] Sections 122.241 to 122.248 establish procedures for school boards that adopt, by resolution, a five-year written agreement:

(1) to provide at least secondary instruction cooperatively for at least one or two years, if the districts cooperate according to subdivision 2; and

(2) to combine into one district.

Subd. 2. [COOPERATION REQUIREMENTS.] Cooperating districts shall must:

(1) implement a written agreement according to section 122.541 no later than the first year of cooperation;

(2) all be members of one education district, if any one of the districts is a member, no later than the end of the second year of cooperation; and

(3) all be members of one SC, if any one of the districts is a member.

Clause (1) does not apply to a district that implemented an agreement for secondary education, according to section 122.535, during any year before the 1991-1992 school year. If the districts cooperate for one or more years, the agreement may be continued during those years.

Subd. 3. [COMBINATION REQUIREMENTS.] Combining districts must be contiguous and meet one of the following requirements at the time of combination:

(1) at least two districts with at least 400 resident pupils enrolled in grades 7 through 12 in the combined district and projections, approved by the department of children, families, and learning, of enrollment at least at that level for five years;

(2) at least two districts if either:

(i) both of the districts qualify for secondary sparsity revenue under section 124A.22, subdivision 6, and have an average isolation index over 23; or

(ii) the combined district qualifies for secondary sparsity revenue;

(3) at least three districts with fewer than 400 resident pupils enrolled in grades 7 through 12 in the combined district; or

(4) at least two districts with fewer than 400 resident pupils enrolled in grades 7 through 12 in the combined district if either district is located on the border of the state.

A combination under clause (2), (3), or (4) must be approved by the commissioner of children, families, and learning. The commissioner shall disapprove a combination under clause (2), (3), or (4) if the combination is educationally unsound or would not reasonably enable the districts to fulfill statutory and rule requirements.

Sec. 35. Minnesota Statutes 1996, section 122.242, subdivision 1, is amended to read:

Sec. 36. Minnesota Statutes 1996, section 122.242, subdivision 3, is amended to read:

Subd. 3. [BOARD FORMATION.] The plan must state:

(1) whether the new district would have one elected school board or whether it would have one elected school board and one elected board for each elementary school exercising powers and duties delegated to it by the school board of the entire district;

(2) how many of the existing members of each district would become members of the school board of the combined district and, if so, a method to gradually reduce the membership to six or seven; and

(3) if desired, election districts that include the establishment of separate areas from each of the combining 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.

Sec. 37. Minnesota Statutes 1996, section 122.242, subdivision 8, is amended to read:

Subd. 8. [REFERENDUM.] The plan must set forth:

(1) procedures for a referendum, held prior to the year of the proposed combination, to approve combining the school districts; and

(2) whether a majority of those voting in each district proposed for combination or a majority of those voting on the question in the entire area proposed for combination would be needed to pass the referendum.

Sec. 38. Minnesota Statutes 1996, section 122.242, subdivision 9, is amended to read:

Subd. 9. [FINANCES.] The plan must state:

(1) whether 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;

(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 children, families, and learning 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. 39. Minnesota Statutes 1996, section 122.243, is amended to read:

122.243 [STATE BOARD AND VOTER APPROVAL.]

Subd. 2. [VOTER APPROVAL.] A referendum on the question of combination shall must be conducted during the first or second year of cooperation for districts that cooperate according to section 122.241, or no more than 18 months before the effective date of combination for districts that do not cooperate. The referendum shall must be on a date called by the school boards. The referendum shall must be conducted by the school boards according to the Minnesota election law, as defined in section 200.01. If the referendum fails, the same question or a modified question may be submitted. If the referendum fails again, the districts shall must modify their cooperation and combination plan. A third referendum may be conducted. If a second or third referendum is conducted after October 1, the newly combined district may not levy under section 124.2725 until the following year. Referendums shall be conducted on the same date in all districts.

Sec. 40. Minnesota Statutes 1996, section 122.245, subdivision 2, is amended to read:

Subd. 2. [NONLICENSED EMPLOYEES TERMINATION.] If compatible plans are not negotiated according to section 122.242, subdivision 5, the school boards shall comply with this subdivision with respect to nonlicensed employees. Nonlicensed employees whose positions are discontinued as a result of cooperation or combination, as applicable, shall be:

(1) employed by a cooperating board or the combined board, if possible;

(2) assigned to work in a cooperating district or the combined district, if possible; or

(3) terminated in the inverse order in which they were employed in a district, according to a combined seniority list of nonlicensed employees in the cooperating or combined district, as applicable.

Sec. 41. Minnesota Statutes 1996, section 122.246, is amended to read:

122.246 [COUNTY AUDITOR PLAT.]

Upon the request of two or more districts that have adopted a resolution to cooperate and combine, the county auditor shall prepare a plat. If the proposed combined district is located in more than one county, the request shall must be submitted to the county auditor of the county that has the greatest land area in the proposed district. The plat shall must show:

(1) the boundaries of each of the present districts;

(2) the boundaries of the proposed district;

(3) the boundaries of proposed election districts, if requested; and

(4) other information deemed pertinent by the school boards or the county auditor.

Sec. 42. Minnesota Statutes 1996, section 122.247, subdivision 2, is amended to read:

Subd. 2. [BONDED DEBT.] Debt service for bonds outstanding at the time of the combination may be levied by the combined school board consistent with the plan adopted according to section 122.242, and any subsequent modifications, subject to section 475.61. The primary obligation to pay the bonded indebtedness that is outstanding on the effective date of combination remains with the district that issued the bonds. However, the combined district may make debt service payments on behalf of a preexisting district.

Sec. 43. Minnesota Statutes 1996, section 122.247, subdivision 2a, is amended to read:

Sec. 44. Minnesota Statutes 1996, section 122.248, is amended to read:

122.248 [REPORTS TO DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.]

Cooperating districts may submit joint reports and jointly provide information required by the department of children, families, and learning. The joint reports must allow information to be attributed to each district. A combined district must report and provide information as a single unit.

Sec. 45. Minnesota Statutes 1996, section 122.25, subdivision 2, is amended to read:

Subd. 2. [BOARD ELECTION.] At the annual meeting, if a majority of the votes cast on the question favors the conversion to an independent district, a board of six members shall be elected. Nominations may be made from the floor of the meeting and election shall be by secret ballot. All board members elected at this meeting shall serve for terms expiring on the third Tuesday in the next May next following the election on which date a regular annual election shall be held in the manner provided by law. At this first annual election for independent districts, six directors shall be elected, two to hold office until July 1 following the next annual election, two to hold office until the expiration of one year from said July 1 and two to hold office until the expiration of two years from said July 1; the time which each director shall hold office being designated on the ballot.

Sec. 46. Minnesota Statutes 1996, section 122.25, subdivision 3, is amended to read:

Subd. 3. [IDENTIFICATION NUMBER.] If the organization of the district is changed from common to independent at the meeting, the clerk shall forthwith notify the auditor and the commissioner.

Upon receipt of such notification, the commissioner shall forthwith assign a new identification number to the district and shall notify the auditor and the clerk of the district thereof.

Sec. 47. Minnesota Statutes 1996, section 122.32, is amended to read:

122.32 [REMAINING DISTRICTS, ACTION OF COUNTY BOARD; ELECTION.]

Subdivision 1. [DISSOLUTION.] If there be Any organized school district not maintaining a classified school within the district, except those districts which have a contract with a state university or with the board of regents of the University of Minnesota for the education of all the children of the district, such district shall hereby be dissolved as of the date the district ceases to maintain a classified school. Any such district not maintaining a classified school shall forthwith must be attached by order of the county board to such district maintaining classified elementary or secondary schools upon notice and hearing as provided in section 122.22 for the attachment of dissolved districts.

Subd. 2. [SPECIAL ELECTION.] Prior to the order of the county board, the board may direct the county auditor to call a special election in the manner and form in which district elections are held. The purpose of the election shall be to determine to which district or districts the dissolved district shall be attached. The county board after hearing shall must determine the form of question as it should appear on the ballot. The results of the election shall be advisory in nature only.

Sec. 48. Minnesota Statutes 1996, section 122.34, is amended to read:

122.34 [PRIVATE SCHOOLS IN NONOPERATING DISTRICTS.]

Section 122.32 shall not apply to any school district in which is located any existing private school maintaining elementary and secondary education for 75 percent of eligible pupils within the district and complying with the requirements of section 120.101.

Sec. 49. Minnesota Statutes 1996, section 122.355, is amended to read:

122.355 [BORDER DISTRICTS; CONTINUED OPERATION.]

Subdivision 1. [BORDER DISTRICTS.] The common school districts situated along the border of the state of Minnesota and the state of Wisconsin which have, for the preceding 25 years, prior to May 26, 1965 been educating pupils of their district in school districts in Wisconsin may continue to operate as common school districts notwithstanding that any of such school districts do not maintain classified schools. Such school districts are not subject to the terms and provisions of sections 122.32 to 122.52.

Subd. 2. [CONTINUED OPERATION.] The provisions of subdivision 1 shall remain in effect as long as the school district does not discontinue the practice of education for their district as described in subdivision 1.

Sec. 50. Minnesota Statutes 1996, section 122.41, is amended to read:

122.41 [DUTY TO MAINTAIN ELEMENTARY AND SECONDARY SCHOOLS.]

Each school district shall must maintain classified elementary and secondary schools, grades 1 through 12, unless the district is exempt according to section 122.34 or 122.355, has made an agreement with another district or districts as provided in sections 122.535, 122.541, or sections 122.241 to 122.248, or 122.93, subdivision 8, or has received a grant under sections 124.492 to 124.495. A district that has an agreement according to sections 122.241 to 122.248 or 122.541 shall must operate a school with the number of grades required by those sections. A district that has an agreement according to section 122.535 or 122.93, subdivision 8, or has received a grant under sections 124.492 to 124.495 shall must operate a school for the grades not included in the agreement, but not fewer than three grades.

Sec. 51. Minnesota Statutes 1996, section 122.43, is amended to read:

122.43 [PHASE OUT OF DISSOLVED DISTRICT.]

Subd. 2. [MAINTAIN SCHOOLS.] The board of each district so dissolved shall continue to maintain school schools until all its territory has been attached to a proper district not later than July 1. Such boards shall only make such contracts and do such things as are necessary to properly maintain schools properly for the period they may be in session prior to the attachment.

Sec. 52. Minnesota Statutes 1996, section 122.44, is amended to read:

122.44 [PROCEDURE FOR ATTACHMENT TO ORGANIZED DISTRICTS.]

Subdivision 1. [ATTACHMENT.] Upon notice and hearing, as provided in section 122.22 for the attachment of dissolved districts, all territory of school districts dissolved by sections 122.41 to 122.52 and all area of the state not in a district maintaining classified elementary and secondary schools shall must be attached by order of the county board to organized districts maintaining classified elementary and secondary schools, grades 1 through 12, unless a district has made an agreement with another district or districts as provided in section 122.535 or 122.541.

Sec. 53. Minnesota Statutes 1996, section 122.45, subdivision 2, is amended to read: