Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7251

STATE OF MINNESOTA

Journal of the House

EIGHTIETH SESSION 1998

__________________

EIGHTIETH DAY

Saint Paul, Minnesota, Wednesday, February 25, 1998

 

The House of Representatives convened at 2:30 p.m. and was called to order by Phil Carruthers, Speaker of the House.

Prayer was offered by the Reverend Ronald A. Smith, House Chaplain.

Music was performed by the Unity Baptist Adult Choir, St. Paul, Minnesota.

The roll was called and the following members were present:

Abrams Erhardt Juhnke Marko Pelowski Tingelstad
Anderson, B. Erickson Kahn McCollum Peterson Tomassoni
Anderson, I. Evans Kalis McElroy Pugh Tompkins
Bakk Farrell Kelso McGuire Rest Trimble
Bettermann Finseth Kielkucki Milbert Reuter Tuma
Biernat Folliard Kinkel Molnau Rhodes Tunheim
Bishop Garcia Knight Mulder Rifenberg Van Dellen
Boudreau Goodno Knoblach Mullery Rostberg Vandeveer
Bradley Greenfield Koskinen Munger Rukavina Wagenius
Broecker Greiling Kraus Murphy Schumacher Weaver
Carlson Gunther Krinkie Ness Seagren Wejcman
Chaudhary Haas Kubly Nornes Seifert Wenzel
Clark, J. Harder Kuisle Olson, E. Sekhon Westfall
Clark, K. Hasskamp Larsen Olson, M. Skare Westrom
Commers Hausman Leighton Opatz Skoglund Winter
Daggett Hilty Leppik Orfield Slawik Wolf
Davids Holsten Lieder Osskopp Smith Workman
Dawkins Huntley Lindner Osthoff Solberg Spk. Carruthers
Dehler Jaros Long Otremba, M. Stanek
Delmont Jefferson Macklin Ozment Stang
Dempsey Jennings Mahon Paulsen Sviggum
Dorn Johnson, A. Mares Pawlenty Swenson, H.
Entenza Johnson, R. Mariani Paymar Sykora

A quorum was present.

Luther was excused.

The Chief Clerk proceeded to read the Journals of the preceding days. Dorn moved that further reading of the Journals be suspended and that the Journals be approved as corrected by the Chief Clerk. The motion prevailed.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7252

REPORTS OF CHIEF CLERK

S. F. No. 2047 and H. F. No. 3148, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

Kubly moved that S. F. No. 2047 be substituted for H. F. No. 3148 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 2192 and H. F. No. 2700, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

SUSPENSION OF RULES

Harder moved that the rules be so far suspended that S. F. No. 2192 be substituted for H. F. No. 2700 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 2266 and H. F. No. 2523, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

SUSPENSION OF RULES

Johnson, A., moved that the rules be so far suspended that S. F. No. 2266 be substituted for H. F. No. 2523 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 2516 and H. F. No. 2777, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

SUSPENSION OF RULES

Jefferson moved that the rules be so far suspended that S. F. No. 2516 be substituted for H. F. No. 2777 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 2570 and H. F. No. 2659, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

Olson, E., moved that S. F. No. 2570 be substituted for H. F. No. 2659 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 2608 and H. F. No. 3065, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

SUSPENSION OF RULES

Dorn moved that the rules be so far suspended that S. F. No. 2608 be substituted for H. F. No. 3065 and that the House File be indefinitely postponed. The motion prevailed.


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S. F. No. 2659 and H. F. No. 3432, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

Wenzel moved that S. F. No. 2659 be substituted for H. F. No. 3432 and that the House File be indefinitely postponed. The motion prevailed.

REPORTS OF STANDING COMMITTEES

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 384, A bill for an act relating to state agencies; modifying procurement procedures; amending Minnesota Statutes 1996, sections 16B.04, subdivisions 1 and 2; 16B.19, subdivisions 1a, 2a, 2b, and 2c; 16B.20, subdivision 1; 16B.226; 16B.28; 16B.29; 16B.482; and 16B.89; proposing coding for new law in Minnesota Statutes, chapters 16B; and 16C; repealing Minnesota Statutes 1996, sections 16B.01, subdivisions 4 and 5; 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.121; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18; 16B.181; and 16B.185.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

PROCUREMENT REFORM

Section 1. Minnesota Statutes 1996, section 15.054, is amended to read:

15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.]

No officer or employee of the state or any of its political subdivisions shall sell or procure for sale or possess or control for sale to any other officer or employee of the state or the subdivision, as appropriate, any property or materials owned by the state or subdivision except pursuant to conditions provided in this section. Property or materials owned by the state or a subdivision, except real property, and not needed for public purposes, may be sold to an employee of the state or the subdivision after reasonable public notice at a public auction or by sealed bid if the employee is the highest responsible bidder and response, if the employee is not directly involved in the auction or process pertaining to the administration and collection of sealed bid process responses. Requirements for reasonable public notice may be prescribed by other law or ordinance so long as at least one week's published or posted notice is specified. A state An employee of the state or a political subdivision may purchase no more than one motor vehicle from the state in any 12-month period. A person violating the provisions of this section is guilty of a misdemeanor. This section shall not apply to the sale of property or materials acquired or produced by the state or subdivision for sale to the general public in the ordinary course of business. Nothing in this section shall prohibit an employee of the state or a political subdivision from selling or possessing for sale public property if the sale or possession for sale is in the ordinary course of business or normal course of the employee's duties.

Sec. 2. Minnesota Statutes 1996, section 16B.181, is amended to read:

16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.]

Subdivision 1. [DEFINITIONS.] As used in this section:

(1) "public entity" or "public entities" includes the state and an agency, department, or institution of the state, any governmental unit as defined in section 471.59, the state legislative and judicial branches, and state colleges and universities; and

(2) "items" includes articles, products, supplies, and services.


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Subd. 2. [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS INDUSTRIES.] (a) The commissioner of corrections, in consultation with the commissioner of administration, shall prepare updated lists of the items available for purchase from department of corrections industries and annually forward a copy of the most recent list to all public entities within the state. A public entity that is supported in whole or in part with funds from the state treasury shall may purchase items directly from corrections industries those items that are comparable in price, quality, and delivery time to items available from other vendors. An item is comparable in price if the price is no more than five percent higher than the lowest bid price. The bid solicitation process is not required for these purchases.

(b) The commissioner of administration shall develop a contract pursuant to section 16B.09, or contracts to enable public entities to purchase items directly from corrections industries. The commissioner of administration, in consultation with the commissioner of corrections, shall determine the fair market price for listed items. In determining fair market price, the commissioner shall use competitive bidding, or shall consider open bid prices in previous years for similar products which meet the needs of the public entity. The commissioner of administration shall require that all requests for bids or proposals, for items provided by corrections industries, be forwarded to the commissioner of corrections to enable corrections industries to submit bids. The commissioner of corrections shall consult with the commissioner of administration prior to introducing new products to the state agency market.

(c) No public entity may evade the intent of this section by adopting slight variations in specifications, when Minnesota corrections industry items meet the reasonable needs and specifications of the public entity.

(d) As part of its ongoing audit process, the legislative auditor is requested to ensure that state agencies are in compliance with this section. The commissioners of administration and corrections shall develop annual performance measures outlining goals to maximize inmate work program participation. The commissioners of administration and corrections shall appoint cochairs for a task force whose purpose is to determine additional methods to achieve the performance goals for public entity purchasing. The task force shall include representatives from the Minnesota house of representatives, Minnesota senate, the Minnesota state colleges and universities, University of Minnesota, Minnesota League of Cities, Minnesota Association of Counties, and administrators with purchasing responsibilities from the Minnesota state departments of corrections, public safety, finance, transportation, natural resources, human services, health, and economic security.

(e) The commissioners of administration and corrections shall appoint a joint task force to explore additional methods that support the philosophy of providing a substantial market opportunity to correctional industries that maximizes inmate work opportunities. The task force shall develop a plan and prepare a set of criteria with which to evaluate the effectiveness of the recommendations and initiatives in the plan. By February 15, 1997, the task force shall report to the chairs of the senate and house of representatives committees having jurisdiction over criminal justice funding. If performance goals for public entity purchasing are not achieved in two consecutive fiscal years, public entities shall purchase items available from corrections industries. The commissioner of administration shall be responsible for notifying public entities of this requirement.

Sec. 3. [16C.02] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] For purposes of this chapter, the following terms have the meanings given them, unless the context clearly indicates otherwise.

Subd. 2. [AGENCY.] "Agency" means any state officer, employee, board, commission, authority, department, entity, or organization of the executive branch of state government.

Unless specifically provided elsewhere in this chapter, agency does not include the Minnesota state colleges and universities.

Subd. 3. [AWARD.] "Award" means a commissioner's written acceptance of a bid or proposal to provide goods, services, or utilities.

Subd. 4. [BEST VALUE.] "Best value" describes a result intended in the acquisition of all goods and services. Price must be one of the evaluation criteria when acquiring goods and services. Other evaluation criteria may include, but are not limited to, environmental considerations, quality, and vendor performance.


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Subd. 5. [COMMISSIONER.] "Commissioner" means the commissioner of administration.

Subd. 6. [CONTRACT.] "Contract" means any written instrument or electronic document containing the elements of offer, acceptance, and consideration to which an agency is a party.

Subd. 7. [FORMAL SOLICITATION.] "Formal solicitation" means a solicitation which requires a sealed response.

Subd. 8. [GOODS.] "Goods" means all types of personal property including commodities, materials, supplies, and equipment.

Subd. 9. [INFORMAL SOLICITATION.] "Informal solicitation" means a solicitation which does not require a sealed response.

Subd. 10. [LEASE.] "Lease" means a contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

Subd. 11. [REQUEST FOR BID OR RFB.] "Request for bid" or "RFB" means a solicitation in which the terms, conditions, and specifications are described and responses are not subject to negotiation.

Subd. 12. [REQUEST FOR PROPOSAL OR RFP.] "Request for proposal" or "RFP" means a solicitation in which it is not advantageous to set forth all the actual, detailed requirements at the time of solicitation and responses are subject to negotiation.

Subd. 13. [RESIDENT VENDOR.] "Resident vendor" means a person, firm, or corporation authorized to conduct business in the state of Minnesota on the date a solicitation for a contract is first advertised or announced. It includes a foreign corporation duly authorized to engage in business in Minnesota.

Subd. 14. [RESPONSE.] "Response" means the offer received from a vendor in response to a solicitation. A response includes submissions commonly referred to as "offers," "bids," "quotes," or "proposals."

Subd. 15. [SEALED.] "Sealed" means a method determined by the commissioner to prevent the contents being revealed or known before the deadline for submission of responses.

Subd. 16. [SERVICE CONTRACT.] "Service contract" means a contract for any nonprofessional or technical services.

Subd. 17. [SERVICES.] "Services" means, unless otherwise indicated, both professional or technical services and service performed under a service contract.

Subd. 18. [SINGLE SOURCE.] "Single source" means an acquisition where, after a search, only one supplier is determined to be reasonably available for the required product, service, or construction item.

Subd. 19. [SOLICITATION.] "Solicitation" means the process used to communicate procurement requirements and to request responses from interested vendors. A solicitation may be, but is not limited to, a request for bid and request for proposal.

Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND DUTIES.]

Subdivision 1. [SCOPE.] The commissioner's authority in this section applies to an agency and is subject to other provisions of this chapter and chapter 16B. Unless otherwise provided, the provisions in this chapter and chapter 16B do not apply to the Minnesota state colleges and universities.

Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, the commissioner may adopt rules, consistent with this chapter and chapter 16B, relating to the following topics:

(1) solicitations and responses to solicitations, bid security, vendor errors, opening of responses, award of contracts, tied bids, and award protest process;


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(2) contract performance and failure to perform;

(3) authority to debar or suspend vendors, and reinstatement of vendors;

(4) contract cancellation; and

(5) procurement from rehabilitation facilities.

Subd. 3. [ACQUISITION AUTHORITY.] The commissioner shall acquire all goods, services, and utilities needed by agencies. The commissioner shall acquire goods, services, and utilities by any method the commissioner deems appropriate, unless another section of law requires a particular method of acquisition be utilized. The commissioner shall make all decisions regarding acquisition activities. The determination of the acquisition method and all decisions involved in the acquisition process, unless otherwise provided for by law, shall be based on best value which includes an evaluation of price and may include other considerations including, but not limited to, environmental considerations, quality, and vendor performance. A best value determination must be based on the evaluation criteria detailed in the solicitation document. Unless it is determined by the commissioner that an alternative solicitation method should be used to determine best value, a request for bid must be used to solicit formal responses for all building and construction contracts. Any or all responses may be rejected. When using the request for bid process, the bid must be awarded to the lowest responsive and responsible bidder, taking into consideration conformity with the specifications, terms of delivery, the purpose for which the contract or purchase is intended, the status and capability of the vendor, and other considerations imposed in the request for bids. The commissioner may decide which is the lowest responsible bidder for all purchases and may use the principles of life-cycle costing, where appropriate, in determining the lowest overall bid. The duties set forth in this subdivision are subject to delegation pursuant to this section.

Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall conduct all contracting by, for, and between agencies and perform all contract management and review functions for contracts, except those functions specifically delegated to be performed by the contracting agency, the attorney general, or otherwise provided for by law.

Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The commissioner shall, in addition to the duties set forth in subdivisions 3 and 4, make all decisions regarding amendments, cancellations, and appeals of all agency acquisition activities unless the duties are delegated pursuant to this section.

Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The commissioner is authorized to enter into lease purchases or installment purchases for periods not exceeding the anticipated useful life of the items acquired unless otherwise prohibited by law.

Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The commissioner is authorized to enter into lease, lease purchase, rental, or installment agreements for the use or acquisition, whichever is applicable, of real or personal property.

Subd. 8. [POLICY AND PROCEDURES.] The commissioner is authorized to issue policies, procedures, and standards applicable to all acquisition activities by and for agencies.

Subd. 9. [EMPLOYEE PURCHASING.] The commissioner is authorized to enter into contracts under which a vendor agrees to sell computer equipment and related products to state employees, for their own use, at contract prices. Under no circumstances shall the state be liable for purchases made under this subdivision. The provisions of section 43A.38, subdivisions 4 and 5, clause (a), do not apply to this subdivision.

Subd. 10. [COOPERATIVE PURCHASING.] The commissioner is authorized to enter into a cooperative purchasing agreement for the provision of goods, services, and utilities with one or more other states or governmental units, as described in section 471.59, subdivision 1. The commissioner is authorized to enter into cooperative purchasing agreements for the purchase of goods, services, and utilities with health care facilities that are required to provide indigent care.


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Subd. 11. [SURPLUS PROPERTY.] The commissioner is authorized to purchase, accept, transfer, warehouse, sell, distribute, or dispose of surplus property in accordance with state and federal rules and regulations. The commissioner may charge a fee to cover any expenses incurred in connection with any of these acts.

Subd. 12. [CENTRAL DISTRIBUTION CENTER.] The commissioner is authorized to provide and manage a central distribution center for federal and state surplus personal property, as defined in section 16C.25, and may provide and manage a warehouse facility.

Subd. 13. [CENTRAL STORES.] The commissioner is authorized to provide agencies with supplies and equipment and operate all central stores and supply rooms serving more than one agency.

Subd. 14. [PROVISION OF GOODS, SERVICES, AND UTILITIES.] The commissioner has the authority to provide goods, services, and utilities under this chapter to state legislative and judicial branch agencies, political subdivisions, the Minnesota state colleges and universities, the University of Minnesota, and federal government agencies.

Subd. 15. [REIMBURSEMENT FOR GOODS, SERVICES, AND UTILITIES.] The commissioner is authorized to charge a fee to cover costs and expenses associated with operating a revolving fund or an enterprise fund to acquire goods, services, and utilities. The fees are appropriated to the commissioner to administer and manage the programs and facilities covered under this section.

Subd. 16. [DELEGATION OF DUTIES.] The commissioner may delegate duties imposed by this chapter to the head of an agency and to any subordinate of the agency head. Delegated duties shall be exercised in the name of the commissioner and under the commissioner's direct supervision and control. A delegation of duties may include, but is not limited to, allowing individuals within agencies to acquire goods, services, and utilities within dollar limitations and for designated types of acquisitions. Delegation of contract management and review functions must be filed with the secretary of state and may not, except with respect to delegations within the department of administration, exceed two years in duration. The commissioner may withdraw any delegation at the commissioner's sole discretion.

Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF INTEREST.]

Subdivision 1. [DUTY.] An employee of the executive branch involved directly or indirectly in the acquisition process, at any level, is subject to the code of ethics in section 43A.38.

Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) The commissioner must develop policies regarding code of ethics and conflict of interest designed to prevent conflicts of interest for employees involved in the acquisition of goods, services, and utilities. The policies must apply to employees who are directly or indirectly involved in the acquisition of goods, services, and utilities, developing requests for proposals, evaluating bids or proposals, awarding the contract, selecting the final vendor, drafting and entering into contracts, evaluating performance under these contracts, and authorizing payments under the contract.

(b) The policies must contain a process for making employees aware of policy and laws relating to conflict of interest, and for training employees on how to avoid and deal with potential conflicts.

(c) The policies must contain a process under which an employee who has a conflict of interest or a potential conflict of interest must disclose the matter, and a process under which work on the contract may be assigned to another employee if possible.

Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND REVIEW.]

Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully cooperate with the commissioner in the management and review of state contracts.

Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A contract is not valid and the state is not bound by it unless:

(1) it has first been executed by the head of the agency or a delegate who is a party to the contract;


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(2) it has been approved by the commissioner;

(3) it has been approved by the attorney general or a delegate as to form and execution;

(4) the accounting system shows an obligation in an expense budget or encumbrance for the amount of the contract liability; and

(5) the combined contract and amendments shall not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years unless the commissioner determines that a longer duration is in the best interest of the state.

(b) Grants, interagency agreements, purchase orders, and annual plans need not, in the discretion of the commissioner and attorney general, require the signature of the commissioner and/or the attorney general.

(c) A fully executed copy of every contract must be kept on file at the contracting agency.

Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do not apply to contracts of the department of economic security distributing state and federal funds for the purpose of subcontracting the provision of program services to eligible recipients. For these contracts, the commissioner of economic security is authorized to directly enter into agency contracts and encumber available funds. For contracts distributing state or federal funds pursuant to the federal Economic Dislocation and Worker Adjustment Assistance Act, United States Code, title 29, section 1651 et seq., or sections 268.9771, 268.978, 268.9781, and 268.9782, the commissioner of economic security is authorized to directly enter into agency contracts with approval of the workforce development council and encumber available funds to ensure a rapid response to the needs of dislocated workers. The commissioner of economic security shall adopt internal procedures to administer and monitor funds distributed under these contracts. This exception also applies to any contracts entered into by the commissioner of children, families, and learning that were previously entered into by the commissioner of economic security.

Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency shall diligently administer and monitor any contract it has entered into, pursuant to a delegation of duties from the commissioner. The commissioner may require an agency to report to the commissioner at any time on the status of any contracts to which the agency is a party.

Subd. 5. [SUBJECT TO AUDIT.] A contract or any pass- through disbursement of public funds to a vendor of goods or services or a grantee made by or under the supervision of the commissioner or any county or unit of local government must include, expressed or implied, an audit clause that provides that the books, records, documents, and accounting procedures and practices of the vendor or other party, that are relevant to the contract or transaction, are subject to examination by the contracting agency and either the legislative auditor or the state auditor, as appropriate, for a minimum of six years. If the contracting agency is a local unit of government, and the governing body of the local unit of government requests that the state auditor examine the books, records, documents, and accounting procedures and practices of the vendor or other party pursuant to this subdivision, the contracting agency shall be liable for the cost of the examination. If the contracting agency is a local unit of government, and the grantee, vendor, or other party requests that the state auditor examine all books, records, documents, and accounting procedures and practices related to the contract, the grantee, vendor, or other party that requested the examination shall be liable for the cost of the examination. An agency contract made for purchase, lease, or license of software and data from the state is not required to contain this audit clause.

Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney general may pursue remedies available by law to avoid the obligation of an agency to pay under a contract or to recover payments made if services performed or goods received under the contract are so unsatisfactory, incomplete, or inconsistent that payment would involve unjust enrichment. The contrary opinion of the contracting agency does not affect the power of the attorney general under this subdivision.

Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND BANDS.] Notwithstanding any other law, an agency may not require an Indian tribe or band to deny its sovereignty as a requirement or condition of a contract with an agency.


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Sec. 7. [16C.07] [ACQUISITIONS.]

Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of solicitations for acquisitions estimated to be more than $25,000 must be publicized in a manner designated by the commissioner.

Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation must be used to acquire all goods, service contracts, and utilities estimated at or more than $25,000 unless otherwise provided for. All formal responses must be sealed when they are received and must be opened in public at the hour stated in the solicitation. Formal responses must be authenticated by the responder in a manner specified by the commissioner.

(b) An informal solicitation may be used to acquire all goods, service contracts, and utilities that are estimated at less than $25,000. The number of vendors required to receive solicitations may be determined by the commissioner. Informal responses must be authenticated by the responder in a manner specified by the commissioner.

Subd. 3. [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the name of the vendor and dollar amounts specified in a response to a request for bids shall be read at the time of opening. Only the name of the responding vendors to all requests for proposals shall be read at the time of opening. All other information contained in a vendor's response to a bid is classified as nonpublic data, as defined in section 13.02, and remains nonpublic data until completion of the selection process. All other information contained in a vendor's response to a request for proposal, other than the name of the vendor, is classified as nonpublic data, as defined in section 13.02, and remains nonpublic data until the completion of the evaluation process.

(b) All responses are public information at the time of the award unless otherwise provided for. All responses and documents pertaining to the final award of an acquisition must be retained and made a part of a permanent file or record and remain open to public inspection, after award, unless otherwise provided for by law.

Subd. 4. [MULTIPLE AWARDS.] The commissioner may award a contract to more than one vendor if, in the opinion of the commissioner, it is in the best interest of the state.

Subd. 5. [STATE AS RESPONDER.] The head of an agency, in consultation with the requesting agency and the commissioner, may respond to a solicitation or request if the goods and services meet the needs of the requesting agency and provide the state with the best value. When an agency responds to a solicitation, all work product relating to the response is nonpublic data as defined in section 13.02, and shall become public information in accordance with subdivision 3.

Subd. 6. [AWARDS.] Awards must be based on best value, which includes an evaluation of price, and may include other considerations including, but not limited to, environmental considerations, quality, and vendor performance.

Subd. 7. [OTHER STATES WITH RESIDENT PREFERENCE.] Acquisition of goods and services must be awarded according to the provisions of this chapter except that a resident vendor shall be allowed a preference over a nonresident vendor from a state that gives or requires a preference to vendors from that state. The preference shall be equal to the preference given or required by the state of the nonresident vendor.

Subd. 8. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 does not apply to a contract for any project in which federal funds are expended.

Subd. 9. [REJECTION.] At the discretion of the commissioner, any or all responses may be rejected if it is determined to be in the best interest of the state.

Subd. 10. [PREFERENCES NOT CUMULATIVE.] The preferences provided for under subdivision 7 and sections 16B.121 and 16C.18 are not cumulative. The total percentage of preference granted on a contract may not exceed the highest percentage of preference allowed for that contract under any one of these statutory sections.


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Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.]

The commissioner of employee relations shall develop a directory of services that state agencies commonly provide that are professional or technical in nature.

Before an agency may seek approval of a professional or technical services contract valued at a total cost in excess of $25,000, it must certify to the commissioner that it has publicized the contract by posting notice at appropriate worksites within agencies and has made reasonable efforts to determine that no state employee or agency, including an employee or agency outside the contracting agency, is able and available to perform the required services. When possible, this posting should be done electronically.

Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.]

Subdivision 1. [DEFINITION.] For the purposes of this section, "professional or technical services" means services that are intellectual in character, including consultation, analysis, evaluation, prediction, planning, programming, or recommendation, and result in the production of a report or the completion of a task. Professional or technical contracts do not include the provision of supplies or materials except by the approval of the commissioner or except as incidental to the provision of professional or technical services.

Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency may seek approval of a professional or technical services contract valued in excess of $5,000, it must certify to the commissioner that:

(1) no current state employee is able and available to perform the services called for by the contract;

(2) the normal competitive bidding mechanisms will not provide for adequate performance of the services;

(3) the contractor has certified that the product of the services will be original in character;

(4) reasonable efforts were made to publicize the availability of the contract to the public;

(5) the agency has received, reviewed, and accepted a detailed work plan from the contractor for performance under the contract, if applicable;

(6) the agency has developed, and fully intends to implement, a written plan providing for the assignment of specific agency personnel to a monitoring and liaison function, the periodic review of interim reports or other indications of past performance, and the ultimate utilization of the final product of the services; and

(7) the agency will not allow the contractor to begin work before funds are fully encumbered.

Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES CONTRACTS.] Before approving a proposed contract for professional or technical services, the commissioner must determine, at least, that:

(1) all provisions of subdivision 2 and section 16C.18 have been verified or complied with;

(2) the work to be performed under the contract is necessary to the agency's achievement of its statutory responsibilities and there is statutory authority to enter into the contract;

(3) the contract will not establish an employment relationship between the state or the agency and any persons performing under the contract;

(4) the contractor and agents are not employees of the state;

(5) no agency has previously performed or contracted for the performance of tasks which would be substantially duplicated under the proposed contract;


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(6) the contracting agency has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(7) the combined contract and amendments will not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years unless the commissioner determines that a longer duration is in the best interest of the state.

Subd. 4. [REPORTS.] (a) The commissioner shall submit to the governor, the chairs of the house ways and means and senate finance committees, and the legislative reference library a yearly listing of all contracts for professional or technical services executed. The report must identify the contractor, contract amount, duration, and services to be provided. The commissioner shall also issue yearly reports summarizing the contract review activities of the department by fiscal year.

(b) The fiscal year report must be submitted by September 1 of each year and must:

(1) be sorted by agency and by contractor;

(2) show the aggregate value of contracts issued by each agency and issued to each contractor;

(3) distinguish between contracts that are being issued for the first time and contracts that are being extended;

(4) state the termination date of each contract;

(5) identify services by commodity code, including topics such as contracts for training, contracts for research and opinions, and contracts for computer systems;

(6) show the number of sole source/single source and overload contracts for each agency as a percent of the total number of contracts for each agency; and

(7) show the number of contracts publicly advertised as a percent of the total number of contracts for each agency.

(c) Within 30 days of final completion of a contract over $40,000 covered by this subdivision, the head of the agency entering into the contract must submit a one-page report to the commissioner who must submit a copy to the legislative reference library. The report must:

(1) summarize the purpose of the contract, including why it was necessary to enter into a contract;

(2) state the amount spent on the contract; and

(3) explain why this amount was a cost-effective way to enable the agency to provide its services or products better or more efficiently.

Subd. 5. [CONTRACT TERMS.] (a) A professional or technical services contract must by its terms permit the commissioner to unilaterally terminate the contract prior to completion, upon payment of just compensation, if the commissioner determines that further performance under the contract would not serve agency purposes.

(b) The terms of a contract must provide that no more than 90 percent of the amount due under the contract may be paid until the final product has been reviewed by the head of the agency entering into the contract and the head of the agency has certified that the contractor has satisfactorily fulfilled the terms of the contract, unless specifically excluded in writing by the commissioner.

Subd. 6. [FILING COPY.] If the final product of the contract is a written report, a copy must be filed with the legislative reference library.

Subd. 7. [EXCLUSIONS.] This section does not apply to contracts with individuals or organizations for administration of employee pension plans authorized under chapter 354B or 354C.


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Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.]

Before entering into or approving a service contract, the commissioner must determine, at least, that:

(1) no current state employee is able and available to perform the services called for by the contract;

(2) the work to be performed under the contract is necessary to the agency's achievement of its statutory responsibilities and there is statutory authority to enter into the contract;

(3) the contract will not establish an employment relationship between the state or the agency and any persons performing under the contract;

(4) the contractor and agents are not employees of the state;

(5) the contracting agency has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(6) the combined contract and amendments will not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years, unless the commissioner determines that a longer duration is in the best interest of the state.

For purposes of clause (1), employees are available if qualified and:

(i) are already doing the work in question; or

(ii) are on layoff status in classes that can do the work in question.

An employee is not available if the employee is doing other work, is retired, or has decided not to do the work in question.

Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION PROCESS.]

Subdivision 1. [SINGLE SOURCE.] The solicitation process described in this chapter is not required when there is clearly and legitimately only a single source for the goods and services and the commissioner determines that the price has been fairly and reasonably established.

Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of this subdivision, "emergency" means a threat to public health, welfare, or safety that threatens the functioning of government, the protection of property, or the health or safety of people.

(b) The solicitation process described in this chapter is not required in emergencies. In emergencies, the commissioner may make any purchases necessary for the repair, rehabilitation, and improvement of a state-owned structure or may authorize an agency to do so and may purchase, or may authorize an agency to purchase, goods, services, or utility services directly for immediate use.

Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding anything in this chapter to the contrary, the commissioner may, instead of soliciting bids, contract for purchases with suppliers who have published schedules of prices effective for sales to any federal agency of the United States. These contracts may be entered into, regardless of the amount of the purchase price, if the commissioner considers them advantageous and if the purchase price of all the commodities purchased under the contract do not exceed the price specified by the schedule.

Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation process described in this chapter is not required for cooperative agreements. The commissioner may enter into contracts or accept prices effective for sales to any governmental unit as defined in section 471.59, through a cooperative agreement as defined in section 471.59.


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Subd. 5. [SPECIFIC PURCHASES.] The solicitation process described in this chapter is not required for acquisition of the following:

(1) merchandise for resale purchased under policies determined by the commissioner;

(2) farm and garden products which, as determined by the commissioner, may be purchased at the prevailing market price on the date of sale;

(3) goods and services from the Minnesota correctional facilities;

(4) goods and services from rehabilitation facilities and sheltered workshops that are certified by the commissioner of economic security;

(5) goods and services for use by a community-based residential facility operated by the commissioner of human services;

(6) goods purchased at auction or when submitting a sealed bid at auction provided that before authorizing such an action, the commissioner consult with the requesting agency to determine a fair and reasonable value for the goods considering factors including, but not limited to, costs associated with submitting a bid, travel, transportation, and storage. This fair and reasonable value must represent the limit of the state's bid; and

(7) utility services where no competition exists or where rates are fixed by law or ordinance.

Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; PURCHASING REVOLVING FUND.]

The commissioner may enter into joint or cooperative purchasing agreements with any entity that is authorized under section 471.59 to do so. The cooperative purchasing venture revolving fund is a separate account in the state treasury. The commissioner may charge a fee to cover the commissioner's administrative expenses to governmental units that have joint or cooperative purchasing agreements with the state under section 471.59. The fees collected must be deposited in the revolving fund established by this section. Money in the fund is appropriated to the commissioner to administer the programs and services covered by this chapter.

Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN STATE.]

The commissioner shall encourage and make a reasonable attempt to identify and purchase food products that are grown in the state.

Sec. 14. [16C.14] [CERTAIN VEHICLES.]

Upon the written request of the commissioner of public safety, motor vehicles for use by investigative and undercover agents of the department of public safety may be purchased by the brand, make, and model specified by the agency.

Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT PURCHASES.]

Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may contract to purchase by installment payments capital or other equipment or services intended to improve the energy efficiency of a state building or facility if:

(1) the term of the contract does not exceed ten years, with not more than a ten-year payback;

(2) the entire cost of the contract is a percentage of the resultant savings in energy costs only. "Savings in energy cost" means a comparison of energy cost and energy usage under the precontract conditions, including reasonable projections of energy cost and usage if no change is made to the precontract conditions, against energy cost and usage with the changes made under the contract. If it is impractical to directly measure energy cost and/or energy usage, reasonable engineering estimates may be substituted for measured results;


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(3) the contract for purchase must be completed using a solicitation;

(4) the commissioner has determined that the contract vendor is a responsible vendor;

(5) the contract vendor can finance or obtain financing for the performance of the contract without state assistance or guarantee; and

(6) the state may unilaterally cancel the agreement if the legislature fails to appropriate funds to continue the contract or if the contractor at any time during the term of the contract fails to perform its contractual obligations, including failure to deliver or install equipment or materials, failure to replace faulty equipment or materials in a timely fashion, and failure to maintain the equipment as agreed in the contract.

Subd. 2. [ENERGY APPROPRIATION.] The commissioner may spend money appropriated for energy costs in payment of a contract under this section.

Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding any other law to the contrary, fuel cost savings resulting from energy conservation actions shall be available at the managerial level at which the actions took place for expenditure for other purposes within the biennium in which the actions occur or in the case of a shared savings agreement for the contract period of the shared savings agreement. For purposes of this subdivision "shared savings agreement" means a contract meeting the terms and conditions of subdivision 1.

Subd. 4. [LEGISLATIVE INTENT.] The purpose of the energy efficiency installment purchase contracts authorized by this section is to save money on energy costs. The entire cost of the contract must be a percentage of the resultant savings in energy costs. Neither the state nor any agency is liable to make payments on the contract except to the extent that there are savings in energy costs that must be shared with other parties to the contract. The legislature intends not to appropriate any more money to pay for energy costs as a result of these contracts than would be payable without them.

Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK ACTIVITY PROGRAMS.]

The commissioner, in consultation with the commissioner of economic security, shall prepare a list containing products and services of state-certified rehabilitation facilities, sheltered workshops, and work activity programs for acquisition by state agencies and institutions.

Sec. 17. [16C.18] [DESIGNATION OF PROCUREMENTS FROM SMALL BUSINESSES.]

Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The commissioner shall for each fiscal year ensure that small businesses receive at least 25 percent of the value of anticipated total state procurement of goods and services, including printing and construction. The commissioner shall divide the procurements so designated into contract award units of economically feasible production runs in order to facilitate offers or bids from small businesses. In making the annual designation of such procurements the commissioner shall attempt (1) to vary the included procurements so that a variety of goods and services produced by different small businesses are obtained each year, and (2) to designate small business procurements in a manner that will encourage proportional distribution of such awards among the geographical regions of the state. To promote the geographical distribution of awards, the commissioner may designate a portion of the small business procurement for award to bidders from a specified congressional district or other geographical region specified by the commissioner. The failure of the commissioner to designate particular procurements shall not be deemed to prohibit or discourage small businesses from seeking the procurement award through the normal process.

Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt rules defining "small business" for purposes of sections 16C.18 to 16C.23, 137.31, 137.35, 161.321, and 473.142. The definition must include only businesses with their principal place of business in Minnesota. The definition must establish different size standards for various types of businesses. In establishing these standards, the commissioner must consider the differences among industries caused by the size of the market for goods or services and the relative size and market share of the competitors operating in those markets.


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Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every state agency shall for each fiscal year designate for awarding to small businesses at least 25 percent of the value of anticipated procurements of that agency for professional or technical services. The set-aside under this subdivision is in addition to that provided by subdivision 1, but must otherwise comply with section 16C.10.

Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner shall establish a program for purchasing goods and services from targeted group businesses, as designated in subdivision 5. The purpose of the program is to remedy the effects of past discrimination against members of targeted groups. In furtherance of this purpose, the commissioner shall attempt to ensure that purchases from targeted group businesses reflect a fair and equitable representation of all the state's purchasing.

Subd. 5. [DESIGNATION OF TARGETED GROUPS.] (a) The commissioner of administration shall periodically designate businesses that are majority owned and operated by women, persons with a substantial physical disability, or specific minorities as targeted group businesses within purchasing categories as determined by the commissioner. A group may be targeted within a purchasing category if the commissioner determines there is a statistical disparity between the percentage of purchasing from businesses owned by group members and the representation of businesses owned by group members among all businesses in the state in the purchasing category.

(b) In addition to designations under paragraph (a), an individual business may be included as a targeted group business if the commissioner determines that inclusion is necessary to remedy discrimination against the owner based on race, gender, or disability in attempting to operate a business that would provide goods or services to public agencies.

(c) The designations of purchasing categories and businesses under paragraphs (a) and (b) are not rules for purposes of chapter 14, and are not subject to rulemaking procedures of that chapter.

Subd. 6. [PURCHASING METHODS.] (a) The commissioner may award up to a six percent preference in the amount bid for specified goods or services to small targeted group businesses.

(b) The commissioner may designate a purchase of goods or services for award only to small businesses or small targeted group businesses if the commissioner determines that at least three small businesses or small targeted group businesses are likely to bid.

(c) The commissioner, as a condition of awarding a construction contract or approving a contract for professional or technical services, may set goals that require the prime contractor to subcontract a portion of the contract to small businesses or small targeted group businesses. The commissioner must establish a procedure for granting waivers from the subcontracting requirement when qualified small businesses or small targeted group businesses are not reasonably available. The commissioner may establish financial incentives for prime contractors who exceed the goals for use of small business or small targeted group business subcontractors and financial penalties for prime contractors who fail to meet goals under this paragraph. The subcontracting requirements of this paragraph do not apply to prime contractors who are small businesses or small targeted group businesses.

Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The commissioner may award up to a four percent preference in the amount bid on state procurement to small businesses located in an economically disadvantaged area. A business is located in an economically disadvantaged area if:

(1) the owner resides in or the business is located in a county in which the median income for married couples is less than 70 percent of the state median income for married couples;

(2) the owner resides in or the business is located in an area designated a labor surplus area by the United States Department of Labor; or

(3) the business is a rehabilitation facility or work activity program.


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The commissioner may designate one or more areas designated as targeted neighborhoods under section 469.202 or as enterprise zones under section 469.167 as economically disadvantaged areas for purposes of this subdivision if the commissioner determines that this designation would further the purposes of this section. If the owner of a small business resides or is employed in a designated area, the small business is eligible for any preference provided under this subdivision.

The department of revenue shall gather data necessary to make the determinations required by clause (1), and shall annually certify counties that qualify under clause (1). An area designated a labor surplus area retains that status for 120 days after certified small businesses in the area are notified of the termination of the designation by the United States Department of Labor.

Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the federal Small Business Administration and second party bonds are acceptable security for a construction award under this section. "Second party bond" means a bond that designates as principal, guarantor, or both, a person or persons in addition to the person to whom the contract is proposed for award.

Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before making an award under the preference programs established in subdivisions 4 to 7, the commissioner shall evaluate whether the small business or small targeted group business scheduled to receive the award is able to perform the contract. This determination shall include consideration of production and financial capacity and technical competence.

Subd. 10. [LIMITS.] At least 75 percent of the value of the subcontracts awarded to small businesses or small targeted group businesses under subdivision 6, paragraph (c), must be performed by the business to which the subcontract is awarded or by another small business or small targeted group business.

Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules pertaining to solicitations, bid evaluations, contract awards, and other procurement matters apply equally to procurements designated for small businesses or small targeted group businesses. In the event of conflict with other rules, section 16C.16 and rules adopted under it govern, if section 16C.16 applies. If it does not apply, sections 16C.18 to 16C.23 and rules adopted under those sections govern.

Subd. 12. [APPLICABILITY.] This section does not apply to construction contracts or contracts for professional or technical services under section 16C.09 that are financed in whole or in part with federal funds and that are subject to federal disadvantaged business enterprise regulations.

Sec. 18. [16C.19] [ENCOURAGEMENT OF PARTICIPATION; ADVISORY COUNCIL.]

Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The commissioners of administration and trade and economic development shall publicize the provisions of the purchasing programs in sections 16C.18 to 16C.23, attempt to locate small businesses or small targeted group businesses able to perform under the programs, and encourage participation through education, technical assistance, mentoring, and other means. When the commissioner of administration determines that a small business or small targeted group business is unable to perform under a program established in sections 16C.18 to 16C.23, the commissioner shall inform the commissioner of trade and economic development who shall assist the small business or small targeted group business in attempting to remedy the causes of the inability to perform the award. In assisting the small business or small targeted group business, the commissioner of trade and economic development in cooperation with the commissioner of administration shall use management or financial assistance programs made available by or through the department of trade and economic development, other state or governmental agencies, or private sources.

Subd. 2. [ADVISORY COUNCIL.] The small business procurement advisory council consists of 13 members appointed by the commissioner of administration. A chair of the advisory council shall be elected from among the members. The appointments are subject to the appointments program provided by section 15.0597. The terms, compensation, and removal of members are as provided in section 15.059.

Subd. 3. [DUTIES.] The small business procurement advisory council shall:

(1) advise the commissioner of administration on matters relating to the small business and small targeted group business procurement program;


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(2) review complaints or grievances from small businesses and small targeted group businesses who are doing or attempting to do business under the program; and

(3) review the reports of the commissioners of administration and trade and economic development provided by section 16C.20 to ensure compliance with the goals of the program.

Sec. 19. [16C.20] [REPORTS.]

Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The commissioner shall submit an annual report pursuant to section 3.195 to the governor and the legislature with a copy to the commissioner of trade and economic development indicating the progress being made toward the objectives and goals of sections 16C.18 to 16C.23, 161.321, and 473.142 during the preceding fiscal year.

Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] The commissioner of trade and economic development shall submit an annual report to the governor and the legislature pursuant to section 3.195 with a copy to the commissioner of administration. This report shall include the following information:

(1) the efforts undertaken to publicize the provisions of the small business and small targeted group business procurement program during the preceding fiscal year;

(2) the efforts undertaken to identify small businesses and small targeted group businesses and the efforts undertaken to encourage participation in the targeted group purchasing program;

(3) the efforts undertaken by the commissioner to remedy the inability of small businesses and small targeted group businesses to perform on potential awards; and

(4) the commissioner's recommendations for strengthening the small business and small targeted group business procurement program and delivery of services to small businesses.

Subd. 3. [REPORTS FROM OTHER AGENCIES.] The commissioner of transportation, and each metropolitan agency listed in section 473.143, subdivision 1, shall report to the commissioner of administration all information that the commissioner requests to make reports required under this section. The information must be reported at the time and in the manner requested by the commissioner of administration.

Sec. 20. [16C.21] [ELIGIBILITY; RULES.]

(a) A small business wishing to participate in the programs under section 16C.18, subdivisions 4 to 7, must be certified by the commissioner. The commissioner shall adopt by rule standards and procedures for certifying that small businesses, small targeted group businesses, and small businesses located in economically disadvantaged areas are eligible to participate under the requirements of sections 16C.18 to 16C.23. The commissioner shall adopt by rule standards and procedures for hearing appeals and grievances and other rules necessary to carry out the duties set forth in sections 16C.18 to 16C.23.

(b) The commissioner may make rules which exclude or limit the participation of nonmanufacturing business, including third-party lessors, brokers, franchises, jobbers, manufacturers' representatives, and others from eligibility under sections 16C.18 to 16C.23.

(c) The commissioner may make rules that set time limits and other eligibility limits on business participation in programs under sections 16C.18 to 16C.23.

Sec. 21. [16C.22] [CERTIFICATION.]

A business that is certified by the commissioner of administration as a small business, small targeted group business or a small business located in an economically disadvantaged area is eligible to participate under the requirements of sections 137.31 and 161.321 and, if certified as a small business or small targeted group business, under section 473.142 without further certification by the contracting agency.


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Sec. 22. [16C.23] [CRIMINAL PENALTY.]

A person who knowingly provides false information to a public official or employee for the purpose of obtaining or retaining certification as a small targeted group business or a small business located in an economically disadvantaged area under sections 16C.18 to 16C.22, 137.31, 137.35, 161.321, or 473.142 is guilty of a misdemeanor.

Sec. 23. [16C.24] [DISTRICT HEATING.]

Notwithstanding any other law, general or special, the commissioner is authorized to enter into or approve a written agreement not to exceed 31 years with a district heating utility that will specify, but not be limited to, the appropriate terms and conditions for the interchange of district heating services.

Sec. 24. [16C.25] [SURPLUS PROPERTY ACQUISITION, DISTRIBUTION, AND DISPOSAL.]

Subdivision 1. [DEFINITIONS.] "Governmental unit or nonprofit organization" means a governmental unit as defined in section 471.59, subdivision 1, an Indian tribal government, and any nonprofit and tax-exempt medical institution, hospital, clinic, health center, school, school system, college, university, or other institution organized and existing for any purpose authorized by federal law to accept surplus federal property.

Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means state or federal commodities, equipment, materials, supplies, books, printed matter, buildings, and other personal or real property that is obsolete, unused, not needed for a public purpose, or ineffective for current use.

Subd. 3. [AUTHORIZATION.] (a) The commissioner is the state agency designated to transfer, purchase, accept, sell, or dispose of surplus property for the state and for the benefit of any other governmental unit or nonprofit organization for any purpose authorized by state and federal law and in accordance with state and federal rules and regulations. Any governmental unit or nonprofit organization may designate the commissioner to purchase or accept surplus property for it upon mutually agreeable terms and conditions. The commissioner may acquire, accept, warehouse, and distribute surplus property and charge a fee to cover any expenses incurred in connection with any of these acts.

(b) Federal surplus property that has been transferred to the state for donation to public agencies and nonprofit organizations must be transferred or sold in accordance with the plan developed under paragraph (c). Expenses incurred in connection with the acquisition, warehousing, distribution, and disposal of federal surplus property must be paid from the surplus services revolving fund. Proceeds of sales, minus any expenses, must be deposited in the surplus services revolving fund.

(c) The commissioner shall develop a detailed plan for disposal of donated federal property in conformance with state law and federal regulations. The plan must be submitted to the governor for certification and submission to the federal administrator of general services.

(d) The commissioner, after consultation with one or more nonprofit organizations with an interest in providing housing for homeless veterans and their families, may acquire property from the United States government that is designated by the General Services Administration as surplus property. The commissioner may lease the property to a qualified nonprofit organization that agrees to develop or rehabilitate the property for the purpose of providing suitable housing for veterans and their families. The lease agreement with the nonprofit organization may require that the property be developed for use as housing for homeless and displaced veterans and their families and for veterans and their families who lose their housing.

Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services revolving fund is a separate fund in the state treasury. All money resulting from the acquisition, acceptance, warehousing, distribution, and public sale of surplus property, must be deposited in the fund. Money paid into the surplus services revolving fund is appropriated to the commissioner for the purposes of the programs and services referred to in this section.


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Subd. 5. [TRANSFER OR SALE.] (a) When the state or an agency operating under a legislative appropriation obtains surplus property from the commissioner, the commissioner of finance must, at the commissioner's request, transfer the cost of the surplus property, including any expenses of acquiring, accepting, warehousing, and distributing the surplus property, from the appropriation of the agency receiving the surplus property to the surplus services revolving fund. The determination of the commissioner is final as to the cost of the surplus property to the agency receiving the property.

(b) When any governmental unit or nonprofit organization other than an agency receives surplus property from the commissioner, the governmental unit or nonprofit organization must reimburse the surplus services revolving fund for the cost of the property, including the expenses of acquiring, accepting, warehousing, and distributing it, in an amount the commissioner sets. The commissioner may, however, require the governmental unit or nonprofit organization to deposit in advance in the surplus services revolving fund the cost of the surplus property upon mutually agreeable terms and conditions.

(c) The commissioner may transfer or sell state surplus property to any person at public auction, at prepriced sale, or by sealed bid process in accordance with applicable state laws.

Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do any of the following to dispose of state surplus property:

(1) transfer it to or between state agencies;

(2) transfer it to a governmental unit or nonprofit organization in Minnesota; or

(3) sell it and charge a fee to cover expenses incurred by the commissioner in the disposal of the surplus property.

The proceeds of the sale less the fee are appropriated to the agency for whose account the sale was made, to be used and expended by that agency to purchase similar state property.

Subd. 7. [GIFTS.] The commissioner is authorized to solicit and accept donated money and fixed and consumable property for the benefit of the state and any other governmental unit or nonprofit organization for any purpose authorized by state and federal law and in accordance with federal regulations and rules. The gift acceptance procedures of sections 7.09 to 7.12 do not apply to this subdivision.

Sec. 25. [16C.26] [RULES.]

Minnesota Rules, parts 1230.0100 to 1230.4300, adopted under chapter 16B, govern under this chapter. In the event rules adopted under chapter 16B conflict with provisions of this chapter, this chapter shall govern.

Sec. 26. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.]

Notwithstanding anything in chapter 16C to the contrary, all contracts for the repair, improvement, maintenance, or construction of highways or highway bridges must be advertised and let as provided by law for highway construction contracts.

Sec. 27. Minnesota Statutes 1997 Supplement, section 363.073, subdivision 1, is amended to read:

Subdivision 1. [SCOPE OF APPLICATION.] No department or agency of the state shall accept any bid or proposal for a contract or agreement (a) For all contracts for goods and services in excess of $100,000, no department or agency of the state shall accept any bid or proposal for a contract or agreement from any business having more than 40 full-time employees within this state on a single working day during the previous 12 months, unless the firm or business has an affirmative action plan for the employment of minority persons, women, and qualified disabled individuals, submitted to the commissioner of human rights for approval. No department or agency of the state shall execute any such contract or agreement for goods or services in excess of $100,000 with any business having more than 40 full-time employees, either within or outside this state, on a single working day during the previous 12 months, unless the firm or business has an until the affirmative action plan for the employment of minority persons, women, and the disabled that has been approved by


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the commissioner of human rights. Receipt of a certificate of compliance issued by the commissioner shall signify that a firm or business has an affirmative action plan that has been approved by the commissioner. A certificate shall be valid for a period of two years. A municipality as defined in section 466.01, subdivision 1, that receives state money for any reason is encouraged to prepare and implement an affirmative action plan for the employment of minority persons, women, and the qualified disabled and submit the plan to the commissioner of human rights.

(b) This paragraph applies to a contract for goods or services in excess of $100,000 to be entered into between a department or agency of the state, and a business that is not subject to paragraph (a), but that has more than 40 full-time employees on a single working day during the previous 12 months in the state where the business has its primary place of business. A department or agency of the state may not execute a contract or agreement with such a business unless the business has a certificate of compliance issued by the commissioner under paragraph (a) or the business certifies to the contracting agency: (1) that it is in compliance with any affirmative action plan requirements in the jurisdiction of its primary place of business; or (2) that the jurisdiction of its primary place of business does not have an affirmative action plan requirement.

Sec. 28. [REPORT.]

The commissioner of administration shall report to the legislature by January 1, 1999, in the biennial report required under Minnesota Statutes, section 115A.15, subdivision 5, on the potential use of measurable objectives as a means of tracking progress toward the purchase of recycled content goods.

Sec. 29. [REPEALER.]

Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; and Minnesota Statutes 1997 Supplement, sections 16B.18, subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed.

Sec. 30. [EFFECTIVE DATE.]

This article is effective July 1, 1998.

ARTICLE 2

CONFORMING AMENDMENTS

Section 1. Minnesota Statutes 1997 Supplement, section 3.225, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION.] This section applies to a contract for professional or technical services entered into by the house of representatives, the senate, the legislative coordinating commission, or any group under the jurisdiction of the legislative coordinating commission. For purposes of this section, "professional or technical services" has the meaning defined in section 16B.17 16C.09, subdivision 1, but does not include legal services for official legislative business.

Sec. 2. Minnesota Statutes 1996, section 3.225, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering into a contract for professional or technical services, the contracting entity must determine that:

(1) all provisions of section 16B.19 16C.18, subdivision 2 3, have been verified or complied with;

(2) the work to be performed under the contract is necessary to the entity's achievement of its responsibilities;

(3) the contract will not establish an employment relationship between the state or the entity and any persons performing under the contract;


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(4) no current legislative employees will engage in the performance of the contract;

(5) no state agency has previously performed or contracted for the performance of tasks which would be substantially duplicated under the proposed contract;

(6) the contracting entity has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(7) the combined contract and amendments will not extend for more than five years.

Sec. 3. Minnesota Statutes 1996, section 3.732, subdivision 6, is amended to read:

Subd. 6. [SETTLEMENT.] The head of each department or agency, or a designee, acting on behalf of the state, may enter into structured settlements, through the negotiation, creation, and use of annuities or similar financial plans for claimants, to resolve claims arising from the alleged negligence of the state, its agencies, or employees. Sections 16B.06, 16B.07, 16B.08, and 16B.09 16C.03, subdivision 4, 16C.06, and 16C.07 do not apply to the state's selection of and contracts with structured settlement consultants or purveyors of structured settlement plans.

Sec. 4. Minnesota Statutes 1996, section 3.922, subdivision 5, is amended to read:

Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council shall annually elect a chair and other officers as it may deem necessary. The chair may appoint subcommittees necessary to fulfill the duties of the council. It shall also employ and prescribe the duties of employees and agents as it deems necessary. The compensation of the executive director of the board is as provided by section 43A.18. All employees are in the unclassified service. The chair is an ex officio member of the state board of human rights. Appropriations and other funds of the council are subject to chapter 16B 16C. The council may contract in its own name. Contracts must be approved by a majority of the members of the council and executed by the chair and the executive director. The council may apply for, receive, and spend in its own name, grants and gifts of money consistent with the powers and duties specified in this section. The council shall maintain its primary office in Bemidji. It shall also maintain personnel and office space in St. Paul.

Sec. 5. Minnesota Statutes 1996, section 3C.10, subdivision 3, is amended to read:

Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may negotiate for all or part of the editing, indexing, compiling, and printing of Minnesota Statutes, supplements to Minnesota Statutes, and Laws of Minnesota and contract with a law book publisher for these services. The provisions of chapter 16B 16C as they relate to competitive bidding do not apply to these contracts. No contract may be made until the revisor of statutes has consulted with the legislative coordinating commission. Failure or refusal of the commission to make a recommendation promptly shall be deemed an affirmative recommendation.

Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended to read:

4A.04 [COOPERATIVE CONTRACTS.]

(a) The director may apply for, receive, and expend money from municipal, county, regional, and other planning agencies; apply for, accept, and disburse grants and other aids for planning purposes from the federal government and from other public or private sources; and may enter into contracts with agencies of the federal government, local governmental units, the University of Minnesota, and other educational institutions, and private persons as necessary to perform the director's duties. Contracts made pursuant to this section are not subject to the provisions of chapter 16B 16C, as they relate to competitive bidding.

(b) The director may apply for, receive, and expend money made available from federal sources or other sources for the purposes of carrying out the duties and responsibilities of the director relating to local and urban affairs.

(c) All money received by the director pursuant to this section shall be deposited in the state treasury and is appropriated to the director for the purposes for which the money has been received. The money shall not cancel and is available until expended.


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Sec. 7. Minnesota Statutes 1996, section 6.551, is amended to read:

6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL GOVERNMENTS.]

The state auditor may examine the books, records, documents, and accounting procedures and practices of a contractor or grantee of a local government pursuant to section 16B.06 16C.06, subdivision 4 5. The examination shall be limited to the books, records, documents, and accounting procedures and practices that are relevant to the contract or transaction with the local government.

Sec. 8. Minnesota Statutes 1996, section 11A.24, subdivision 4, is amended to read:

Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may invest funds in bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage securities and asset backed securities, repurchase agreements and reverse repurchase agreements, guaranteed investment contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance companies if they conform to the following provisions:

(1) bankers acceptances and deposit notes of United States banks are limited to those issued by banks rated in the highest four quality categories by a nationally recognized rating agency;

(2) certificates of deposit are limited to those issued by (i) United States banks and savings institutions that are rated in the top four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies; or (ii) credit unions in amounts up to the limit of insurance coverage provided by the National Credit Union Administration;

(3) commercial paper is limited to those issued by United States corporations or their Canadian subsidiaries and rated in the highest two quality categories by a nationally recognized rating agency;

(4) mortgage securities shall be rated in the top four quality categories by a nationally recognized rating agency;

(5) collateral for repurchase agreements and reverse repurchase agreements is limited to letters of credit and securities authorized in this section;

(6) guaranteed investment contracts are limited to those issued by insurance companies or banks rated in the top four quality categories by a nationally recognized rating agency or to alternative guaranteed investment contracts where the underlying assets comply with the requirements of this section;

(7) savings accounts are limited to those fully insured by federal agencies; and

(8) asset backed securities shall be rated in the top four quality categories by a nationally recognized rating agency.

(b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 16C.06 do not apply to certificates of deposit and collateralization agreements executed by the state board under paragraph (a), clause (2).

(c) In addition to investments authorized by paragraph (a), clause (4), the state board may purchase from the Minnesota housing finance agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the agency. The state board may also enter into a commitment with the agency, at the time of any issue of bonds or notes, to purchase at a specified future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The state board may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the state board comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The state board may also enter into agreements with the agency for the investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal privileges, and any guaranteed rate of return.


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Sec. 9. Minnesota Statutes 1996, section 12.221, subdivision 5, is amended to read:

Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any federal-state agreement entered into by the state director, serving as the governor's authorized representative, in the acceptance of federal money made available as a result of a disaster declaration, and upon the review and acceptance by the attorney general's office of the language contained in the subgrant agreement and any amendments to the agreement, the requirements of section 16B.06 16C.06, subdivision 2, paragraph (a), clause (3), must be waived.

Sec. 10. Minnesota Statutes 1996, section 15.061, is amended to read:

15.061 [PROFESSIONAL OR TECHNICAL SERVICES.]

In accordance with section 16B.17 sections 16C.03 and 16C.09, the head of a state department or agency may, with the approval of the commissioner of administration, contract for professional or technical services in connection with the operation of the department or agency. A contract negotiated under this section is not subject to the competitive bidding requirements of chapter 16B 16C.

Sec. 11. Minnesota Statutes 1996, section 16A.101, is amended to read:

16A.101 [SERVICE CONTRACTS.]

The state accounting system must list expenditures for professional and technical service contracts, as defined in section 16B.17 16C.09, subdivision 1, as a separate category. No other expenditures may be included in this category.

Sec. 12. Minnesota Statutes 1997 Supplement, section 16A.15, subdivision 3, is amended to read:

Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may not be made without prior obligation. An obligation may not be incurred against any fund, allotment, or appropriation unless the commissioner has certified a sufficient unencumbered balance or the accounting system shows sufficient allotment or encumbrance balance in the fund, allotment, or appropriation to meet it. The commissioner shall determine when the accounting system may be used to incur obligations without the commissioner's certification of a sufficient unencumbered balance. An expenditure or obligation authorized or incurred in violation of this chapter is invalid and ineligible for payment until made valid. A payment made in violation of this chapter is illegal. An employee authorizing or making the payment, or taking part in it, and a person receiving any part of the payment, are jointly and severally liable to the state for the amount paid or received. If an employee knowingly incurs an obligation or authorizes or makes an expenditure in violation of this chapter or takes part in the violation, the violation is just cause for the employee's removal by the appointing authority or by the governor if an appointing authority other than the governor fails to do so. In the latter case, the governor shall give notice of the violation and an opportunity to be heard on it to the employee and to the appointing authority. A claim presented against an appropriation without prior allotment or encumbrance may be made valid on investigation, review, and approval by the agency head in accordance with the commissioner's policy, if the services, materials, or supplies to be paid for were actually furnished in good faith without collusion and without intent to defraud. The commissioner may then draw a warrant to pay the claim just as properly allotted and encumbered claims are paid.

(b) The commissioner may approve payment for materials and supplies in excess of the obligation amount when increases are authorized by section 16B.07 16C.03, subdivision 2 3.

(c) To minimize potential construction delay claims, an agency with a project funded by a building appropriation may allow a contractor to proceed with supplemental work within the limits of the appropriation before money is encumbered. Under this circumstance, the agency may requisition funds and allow contractors to expeditiously proceed with a construction sequence. While the contractor is proceeding, the agency shall immediately act to encumber the required funds.


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Sec. 13. Minnesota Statutes 1996, section 16A.85, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] The commissioner of administration may determine, in conjunction with the commissioner of finance, the personal property needs of the various state departments, agencies, boards, commissions and the legislature of the kinds of property identified in this subdivision that may be economically funded through a master lease program and request the commissioner of finance to execute a master lease. The master lease may be used only to finance the following kinds of purchases:

(a) The master lease may be used to finance purchases by the commissioner of administration with money from an internal services fund.

(b) The master lease may be used to refinance a purchase of equipment already purchased under a lease-purchase agreement.

(c) The master lease may be used to finance purchases of large equipment with a capital value of more than $100,000 and a useful life of more than ten years.

(d) The legislature may specifically authorize a particular purchase to be financed using the master lease. The legislature anticipates that this authorization will be given only to finance the purchase of major pieces of equipment with a capital value of more than $10,000.

The commissioner of finance may authorize the sale and issuance of certificates of participation relative to a master lease in an amount sufficient to fund these personal property needs. The term of the certificates must be less than the expected useful life of the equipment whose purchase is financed by the certificates. The commissioner of administration may use the proceeds from the master lease or the sale of the certificates of participation to acquire the personal property through the appropriate procurement procedure in chapter 16B 16C. Money appropriated for the lease or acquisition of this personal property is appropriated to the commissioner of finance to make master lease payments.

Sec. 14. Minnesota Statutes 1997 Supplement, section 16B.465, subdivision 7, is amended to read:

Subd. 7. [EXEMPTION.] The system is exempt from the five-year limitation on contracts set by section 16B.07, subdivision 2 sections 16C.06, subdivision 2, paragraph (a), clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, clause (6).

Sec. 15. Minnesota Statutes 1997 Supplement, section 16E.07, subdivision 9, is amended to read:

Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall identify opportunities to aggregate demand for technical services required by government units for online activities and may contract with governmental or nongovernmental entities to provide services. These contracts are not subject to the requirements of chapter chapters 16B and 16C, except sections 16B.167, 16B.17, and 16B.175 16C.05, 16C.08, 16C.09, and 16C.10.

Sec. 16. Minnesota Statutes 1997 Supplement, section 17.03, subdivision 12, is amended to read:

Subd. 12. [CONTRACTS; APPROPRIATION.] The commissioner may accept money as part of a contract with any public or private entity to provide statutorily prescribed services by the department. A contract must specify the services to be provided by the department and the amount and method of reimbursement. Money generated in a contractual agreement under this section must be deposited in a special revenue fund and is appropriated to the department for purposes of providing services specified in the contracts. Contracts under this section must be processed in accordance with section 16B.06 16C.06. The commissioner must report revenues collected and expenditures made under this section to the chairs of the environment and natural resources finance committee in the house of representatives and the environment and agriculture budget division in the senate by January 15 of each odd-numbered year.


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Sec. 17. Minnesota Statutes 1996, section 17.1015, is amended to read:

17.1015 [PROMOTIONAL EXPENDITURES.]

In order to accomplish the purposes of section 17.101, the commissioner may participate jointly with private persons in appropriate programs and projects and may enter into contracts to carry out those programs and projects. The contracts may not include the acquisition of land or buildings and are not subject to the provisions of chapter 16B 16C relating to competitive bidding.

The commissioner may spend money appropriated for the purposes of section 17.101, and expenditures made pursuant to section 17.101 for food, lodging, or travel are not governed by the travel rules of the commissioner of employee relations.

Sec. 18. Minnesota Statutes 1996, section 41A.023, is amended to read:

41A.023 [POWERS.]

In addition to other powers granted by this chapter, the board may:

(1) sue and be sued;

(2) acquire, hold, lease, and transfer any interest in real and personal property for its corporate purposes;

(3) sell at public or private sale, at the price or prices determined by the board, any note, mortgage, lease, sublease, lease purchase, or other instrument or obligation evidencing or securing a loan made for the purpose of economic development, job creation, redevelopment, or community revitalization by a public agency to a business, for-profit or nonprofit organization, or an individual;

(4) obtain insurance on its property;

(5) obtain municipal bond insurance, letters of credit, surety obligations, or similar agreements from financial institutions;

(6) enter into other agreements or transactions, without regard to chapter 16B or 16C, that the board considers necessary or appropriate to carry out the purposes of this chapter with federal or state agencies, political subdivisions of the state, or other persons, firms, or corporations;

(7) establish and collect fees without regard to chapter 14 and section 16A.1285;

(8) accept appropriations, gifts, grants, and bequests;

(9) use money received from any source for any legal purpose or program of the board;

(10) participate in loans for agricultural resource projects in accordance with section 41A.035;

(11) provide small business development loans in accordance with section 41A.036; and

(12) guarantee or insure bonds or notes issued by the board.

Sec. 19. Minnesota Statutes 1997 Supplement, section 41D.03, subdivision 7, is amended to read:

Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical educational equipment may be procured for programs of the Minnesota center for agriculture education by the council either by brand designation or in accordance with standards and specifications the council may adopt, notwithstanding chapter 16B 16C.


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Sec. 20. Minnesota Statutes 1996, section 43A.23, subdivision 1, is amended to read:

Subdivision 1. [GENERAL.] The commissioner is authorized to request bids from carriers or to negotiate with carriers and to enter into contracts with carriers which in the judgment of the commissioner are best qualified to underwrite and service the benefit plans. Contracts entered into with carriers are not subject to the requirements of sections 16B.19 to 16B.22 16C.18 to 16C.21. The commissioner may negotiate premium rates and coverage provisions with all carriers licensed under chapters 62A, 62C, and 62D. The commissioner may also negotiate reasonable restrictions to be applied to all carriers under chapters 62A, 62C, and 62D. Contracts to underwrite the benefit plans must be bid or negotiated separately from contracts to service the benefit plans, which may be awarded only on the basis of competitive bids. The commissioner shall consider the cost of the plans, conversion options relating to the contracts, service capabilities, character, financial position, and reputation of the carriers, and any other factors which the commissioner deems appropriate. Each benefit contract must be for a uniform term of at least one year, but may be made automatically renewable from term to term in the absence of notice of termination by either party. The commissioner shall, to the extent feasible, make hospital and medical benefits available from at least one carrier licensed to do business pursuant to each of chapters 62A, 62C, and 62D. The commissioner need not provide health maintenance organization services to an employee who resides in an area which is not served by a licensed health maintenance organization. The commissioner may refuse to allow a health maintenance organization to continue as a carrier. The commissioner may elect not to offer all three types of carriers if there are no bids or no acceptable bids by that type of carrier or if the offering of additional carriers would result in substantial additional administrative costs. A carrier licensed under chapter 62A is exempt from the tax imposed by section 60A.15 on premiums paid to it by the state.

Sec. 21. Minnesota Statutes 1996, section 44A.01, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade center corporation is a public corporation established to facilitate and support Minnesota world trade center programs and services and to promote the Minnesota world trade center. The corporation is a state agency, but is not subject to chapters 14, 16A, 16B, 16C, 43A, and 179A.

Sec. 22. Minnesota Statutes 1996, section 45.0291, is amended to read:

45.0291 [DEPARTMENT BONDS.]

Bonds issued under chapters 45 to 83, 309, 332, and sections 326.83 to 326.98, are not state bonds or contracts for purposes of sections 8.05 and 16B.06 16C.06, subdivision 2.

Sec. 23. Minnesota Statutes 1997 Supplement, section 61B.21, subdivision 1, is amended to read:

Subdivision 1. [FUNCTIONS.] The Minnesota life and health insurance guaranty association shall perform its functions under the plan of operation established and approved under section 61B.25, and shall exercise its powers through a board of directors. The association is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. For purposes of administration and assessment, the association shall establish and maintain two accounts:

(1) the life insurance and annuity account which includes the following subaccounts:

(i) the life insurance account;

(ii) the annuity account; and

(iii) the unallocated annuity account; and

(2) the health insurance account.

Sec. 24. Minnesota Statutes 1996, section 84.025, subdivision 7, is amended to read:

Subd. 7. [CONTRACTS.] The commissioner of natural resources may contract with the federal government, local governmental units, the University of Minnesota, and other educational institutions, and private persons as may be necessary in the performance of duties. Contracts made pursuant to this section for professional services shall not be subject to the provisions of chapter 16B 16C, as they relate to competitive bidding.


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Sec. 25. Minnesota Statutes 1996, section 84.026, is amended to read:

84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES SERVICES.]

The commissioner of natural resources is authorized to enter into contractual agreements with any public or private entity for the provision of statutorily prescribed natural resources services by the department. The contracts shall specify the services to be provided and the amount and method of reimbursement. Funds generated in a contractual agreement made pursuant to this section shall be deposited in the special revenue fund and are appropriated to the department for purposes of providing the services specified in the contracts. All such contractual agreements shall be processed in accordance with the provisions of section 16B.06 16C.06. The commissioner shall report revenues collected and expenditures made under this section to the chairs of the committees on appropriations in the house and finance in the senate by January 1 of each odd-numbered year.

Sec. 26. Minnesota Statutes 1996, section 84.0845, is amended to read:

84.0845 [ADVANCE OF MATCHING FUNDS.]

The commissioner may advance funds appropriated for fish and wildlife programs to government agencies, the National Fish and Wildlife Foundation, federally recognized Indian tribes and bands, and private, nonprofit organizations for the purposes of securing nonstate matching funds for projects involving acquisition and improvement of fish and wildlife habitat and related research and management. The commissioner shall execute agreements for contracts with the matching parties under section 16B.06 sections 16C.03, subdivision 4, and 16C.06 prior to advancing any state funds. The agreement or contract shall contain provisions for return of the state's share and the matching funds within a period of time specified by the commissioner. The state's funds and the nonstate matching funds must be deposited in a separate account and expended solely for the purposes set forth in the agreement or contract. The commissioner shall enter into agreements or contracts only with the National Fish and Wildlife Foundation and federal and nonprofit authorities deemed by the commissioner to be dedicated to the purposes of the project.

Sec. 27. Minnesota Statutes 1996, section 85A.02, subdivision 3, is amended to read:

Subd. 3. The board may conduct research studies and programs, collect and analyze data and prepare reports, maps, charts and other information relating to the zoological garden or any wild or domestic animals or may contract for any of such services without complying with chapter 16B 16C.

Sec. 28. Minnesota Statutes 1997 Supplement, section 85A.02, subdivision 5b, is amended to read:

Subd. 5b. [EXEMPTIONS.] The board is not subject to sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; chapter chapters 16B and 16C, except for sections 16B.07, 16B.102, 16B.17, 16B.19, 16B.35, and 16B.55 16B.35, 16B.55, 16C.07, 16C.09, 16C.10, and 16C.18; and chapter 14, except section 14.386, paragraph (a), clauses (1) and (3). Section 14.386, paragraph (b), does not apply to the board's actions.

Sec. 29. Minnesota Statutes 1996, section 85A.02, subdivision 16, is amended to read:

Subd. 16. The board may acquire by lease-purchase or installment purchase contract, transportation systems, facilities and equipment that it determines will substantially enhance the public's opportunity to view, study or derive information concerning the animals to be located in the zoological garden, and will increase attendance at the garden. The contracts may provide for: (1) the payment of money over a 12-year period, or over a longer period not exceeding 25 years if approved by the board; (2) the payment of money from any funds of the board not pledged or appropriated for another purpose; (3) indemnification of the lessor or seller for damage to property or injury to persons due primarily to the actions of the board or its employees; (4) the transfer of title to the property to the board upon execution of the contract or upon payment of specified amounts; (5) the reservation to the lessor or seller of a security interest in the property; and (6) any other terms that the board determines to be commercially reasonable. Property so acquired by the board, and its purchase or use by the board, or by any nonprofit corporation having a concession from the board requiring its purchase, shall not be subject to taxation by the state or its political subdivisions. Each contract shall be subject to the provisions of chapter 16B 16C, relating to competitive bidding, provided that, notwithstanding subdivision 5b, the board is not required to readvertise for competitive proposals for any transportation system, facilities and equipment heretofore selected from competitive proposals.


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Sec. 30. Minnesota Statutes 1996, section 85A.02, subdivision 18, is amended to read:

Subd. 18. [PURCHASING.] The board may contract for supplies, materials, purchase or rental of equipment, and utility services. Except as provided in subdivision 5b, chapter 16B 16C does not apply to these contracts.

Sec. 31. Minnesota Statutes 1996, section 103F.515, subdivision 3, is amended to read:

Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may acquire, or accept by gift or donation, conservation easements on eligible land. An easement may be permanent or of limited duration. An easement acquired on land for windbreak purposes, under subdivision 2, may be only of permanent duration. An easement of limited duration may not be acquired if it is for a period less than 20 years. The negotiation and acquisition of easements authorized by this section are exempt from the contractual provisions of chapter chapters 16B and 16C.

(b) The board may acquire, or accept by gift or donation, flowage easements when necessary for completion of wetland restoration projects.

Sec. 32. Minnesota Statutes 1996, section 116.03, subdivision 2, is amended to read:

Subd. 2. The commissioner shall organize the agency and employ such assistants and other officers, employees and agents as the commissioner may deem necessary to discharge the functions of the commissioner's office, define the duties of such officers, employees and agents, and delegate to them any of the commissioner's powers, duties, and responsibilities, subject to the commissioner's control and under such conditions as the commissioner may prescribe. The commissioner may also contract with persons, firms, corporations, the federal government and any agency or instrumentality thereof, the water research center of the University of Minnesota or any other instrumentality of such university, for doing any of the work of the commissioner's office, and none of the provisions of chapter 16B 16C, relating to bids, shall apply to such contracts.

Sec. 33. Minnesota Statutes 1996, section 116J.035, subdivision 1, is amended to read:

Subdivision 1. [POWERS.] The commissioner may:

(a) apply for, receive, and expend money from municipal, county, regional, and other government agencies;

(b) apply for, accept, and disburse grants and other aids from other public or private sources;

(c) contract for professional services if such work or services cannot be satisfactorily performed by employees of the department or by any other state agency;

(d) enter into interstate compacts to jointly carry out such research and planning with other states or the federal government where appropriate;

(e) distribute informational material at no cost to the public upon reasonable request; and

(f) enter into contracts necessary for the performance of the commissioner's duties with federal, state, regional, metropolitan, local, and other agencies or units of government; educational institutions, including the University of Minnesota. Contracts made pursuant to this section shall not be subject to the competitive bidding requirements of chapter 16B 16C.

The commissioner may apply for, receive, and expend money made available from federal or other sources for the purpose of carrying out the duties and responsibilities of the commissioner pursuant to this chapter.

All moneys received by the commissioner pursuant to this chapter shall be deposited in the state treasury and are appropriated to the commissioner for the purpose for which the moneys have been received. The money shall not cancel and shall be available until expended.


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Sec. 34. Minnesota Statutes 1996, section 116J.402, is amended to read:

116J.402 [COOPERATIVE CONTRACTS.]

The commissioner of trade and economic development may apply for, receive, and spend money for community development from municipal, county, regional, and other planning agencies. The commissioner may also apply for, accept, and disburse grants and other aids for community development and related planning from the federal government and other sources. The commissioner may enter into contracts with agencies of the federal government, local governmental units, regional development commissions, and the metropolitan council, other state agencies, the University of Minnesota, and other educational institutions, and private persons as necessary to perform the commissioner's duties. Contracts made according to this section, except those with private persons, are not subject to the provisions of chapter 16B 16C concerning competitive bidding.

The commissioner may apply for, receive, and spend money made available from federal sources or other sources for the purposes of carrying out the duties and responsibilities of the commissioner.

Money received by the commissioner under this section must be deposited in the state treasury and is appropriated to the commissioner for the purposes for which the money has been received. The money does not cancel and is available until spent.

Sec. 35. Minnesota Statutes 1996, section 116J.58, subdivision 2, is amended to read:

Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry out duties and responsibilities and to serve the people of the state in the promotion of tourism, trade, and economic development, the commissioner may engage in programs and projects jointly with a private person, firm, corporation or association and may enter into contracts under terms to be mutually agreed upon to carry out such programs and projects not including acquisition of land or buildings. Contracts may be negotiated and are not subject to the provisions of chapter 16B 16C relating to competitive bidding.

Sec. 36. Minnesota Statutes 1996, section 116J.68, subdivision 2, is amended to read:

Subd. 2. The bureau shall:

(a) provide information and assistance with respect to all aspects of business planning and business management related to the start-up, operation, or expansion of a small business in Minnesota;

(b) refer persons interested in the start-up, operation, or expansion of a small business in Minnesota to assistance programs sponsored by federal agencies, state agencies, educational institutions, chambers of commerce, civic organizations, community development groups, private industry associations, and other organizations or to the business assistance referral system established by the Minnesota Project Outreach Corporation;

(c) plan, develop, and implement a master file of information on small business assistance programs of federal, state, and local governments, and other public and private organizations so as to provide comprehensive, timely information to the bureau's clients;

(d) employ staff with adequate and appropriate skills and education and training for the delivery of information and assistance;

(e) seek out and utilize, to the extent practicable, contributed expertise and services of federal, state, and local governments, educational institutions, and other public and private organizations;

(f) maintain a close and continued relationship with the director of the procurement program within the department of administration so as to facilitate the department's duties and responsibilities under sections 16B.19 to 16B.22 16C.18 to 16C.21 relating to the small targeted group business and economically disadvantaged business program of the state;


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(g) develop an information system which will enable the commissioner and other state agencies to efficiently store, retrieve, analyze, and exchange data regarding small business development and growth in the state. All executive branch agencies of state government and the secretary of state shall to the extent practicable, assist the bureau in the development and implementation of the information system;

(h) establish and maintain a toll free telephone number so that all small business persons anywhere in the state can call the bureau office for assistance. An outreach program shall be established to make the existence of the bureau well known to its potential clientele throughout the state. If the small business person requires a referral to another provider the bureau may use the business assistance referral system established by the Minnesota Project Outreach Corporation;

(i) conduct research and provide data as required by the state legislature;

(j) develop and publish material on all aspects of the start-up, operation, or expansion of a small business in Minnesota;

(k) collect and disseminate information on state procurement opportunities, including information on the procurement process;

(l) develop a public awareness program through the use of newsletters, personal contacts, and electronic and print news media advertising about state assistance programs for small businesses, including those programs specifically for socially disadvantaged small business persons;

(m) enter into agreements with the federal government and other public and private entities to serve as the statewide coordinator or host agency for the federal small business development center program under United States Code, title 15, section 648; and

(n) assist providers in the evaluation of their programs and the assessment of their service area needs. The bureau may establish model evaluation techniques and performance standards for providers to use.

Sec. 37. Minnesota Statutes 1996, section 116J.966, subdivision 1, is amended to read:

Subdivision 1. [GENERALLY.] (a) The commissioner shall promote, develop, and facilitate trade and foreign investment in Minnesota. In furtherance of these goals, and in addition to the powers granted by section 116J.035, the commissioner may:

(1) locate, develop, and promote international markets for Minnesota products and services;

(2) arrange and lead trade missions to countries with promising international markets for Minnesota goods, technology, services, and agricultural products;

(3) promote Minnesota products and services at domestic and international trade shows;

(4) organize, promote, and present domestic and international trade shows featuring Minnesota products and services;

(5) host trade delegations and assist foreign traders in contacting appropriate Minnesota businesses and investments;

(6) develop contacts with Minnesota businesses and gather and provide information to assist them in locating and communicating with international trading or joint venture counterparts;

(7) provide information, education, and counseling services to Minnesota businesses regarding the economic, commercial, legal, and cultural contexts of international trade;

(8) provide Minnesota businesses with international trade leads and information about the availability and sources of services relating to international trade, such as export financing, licensing, freight forwarding, international advertising, translation, and custom brokering;


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(9) locate, attract, and promote foreign direct investment and business development in Minnesota to enhance employment opportunities in Minnesota;

(10) provide foreign businesses and investors desiring to locate facilities in Minnesota information regarding sources of governmental, legal, real estate, financial, and business services;

(11) enter into contracts or other agreements with private persons and public entities, including agreements to establish and maintain offices and other types of representation in foreign countries, to carry out the purposes of promoting international trade and attracting investment from foreign countries to Minnesota and to carry out this section, without regard to sections 16B.07 and 16B.09 section 16C.07;

(12) enter into administrative, programming, and service partnerships with the Minnesota world trade center; and

(13) market trade-related materials to businesses and organizations, and the proceeds of which must be placed in a special revolving account and are appropriated to the commissioner to prepare and distribute trade-related materials.

(b) The programs and activities of the commissioner of trade and economic development and the Minnesota trade division may not duplicate programs and activities of the commissioner of agriculture or the Minnesota world trade center corporation.

(c) The commissioner shall notify the chairs of the senate finance and house appropriations committees of each agreement under this subdivision to establish and maintain an office or other type of representation in a foreign country.

Sec. 38. Minnesota Statutes 1997 Supplement, section 121.1113, subdivision 2, is amended to read:

Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING ASSISTANCE.] The department of children, families, and learning shall contract for professional and technical services according to competitive bidding procedures under chapter 16B 16C for purposes of this section.

Sec. 39. Minnesota Statutes 1996, section 124.14, subdivision 1, is amended to read:

Subdivision 1. The commissioner shall supervise distribution of school aids and grants in accordance with law. It may make rules consistent with law for the distribution to enable districts to perform efficiently the services required by law and further education in the state, including reasonable requirements for the reports and accounts to it as will assure accurate and lawful apportionment of aids. State and federal aids and discretionary or entitlement grants distributed by the commissioner shall not be subject to the contract approval procedures of the commissioner of administration or to chapter 16A or, 16B, or 16C. The commissioner shall adopt internal procedures for administration and monitoring of aids and grants.

Sec. 40. Minnesota Statutes 1996, section 126.151, subdivision 2, is amended to read:

Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner and the board of trustees of the Minnesota state colleges and universities may retain dues and other money collected on behalf of students participating in approved vocational student organizations and may deposit the money in separate accounts. The money in these accounts shall be available for expenditures for state and national activities related to specific organizations. Administration of money collected under this section is not subject to the provisions of chapters 15, 16A, and 16B, and 16C, and may be deposited outside the state treasury. Money shall be administered under the policies of the applicable state board or agency relating to post-secondary and secondary vocational student organizations and is subject to audit by the legislative auditor. Any unexpended money shall not cancel but may be carried forward to the next fiscal year.

Sec. 41. Minnesota Statutes 1996, section 129C.10, subdivision 7, is amended to read:

Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical educational equipment may be procured for programs of the Lola and Rudy Perpich Minnesota center for arts education by the board either by brand designation or in accordance with standards and specifications the board may adopt, notwithstanding chapter chapters 16B and 16C.


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Sec. 42. Minnesota Statutes 1996, section 136A.06, is amended to read:

136A.06 [FEDERAL FUNDS.]

The higher education services office is designated the state agency to apply for, receive, accept, and disburse to both public and private institutions of higher education all federal funds which are allocated to the state of Minnesota to support higher education programs, construction, or other activities and which require administration by a state higher education agency under the Higher Education Facilities Act of 1963, and any amendments thereof, the Higher Education Act of 1965, and any amendments thereof, and any other law which provides funds for higher education and requires administration by a state higher education agency as enacted or may be enacted by the Congress of the United States; provided that no commitment shall be made that shall bind the legislature to make appropriations beyond current allocations of funds. The office may apply for, receive, accept, and disburse all administrative funds available to the office for administering federal funds to support higher education programs, construction, or other activities. The office also may apply for, receive, accept, and disburse any research, planning, or program funds which are available for purposes consistent with the provisions of this chapter. In making application for and administering federal funds the office may comply with any and all requirements of federal law and federal rules and regulations to enable it to receive and accept such funds. The expenditure of any such funds received shall be governed by the laws of the state, except insofar as federal regulations may otherwise provide. The office may contract with both public and private institutions in administering federal funds, and such contracts shall not be subject to the provisions of chapter 16B 16C. All such money received by the office shall be deposited in the state treasury and are hereby appropriated to it annually for the purpose for which such funds are received. None of such moneys shall cancel but shall be available until expended.

Sec. 43. Minnesota Statutes 1996, section 136A.16, subdivision 1, is amended to read:

Subdivision 1. Notwithstanding chapter 16B 16C, the Minnesota higher education services office is designated as the administrative agency for carrying out the purposes and terms of sections 136A.15 to 136A.1702. The office may establish one or more loan programs.

Sec. 44. Minnesota Statutes 1996, section 136A.29, subdivision 6, is amended to read:

Subd. 6. The authority is authorized and empowered to determine the location and character of any project to be financed under the provisions of sections 136A.25 to 136A.42, and to construct, reconstruct, remodel, maintain, manage, enlarge, alter, add to, repair, operate, lease, as lessee or lessor, and regulate the same, to enter into contracts for any or all of such purposes, to enter into contracts for the management and operation of a project, and to designate a participating institution of higher education as its agent to determine the location and character of a project undertaken by such participating institution of higher education under the provisions of sections 136A.25 to 136A.42 and as the agent of the authority, to construct, reconstruct, remodel, maintain, manage, enlarge, alter, add to, repair, operate, lease, as lessee or lessor, and regulate the same, and as the agent of the authority, to enter into contracts for any or all of such purposes, including contracts for the management and operation of such project. Contracts of the authority or of a participating institution of higher education to acquire or to construct, reconstruct, remodel, maintain, enlarge, alter, add to, or repair projects shall not be subject to the provisions of chapter 16B 16C or section 574.26, or any other public contract or competitive bid law.

Sec. 45. Minnesota Statutes 1997 Supplement, section 136A.40, is amended to read:

136A.40 [ADMINISTRATION.]

The administration of sections 136A.25 to 136A.42, shall be under the authority independent of other departments and agencies and notwithstanding chapter 16B 16C. The authority shall not be subject to the provisions of chapter 14, including section 14.386 in connection with the adoption of any rules, rents, fees or charges or with the exercise of any other powers or duties.


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Sec. 46. Minnesota Statutes 1996, section 136F.23, is amended to read:

136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.]

Notwithstanding chapter 16A or 16B 16C, the student associations recognized by the board of trustees of the Minnesota state colleges and universities may purchase goods or materials through state purchasing authority for the ordinary day-to-day operations of the associations. The student associations must be nonprofit 501(c)(3) organizations in order to qualify for this authority. The department of administration may require that the purchase documents be approved by appropriate officials in the board's central office.

Sec. 47. Minnesota Statutes 1996, section 136F.56, subdivision 5, is amended to read:

Subd. 5. [SERVICE CONTRACTS.] The council may contract for the services it needs to carry out its function. The council may also contract to provide services to other organizations. The contracts are not subject to the contract approval procedures of the commissioner of administration or of chapter 16B 16C.

Sec. 48. Minnesota Statutes 1996, section 136F.581, subdivision 3, is amended to read:

Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The policies and procedures must include provisions for procurement, including construction, from small targeted group businesses and businesses from economically disadvantaged areas designated under section 16B.19 16C.18. The board, colleges, and universities shall use the methods contained in section 471.345, subdivision 8, for such purchasing, or may develop additional methods in which the cost percentage preferences are consistent with the provision of section 16B.19 16C.18, subdivisions 2c and 2d 6, paragraph (a), and 7, or consistent with the provisions of the University of Minnesota's targeted group business purchasing program.

Sec. 49. Minnesota Statutes 1996, section 136F.66, is amended to read:

136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.]

In awarding contracts for capital projects under section 136F.64, the board shall consider the documentation provided by the bidders regarding their qualifications, including evidence of having successfully completed similar work, or delivering services or products comparable to that being requested. The board shall set procedures to administer this section, which must include practices that will assist in the economic development of small businesses, small targeted group businesses, and businesses in economically disadvantaged areas designated under section 16B.19 16C.18.

Sec. 50. Minnesota Statutes 1996, section 136F.72, subdivision 3, is amended to read:

Subd. 3. [ADMINISTRATION.] Each college and university, independent of other authority and notwithstanding chapters 16A and, 16B, and 16C, shall administer its activity funds. The board, independent of other authority and notwithstanding chapters 16A and, 16B, and 16C, shall administer the administrative fund established in the system office. All activity fund money collected shall be administered under the policies of the board subject to audit of the legislative auditor.

Sec. 51. Minnesota Statutes 1996, section 136F.96, is amended to read:

136F.96 [ADMINISTRATION.]

The administration of sections 136F.90 to 136F.98 shall be under the board of trustees of the Minnesota state colleges and universities independent of other authority and notwithstanding chapters 16A and, 16B, and 16C.

Sec. 52. Minnesota Statutes 1996, section 137.35, subdivision 1, is amended to read:

Subdivision 1. [PURCHASING METHODS.] (a) The regents may award up to a six percent preference in the amount bid for specified goods and services to small targeted group businesses designated under section 16B.19 16C.18, subdivision 5.


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(b) The regents may designate a purchase of goods or services for award only to small targeted group businesses designated under section 16B.19 16C.18, subdivision 5, if the regents determine that at least three small targeted group businesses are likely to bid.

(c) The regents, as a condition of awarding a construction contract or approving a contract for consultant, professional, or technical services, may set goals that require the prime contractor to subcontract a portion of the contract to small targeted group businesses. The regents must establish a procedure for granting waivers from the subcontracting requirement when qualified small targeted group businesses are not reasonably available. The regents may establish financial incentives for prime contractors who exceed the goals for use of subcontractors and financial penalties for prime contractors who fail to meet goals under this paragraph. The subcontracting requirements of this paragraph do not apply to prime contractors who are small targeted group businesses. At least 75 percent of the value of the subcontracts awarded to small targeted group businesses under this paragraph must be performed by the business to which the subcontract is awarded or by another small targeted group business.

(d) The regents may award up to a four percent preference in the amount bid on university procurement to small businesses located in an economically disadvantaged area as defined in section 16B.19 16C.18, subdivision 7.

(e) The regents may delegate responsibility under this section to university employees.

Sec. 53. Minnesota Statutes 1996, section 137.35, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY.] The rules adopted by the commissioner of administration to define small businesses and to set time and other eligibility requirements for participation in programs under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply to this section.

Sec. 54. Minnesota Statutes 1996, section 137.35, subdivision 3, is amended to read:

Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

Sec. 55. Minnesota Statutes 1997 Supplement, section 138.35, subdivision 1b, is amended to read:

Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The state archaeologist may contract with the federal government, local governmental units, other states, the university and other educational institutions, and private persons or organizations as necessary in the performance of the duties in sections 138.31 to 138.42. Contracts made under this section for professional services shall not be subject to chapter 16B 16C, as it relates to competitive bidding. The state archaeologist may recruit, train, and accept, without regard to personnel laws or rules, the services of individuals as volunteers for or in aid of performance of the state archaeologist's duties, and may provide for the incidental expenses of volunteers, such as transportation, lodging, and subsistence. The state archaeologist may apply for, receive, and expend grants and gifts of money consistent with the powers and duties in sections 138.31 to 138.42. Any money so received is appropriated for the purpose for which it was granted.

Sec. 56. Minnesota Statutes 1996, section 144.0742, is amended to read:

144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH SERVICES.]

The commissioner of health is authorized to enter into contractual agreements with any public or private entity for the provision of statutorily prescribed public health services by the department. The contracts shall specify the services to be provided and the amount and method of reimbursement therefor. Funds generated in a contractual agreement made pursuant to this section are appropriated to the department for purposes of providing the services specified in the contracts. All such contractual agreements shall be processed in accordance with the provisions of chapter 16B 16C.

Sec. 57. Minnesota Statutes 1996, section 144.95, subdivision 5, is amended to read:

Subd. 5. [GENERAL AUTHORITY.] (a) To carry out subdivisions 1 to 4, the commissioner of health may:

(1) accept money, property, or services from any source;


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(2) receive and hold lands;

(3) accept gifts;

(4) cooperate with city, state, federal, or private agencies whose research on mosquito control or on other environmental matters may be affected by the commissioner's mosquito management and research activities; and

(5) enter into contracts with any public or private entity.

(b) The contracts must specify the duties performed, services provided, and the amount and method of reimbursement for them. Money collected by the commissioner under contracts made under this subdivision is appropriated to the commissioner for the purposes specified in the contracts. Contractual agreements must be processed under section 16B.17 16C.09.

Sec. 58. Minnesota Statutes 1996, section 161.315, subdivision 4, is amended to read:

Subd. 4. [EXCEPTIONS.] The commissioner may terminate a debarment by order, or the commissioner or a county, town, or home rule or statutory city may award a contract to a debarred or suspended person when:

(1) that person is the sole supplier of a material or service required by the commissioner or a county, town, or home rule or statutory city;

(2) the commissioner determines that an emergency exists as defined in section 161.32, subdivision 3;

(3) the commissioner of administration determines that an emergency exists as defined in section 16B.08 16C.11, subdivision 6 2;

(4) in the case of a contract to be awarded by a county, town, or home rule or statutory city, the governing body thereof determines by resolution that an emergency exists that will result in a road, street, or bridge being closed to travel; or

(5) the contract is for purchasing materials or renting equipment for routine road maintenance.

Sec. 59. Minnesota Statutes 1996, section 161.321, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of this section the following terms have the meanings given them, except where the context clearly indicates a different meaning is intended.

(a) "Award" means the granting of a contract in accordance with all applicable laws and rules governing competitive bidding except as otherwise provided in this section.

(b) "Contract" means an agreement entered into between a business entity and the state of Minnesota for the construction of transportation improvements.

(c) "Subcontractor" means a business entity which enters into a legally binding agreement with another business entity which is a party to a contract as defined in clause (b).

(d) "Targeted group business" means a business designated under section 16B.19 16C.18, subdivision 2b 5.

Sec. 60. Minnesota Statutes 1996, section 161.321, subdivision 2, is amended to read:

Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner may award up to a six percent preference in the amount bid for specified construction work to small targeted group businesses.

(b) The commissioner may designate a contract for construction work for award only to small targeted group businesses if the commissioner determines that at least three small targeted group businesses are likely to bid.


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(c) The commissioner, as a condition of awarding a construction contract, may set goals that require the prime contractor to subcontract a portion of the contract to small targeted group businesses. The commissioner must establish a procedure for granting waivers from the subcontracting requirement when qualified small targeted group businesses are not reasonably available. The commissioner may establish financial incentives for prime contractors who exceed the goals for use of subcontractors and financial penalties for prime contractors who fail to meet goals under this paragraph. The subcontracting requirements of this paragraph do not apply to prime contractors who are small targeted group businesses.

(d) The commissioner may award up to a four percent preference in the amount bid on procurement to small businesses located in an economically disadvantaged area as defined in section 16B.19 16C.18, subdivision 7.

Sec. 61. Minnesota Statutes 1996, section 161.321, subdivision 5, is amended to read:

Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the commissioner is unable to award a contract pursuant to the provisions of subdivisions 2 and 3, the award may be placed pursuant to the normal solicitation and award provisions set forth in this chapter and chapter 16B 16C.

Sec. 62. Minnesota Statutes 1996, section 161.321, subdivision 6, is amended to read:

Subd. 6. [RULES.] The rules adopted by the commissioner of administration to define small businesses and to set time and other eligibility requirements for participation in programs under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply to this section. The commissioner may promulgate other rules necessary to carry out this section.

Sec. 63. Minnesota Statutes 1996, section 161.321, subdivision 7, is amended to read:

Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

Sec. 64. Minnesota Statutes 1996, section 161.41, subdivision 2, is amended to read:

Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The commissioner shall administer all aspects of the disposition of property declared to be surplus under this section. The commissioner shall first determine the value of the surplus property. The commissioner may then transfer the possession of the surplus property to any state agency or political subdivision of this state or to the United States government upon receipt of payment in an amount equal to the value of the surplus property.

The commissioner may also sell the surplus property under the competitive bidding provisions of chapter 16B 16C if no state agency or political subdivision of this state offers to purchase the surplus property for its determined value.

Sec. 65. Minnesota Statutes 1997 Supplement, section 179A.03, subdivision 14, is amended to read:

Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or "employee" means any person appointed or employed by a public employer except:

(a) elected public officials;

(b) election officers;

(c) commissioned or enlisted personnel of the Minnesota national guard;

(d) emergency employees who are employed for emergency work caused by natural disaster;

(e) part-time employees whose service does not exceed the lesser of 14 hours per week or 35 percent of the normal work week in the employee's appropriate unit;


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(f) employees whose positions are basically temporary or seasonal in character and: (1) are not for more than 67 working days in any calendar year; or (2) are not for more than 100 working days in any calendar year and the employees are under the age of 22, are full-time students enrolled in a nonprofit or public educational institution prior to being hired by the employer, and have indicated, either in an application for employment or by being enrolled at an educational institution for the next academic year or term, an intention to continue as students during or after their temporary employment;

(g) employees providing services for not more than two consecutive quarters to the board of trustees of the Minnesota state colleges and universities under the terms of a professional or technical services contract as defined in section 16B.17 16C.09, subdivision 1;

(h) employees of charitable hospitals as defined by section 179.35, subdivision 3;

(i) full-time undergraduate students employed by the school which they attend under a work-study program or in connection with the receipt of financial aid, irrespective of number of hours of service per week;

(j) an individual who is employed for less than 300 hours in a fiscal year as an instructor in an adult vocational education program;

(k) an individual hired by a school district or the board of trustees of the Minnesota state colleges and universities to teach one course for up to four credits for one quarter in a year.

The following individuals are public employees regardless of the exclusions of clauses (e) and (f):

(1) An employee hired by a school district or the board of trustees of the Minnesota state colleges and universities except at the university established in section 136F.13 or for community services or community education instruction offered on a noncredit basis: (i) to replace an absent teacher or faculty member who is a public employee, where the replacement employee is employed more than 30 working days as a replacement for that teacher or faculty member; or (ii) to take a teaching position created due to increased enrollment, curriculum expansion, courses which are a part of the curriculum whether offered annually or not, or other appropriate reasons; and

(2) An employee hired for a position under clause (f)(1) if that same position has already been filled under clause (f)(1) in the same calendar year and the cumulative number of days worked in that same position by all employees exceeds 67 calendar days in that year. For the purpose of this paragraph, "same position" includes a substantially equivalent position if it is not the same position solely due to a change in the classification or title of the position.

Sec. 66. Minnesota Statutes 1996, section 179A.23, is amended to read:

179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA BARGAINING UNIT.]

Any contract entered into after March 23, 1982, by the state of Minnesota or the University of Minnesota involving services, any part of which, in the absence of the contract, would be performed by members of a unit provided in sections 179A.10 and 179A.11, shall be subject to section 16B.07 16C.07 and shall provide for the preferential employment by a party of members of that unit whose employment with the state of Minnesota or the University of Minnesota is terminated as a result of that contract.

Contracts entered into by the state of Minnesota for the purpose of providing court reporter services or transcription of the record of a hearing which was recorded by means of an audio magnetic recording device shall be subject to section 16B.17 16C.09 and the preferential employment provisions enumerated in this section. Any court reporter seeking a contract pursuant to the preferential employment provisions of this section shall be given preference when the services are needed only if that court reporter's charges for the services requested are no greater than the average of the charges made for the identical services by other court reporters in the same locality who are also under contract with the state for those services.


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Sec. 67. Minnesota Statutes 1996, section 198.35, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The board may establish a veterans home in Silver Bay by renovating an existing facility owned by the city of Silver Bay if the city donates the building to the board at no cost. Contracts made by the board for the purposes of this subdivision are subject to chapter 16B 16C. Buildings used for the veterans home must comply with requirements established by federal agencies as conditions for the receipt of federal funds for the nursing and boarding care of veterans. The city of Silver Bay shall secure the state match requirement from sources other than the state general fund. Money from other sources must equal at least 35 percent of the total cost of the renovation with the remainder of the funds to be provided by the United States Veterans Administration.

Sec. 68. Minnesota Statutes 1996, section 216C.02, subdivision 1, is amended to read:

Subdivision 1. [POWERS.] (a) The commissioner may:

(1) apply for, receive, and spend money received from federal, municipal, county, regional, and other government agencies and private sources;

(2) apply for, accept, and disburse grants and other aids from public and private sources;

(3) contract for professional services if work or services required or authorized to be carried out by the commissioner cannot be satisfactorily performed by employees of the department or by another state agency;

(4) enter into interstate compacts to carry out research and planning jointly with other states or the federal government when appropriate;

(5) upon reasonable request, distribute informational material at no cost to the public; and

(6) enter into contracts for the performance of the commissioner's duties with federal, state, regional, metropolitan, local, and other agencies or units of government and educational institutions, including the University of Minnesota, without regard to the competitive bidding requirements of chapters 16A and 16B 16C.

(b) The commissioner shall collect information on conservation and other energy-related programs carried on by other agencies, by public utilities, by cooperative electric associations, by municipal power agencies, by other fuel suppliers, by political subdivisions, and by private organizations. Other agencies, cooperative electric associations, municipal power agencies, and political subdivisions shall cooperate with the commissioner by providing information requested by the commissioner. The commissioner may by rule require the submission of information by other program operators. The commissioner shall make the information available to other agencies and to the public and, as necessary, shall recommend to the legislature changes in the laws governing conservation and other energy-related programs to ensure that:

(1) expenditures on the programs are adequate to meet identified needs;

(2) the needs of low-income energy users are being adequately addressed;

(3) duplication of effort is avoided or eliminated;

(4) a program that is ineffective is improved or eliminated; and

(5) voluntary efforts are encouraged through incentives for their operators.

The commissioner shall appoint an advisory task force to help evaluate the information collected and formulate recommendations to the legislature. The task force must include low-income energy users.

(c) By January 15 of each year, the commissioner shall report to the legislature on the projected amount of federal money likely to be available to the state during the next fiscal year, including grant money and money received by the state as a result of litigation or settlements of alleged violations of federal petroleum pricing regulations. The report must also


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estimate the amount of money projected as needed during the next fiscal year to finance a level of conservation and other energy-related programs adequate to meet projected needs, particularly the needs of low-income persons and households, and must recommend the amount of state appropriations needed to cover the difference between the projected availability of federal money and the projected needs.

Sec. 69. Minnesota Statutes 1997 Supplement, section 216D.03, subdivision 2, is amended to read:

Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] (a) The notification center services must be provided by a nonprofit corporation approved in writing by the commissioner. The nonprofit corporation must be governed by a board of directors of up to 20 members, one of whom is the director of the office of pipeline safety. The other board members must represent and be elected by operators, excavators, and other persons eligible to participate in the center. In deciding to approve a nonprofit corporation, the commissioner shall consider whether it meets the requirements of this paragraph and whether it demonstrates that it has the ability to contract for and implement the notification center service.

(b) The commissioner shall adopt rules:

(1) establishing a notification process and competitive bidding procedure for selecting a vendor to provide the notification service;

(2) governing the operating procedures and technology needed for a statewide notification center; and

(3) setting forth the method for assessing the cost of the service among operators.

(c) The commissioner shall select a vendor to provide the notification center service. The commissioner may advertise for bids as provided in section 16B.07 16C.07, subdivision 3 subdivisions 1 and 2, and base the selection of a vendor on an identification of the lowest responsible bidder best value as provided in section 16B.09 16C.07, subdivision 1 6. The commissioner shall select and contract with the vendor to provide the notification center service, but all costs of the center must be paid by the operators. The commissioner may at any time appoint a task force to advise on the renewal of the contract or any other matter involving the center's operations.

(d) An operator may submit a bid and be selected to contract to provide the notification center service under paragraph (a) or (c). The commissioner shall annually review the services provided by the nonprofit corporation approved under paragraph (a) or the vendor selected under paragraph (c).

Sec. 70. Minnesota Statutes 1996, section 237.51, subdivision 5a, is amended to read:

Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In addition to any duties specified elsewhere in sections 237.51 to 237.56, the department of human services shall:

(1) define economic hardship, special needs, and household criteria so as to determine the priority of eligible applicants for initial distribution of devices and to determine circumstances necessitating provision of more than one communication device per household;

(2) establish a method to verify eligibility requirements;

(3) establish specifications for communication devices to be purchased under section 237.53, subdivision 3;

(4) inform the public and specifically the community of communication-impaired persons of the program; and

(5) notwithstanding any provision of chapter chapters 16B and 16C, develop guidelines for the purchase of some communication devices from local retailers and dispensers if the department determines that otherwise they will be economically harmed by implementation of sections 237.50 to 237.56.


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(b) The department may establish an advisory board to advise the department in carrying out the duties specified in this section and to advise the department of public service in carrying out its duties under section 237.54. If so established, the advisory board must include, at a minimum, the following communication-impaired persons:

(1) at least one member who is deaf;

(2) at least one member who is speech impaired;

(3) at least one member who is mobility impaired; and

(4) at least one member who is hard-of-hearing.

The membership terms, compensation, and removal of members and the filling of membership vacancies are governed by section 15.059. Advisory board meetings shall be held at the discretion of the commissioner.

Sec. 71. Minnesota Statutes 1996, section 241.0221, subdivision 6, is amended to read:

Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] To qualify for a subsidy, a county or group of counties must enter into a memorandum of agreement with the commissioner agreeing to comply with the minimum standards and requirements established by the commissioner under subdivision 4. The memorandum of agreement is not subject to the contract approval procedures of the commissioner of administration or chapter chapters 16B and 16C. The commissioner shall provide forms and instructions for submission of subsidy applications.

The commissioner shall require a county or group of counties to document in its application that it is requesting subsidy funds for the least restrictive alternative appropriate to the county or counties detention needs. The commissioner shall evaluate applications and grant subsidies for local detention facilities and alternative detention programs described in this section in a manner consistent with the minimum standards and requirements established by the commissioner in subdivision 4 and within the limit appropriations made available by law.

Sec. 72. Minnesota Statutes 1996, section 241.27, subdivision 2, is amended to read:

Subd. 2. [REVOLVING FUND; USE OF FUND.] There is established in the department of corrections under the control of the commissioner of corrections the Minnesota correctional industries revolving fund to which shall be transferred the revolving funds authorized in Minnesota Statutes 1978, sections 243.41 and 243.85, clause (f), and any other industrial revolving funds heretofore established at any state correctional facility under the control of the commissioner of corrections. The revolving fund established shall be used for the conduct of the industrial and commercial activities now or hereafter established at any state correctional facility, including but not limited to the purchase of equipment, raw materials, the payment of salaries, wages and other expenses necessary and incident thereto. The purchase of materials and commodities for resale are not subject to the competitive bidding procedures of section 16B.07 16C.07, but are subject to all other provisions of chapter 16B chapters 16B and 16C. When practical, purchases must be made from small targeted group businesses designated under section 16B.19 16C.18. Additionally, the expenses of inmate vocational training and the inmate release fund may be financed from the correctional industries revolving fund in an amount to be determined by the commissioner. The proceeds and income from all industrial and commercial activities conducted at state correctional facilities shall be deposited in the correctional industries revolving fund subject to disbursement as hereinabove provided. The commissioner of corrections may request that money in the fund be invested pursuant to section 11A.25; the proceeds from the investment not currently needed shall be accounted for separately and credited to the fund.

Sec. 73. Minnesota Statutes 1997 Supplement, section 241.277, subdivision 2, is amended to read:

Subd. 2. [REQUEST FOR PROPOSALS.] After consulting with and considering the advice of the association of Minnesota counties, the commissioner may issue a request for proposals and select a vendor to operate the program. Section 16B.17 16C.09 does not apply to the issuance of the request for proposals.


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Sec. 74. Minnesota Statutes 1996, section 246.36, is amended to read:

246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.]

For the purpose of carrying out a duty, the commissioner of human services shall have authority to accept uncompensated and voluntary services and to enter into contracts or agreements with private or public agencies, or persons, for uncompensated and voluntary services, as the commissioner may deem practicable. Uncompensated and voluntary services do not include services mandated by licensure and certification requirements for health care facilities. The volunteer agencies, organizations, or persons who provide services to residents of state facilities operated under the authority of the commissioner are not subject to the procurement requirements of chapters 16A and 16B 16C. The agencies, organizations, or persons may purchase supplies, services, and equipment to be used in providing services to residents of state facilities through the department of administration.

Sec. 75. Minnesota Statutes 1996, section 246.57, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZED.] The commissioner of human services may authorize any state facility operated under the authority of the commissioner to enter into agreement with other governmental entities and both nonprofit and for-profit organizations for participation in shared service agreements that would be of mutual benefit to the state, other governmental entities and organizations involved, and the public. Notwithstanding section 16B.06 16C.06, subdivision 2, the commissioner of human services may delegate the execution of shared services contracts to the chief executive officers of the regional centers or state operated nursing homes. No additional employees shall be added to the legislatively approved complement for any regional center or state nursing home as a result of entering into any shared service agreement. However, positions funded by a shared service agreement may be authorized by the commissioner of finance for the duration of the shared service agreement. The charges for the services shall be on an actual cost basis. All receipts for shared services may be retained by the regional treatment center or state-operated nursing home that provided the services, in addition to other funding the regional treatment center or state-operated nursing home receives.

Sec. 76. Minnesota Statutes 1996, section 246.57, subdivision 6, is amended to read:

Subd. 6. [DENTAL SERVICES.] The commissioner of human services shall authorize any regional treatment center or state-operated nursing home under the commissioner's authority to provide dental services to disabled persons who are eligible for medical assistance and are not residing at the regional treatment center or state-operated nursing home, provided that the reimbursement received for these services is sufficient to cover actual costs. To provide these services, regional treatment centers and state-operated nursing homes may participate under contract with health networks in their service area. Notwithstanding section 16B.06 16C.06, subdivision 2, the commissioner of human services may delegate the execution of these dental services contracts to the chief executive officers of the regional centers or state-operated nursing homes. All receipts for these dental services shall be retained by the regional treatment center or state-operated nursing home that provides the services and shall be in addition to other funding the regional treatment center or state-operated nursing home receives.

Sec. 77. Minnesota Statutes 1996, section 256B.031, subdivision 1, is amended to read:

Subdivision 1. [CONTRACTS.] The commissioner may contract with health insurers licensed and operating under chapters 60A and 62A, nonprofit health service plans licensed and operating under chapter 62C, health maintenance organizations licensed and operating under chapter 62D, and vendors of medical care and organizations participating in prepaid programs under section 256D.03, subdivision 4, clause (b), to provide medical services to medical assistance recipients. Notwithstanding any other law, health insurers may enter into contracts with the commissioner under this section. As a condition of the contract, health insurers and health service plan corporations must agree to comply with the requirements of section 62D.04, subdivision 1, clauses (a), (b), (c), (d), and (f), and provide a complaint procedure that satisfies the requirements of section 62D.11. Nothing in this section permits health insurers not licensed as health maintenance organizations under chapter 62D to offer a prepaid health plan as defined in section 256B.02, subdivision 12, to persons other than those receiving medical assistance or general assistance medical care under this section. Contracts between the commissioner and a prepaid health plan are exempt from the set-aside and preference provisions of section 16B.19 16C.18, subdivisions 5 and 6, paragraph (a), and 7. Contracts must specify the services that are included in the per capita rate. Contracts must specify those services that are to be eligible for risk sharing between the prepaid health plan and the state. Contracts must also state that payment must be made within 60 days after the month of coverage.


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Sec. 78. Minnesota Statutes 1996, section 256B.04, subdivision 14, is amended to read:

Subd. 14. [COMPETITIVE BIDDING.] When determined to be effective, economical, and feasible, the commissioner may utilize volume purchase through competitive bidding and negotiation under the provisions of chapter 16B 16C, to provide items under the medical assistance program including but not limited to the following:

(1) eyeglasses;

(2) oxygen. The commissioner shall provide for oxygen needed in an emergency situation on a short-term basis, until the vendor can obtain the necessary supply from the contract dealer;

(3) hearing aids and supplies; and

(4) durable medical equipment, including but not limited to:

(a) hospital beds;

(b) commodes;

(c) glide-about chairs;

(d) patient lift apparatus;

(e) wheelchairs and accessories;

(f) oxygen administration equipment;

(g) respiratory therapy equipment;

(h) electronic diagnostic, therapeutic and life support systems;

(5) special transportation services; and

(6) drugs.

Sec. 79. Minnesota Statutes 1996, section 256B.04, subdivision 15, is amended to read:

Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a statewide basis a new program to safeguard against unnecessary or inappropriate use of medical assistance services, against excess payments, against unnecessary or inappropriate hospital admissions or lengths of stay, and against underutilization of services in prepaid health plans, long-term care facilities or any health care delivery system subject to fixed rate reimbursement. In implementing the program, the state agency shall utilize both prepayment and postpayment review systems to determine if utilization is reasonable and necessary. The determination of whether services are reasonable and necessary shall be made by the commissioner in consultation with a professional services advisory group or health care consultant appointed by the commissioner.

(2) Contracts entered into for purposes of meeting the requirements of this subdivision shall not be subject to the set-aside provisions of chapter 16B 16C.

(3) A recipient aggrieved by the commissioner's termination of services or denial of future services may appeal pursuant to section 256.045. A vendor aggrieved by the commissioner's determination that services provided were not reasonable or necessary may appeal pursuant to the contested case procedures of chapter 14. To appeal, the vendor shall notify the commissioner in writing within 30 days of receiving the commissioner's notice. The appeal request shall specify each disputed item, the reason for the dispute, an estimate of the dollar amount involved for each disputed item, the computation that the vendor believes is correct, the authority in statute or rule upon which the vendor relies for each disputed item, the name and address of the person or firm with whom contacts may be made regarding the appeal, and other information required by the commissioner.


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(4) The commissioner may select providers to provide case management services to recipients who use health care services inappropriately or to recipients who are eligible for other managed care projects. The providers shall be selected based upon criteria that may include a comparison with a peer group of providers related to the quality, quantity, or cost of health care services delivered or a review of sanctions previously imposed by health care services programs or the provider's professional licensing board.

Sec. 80. Minnesota Statutes 1997 Supplement, section 256B.19, subdivision 2a, is amended to read:

Subd. 2a. [DIVISION OF COSTS.] The county shall ensure that only the least costly, most appropriate transportation and travel expenses are used. The state may enter into volume purchase contracts, or use a competitive bidding process, whenever feasible, to minimize the costs of transportation services. If the state has entered into a volume purchase contract or used the competitive bidding procedures of chapter 16B 16C to arrange for transportation services, the county may be required to use such arrangements.

Sec. 81. Minnesota Statutes 1997 Supplement, section 256D.03, subdivision 6, is amended to read:

Subd. 6. [DIVISION OF COSTS.] The state share of county agency expenditures for general assistance medical care shall be 100 percent. Payments made under this subdivision shall be made according to sections 256B.041, subdivision 5 and 256B.19, subdivision 1. In counties where a pilot or demonstration project is operated for general assistance medical care services, the state may pay 100 percent of the costs of administering the pilot or demonstration project.

Notwithstanding any provision to the contrary, beginning July 1, 1991, the state shall pay 100 percent of the costs for centralized claims processing by the department of administration relative to claims beginning January 1, 1991, and submitted on behalf of general assistance medical care recipients by vendors in the general assistance medical care program.

Beginning July 1, 1991, the state shall reimburse counties up to the limit of state appropriations for general assistance medical care common carrier transportation and related travel expenses provided for medical purposes after December 31, 1990. For purposes of this subdivision, transportation shall have the meaning given it in Code of Federal Regulations, title 42, section 440.170(a), as amended through October 1, 1987, and travel expenses shall have the meaning given in Code of Federal Regulations, title 42, section 440.170(a)(3), as amended through October 1, 1987.

The county shall ensure that only the least costly most appropriate transportation and travel expenses are used. The state may enter into volume purchase contracts, or use a competitive bidding process, whenever feasible, to minimize the costs of transportation services. If the state has entered into a volume purchase contract or used the competitive bidding procedures of chapter 16B 16C to arrange for transportation services, the county may be required to use such arrangements to be eligible for state reimbursement for general assistance medical care common carrier transportation and related travel expenses provided for medical purposes.

In counties where prepaid health plans are under contract to the commissioner to provide services to general assistance medical care recipients, the cost of court ordered treatment that does not include diagnostic evaluation, recommendation, or referral for treatment by the prepaid health plan is the responsibility of the county of financial responsibility.

Sec. 82. Minnesota Statutes 1996, section 298.2211, subdivision 4, is amended to read:

Subd. 4. [OBLIGATIONS NOT STATE DEBT.] Bonds and other obligations issued by the commissioner pursuant to this section, along with all related documents, are not general obligations of the state of Minnesota and are not subject to section 16B.06 sections 16C.03, subdivision 4, and 16C.06. The full faith and credit and taxing powers of the state are not and may not be pledged for the payment of these bonds or other obligations, and no person has the right to compel the levy of any state tax for their payment or to compel the appropriation of any moneys of the state for their payment except as specifically provided herein. These bonds and obligations shall be payable solely from the property and moneys derived by the commissioner pursuant to the authority granted in this section that the commissioner pledges to their payment. The legislature intends not to appropriate money from the general fund to pay for these bonds or other obligations. All these bonds or other obligations must contain the provisions of this subdivision or words to the same effect on their face.


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Sec. 83. Minnesota Statutes 1996, section 349A.06, subdivision 1, is amended to read:

Subdivision 1. [CONTRACTS.] The director shall sell tickets for the lottery through lottery retailers with whom the director contracts. Contracts under this section are not subject to the provisions of sections 16B.06 to 16B.102, and 16B.17 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and are valid for a period of one year. The director may permit a retailer to sell tickets at more than one business location under a contract entered into under this section.

Sec. 84. Minnesota Statutes 1996, section 349A.07, subdivision 6, is amended to read:

Subd. 6. [EXEMPTIONS.] Lottery procurement contracts entered into by the director are not subject to the provisions of sections 16B.06 to 16B.102 or 16B.17 section 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director must utilize an open and competitive bid process, and as nearly as practicable follow the procedures of chapter chapters 16B and 16C governing contracts, consistent with the provisions of this section.

Sec. 85. Minnesota Statutes 1996, section 352.03, subdivision 6, is amended to read:

Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The management of the system is vested in the director, who is the executive and administrative head of the system. The director shall be advisor to the board on matters pertaining to the system and shall also act as the secretary of the board. The director shall:

(1) attend meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate an assistant director with the approval of the board;

(5) appoint any employees, both permanent and temporary, that are necessary to carry out the provisions of this chapter;

(6) organize the work of the system as the director deems necessary to fulfill the functions of the system, and define the duties of its employees and delegate to them any powers or duties, subject to the control of the director and under conditions the director may prescribe. Appointments to exercise delegated power must be by written order and shall be filed with the secretary of state;

(7) with the advice and consent of the board, contract for the services of an approved actuary, professional management services, and any other consulting services as necessary and fix the compensation for those services. The contracts are not subject to competitive bidding under chapter 16B 16C. Any approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director, and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Professional management services may not be contracted for more often than once in six years. Copies of professional management survey reports must be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems are qualified to contract with the director;

(8) with the advice and consent of the board provide in-service training for the employees of the system;

(9) make refunds of accumulated contributions to former state employees and to the designated beneficiary, surviving spouse, legal representative, or next of kin of deceased state employees or deceased former state employees, as provided in this chapter;


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(10) determine the amount of the annuities and disability benefits of employees covered by the system and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;

(11) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the system;

(12) certify funds available for investment to the state board of investment;

(13) with the advice and approval of the board request the state board of investment to sell securities when the director determines that funds are needed for the system;

(14) prepare and submit to the board and the legislature an annual financial report covering the operation of the system, as required by section 356.20;

(15) prepare and submit biennial and annual budgets to the board and with the approval of the board submit the budgets to the department of finance; and

(16) with the approval of the board, perform other duties required to administer the retirement and other provisions of this chapter and to do its business.

Sec. 86. Minnesota Statutes 1996, section 352.03, subdivision 16, is amended to read:

Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding chapter 16B, or 16C or any law to the contrary, the executive director of the system may use the services of the department of administration, information services division, for electronic data processing and related services or may contract for all or a part of the services.

Sec. 87. Minnesota Statutes 1997 Supplement, section 353.03, subdivision 3a, is amended to read:

Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The board shall appoint, with the advice and consent of the senate, an executive director on the basis of education, experience in the retirement field, and leadership ability. The executive director shall have had at least five years' experience in an executive level management position, which has included responsibility for pensions, deferred compensation, or employee benefits. The executive director serves at the pleasure of the board. The salary of the executive director is as provided by section 15A.0815.

(b) [DUTIES.] The management of the association is vested in the executive director who shall be the executive and administrative head of the association. The executive director shall act as adviser to the board on all matters pertaining to the association and shall also act as the secretary of the board. The executive director shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate, with the approval of the board, up to two persons who shall serve in the unclassified service and whose salary is set in accordance with section 43A.18, subdivision 3, appoint a confidential secretary in the unclassified service, and appoint employees to carry out this chapter, who are subject to chapters 43A and 179A in the same manner as are executive branch employees;

(5) organize the work of the association as the director deems necessary to fulfill the functions of the association, and define the duties of its employees and delegate to them any powers or duties, subject to the control of, and under such conditions as, the executive director may prescribe;


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(6) with the approval of the board, contract for the services of an approved actuary, professional management services, and any other consulting services as necessary to fulfill the purposes of this chapter. All contracts are subject to chapter 16B 16C. The commissioner of administration shall not approve, and the association shall not enter into, any contract to provide lobbying services or legislative advocacy of any kind. Any approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Copies of professional management survey reports shall be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the same time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems shall be qualified to contract with the director hereunder;

(7) with the approval of the board provide in-service training for the employees of the association;

(8) make refunds of accumulated contributions to former members and to the designated beneficiary, surviving spouse, legal representative or next of kin of deceased members or deceased former members, as provided in this chapter;

(9) determine the amount of the annuities and disability benefits of members covered by the association and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the association;

(11) prepare and submit to the board and the legislature an annual financial report covering the operation of the association, as required by section 356.20;

(12) prepare and submit biennial and annual budgets to the board for its approval and submit the approved budgets to the department of finance for approval by the commissioner;

(13) reduce all or part of the accrued interest payable under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, subdivision 5, upon receipt of proof by the association of an unreasonable processing delay or other extenuating circumstances of the employing unit. The executive director shall prescribe and submit for approval by the board the conditions under which such interest may be reduced; and

(14) with the approval of the board, perform such other duties as may be required for the administration of the association and the other provisions of this chapter and for the transaction of its business.

Sec. 88. Minnesota Statutes 1996, section 354.06, subdivision 2a, is amended to read:

Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management of the association is vested in the executive director who shall be the executive and administrative head of the association. The executive director shall act as advisor to the board on all matters pertaining to the association and shall also act as the secretary of the board. The executive director shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate an assistant executive director in the unclassified service and two assistant executive directors in the classified service with the approval of the board, and appoint such employees, both permanent and temporary, as are necessary to carry out the provisions of this chapter;


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(5) organize the work of the association as the director deems necessary to fulfill the functions of the association, and define the duties of its employees and delegate to them any powers or duties, subject to the director's control and under such conditions as the director may prescribe;

(6) with the approval of the board, contract and set the compensation for the services of an approved actuary, professional management services, and any other consulting services. These contracts are not subject to the competitive bidding procedure prescribed by chapter 16B 16C. An approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Copies of professional management survey reports must be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the same time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems are qualified to contract with the executive director;

(7) with the approval of the board, provide in-service training for the employees of the association;

(8) make refunds of accumulated contributions to former members and to the designated beneficiary, surviving spouse, legal representative, or next of kin of deceased members or deceased former members, under this chapter;

(9) determine the amount of the annuities and disability benefits of members covered by the association and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, under this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the association;

(11) prepare and submit to the board and the legislature an annual financial report covering the operation of the association, as required by section 356.20;

(12) certify funds available for investment to the state board of investment;

(13) with the advice and approval of the board, request the state board of investment to sell securities on determining that funds are needed for the purposes of the association;

(14) prepare and submit biennial and annual budgets to the board and with the approval of the board submit those budgets to the department of finance; and

(15) with the approval of the board, perform such other duties as may be required for the administration of the association and the other provisions of this chapter and for the transaction of its business. The executive director may:

(i) reduce all or part of the accrued interest and fines payable by an employing unit for reporting requirements under section 354.52, based on an evaluation of any extenuating circumstances of the employing unit;

(ii) assign association employees to conduct field audits of an employing unit to ensure compliance with the provisions of this chapter; and

(iii) recover overpayments, if not repaid to the association, by suspending or reducing the payment of a retirement annuity, refund, disability benefit, survivor benefit, or optional annuity under this chapter until the overpayment, plus interest, has been recovered.

Sec. 89. Minnesota Statutes 1996, section 354.07, subdivision 7, is amended to read:

Subd. 7. Notwithstanding chapter 16B, or 16C or any law to the contrary, the board may use the services of the department of administration, information services division, for electronic data processing and related services or may contract for all or a portion of such services.


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Sec. 90. Minnesota Statutes 1996, section 356A.06, subdivision 7, is amended to read:

Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise authorized by law or bylaws, a covered pension plan not described by subdivision 6, paragraph (a), may invest its assets only in accordance with this subdivision.

(b) [SECURITIES GENERALLY.] The covered pension plan has the authority to purchase, sell, lend, or exchange the securities specified in paragraphs (c) to (g), including puts and call options and future contracts traded on a contract market regulated by a governmental agency or by a financial institution regulated by a governmental agency. These securities may be owned as units in commingled trusts that own the securities described in paragraphs (c) to (g).

(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may invest funds in governmental bonds, notes, bills, mortgages, and other evidences of indebtedness provided the issue is backed by the full faith and credit of the issuer or the issue is rated among the top four quality rating categories by a nationally recognized rating agency. The obligations in which funds may be invested under this paragraph include guaranteed or insured issues of (1) the United States, its agencies, its instrumentalities, or organizations created and regulated by an act of Congress; (2) Canada and its provinces, provided the principal and interest is payable in United States dollars; (3) the states and their municipalities, political subdivisions, agencies, or instrumentalities; (4) the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, or any other United States government sponsored organization of which the United States is a member, provided the principal and interest is payable in United States dollars.

(d) [CORPORATE OBLIGATIONS.] The covered pension plan may invest funds in bonds, notes, debentures, transportation equipment obligations, or any other longer term evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof if they conform to the following provisions:

(1) the principal and interest of obligations of corporations incorporated or organized under the laws of the Dominion of Canada or any province thereof must be payable in United States dollars; and

(2) obligations must be rated among the top four quality categories by a nationally recognized rating agency.

(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may invest funds in bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage participation certificates and pools, asset backed securities, repurchase agreements and reverse repurchase agreements, guaranteed investment contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance companies if they conform to the following provisions:

(i) bankers acceptances and deposit notes of United States banks are limited to those issued by banks rated in the highest four quality categories by a nationally recognized rating agency;

(ii) certificates of deposit are limited to those issued by (A) United States banks and savings institutions that are rated in the highest four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided by the National Credit Union Administration;

(iii) commercial paper is limited to those issued by United States corporations or their Canadian subsidiaries and rated in the highest two quality categories by a nationally recognized rating agency;

(iv) mortgage participation or pass through certificates evidencing interests in pools of first mortgages or trust deeds on improved real estate located in the United States where the loan to value ratio for each loan as calculated in accordance with section 61A.28, subdivision 3, does not exceed 80 percent for fully amortizable residential properties and in all other respects meets the requirements of section 61A.28, subdivision 3;

(v) collateral for repurchase agreements and reverse repurchase agreements is limited to letters of credit and securities authorized in this section;


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(vi) guaranteed investment contracts are limited to those issued by insurance companies or banks rated in the top four quality categories by a nationally recognized rating agency or to alternative guaranteed investment contracts where the underlying assets comply with the requirements of this subdivision;

(vii) savings accounts are limited to those fully insured by federal agencies; and

(viii) asset backed securities must be rated in the top four quality categories by a nationally recognized rating agency.

(2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 16C.06 do not apply to certificates of deposit and collateralization agreements executed by the covered pension plan under clause (1), item (ii).

(3) In addition to investments authorized by clause (1), item (iv), the covered pension plan may purchase from the Minnesota housing finance agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the agency. The covered pension plan may also enter into a commitment with the agency, at the time of any issue of bonds or notes, to purchase at a specified future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The covered pension plan may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the covered pension plan comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The covered pension plan may also enter into agreements with the agency for the investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal privileges, and any guaranteed rate of return.

(f) [CORPORATE STOCKS.] The covered pension plan may invest funds in stocks or convertible issues of any corporation organized under the laws of the United States or the states thereof, the Dominion of Canada or its provinces, or any corporation listed on the New York Stock Exchange or the American Stock Exchange, if they conform to the following provisions:

(1) the aggregate value of corporate stock investments, as adjusted for realized profits and losses, must not exceed 85 percent of the market or book value, whichever is less, of a fund, less the aggregate value of investments according to subdivision 6;

(2) investments must not exceed five percent of the total outstanding shares of any one corporation.

(g) [OTHER INVESTMENTS.] (1) In addition to the investments authorized in paragraphs (b) to (f), and subject to the provisions in clause (2), the covered pension plan may invest funds in:

(i) venture capital investment businesses through participation in limited partnerships and corporations;

(ii) real estate ownership interests or loans secured by mortgages or deeds of trust through investment in limited partnerships, bank sponsored collective funds, trusts, and insurance company commingled accounts, including separate accounts;

(iii) regional and mutual funds through bank sponsored collective funds and open-end investment companies registered under the Federal Investment Company Act of 1940;

(iv) resource investments through limited partnerships, private placements, and corporations; and

(v) international securities.

(2) The investments authorized in clause (1) must conform to the following provisions:

(i) the aggregate value of all investments made according to clause (1) may not exceed 35 percent of the market value of the fund for which the covered pension plan is investing;

(ii) there must be at least four unrelated owners of the investment other than the state board for investments made under clause (1), item (i), (ii), (iii), or (iv);


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(iii) covered pension plan participation in an investment vehicle is limited to 20 percent thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and

(iv) covered pension plan participation in a limited partnership does not include a general partnership interest or other interest involving general liability. The covered pension plan may not engage in any activity as a limited partner which creates general liability.

Sec. 91. Minnesota Statutes 1996, section 446A.12, subdivision 5, is amended to read:

Subd. 5. [EXEMPTION.] The notes and bonds of the authority are not subject to section 16B.06 sections 16C.03, subdivision 4, and 16C.06.

Sec. 92. Minnesota Statutes 1996, section 462A.18, subdivision 2, is amended to read:

Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the provisions of this section, the agency shall have power to contract with the holders of any of its notes or bonds, as to the custody, collection, securing, investment, and payment of any money of the agency, or any money held in trust or otherwise for the payment of notes or bonds, and to carry out such contract. Money held in trust or otherwise for the payment of notes or bonds or in any way to secure notes or bonds and deposits of such money may be secured in the same manner as money of the agency, and all banks and trust companies are authorized to give such security for such deposits. All money so paid to the state treasurer as agent of the agency, from whatever source, are appropriated to the agency. The agency's notes and bonds are not subject to section 16B.06 sections 16C.03, subdivision 4, and 16C.06.

Sec. 93. Minnesota Statutes 1996, section 471.345, subdivision 8, is amended to read:

Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED PERSONS.] For purposes of this subdivision, the following terms shall have the meanings herein ascribed to them:

(a) "Small targeted group business" means businesses designated under section 16B.19 16C.18.

(b) "Business entity" means an entity organized for profit, including an individual, partnership, corporation, joint venture, association, or cooperative.

Nothing in this section shall be construed to prohibit any municipality from adopting a resolution, rule, regulation, or ordinance which on an annual basis designates and sets aside for awarding to small targeted group businesses a percentage of the value of its anticipated total procurement of goods and services, including construction, and which uses either a negotiated price or bid contract procedure in the awarding of a procurement contract under a set-aside program as allowed in this subdivision, provided that any award based on a negotiated price shall not exceed by more than five percent the municipality's estimated price for the goods and services if they were purchased on the open market and not under the set-aside program.

Sec. 94. Minnesota Statutes 1996, section 473.142, is amended to read:

473.142 [SMALL BUSINESSES.]

(a) The metropolitan council and agencies specified in section 473.143, subdivision 1, may award up to a six percent preference in the amount bid for specified goods or services to small targeted group businesses designated under section 16B.19 16C.18.

(b) The council and each agency specified in section 473.143, subdivision 1, may designate a purchase of goods or services for award only to small targeted group businesses designated under section 16B.19 16C.18 if the council or agency determines that at least three small targeted group businesses are likely to bid.


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(c) The council and each agency specified in section 473.143, subdivision 1, as a condition of awarding a construction contract or approving a contract for consultant, professional, or technical services, may set goals that require the prime contractor to subcontract a portion of the contract to small targeted group businesses designated under section 16B.19 16C.18. The council or agency must establish a procedure for granting waivers from the subcontracting requirement when qualified small targeted group businesses are not reasonably available. The council or agency may establish financial incentives for prime contractors who exceed the goals for use of subcontractors and financial penalties for prime contractors who fail to meet goals under this paragraph. The subcontracting requirements of this paragraph do not apply to prime contractors who are small targeted group businesses. At least 75 percent of the value of the subcontracts awarded to small targeted group businesses under this paragraph must be performed by the business to which the subcontract is awarded or by another small targeted group business.

(d) The council and each agency listed in section 473.143, subdivision 1, are encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

(e) The council and each agency may adopt rules to implement this section.

(f) Each council or agency contract must require the prime contractor to pay any subcontractor within ten days of the prime contractor's receipt of payment from the council or agency for undisputed services provided by the subcontractor. The contract must require the prime contractor to pay interest of 1-1/2 percent per month or any part of a month to the subcontractor on any undisputed amount not paid on time to the subcontractor. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the prime contractor shall pay the actual penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from a prime contractor must be awarded its costs and disbursements, including attorney fees, incurred in bringing the action.

(g) This section does not apply to procurement financed in whole or in part with federal funds if the procurement is subject to federal disadvantaged, minority, or women business enterprise regulations. The council and each agency shall report to the commissioner of administration on compliance with this section. The information must be reported at the time and in the manner requested by the commissioner.

Sec. 95. Minnesota Statutes 1996, section 473.556, subdivision 14, is amended to read:

Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its powers to contract for the purchase of services, materials, supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 10, the commission shall designate and set aside each fiscal year for awarding to small businesses approximately ten percent of the value of anticipated contracts and subcontracts of that kind for that year, in the manner required of the commissioner of administration for state procurement contracts pursuant to sections 16B.19 to 16B.22 16C.18 to 16C.21. The commission shall follow the rules promulgated by the commissioner of administration pursuant to section 16B.22 16C.21, and shall submit reports of the kinds required of the commissioners of administration and economic development by section 16B.21 16C.20.

Sec. 96. Minnesota Statutes 1996, section 480.09, subdivision 1, is amended to read:

Subdivision 1. The state library shall be maintained in the capitol and shall be under the supervision of the justices of the supreme court. Notwithstanding chapter 16B 16C or any other act inconsistent herewith or acts amendatory thereof or supplementary thereto, they shall direct the purchases of books, pamphlets, and documents therefor and the sales and exchanges therefrom upon such terms and conditions as they may deem just and proper. They may authorize the transfer of books and documents to the University of Minnesota or any department thereof, or to any state agency. They shall adopt rules for the government of the library and the management of its affairs, and prescribe penalties for the violation thereof.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7302

Sec. 97. Minnesota Statutes 1996, section 626.90, subdivision 2, is amended to read:

Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the powers of a law enforcement agency, as defined in section 626.84, subdivision 1, paragraph (h), if all of the requirements of clauses (1) to (4) are met:

(1) the band agrees to be subject to liability for its torts and those of its officers, employees, and agents acting within the scope of their employment or duties arising out of a law enforcement agency function conferred by this section, to the same extent as a municipality under chapter 466, and the band further agrees, notwithstanding section 16B.06 16C.06, subdivision 6 7, to waive its sovereign immunity for purposes of claims of this liability;

(2) the band files with the board of peace officer standards and training a bond or certificate of insurance for liability coverage for the maximum amounts set forth in section 466.04;

(3) the band files with the board of peace officer standards and training a certificate of insurance for liability of its law enforcement officers, employees, and agents for lawsuits under the United States Constitution; and

(4) the band agrees to be subject to section 13.82 and any other laws of the state relating to data practices of law enforcement agencies.

(b) The band shall enter into mutual aid/cooperative agreements with the Mille Lacs county sheriff under section 471.59 to define and regulate the provision of law enforcement services under this section. The agreements must define the trust property involved in the joint powers agreement.

(c) The band shall have concurrent jurisdictional authority under this section with the Mille Lacs county sheriff's department only if the requirements of paragraph (a) are met and under the following circumstances:

(1) over all persons in the geographical boundaries of the property held by the United States in trust for the Mille Lacs band or the Minnesota Chippewa tribe;

(2) over all Minnesota Chippewa tribal members within the boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota; and

(3) concurrent jurisdiction over any person who commits or attempts to commit a crime in the presence of an appointed band peace officer within the boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota.

Sec. 98. Minnesota Statutes 1997 Supplement, section 626.91, subdivision 2, is amended to read:

Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has the powers of a law enforcement agency, as defined in section 626.84, subdivision 1, paragraph (h), if all of the requirements of clauses (1) to (4) are met:

(1) the community agrees to be subject to liability for its torts and those of its officers, employees, and agents acting within the scope of their employment or duties arising out of the law enforcement agency powers conferred by this section to the same extent as a municipality under chapter 466, and the community further agrees, notwithstanding section 16B.06 16C.06, subdivision 6 7, to waive its sovereign immunity with respect to claims arising from this liability;

(2) the community files with the board of peace officer standards and training a bond or certificate of insurance for liability coverage for the maximum amounts set forth in section 466.04;

(3) the community files with the board of peace officer standards and training a certificate of insurance for liability of its law enforcement officers, employees, and agents for lawsuits under the United States Constitution; and

(4) the community agrees to be subject to section 13.82 and any other laws of the state relating to data practices of law enforcement agencies.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7303

(b) The community shall enter into an agreement under section 471.59 with the Redwood county sheriff to define and regulate the provision of law enforcement services under this section and to provide for mutual aid and cooperation. The agreement must identify and describe the trust property involved in the agreement. For purposes of entering into this agreement, the community shall be considered a "governmental unit" as that term is defined in section 471.59, subdivision 1.

Sec. 99. [EFFECTIVE DATE.]

This article is effective July 1, 1998."

Delete the title and insert:

"A bill for an act relating to state agencies; modifying procurement procedures; amending Minnesota Statutes 1996, sections 3.225, subdivision 2; 3.732, subdivision 6; 3.922, subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, subdivision 3; 116.03, subdivision 2; 116J.035, subdivision 1; 116J.402; 116J.58, subdivision 2; 116J.68, subdivision 2; 116J.966, subdivision 1; 124.14, subdivision 1; 126.151, subdivision 2; 129C.10, subdivision 7; 136A.06; 136A.16, subdivision 1; 136A.29, subdivision 6; 136F.23; 136F.56, subdivision 5; 136F.581, subdivision 3; 136F.66; 136F.72, subdivision 3; 136F.96; 137.35, subdivisions 1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 1; 216C.02, subdivision 1; 237.51, subdivision 5a; 241.0221, subdivision 6; 241.27, subdivision 2; 246.36; 246.57, subdivisions 1 and 6; 256B.031, subdivision 1; 256B.04, subdivisions 14 and 15; 298.2211, subdivision 4; 349A.06, subdivision 1; 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 354.06, subdivision 2a; 354.07, subdivision 7; 356A.06, subdivision 7; 446A.12, subdivision 5; 462A.18, subdivision 2; 471.345, subdivision 8; 473.142; 473.556, subdivision 14; 480.09, subdivision 1; and 626.90, subdivision 2; Minnesota Statutes 1997 Supplement, sections 3.225, subdivision 1; 16A.15, subdivision 3; 16B.465, subdivision 7; 16E.07, subdivision 9; 17.03, subdivision 12; 41D.03, subdivision 7; 61B.21, subdivision 1; 85A.02, subdivision 5b; 121.1113, subdivision 2; 136A.40; 138.35, subdivision 1b; 179A.03, subdivision 14; 216D.03, subdivision 2; 241.277, subdivision 2; 256B.19, subdivision 2a; 256D.03, subdivision 6; 353.03, subdivision 3a; 363.073, subdivision 1; and 626.91, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 16C; and 174; repealing Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, subdivision 3; 16B.20, subdivision 2; and 16B.482."

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1072, A bill for an act relating to professions; modifying enforcement provisions for the board of psychology; providing criminal penalties; amending Minnesota Statutes 1996, section 148.941, subdivision 6, and by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 148.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 148.941, subdivision 6, is amended to read:

Subd. 6. [VIOLATION.] Persons who engage in the unlicensed practice of psychology or who misrepresent themselves as psychologists or psychological practitioners are guilty of a gross misdemeanor.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7304

Sec. 2. [148.952] [IMMUNITY.]

(a) Any person, health care facility, business, or organization is immune from civil liability and criminal prosecution for reporting in good faith to the board violations or alleged violations of the Psychology Practice Act.

(b) Any person, health care facility, business, or organization is immune from civil liability and criminal prosecution for cooperating with the board in good faith in the investigation of violations or alleged violations of the Psychology Practice Act."

Delete the title and insert:

"A bill for an act relating to professions; modifying criminal penalties for the unlicensed practice of psychology; providing immunity for activities of the board of psychology; amending Minnesota Statutes 1996, section 148.941, subdivision 6; proposing coding for new law in Minnesota Statutes, chapter 148."

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1116, A bill for an act relating to professions; modifying provisions relating to the board of architecture, engineering, land surveying, landscape architecture, geoscience, and interior design; amending Minnesota Statutes 1996, sections 326.03, subdivision 1; 326.04; 326.05; 326.07; 326.09; 326.10, subdivisions 2 and 7; 326.13; and 599.14; proposing coding for new law in Minnesota Statutes, chapter 326; repealing Minnesota Statutes 1996, section 326.08.

Reported the same back with the following amendments:

Pages 1 and 2, delete section 1

Pages 8 and 9, delete section 9

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 6, delete "326.03, subdivision 1;"

Page 1, line 8, delete everything after the semicolon

Page 1, line 9, delete everything before "repealing"

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1414, A bill for an act relating to probate; changing provisions on appointment of guardians and conservators; amending Minnesota Statutes 1996, section 525.591.

Reported the same back with the following amendments:

Page 3, line 7, delete the new language


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7305

Page 3, lines 12 and 13, delete the new language and insert "Except as otherwise provided in this section, the appointment of a special guardian or conservator may not exceed 30 days in duration. A county that is acting under section 626.557, subdivision 10, by petitioning for appointment of a special guardian or conservator on behalf of a vulnerable adult is not subject to this 30-day limit.

Subd. 6. [DURATION LIMITS; EXCEPTIONS.] If a petition is filed requesting appointment of a general guardian or conservator for a person for whom a special guardian or conservator has been appointed, but a final hearing on the petition cannot be held after proper notice within 30 days of the appointment of the special guardian or conservator because the petition becomes contested, a hearing date is not available within the time limit or other good cause exists, the appointment of the special guardian or conservator may be extended as provided in this subdivision. The court, on its own motion or upon request of the petitioner or the special guardian or conservator, may extend the appointment to the date of the hearing on the petition. At that time, if the court finds that grounds for appointment of the special guardian or conservator still exist, the court may further extend the appointment to the date of a final decision on the petition. If a special guardian or conservator is appointed for the sole purpose of representing the ward or conservatee in litigation or any other legal proceeding, other than the pending guardianship or conservatorship proceedings, the court may specify that the appointment will last until the litigation or proceeding is finally concluded."

Page 3, line 14, delete "6" and insert "7" and delete "DURATION" and insert "FINAL ACCOUNTING"

Page 3, line 22, after the semicolon, insert "or"

Page 3, delete lines 23 and 24

Page 3, line 25, delete "(3)" and insert "(2)"

With the recommendation that when so amended the bill pass.

The report was adopted.

Osthoff from the Committee on Environment, Natural Resources and Agriculture Finance to which was referred:

H. F. No. 2256, A bill for an act relating to capital improvements; appropriating money to restore Camp Rabideau in Chippewa National Forest; authorizing state bonds.

Reported the same back with the following amendments:

Page 1, line 7, delete "$2,500,000" and insert "$50,000" and delete "bond proceeds" and insert "general"

Page 1, delete line 8 and insert "the city of Blackduck to help restore and stabilize eight buildings at Camp Rabideau in"

Page 1, delete lines 10 to 17

Page 1, line 18, delete "3" and insert "2"

Delete the title and insert:

"A bill for an act relating to appropriations; appropriating money to restore Camp Rabideau in Chippewa National Forest."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Economic Development and International Trade.

The report was adopted.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7306

Wagenius from the Committee on Transportation and Transit to which was referred:

H. F. No. 2532, A bill for an act relating to drivers' licenses; establishing youth-oriented driver improvement clinics; establishing a graduated licensing system with provisional license phase; restricting driving privileges for holders of instruction permits and provisional licenses and requiring violation-free period before advancement to next license stage; making technical changes; amending Minnesota Statutes 1996, sections 120.73, subdivision 1; 169.89, subdivision 5; 169.971, subdivision 1, and by adding a subdivision; 169.972; 169.973, subdivision 1; 171.01, subdivision 14; 171.04, subdivision 1; 171.05, subdivision 2, and by adding subdivisions; 171.06, subdivision 1; 171.07, subdivision 1; 171.10, subdivision 1; 171.12, subdivision 3; 171.16, subdivision 5; 171.17, subdivisions 2 and 3; 171.172; 171.173; 171.174; 171.20, subdivision 3; 171.27; and 171.39; Minnesota Statutes 1997 Supplement, sections 171.041; 171.06, subdivisions 2 and 4; and 171.171; proposing coding for new law in Minnesota Statutes, chapter 171.

Reported the same back with the following amendments:

Page 4, line 11, delete "25" and insert "18"

Page 6, line 4, after "(i)" insert "the applicant is 16 or 17 years of age and has a previously issued valid license from another state or country or"

Page 6, line 6, delete everything after "driving" and insert a semicolon

Page 6, delete lines 7 and 8

Page 6, lines 9 to 11, delete the new language and strike the old language

Page 6, line 12, delete "(iii)" and insert "(ii)"

Page 6, line 32, after the semicolon, insert "and"

Page 6, line 33, delete "(iv)" and insert "(iii)"

Page 6, line 34, delete "(iii)" and insert "(ii)"

Page 9, delete section 10

Page 11, line 22, after the semicolon, insert "and" and delete "incurred" and insert "been convicted of"

Page 11, line 23, delete "and"

Page 11, delete lines 24 and 25

Page 12, line 14, delete "11:00 p.m." and insert "12:00 midnight."

Page 12, line 18, delete "11:00 p.m." and insert "12:00 midnight" and before "The" insert "School-sponsored social, sporting, and entertainment events and events sponsored by a religious organization are deemed to have an educational purpose."

Page 12, line 23, delete "items" and insert "clauses"

Page 15, delete section 17

Page 19, line 32, delete "25" and insert "18"

Page 21, line 34, delete "27" and insert "25"


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7307

Page 21, delete lines 35 and 36 and insert "Sections 1, 7 to 24, and 26 to 28 are effective January 1, 1999, and apply to"

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 14, delete "subdivisions" and insert "a subdivision"

Page 1, line 15, delete "171.07, subdivision 1;"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Wagenius from the Committee on Transportation and Transit to which was referred:

H. F. No. 2589, A bill for an act relating to transportation; providing for certain types of claims; permitting transfer or extinguishment of access rights; regulating snow fence easements, highway closures, and signs; changing distributions from the highway user tax distribution fund; providing for the costs of town highways and bridges; permitting conveyances to public bodies; providing for the revision of the state transportation plan; regulating private carriers; regulating charges for air transportation services; removing a route from the trunk highway system; amending Minnesota Statutes 1996, sections 84.63; 117.21; 160.27, by adding a subdivision; 160.296, subdivision 1; 160.80, subdivision 1, and by adding a subdivision; 161.081, subdivision 1, and by adding a subdivision; 161.082, subdivisions 1 and 2a; 161.44, subdivision 1; 174.03, subdivisions 1a and 2; 221.011, by adding a subdivision; 221.0251, subdivisions 1, 2, 3, 5, and by adding subdivisions; 221.031, subdivision 6; 221.034, subdivisions 1 and 5; 222.63, subdivision 4; 270.077; and 360.024; Minnesota Statutes 1997 Supplement, section 3.736, subdivision 3; repealing Minnesota Statutes 1996, section 161.115, subdivision 219.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

TRANSPORTATION POLICY

Section 1. Minnesota Statutes 1996, section 84.63, is amended to read:

84.63 [CONVEYANCE OF INTERESTS IN LANDS TO STATE AND FEDERAL GOVERNMENTS.]

Notwithstanding any existing law to the contrary, the commissioner of natural resources is hereby authorized on behalf of the state to convey to the United States or to the state of Minnesota or any of its subdivisions, upon state-owned lands under the administration of the commissioner of natural resources, permanent or temporary easements for specified periods or otherwise for trails, highways, roads and trails including limitation of right of access from the lands to adjacent highways and roads, flowage for development of fish and game resources, stream protection, flood control, and necessary appurtenances thereto, such conveyances to be made upon such terms and conditions including provision for reversion in the event of nonuser as the commissioner of natural resources may determine.

Sec. 2. Minnesota Statutes 1996, section 117.21, is amended to read:

117.21 [EASEMENT TO MAY INCLUDE SNOW FENCES.]

When the right to establish a public road is acquired by the state, or by any of its agencies or political subdivisions, there shall may be included in the easement so acquired the power to erect and maintain temporary snow fences as required upon lands adjoining the highway part of which lands have been taken for road purposes. If included, the right to erect


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7308

and maintain such fences shall be considered in awarding damages, and any award shall be conclusively presumed to include the damages, if any, caused by the right to erect and maintain such fences; provided, that, if the state, or agency or political subdivision thereof, shall file with its petition, or at any time before the question of damages is submitted to a jury, a written disclaimer of its desire and intention to acquire a right to erect and maintain snow fences as to any particular tract of land involved, then no such right shall be acquired in such proceeding and no consideration given to such fences as an element of damage.

Sec. 3. Minnesota Statutes 1996, section 160.27, is amended by adding a subdivision to read:

Subd. 7. [TRUNK HIGHWAY CLOSURE; AUTHORITY, NOTICE, CIVIL PENALTY.] (a) The commissioner may restrict the use of, or close, any state trunk highway for the protection and safety of the public or for the protection of the highway from damage during and after storms if there is danger of the road becoming impassable or if visibility is so limited that safe travel is unlikely.

(b) To notify the public that a trunk highway is closed or its use restricted, the commissioner shall give notice by one or more of the following methods:

(1) erect suitable barriers or obstructions on the highway;

(2) post warnings or notices of the closing or restricting of a trunk highway;

(3) place signs to warn, detour, direct, or otherwise control traffic on the highway; or

(4) place personnel to warn, detour, direct, or otherwise control traffic on the highway.

(c) A person is civilly liable for rescue costs if the person (1) fails to obey the direction or instruction of authorized personnel at the location of the closed highway, or (2) drives over, through, or around a barricade, fence, or obstruction erected to prevent traffic from passing over a portion of a highway closed to public travel. "Civilly liable for rescue costs" means that the person is liable to a state agency or political subdivision for costs incurred for the purpose of rescuing the person, any passengers, or the vehicle. Civil liability may be imposed under this subdivision in addition to the misdemeanor penalty imposed under subdivision 5. However, civil liability must not exceed $10,000. A fine paid by a defendant in a misdemeanor action that arose from the same violation may not be applied toward payment of the civil liability imposed under this subdivision.

(d) A state agency or political subdivision that incurs costs as described in paragraph (c) may bring an action to recover the civil liability and related legal, administrative, and court costs. A civil action may be commenced as is any civil action.

Sec. 4. Minnesota Statutes 1996, section 160.296, subdivision 1, is amended to read:

Subdivision 1. [PROCEDURE.] (a) A person who desires a specific service sign panel shall request the commissioner of transportation to install the sign. The commissioner of transportation may grant the request if the applicant qualifies for the sign panel and if space is available. All signs shall be fabricated, installed, maintained, replaced and removed by the commissioner of transportation. The applicant shall pay a fee to the commissioner of transportation to cover all costs for fabricating, installing, maintaining, replacing and removing. The requests for specific service sign panels shall be renewed every three years.

(b) If the applicant desires to display a business panel, the business panel for each specific service sign panel shall be supplied by the applicant. All costs to fabricate business panels shall be paid by the applicant. All business panels shall be installed and removed by the appropriate road authority. The costs for installing and removing business sign panels on specific service signs located on nonfreeway trunk highways are included in the fee specified in paragraph (a). If a business panel is stolen or damaged beyond repair, the applicant shall supply a new business panel paid for by the applicant.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7309

Sec. 5. Minnesota Statutes 1996, section 160.80, subdivision 1, is amended to read:

Subdivision 1. [COMMISSIONER MAY ESTABLISH PROGRAM.] (a) The commissioner of transportation may establish a sign franchise program for the purpose of providing on the right-of-way of interstate and controlled-access trunk highways specific information on gas, food, camping, and lodging, for the benefit of the motoring public.

(b) The sign franchise program must include urban interstate highways. The commissioner may implement policies that apply only to signs on interstate highways in urban areas, such as distance requirements from the interstate for eligible services, priority issues, and mixing of service logos.

Sec. 6. Minnesota Statutes 1996, section 160.80, is amended by adding a subdivision to read:

Subd. 1a. [ELIGIBILITY CRITERIA FOR BUSINESS PANELS.] (a) To be eligible for a business panel on a logo sign panel, a business establishment must:

(1) be open for business;

(2) have a sign on site that both identifies the business and is visible to motorists;

(3) be open to everyone, regardless of race, religion, color, age, sex, national origin, creed, marital status, sexual orientation, or disability;

(4) not impose a cover charge or otherwise require customers to purchase additional products or services; and

(5) meet the appropriate criteria in paragraphs (b) to (e).

(b) Gas businesses must provide vehicle services including fuel and oil; restroom facilities and drinking water; continuous, staffed operation at least 12 hours a day, seven days a week; and public access to a telephone.

(c) Food businesses must serve at least two meals a day during normal mealtimes of breakfast, lunch, and dinner; provide a continuous, staffed food service operation at least ten hours a day, seven days a week except holidays as defined in section 645.44, subdivision 5, and except as provided for seasonal food service businesses; provide seating capacity for at least 20 people; serve meals prepared on the premises, excluding food service businesses that only reheat prepackaged, ready-to-eat food; and possess any required state or local licensing or approval. Seasonal food service businesses must provide a continuous, staffed food service operation at least ten hours a day, seven days a week, during their months of operation.

(d) Lodging businesses must include sleeping accommodations, provide public access to a telephone, and possess any required state or local licensing or approval.

(e) Camping businesses must include sites for camping, include parking accommodations for each campsite, provide sanitary facilities and drinking water, and possess any required state or local licensing or approval.

(f) Businesses that do not meet the appropriate criteria in paragraphs (b) to (e) but that have a signed lease as of January 1, 1998, may retain the business panel until December 31, 2005, or until they withdraw from the program, whichever occurs first, provided they continue to meet the criteria in effect in the department's contract with the logo sign vendor on August 1, 1995. After December 31, 2005, or after withdrawing from the program, a business must meet the appropriate criteria in paragraphs (a) to (e) to qualify for a business panel.

(g) Seasonal businesses must indicate to motorists when they are open for business by either putting the full months of operation directly on the business panel or by having a "closed" plaque applied to the business panel when the business is closed for the season.

(h) The maximum distance that an eligible business in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington county can be located from the interchange is: for gas businesses, one mile; for food businesses, two miles; for lodging businesses, three miles; and for camping businesses, ten miles.


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(i) The maximum distance that an eligible business in any other county can be located from the interchange shall not exceed three miles in either direction, except that if facilities described in paragraphs (b) to (e) are not available within the three-mile limit, the limit of eligibility may be extended in three-mile increments until one or more of those facilities are reached. The maximum distance that eligible facilities can be located from the interchange to qualify for a business panel is 15 miles in either direction.

(j) Logo sign panels must be erected so that motorists approaching an interchange view the panels in the following order: camping, lodging, food, gas.

(k) If there is insufficient space on a logo sign panel to display all eligible businesses for a specific type of service, the businesses closest to the interchange have priority over businesses farther away from the interchange.

Sec. 7. Minnesota Statutes 1996, section 161.082, subdivision 2a, is amended to read:

Subd. 2a. [TOWN BRIDGES AND CULVERTS; TOWN ROAD ACCOUNT.] (a) An amount equal to 25 16 percent of the county turnback account must be expended on town road bridge structures that are ten feet or more in length and on town road culverts that replace existing town road bridges. In addition, if the present bridge structure is less than ten feet in length but a hydrological survey indicates that the replacement bridge structure or culvert must be ten feet or more in length, then the bridge or culvert is eligible for replacement funds.

(b) In addition, if a culvert that replaces a deficient bridge is in a county comprehensive water plan approved by the board of water and soil resources and the department of natural resources, the costs of the culvert and roadway grading other than surfacing are eligible for replacement funds up to the cost of constructing a replacement bridge.

(c) The expenditures on bridge structures and culverts may be on a matching basis, and if on a matching basis, not more than 90 percent of the cost of a bridge structure or culvert may be paid from the county turnback account and may be for 100 percent of the cost of the replacement structure or culvert or for 100 percent of the cost of rehabilitating the existing structure.

(d) The town bridge account may be used to pay the costs to abandon an existing bridge that is deficient and in need of replacement, but where no replacement will be made. It may also be used to pay the costs to construct a road or street to facilitate the abandonment of an existing bridge determined by the commissioner to be deficient, if the commissioner determines that construction of the road or street is more cost efficient than replacing the existing bridge.

(e) When bridge approach construction work exceeds $10,000 in costs, or when the county engineer determines that the cost of the replacement culverts alone will not exceed $20,000, the town shall be eligible for financial assistance from the town bridge account. Financial assistance shall be requested by resolution of the county board and shall be limited to:

(1) 100 percent of the cost of the bridge approach work that is in excess of $10,000; or

(2) 100 percent of the cost of the replacement culverts when the cost does not exceed $20,000 and the town board agrees to be responsible for all the other costs, which may include costs for structural removal, installation, and permitting. The replacement structure design and costs shall be approved and certified by the county engineer, but need not be subsequently approved by the department of transportation.

(f) An amount equal to 47.5 percent of the county turnback account must be set aside as a town road account and distributed as provided in section 162.081.

Sec. 8. Minnesota Statutes 1996, section 169.26, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS.] (a) When any person driving a vehicle approaches a railroad grade crossing under any of the circumstances stated in this paragraph, the driver shall stop the vehicle not less than ten feet from the nearest railroad track and shall not proceed until safe to do so. These requirements apply when:

(1) a clearly visible electric or mechanical signal device warns of the immediate approach of a railroad train; or


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(2) a crossing gate is lowered warning of the immediate approach or passage of a railroad train; or

(3) an approaching railroad train is plainly visible and is in hazardous proximity.

(b) The fact that a moving train approaching a railroad grade crossing is visible from the crossing is prima facie evidence that it is not safe to proceed.

(c) The driver of a vehicle shall stop and remain stopped and not traverse the grade crossing when a human flagger signals the approach or passage of a train or when a crossing gate is lowered to warn of the immediate approach or passage of a railroad train. No person may (1) drive a vehicle past a flagger at a railroad crossing until the flagger signals that the way is clear to proceed, or (2) drive a vehicle past a lowered crossing gate.

Sec. 9. Minnesota Statutes 1996, section 174.03, subdivision 1a, is amended to read:

Subd. 1a. [REVISION OF STATE TRANSPORTATION PLAN.] The commissioner shall revise the state transportation plan by January 1, 1996, January 1, 2000, and, if the requirements of clauses (1) and (2) have been met in the previous revision, by January 1 of each odd-numbered every third even-numbered year thereafter. Before final adoption of a revised plan, the commissioner shall hold a hearing to receive public comment on the preliminary draft of the revised plan. The revised state transportation plan must:

(1) incorporate the goals of the state transportation system in section 174.01; and

(2) establish objectives, policies, and strategies for achieving those goals.

Sec. 10. Minnesota Statutes 1996, section 174.03, subdivision 2, is amended to read:

Subd. 2. [IMPLEMENTATION OF PLAN.] After the adoption and each revision of the statewide transportation plan, the commissioner and the transportation regulation board shall take no action inconsistent with the revised plan.

Sec. 11. Minnesota Statutes 1996, section 221.034, subdivision 1, is amended to read:

Subdivision 1. [NOTICE REQUIRED.] At the earliest practicable moment, each person who transports hazardous materials, including hazardous wastes, shall give notice in accordance with subdivision 2 after each incident that occurs during the course of transportation including loading, unloading, and temporary storage, in which as a direct result of hazardous materials:

(1) a person is killed;

(2) a person receives injuries requiring hospitalization;

(3) estimated carrier or other property damage exceeds $50,000;

(4) an evacuation of the general public occurs lasting one or more hours;

(5) one or more major transportation arteries or facilities are closed or shut down for one hour or more;

(6) the operational flight pattern or routine of an aircraft is altered;

(7) fire, breakage, spillage, or suspected radioactive contamination occurs involving shipment of radioactive material;

(8) fire, breakage, spillage, or suspected contamination occurs involving shipment of etiologic agents; or

(9) a situation exists of such a nature that, in the judgment of the carrier, it should be reported in accordance with subdivision 2 even though it does not meet the criteria of clause (1), (2), or (3), but a continuing danger to life exists at the scene of the incident; or

(10) there has been a release of a marine pollutant in a quantity exceeding 450 liters (119 gallons) for liquids or 450 kilograms (882 pounds) for solids.


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Sec. 12. Minnesota Statutes 1996, section 221.034, subdivision 5, is amended to read:

Subd. 5. [DISCHARGES NOT APPLICABLE.] Except as provided in subdivision 6, the requirements of subdivision 3 do not apply to incidents involving the unintentional release of hazardous materials being transported under the following proper shipping names:

(1) consumer commodity;

(2) battery, electric storage, wet, filled with acid or alkali;

(3) paint, enamel, lacquer, stain, shellac or varnish aluminum, bronze, gold, wood filler, and liquid or lacquer base liquid when shipped in packagings of five gallons or less; or

(4) materials prepared and transported as a limited quantity according to Code of Federal Regulations, title 49, subchapter C.

Sec. 13. Minnesota Statutes 1996, section 270.077, is amended to read:

270.077 [TAXES CREDITED TO STATE AIRPORTS FUND CREATED.]

There is hereby created in the state treasury a fund to be known as the state airports fund to which shall be credited the proceeds of All taxes levied under sections 270.071 to 270.079 and all other moneys which may be deposited to the credit thereof pursuant to any other provision of law. All moneys in the state airports fund are hereby appropriated to the commissioner of transportation for the purpose of acquiring, constructing, improving, maintaining, and operating airports and other air navigation facilities for the state, and to assist municipalities within the state in the acquisition, construction, improvement, and maintenance of airports and other air navigation facilities must be credited to the state airports fund created in section 360.017.

Sec. 14. Minnesota Statutes 1996, section 360.024, is amended to read:

360.024 [AIR TRANSPORTATION SERVICES, COST REIMBURSEMENT SERVICE CHARGES.]

The commissioner shall charge users of air transportation services provided by the commissioner for all direct operating costs, including salaries and acquisition of excluding pilot salary and aircraft acquisition costs. All receipts for these services shall be deposited in the air transportation services account in the state airports fund and are appropriated to the commissioner to pay all these direct air service operating costs , including salaries. Receipts to cover the cost of acquisition of aircraft must be transferred and credited to the account or fund whose assets were used for the acquisition.

Sec. 15. Laws 1997, chapter 159, article 2, section 51, subdivision 1, is amended to read:

Subdivision 1. [STUDY.] The commissioner of transportation, through the division of railroads and waterways, shall conduct a study of the potential of utilizing freight rail corridors in of the Twin Cities metropolitan area for commuter rail service. The commissioner shall perform the study in coordination with the metropolitan council and other affected metropolitan regional rail authorities and, affected metropolitan railroad companies, and the designated representatives of organized railroad employees. At least one representative of regional rail authorities, of railroad management, of operating craft employees, and of nonoperating craft employees shall serve on the policy formulation body and all other bodies of the study committee. Both employee members shall be selected by representatives of rail employees. The study committee shall consider, among other things, the positive and negative effects of commuter rail service on surrounding neighborhoods.

Sec. 16. [REPEALER.]

Minnesota Statutes 1996, section 161.115, subdivision 219, is repealed when the transfer of jurisdiction of a portion of legislative route No. 288 agreed to by the commissioner of transportation and the Anoka county board and a copy of the agreement, signed by the commissioner and the chair of the Anoka county board, is filed in the office of the commissioner.


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Sec. 17. [INSTRUCTION TO THE REVISOR.]

The revisor of statutes shall delete the route identified in section 16 in the next publication of Minnesota Statutes unless the commissioner of transportation informs the revisor that the conditions required to transfer the route were not satisfied.

Sec. 18. [EFFECTIVE DATE.]

Section 15 is effective the day following final enactment.

ARTICLE 2

TRANSPORTATION PROGRAMS

Section 1. [16B.171] [EXCEPTION FOR FEDERAL TRANSPORTATION CONTRACTS.]

Notwithstanding section 16B.17 or other law to the contrary, the commissioner of transportation may, when required by a federal agency entering into an intergovernmental contract, negotiate contract terms providing for full or partial prepayment to the federal agency before work is performed or services are provided.

Sec. 2. Minnesota Statutes 1996, section 160.18, subdivision 1, is amended to read:

Subdivision 1. [CULVERT ON EXISTING HIGHWAYS.] Except when the easement of access has been acquired, the a road authorities authority, other than town boards and county boards, as to highways a highway already established and constructed shall furnish one substantial culvert to an abutting owner in cases where the culvert is necessary for, may grant by permit a suitable approach to such the highway. A town board shall furnish one substantial culvert to an abutting owner in cases where the culvert is necessary for suitable approach to a town road, provided that at any annual town meeting the electors of any town may by resolution authorize the town board to require that all or part of the costs of the furnishing of all culverts on the town roads of such town be paid by the abutting owner. A county board, by resolution, shall, before furnishing any culverts after August 1, 1975, establish The requesting abutting property owner shall pay for the cost and installation of any required culverts unless a road authority, other than the commissioner, adopts by resolution a policy for the furnishing of a culvert to an abutting owner when a culvert is necessary for suitable approach to a county and state-aid road, and such. The policy may include provisions for the payment of all or part of the costs of furnishing such culverts the culvert by the abutting landowner.

Sec. 3. Minnesota Statutes 1996, section 161.115, subdivision 38, is amended to read:

Subd. 38. [ROUTE NO. 107.] Beginning at the terminus of Route No. 10 on the westerly limits on the city of Minneapolis, thence extending in an easterly direction to a point on Route No. 104 as herein established at or near Washington Avenue in the city of Minneapolis.

Sec. 4. Minnesota Statutes 1996, section 161.115, subdivision 87, is amended to read:

Subd. 87. [ROUTE NO. 156.] Beginning at a point on Route No. 394 105 in the city of Minneapolis and extending in a northerly and westerly direction to a point on Route No. 62 easterly of the Great Northern Railway at or near the city of Coon Rapids.

Sec. 5. Minnesota Statutes 1996, section 165.03, is amended to read:

165.03 [STRENGTH OF BRIDGES; INSPECTIONS.]

Subdivision 1. [STANDARDS GENERALLY.] Each bridge, including a privately owned bridge, must conform to the strength, width, clearance, and safety standards imposed by the commissioner for the connecting highway or street. This subdivision applies to a bridge that is constructed after August 1, 1989, on any public highway or street. The bridge must have sufficient strength to support with safety the maximum vehicle weights allowed under section 169.825 and must have the minimum width specified in section 165.04, subdivision 3.


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Subd. 2. [INSPECTION AND INVENTORY RESPONSIBILITIES; RULES; FORMS.] The commissioner of transportation shall adopt official inventory and bridge inspection report forms for use in making bridge inspections by the owners or highway authorities specified by this subdivision. Bridge inspections shall be made at regular intervals, not to exceed two years, by the following officials owner or official:

(a) The commissioner of transportation for all bridges located wholly or partially within or over the right-of-way of a state trunk highway.

(b) The county highway engineer for all bridges located wholly or partially within or over the right-of-way of any county or township road, or any street within a municipality which does not have a city engineer regularly employed.

(c) The city engineer for all bridges located wholly or partially within or over the right-of-way of any street located within or along municipal limits.

(d) The commissioner of transportation in case of a toll bridge that is used by the general public and that is not inspected and certified under subdivision 6; provided, that the commissioner of transportation may assess the owner for the costs of such inspection.

(e) The owner of a bridge over a public highway or street or that carries a roadway designated for public use by a public authority, if not required to be inventoried and inspected under clause (a), (b), (c), or (d).

The commissioner of transportation shall prescribe the standards for bridge inspection and inventory by rules. The specified owner or highway authorities authority shall inspect and inventory in accordance with these standards and furnish the commissioner with such data as may be necessary to maintain a central inventory.

Subd. 3. [COUNTY INVENTORY AND INSPECTION RECORDS AND REPORTS.] The county engineer shall maintain a complete inventory record of all bridges as set forth in subdivision 2, clause (b), with the inspection reports thereof, and shall certify annually to the commissioner, as prescribed by the commissioner, that inspections have been made at regular intervals not to exceed two years. A report of the inspections shall be filed annually, on or before February 15 of each year, with the county auditor or township town clerk, or the governing body of the municipality. The report shall contain recommendations for the correction of, or legal posting of load limits on any bridge or structure that is found to be understrength or unsafe.

Subd. 4. [MUNICIPAL INVENTORY AND INSPECTION RECORDS AND REPORTS.] The city engineer shall maintain a complete inventory record of all bridges as set forth in subdivision 2, clause (c), with the inspection reports thereof, and shall certify annually to the commissioner, as prescribed by the commissioner, that inspections have been made at regular intervals not to exceed two years. A report of the inspections shall be filed annually, on or before February 15 of each year, with the governing body of the municipality. The report shall contain recommendations for the correction of, or legal posting of load limits on any bridge or structure that is found to be understrength or unsafe.

Subd. 5. [AGREEMENTS.] Agreements may be made among the various units of governments, or between governmental units and qualified engineering personnel to carry out the responsibilities for the bridge inspections and reports, as established by subdivision 2.

Subd. 6. [TOLL OTHER BRIDGES.] The owner of a toll bridge and the owner of a bridge described in subdivision 2, clause (e), shall certify to the commissioner, as prescribed by the commissioner, that inspections of the bridge have been made at regular intervals not to exceed two years. The certification shall be accompanied by a report of the inspection. The report shall contain recommendations for the correction of or legal posting of load limitations if the bridge is found to be understrength or unsafe.

Subd. 7. [DEPARTMENT OF NATURAL RESOURCES BRIDGES.] (a) Notwithstanding subdivision 2, the commissioners of transportation and natural resources shall negotiate a memorandum of understanding that governs the inspection of bridges owned, operated, or maintained by the commissioner of natural resources.

(b) The memorandum of understanding must provide for:

(1) the inspection and inventory of bridges subject to federal law or regulations;


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(2) the frequency of inspection of bridges described in paragraph (a); and

(3) who may perform inspections required under the memorandum of understanding.

Sec. 6. Minnesota Statutes 1996, section 174A.06, is amended to read:

174A.06 [CONTINUATION OF RULES.]

Orders and directives heretofore in force, issued, or promulgated by the public service commission, public utilities commission, or the department of transportation under authority of chapters 174A, 216A, 218, 219, and 221, and 222 remain and continue in force and effect until repealed, modified, or superseded by duly authorized orders or directives of the commissioner of transportation regulation board. To the extent allowed under federal law or regulation, rules adopted by the public service commission, public utilities commission or the department of transportation under authority of the following sections are transferred to the commissioner of transportation regulation board and continue in force and effect until repealed, modified, or superseded by duly authorized rules of the transportation regulation board commissioner:

(1) section 218.041 except rules related to the form and manner of filing railroad rates, railroad accounting rules, and safety rules;

(2) section 219.40;

(3) (2) rules relating to rates or tariffs, or the granting, limiting, or modifying of permits or certificates of convenience and necessity under section 221.031, subdivision 1;

(4) (3) rules relating to the sale, assignment, pledge, or other transfer of a stock interest in a corporation holding authority to operate as a permit carrier as prescribed in section 221.151, subdivision 1, or a local cartage carrier under section 221.296, subdivision 8;

(5) (4) rules relating to rates, charges, and practices under section 221.161, subdivision 4; and

(6) (5) rules relating to rates, tariffs, or the granting, limiting, or modifying of permits under sections 221.121, 221.151, and 221.296 or certificates of convenience and necessity under section 221.071.

The board commissioner shall review the transferred rules, orders, and directives and, when appropriate, develop and adopt new rules, orders, or directives within 18 months of July 1, 1985.

Sec. 7. Minnesota Statutes 1996, section 574.26, subdivision 1a, is amended to read:

Subd. 1a. [EXEMPTION; EXEMPTIONS: CERTAIN MANUFACTURERS; COMMISSIONER OF TRANSPORTATION.] (a) Sections 574.26 to 574.32 do not apply to a manufacturer of public transit buses that manufactures at least 100 public transit buses in a calendar year. For purposes of this section, "public transit bus" means a motor vehicle designed to transport people, with a design capacity for carrying more than 40 passengers, including the driver. The term "public transit bus" does not include a school bus, as defined in section 169.01, subdivision 6.

(b) At the discretion of the commissioner of transportation, sections 574.26 to 574.32 do not apply to any projects of the department of transportation (1) costing less than $75,000, or (2) involving the permanent or semipermanent installation of heavy machinery, fixtures, or other capital equipment to be used primarily for maintenance or repair.

Sec. 8. [SALE OF TAX-FORFEITED LAND; HENNEPIN COUNTY.]

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, Hennepin county may sell to the Minnesota department of transportation the tax-forfeited land bordering public water that is described in paragraph (c).

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


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(c) The land that may be conveyed is located in the city of Champlin, Hennepin county and is described as: That part of Lot 11, Block 5, Auditor's Subdivision No. 15, according to the plat thereof on file and of record in the office of the County Recorder in and for Hennepin County, Minnesota, lying south of a line run parallel with and distant 43 feet north of the south line of Government Lot 3, Section 19, Township 120 North, Range 21 West and lying east of a line run parallel with and distant 36.5 feet east of the west line of said Government Lot 3; together with all right of access, being the right of ingress to and egress from said Lot 11 to U.S. Highway No. 169 and Hayden Lake Road.

Subject to permanent easement for sanitary sewers granted to the metropolitan council on March 2, 1995, by the Hennepin county auditor. Subject to easements of record.

Sec. 9. [REPEALER.]

Minnesota Statutes 1996, section 161.115, subdivision 57, is repealed.

Sec. 10. [EFFECTIVE DATE.]

Subdivision 1. [DESCRIPTION OF ROUTE NO. 107 CHANGED; EFFECTIVE DATE.] Section 3 is effective when an agreement to transfer jurisdiction of a portion of marked Route No. 52 has been signed by the commissioner of transportation and the chair of the Hennepin county board and filed in the office of the commissioner.

Subd. 2. [DESCRIPTION OF ROUTE NO. 156 CHANGED; EFFECTIVE DATE.] Section 4 is effective when the transfer of jurisdiction of a portion of the old route is agreed to by the commissioner of transportation and Hennepin county and a copy of the agreement, signed by the commissioner and the chair of the Hennepin county board, has been filed in the office of the commissioner.

Subd. 3. [ROUTE NO. 126 DISCONTINUED; EFFECTIVE DATE.] Section 9 is effective when the transfer of jurisdiction of legislative Route No. 126 is agreed to by the commissioner of transportation and Ramsey county and a copy of the agreement, signed by the commissioner and the chair of the Ramsey county board, has been filed in the office of the commissioner.

Subd. 4. [INSTRUCTION TO REVISOR.] The revisor of statutes shall delete the route identified in subdivision 3 and change the description of each route identified in subdivisions 1 and 2 in the next publication of Minnesota Statutes unless the commissioner of transportation informs the revisor that the conditions required to transfer a particular route were not satisfied.

Subd. 5. [OTHER PROVISIONS.] Section 1 is effective the day following final enactment. Sections 2 and 7 are effective July 1, 1998."

Delete the title and insert:

"A bill for an act relating to transportation; authorizing advance payment when required by federal government for transportation project; providing for payment for costs of certain culverts when abutting landowner is a road authority; providing for bridge inspections; permitting transfer of extinguishment of access rights; regulating snow fence easements, highway closures, and signs; providing for the costs of town highways and bridges; providing for revisions of state transportation plan; transferring certain rules from transportation regulation board to commissioner of transportation; regulating charges for air transportation services; modifying contractor bond requirements for certain transportation projects; authorizing conveyance of certain tax-forfeited and acquired land that borders public water or natural wetlands in Hennepin county; removing routes from trunk highway system and changing descriptions of certain routes; requiring certain representation in study of commuter rail service; amending Minnesota Statutes 1996, sections 84.63; 117.21; 160.18, subdivision 1; 160.27, by adding a subdivision; 160.296, subdivision 1; 160.80, subdivision 1, and by adding a subdivision; 161.082, subdivision 2a; 161.115, subdivisions 38 and 87; 165.03; 169.26, subdivision 1; 174.03, subdivisions 1a and 2; 174A.06; 221.034, subdivisions 1 and 5; 270.077; 360.024; and 574.26, subdivision 1a; Laws 1997, chapter 159, article 2, section 51, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 16B; repealing Minnesota Statutes 1996, section 161.115, subdivisions 57 and 219."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.


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Osthoff from the Committee on Environment, Natural Resources and Agriculture Finance to which was referred:

H. F. No. 2722, A bill for an act relating to the environment; providing penalties for violations of underground storage tank statutes and rules; amending Minnesota Statutes 1996, sections 115.071, by adding a subdivision; and 116.073, subdivisions 1 and 2.

Reported the same back with the following amendments:

Page 3, lines 15, 19, 22, 25, and 28, delete everything after "violation"

Page 3, lines 16, 23, 26, and 29, delete everything before " relating"

With the recommendation that when so amended the bill pass.

The report was adopted.

Osthoff from the Committee on Environment, Natural Resources and Agriculture Finance to which was referred:

H. F. No. 2724, A bill for an act relating to natural resources; providing for the acquisition of critical aquatic habitat; modifying commercial netting provisions; permitting the commissioner to take catfish in certain waters; modifying minnow retailer provisions; modifying turtle license provisions; amending Minnesota Statutes 1996, sections 86A.04; 97C.041; 97C.501, subdivision 1; and 97C.605, subdivisions 1 and 2; Minnesota Statutes 1997 Supplement, sections 97A.475, subdivision 30; and 97C.501, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 97C.

Reported the same back with the following amendments:

Page 1, after line 13, insert:

"Section 1. Minnesota Statutes 1996, section 84.83, subdivision 3, is amended to read:

Subd. 3. [PURPOSES FOR THE ACCOUNT.] The money deposited in the account and interest earned on that money may be expended only as appropriated by law for the following purposes:

(1) for a grant-in-aid program to counties and municipalities for construction and maintenance of snowmobile trails, including maintenance of trails on lands and waters of Voyageurs National Park;

(2) for acquisition, development, and maintenance of state recreational snowmobile trails;

(3) for snowmobile safety programs; and

(4) for the administration and enforcement of sections 84.81 to 84.90.

Sec. 2. Minnesota Statutes 1996, section 84.83, subdivision 4, is amended to read:

Subd. 4. [PROVISIONS APPLICABLE TO FUNDING RECIPIENTS.] (a) Recipients of Minnesota trail assistance program funds must be the same protection and be held to the same standard of liability as a political subdivision under chapter 466 for activities associated with the administration, design, construction, maintenance, and grooming of snowmobile trails.

(b) Recipients of Minnesota trail assistance program funds who maintain ice trails on waters of Voyageurs National Park are expressly immune from liability under section 466.03, subdivision 6e."


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Page 2, after line 3, insert:

"Sec. 4. [86B.107] [REMOVAL OF VEHICLES FROM STATE WATERS.]

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, "vehicle" has the meaning given to "motor vehicle" in section 97A.015, subdivision 32, and the meaning given to "motorboat" in section 86B.005, subdivision 9.

(b) For purposes of this section, "owner" means registered owner, last registered owner, or actual owner of a vehicle if the vehicle is not registered.

Subd. 2. [REMOVAL REQUIREMENT.] (a) The owner of a vehicle shall be responsible to remove the vehicle from waters of the state unless the vehicle is permitted under section 86B.121, or otherwise exempt from removal. Removal shall be completed within 30 days of the vehicle entering the water or being discovered in the water, unless the owner is notified in writing by the county having jurisdiction that the removal must be completed sooner. The owner of the vehicle shall report that the vehicle is submerged in a body of water, and the date and circumstances surrounding it becoming submerged, to the sheriff of the county where the body of water is located within 48 hours of the vehicle entering the water.

(b) If the vehicle is not removed pursuant to paragraph (a), the county in whose jurisdiction the lake or watercourse exists shall remove the vehicle. The owner of the vehicle shall be subject to a civil penalty for all costs incurred in the removal of the vehicle. If the penalty is not paid within 60 days of notification of the owner the county that incurs costs as described in this section may bring an action to recover the costs at two times the actual cost of removal.

(c) The owner of the vehicle is not responsible for removal of the vehicle if the vehicle was used without their knowledge and the driver or operator of the vehicle can be determined.

Sec. 5. Minnesota Statutes 1996, section 97A.431, subdivision 4, is amended to read:

Subd. 4. [SEPARATE SELECTION; ELIGIBILITY.] (a) The commissioner may conduct a separate selection for up to 20 percent of the moose licenses to be issued for an area. Only owners of, and tenants living on, at least 160 acres of agricultural or grazing land in the area, and their family members, are eligible for the separate selection under this paragraph. Persons that are unsuccessful in a separate selection must be included in the selection for the remaining licenses.

(b) The commissioner must conduct a separate selection for five percent of the moose licenses to be issued each year. Only individuals who have applied at least ten times for a moose license and who have never received a license are eligible for this separate selection. An individual applying for a license under this paragraph may designate individuals who have not made at least ten unsuccessful applications for a moose license as members of the applicant's hunting party and must certify that the applicant has not accepted any compensation from those individuals in exchange for including them on the application.

(c) The commissioner may by rule establish criteria for:

(1) determining eligible family members under this subdivision. paragraph (a); and

(2) verifying that an individual has made at least ten unsuccessful applications for the purposes of paragraph (b).

(d) A person who is unsuccessful in a separate selection under this subdivision must be included in the selection for the remaining licenses."

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 7, after the semicolon, insert "modifying provisions of trail grant-in-aid funding; requiring removal of vehicles from state waters; modifying provisions for issuing moose licenses; providing civil penalties;"


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Page 1, line 8, after "sections" insert "84.83, subdivisions 3 and 4;" and after "86A.04;" insert "97A.431, subdivision 4;"

Page 1, line 12, delete "chapter" and insert "chapters 86B; and"

With the recommendation that when so amended the bill pass.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 2814, A bill for an act relating to health; establishing a minimum definition of durable medical equipment; requiring disclosure of covered medical equipment and supplies; proposing coding for new law in Minnesota Statutes, chapter 62Q.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [62Q.66] [DURABLE MEDICAL EQUIPMENT COVERAGE.]

No health plan company that covers durable medical equipment may utilize medical coverage criteria for durable medical equipment that limits coverage solely to equipment used in the home.

Sec. 2. [62Q.67] [DISCLOSURE OF COVERED DURABLE MEDICAL EQUIPMENT.]

Subdivision 1. [DISCLOSURE.] A health plan company that covers durable medical equipment shall provide enrollees, and upon request prospective enrollees, written disclosure that includes the information set forth in subdivision 2. The health plan company may include the information in the member contract, certificate of coverage, schedule of payments, member handbook, or other written enrollee communication.

Subd. 2. [INFORMATION TO BE DISCLOSED.] A health plan company that covers durable medical equipment shall disclose the following information:

(1) general descriptions of the coverage for durable medical equipment, level of coverage available, and criteria and procedures for any required prior authorizations; and

(2) the address and telephone number of a health plan representative whom an enrollee may contact to obtain specific information verbally, or upon request in writing, about prior authorization including criteria used in making coverage decisions and information on limitations or exclusions for durable medical equipment.

Sec. 3. [EFFECTIVE DATE; APPLICATION.]

Sections 1 and 2 are effective January 1, 1999, and apply to health plans issued, renewed, or continued as defined in Minnesota Statutes, section 60A.02, subdivision 2a, to provide coverage to a Minnesota resident on or after that date."

Amend the title as follows:

Page 1, line 2, delete everything after the semicolon

Page 1, line 3, delete everything before "requiring" and insert "regulating coverage of durable medical equipment;"

With the recommendation that when so amended the bill pass.

The report was adopted.


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Carlson from the Committee on Education to which was referred:

H. F. No. 2874, A bill for an act relating to education; repealing the Minnesota education finance act of 1992; repealing Minnesota Statutes 1996, sections 124A.697; 124A.698; 124A.70; 124A.71; 124A.711, subdivision 1; 124A.72; and 124A.73; Minnesota Statutes 1997 Supplement, section 124A.711, subdivision 2; and Laws 1992, chapter 499, article 7, section 31.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

GENERAL EDUCATION

Section 1. Minnesota Statutes 1997 Supplement, section 121.904, subdivision 4a, is amended to read:

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

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

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

(2) the sum of the state aids and credits enumerated in section 124.155, subdivision 2, which are for the fiscal year payable in that fiscal year plus an amount equal to the levy recognized as revenue in June of the prior year plus 31 percent of the amount of the levy certified in the prior calendar year according to section 124A.03, subdivision 2; or

(3)(i) 7.0 6.8 percent of the lesser of the amount of the general education levy certified in the prior calendar year according to section 124A.23, subdivision 2, or the difference between the amount of the total general fund levy certified in the prior calendar year and the sum of the amounts certified in the prior calendar year according to sections 124A.03, subdivision 2; 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); and 124.918, subdivision 6; plus

(ii) 31 percent of the referendum levy certified in the prior calendar year according to section 124A.03, subdivision 2; plus

(iii) the entire amount of the levy certified in the prior calendar year according 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); and 124.918, subdivision 6.

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

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

Sec. 2. Minnesota Statutes 1996, section 121.908, subdivision 2, is amended to read:

Subd. 2. Each district shall submit to the commissioner by August September 15 of each year an unaudited financial statement data for the preceding fiscal year. This statement financial data shall be submitted on forms in the format prescribed by the commissioner.


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Sec. 3. Minnesota Statutes 1996, section 121.908, subdivision 3, is amended to read:

Subd. 3. By December 31 November 30 of the calendar year of the submission of the unaudited financial statement data, the district shall provide to the commissioner and state auditor an audited financial data for the preceding fiscal year. An audited financial statement prepared in a form which will allow comparison with and correction of material differences in the unaudited statement financial data shall be submitted to the commissioner and the state auditor by November 30. The audited financial statement must also provide a statement of assurance pertaining to uniform financial accounting and reporting standards compliance and a copy of the management letter submitted to the district by the school district's auditor.

Sec. 4. Minnesota Statutes 1996, section 123.39, subdivision 1, is amended to read:

Subdivision 1. The board may provide for the transportation of pupils to and from school and for any other purpose. The board may also provide for the transportation of pupils to schools in other districts for grades and departments not maintained in the district, including high school, at the expense of the district, when funds are available therefor and if agreeable to the district to which it is proposed to transport the pupils, for the whole or a part of the school year, as it may deem advisable, and subject to its rules. In any school district, the board shall arrange for the attendance of all pupils living two miles or more from the school, except pupils whose transportation privileges have been revoked under section 123.805, subdivision 1, clause (6), or 123.7991, paragraph (b), through suitable provision for transportation or through the boarding and rooming of the pupils who may be more economically and conveniently provided for by that means. Arrangement for attendance may include a requirement that the student's parent or guardian request transportation services from the school district. The board shall provide transportation to and from the home of a child with a disability not yet enrolled in kindergarten when special instruction and services under sections 120.17 and 120.1701 are provided in a location other than in the child's home. When transportation is provided, scheduling of routes, establishment of the location of bus stops, manner and method of transportation, control and discipline of school children and any other matter relating thereto shall be within the sole discretion, control, and management of the school board. The district may provide for the transportation of pupils or expend a reasonable amount for room and board of pupils whose attendance at school can more economically and conveniently be provided for by that means or who attend school in a building rented or leased by a district within the confines of an adjacent district.

Sec. 5. Minnesota Statutes 1996, section 123.39, is amended by adding a subdivision to read:

Subd. 1a. [VOLUNTARY SURRENDER OF TRANSPORTATION PRIVILEGES.] The parent or guardian of a secondary student may voluntarily surrender the secondary student's to and from school transportation privileges granted under subdivision 1. A district may reduce parking fees or offer other incentives to a student who voluntarily waives these transportation privileges. The school district shall inform each secondary student who has voluntarily surrendered transportation privileges of the location of the nearest school bus stop and establish a policy allowing the student to ride the bus on an occasional basis. The district must also establish a process to allow a student to regain transportation privileges if the student's circumstances change during the school year.

Sec. 6. 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, excluding appropriations under sections 124.255, 124.26, 124.2601, 124.2605, 124.261, 124.2615, 124.2711, 124.2712, 124.2713, 124.2714, 124.2715, and 124.2716, 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 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. 7. Minnesota Statutes 1996, section 124.14, is amended by adding a subdivision to read:

Subd. 7a. [APPROPRIATION TRANSFERS FOR COMMUNITY EDUCATION PROGRAMS.] If a direct appropriation from the general fund to the department of children, families, and learning for an education aid or grant authorized under section 124.255, 124.26, 124.2601, 124.2605, 124.261, 124.2615, 124.2711, 124.2712, 124.2713, 124.2714, 124.2715, or 124.2716 exceeds the amount required, the commissioner of children, families, and learning may transfer the excess to any education aid or grant appropriation that is insufficiently funded under these sections. Excess


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appropriations shall 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. 8. Minnesota Statutes 1997 Supplement, section 124.17, subdivision 1d, is amended to read:

Subd. 1d. [COMPENSATION REVENUE PUPIL UNITS.] Compensation revenue pupil units for fiscal year 1998 and thereafter must be computed according to this subdivision.

(a) The compensation revenue concentration percentage for each building in a district equals the product of 100 times the ratio of:

(1) the sum of the number of pupils enrolled in the building eligible to receive free lunch plus one-half of the pupils eligible to receive reduced priced lunch on October 1 of the previous fiscal year; to

(2) the number of pupils enrolled in the building on October 1 of the previous fiscal year.

(b) The compensation revenue pupil weighting factor for a building equals the lesser of one or the quotient obtained by dividing the building's compensation revenue concentration percentage by 80.0.

(c) The compensation revenue pupil units for a building equals the product of:

(1) the sum of the number of pupils enrolled in the building eligible to receive free lunch and one-half of the pupils eligible to receive reduced priced lunch on October 1 of the previous fiscal year times the equity adjustment factor; times

(2) the compensation revenue pupil weighting factor for the building times the equity adjustment factor; times

(3) .60.

(d) For fiscal years 1999 and later, a district qualifies for the equity adjustment factor if the district served more than 5,000 pupils eligible to receive free or reduced price lunch during the previous fiscal year and if the district's percentage of pupils eligible to receive free or reduced price lunch during the previous fiscal year is less than the statewide average percentage for that year. The equity adjustment factor equals the ratio of the statewide percentage of pupils eligible to receive free or reduced price lunch during the previous fiscal year to the district's percentage of pupils eligible to receive free or reduced price lunch.

(e) Notwithstanding paragraphs (a) to (c), for charter schools and contracted alternative programs in the first year of operation, compensation revenue pupil units shall be computed using data for the current fiscal year. If the charter school or contracted alternative program begins operation after October 1, compensatory revenue pupil units shall be computed based on pupils enrolled on an alternate date determined by the commissioner, and the compensation revenue pupil units shall be prorated based on the ratio of the number of days of student instruction to 170 days.

(f) The percentages in this subdivision must be based on the count of individual pupils and not on a building average or minimum.

Sec. 9. Minnesota Statutes 1996, section 124.17, is amended by adding a subdivision to read:

Subd. 5a. [BASIC SKILLS SUMMER SCHOOL PUPIL UNITS.] When a pupil who has not passed an assessment of basic graduation standards in reading, writing, or mathematics is enrolled in a mastery of basic skills summer school program that is not a part of the regular school term and the student has a total enrollment time of more than 1,020 hours in a school year, the pupil may be counted as more than one pupil in average daily membership for purposes of this subdivision only. The amount in excess of one pupil must be determined by the ratio of the number of hours of instruction provided to that pupil in excess of 1,020 hours. For each pupil, only the amount of summer school enrollment time


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attributable to basic skills instruction may be used to calculate the additional hours in the school year. Basic skills instruction is defined as in Minnesota's rules on graduation standards and includes reading, writing, and mathematics. Hours that occur after the close of the instructional year in June are attributable to the following fiscal year. A pupil for whom payment is made under this subdivision may be counted by a district only for the computation of basic revenue, according to section 124A.22, subdivision 2.

Sec. 10. Minnesota Statutes 1997 Supplement, section 124.17, subdivision 6, is amended to read:

Subd. 6. [FREE AND REDUCED PRICED LUNCHES.] The commissioner shall determine the number of children eligible to receive either a free or reduced priced lunch on October 1 each year. Children enrolled in a building on October 1 and determined to be eligible to receive free or reduced price lunch by January 15 of the following year shall be counted as eligible on October 1 for purposes of subdivision 1d. The commissioner may use federal definitions for these purposes and may adjust these definitions as appropriate. The commissioner may adopt reporting guidelines to assure accuracy of data counts and eligibility. Districts shall use any guidelines adopted by the commissioner.

Sec. 11. Minnesota Statutes 1997 Supplement, section 124.17, subdivision 7, is amended to read:

Subd. 7. [LEP PUPIL UNITS.] (a) Limited English proficiency pupil units for fiscal year 1998 and thereafter shall be determined according to this subdivision.

(b) The limited English proficiency concentration percentage for a district equals the product of 100 times the ratio of:

(1) the number of pupils of limited English proficiency enrolled in the district during the current fiscal year; to

(2) the number of pupils in average daily membership enrolled in the district.

(c) The limited English proficiency pupil units for each pupil enrolled in a program for pupils of limited English proficiency in accordance with sections 126.261 to 126.269 equals the lesser of one or the quotient obtained by dividing the limited English proficiency concentration percentage for the pupil's district of enrollment by 11.5.

(d) Limited English proficiency pupil units shall be counted by the district of enrollment.

(e) Notwithstanding paragraph (d), for the purposes of this subdivision, pupils enrolled in a cooperative or intermediate school district shall be counted by the district of residence.

Sec. 12. Minnesota Statutes 1996, section 124.248, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION REVENUE.] General education revenue shall be paid to a charter school as though it were a school district. The general education revenue for each pupil unit is the state average general education revenue per pupil unit minus $170 an amount equal to the product of the formula allowance according to section 124A.22, subdivision 2, times .0485, calculated without compensatory basic skills revenue, transportation sparsity revenue, and the transportation portion of the transition revenue adjustment, plus compensatory basic skills revenue as though the school were a school district.

Sec. 13. Minnesota Statutes 1996, section 124.248, subdivision 1a, is amended to read:

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

(a) In addition to the revenue under subdivision 1, a charter school providing transportation services shall receive general education aid for each pupil unit equal to the sum of $170 an amount equal to the product of the formula allowance according to section 124A.22, subdivision 2, times .0485, plus the transportation sparsity allowance for the school district in which the charter school is located, plus the transportation transition allowance for the school district in which the charter school is located.


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(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. 14. Minnesota Statutes 1997 Supplement, section 124.248, subdivision 2a, is amended to read:

Subd. 2a. [BUILDING LEASE AID.] When a charter school finds it economically advantageous to rent or lease a building or land for any instructional purposes and it determines that the total operating capital revenue under section 124A.22, subdivision 10, is insufficient for this purpose, it may apply to the commissioner for building lease aid for this purpose. Criteria for aid approval and revenue uses shall be as defined for the building lease levy in section 124.91, subdivision 1, paragraphs (a) and (b). The amount of building lease aid per pupil unit served for a charter school for any year shall not exceed the lesser of (a) 80 percent of the approved cost or (b) the product of the actual pupil units served for the current school year times the sum of the state average debt redemption fund revenue plus capital revenue, according to section 124.91, per actual pupil unit served for the current fiscal year.

Sec. 15. Minnesota Statutes 1997 Supplement, section 124.248, subdivision 6, is amended to read:

Subd. 6. [START-UP COSTS.] During the first two years of a charter school's operation, the charter school is eligible for aid to pay for start-up costs and additional operating costs. Start-up cost aid equals the greater of:

(1) $50,000 per charter school; or

(2) $500 times the charter school's pupil units served for that year.

Sec. 16. 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.

(c) Notwithstanding paragraphs (a) and (b), if the special education base revenue for a district is greater than zero, and the base year amount for the district under subdivision 2, paragraph (a), clause (7), equals zero, the special education revenue equals the sum of the amount computed according to paragraph (a), plus the amount computed according to subdivision 2, paragraph (a), clause (7), using current year data.

Sec. 17. Minnesota Statutes 1996, section 124A.03, subdivision 3c, is amended to read:

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

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

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


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

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

(e) When referendum authority approved before June 1, 1996, expires, the referendum allowance reduction for a district shall be decreased by the amount of the decrease in the district's total referendum allowance under subdivision 1c. For districts with more than one referendum authority remaining after the expiration, the amount of any remaining allowance reduction shall be reallocated among the remaining referendum authority approved before June 1, 1996, according to paragraph (d).

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

Sec. 18. Minnesota Statutes 1997 Supplement, section 124A.036, subdivision 5, is amended to read:

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 basic skills 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 be increased by an amount equal to the general education revenue exclusive of compensatory basic skills 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 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 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.

Sec. 19. Minnesota Statutes 1996, section 124A.036, subdivision 6, is amended to read:

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

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


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(c) General education aid paid to a district in which a charter school not providing transportation according to section 120.064, subdivision 15, is located shall be increased by an amount equal to the product of: (1) the sum of $170 an amount equal to the product of the formula allowance according to section 124A.22, subdivision 2, times .0485, 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. 20. Minnesota Statutes 1997 Supplement, section 124A.22, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION REVENUE.] (a) For fiscal years 1997 and 1998, the general education revenue for each district equals the sum of the district's basic revenue, compensatory education revenue, secondary sparsity revenue, elementary sparsity revenue, transportation sparsity revenue, total operating capital revenue, transition revenue, and supplemental revenue.

(b) For fiscal year 1999 and thereafter, the general education revenue for each district equals the sum of the district's basic revenue, basic skills revenue, training and experience revenue, secondary sparsity revenue, elementary sparsity revenue, transportation sparsity revenue, total operating capital revenue, graduation standards implementation revenue, transition revenue, and supplemental revenue.

Sec. 21. Minnesota Statutes 1996, section 124A.22, is amended by adding a subdivision to read:

Subd. 14. [GRADUATION STANDARDS IMPLEMENTATION REVENUE.] (a) A school district's graduation standards implementation revenue is equal to $63 times its actual pupil units for fiscal year 1999 and $36 per pupil unit for fiscal year 2000 and later. Graduation standards implementation revenue is reserved and must be used according to paragraphs (b) and (c).

(b) For fiscal year 1999, revenue must be reserved for programs according to clauses (1) to (3).

(1) $36 per actual pupil unit must be allocated to school sites in proportion to the number of students enrolled at each school site weighted according to section 124.17, subdivision 1, and is reserved for programs designed to enhance the implementation of the graduation rule through intensive staff development and decentralized decision making.

(2) At least $5 per actual pupil unit is reserved for gifted and talented programs that are integrated with the graduation rule. This aid must supplement, not supplant, money spent on gifted and talented programs authorized under Laws 1997, First Special Session chapter 4, article 5, section 24.

(3) Any remaining aid under this paragraph must be used for either class size reduction or for technology purchases related to the graduation rule consistent with subdivision 11, clauses (15), (18), (19), (23), and (24).

(c) For fiscal year 2000 and later, revenue must be allocated to school sites and reserved for programs designed to enhance the implementation of the graduation rule through either staff development programs or class size reduction programs based at the school site.

(d) To the extent possible, school districts shall make opportunities for graduation standards implementation available to teachers employed by intermediate school districts. If the commissioner determines that the supplemental appropriation made for this subdivision under section 37, subdivision 2, is in excess of the amount needed for this subdivision, the commissioner shall make equal payments of one-third of the excess to each intermediate school district for the purpose of paragraph (a).


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Sec. 22. Minnesota Statutes 1997 Supplement, section 124A.23, subdivision 1, is amended to read:

Subdivision 1. [GENERAL EDUCATION TAX RATE.] The commissioner shall establish the general education tax rate by July 1 of each year for levies payable in the following year. The general education tax capacity rate shall be a rate, rounded up to the nearest hundredth of a percent, that, when applied to the adjusted net tax capacity for all districts, raises the amount specified in this subdivision. The general education tax rate shall be the rate that raises $1,359,000,000 for fiscal year 1998 and $1,385,500,000 for fiscal year 1999 and, $1,328,000,000 for fiscal year 2000, and $1,325,100,000 for fiscal year 2001, and later fiscal years. The general education tax rate may not be changed due to changes or corrections made to a district's adjusted net tax capacity after the tax rate has been established. If the levy target for fiscal year 1999 or fiscal year 2000 is changed by another law enacted during the 1997 or 1998 session, the commissioner shall reduce the general education levy target in this bill section by the amount of the reduction in the enacted law.

Sec. 23. Minnesota Statutes 1997 Supplement, section 124A.28, subdivision 1, is amended to read:

Subdivision 1. [USE OF THE REVENUE.] The compensatory education revenue under section 124A.22, subdivision 3, and the portion of the transition revenue adjustment under section 124A.22, subdivision 13c, attributable to the compensatory transition allowance under section 124A.22, subdivision 13b, paragraph (b), must be used to meet the educational needs of pupils whose progress toward meeting state or local content or performance standards is below the level that is appropriate for learners of their age. Any of the following may be provided to meet these learners' needs:

(1) direct instructional services under the assurance of mastery program according to section 124.3111;

(2) remedial instruction in reading, language arts, mathematics, other content areas, or study skills to improve the achievement level of these learners;

(3) additional teachers and teacher aides to provide more individualized instruction to these learners through individual tutoring, lower instructor-to-learner ratios, or team teaching;

(4) a longer school day or week during the regular school year or through a summer program that may be offered directly by the site or under a performance-based contract with a community-based organization;

(5) comprehensive and ongoing staff development consistent with district and site plans according to section 126.70, for teachers, teacher aides, principals, and other personnel to improve their ability to identify the needs of these learners and provide appropriate remediation, intervention, accommodations, or modifications;

(6) instructional materials and technology appropriate for meeting the individual needs of these learners;

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

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

(9) all day kindergarten;

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

(11) substantial parent involvement in developing and implementing remedial education or intervention plans for a learner, including learning contracts between the school, the learner, and the parent that establish achievement goals and responsibilities of the learner and the learner's parent or guardian; and

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


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Sec. 24. Minnesota Statutes 1997 Supplement, section 124A.28, subdivision 1a, is amended to read:

Subd. 1a. [BUILDING ALLOCATION.] (a) For fiscal years 1999 and later, a district must allocate revenue any increase in its compensatory revenue over the amount of compensatory revenue that would have been earned in fiscal year 1998, as calculated under section 124A.22, subdivision 13b, paragraph (c), clause (1), to each school building in the district where the children who have generated the revenue are served.

(b) A district may allocate compensatory revenue not otherwise allocated under paragraph (a) to school sites according to a plan adopted by the school board.

(c) For the purposes of this section and section 124.17, subdivision 1d, "building" means education site as defined in section 123.951, subdivision 1.

(d) If the pupil is served at a site other than one owned and operated by the district, the revenue shall be paid to the district and used for services for pupils who generate the revenue.

Sec. 25. Minnesota Statutes 1996, section 124A.30, is amended to read:

124A.30 [STATEWIDE AVERAGE REVENUE.]

By October 1 of each year the commissioner shall estimate the statewide average adjusted general education revenue per actual pupil unit and the range disparity in adjusted general education revenue among pupils and districts by computing the difference between the fifth and the ratio of the ninety-fifth percentiles percentile to the fifth percentile of adjusted general education revenue. The commissioner must provide that information to all school districts.

If the disparity in adjusted general education revenue as measured by the difference between the fifth and ratio of the ninety-fifth percentiles percentile to the fifth percentile increases in any year, the commissioner must propose a shall recommend to the legislature options for change in the general education formula that will limit the disparity in adjusted general education revenue to no more than the disparity for the previous school year. The commissioner must submit the proposal recommended options to the education committees of the legislature by January 15.

For purposes of this section, adjusted general revenue means the sum of basic revenue under section 124A.22, subdivision 2; supplemental revenue under section 124A.22, subdivisions 8 and 9; transition revenue under section 124.22, subdivision 13c; and referendum revenue under section 124A.03.

Sec. 26. [124A.32] [IN-SCHOOL SUSPENSION REVENUE.]

A school site shall receive $4 per pupil per school day for each pupil the school site suspends and places in an in-school suspension program or alternative to an out-of-school suspension program instead of prohibiting the pupil from attending school. The school site shall use the revenue for the increased costs of having a licensed teacher instruct a pupil placed in an in-school suspension program or alternative to an out-of-school suspension program.

Sec. 27. Laws 1992, chapter 499, article 7, section 31, is amended to read:

Sec. 31. [REPEALER.]

Minnesota Statutes 1990, sections 124A.02, subdivision 24; 124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3; 124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and 23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9; 124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision 1; and 124A.29, subdivision 1, are repealed effective June 30, 1999; Laws 1991, chapter 265, article 7, section 35, is repealed.

Sec. 28. Laws 1997, First Special Session chapter 4, article 1, section 58, is amended to read:

Sec. 58. [BUS PURCHASE LEVY.]

(a) For 1997 taxes payable in 1998, a school district may levy the amount necessary to eliminate the deficit in the reserved fund balance account for bus purchases in its transportation fund as of June 30, 1996.


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(b) For 1998 taxes payable in 1999, a school district that had a positive balance in the reserved fund balance account for bus purchases in its transportation fund as of June 30, 1996, but that had already entered into a contract for new buses or ordered new buses that had not been received prior to June 30, 1996, may levy an amount equal to the difference between the purchase price of the buses and its balance in the reserve account for bus purchases.

Sec. 29. Laws 1997, First Special Session chapter 4, article 1, section 61, subdivision 3, is amended to read:

Subd. 3. [EQUALIZING FACTORS.] The commissioner shall adjust each equalizing factor established using adjusted net tax capacity per actual pupil unit under Minnesota Statutes, chapters 124 and 124A, by dividing the equalizing factor by the ratio of the statewide tax capacity as calculated using the class rates in effect for assessment year 1996 to the statewide tax capacity using the class rates for that assessment year.

Sec. 30. Laws 1997, First Special Session chapter 4, article 2, section 51, subdivision 29, is amended to read:

Subd. 29. [FIRST GRADE PREPAREDNESS.] (a) For grants for the first grade preparedness program under Minnesota Statutes, section 124.2613, and for school sites that have provided a full-day kindergarten option for kindergarten students enrolled in fiscal years 1996 and 1997:

$5,000,000 . . . . . 1998

$5,000,000 $5,500,000 . . . . . 1999

(b) To be a qualified site, licensed teachers must have taught the optional full-day kindergarten classes. A district that charged a fee for students participating in an optional full-day program is eligible to receive the grant to provide full-day kindergarten for all students as required by Minnesota Statutes, section 124.2613, subdivision 4. Districts with eligible sites must apply to the commissioner of children, families, and learning for a grant.

(c) This appropriation must first be used to fund programs operating during the 1996-1997 school year under paragraph (b) and Minnesota Statutes, section 124.2613. Any remaining funds may be used to expand the number of sites providing first grade preparedness programs.

Sec. 31. Laws 1997, First Special Session chapter 4, article 5, section 28, subdivision 12, is amended to read:

Subd. 12. [GRADUATION RULE IMPLEMENTATION AT THE SITE AID.] For graduation rule implementation:

$10,000,000 . . . . . 1998

(a) This appropriation shall be paid to districts according to paragraph (b). The purpose of the aid is to accelerate the implementation of the graduation rule throughout all education sites in the district through intensive staff development and decentralized decision making. The board shall work with the teaching staff in the district to determine the most effective staff development processes to assure an acceleration of the implementation. This appropriation is one-time only.

(b) A district shall receive aid equal to $10 times the number of fund balance pupil units in the district for fiscal year 1998 excluding pupil units attributable to shared time pupils. At least 30 percent must be used for the purposes of paragraph (a).

Sec. 32. Laws 1997, First Special Session chapter 4, article 9, section 11, is amended to read:

Sec. 11. [ADDITIONAL TECHNOLOGY REVENUE.]

(a) For fiscal year 1998 only, the allowance in Minnesota Statutes, section 124A.22, subdivision 10, paragraph (a), is increased by:

(1) $24 per pupil unit; or

(2) the lesser of $25,000 or $80 per pupil unit.


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Revenue received under this section must be used according to Minnesota Statutes, section 124A.22, subdivision 11, clauses (15), (18), (19), (23), and (24).

(b) For the purposes of paragraph (a), "pupil unit" means fund balance pupil unit as defined in Minnesota Statutes, section 124A.26, subdivision 1, excluding pupil units attributable to shared time pupils.

Sec. 33. [COMPENSATION PUPIL UNITS; FISCAL YEAR 1998.]

Notwithstanding Minnesota Statutes, section 124.17, subdivision 1d, paragraphs (a) to (c), for fiscal year 1998 only, compensation revenue pupil units for buildings with no free or reduced price lunch counts for fiscal year 1997 because the site did not participate in the national school lunch program, or for a contracted alternative program for which no count was reported to the department of children, families, and learning, shall be computed using data for the current fiscal year.

Sec. 34. [SUPPLEMENTAL REVENUE.]

Supplemental revenue for fiscal years 1998 and later under Minnesota Statutes, section 124A.22, subdivision 8, is increased by the following amounts:

(1) for independent school district No. 593, Crookston, $117,000;

(2) for independent school district No. 361, International Falls, $107,000;

(3) for independent school district No. 706, Virginia, $43,000; and

(4) for independent school district No. 2154, Eveleth-Gilbert, $8,000.

Supplemental revenue increased under this section is not subject to reduction under Minnesota Statutes, section 124A.22, subdivision 9.

Sec. 35. [MODEL TRANSPORTATION AND SCHOOL START TIME POLICY.]

Subdivision 1. [TRANSPORTATION EFFICIENCY.] Independent school district No. 270, Hopkins, shall establish a task force consisting of community members, school board members, parents, teachers, and administrators to examine its existing pupil transportation system. The task force shall examine all manner of school bus transportation efficiencies, including:

(1) state transportation mandates;

(2) school bus route design;

(3) school bus stop locations;

(4) school bus student pick-up times; and

(5) changes to peak-hour highway policies for school buses, with particular attention paid to the effects of metered ramps on school bus efficiency.

The task force shall also evaluate alternative transportation methods such as metropolitan transit commission bus service, student carpools, and other manners of student transportation to and from school.

Subd. 2. [SCHOOL START TIME.] The task force shall evaluate the effect of transportation decisions on school start times and make recommendations about school start times for elementary and secondary students.

Subd. 3. [REPORT.] Independent school district No. 270, Hopkins, shall summarize the activities of the task force and prepare a report to be presented by March 1, 1999, to the 1999 legislature.


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Sec. 36. [INDEPENDENT SCHOOL DISTRICT NO. 2862, JACKSON COUNTY CENTRAL; REFERENDUM AUTHORITY.]

Subdivision 1. [REFERENDUM REVENUE ADJUSTMENT.] Notwithstanding Minnesota Statutes, section 124A.03, referendum equalization aid for fiscal year 1998 for independent school district No. 2862, Jackson County Central, is $72,000, and the district's net tax capacity referendum levy is $61,000.

Subd. 2. [AID ADJUSTMENT.] The department of children, families, and learning shall adjust the aid payments for fiscal year 1998 to independent school district No. 2862, Jackson County Central, according to subdivision 1.

Subd. 3. [LEVY ADJUSTMENT.] For taxes payable in 1999, the department of children, families, and learning shall make a levy adjustment for the independent school district No. 2862, Jackson County Central, referendum levy authority for fiscal year 1998, according to subdivision 1.

Sec. 37. [APPROPRIATION.]

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

Subd. 2. [GENERAL EDUCATION AID.] For general education aid:

$185,000 . . . . . 1998

$59,787,000 . . . . . 1999

This aid is in addition to any other aid appropriated for this purpose.

Subd. 3. [HOPKINS.] For a grant to independent school district No. 270, Hopkins, for the purposes of section 35:

$50,000 . . . . . 1999

Subd. 4. [IN-SCHOOL SUSPENSION COSTS.] For in-school suspension costs that school sites incur under Minnesota Statutes, section 124A.32:

$300,000 . . . . . 1999

Subd. 5. [TECHNOLOGY INTEGRATION PROJECT.] For a grant to independent school district No. 62, Ortonville, to implement a technology integration program:

$200,000 . . . . . 1999

The purpose of the technology integration pilot project is to demonstrate successful and effective uses of technology for students, teachers, guidance counselors, administrators, and parents to implement Minnesota's graduation standards and track student performance in meeting the standards.

Sec. 38. [REPEALER.]

(a) Minnesota Statutes 1997 Supplement, section 124.912, subdivisions 2 and 3, are repealed effective for taxes payable in 1998.

(b) Minnesota Statutes 1996, sections 124A.697; 124A.698; 124A.70; 124A.71; 124A.711, subdivision 1; 124A.72; and 124A.73; and Minnesota Statutes 1997 Supplement, section 124A.711, subdivision 2, are repealed.

Sec. 39. [EFFECTIVE DATE.]

(a) Sections 1, 2, 4, 5, 25, 28, 30, and 35 are effective July 1, 1998.


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(b) Section 3 is effective July 1, 1999.

(c) Sections 8, 22, 27, and 36 are effective the day following final enactment.

(d) Sections 9, 12, 13, 16, 18, 19, 20, 21, 23, 24, and 26 are effective for revenue for fiscal year 1999.

(e) Sections 6, 7, 11, 14, 15, 16, 17, 29, 31, 32, 33, and 34 are effective for revenue for fiscal year 1998.

(f) Section 10 is effective retroactively to July 1, 1997, for revenue for fiscal year 1999.

ARTICLE 2

SPECIAL EDUCATION

Section 1. Minnesota Statutes 1996, section 120.03, subdivision 1, is amended to read:

Subdivision 1. Every child who has a hearing impairment, visual disability, speech or language impairment, physical handicap, other health impairment, mental handicap, emotional/behavioral disorder, specific learning disability, autism, traumatic brain injury, or deaf/blind disability and needs special instruction and services, as determined by the standards of the state board, is a child with a disability. In addition, every child under up to age five three, and at local district discretion from age three to seven, who needs special instruction and services, as determined by the standards of the state board, because the child has a substantial delay or has an identifiable physical or mental condition known to hinder normal development is a child with a disability.

Sec. 2. [120.031] [STATEWIDE DATA MANAGEMENT SYSTEM TO MAXIMIZE MEDICAL ASSISTANCE REIMBURSEMENT.]

Subdivision 1. [DEFINITION.] For purposes of this section, cooperative unit has the meaning given in section 123.35, subdivision 19b, paragraph (d).

Subd. 2. [PROVIDING ASSISTANCE AND TRAINING.] The commissioner, in cooperation with the commissioner of human services, shall develop a statewide data management system using the educational data reporting system or other existing data management system for school districts and cooperative units to use to maximize medical assistance reimbursement for health and health-related services provided under individual education plans and individual family service plans. The statewide data management system must enable school district and cooperative unit staff to:

(1) establish medical assistance billing systems or improve existing systems;

(2) understand the appropriate medical assistance billing codes for services provided under individual education plans and individual family service plans;

(3) comply with the Individuals with Disabilities Education Act, Public Law Number 105-17;

(4) contract with billing agents; and

(5) carry out other activities necessary to maximize medical assistance reimbursement.

Sec. 3. Minnesota Statutes 1996, section 120.06, subdivision 2a, is amended to read:

Subd. 2a. [EDUCATION AND RESIDENCE OF HOMELESS.] (a) Notwithstanding subdivision 1, a school district must not deny free admission to a homeless person of school age solely because the school district cannot determine that the person is a resident of the school district.

(b) The school district of residence for a homeless person of school age shall be the school district in which the homeless shelter or other program, center, or facility assisting the homeless person is located. The educational services a school district provides to a homeless person must allow the person to work toward meeting the graduation standards under section 121.11, subdivision 7c.


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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 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 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;

(5) requirements and procedures for program and financial audits;

(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; and

(10) if the board of directors or the operators of the charter school provide special instruction and services for children with a disability under section 120.17, a description of the financial parameters within which the charter school will operate to provide the special instruction and services to children with a disability.

Sec. 5. Minnesota Statutes 1996, section 120.101, subdivision 3, is amended to read:

Subd. 3. [PARENT DEFINED; RESIDENCY DETERMINED.] (a) In sections 120.101 to 120.103, "parent" means a parent, guardian, or other person having legal custody of a child.

(b) In section 120.17, "parent" means a parent, guardian, or other person having legal custody of a child under age 18. For an unmarried pupil age 18 or over, "parent" means the pupil unless a guardian or conservator has been appointed, in which case it means the guardian or conservator.

(c) For purposes of section 120.17, the school district of residence for an unmarried pupil age 18 or over who is a parent under paragraph (b) and who is placed in a center for care and treatment, shall be the school district in which the pupil's biological or adoptive parent or designated guardian resides.

(d) For a married pupil age 18 or over, the school district of residence is the school district in which the married pupil resides.

Sec. 6. Minnesota Statutes 1996, section 120.17, subdivision 1, is amended to read:

Subdivision 1. [SPECIAL INSTRUCTION FOR CHILDREN WITH A DISABILITY.] (a) As defined in paragraph (b), to the extent required in federal law as of July 1, 1999, every district shall 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.

(b) 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 refer children under age five who are known to need or suspected of needing special instruction and services to the


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school district. Districts with less than the minimum number of eligible children with a disability as determined by the state board shall 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. 7. Minnesota Statutes 1996, section 120.17, subdivision 2, is amended to read:

Subd. 2. [METHOD OF SPECIAL INSTRUCTION.] (a) As defined in this subdivision, to the extent required by federal law as of July 1, 1999, 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.

(c) The primary responsibility for the education of a child with a disability shall remain with the district of the child's residence regardless of which method of providing special instruction and services is used. If a district other than a child's district of residence provides special instruction and services to the child, then the district providing the special instruction and services shall notify the child's district of residence before the child's individual education plan is developed and shall 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.


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"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 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

(ii) a specification of the evidence used to determine that the student's ability to read and write effectively without Braille is not impaired.

(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 not be construed to supersede any rights of a parent or guardian of a child with a disability under federal or state law.

Sec. 8. Minnesota Statutes 1996, section 120.17, subdivision 3, is amended to read:

Subd. 3. [RULES OF THE STATE BOARD.] (a) As defined in this paragraph, but not to exceed the extent required by federal law as of July 1, 1999, the state board shall promulgate 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 rules for instruction of children with a disability. These rules shall provide standards and procedures appropriate for the implementation of and within the limitations of subdivisions 3a and 3b. These rules shall also provide standards for the discipline, control, management and protection of children with a disability. The state board shall not adopt rules for pupils served in level 1, 2, or 3, as defined in Minnesota Rules,


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part 3525.2340, primarily in the regular classroom 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 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 adopt rules to determine eligibility for special education services. The rules shall include procedures and standards by which to grant variances for experimental eligibility criteria. The state board shall, 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 specify the program standards used to evaluate the request and the reasons for denying the request.

(b) As provided in this paragraph, but not to exceed the extent required by federal law as of July 1, 1999, 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 and, where appropriate, to support staff including school nurses 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, and conflict, appropriate due process hearing procedures and reduced 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. 9. Minnesota Statutes 1996, section 120.17, subdivision 3a, is amended to read:

Subd. 3a. [SCHOOL DISTRICT OBLIGATIONS.] (a) As defined in this subdivision, to the extent required by federal law as of July 1, 1999, every district shall ensure that:

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

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

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


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(4) eligibility and needs of children with a disability are determined by an initial assessment or reassessment, which may be completed using existing data under United States Code, title 20, section 33, et seq.;

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

(6) (7) 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.

(b) For paraprofessionals employed to work in programs for students with disabilities, the school board in each district shall ensure that:

(1) before or immediately upon employment, each paraprofessional develops sufficient knowledge and skills in emergency procedures, building orientation, roles and responsibilities, confidentiality, vulnerability, and reportability, among other things, to begin meeting the needs of the students with whom the paraprofessional works;

(2) annual training opportunities are available to enable the paraprofessional to continue to further develop the knowledge and skills that are specific to the students with whom the paraprofessional works, including understanding disabilities, following lesson plans, and implementing follow-up instructional procedures and activities; and

(3) a districtwide process obligates each paraprofessional to work under the ongoing direction of a licensed teacher and, where appropriate and possible, the supervision of a school nurse.

Sec. 10. Minnesota Statutes 1996, section 120.17, subdivision 3b, is amended to read:

Subd. 3b. [PROCEDURES FOR DECISIONS.] As defined in this paragraph, but not to exceed the extent required by federal law as of July 1, 1999, every district shall utilize at least the following procedures for decisions involving identification, assessment, and educational placement of children with a disability:

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

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

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

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

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

(c) Parents and guardians shall have an opportunity to meet with appropriate district staff in at least one conciliation conference, mediation, or other method of alternative dispute resolution that the parties agree to, if they object to any proposal of which they are notified pursuant to clause paragraph (a). The intent of the state is to encourage parties to resolve disputes through mediation or other form of alternative dispute resolution. A school district and a parent or guardian must participate in mediation using the mediation services of MNSEMS, which is free to both parties, unless


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a parent or guardian objects to the mediation. Mediation under this paragraph shall not affect parties' subsequent rights to a due process hearing. All mediation is subject to the confidentiality requirements under rule 114.08 of the general rules of practice for the district courts. The conciliation process or other form of alternative dispute resolution shall not be used to deny or delay a parent or guardian's right to a due process hearing. If the parent or guardian refuses efforts by the district to conciliate the dispute with the school district, the requirement of an opportunity for conciliation or other alternative dispute resolution shall be deemed to be satisfied. Notwithstanding other law, in any proceeding following a conciliation conference, the school district must not offer a conciliation conference memorandum into evidence, except for any portions that describe the district's final proposed offer of service. Otherwise, with respect to forms of dispute resolution, mediation, or conciliation, Minnesota Rule of Evidence 408 applies. The department of children, families, and learning may reimburse the districts or directly pay the costs of lay advocates, not to exceed $150 per dispute, used in conjunction with alternative dispute resolution.

(d) The commissioner shall establish a mediation process to assist parents, school districts, or other parties to resolve disputes arising out of the identification, assessment, or educational placement of children with a disability. The mediation process must be offered as an informal alternative to the due process hearing provided under clause 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 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.

Unless otherwise agreed to by its parties, an impartial due process hearing is limited to eight hours, with a maximum of four hours available to each party. The party requesting the hearing shall plead with specificity as to what issues are in dispute and all issues not pleaded with specificity are deemed waived. Parties to a hearing are encouraged to present only essential witnesses to prove a claim. A hearing review officer, at the officer's discretion, may exclude cumulative evidence.

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

The hearing shall take place before an impartial hearing officer mutually agreed to by the school board and the parent or guardian. Within four business days of the receipt of the request for the hearing, if the parties have not agreed on the hearing officer, the school board shall request the commissioner to appoint a hearing officer from a list maintained for that purpose. A retired judge, retired court referee, or retired federal magistrate judge who is otherwise qualified under this section and wishes to be a hearing officer must be put on the list. The school board shall 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 not be a school board member or employee of the school district where the child resides or of the child's school district of residence, an employee of any other public agency involved in the education or care of the child, or any person with a personal or professional interest which would conflict with the person's objectivity at the hearing. A person who otherwise qualifies as a hearing officer is not an employee of the district solely because the person is paid by the district to serve as a hearing officer. Any party to a hearing, except an expedited hearing


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under federal law, may make and serve upon the opposing party and the commissioner a notice to remove a hearing officer appointed by the commissioner. The notice shall be served and filed within two business days after the party receives notice of the appointment of the hearing officer by the commissioner, but not later than the commencement of the hearing.

No such notice may be filed by a party against a hearing officer who has presided at a motion or any other proceeding of which the party had notice. A hearing officer who has presided at a motion or other proceeding may not be removed except upon an affirmative showing of prejudice on the part of the hearing officer.

After the party has once disqualified a hearing officer as a matter of right, that party may disqualify the substitute hearing officer only by making an affirmative showing of prejudice or bias to the commissioner, or to the chief administrative law judge if the hearing officer is an administrative law judge.

Upon the filing of a notice to remove or if a party makes an affirmative showing of prejudice against a substitute hearing officer, the commissioner shall assign any other hearing officer to hear the matter.

If the hearing officer requests an independent educational assessment of a child, the cost of the assessment shall be at district expense. The proceedings shall be recorded and preserved, at the expense of the school district, pending ultimate disposition of the action.

(f) The decision of the hearing officer pursuant to clause 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 may exclude from the 45 calendar days the time required for mediation under paragraph (c) and 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 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 (g) paragraph (h); and also in the case of children birth through two, by the county board.

The local decision shall:

(1) be in writing;

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

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

(g) The hearing officer may require the resident school district to provide compensatory educational services to the child if the hearing officer finds that the school district has not offered or made available to the child a free appropriate public education in the child's educational program and that the child has suffered a loss of educational benefit. Such services shall take the form of direct and indirect special education and related services designed to address any loss of educational benefit that may have occurred. The hearing officer's finding shall be based on a present determination of whether the child has suffered a loss of educational benefit.

(g) (h) 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 note the specific parts of the hearing decision being appealed.

If the decision is appealed, a written transcript of the hearing shall be made by the school district and provided by the district to the parties involved and the hearing review officer within five calendar days of the filing of the appeal. The hearing review officer shall conduct an appellate review and issue a final independent decision based on an impartial review of the local decision and the entire record within 30 calendar days after the filing of the appeal. However, the hearing review officer shall seek additional evidence if necessary and may afford the parties an opportunity for written or


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

The final decision shall:

(1) be in writing;

(2) include findings and conclusions; and

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

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

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

(1) the individual must be knowledgeable and impartial;

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

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

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

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

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

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

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

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

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

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

(m) (n) 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.


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

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

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

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

Sec. 11. 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:

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

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

(c) When a child is temporarily placed in a residential program for care and treatment, the nonresident district in which the child is placed is responsible for providing an appropriate educational program for the child and necessary transportation while the child is attending the educational program; and shall bill the district of the child's residence for the actual cost of providing the program, as outlined in subdivision 4, except that the board, lodging, and treatment costs incurred in behalf of a child with a disability placed outside of the school district of residence by the commissioner of human services or the commissioner of corrections or their agents, for reasons other than for making provision for the child's special educational needs shall not become the responsibility of either the district providing the instruction or the district of the child's residence. For the purposes of this section, the state correctional facilities operated on a fee-for-service basis are considered to be residential programs for care and treatment.

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

Sec. 12. Minnesota Statutes 1996, section 120.17, subdivision 7, is amended to read:

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

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


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(b) When the educational needs of such child can be met through the institutional program, the costs for such instruction shall be paid by the department to which the institution is assigned with exception of children placed in fee-for-service facilities operated by the commissioner of corrections whose cost for such instruction shall be paid as outlined in subdivision 6.

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

(1) determination of eligibility for special instruction and services shall 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 responsible for providing transportation and an appropriate educational program for the child and shall make a tuition charge to the child's district of residence for the actual cost of providing the program;

(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 be paid by the district where the institution is located and the state shall pay transportation aid to that district.

Sec. 13. 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 under this section shall be denied provision of this instruction and service on a shared time basis consistent with section 124A.034, subdivision 2, because of attendance at attending a nonpublic school defined in section 123.932, subdivision 3. If a resident pupil with a disability attends a nonpublic school located within the district of residence, the district shall provide necessary transportation for that pupil within the district between the nonpublic school and the educational facility where special instruction and services are provided on a shared time basis. If a resident pupil with a disability attends a nonpublic school located in another district and if no agreement exists pursuant to under section 124A.034, subdivision 1 or 1a, for the provision of providing special instruction and services on a shared time basis to that pupil by the district of attendance and where the special instruction and services are provided within the district of residence, the district of residence shall provide necessary transportation for that pupil between the boundary of the district of residence and the educational facility. The district of residence may provide necessary transportation for that pupil between its boundary and the nonpublic school attended, but the nonpublic school shall pay the cost of transportation provided outside the district boundary.

Sec. 14. Minnesota Statutes 1996, section 120.17, subdivision 15, is amended to read:

Subd. 15. [THIRD PARTY PAYMENT.] (a) Nothing in this section relieves an insurer or similar third party from an otherwise valid obligation to pay, or changes the validity of an obligation to pay, for services rendered to a child with a disability, and the child's family. A school district may pay or reimburse copayments, coinsurance, deductibles, and other enrollee cost-sharing amounts, on behalf of the student or family, in connection with health and related services provided under an individual educational plan.

(b) Beginning July 1, 1999, districts shall seek reimbursement from insurers and similar third parties for the cost of services provided by the district whenever the services provided by the district are otherwise covered by the child's health coverage. Districts shall request, but may not require, the child's family to provide information about the child's health coverage when a child with a disability begins to receive services from the district of a type that may be reimbursable, and shall request, but may not require, updated information after that as needed. Districts shall request, but may not require, the child's parent or legal representative to sign a consent form, permitting the school district to apply for and receive reimbursement directly from the insurer or other similar third party, to the extent permitted by the insurer or other third party.

(c) Of the reimbursements received, districts may:

(1) retain an amount sufficient to compensate the district for its administrative costs of obtaining reimbursements;


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(2) regularly obtain from education- and health-related entities training and other appropriate technical assistance designed to improve the district's ability to determine which services are reimbursable and to seek timely reimbursement in a cost-effective manner; or

(3) reallocate reimbursements for the benefit of students with special needs in the district.

(d) To the extent required by federal law, a school district may not require parents of children with disabilities, if they would incur a financial cost, to use private or public health coverage to pay for the services that must be provided under an individual education plan.

(e) When obtaining informed consent, consistent with sections 13.05, subdivision 4, paragraph (d); and 256B.77, subdivision 2, paragraph (p), to bill health plans for covered services, the school district must notify the legal representative (1) that the cost of the person's health insurance premium may increase due to providing the covered service in the school setting, (2) that the school district may pay certain health plan expenses, health plan expenses include, but are not limited to, an enrollee's copayments, coinsurance, deductibles, monthly premium increases or other enrollee cost-sharing amounts for health and related services required by an individual service plan, or individual family service plan, and (3) that the school's billing for each type of covered service may affect service limits and prior authorization thresholds. The informed consent may be revoked in writing at any time by the person authorizing the billing of the health plan.

(f) To the extent required by federal law, no school district may withhold or delay any service that must be provided under an individual education plan because a family has refused to provide informed consent to bill a health plan for services or a health plan company has refused to pay any, all, or a portion of the cost of services billed.

(g) A school district may disclose information contained in a student's individual education plan, consistent with section 13.32, subdivision 3(a), including records of the student's diagnosis and treatment, to a health plan company only with the signed and dated consent of the student's parent, or other legally authorized individual. The school district shall disclose only that information necessary for the health plan company to decide matters of payment. A health plan company may use the information only for making decisions regarding payment, and any other use of the information and dissemination of the information is prohibited.

Sec. 15. Minnesota Statutes 1996, section 120.1701, subdivision 17, is amended to read:

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

(a) A parent may resolve a dispute regarding issues in subdivision 16, paragraph (b), clause (5), through mediation. If the parent chooses mediation, all public agencies involved in the dispute shall participate in the mediation process. The parent and the public agencies must complete the mediation process within 20 30 calendar days of the date the commissioner office of dispute resolution receives a parent's written request for mediation. The mediation process may not be used to delay a parent's right to a due process hearing. The resolution of the mediation is not binding on any party.

(b) Resolution of a dispute through mediation, or other form of alternative dispute resolution, is not limited to formal disputes arising from the objection of a parent or guardian and is not limited to the period following a request for a due process hearing.

(c) The commissioner shall provide training and resources to school districts to facilitate early identification of disputes and access to mediation.

(b) (d) 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. 16. Minnesota Statutes 1996, section 120.173, subdivision 1, is amended to read:

Subdivision 1. [COMMISSIONER APPROVAL.] The commissioner of children, families, and learning may approve applications from school districts to provide prevention services as an alternative to special education and other compensatory programs during three school years. A district with an approved program may provide instruction and


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services in a regular education classroom, or an area learning center, to eligible pupils. Pupils eligible to participate in the program are low-performing pupils who, based on documented experience, the professional judgment of a classroom teacher, or a team of licensed professionals, would eventually qualify for special education instruction or related services under section 120.17 if the intervention services authorized by this section were unavailable. Pupils may be provided services during extended school days and throughout the entire year and through the assurance of mastery program under section 124.3111.

Sec. 17. 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 United States Code, title 20, section 33, 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. 18. 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 be determined as provided in this section.

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

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

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

(d) When a pupil without a disability is temporarily placed in a residential program for care and treatment, the district in which the pupil is placed shall provide instruction for the pupil and necessary transportation while the pupil is receiving instruction, and in the case of a placement outside of the district of residence, the nonresident district shall bill the district of residence for the actual cost of providing the instruction for the regular school year and for summer school, excluding transportation costs. When a pupil without a disability is temporarily placed in a residential program outside the district of residence, the administrator of the court placing the pupil shall send timely written notice of the placement to the district of residence. The district of placement may contract with a residential facility to provide instruction by teachers licensed by the state board of teaching. For purposes of this section, the state correctional facilities operated on a fee-for-service basis are considered to be residential programs for care and treatment.

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


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Sec. 19. Minnesota Statutes 1996, section 123.935, subdivision 1, is amended to read:

Subdivision 1. [PROVIDED SERVICES.] The state board of education shall promulgate rules under the provisions of chapter 14 requiring each school district or other intermediary service area: (a) to provide each year upon formal request by a specific date by or on behalf of a nonpublic school pupil enrolled in a nonpublic school located in that district or area, the same specific health services as are provided for public school pupils by the district where the nonpublic school is located; and (b) to provide each year upon formal request by a specific date by or on behalf of a nonpublic school secondary pupil enrolled in a nonpublic school located in that district or area, the same specific guidance and counseling services as are provided for public school secondary pupils by the district where the nonpublic school is located. The district where the nonpublic school is located shall provide the necessary transportation within the district boundaries between the nonpublic school and a public school or neutral site for nonpublic school pupils who are provided pupil support services pursuant to under this section if the district elects to provide pupil support services at a site other than the nonpublic school. Each request for pupil support services shall set forth the guidance and counseling or health services requested by or on behalf of all eligible nonpublic school pupils enrolled in a given nonpublic school. No district or intermediary service area shall expend an amount for these pupil support services which exceeds the amount allotted to it under this section.

Sec. 20. Minnesota Statutes 1996, section 123.935, subdivision 2, is amended to read:

Subd. 2. [LOCATION OF SERVICES.] Health and guidance and counseling services may be provided to nonpublic school pupils pursuant to under this section at a public school, a neutral site, the nonpublic school or any other suitable location. Guidance and counseling services may be provided to nonpublic school pupils pursuant to this section only at a public school or a neutral site. District or intermediary service area personnel and representatives of the nonpublic school pupils receiving pupil support services shall hold an annual consultation regarding the type of services, provider of services, and the location of the provision of these services. The district board or intermediary service area governing board shall make the final decision on the location of the provision of these services.

Sec. 21. Minnesota Statutes 1996, section 124.17, subdivision 2, is amended to read:

Subd. 2. [AVERAGE DAILY MEMBERSHIP.] Membership for pupils in grades kindergarten through 12 and for prekindergarten pupils with disabilities shall mean the number of pupils on the current roll of the school, counted from the date of entry until withdrawal. The date of withdrawal shall mean the day the pupil permanently leaves the school or the date it is officially known that the pupil has left or has been legally excused. However, a pupil, regardless of age, who has been absent from school for 15 consecutive school days during the regular school year or for five consecutive school days during summer school or intersession classes of flexible school year programs without receiving instruction in the home or hospital shall be dropped from the roll and classified as withdrawn. Nothing in this section shall be construed as waiving the compulsory attendance provisions cited in section 120.101. Average daily membership shall equal the sum for all pupils of the number of days of the school year each pupil is enrolled in the district's schools divided by the number of days the schools are in session. Days of summer school or intersession classes of flexible school year programs shall only be included in the computation of membership for pupils with a disability not appropriately served at level 4, 5, or 6 of the continuum of placement model described in Minnesota Rules, part 3525.0200 primarily in the regular classroom.

Sec. 22. Minnesota Statutes 1997 Supplement, section 124.3111, subdivision 2, is amended to read:

Subd. 2. [ELIGIBLE PUPILS.] A pupil is eligible to receive services through an assurance of mastery program if the pupil has not demonstrated progress toward mastering the required graduation standards, after receiving instruction that was designed to enable the pupil to make progress toward mastering the required graduation standards in a regular classroom setting. A pupil also is eligible to receive services through an assurance of mastery program if the pupil, based on the professional judgment of a classroom teacher or a team of licensed professionals, demonstrates a need for alternative instructional strategies or interventions. To determine pupil eligibility, a district must use a process adopted by the school board to review curriculum and instruction, for the subjects and at the grade level at which the district uses the revenue.


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Sec. 23. Minnesota Statutes 1997 Supplement, section 124.3111, subdivision 3, is amended to read:

Subd. 3. [ELIGIBLE SERVICES.] (a) Assurance of mastery programs may provide direct instructional services to an eligible pupil, or a group of eligible pupils, under the following conditions in paragraphs (b) to (d) (e).

(b) Instruction may be provided at one or more grade levels from kindergarten to grade 8 and for students in grades 9 through 12 who have failed the basic skills tests. If an assessment of pupils' needs within a district demonstrates that the eligible pupils in grades kindergarten to grade 8 are being appropriately served, a district may serve eligible pupils in grades 9 to 12.

(c) Instruction must be provided under the supervision of the eligible pupil's regular classroom teacher. Instruction may be provided by the eligible pupil's classroom teacher, by another teacher, by a team of teachers, or by an education assistant or aide. A special education teacher may provide instruction, but instruction that is provided under this section is not eligible for aid under section 124.3201.

(d) The instruction that is provided must differ from the initial instruction the pupil received in the regular classroom setting. The instruction may differ by presenting different curriculum than was initially presented in the regular classroom or by presenting the same curriculum:

(1) at a different rate or in a different sequence than it was initially presented;

(2) using different teaching methods or techniques than were used initially; or

(3) using different instructional materials than were used initially.

(e) Instruction must focus on preventive measures that meet students' individual needs.

Sec. 24. Minnesota Statutes 1996, section 124.32, is amended by adding a subdivision to read:

Subd. 13. [LITIGATION AND HEARING COSTS.] (a) For fiscal year 1999 and thereafter, the commissioner of children, families, and learning, or the commissioner's designee, shall use federal funds to reimburse school districts for the administrative costs of a due process hearing incurred under section 120.17, subdivision 3b, paragraphs (e), (h), and (i), including hearing officer fees, court reporter fees, mileage costs, transcript costs, and rental of hearing rooms, but not including district legal or attorney fees. In order to receive federal aid under this paragraph, a school district shall submit to the commissioner at the end of each school year itemized actual costs for fees and other expenses under this paragraph. Federal funds used for aid to school districts under this paragraph shall be based on costs districts submitted during the previous school year.

(b) For fiscal year 1999 and thereafter, a school district, to the extent to which it prevails as prescribed by Rule 68 of the Federal Rules of Civil Procedure, shall receive state aid for litigation costs incurred after a request for a due process hearing is served upon the parties based on 50 percent of the costs associated with a due process hearing under section 120.17, subdivision 3b, paragraphs (e), (h), and (i), not covered under paragraph (a), including hearing officer fees, court reporter fees, expert witness fees, mileage costs, transcript costs, cost of outside evaluations ordered by the hearing officer, rental of hearing rooms, and district legal or attorney fees. No more than 60 percent of the aid a school district receives under this paragraph shall be for the costs of district legal or attorney fees, which shall be available only if the district can satisfactorily demonstrate to the commissioner that it is the prevailing party under Rule 68 of the Federal Rules of Civil Procedure, and the district has made a good faith effort to resolve the dispute through mediation. To receive aid under this paragraph, a school district shall submit to the commissioner at the end of each school year itemized actual costs associated with due process hearing and indicate those costs for which federal funds are available under paragraph (a). Aid under this paragraph for each school district is based on costs submitted from the previous school year.

Sec. 25. Minnesota Statutes 1997 Supplement, section 124.3201, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For the purposes of this section and section 124.321, the definitions in this subdivision apply.


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(a) "Base year" for fiscal year 1998 2000 and later fiscal years means the second fiscal year preceding the fiscal year for which aid will be paid.

(b) "Basic revenue" has the meaning given it in section 124A.22, subdivision 2. For the purposes of computing basic revenue pursuant to this section, each child with a disability shall be counted as prescribed in section 124.17, subdivision 1.

(c) "Essential personnel" means teachers, related services, and support services staff providing direct services to students.

(d) "Average daily membership" has the meaning given it in section 124.17.

(e) "Program growth factor" means 1.00 for fiscal year 2000 and later.

(f) "Aid percentage factor" means 60 percent for fiscal year 1996, 70 percent for fiscal year 1997, 80 percent for fiscal year 1998, 90 percent for fiscal year 1999, and 100 percent for fiscal years 2000 and later.

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

Sec. 26. Minnesota Statutes 1997 Supplement, section 124.3201, subdivision 2, is amended to read:

Subd. 2. [SPECIAL EDUCATION BASE REVENUE.] (a) The special education base revenue equals the sum of the following amounts computed using base year data:

(1) 68 percent of the salary of each essential person employed in the district's program for children with a disability during the regular school fiscal year, whether the person is employed by one or more districts or a Minnesota correctional facility operating on a fee-for-service basis;

(2) for the Minnesota state academy for the deaf or the Minnesota state academy for the blind, 68 percent of the salary of each instructional aide assigned to a child attending the academy, if that aide is required by the child's individual education plan;

(3) for special instruction and services provided to any pupil by contracting with public, private, or voluntary agencies other than school districts, in place of special instruction and services provided by the district, 52 percent of the difference between the amount of the contract and the basic revenue of the district for that pupil for the fraction of the school day the pupil receives services under the contract;

(4) for special instruction and services provided to any pupil by contracting for services with public, private, or voluntary agencies other than school districts, that are supplementary to a full educational program provided by the school district, 52 percent of the amount of the contract for that pupil;

(5) for supplies and equipment purchased or rented for use in the instruction of children with a disability an amount equal to 47 percent of the sum actually expended by the district, or a Minnesota correctional facility operating on a fee-for-service basis, but not to exceed an average of $47 in any one school year for each child with a disability receiving instruction;

(6) for fiscal years 1997 and later, special education base revenue shall include amounts under clauses (1) to (5) for special education summer programs provided during the base year for that fiscal year; and

(7) for fiscal years 1999 and later, the cost of providing transportation services for children with disabilities under section 124.225, subdivision 1, paragraph (b), clause (4).

(b) If requested by a school district operating a special education program during the base year for less than the full school fiscal year, or a school district in which is located a Minnesota correctional facility operating on a fee-for-service basis for less than the full fiscal year, the commissioner may adjust the base revenue to reflect the expenditures that would have occurred during the base year had the program been operated for the full school fiscal year.


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(c) Notwithstanding paragraphs (a) and (b), the portion of a school district's base revenue attributable to a Minnesota correctional facility operating on a fee-for-service basis during the facilities first year of operating on a fee-for-service basis shall be computed using current year data.

Sec. 27. Minnesota Statutes 1997 Supplement, section 124.3201, subdivision 4, is amended to read:

Subd. 4. [STATE TOTAL SPECIAL EDUCATION REVENUE.] (a) The state total special education revenue for fiscal year 1998 equals $358,542,000. The state total special education revenue for fiscal year 1999 equals $435,322,000. The state total special education revenue for later fiscal years equals:

(1) the state total special education revenue for the preceding fiscal year; times

(2) the program growth factor; times

(3) the ratio of the state total average daily membership for the current fiscal year to the state total average daily membership for the preceding fiscal year.

(b) For fiscal years 2000 and later, the commissioner shall increase the state total special education revenue amount by the amount of any decrease in the excess cost aid program due to eliminating the two-year lag under subdivision 1.

Sec. 28. 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.

(c) If the state special education base revenue is not known during the current year, the department of children, families, and learning shall initially calculate school district special education revenue based on 95 percent of the state total special education revenue established in subdivision 4 until the special education base revenue is known.

Sec. 29. Minnesota Statutes 1996, section 124.323, is amended by adding a subdivision to read:

Subd. 4. [TUITION.] Notwithstanding section 120.17, for children who are nonresidents of Minnesota, receive services under section 124.3201, subdivisions 1 and 2, and are placed in the serving school district by court action, the serving school district shall submit unreimbursed tuition bills for eligible services to the department of children, families, and learning instead of the resident school district. To be eligible for reimbursement, the serving school district, as part of its child intake procedures, must demonstrate good faith effort to obtain from the placing agency a financial commitment to pay tuition costs.

Sec. 30. Minnesota Statutes 1996, section 124.323, is amended by adding a subdivision to read:

Subd. 5. [COURT-PLACED SPECIAL EDUCATION REVENUE.] For purposes of reimbursing serving school districts under subdivision 4, $300,000 is annually appropriated from the general fund to the commissioner of children, families, and learning for unreimbursed eligible expenditures attributable to children who have been placed in the serving school district by court action.


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Sec. 31. Minnesota Statutes 1996, section 124A.034, subdivision 2, is amended to read:

Subd. 2. [LOCATION OF SERVICES.] (a) Public school programs that provide instruction in core curriculum may be provided to shared time pupils only at a public school building; provided, however, that special instruction and services for children with a disability required pursuant to section 120.17 may also be provided at a neutral site as defined in section 123.932, public school programs, excluding programs that provide instruction in core curriculum, may be provided to shared time pupils at a public school building, a neutral site, the nonpublic school, or any other suitable location. Guidance and counseling and diagnostic and health services required pursuant to under section 120.17 may also be provided at a nonpublic school building. As used in this subdivision, "diagnostic services" means speech, hearing, vision, psychological, medical and dental diagnostic services and "health services" means physician, nursing or optometric services provided to pupils in the field of physical and mental health.

(b) For those children with a disability under section 120.17 who attend nonpublic school and for whom a free and appropriate education is available at a public school, a school district may provide special instruction and services at the nonpublic school building only to the extent required under the Individuals with Disabilities Education Act, Public Law Number 105-17, as amended. A school district may provide special instruction and services for such children at a neutral site as defined in section 123.932, subdivision 9.

Sec. 32. Minnesota Statutes 1996, section 124A.036, subdivision 1a, is amended to read:

Subd. 1a. [REPORTING; REVENUE FOR HOMELESS.] For all school purposes, unless otherwise specifically provided by law, a homeless pupil must be considered is a resident of the school district that enrolls the pupil in which the homeless shelter or other program, center, or facility assisting the homeless pupil or the pupil's family is located.

Sec. 33. Minnesota Statutes 1996, section 124A.036, is amended by adding a subdivision to read:

Subd. 1b. [REVENUE FOR CHILDREN OF DIVORCED PARENTS.] (a) In those instances when the divorced parents share joint physical custody of the child and the divorced parents reside in different school districts, for all school purposes, unless otherwise specifically provided by law, the child must be considered a resident of the school district in which the child resides for the majority of the school year, as indicated by the child's parents.

(b) When the child of divorced parents under paragraph (a) resides with each parent on alternate weeks, the parents shall transport the child to the border of the resident school district during those weeks when the child resides in the nonresident school district.

Sec. 34. Minnesota Statutes 1996, section 124A.036, subdivision 4, is amended to read:

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 is not the child's district of residence or to place a pupil who is a parent under section 120.101, subdivision 3, in a school district which is not the school district in which the pupil's biological or adoptive parent or designated guardian resides, that agency or court shall, prior to 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 the placement, the agency or court may make the decision and placement without that participation or prior notice. The agency or court shall 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.

Sec. 35. Minnesota Statutes 1996, section 124C.45, subdivision 2, is amended to read:

Subd. 2. [ACCESS TO SERVICES.] A center shall have access to the district's regular education programs, special education programs, technology facilities, and staff. It may contract with individuals or post-secondary institutions. It shall seek the involvement of community education programs, post-secondary institutions, interagency collaboratives, community resources, businesses, and other federal, state, and local public agencies.


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Sec. 36. Minnesota Statutes 1997 Supplement, section 124C.46, subdivision 1, is amended to read:

Subdivision 1. [PROGRAM FOCUS.] (a) The programs and services of a center must focus on academic and learning skills, applied learning opportunities, trade and vocational skills, work-based learning opportunities, work experience, youth service to the community, and transition services. Applied learning, work-based learning, and service learning may best be developed in collaboration with a local education and transitions partnership. In addition to offering programs, the center shall coordinate the use of other available educational services, special education services, social services, health services, and post-secondary institutions in the community and services area.

(b) Consistent with the requirements of sections 127.26 to 127.39, a school district may provide an alternative education program for a student who is within the compulsory attendance age under section 120.06 and who is involved in severe or repeated disciplinary action.

(c) Area learning centers are encouraged to offer extended-day and extended-year programs to pupils who are at risk of not meeting state graduation standards.

Sec. 37. Minnesota Statutes 1997 Supplement, section 124C.46, subdivision 2, is amended to read:

Subd. 2. [PEOPLE TO BE SERVED.] A center shall provide programs for secondary pupils and adults. A center may also provide programs and services for elementary and secondary pupils who are not attending the center to assist them in being successful in school. An individual education plan team may identify a center as an appropriate placement to the extent a center can provide the student with the appropriate special education services described in the student's plan. Pupils eligible to be served are those age five to adults 21 22 and older who qualify under the graduation incentives program in section 126.22, subdivision 2, or those pupils who are eligible to receive special education services under section 120.17.

Sec. 38. Minnesota Statutes 1996, section 124C.47, is amended to read:

124C.47 [RESOURCE CENTER FOR OTHER PROGRAMS.]

An area learning center must serve as a resource for other districts, educational, community, and business organizations. The center may charge a fee for these services. The following services shall be provided for a region or the state:

(1) information and research for alternative programs;

(2) regional or state workshops on awareness, identification, programs, and support for these pupils; and

(3) recommendations for staff qualifications to ensure the most qualified staff can be selected for the programs; and

(4) recommendations for successful learning programs for special education students placed in an alternative setting.

Sec. 39. Minnesota Statutes 1996, section 124C.48, is amended by adding a subdivision to read:

Subd. 3. [SPECIAL EDUCATION REVENUE.] Payment of special education revenue for nonresident pupils enrolled in the center must be made according to section 120.17, subdivision 6.

Sec. 40. Minnesota Statutes 1996, section 126.237, is amended to read:

126.237 [ALTERNATE INSTRUCTION REQUIRED.]

(a) Before a pupil is referred for a special education assessment, the district must conduct and document at least two instructional strategies, alternatives, or interventions while the pupil is in the regular classroom. The pupil's teacher must provide the documentation. A special education assessment team may waive this requirement when they determine the pupil's need for the assessment is urgent. This section may not be used to deny a pupil's right to a special education assessment.


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(b) A school district shall adopt procedures for using alternative intervention services, including the assurance of mastery program under section 124.3111 and the first grade preparedness program under section 124.2613, to serve at-risk students who demonstrate a need for alternative instructional strategies or interventions.

Sec. 41. Minnesota Statutes 1996, section 127.27, subdivision 2, is amended to read:

Subd. 2. [DISMISSAL.] "Dismissal" means the denial of the appropriate current educational program to any pupil, including exclusion, expulsion, and suspension. It does not include removal from class.

Sec. 42. Minnesota Statutes 1996, section 127.27, subdivision 4, is amended to read:

Subd. 4. [EXCLUSION.] "Exclusion" means an action taken by the school board to prevent enrollment or reenrollment of a pupil for a period that shall not extend beyond the end of the current school year.

Sec. 43. Minnesota Statutes 1997 Supplement, section 127.27, subdivision 10, is amended to read:

Subd. 10. [SUSPENSION.] "Suspension" means an action by the school administration, under rules promulgated by the school board, prohibiting a pupil from attending school for a period of no more than ten school days. If a suspension is longer than five days, the suspending administrator must provide the superintendent with a reason for the longer suspension. This definition does not apply to dismissal from school for one school day or less, except as provided in federal law for a student with a disability. Each suspension action shall may include a readmission plan. The readmission plan shall include, where appropriate, a provision for implementing alternative educational services upon readmission and may not be used to extend the current suspension. The school administration may not impose consecutive suspensions against the same pupil for the same course of conduct, or incident of misconduct, except where the pupil will create an immediate and substantial danger to self or to surrounding persons or property, or where the district is in the process of initiating an expulsion, in which case the school administration may extend the suspension up to a total of 15 days. In the case of a pupil with a disability, a suspension may not exceed ten school days school districts must comply with applicable federal law. The school administration shall implement alternative educational services to the extent that when the suspension exceeds five ten days. A separate administrative conference is required for each period of suspension.

Sec. 44. Minnesota Statutes 1997 Supplement, section 127.27, subdivision 11, is amended to read:

Subd. 11. [ALTERNATIVE EDUCATIONAL SERVICES.] "Alternative educational services" may include, but are not limited to, special tutoring, modified curriculum, modified instruction, other modifications or adaptations, instruction through electronic media, special education services as indicated by appropriate assessment, homebound instruction, supervised homework, or enrollment in another district or in an alternative learning center under section 124C.45 selected to allow the pupil to progress toward meeting graduation standards under section 121.11, subdivision 7c, although in a different setting.

Sec. 45. Minnesota Statutes 1997 Supplement, section 127.281, is amended to read:

127.281 [EXCLUSION AND EXPULSION OF PUPILS WITH A DISABILITY.]

When a pupil who has an individual education plan is excluded or expelled under sections 127.26 to 127.39 for misbehavior that is not a manifestation of the pupil's disability, the district shall continue to provide special education and related services after a period of suspension, if suspension is imposed. The district shall initiate a review of the individual education plan within five ten school days of commencing an expulsion, exclusion, or a suspension.

Sec. 46. Minnesota Statutes 1997 Supplement, section 127.31, subdivision 15, is amended to read:

Subd. 15. [ADMISSION OR READMISSION PLAN.] A school administrator shall prepare and enforce an admission or readmission plan for any pupil who is suspended, excluded, or expelled from school. The plan may include measures to improve the pupil's behavior and require parental involvement in the admission or readmission process, and may indicate the consequences to the pupil of not improving the pupil's behavior.


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Sec. 47. Minnesota Statutes 1997 Supplement, section 127.32, is amended to read:

127.32 [APPEAL.]

A party to an exclusion or expulsion decision made under sections 127.26 to 127.39 may appeal the decision to the commissioner of children, families, and learning within 21 calendar days of school board action. Upon being served with a notice of appeal, the district shall provide the commissioner and the parent or guardian with a complete copy of the hearing record within five days of its receipt of the notice of appeal. All written submissions by the appellant must be submitted and served on the respondent within ten days of its actual receipt of the transcript. All written submissions by the respondent must be submitted and served on the appellant within ten days of its actual receipt of the written submissions of the appellant. The decision of the school board must be implemented during the appeal to the commissioner.

In an appeal under this section, the commissioner may affirm the decision of the agency, may remand the decision for additional findings, or may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) in violation of constitutional provisions;

(2) in excess of the statutory authority or jurisdiction of the school district;

(3) made upon unlawful procedure, except as provided in section 127.311;

(4) affected by other error of law;

(5) unsupported by substantial evidence in view of the entire record submitted; or

(6) arbitrary or capricious.

The commissioner or the commissioner's representative shall make a final decision based upon the record of evidence presented at the hearing. The commissioner shall issue a decision within 30 calendar days of receiving the entire record and the parties' written submission on appeal. The commissioner's decision shall be final and binding upon the parties after the time for appeal expires under section 127.33.

Sec. 48. Minnesota Statutes 1997 Supplement, section 127.36, subdivision 1, is amended to read:

Subdivision 1. [EXCLUSIONS AND EXPULSIONS.] The school board shall report each exclusion or expulsion within 30 days of the effective date of the action to the commissioner of children, families, and learning. This report shall include a statement of alternative educational services given the pupil before beginning exclusion or expulsion proceedings, and the reason for, the effective date, and the duration of the exclusion or expulsion.

Sec. 49. Minnesota Statutes 1997 Supplement, section 127.38, is amended to read:

127.38 [POLICIES TO BE ESTABLISHED.]

(a) The commissioner of children, families, and learning shall promulgate guidelines to assist each school board. Each school board shall establish uniform criteria for dismissal and adopt written policies and rules to effectuate the purposes of sections 127.26 to 127.39. The policies shall emphasize preventing dismissals through early detection of problems and shall be designed to address students' inappropriate behavior from recurring. The policies shall recognize the continuing responsibility of the school for the education of the pupil during the dismissal period. The alternative educational services, if the pupil wishes to take advantage of them, must be adequate to allow the pupil to make progress towards meeting the graduation standards adopted under section 121.11, subdivision 7c, and, at a minimum, appropriate to the grade level the pupil would have been enrolled in if the pupil had not been dismissed, and help prepare the pupil for readmission.


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(b) An area learning center under section 124C.45 may not prohibit an expelled or excluded pupil from enrolling solely because a district expelled or excluded the pupil. The board of the area learning center may use the provisions of The Pupil Fair Dismissal Act to exclude a pupil or to require an admission plan.

(c) The commissioner shall actively encourage and assist school districts to cooperatively establish alternative educational services within school buildings or at alternative program sites that offer instruction to pupils who are dismissed from school for willfully engaging in dangerous, disruptive, or violent behavior, including for possessing a firearm in a school zone.

Sec. 50. Minnesota Statutes 1996, section 256B.0625, subdivision 26, is amended to read:

Subd. 26. [SPECIAL EDUCATION SERVICES.] Medical assistance covers medical services identified in a recipient's individualized education plan and covered under the medical assistance state plan. The services may be provided by a Minnesota school district that is enrolled as a medical assistance provider or its subcontractor, and only if the services meet all the requirements otherwise applicable if the service had been provided by a provider other than a school district, in the following areas: medical necessity, physician's orders, documentation, personnel qualifications, and prior authorization requirements. Services of a speech-language pathologist provided under this section are covered notwithstanding Minnesota Rules, part 9505.0390, subpart 1, item L, if the person:

(1) holds a masters degree in speech-language pathology;

(2) is licensed by the Minnesota board of teaching as an educational speech-language pathologist; and

(3) either has a certificate of clinical competence from the American Speech and Hearing Association, has completed the equivalent educational requirements and work experience necessary for the certificate or has completed the academic program and is acquiring supervised work experience to qualify for the certificate. Medical assistance coverage for medically necessary services provided under other subdivisions in this section may not be denied solely on the basis that the same or similar services are covered under this subdivision.

Sec. 51. Laws 1997, First Special Session chapter 4, article 2, section 51, subdivision 2, is amended to read:

Subd. 2. [AMERICAN INDIAN LANGUAGE AND CULTURE PROGRAMS.] For grants to American Indian language and culture education programs according to Minnesota Statutes, section 126.54, subdivision 1:

$591,000 . . . . . 1998

$591,000 $716,000 . . . . . 1999

The 1998 appropriation includes $59,000 for 1997 and $532,000 for 1998.

The 1999 appropriation includes $59,000 for 1998 and $532,000 $657,000 for 1999.

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

Sec. 52. Laws 1997, First Special Session chapter 4, article 2, section 51, subdivision 4, is amended to read:

Subd. 4. [AMERICAN INDIAN POST-SECONDARY PREPARATION GRANTS.] For American Indian post-secondary preparation grants according to Minnesota Statutes, section 124.481:

$857,000 . . . . . 1998

$857,000 $982,000 . . . . . 1999

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


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Sec. 53. Laws 1997, First Special Session chapter 4, article 2, section 51, subdivision 5, is amended to read:

Subd. 5. [AMERICAN INDIAN SCHOLARSHIPS.] For American Indian scholarships according to Minnesota Statutes, section 124.48:

$1,600,000 . . . . . 1998

$1,600,000 $1,725,000 . . . . . 1999

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

Sec. 54. [RULES AFFECTING SPECIAL EDUCATION INSTRUCTION AND SERVICES.]

(a) The state board of education must amend all rules relating to providing special instruction and services to children with a disability so that the rules do not impose requirements that exceed federal law. The state board, with the assistance of the department of children, families, and learning, shall provide a written report to the education committees of the legislature by January 1, 1999, identifying and explaining those state special education rules that exceed federal special education requirements by improving services or efficiency or reducing state or district costs. The state board may use the expedited process under Minnesota Statutes, section 14.389, to amend these rules.

(b) As of July 1, 1999, any rules relating to providing special instruction and services to children with a disability are invalid to the extent they exceed the requirements in federal law unless a law is enacted before July 1, 1999, indicating the intent of the state to exceed one or more federal requirements.

Sec. 55. [GRANTS TO IMPLEMENT CONSTRUCTIVE SCHOOL DISCIPLINE POLICIES.]

Subdivision 1. [ESTABLISHMENT.] A grant program for fiscal year 1999 is established to develop, implement, and evaluate school discipline policies, consistent with the Pupil Fair Dismissal Act of 1974 under Minnesota Statutes, sections 127.26 to 127.39 and 127.40 to 127.48. Discipline policies developed under this section should be designed to enable students to successfully return to the regular classroom setting after being disciplined for misbehavior. Discipline policies should focus on early intervention strategies that limit the need to provide regular education students with additional special programs or services.

Subd. 2. [ELIGIBILITY.] An applicant for a grant must be a school site, school district, charter school, or provider of an alternative education program. To be eligible for a grant, the grant applicant must meet all of the following criteria:

(1) develop a plan to establish a school site mediation board under Minnesota Statutes, sections 127.411 to 127.42, to mediate issues relating to district or school site codes of conduct that apply to regular and special education students;

(2) include in the code of conduct a plan to remove from the regular classroom setting those students who violate the code;

(3) provide students who violate the code with an alternative education setting within the school or program site; and

(4) make the alternative education setting a constructive experience by using instructional materials tied to educational standards, placing students in an alternative setting outside the normal school day, involving parents in effecting discipline, or developing intervention techniques such as timeouts, among other alternatives.

Subd. 3. [APPLICATION PROCESS.] To obtain a grant to implement constructive school discipline policies, a grant applicant must submit an application to the commissioner of children, families, and learning in the form and manner the commissioner establishes. The application must describe how the applicant will meet the eligibility criteria under subdivision 2. The commissioner may require the applicant to provide additional information.


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Subd. 4. [GRANT AWARDS.] The commissioner may award up to five grants of up to $50,000. Grant recipients must be located throughout the state and have diverse experiences with student disciplinary matters. The amount of the grant shall be based on the number of students the grant recipient anticipates will be disciplined and on the alternative education settings the grant recipient proposes to use. Grant recipients must use the grant proceeds to accomplish the purposes of this section.

Subd. 5. [EVALUATION.] The commissioner shall evaluate the grant sites and selected control sites to determine the impact of the constructive discipline policy grant program on measures of student behavior and performance, including at least, student achievement and attendance, and the impact of the program on the school site, student body, classroom, and school faculty. The evaluation must also address the financial impact of the program on the district and the school site. Upon implementing a student code of conduct consistent with this section, the grant recipient must cooperate in evaluating the impact of code policies. As a part of the evaluation process, the grant recipient must document student and parent response to code policies over at least a three-year period. The commissioner shall compile for the education committees of the legislature a progress report by February 1, 1999, and a final report by February 1, 2001, on the effectiveness and impact of discipline policies.

Sec. 56. [SPEECH-LANGUAGE PATHOLOGISTS.]

The board of teaching shall allow individuals who hold a certificate of clinical competence from the American Speech-Language-Hearing Association to be licensed as speech-language pathologists.

Sec. 57. [BOARD OF TEACHING; RULE CHANGES; SPEECH-LANGUAGE SERVICES.]

The board of teaching, in order to comply with section 56, shall by rule allow individuals who hold a certificate of clinical competence from the American Speech-Language-Hearing Association to be licensed as speech-language pathologists.

Sec. 58. [SPECIAL EDUCATION BASE ADJUSTMENT; ROCHESTER.]

Special education base revenue for independent school district No. 535, Rochester, is increased by $150,000 per year for fiscal years 1998 and 1999 to reflect the increased special education costs associated with the opening of a new facility for juvenile offenders in Olmsted county.

Sec. 59. [REPORT TO COMPARE FEDERAL AND STATE SPECIAL EDUCATION LAW.]

The commissioner of children, families, and learning shall prepare a report comparing existing and currently proposed federal laws and regulations and state laws and rules governing special education, indicating those state laws and rules governing special education that exceed or expand upon minimum requirements under federal special education law or regulations and the rationale for the state to exceed or expand upon those federal requirements. The commissioner shall make the report available to the public, the education committees of the legislature, and the state board by September 30, 1998, for consideration in amending state rules under section 54.

Sec. 60. [APPROPRIATIONS.]

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

Subd. 2. [CONSTRUCTIVE SCHOOL DISCIPLINE POLICIES.] For grants to develop, implement, and evaluate school discipline policies under section 55:

$250,000 . . . . . 1999

Grant recipients may expend grant proceeds over a three-year period. Of this amount, $13,500 is for performing an evaluation.


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Subd. 3. [STATEWIDE THIRD-PARTY BILLING SYSTEM; ASSISTANCE.] For developing and implementing an effective and efficient statewide third-party billing system under section 2:

$200,000 . . . . . 1999

Funds remain available until expended.

Subd. 4. [LITIGATION COSTS.] For paying 50 percent of the litigation costs a district actually incurs under section 24, paragraph (b):

$300,00 . . . . . 1999

If the amount appropriated is insufficient to fully fund the aid for hearing and litigation costs under Minnesota Statutes, section 124.32, subdivision 13, paragraph (b), the commissioner shall prorate the appropriation to school districts based on the amount of aid calculated for each district.

Subd. 5. [PROVIDING TECHNICAL ASSISTANCE.] For department staff to provide technical assistance and training to school districts and cooperative units under section 2:

$50,000 . . . . . 1999

Subd. 6. [COURT-PLACED SPECIAL EDUCATION REVENUE.] For reimbursing serving school districts for unreimbursed eligible expenditures attributable to children placed in the serving school district by court action under Minnesota Statutes, section 124.323:

$300,000 . . . . . 1999

Sec. 61. [PROVIDING TECHNICAL ASSISTANCE.]

$50,000 is appropriated in fiscal year 1999 from the general fund to the commissioner of human services to provide technical assistance and training under section 2.

Sec. 62. [REPEALER.]

Minnesota Rules, part 3525.2750, subpart 1, item B, is repealed.

Sec. 63. [EFFECTIVE DATE.]

Sections 9, 22, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, and 58 are effective the day following final enactment.

ARTICLE 3

INTERAGENCY SERVICES AND LIFELONG LEARNING

Section 1. 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 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;


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(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.

(e) "Early intervention services" means services provided in conformity with an individualized family service plan that are designed to meet the special developmental needs of a child eligible under Code of Federal Regulations, title 34, part 303, and the needs of the child's family related to enhancing the child's development and that are selected in collaboration with the parent. These services include core early intervention services and additional early intervention services listed in subdivision 4 and services defined in Code of Federal Regulations, title 34, section 303, et seq.

(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.


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(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) "Natural environments" means the child's home and community settings in which children without disabilities participate.

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

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

(o) (p) "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) (q) "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).

(q) (r) "Surrogate parent" means a person appointed by the local education agency to assure that the rights of the child to early intervention services are protected. A person cannot be a surrogate parent to a child for whom the person provides early intervention services.

Sec. 2. 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 be appointed by the governor. Council members shall elect the council chair. The representative of the commissioner of children, families, and learning may not serve as the chair. The council shall 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, local Head Start 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 a representative from the state agency responsible for child care, 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 meet at least quarterly.

The council shall 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.


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Each year by June 1, the council shall 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 on June 30, 2001.

Sec. 3. 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 establish an interagency early intervention committee for children with disabilities under age five and their families under this section, and for children with disabilities ages three to 22 consistent with the requirements under sections 120.1703 and 120.1705. Committees shall 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 and school nurses. The committee shall elect a chair from among its members and shall meet at least quarterly.

(b) The committee shall 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 to develop individual family service plans for children with disabilities, age three and older;

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

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

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

(8) 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

(9) develop a policy that is consistent with section 13.05, subdivision 9, and federal law to enable a member of an interagency early intervention committee to allow another member access to data classified as not public.

(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;


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(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. 4. 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 establish maintain 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 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. 5. Minnesota Statutes 1996, section 120.1701, subdivision 17, is amended to read:

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

(a) A parent may resolve a dispute regarding issues in subdivision 16, paragraph (b), clause (5), through mediation. If the parent chooses mediation, all public agencies involved in the dispute shall participate in the mediation process. The parent and the public agencies must complete the mediation process within 20 calendar days of the date the commissioner receives a parent's written request for mediation. The mediation process may not be used to delay a parent's right to a due process hearing. The resolution of the mediation is not binding on any party.

(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. 6. [120.1703] [COORDINATED INTERAGENCY SERVICES.]

Subdivision 1. [CITATION.] Sections 120.1703 and 120.1705 shall be cited as the "Interagency Services for Children with Disabilities Act."

Subd. 2. [PURPOSE.] It is the policy of the state to develop and implement a coordinated, multidisciplinary, interagency intervention service system for children ages three to 22 with disabilities.

Subd. 3. [DEFINITIONS.] For purposes of sections 120.1703 and 120.1705, the following terms have the meanings given them:

(a) "Health plan" means:

(1) a health plan under section 62Q.01, subdivision 3;

(2) a county-based purchasing plan under section 256B.692;


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(3) a self-insured health plan established by a local government under section 471.617; or

(4) self-insured health coverage provided by the state to its employees or retirees.

(b) For purposes of this section, "health plan company" means an entity that issues a health plan as defined in paragraph (a).

(c) "Individual interagency intervention plan" means a standardized written plan describing those programs or services and the accompanying funding sources available to eligible children with disabilities.

(d) "Interagency intervention service system" means a system that coordinates services and programs required in state and federal law to meet the needs of eligible children with disabilities ages three to 22, including:

(1) services provided under the following programs or initiatives administered by state or local agencies:

(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 under United States Code, title 20, chapter 33, subchapter II, sections 1411 to 1420;

(iii) medical assistance under the Social Security Act, United States Code, title 42, chapter 7, subchapter XIX, section 1396, et seq.;

(iv) the Developmental Disabilities Assistance and Bill of Rights Act, United States Code, title 42, chapter 75, subchapter II, sections 6021 to 6030, Part B;

(v) the Head Start Act, United States Code, title 42, chapter 105, subchapter II, sections 9831 to 9852;

(vi) rehabilitation services provided under chapter 268A;

(vii) juvenile court act services provided under sections 260.011 to 260.301;

(viii) the children's mental health collaboratives under section 245.493;

(ix) the family service collaboratives under section 121.8355;

(x) the family community support plan under section 245.4881, subdivision 4;

(xi) the Minnesota care program under chapter 256L;

(xii) the community health services grants under chapter 145;

(xiii) the community social services act funding under the Social Security Act, United States Code, title 42, sections 1397 to 1397f; and

(xiv) the community interagency transition committees under section 120.17, subdivision 16;

(2) services provided under a health plan in conformity with an individual family service plan or an individual education plan; and

(3) additional appropriate services that local agencies and counties provide on an individual need basis upon determining eligibility and receiving a request from the interagency early intervention committee and the child's parent.

(e) "Children with disabilities" has the meaning given in section 120.03.


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(f) A "standardized written plan" means those individual services or programs available through the interagency intervention service system to an eligible child other than the services or programs described in the child's individual education plan or the child's individual family service plan.

Subd. 4. [STATE INTERAGENCY COMMITTEE.] (a) The governor shall convene by July 1, 1998, an 18-member interagency committee to develop and implement a coordinated, multidisciplinary, interagency intervention service system for children with disabilities ages three to 22. The commissioners of commerce, children, families, and learning, health, human rights, human services, economic security, and corrections shall each appoint two committee members from their departments; the association of Minnesota counties shall appoint two county representatives, one of whom shall be an elected official, as committee members; and the Minnesota school boards association and the school nurse association of Minnesota shall each appoint one committee member. The committee shall select a chair from among its members. The committee shall meet at least monthly.

(b) The committee shall:

(1) identify and assist in removing state and federal barriers to local coordination of services provided to children with disabilities;

(2) ensure adequate, equitable, and flexible funding sources to streamline these services;

(3) develop guidelines for implementing policies that ensure a comprehensive and coordinated system of all state and local agency services, including multidisciplinary assessment practices for children with disabilities ages three to 22;

(4) develop, consistent with federal law, a standardized written plan for providing services to a child with disabilities;

(5) identify how current systems for dispute resolution can be coordinated and develop guidelines for that coordination;

(6) develop an evaluation process to measure the success of state and local interagency efforts in improving the quality and coordination of services to children with disabilities ages three to 22;

(7) develop guidelines to assist the governing boards of the interagency early intervention committees in carrying out the duties assigned in section 120.1705, subdivision 1, paragraph (b); and

(8) carry out other duties necessary to develop and implement within communities a coordinated, multidisciplinary, interagency intervention service system for children with disabilities.

(c) The committee shall consult on an ongoing basis with the state education advisory committee for special education and the governor's interagency coordinating council in carrying out its duties under this section, including assisting the governing boards of the interagency early intervention committees.

Subd. 5. [INTERVENTION DEMONSTRATION PROJECTS.] (a) The state interagency committee shall issue a request for proposals by January 1, 1999, to provide grants to the governing boards of interagency intervention committees under section 120.1705 or a combination of one or more counties and school districts to establish five voluntary interagency intervention demonstration projects. One grant shall be used to implement a coordinated service system for all eligible children with disabilities up to age five who received services under section 120.1701. Each project must be operational by July 1, 1999. The governing boards of the interagency early intervention committees and the counties and school districts receiving project grants must develop efficient ways to coordinate services and funding for children with disabilities ages three to 22, consistent with the requirements of this section and section 120.1705 and the guidelines developed by the state interagency committee under this section.

(b) The state interagency committee shall evaluate the demonstration projects and provide the evaluation results to interagency early intervention committees.

Subd. 6. [THIRD-PARTY LIABILITY.] Nothing in this section and section 120.1705 relieves a health plan company, third-party administrator or other third-party payer of an obligation to pay for, or changes the validity of an obligation to pay for, services provided to children with disabilities ages three to 22 and their families.


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Subd. 7. [AGENCY OBLIGATION.] Nothing in this section and section 120.1705 removes the obligation of the state, counties, local school districts, a regional agency, or a local agency or organization to comply with any federal or state law that mandates responsibility for finding, assessing, delivering, assuring, or paying for education or related services for children with disabilities and their families.

Sec. 7. [120.1705] [INTERAGENCY EARLY INTERVENTION COMMITTEE RESPONSIBILITIES.]

Subdivision 1. [ADDITIONAL DUTIES.] (a) The governing boards of the interagency early intervention committees are responsible for developing and implementing interagency policies and procedures to coordinate services at the local level for children with disabilities ages three to 22 under guidelines established by the state interagency committee under section 120.1703, subdivision 4. Consistent with the requirements in this section and section 120.1703, the governing boards of the interagency early intervention committees shall organize as a joint powers board under section 471.59 or enter into an interagency agreement that establishes a governance structure.

(b) The governing board of each interagency early intervention committee as defined in section 120.1701, subdivision 5, paragraph (a), which may include a juvenile justice professional, shall:

(1) identify and assist in removing state and federal barriers to local coordination of services provided to children with disabilities;

(2) ensure adequate, equitable, and flexible use of funding by local agencies for these services;

(3) implement policies that ensure a comprehensive and coordinated system of all state and local agency services, including multidisciplinary assessment practices, for children with disabilities ages three to 22;

(4) use a standardized written plan for providing services to a child with disabilities developed under section 120.1703;

(5) access the coordinated dispute resolution system and incorporate the guidelines for coordinating services at the local level, consistent with section 120.1703;

(6) use the evaluation process to measure the success of the local interagency effort in improving the quality and coordination of services to children with disabilities ages three to 22 consistent with section 120.1703;

(7) develop a transitional plan for children moving from the interagency early childhood intervention system under section 120.1701 into the interagency intervention service system under this section;

(8) coordinate services and facilitate payment for services from public and private institutions, agencies, and health plan companies; and

(9) share needed information consistent with state and federal data practices requirements.

Subd. 2. [SERVICES.] (a) Consistent with their training and experience, physicians, other health care professionals including school nurses, and education and human services providers jointly must, with full participation of parents, determine appropriate and medically necessary services for eligible children with disabilities ages three to 22. The services provided to the child under this section must conform with the child's standardized written plan. The governing board of an interagency early intervention committee must provide those services contained in a child's individual education plan and those services for which a legal obligation exists to the extent funding is available.

(b) Nothing in this section and section 120.1703 increases or decreases the obligation of the state, county, regional agency, local school district, or local agency or organization to pay for education, health care, or social services.

(c) A health plan may not exclude any medically necessary covered service solely because the service is or could be identified in a child's individual family service plan, individual education plan, a plan established under section 504 of the federal Rehabilitation Act of 1973, or a student's individual health plan. This paragraph reaffirms the obligation of a health plan company to provide or pay for certain medically necessary covered services, and encourages a health plan company


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to coordinate this care with any other providers of similar services. Also, a health plan company may not exclude from a health plan any medically necessary covered service such as an assessment or physical examination solely because the resulting information may be used for an individual education plan or a standardized written plan.

Subd. 3. [IMPLEMENTATION TIMELINE.] (a) By July 1, 2000, all governing boards of interagency early intervention committees statewide must implement a coordinated service system for children with disabilities up to age five consistent with the requirements of this section and section 120.1703 and the evaluation results from the demonstration projects under section 120.1703, subdivision 5. Children with disabilities up to the age of 22 shall be eligible for coordinated services and their eligibility to receive such services under this section shall be phased in over a four-year period as follows:

(1) July 1, 2001, children up to age nine become eligible;

(2) July 1, 2002, children up to age 14 become eligible;

(3) July 1, 2003, children up to age 18 become eligible; and

(4) July 1, 2004, children up to age 22 become eligible.

Sec. 8. Minnesota Statutes 1997 Supplement, section 126.79, subdivision 3, is amended to read:

Subd. 3. [LOCAL PROGRAMS; APPLICATION PROCEDURE; GRANT AWARDS.] The commissioner shall make grants to eligible applicants to establish local learn and earn programs. Each program shall operate for at least a four-year period. A local program shall select its participants from among eligible students who are entering or are in the ninth grade at the inception of the program. A program may not refill a program slot with another student if a student drops out of the program. Students selected to participate in the program shall be considered part of the program class and students who drop out may return to the program at any time prior to graduation.

The commissioner shall establish the application procedure for awarding grants under this section. The commissioner shall begin awarding grants by September 1, 1997 May 1, 1998.

Sec. 9. Minnesota Statutes 1997 Supplement, section 126.79, subdivision 6, is amended to read:

Subd. 6. [PROGRAM COMPONENTS.] Each learn and earn graduation achievement program must provide the opportunity for participating students to complete:

(1) 250 hours each year, not including regular required classroom hours, in basic education competency skills;

(2) 250 hours each year of service to the community service; and

(3) 250 hours each year of cultural enrichment and personal development, including but not limited to adult mentoring; participating in community cultural events; developing life skills for use in the home, workplace, and community; and learning to set goals, manage time, and make appropriate behavior choices for varying social situations.

Sec. 10. Minnesota Statutes 1997 Supplement, section 126.79, subdivision 7, is amended to read:

Subd. 7. [PROGRAM INCENTIVES.] (a) Each participating student shall receive a monetary stipend for each hour spent in a program component activity, plus a bonus upon completion of each component during each year of the program.

(b) An additional amount equal to or greater than each student's earned stipends and bonuses must be deposited for the student in a post-secondary opportunities interest-bearing account, established by the commissioner through the higher education services office. A student may, upon graduation from high school, use the funds accumulated for the student toward the costs, including tuition, books, and lab fees, of attending a Minnesota post-secondary institution or participating in a Minnesota post-secondary program in a career training program. Funds accumulated for a student shall be available to the student from the time the student graduates from high school until ten years after the date the student entered the learn and earn graduation achievement program. After ten years, the commissioner shall close the student's account and any remaining money in the account shall revert to the general fund.


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The commissioner shall establish a procedure for providing the monetary stipends and bonuses to students. The commissioner may delegate this authority to grantees.

Sec. 11. Minnesota Statutes 1997 Supplement, section 126.79, subdivision 8, is amended to read:

Subd. 8. [PROGRAM COORDINATOR.] The local learn and earn program coordinator must maintain contact with all participating students and their families; work with the school to link students with the resources needed to improve their educational skills; arrange for service to the community service and cultural enrichment opportunities for students; maintain records regarding student completion of program component hours; and perform other administrative duties as necessary. A program coordinator must, to the extent possible, agree to remain with the program for four years to provide continuity of adult contact to the participating students.

Sec. 12. Minnesota Statutes 1997 Supplement, section 126.79, subdivision 9, is amended to read:

Subd. 9. [EVALUATION AND REPORTS.] The commissioner shall collect information about participating students and a demographically similar control group and shall evaluate the short-term and long-term benefits participating students receive from the learn and earn graduation achievement program, based on the outcome measures specified in subdivision 2, and any other criteria established by the commissioner as part of the grant application process. The evaluation must include a statistical comparison of students participating in the program and the control group. The commissioner shall track follow participating students and the control group for a minimum of six years from the start of the program. The commissioner shall submit a preliminary report to the governor and the chairs of the senate and house committees having jurisdiction over education and crime prevention by December 15, 2000 2001, regarding continuation of the learn and earn graduation achievement program for participating schools and expansion of the program to additional schools. The commissioner shall submit a final report by December 15, 2002 2003.

Sec. 13. Laws 1997, First Special Session chapter 4, article 3, section 23, is amended by adding a subdivision to read:

Subd. 4a. [PLANNING AND DESIGN GRANT.] (a) An eligible lifework learning site applicant may apply for a one-time grant to plan and design a lifework learning facility. The planning and design grant shall not exceed $200,000 for a site.

(b) A planning and design grant recipient shall report to the commissioner of children, families, and learning on the planning and design of the lifework learning facility and the ability to start up the site and maintain the facility.

Sec. 14. Laws 1997, First Special Session chapter 4, article 3, section 25, subdivision 2, is amended to read:

Subd. 2. [SECONDARY VOCATIONAL EDUCATION AID.] For secondary vocational education aid according to Minnesota Statutes, section 124.573:

$11,617,000 $12,718,000 . . . . . 1998

$11,596,000 $12,844,000 . . . . . 1999

The 1998 appropriation includes $1,180,000 for 1997 and $10,437,000 $11,538,000 for 1998.

The 1999 appropriation includes $1,159,000 $1,282,000 for 1998 and $10,437,000 $11,562,000 for 1999.

Sec. 15. Laws 1997 First Special Session, chapter 4, article 3, section 25, subdivision 4, is amended to read:

Subd. 4. [EDUCATION AND EMPLOYMENT TRANSITIONS PROGRAM GRANTS.] For education and employment transitions program:

$4,750,000 . . . . . 1998

$4,750,000 . . . . . 1999


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$500,000 each year is for development of MnCEPs, an Internet-based education and employment information system. These are one-time funds.

$1,225,000 in fiscal year 1998 and $1,250,000 in fiscal year 1999 is for a rebate program for qualifying employers who employ less than 250 employees, who offer youth internships to educators. An employer may apply for a rebate of up to $500 for each paid youth internship and each educator internship, and up to $3,000 for each paid youth apprenticeship. The commissioner shall determine the application and payment process.

$450,000 each year is for youth apprenticeship program grants.

$225,000 each year is for youth entrepreneurship grants under Minnesota Statutes, section 121.72. Of this amount, $25,000 each year is for the high school student entrepreneurship program in independent school district No. 175, Westbrook. This appropriation shall be used for expenses, including, but not limited to, salaries, travel, seminars, equipment purchases, contractual expenses, and other expenses related to the student-run business.

$125,000 each year is for youth employer grants under Laws 1995, First Special Session chapter 3, article 4, section 28.

$150,000 each year is for parent and community awareness training.

$825,000 each year is for the development of career assessment benchmarks, lifework portfolios, industry skill standards, curriculum development, career academies, and career programs for elementary, middle school, and at-risk learners.

$400,000 each year is for state level activities, including the governor's workforce council.

$275,000 each year is for development of occupational information.

$300,000 each year is for a grant to be made available to a county government that has established school-to-work projects with schools located in a city of the first class. These grants must be used to expand the number of at-risk students participating in these school-to-work projects. Priority must be given to projects that demonstrate collaboration between private employers, collective bargaining representatives, school officials, and the county government and which prepare at-risk students for long-term employment with private sector employers paying a minimum of 150 percent of the federal poverty level for a family of four and with the majority of their employees in collective bargaining units.

$250,000 each year is for agricultural school-to-work grants.

$25,000 is for a grant to the Minnesota Historical Society for money canceled in fiscal year 1997.

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

Sec. 16. [APPROPRIATIONS.]

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

Subd. 2. [INTERVENTION DEMONSTRATION PROJECTS.] For establishing five voluntary interagency intervention demonstration projects under section 6, subdivision 5:

$ 250,000 . . . . . 1999

The commissioner shall allocate the grant awards according to the implementation needs of the grant recipients.

Subd. 3. [PLANNING AND DESIGN GRANT.] For one-time grants to plan and design a lifework learning facility under section 13:

$ 450,000 . . . . . 1999


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Sec. 17. [REPEALER.]

Laws 1993, chapter 146, article 5, section 20, as amended by Laws 1997, First Special Session chapter 4, article 3, section 20, is repealed.

Sec. 18. [EFFECTIVE DATE.]

Sections 6, 8, 10, 13, 14, and 15 are effective the day following final enactment.

ARTICLE 4

FACILITIES AND ORGANIZATION

Section 1. Minnesota Statutes 1996, section 122.23, subdivision 6, is amended to read:

Subd. 6. The commissioner shall, upon receipt of a plat, forthwith examine it and approve, modify or reject it. The commissioner shall also approve or reject any proposal contained in the resolution or petition regarding the disposition of the bonded debt of the component districts. If the plat shows the boundaries of proposed separate election districts and if the commissioner modifies the plat, the commissioner shall also modify the boundaries of the proposed separate election districts. The commissioner shall conduct a hearing public meeting at the nearest county seat in the area upon reasonable notice to the affected districts and county boards if requested within 20 days after submission of the plat. Such a hearing The public meeting 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. 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 after a minimum of 20 days, but no more than 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. 2. Minnesota Statutes 1996, section 123.35, subdivision 19a, is amended to read:

Subd. 19a. [LIMITATION ON PARTICIPATION AND FINANCIAL SUPPORT.] (a) No school district shall be required by any type of formal or informal agreement except an agreement to provide building space according to paragraph (f), including a joint powers agreement, or membership in any cooperative unit defined in subdivision 19b, paragraph (d), to participate in or provide financial support for the purposes of the agreement for a time period in excess of one four fiscal year years, or the time period set forth in this subdivision. Any agreement, part of an agreement, or other type of requirement to the contrary is void.

(b) This subdivision shall not affect the continued liability of a school district for its share of bonded indebtedness or other debt incurred as a result of any agreement before July 1, 1993. The school district is liable only until the obligation or debt is discharged and only according to the payment schedule in effect on July 1, 1993, except that the payment schedule may be altered for the purpose of restructuring debt or refunding bonds outstanding on July 1, 1993, if the annual payments of the school district are not increased and if the total obligation of the school district for its share of outstanding bonds or other debt is not increased.

(c) To cease participating in or providing financial support for any of the services or activities relating to the agreement or to terminate participation in the agreement, the school board shall adopt a resolution and notify other parties to the agreement of its decision on or before February 1 of any year. The cessation or withdrawal shall be effective June 30 of the same year except that for a member of an education district organized under sections 122.91 to 122.95 or an intermediate district organized under chapter 136D, cessation or withdrawal shall be effective June 30 of the following fiscal year. At the option of the school board, cessation or withdrawal may be effective June 30 of the following fiscal year for a district participating in any type of agreement.


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(d) Before issuing bonds or incurring other debt, the governing body responsible for implementing the agreement shall adopt a resolution proposing to issue bonds or incur other debt and the proposed financial effect of the bonds or other debt upon each participating district. The resolution shall be adopted within a time sufficient to allow the school board to adopt a resolution within the time permitted by this paragraph and to comply with the statutory deadlines set forth in sections 122.895, 125.12, and 125.17. The governing body responsible for implementing the agreement shall notify each participating school board of the contents of the resolution. Within 120 days of receiving the resolution of the governing body, the school board of the participating district shall adopt a resolution stating:

(1) its concurrence with issuing bonds or incurring other debt;

(2) its intention to cease participating in or providing financial support for the service or activity related to the bonds or other debt; or

(3) its intention to terminate participation in the agreement.

A school board adopting a resolution according to clause (1) is liable for its share of bonded indebtedness or other debt as proposed by the governing body implementing the agreement. A school board adopting a resolution according to clause (2) is not liable for the bonded indebtedness or other debt, as proposed by the governing body, related to the services or activities in which the district ceases participating or providing financial support. A school board adopting a resolution according to clause (3) is not liable for the bonded indebtedness or other debt proposed by the governing body implementing the agreement.

(e) After July 1, 1993, a district is liable according to paragraph (d) for its share of bonded indebtedness or other debt incurred by the governing body implementing the agreement to the extent that the bonds or other debt are directly related to the services or activities in which the district participates or for which the district provides financial support. The district has continued liability only until the obligation or debt is discharged and only according to the payment schedule in effect at the time the governing body implementing the agreement provides notice to the school board, except that the payment schedule may be altered for the purpose of refunding the outstanding bonds or restructuring other debt if the annual payments of the district are not increased and if the total obligation of the district for the outstanding bonds or other debt is not increased.

(f) A school district that is a member of a cooperative unit as defined in subdivision 19b, paragraph (d), may obligate itself to participate in and provide financial support for an agreement with a cooperative unit to provide school building space for a term not to exceed two years with an option on the part of the district to renew for an additional two years.

(g) Notwithstanding any limitations imposed under this subdivision, a school district may, according to section 123.36, subdivision 10, enter into a lease of all or a portion of a schoolhouse that is not needed for school purposes, including, but not limited to, a lease with a term of more than one year.

Sec. 3. Minnesota Statutes 1996, section 124.273, is amended by adding a subdivision to read:

Subd. 8. [ALLOCATIONS FROM COOPERATIVE UNITS.] For the purposes of this section and section 124.321, pupils of limited English proficiency enrolled in a cooperative or intermediate school district unit shall be counted by the school district of residence, and the cooperative unit shall allocate its approved expenditures for limited English proficiency programs among participating school districts. Limited English proficiency aid for services provided by a cooperative or intermediate school district shall be paid to the participating school districts.

Sec. 4. Minnesota Statutes 1996, section 124.755, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For the purposes of this section, the term "debt obligation" means either:

(1) a tax or aid anticipation certificate of indebtedness;

(2) a certificate of participation issued under section 124.91, subdivision 7; or

(3) a general obligation bond.


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Sec. 5. Minnesota Statutes 1997 Supplement, section 124.91, subdivision 1, is amended to read:

Subdivision 1. [TO LEASE BUILDING OR LAND.] (a) When a district finds it economically advantageous to rent or lease a building or land for any instructional purposes or for school storage or furniture repair, and it determines that the operating capital revenue authorized under section 124A.22, subdivision 10, is insufficient for this purpose, it may apply to the commissioner for permission to make an additional capital expenditure levy for this purpose. An application for permission to levy under this subdivision must contain financial justification for the proposed levy, the terms and conditions of the proposed lease, and a description of the space to be leased and its proposed use.

(b) The criteria for approval of applications to levy under this subdivision must include: the reasonableness of the price, the appropriateness of the space to the proposed activity, the feasibility of transporting pupils to the leased building or land, conformity of the lease to the laws and rules of the state of Minnesota, and the appropriateness of the proposed lease to the space needs and the financial condition of the district. The commissioner must not authorize a levy under this subdivision in an amount greater than the cost to the district of renting or leasing a building or land for approved purposes. The proceeds of this levy must not be used for custodial or other maintenance services. A district may not levy under this subdivision for the purpose of leasing or renting a district-owned building or site to itself.

(c) For agreements finalized after July 1, 1997, a district may not levy under this subdivision for the purpose of leasing: (1) a newly constructed building used primarily for regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed building addition or additions used primarily for regular kindergarten, elementary, or secondary instruction that contains more than 20 percent of the square footage of the previously existing building.

(d) The total levy under this subdivision for a district for any year must not exceed $100 times the actual pupil units for the fiscal year to which the levy is attributable.

(e) For agreements finalized after April 1, 1998, the term "instructional purpose" as used in this subdivision excludes expenditures on stadiums.

Sec. 6. Minnesota Statutes 1997 Supplement, section 124.91, subdivision 5, is amended to read:

Subd. 5. [INTERACTIVE TELEVISION.] (a) A school district with its central administrative office located within economic development region one, two, three, four, five, six, seven, eight, nine, and ten may apply to the commissioner of children, families, and learning for ITV revenue up to the greater of .5 percent of the adjusted net tax capacity of the district or $25,000. Eligible interactive television expenditures include the construction, maintenance, and lease costs of an interactive television system for instructional purposes. An eligible school district that has completed the construction of its interactive television system may also purchase computer hardware and software used primarily for instructional purposes and access to the Internet provided that its total expenditures for interactive television maintenance and lease costs and for computer hardware and software under this subdivision do not exceed its interactive television revenue for fiscal year 1998. The approval by the commissioner of children, families, and learning and the application procedures set forth in subdivision 1 shall apply to the revenue in this subdivision. In granting the approval, the commissioner must consider whether the district is maximizing efficiency through peak use and off-peak use pricing structures.

(b) To obtain ITV revenue, a district may levy an amount not to exceed the district's ITV revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the year before the year the levy is certified by the actual pupil units in the district for the year to which the levy is attributable; to

(2) 100 percent of the equalizing factor as defined in section 124A.02, subdivision 8, for the year to which the levy is attributable $10,000.

(c) A district's ITV aid is the difference between its ITV revenue and the ITV levy.

(d) The revenue in the first year after reorganization for a district that has reorganized under section 122.22, 122.23, or 122.241 to 122.247 shall be the greater of:

(1) the revenue computed for the reorganized district under paragraph (a), or


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(2)(i) for two districts that reorganized, 75 percent of the revenue computed as if the districts involved in the reorganization were separate, or

(ii) for three or more districts that reorganized, 50 percent of the revenue computed as if the districts involved in the reorganization were separate.

(e) The revenue in paragraph (d) is increased by the difference between the initial revenue and ITV lease costs for leases that had been entered into by the preexisting districts on the effective date of the consolidation or combination and with a term not exceeding ten years. This increased revenue is only available for the remaining term of the lease. However, in no case shall the revenue exceed the amount available had the preexisting districts received revenue separately.

(f) Effective for fiscal year 2000, the revenue under this section shall be 75 percent of the amount determined in paragraph (a); for fiscal year 2001, 50 percent of the amount in paragraph (a); and for fiscal year 2002, 25 percent of the amount in paragraph (a).

(g) This section expires effective for revenue for fiscal year 2003, or when leases in existence on the effective date of Laws 1997, First Special Session chapter 4, expire.

Sec. 7. Minnesota Statutes 1996, section 124.95, subdivision 6, is amended to read:

Subd. 6. [DEBT SERVICE EQUALIZATION AID PAYMENT SCHEDULE.] Debt service equalization aid must be paid as follows: 30 percent before September 15, 30 percent before December 15, 25 30 percent before March 15, and a final payment of 15 10 percent by July 15 of the subsequent fiscal year.

Sec. 8. Minnesota Statutes 1997 Supplement, section 124A.22, subdivision 11, is amended to read:

Subd. 11. [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total operating capital revenue may be used only for the following purposes:

(1) to acquire land for school purposes;

(2) to acquire or construct buildings for school purposes, up to $400,000;

(3) to rent or lease buildings, including the costs of building repair or improvement that are part of a lease agreement;

(4) to improve and repair school sites and buildings, and equip or reequip school buildings with permanent attached fixtures;

(5) for a surplus school building that is used substantially for a public nonschool purpose;

(6) to eliminate barriers or increase access to school buildings by individuals with a disability;

(7) to bring school buildings into compliance with the uniform fire code adopted according to chapter 299F;

(8) to remove asbestos from school buildings, encapsulate asbestos, or make asbestos-related repairs;

(9) to clean up and dispose of polychlorinated biphenyls found in school buildings;

(10) to clean up, remove, dispose of, and make repairs related to storing heating fuel or transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined in section 296.01;

(11) for energy audits for school buildings and to modify buildings if the audit indicates the cost of the modification can be recovered within ten years;


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(12) to improve buildings that are leased according to section 123.36, subdivision 10;

(13) to pay special assessments levied against school property but not to pay assessments for service charges;

(14) to pay principal and interest on state loans for energy conservation according to section 216C.37 or loans made under the Northeast Minnesota Economic Protection Trust Fund Act according to sections 298.292 to 298.298;

(15) to purchase or lease interactive telecommunications equipment;

(16) by school board resolution, to transfer money into the debt redemption fund to: (i) pay the amounts needed to meet, when due, principal and interest payments on certain obligations issued according to chapter 475; or (ii) pay principal and interest on debt service loans or capital loans according to section 124.44;

(17) to pay capital expenditure equipment-related assessments of any entity formed under a cooperative agreement between two or more districts;

(18) to purchase or lease computers and related materials, copying machines, telecommunications equipment, and other noninstructional equipment;

(19) to purchase or lease assistive technology or equipment for instructional programs;

(20) to purchase textbooks;

(21) to purchase new and replacement library books;

(22) to purchase vehicles;

(23) to purchase or lease telecommunications equipment, computers, and related equipment for integrated information management systems for:

(i) managing and reporting learner outcome information for all students under a results-oriented graduation rule;

(ii) managing student assessment, services, and achievement information required for students with individual education plans; and

(iii) other classroom information management needs; and

(24) to pay personnel costs directly related to the acquisition, operation, and maintenance of telecommunications systems, computers, related equipment, and network and applications software.

Sec. 9. Laws 1997, First Special Session chapter 4, article 4, section 35, subdivision 9, is amended to read:

Subd. 9. [FLOOD LOSSES.] For grants and loans to independent school district Nos. 2854, Ada-Borup; 2176, Warren-Alvarado-Oslo; 846, Breckenridge; 595, East Grand Forks; and other districts affected by the 1997 floods for expenses associated with the floods not covered by insurance or state or federal disaster relief:

$4,700,000 . . . . . 1998

The commissioner shall award grants and loans to school districts to cover expenses associated with the 1997 floods. The grants or loans may be for capital losses or for extraordinary operating expenses resulting from the floods. School districts shall repay any loan or grant amounts to the department if those amounts are otherwise funded from other sources. The commissioner shall establish the terms and conditions of any loans and may request any necessary information from school districts before awarding a grant or loan. This appropriation shall also be used to fund aid under sections 33 and 34.

This appropriation is available until June 30, 1999.


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Sec. 10. Laws 1997, First Special Session chapter 4, article 9, section 12, subdivision 8, is amended to read:

Subd. 8. [INTERACTIVE TELEVISION (ITV) AID.] For interactive television (ITV) aid under Minnesota Statutes, section 124.91, subdivision 5:

$4,030,000 $4,569,000 . . . . . 1998

$4,052,000 $6,050,000 . . . . . 1999

The 1998 appropriation includes $384,000 for 1997 and $3,646,000 $4,185,000 for 1998.

The 1999 appropriation includes $405,000 $465,000 for 1998 and $3,647,000 $5,585,000 for 1999.

Sec. 11. [ENHANCED PAIRING COOPERATION AND COMBINATION AID.]

Subdivision 1. [DISTRICT ELIGIBILITY.] A group of districts participating in an enhanced pairing agreement under Laws 1995, First Special Session chapter 3, article 6, section 17, is eligible for a grant for cooperation and combination.

Subd. 2. [AID AMOUNT.] A district that is participating in an enhanced pairing agreement is eligible for consolidation transition revenue under Minnesota Statutes, section 124.2726 and is also eligible for additional state aid equal to $100 times the number of pupil units enrolled in an enhanced paired district in the year prior to consolidation.

Subd. 3. [AID USES.] A district receiving aid under this section must use the aid consistent with the purposes listed under Minnesota Statutes, section 124.2725, subdivision 11, or other purposes related to combination of the individual districts as determined by the school board. If, after receipt of state aid under this section the districts choose not to combine and receive aid under Minnesota Statutes, section 124.2726, the commissioner of children, families, and learning must recover aid equal to $25 times the number of pupil units in the enhanced paired district.

Sec. 12. [LEASE LEVY FOR ADMINISTRATIVE SPACE; SOUTH ST. PAUL AND MANKATO.]

Each year, special school district No. 6, South St. Paul, and independent school district No. 77, Mankato, may levy the amounts necessary to rent or lease administrative space so that space previously used for administrative purposes may be used for instructional purposes.

Sec. 13. [BONDING AUTHORIZATION.]

To provide funds for the acquisition or betterment of school facilities, independent school district No. 625, St. Paul, may by two-thirds majority vote of all the members of the board of directors issue general obligation bonds in one or more series in calendar years 1998 to 2002, both inclusive, as provided in this section. The aggregate principal amount of any bonds issued under this section for each calendar year must not exceed $15,000,000. Issuance of the bonds is not subject to Minnesota Statutes, section 475.58 or 475.59. The bonds must otherwise be issued as provided in Minnesota Statutes, chapter 475. The authority to issue bonds under this section is in addition to any bonding authority authorized by Minnesota Statutes, chapter 124, or other law. The amount of bonding authority authorized under this section must be disregarded in calculating the bonding limit of Minnesota Statutes, chapter 124, or any other law other than Minnesota Statutes, section 475.53, subdivision 4.

Sec. 14. [TAX LEVY FOR DEBT SERVICE.]

To pay the principal of and interest on bonds issued under section 13, independent school district No. 625, St. Paul, must levy a tax annually in an amount sufficient under Minnesota Statutes, section 475.61, subdivisions 1 and 3, to pay the principal of and interest on the bonds. The tax authorized under this section is in addition to the taxes authorized to be levied under Minnesota Statutes, chapter 124A or 275, or other law.


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Sec. 15. [LEVY MODIFICATION.]

Independent school district No. 625, St. Paul, shall submit a revised schedule for capital expenditure health and safety projects to the commissioner of children, families, and learning. The schedule must show a decrease in the district's health and safety revenue projects commensurate with the increase in its debt service levy attributable to the enactment of sections 13 and 14 for taxes payable in 1999 and taxes payable in 2000.

Sec. 16. [MODEL TECHNOLOGY PROGRAM.]

Subdivision 1. [PROGRAM.] A school district may develop a model technology program. The program must provide for a systematic implementation of the district's technology plan. The plan must include a schedule of hardware and software purchases as well as provide for the technical support and staff development necessary to fully utilize the technology.

Subd. 2. [EQUIPMENT LEASING.] Notwithstanding any other law to the contrary, a school district may enter into an arrangement to lease hardware and software for a period of time mutually agreed upon by the school board and the contractor.

Sec. 17. [APPROPRIATION.]

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

Subd. 2. [CROW RIVER AND MEEKER AND WRIGHT SPECIAL EDUCATION COOPERATIVES.] For a grant to special education cooperatives No. 52-937, Crow River, and No. 52-938, Meeker and Wright, for disability access improvements to conform to the Americans with Disabilities Act and for code compliance in school building space for the students served by the cooperatives:

$ 100,000 . . . . . 1999

Subd. 3. [CARLTON PLANNING GRANT.] For a grant to independent school district No. 93, Carlton, to develop a plan to coordinate district buildings and services:

$ 10,000 . . . . . 1999

The school district shall collaborate with the city of Carlton and Carlton county in developing the plan.

Subd. 4. [CALEDONIA PLANNING GRANT.] (a) For a grant to perform a management assistance study for independent school district No. 299, Caledonia:

$ 40,000 . . . . . 1999

(b) The study shall include an analysis of facility needs, enrollment trends, and instructional opportunities available to pupils of independent school district No. 299, Caledonia. The department may consult with neighboring school districts, as appropriate. The department shall complete the management assistance study by December 31, 1998.

(c) This appropriation is available until June 30, 1999.

Subd. 5. [COORDINATED FACILITIES PLAN; MAPLE RIVER.] For a grant to independent school district No.2135, Maple River:

$ 200,000 . . . . . 1999

The grant shall be used to examine and coordinate the district's building needs. The district must evaluate how the current use of its facilities is affecting its educational services and examine cost efficiencies that may result from a coordinated facilities plan. The grant may be used for operating purposes, transportation purposes, or facilities purposes that lead to greater program efficiencies.


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Subd. 6. [ENHANCED PAIRING COMBINATION AID.] For a grant to a group of school districts participating in the enhanced pairing program that intend to combine into a single school district:

$ 135,000 . . . . . 1999

Sec. 18. [EFFECTIVE DATE.]

(a) Sections 1, 2, 3, and 12 are effective July 1, 1998.

(b) Section 4 is effective retroactively for revenue for fiscal year 1997.

(c) Section 6 is effective for revenue for fiscal year 1999.

(d) Section 7 is effective for revenue for fiscal year 1998.

(e) Sections 8, 9, and 10 are effective the day following final enactment.

(f) Sections 13 and 14 are effective the day after the governing body of independent school district No. 625, St. Paul, complies with Minnesota Statutes, section 645.021, subdivision 3.

ARTICLE 5

POLICIES PROMOTING ACADEMIC EXCELLENCE

Section 1. Minnesota Statutes 1996, section 43A.17, subdivision 9, is amended to read:

Subd. 9. [POLITICAL SUBDIVISION COMPENSATION LIMIT.] The salary and the value of all other forms of compensation of a person employed by a statutory or home rule charter city, county, town, school district, metropolitan or regional agency, or other political subdivision of this state excluding a school district, or employed under section 422A.03, may not exceed 95 percent of the salary of the governor as set under section 15A.082, except as provided in this subdivision. Deferred compensation and payroll allocations to purchase an individual annuity contract for an employee are included in determining the employee's salary. Other forms of compensation which shall be included to determine an employee's total compensation are all other direct and indirect items of compensation which are not specifically excluded by this subdivision. Other forms of compensation which shall not be included in a determination of an employee's total compensation for the purposes of this subdivision are:

(1) employee benefits that are also provided for the majority of all other full-time employees of the political subdivision, vacation and sick leave allowances, health and dental insurance, disability insurance, term life insurance, and pension benefits or like benefits the cost of which is borne by the employee or which is not subject to tax as income under the Internal Revenue Code of 1986;

(2) dues paid to organizations that are of a civic, professional, educational, or governmental nature; and

(3) reimbursement for actual expenses incurred by the employee which the governing body determines to be directly related to the performance of job responsibilities, including any relocation expenses paid during the initial year of employment.

The value of other forms of compensation shall be the annual cost to the political subdivision for the provision of the compensation. The salary of a medical doctor or doctor of osteopathy occupying a position that the governing body of the political subdivision has determined requires an M.D. or D.O. degree is excluded from the limitation in this subdivision. The commissioner may increase the limitation in this subdivision for a position that the commissioner has determined requires special expertise necessitating a higher salary to attract or retain a qualified person. The commissioner shall review each proposed increase giving due consideration to salary rates paid to other persons with similar responsibilities in the state and nation. The commissioner may not increase the limitation until the commissioner has presented the proposed increase to the legislative coordinating commission and received the commission's recommendation on it. The recommendation is advisory only. If the commission does not give its recommendation on a proposed increase within 30 days from its receipt of the proposal, the commission is deemed to have recommended approval.


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Sec. 2. Minnesota Statutes 1996, section 43A.17, subdivision 10, is amended to read:

Subd. 10. [LOCAL ELECTED OFFICIALS; CERTAIN COMPENSATION PROHIBITED.] The compensation plan for an elected official of a statutory or home rule charter city, county, or town, or school district may not include a provision for vacation or sick leave. The salary of an official covered by this subdivision may not be diminished because of the official's absence from official duties because of vacation or sickness.

Sec. 3. Minnesota Statutes 1996, section 120.064, subdivision 11, is amended to read:

Subd. 11. [EMPLOYMENT AND OTHER OPERATING MATTERS.] (a) A charter school shall 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.

(b) A charter school may enter into a contract for teaching or administrative services related to instruction only with:

(1) an individual teacher for the teaching services of that teacher;

(2) an individual administrator for the administrative services of that administrator; or

(3) a nonprofit entity not controlled by or under common control with a related organization as defined in section 317A.011, subdivision 18, that is other than a nonprofit corporation.

Nothing in this subdivision shall prevent a charter school from contracting with other entities for administrative or instructional services if those services do not constitute the entire administration or operation of the charter school.

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

Sec. 4. Minnesota Statutes 1997 Supplement, section 120.101, subdivision 5, is amended to read:

Subd. 5. [AGES AND TERMS.] (a) Every child between seven and 16 years of age shall receive instruction. Every child under the age of seven who is enrolled in a half-day kindergarten, or a full-day kindergarten program on alternate days, or other kindergarten programs shall receive instruction. Except as provided in subdivision 5a, a parent may withdraw a child under the age of seven from enrollment at any time.

(b) A school district by annual board action may require children subject to this subdivision to receive instruction in summer school. A district that acts to require children to receive instruction in summer school shall establish at the time of its action the criteria for determining which children must receive instruction.

Sec. 5. Minnesota Statutes 1996, section 120.73, subdivision 1, is amended to read:

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

(a) (1) in any program where the resultant product, in excess of minimum requirements and at the pupil's option, becomes the personal property of the pupil;

(b) (2) admission fees or charges for extra curricular activities, where attendance is optional and where the admission fees or charges a student must pay to attend or participate in an extracurricular activity is the same for all students, regardless of whether the student is enrolled in a public or a home school;

(c) (3) a security deposit for the return of materials, supplies, or equipment;

(d) (4) personal physical education and athletic equipment and apparel, although any pupil may personally provide it if it meets reasonable requirements and standards relating to health and safety established by the school board;


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(e) (5) items of personal use or products which a student has an option to purchase such as student publications, class rings, annuals, and graduation announcements;

(f) (6) fees specifically permitted by any other statute, including but not limited to section 171.04, subdivision 1, clause (1);

(g) (7) field trips considered supplementary to a district educational program;

(h) (8) any authorized voluntary student health and accident benefit plan;

(i) (9) for the use of musical instruments owned or rented by the district, a reasonable rental fee not to exceed either the rental cost to the district or the annual depreciation plus the actual annual maintenance cost for each instrument;

(j) (10) transportation of pupils to and from extra curricular activities conducted at locations other than school, where attendance is optional;

(k) (11) transportation of pupils to and from school for which aid for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.223, subdivision 1, and for which levy for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.226, subdivision 5, if a district charging fees for transportation of pupils establishes guidelines for that transportation to ensure that no pupil is denied transportation solely because of inability to pay;

(l) (12) motorcycle classroom education courses conducted outside of regular school hours; provided the charge shall not exceed the actual cost of these courses to the school district;

(m) (13) transportation to and from post-secondary institutions for pupils enrolled under the post-secondary enrollment options program under section 123.39, subdivision 16. Fees collected for this service must be reasonable and shall be used to reduce the cost of operating the route. Families who qualify for mileage reimbursement under section 123.3514, subdivision 8, may use their state mileage reimbursement to pay this fee. If no fee is charged, districts shall allocate costs based on the number of pupils riding the route.

Sec. 6. Minnesota Statutes 1997 Supplement, section 121.11, subdivision 7c, is amended to read:

Subd. 7c. [RESULTS-ORIENTED GRADUATION RULE.] (a) The legislature is committed to establishing a rigorous, results-oriented graduation rule for Minnesota's public school students. To that end, the state board shall use its rulemaking authority under subdivision 7b to adopt a statewide, results-oriented graduation rule to be implemented starting with students beginning ninth grade in the 1996-1997 school year. The board shall not prescribe in rule or otherwise the delivery system or form of instruction that local sites must use to meet the requirements contained in this rule.

(b) To successfully accomplish paragraph (a), the state board shall set in rule high academic standards for all students. The standards must contain the foundational skills in the three core curricular areas of reading, writing, and mathematics while meeting requirements for high school graduation. The standards must also provide an opportunity for students to excel by meeting higher academic standards through a profile of learning that uses curricular requirements to allow students to expand their knowledge and skills beyond the foundational skills. All state board actions regarding the rule must be premised on the following:

(1) the rule is intended to raise academic expectations for students, teachers, and schools;

(2) any state action regarding the rule must evidence consideration of school district autonomy; and

(3) the department of children, families, and learning, with the assistance of school districts, must make available information about all state initiatives related to the rule to students and parents, teachers, and the general public in a timely format that is appropriate, comprehensive, and readily understandable.


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(c) For purposes of adopting the rule, the state board, in consultation with the department, recognized psychometric experts in assessment, and other interested and knowledgeable educators, using the most current version of professional standards for educational testing, shall evaluate the alternative approaches to assessment.

(d) The content of the graduation rule must differentiate between minimum competencies reflected in the basic requirements assessment and rigorous profile of learning standards. When fully implemented, the requirements for high school graduation in Minnesota must include both basic requirements and the required profile of learning. The profile of learning must measure student performance using performance-based assessments compiled over time that integrate higher academic standards, higher order thinking skills, and application of knowledge from a variety of content areas. The profile of learning shall include a broad range of academic experience and accomplishment necessary to achieve the goal of preparing students to function effectively as purposeful thinkers, effective communicators, self-directed learners, productive group participants, and responsible citizens. The commissioner, with the assistance of the office of educational accountability, the clearinghouse of best educational practices, and the technical quality review advisory panel under section 121.1115, shall develop and disseminate to school districts a uniform form and method for districts to use in measuring and reporting student performance on the profile of learning at the school, district, and state levels beginning with the 1999-2000 school year and thereafter.

(e) The state board shall periodically review and report on the assessment process and student achievement with the expectation of raising the standards and expanding high school graduation requirements.

(f) The state board shall report in writing to the legislature annually by January 15 on its progress in developing and implementing the graduation requirements according to the requirements of this subdivision and section 123.97 until such time as all the graduation requirements are implemented.

Sec. 7. Minnesota Statutes 1997 Supplement, section 121.1113, subdivision 1, is amended to read:

Subdivision 1. [STATEWIDE TESTING.] (a) The commissioner, with advice from experts with appropriate technical qualifications and experience and stakeholders, shall include in the comprehensive assessment system, for each grade level to be tested, a single statewide norm-referenced or criterion-referenced test, or a combination of a norm-referenced and a criterion-referenced test, which shall be highly correlated with the state's graduation standards and administered annually to all students in the third, fifth, and eighth grades. The commissioner shall establish one or more months during which schools shall administer the tests to students each school year. The Minnesota basic skills tests in reading and mathematics shall fulfill students' eighth grade testing requirements. School districts shall continue to administer official state basic skills tests in reading and mathematics between one and three times per year to a student until the student receives a passing score on those state tests, thereby fulfilling the student's eighth grade testing requirements. Other testing options do not fulfill the student's eighth grade testing requirements for a passing state notation.

(b) In addition, at the secondary level, districts shall assess student performance in all required learning areas and selected required standards within each area of the profiles of learning. The testing instruments and testing process shall be determined by the commissioner. The results shall be aggregated at the site and district level. The testing shall be administered beginning in the 1999-2000 school year and thereafter.

(c) The comprehensive assessment system shall include an evaluation of school site and school district performance levels during the 1997-1998 school year and thereafter using an established performance baseline developed from students' test scores under this section that records, at a minimum, students' unweighted mean test scores in each tested subject, a second performance baseline that reports, at a minimum, the same unweighted mean test scores of only those students enrolled in the school by January 1 of the previous school year, and a third performance baseline that reports the same unweighted test scores of all students except those students receiving limited English proficiency instruction. The evaluation also shall record separately, in proximity to the performance baselines, the percentages of students who are eligible to receive a free or reduced price school meal, demonstrate limited English proficiency, or are eligible to receive special education services.


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(d) In addition to the testing and reporting requirements under paragraphs (a), (b), and (c), the commissioner, in consultation with the state board of education, shall include the following components in the statewide educational accountability and public reporting system:

(1) uniform statewide testing of all third, fifth, eighth, and post-eighth grade students with exemptions, only with parent or guardian approval, from the testing requirement only for those very few students for whom the student's individual education plan team under section 120.17, subdivision 2, determines that the student is incapable of taking a statewide test, or a limited English proficiency student under section 126.262, subdivision 2, if the student has been in the United States for fewer than 12 months and for whom special language barriers exist, such as the student's native language does not have a written form or the district does not have access to appropriate interpreter services for the student's native language;

(2) educational indicators that can be aggregated and compared across school districts and across time on a statewide basis;

(3) students' scores on the American College Test;

(4) participation in the National Assessment of Educational Progress so that the state can benchmark its performance against the nation and other states, and, where possible, against other countries, and contribute to the national effort to monitor achievement; and

(5) basic skills and advanced competencies connecting teaching and learning to high academic standards, assessment, and transitions to citizenship and employment.

(e) Districts must report exemptions under paragraph (d), clause (1), to the commissioner consistent with a format provided by the commissioner.

Sec. 8. Minnesota Statutes 1996, section 121.1115, is amended by adding a subdivision to read:

Subd. 1b. [EDUCATIONAL ACCOUNTABILITY.] (a) In realizing its purpose under Laws 1997, First Special Session chapter 4, article 5, section 28, subdivision 2, the office of educational accountability shall advise the education committees of the legislature at least on a biennial basis, on the degree to which the statewide educational accountability and reporting system includes a comprehensive, performance-based assessment framework that makes schools accountable for students achieving the goals described in the state's high school graduation rule. The office shall consider whether the statewide system of educational accountability provides useful comparative and contextual data on students, schools, districts, and the state, and whether it includes:

(1) public reporting on the condition of the educational system using multiple indicators that are essential to describing and understanding the needs of children and youth and apply to all students;

(2) a core set of educational indicators that are comparable and capable of being aggregated across school districts and across time on a statewide basis;

(3) public reporting on the condition of the educational system that supports the direction of state educational policy;

(4) a public reporting system that is flexible and permits the adding, modifying, and deleting of measures as policies and circumstances change;

(5) a public reporting system that aligns conceptually and in practice with the information needs of local school districts and contains measures that local communities and schools can influence;

(6) reports of performance information that ensure all students' privacy and confidentiality;

(7) student performance indicators that contain clearly articulated standards of student performance and have broad community support;


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(8) reports of educational performance that reflect current results and trends over time;

(9) a reporting system that reduces and consolidates the existing reporting burden on school districts by better using existing information and building on current data reporting systems at the state and district levels; and

(10) a reporting system that is managed in a nonpartisan and highly competent manner to ensure the public's use and confidence and minimizes the reporting burden on school districts. To the extent the statewide educational accountability and reporting system does not include a comprehensive, performance-based assessment framework that makes schools accountable for students achieving the goals described in the state's high school graduation rule, or does not provide useful comparative and contextual data on students, schools, districts, and the state, the office shall recommend to the legislature ways to improve the accountability and reporting system.

(b) When the office reviews the statewide educational accountability and reporting system, it shall also:

(1) consider the objectivity and neutrality of the state's educational accountability system;

(2) develop strong relationships with other policy actors and with leaders outside government; and

(3) consider the impact of a high stakes testing program on school curriculum and student learning.

(c) A technical quality review advisory panel is established to assist the office of educational accountability in clearly articulating the criteria for judging the statewide education accountability and reporting system. Among other things, the criteria shall measure the extent to which the system:

(1) creates intended and unintended consequences;

(2) is fairly administered;

(3) evaluates the desired and appropriate complex intellectual processes;

(4) is relevant and meaningful to teachers, students, and parents;

(5) evaluates skills that are transferable;

(6) is cost-efficient; and

(7) is comprehensive in its coverage of content.

Panel members shall include psychometricians and other experts in the field of student assessment, an elementary school teacher employed in a state public school, a secondary school teacher employed in a state public school, a curriculum and instruction director employed in a state public school, and a local public school administrator. Panel members are appointed by and serve at the pleasure of the speaker of the house, the house minority leader, the majority leader of the senate, and the senate minority leader. Panel members shall receive compensation according to section 15.059, subdivision 3.

(d) The office of educational accountability shall report at least biennially by November 1 preceding the first year of the state's biennial legislative session to the education committees of the legislature on the status of the statewide system of educational accountability.

Sec. 9. Minnesota Statutes 1996, section 121.1115, is amended by adding a subdivision to read:

Subd. 1c. [CLEARINGHOUSE OF BEST EDUCATIONAL PRACTICES; DIRECTOR.] (a) To provide practical, effective assistance to schools with academically at-risk students, a clearinghouse of best educational practices is established to make available to interested school districts human and informational resources for improving student performance. The clearinghouse shall:

(1) conduct research and collect information on the best educational practices affecting a school's management, operation, financing, personnel, and instruction;


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(2) train quality intervention teams composed of highly qualified educators to assist a school's staff in working to improve the educational performance of academically at-risk students by addressing a school's management, operation, financing, personnel, and instruction practices;

(3) develop and make available to interested school districts a model for an independent educational audit that evaluates a school's performance strengths and weaknesses and makes specific recommendations for reinforcing performance strengths and improving performance weaknesses cited in the audit;

(4) using the comprehensive, performance-based assessment framework under subdivision 1b, paragraph (a), and with the assistance of the office of educational accountability, develop student and school performance indicators schools may use to reliably measure school improvement over time; and

(5) provide staff development opportunities to assist teachers and other educators in integrating educational reform measures into a school's best practices.

The clearinghouse shall assist school districts under this subdivision at district request.

(b) The office of educational accountability, in consultation with organizations representing the state's kindergarten through grade 12 public school teachers, shall appoint a licensed kindergarten through grade 12 teacher as director of the clearinghouse. The director shall receive a one-year sabbatical leave to serve as clearinghouse director and may receive additional one-year sabbatical leaves for this purpose.

Sec. 10. Minnesota Statutes 1996, section 125.191, is amended to read:

125.191 [LICENSE AND DEGREE EXEMPTION FOR HEAD COACH.]

Notwithstanding section 125.03, subdivision 1, a school district may employ as a head varsity coach of an interscholastic sport at its secondary school a person who does not have a license as head varsity coach of interscholastic sports and who does not have a bachelor's degree if:

(1) in the judgment of the school board, the person has the knowledge and experience necessary to coach the sport;

(2) the position has been posted as a vacancy within the present teaching staff for a period of 30 days and no licensed coaches have applied for the position;

(3) the person can verify completion of six quarter credits, or the equivalent, or 60 clock hours of instruction in first aid and the care and prevention of athletic injuries; and

(4) the person (3) can verify completion of a coaching methods or theory course.

Notwithstanding section 125.121, a person employed as a head varsity coach under this section has an annual contract as a coach that the school board may or may not renew as the board sees fit, after annually posting the position as required in clause (2) and no licensed coach has applied for the position.

Sec. 11. [126.238] [ACCELERATED INSTRUCTION FOR HIGH SCORING STUDENTS.]

Every district shall provide accelerated instruction to all enrolled elementary and secondary students who score three standard deviations above the norm on a standardized achievement test. Each high scoring student shall have a written accelerated learning plan developed by an accelerated learning plan team that includes the student's teachers, parents, and school counselor and may include other qualified educators and the student if the student is a secondary school student. The plan shall state the educational outcomes the student will work to achieve, indicating the curricular content of the educational outcomes and the instructional strategies to be used in providing curricula. Cost to the school district may be among the factors the team considers in choosing how to provide the accelerated instruction contained in the student's plan. The school district shall make the final decision about the contents of a plan. Plan contents shall be consistent with and enhance the requirements of the state's results-oriented high school graduation rule. The accelerated learning plan


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of each secondary student shall provide for a transition from secondary school to post-secondary education, employment, or community service. The district shall evaluate a student's success in achieving the educational outcomes stated in the accelerated learning plan and the contents of the plan at least once per school year. School districts with a small number of high scoring students may cooperate with other districts in providing the students with sufficient opportunities for accelerated instruction as stated in the student's accelerated learning plan.

Sec. 12. Minnesota Statutes 1996, section 260.015, subdivision 19, is amended to read:

Subd. 19. [HABITUAL TRUANT.] "Habitual truant" means a child under the age of 16 years who is absent from attendance at school without lawful excuse for seven school days if the child is in elementary school or for one or more class periods on seven school days if the child is in middle school, junior high school, or high school, or a child who is 16 or 17 years of age who is absent from attendance at school without lawful excuse for one or more class periods on seven school days and who has not lawfully withdrawn from school under section 120.101, subdivision 5d.

Sec. 13. Minnesota Statutes 1996, section 260.132, subdivision 4, is amended to read:

Subd. 4. [TRUANT.] When a peace officer or probation officer has probable cause to believe that a child is currently under age 16 subject to compulsory instruction requirements under section 120.101, subdivisions 5 and 5d, and is absent from school without lawful excuse, the officer may transport the child to the child's home and deliver the child to the custody of the child's parent or guardian, transport the child to the child's school of enrollment and deliver the child to the custody of a school superintendent or teacher or transport the child to a truancy service center under section 260A.04, subdivision 3.

Sec. 14. Laws 1997, First Special Session chapter 4, article 5, section 24, subdivision 4, is amended to read:

Subd. 4. [GRANT AWARDS.] A school district or any group of districts may receive a grant in the amount of $25 per pupil per year. The grant recipient must match one local dollar for every state dollar received. The local match may include in kind contributions. In awarding grants, the commissioner shall consider which students will benefit most from these programs. No grant recipient shall use the grant award to supplant existing funding for gifted and talented programs.

Sec. 15. Laws 1997, First Special Session chapter 4, article 5, section 28, subdivision 4, is amended to read:

Subd. 4. [ADVANCED PLACEMENT AND INTERNATIONAL BACCALAUREATE PROGRAMS.] For the state advanced placement and international baccalaureate programs:

$1,875,000 . . . . . 1998

$1,875,000 . . . . . 1999

Notwithstanding Minnesota Statutes, section 126.239, subdivisions 1 and 2, $200,000 each year is for teachers to attend subject matter summer training programs and follow-up support workshops approved by the advanced placement or international baccalaureate programs. The amount of the subsidy for each teacher attending an advanced placement or international baccalaureate summer training program or workshop shall be the same. The commissioner shall determine the payment process and the amount of the subsidy.

Notwithstanding Minnesota Statutes, section 126.239, subdivision 3, in each year to the extent of available appropriations, the commissioner shall pay all examination fees for all students sitting for an advanced placement examination, international baccalaureate examination, or both. If this amount is not adequate, the commissioner may pay less than the full examination fee.

$300,000 each year is for student scholarships. A student scholarship shall be awarded to a student scoring three or better on one or more advanced placement examinations or a four or better on one or more international baccalaureate examinations. The amount of each scholarship shall range from $150 $75 to $500 based on the student's score on the exams. The scholarships shall be awarded only to students who are enrolled in a Minnesota public or private college or university. The total amount of each scholarship shall be paid directly to the student's designated college or university and


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must be used by the student only for tuition, required fees, and books in nonsectarian courses or programs. The higher education services office, in consultation with the commissioner, shall determine the payment process, the amount of the scholarships, and provisions for unused scholarships.

In order to be eligible to receive advanced placement or international baccalaureate scholarships on behalf of the qualifying students, the college or university must have an advanced placement, international baccalaureate, or both, credit and placement policy for the scholarship recipients. In addition, each college or university must certify these policies to the department each year. The department must provide each secondary school in the state with a copy of the post-secondary advanced placement and international baccalaureate policies each year.

$375,000 each year is for teacher stipends. A teacher who teaches an advanced placement or international baccalaureate course shall receive a stipend for each student in that teacher's course who receives a three or better on the advanced placement or a four or better on the international baccalaureate examination that covers the subject matter of the course. The commissioner shall determine the payment process and the amount of the teacher stipend ranging from $25 to $50 for each student receiving a qualifying score.

A stipend awarded to a teacher under this subdivision shall not be a mandatory subject of bargaining under Minnesota Statutes, chapter 179A, or any other law and shall not be a term or condition of employment. The amount of any award shall be final and shall not be subject to review by an arbitrator through any grievance or other process or by a court through any appeal process.

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

Sec. 16. Laws 1997, First Special Session chapter 4, article 5, section 28, subdivision 9, is amended to read:

Subd. 9. [COLLABORATIVE URBAN EDUCATOR PROGRAMS.] For grants to collaborative urban educator programs that prepare and license people of color to teach:

$895,000 . . . . . 1998

$150,000 . . . . . 1999

This appropriation is available until June 30, 1999.

Sec. 17. [RULE REVISION.]

The state board of education shall amend or repeal those portions of Minnesota Rules, parts 3501.0010 to 3501.0180, necessary to conform with the basic skills testing requirements in reading and mathematics under Minnesota Statutes, section 121.1113, subdivision 1.

Sec. 18. [EXEMPTION.]

Any contract entered into during the 1996-1997 school year authorizing a charter school under Minnesota Statutes, section 120.064, subdivision 5, is exempt from the amended requirements of Minnesota Statutes, section 120.064, subdivision 11, only as long as the sponsor of the charter school finds and can adequately demonstrate to the state board of education that the charter school continues without interruption to satisfactorily meet all its performance outcomes. If either the charter school sponsor or the state board of education determines that the charter school under this section is not satisfactorily meeting one or more of its performance outcomes, the amended requirements of Minnesota Statutes, section 120.064, subdivision 11, apply to that charter school.

Sec. 19. [REPORT ON COOPERATIVE SPONSORSHIPS.]

A school district shall immediately transmit to the commissioner of children, families, and learning information about each decision to deny a home school a cooperative sponsorship under state high school league rules or to otherwise deny a home school student an opportunity to participate in the district's extracurricular activities. The school district shall


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transmit the information in the form and manner the commissioner requires. The commissioner shall prepare an interim written report by February 1, 1999, and a final written report by February 1, 2000, for the speaker of the house, the senate majority leader, and the chairs of the house and senate education committees detailing by school district the instances when a school district denies a home school a cooperative sponsorship or a home school student an opportunity to participate in an extracurricular activity and the district rationale for the denial.

Sec. 20. [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY PILOT PROGRAM.]

(a) Consistent with the terms for receiving program grants under Laws 1995, First Special Session chapter 3, article 7, section 4, as amended by Laws 1996, chapter 412, article 7, section 13, independent school district No. 241, Albert Lea, is eligible to receive additional grant funding for its year-round school/extended week or day pilot program.

(b) The commissioner of children, families, and learning, with the assistance of independent school district No. 241, Albert Lea, shall evaluate the efficacy of the district's program and submit a report to the education committees of the legislature by February 1, 2001. The commissioner shall include in the report sufficient information to permit other school districts to readily replicate the program if the commissioner determines that the program is successful.

Sec. 21. [COUNSELOR ASSESSMENT.]

The department of children, families, and learning, in consultation with affected groups, shall conduct an assessment of the need for expanding the number of counselors in school districts. As part of the assessment, the department shall consider recommended ratios and the costs of meeting these, alternative strategies for collaboration to provide counseling services to pupils especially in small districts, mechanisms to strengthen collaboration between school districts and local colleges and universities in providing information and experience to pupils, and suggestions for meeting the needs of pupils for counseling that is focused on academic and career needs and planning. The department shall report its findings and recommendations to the education committees of the house and senate as part of its 2000-2001 biennial budget request.

Sec. 22. [YOUTH ATHLETIC DEMONSTRATION PROGRAM.]

(a) A demonstration athletic grant program through special school district No. 1, Minneapolis, and the Minneapolis park and recreation board is established for children ages seven to 14 at Waite Park school. The goal of the demonstration program is to develop a neighborhood-based athletic program that teaches sports fundamentals to students that will lead to their participation in high school level athletics. The program shall be year-round and shall require both in-school and after-school participation by students. A student who satisfactorily completes the program curriculum shall receive secondary course credit and the credit shall count towards the student's graduation requirements consistent with Minnesota Statutes, section 126.83.

(b) The program shall be established at Waite Park school in Minneapolis where the school facility and park and recreation facility are jointly located and where the school district has established a neighborhood-based school for enrollment purposes. The school district and the park and recreation board shall recruit at-risk students and those students who have not participated in current after-school park programs to participate in the demonstration project.

(c) The program funds shall be used for recreational professionals at the park board to coordinate the program and licensed teachers employed in the district; internships for students at the University of Minnesota, Augsburg College, or other post-secondary institutions to work in the program; master coaches to train coaches; transportation costs; facilities' costs; and assistance to neighborhood park athletic councils.

(d) The school district and the park board shall report to the commissioner of children, families, and learning on the outcome of the program. The commissioner shall report to the education committees of the legislature on the program and the advisability of creating a statewide program by March 15, 1999.


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Sec. 23. [RESIDENTIAL ACADEMY PROGRAM.]

Subdivision 1. [PUBLIC GRANT RECIPIENT.] The commissioner of children, families, and learning may award grants to a public organization for start-up costs for residential academies for students in grades 4 through 12 who express a desire to attend a residential academy that provides a secure and nurturing learning environment, have demonstrated an interest in learning and a potential for academic achievement, and who:

(1) perform or are at risk of performing below the academic performance level for pupils of the same age;

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

(3) have experienced homelessness or an unstable home environment.

Subd. 2. [ORGANIZATIONAL STRUCTURE.] The public grant recipient may collaborate with other organizations in effecting this subdivision.

(a) Enrollment is voluntary. A student may be referred to an academy by a parent or guardian, the student's county of residence, the student's school, health care provider, or the judicial system.

(b) A residential academy must provide an education program for the resident students to:

(1) increase school attendance;

(2) increase academic achievement;

(3) enable secondary students to earn a high school diploma; and

(4) improve for secondary students the transition to post-secondary education or the transition from school to work.

The academy may collaborate with a school district or charter school to provide the education program.

(c) To the extent allowed in law, education and social services funding shall follow each child from the child's school district or county of residence to the academy.

(d) The cost of residential care for a student may be covered under a sliding fee program based on student need.

(e) An academy may receive any gift, grant, bequest, or devise.

(f) The commissioner of children, families, and learning shall prescribe the form and manner of applications. The commissioner shall consider the academy's location, the composition of the academy's governance structure and board, collaborative effort among various organizations, family and community involvement, provision of social services, quality of education program, after-school enrichment, and provision of instruction throughout the entire year in awarding grants. The commissioner shall evaluate the residential academy program and report to the education committees of the legislature by February 15, 2000.

Sec. 24. [SARTELL; SCHOOL YEAR START DATE.]

Notwithstanding Minnesota Statutes, section 126.12, subdivision 1, and Laws 1997, First Special Session chapter 4, article 7, section 49, subdivision 1, independent school district No. 748, Sartell, may begin the 1998-1999 school year before Labor Day only by the number of days necessary to accommodate the district building construction project.

Sec. 25. [HOLDINGFORD; SCHOOL YEAR START DATE.]

Notwithstanding Minnesota Statutes, section 126.12, subdivision 1, and Laws 1997, First Special Session chapter 4, article 7, section 49, subdivision 1, independent school district No. 738, Holdingford, may begin the 1998-1999 school year on the Monday prior to Labor Day.


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Sec. 26. [COMMISSIONER OF CHILDREN, FAMILIES, AND LEARNING.]

The commissioner of children, families, and learning shall designate a staff member as a resource person for gifted and talented programs to provide assistance to parents and school districts. The commissioner shall pay all costs for that staff member out of existing department appropriations.

Sec. 27. [RESIDENCY REQUIREMENT.]

The downtown Minneapolis magnet school that is part of the western metropolitan education program may enroll in the magnet school only those otherwise qualified students who reside within one of the nine participating school districts. No student residing in any other district and participating in a program under Minnesota Statutes, section 120.062, may enroll in the magnet school.

Sec. 28. [TASK FORCE ON KINDERGARTEN THROUGH GRADE 12 EDUCATION GOVERNANCE STRUCTURE.]

Subdivision 1. [ESTABLISHMENT; PURPOSE.] A task force on kindergarten through grade 12 education governance structure is established to examine alternatives for governing the state's kindergarten through grade 12 education system.

Subd. 2. [MEMBERSHIP.] The task force shall consist of 15 members. The department of children, families, and learning shall provide staff support for task force activities. Task force members, appointed by the panel under subdivision 3, must include five people directly involved in public education, five people who represent state or local governments, and five people who are public members, including parents, business leaders, labor leaders, and others who have demonstrated a commitment to excellence in Minnesota public schools. Membership terms and removal are governed by Minnesota Statutes, section 15.059.

Subd. 3. [PANEL.] A panel, composed of one person appointed by the governor, one person appointed by the speaker of the house of representatives, and one person appointed by the subcommittee on committees of the senate committee on rules and administration, shall appoint the members of the task force. The panel shall consider gender and geographical and racial diversity in making the appointments. The commissioner of children, families, and learning shall convene the first meeting of the panel. The panel must make the first appointments to the task force by July 15, 1998.

Subd. 4. [TASK FORCE ACTIVITIES.] The task force shall examine alternatives for governing the state's kindergarten through grade 12 education system by considering at least the following:

(1) the roles of the legislature, governor's office, state board of education, and the commissioner of children, families, and learning in making statewide policy and administrative decisions affecting kindergarten through grade 12 education;

(2) the extent to which the current structure of regional and local government units, including service units, education districts, school districts, city councils, and county boards, promotes or inhibits intergovernmental collaboration;

(3) how to facilitate broad-based collaboration between schools and state and county-based social service agencies serving the same or similar populations of children and families; and

(4) how to best accommodate changing educational needs and demands.

Subd. 5. [REPORT.] The task force shall submit a report of its findings and recommendations to the chairs of the education committees in the house and the senate by February 15, 1999.

Subd. 6. [EXPIRATION.] The task force expires on June 1, 1999.

Sec. 29. [APPROPRIATION; BOARD OF REGENTS.]

$500,000 is appropriated in fiscal year 1999 from the general fund to the board of regents of the University of Minnesota for the purposes of Minnesota Statutes, section 121.1115, subdivisions 1b and 1c.


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Sec. 30. [APPROPRIATIONS.]

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

Subd. 2. [REMOTE SITE CONSULTING SERVICES; MINNESOTA LEARNING RESOURCE CENTER.] To expand attention and reading readiness programs and providing remote site consulting services:

$ 150,000 . . . . . 1999

This appropriation is available to the New Visions program for two purposes: a grant for remote-site consulting services for replicating charter school No. 4011, New Visions program at two other school sites; and neurophysiological models, including Boost-Up, EEG neurofeedback, developmental optometry, and auditory stimulation for assessing, treating, and teaching children with learning problems to improve their attention skills, classroom behavior, and academic performance, to acquire the space and technology needed to establish and equip the Minnesota learning resource center.

Subd. 3. [NONTRADITIONAL CAREERS FOR GIRLS AND WOMEN.] (a) For grants to organizations for programs that encourage and assist girls and women to enter nontraditional careers in the trades and in manual and technical occupations:

$ 20,000 . . . . . 1999

The appropriation is available until June 30, 1999.

(b) To be eligible for a grant under this section, a program must include outreach to girls and women through public and private elementary, junior high, and high schools, appropriate community organizations that work directly with girls and women, or existing state and county employment and training programs. The outreach must consist of general information concerning opportunities for women in the trades, manual, and technical occupations, including specific fields where worker shortage exists, and specific information about training programs offered. The outreach must also include mentoring and hands-on opportunities for girls to learn about nontraditional careers. The outreach may include printed or recorded information, presentations to girls and women, or ongoing contact with the appropriate staff.

Subd. 4. [STUDY ON ENCOURAGING SCHOOL DISTRICTS TO ACCEPT ACADEMICALLY AT-RISK STUDENTS UNDER OPEN ENROLLMENT.] For developing recommendations on how the state's open enrollment program under Minnesota Statutes, section 120.062, can be amended to encourage school districts that limit open enrollment of nonresident students to give priority to accepting at-risk nonresident students:

$ 20,000 . . . . . 1999

The commissioner shall include in the recommendations, among other things: a definition of at-risk student; an incentive for encouraging school districts to accept nonresident at-risk students, including accepting a minimum number of such students from a single attendance area; a mechanism for transporting the students to the nonresident school district; a process for providing timely, useful, and accessible information to families of at-risk students; a method for ensuring that nonresident at-risk students receive ongoing student counseling services while attending the nonresident school district; and a funding structure to accommodate the recommendations. The commissioner shall present the written recommendations by February 1, 1999, to the education committees of the legislature.

Subd. 5. [YEAR-ROUND SCHOOL/EXTENDED WEEK OR DAY PILOT PROGRAM.] For independent school district No. 241, Albert Lea, for an additional year-round school/extended week or day pilot program grant under section 20:

$ 60,000 . . . . . 1999

The appropriation is available until June 30, 2000.


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Subd. 6. [UNLIMITED POSSIBILITIES PLAN.] For a grant to a nonprofit agency representing the private alternative schools:

$ 100,000 . . . . . 1999

The purpose of the grant is to support the Unlimited Possibilities Plan to assist student transition from secondary school to college or gainful employment including mentoring programs, post-secondary training, career exploration, and placement services. The grant recipient must match state funds with an equal amount of funds raised from nonpublic sources.

This appropriation does not cancel but is available until June 30, 2000.

Subd. 7. [MINNESOTA COUNCIL ON ECONOMIC EDUCATION.] For a grant to the Minnesota Council on Economic Education to provide staff development to teachers for implementing of the state graduation standards in learning areas relating to economic education:

$ 200,000 . . . . . 1999

The commissioner and the council must develop the expected results of the staff development, the eligible participants, the evaluation plan, and the amount of direct and in-kind contributions of the council.

Subd. 8. [YOUTH ATHLETIC DEMONSTRATION PROGRAM.] For a grant to special school district No. 1, Minneapolis, and the Minneapolis park and recreation board to establish a youth athletic demonstration program under section 22:

$ 100,000 . . . . . 1999

Subd. 9. [MODEL DISTANCE LEARNING GRANT; LAKE OF THE WOODS.] For a grant to independent school district No. 390, Lake of the Woods, for developing a model distance learning program:

$ 250,000 . . . . . 1999

The model program must address students' curriculum needs for vocational programs, advanced collegiate level courses, gifted and talented programming, programming for students with disabilities, and other areas of programming made more difficult because of the school district's geographic isolation.

Subd. 10. [SCHOOL RESTRUCTURING GRANT.] For a school restructuring grant to a nonstate organization to develop systemic site decision-making models and implement systemic site decision-making in school districts:

$ 500,000 . . . . . 1999

Sec. 31. [REPEALER.]

(a) Minnesota Statutes 1996, section 126.12, is repealed.

(b) Minnesota Statutes 1997 Supplement, section 135A.081, is repealed.

Sec. 32. [EFFECTIVE DATES.]

(a) Consistent with the requirements in Minnesota Statutes, section 123.34, subdivision 9, sections 1 and 2 are effective for superintendents' contracts negotiated to apply beginning the first day of instruction for the 1998-1999 school year and thereafter.

(b) Sections 3, 4, 5, 7, 11, 12, 13, 14, and 18 are effective for the 1998-1999 school year and thereafter.


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(c) Sections 19, 20, 22, 23, 28, and 31, paragraph (b), are effective the day following final enactment.

(d) Section 31, paragraph (a), is effective for the 2000-2001 school year and thereafter.

ARTICLE 6

EDUCATION POLICY ISSUES

Section 1. Minnesota Statutes 1997 Supplement, section 124.2601, subdivision 3, is amended to read:

Subd. 3. [REVENUE AID.] Adult basic education revenue aid for each approved program equals 65 percent of the general education formula allowance times the number of full-time equivalent students in its adult basic education program.

Sec. 2. 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 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 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 Minnesota Statutes 1997 Supplement, section 124.2601, subdivision 5. For fiscal year 1999 and later, additional aid under this paragraph must be reduced by 20 percent each year equals 80 percent of the additional aid computed for fiscal year 1998. For fiscal year 2000, the additional aid under this paragraph equals 60 percent of the additional aid computed for fiscal year 1998. For fiscal year 2001, the additional aid under this paragraph equals 40 percent of the additional aid computed for fiscal year 1998. For fiscal year 2002, the additional aid under this paragraph equals 20 percent of the additional aid computed for fiscal year 1998. For fiscal year 2003 and later, the additional aid under this paragraph equals zero.

Sec. 3. Minnesota Statutes 1997 Supplement, section 124.2711, subdivision 2a, is amended to read:

Subd. 2a. [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To obtain early childhood family education revenue, a district may levy an amount equal to the tax rate of .653 .45 percent times the adjusted tax capacity of the district for the year preceding the year the levy is certified. If the amount of the early childhood family education levy would exceed the early childhood family education revenue, the early childhood family education levy shall equal the early childhood family education revenue.

Sec. 4. Minnesota Statutes 1997 Supplement, section 124.2713, subdivision 6, is amended to read:

Subd. 6. [COMMUNITY EDUCATION LEVY.] To obtain community education revenue, a district may levy the amount raised by a tax rate of 1.09 .41 percent times the adjusted net tax capacity of the district. If the amount of the community education levy would exceed the community education revenue, the community education levy shall be determined according to subdivision 6a.

Sec. 5. Minnesota Statutes 1996, section 124.2713, subdivision 6a, is amended to read:

Subd. 6a. [COMMUNITY EDUCATION LEVY; DISTRICTS OFF THE FORMULA.] If the amount of the community education levy for a district exceeds the district's community education revenue, the amount of the community education levy is limited to the sum of:

(1) the district's community education revenue according to subdivision 1; plus.


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(2) the amount of the aid reduction for the same fiscal year according to subdivision 6b.

For purposes of statutory cross-reference, a levy made according to this subdivision is the levy made according to subdivision 6.

Sec. 6. [124.305] [LOW-INCOME CONCENTRATION LEVY PROGRAM.]

Subdivision 1. [ELIGIBILITY.] A school building qualifies for the low-income concentration program if:

(1) at least 20 percent of the enrolled students are eligible to receive free or reduced price lunch based on the enrollment counts for the previous year;

(2) at least 20 percent of the enrolled students are students of color based on the enrollment counts for the previous year; and

(3) the school building is located in a school district that is not wholly located within the boundaries of a city of the first class.

Subd. 2. [LEVY.] For taxes payable in 1999 only, a school district may levy an amount equal to:

(1) $286; times

(2) the number of children eligible to receive free or reduced price lunch for the previous year enrolled at each qualifying site within the district.

Subd. 3. [REVENUE USES.] Low-income concentration revenue must be used for the purposes listed in section 124A.28, subdivision 1a.

Sec. 7. Minnesota Statutes 1996, section 124.646, subdivision 4, is amended to read:

Subd. 4. [SCHOOL FOOD SERVICE FUND.] (a) The expenses described in this subdivision must be recorded as provided in this subdivision.

(b) In each school district, the expenses for a school food service program for pupils must be attributed to a school food service fund. Under a food service program, the school food service may prepare or serve milk, meals, or snacks in connection with school or community service activities.

(c) Revenues and expenditures for food service activities must be recorded in the food service fund. The costs of processing applications, accounting for meals, preparing and serving food, providing kitchen custodial services, and other expenses involving the preparing of meals or the kitchen section of the lunchroom may be charged to the food service fund or to the general fund of the district. The costs of lunchroom supervision, lunchroom custodial services, lunchroom utilities, and other administrative costs of the food service program must be charged to the general fund.

That portion of superintendent and fiscal manager costs that can be documented as attributable to the food service program may be charged to the food service fund provided that the school district does not employ or contract with a food service director or other individual who manages the food service program, or food service management company. If the cost of the superintendent or fiscal manager is charged to the food service fund, the charge must be at a wage rate not to exceed the statewide average for food service directors as determined by the department of children, families, and learning.

(d) Capital expenditures for the purchase of food service equipment must be made from the capital general fund and not the food service fund, unless two conditions apply:

(1) the unreserved balance in the food service fund at the end of the last fiscal year is greater than the cost of the equipment to be purchased; and

(2) the department of children, families, and learning has approved the purchase of the equipment.


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(e) If the two conditions set out in paragraph (d) apply, the equipment may be purchased from the food service fund.

(f) If a deficit in the food service fund exists at the end of a fiscal year, and the deficit is not eliminated by revenues from food service operations in the next fiscal year, then the deficit must be eliminated by a permanent fund transfer from the general fund at the end of that second fiscal year. However, if a district contracts with a food service management company during the period in which the deficit has accrued, the deficit must be eliminated by a payment from the food service management company.

(g) Notwithstanding paragraph (f), a district may incur a deficit in the food service fund for up to three years without making the permanent transfer if the district submits to the commissioner by January 1 of the second fiscal year a plan for eliminating that deficit at the end of the third fiscal year.

(h) If a surplus in the food service fund exists at the end of a fiscal year for three successive years, a district may recode for that fiscal year the costs of lunchroom supervision, lunchroom custodial services, lunchroom utilities, and other administrative costs of the food service program charged to the general fund according to paragraph (c) and charge those costs to the food service fund in a total amount not to exceed the amount of surplus in the food service fund.

Sec. 8. Minnesota Statutes 1997 Supplement, section 124.6475, is amended to read:

124.6475 [SUMMER FOOD SERVICE REPLACEMENT AID.]

States funds are available to compensate department-approved summer food program sponsors for reduced federal operating reimbursement rates under Public Law Number 104-193, the federal summer food service program. A sponsor is eligible for summer food service replacement aid equal to the sum of the following amounts:

(1) for breakfast service, subtract the current year maximum reimbursement rate from the 1996 maximum reimbursement rate and multiply the result by the number of breakfasts the district served up to four cents per breakfast served by the sponsor during the current school program year;

(2) for lunch or supper service, subtract the current year maximum reimbursement rate from the 1996 maximum reimbursement rate and multiply the result by the number of lunches and suppers the district served up to 14 cents per lunch or supper served by the sponsor during the current school program year; and

(3) for supplement service, subtract the current year maximum reimbursement rate from the 1996 maximum reimbursement rate and multiply the result by the number of up to ten cents per supplement meals served by the district served sponsor during the current school program year.

Sec. 9. Minnesota Statutes 1997 Supplement, section 124.648, subdivision 3, is amended to read:

Subd. 3. [PROGRAM GUIDELINES; DUTIES OF THE COMMISSIONER.] (a) The commissioner shall:

(1) encourage all districts to participate in the school milk program for kindergartners;

(2) prepare program guidelines, not subject to chapter 14 until July 1, 1998, which will effectively and efficiently distribute appropriated and donated money to participating districts; and

(3) seek donations and matching funds from appropriate private and public sources.

(b) Program guidelines may provide for disbursement to districts through a mechanism of prepayments or by reimbursement for approved program expenses.

(c) It is suggested that the benefits of the school milk program may reach the largest number of kindergarten students if districts are allowed to submit annual bids stating the per-serving level of support that would be acceptable to the district for their participation in the program. The commissioner would review all bids received and approve bids in sufficient number and value to maximize the provision of milk to kindergarten students consistent with available funds.


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Sec. 10. Minnesota Statutes 1997 Supplement, section 124.916, subdivision 2, is amended to read:

Subd. 2. [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes payable in 1996, 1997, 1998, and 1999 only Each year, a school district may levy an amount up to the amount the district is required by the collective bargaining agreement in effect on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for licensed and nonlicensed employees who have terminated services in the employing district and withdrawn from active teaching service or other active service, as applicable, before July 1, 1992. The total amount of the levy each year may not exceed $300,000.

Sec. 11. Minnesota Statutes 1996, section 124A.292, subdivision 3, is amended to read:

Subd. 3. [STAFF DEVELOPMENT LEVY.] A district's levy equals its revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the district's adjusted net tax capacity for the year before the year the levy is certified by the district's actual pupil units for the school year to which the levy is attributable, to

(2) the equalizing factor for the school year to which the levy is attributable the number of teachers at the site times $8.15.

Sec. 12. Laws 1997, First Special Session chapter 4, article 6, section 20, subdivision 4, is amended to read:

Subd. 4. [SCHOOL LUNCH AND FOOD STORAGE AID.] (a) For school lunch aid according to Minnesota Statutes, section 124.646, and Code of Federal Regulations, title 7, section 210.17, and for food storage and transportation costs for United States Department of Agriculture donated commodities; and for a temporary transfer to the commodity processing revolving fund to provide cash flow to permit schools and other recipients of donated commodities to take advantage of volume processing rates and for school milk aid according to Minnesota Statutes, section 124.648:

$7,254,000 . . . . . 1998

$7,254,000 $7,770,000 . . . . . 1999

(b) Any unexpended balance remaining from the appropriations in this subdivision shall be prorated among participating schools based on the number of free, reduced, and fully paid federally reimbursable student lunches served during that school year.

(c) If the appropriation amount attributable to either year is insufficient, the rate of payment for each fully paid student lunch shall be reduced and the aid for that year shall be prorated among participating schools so as not to exceed the total authorized appropriation for that year.

(d) Any temporary transfer processed in accordance with this subdivision to the commodity processing fund will be returned by June 30 in each year so that school lunch aid and food storage costs can be fully paid as scheduled.

(e) Not more than $800,000 of the amount appropriated each year may be used for school milk aid.

(f) The commissioner may reduce other future aid and grant payments due to school districts and other organizations for the costs of processing and storage of commodities used by the district or organization.

Sec. 13. [SCHOOL CROSSING GUARDS LEVY; HASTINGS.]

In addition to other levies, independent school district No. 200, Hastings, may levy up to $55,000 for school crossing guards each year.


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Sec. 14. [FUND TRANSFERS; REVENUE USES.]

Subdivision 1. [USE OF BOND PROCEEDS; ST. CLOUD.] Notwithstanding Minnesota Statutes, section 475.58, subdivision 4, independent school district No. 742, St. Cloud, upon passage of a written resolution specifying the amount and purpose of the expenditure, may expend up to $800,000 from its building construction fund to purchase a building and site to be used for community education purposes.

Subd. 2. [RESERVED ACCOUNT TRANSFER; LYND.] Notwithstanding Minnesota Statutes, sections 121.912 and 121.9121, on June 30, 1998, independent school district No. 415, Lynd, may permanently transfer up to $100,000 from reserve accounts in the general fund to the unreserved general fund. The transfer may be made from the reemployment account and the bus purchase account. Transfers from the reemployment account may be made without making a levy reduction.

Subd. 3. [HEALTH AND SAFETY REVENUE; MOUNDS VIEW.] Notwithstanding Minnesota Statutes, section 124.83, subdivision 6, independent school district No. 621, Mounds View, is authorized to use up to $300,000 of its health and safety revenue to replace portable classrooms with new construction of classrooms.

Subd. 4. [HEALTH AND SAFETY; ADA-BORUP.] Notwithstanding Minnesota Statutes, section 124.83, subdivision 6, independent school district No. 2854, Ada-Borup, may use up to $90,000 of its health and safety revenue for capital improvements, equipment, or furnishings for new facilities.

Subd. 5. [HEALTH AND SAFETY; EVELETH-GILBERT.] Notwithstanding any law to the contrary, independent school district No. 2154, Eveleth-Gilbert, may include in its health and safety program the amounts necessary to make health and safety improvements to an ice arena located within the district boundaries. The total amount of revenue approved for this purpose shall not exceed $300,000.

Sec. 15. [OSSEO LEVY.]

For taxes payable in 1999 only, independent school district No. 279, Osseo, may levy a tax in an amount not to exceed $800,000. The proceeds of this levy must be used to provide instructional services for at-risk children.

Sec. 16. [APPROPRIATIONS.]

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

Subd. 2. [HISTORY EDUCATION.] (a) For grants to develop and sustain historical educational programming and curriculum designed primarily for elementary and secondary school students:

$ 180,000 . . . . . 1999

(b) Of the amount appropriated in paragraph (a), $90,000 is for a grant to Murphy's landing living history village for its educational programs including education tours, outreach programs, and immersion camps and $90,000 is for a grant to Ironworld for its historical education programs.

(c) This appropriation shall be included in the education base budget estimates for the 2000-2001 biennium.

Subd. 3. [MEDIA SPECIALIST.] For a media specialist for independent school district No. 707, Nett Lake:

$ 34,000 . . . . . 1999

Sec. 17. [REPEALER.]

(a) Minnesota Statutes 1997 Supplement, section 124.2601, subdivision 4, is repealed.


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(b) Minnesota Statutes 1997 Supplement, section 124.2601, subdivision 5, is repealed effective July 1, 1999.

(c) Minnesota Statutes 1996, section 124.2713, subdivision 6b, is repealed effective for taxes payable in 1999 and revenue for fiscal year 2000.

(d) Minnesota Statutes 1996, section 124A.292, subdivisions 2 and 4, are repealed effective for revenue for fiscal year 2000.

(e) Laws 1997, chapter 231, article 1, section 17, is repealed effective the day following final enactment.

(f) Minnesota Statutes 1996, section 124.647, is repealed.

Sec. 18. [EFFECTIVE DATE.]

(a) Sections 12 and 14 are effective the day following final enactment.

(b) Sections 2, 3, 4, 7 to 11, and 15 are effective July 1, 1998.

(c) Section 1 is effective July 1, 1999.

(d) Section 5 is effective for revenue for fiscal year 2000.

ARTICLE 7

LIBRARIES

Section 1. Laws 1997, First Special Session chapter 4, article 8, section 4, subdivision 3, is amended to read:

Subd. 3. [BOARD; APPOINTMENTS.] The resolution in subdivision 2 shall provide for a library board of five seven members as follows: two members appointed by the school board of independent school district No. 319, one member appointed by each town board located within independent school district No. 319 boundaries, one member appointed by the council of the city of Nashwauk, and one member appointed by the Itasca county board to represent the unorganized towns within the school district territory.

Sec. 2. [DATABASE ACCESS PROGRAM FOR PUBLIC LIBRARIES AND SCHOOL MEDIA CENTERS.]

Subdivision 1. [ESTABLISHMENT.] The commissioner of children, families, and learning shall establish a program to provide statewide licenses to commercial electronic databases of periodicals, encyclopedias, and associated reference materials for school media centers and public libraries. The commissioner, in consultation with Minitex and in cooperation with the Library Planning Task Force, shall solicit proposals for access licenses to commercial vendors of the databases. Responses to those proposals shall be evaluated by staff of the office of library development and services in the department of children, families, and learning, Minitex staff, and a representative panel of school media specialists and public librarians.

Subd. 2. [ELIGIBILITY.] Access to the selected databases shall be made available to a school or school district that is a member of a multicounty, multitype library system as defined in Minnesota Statutes, section 134.001, subdivision 6, or a public library as defined in Minnesota Statutes, section 134.001, subdivision 2, that is a member of a multicounty, multitype library system. With appropriate authentication any user of an eligible library may have access to the databases from a remote site.

Sec. 3. [APPROPRIATION; DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING.]

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


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Subd. 2. [REGIONAL LIBRARY SYSTEMS.] For regional library systems:

$250,000 . . . . . 1999

The money must be divided equally among the 12 regional public library systems established under Minnesota Statutes, section 134.20, for use in providing library services.

Subd. 3. [LIBRARY FOR THE BLIND; APPROPRIATION.] For the purchase and installation of online catalog software for the Minnesota library for the blind and physically handicapped:

$60,000 . . . . . 1999

Subd. 4. [DATABASE ACCESS PROGRAM.] For establishing a database access program for public libraries and school media centers under section 2:

$1,200,000 . . . . . 1999

Subd. 5. [METRONET.] To the metropolitan multitype library consortium for copying and making available to the 11 greater Minnesota regional public library systems and the St. Paul and Minneapolis libraries, through the Minnesota Center for the Book, a series of video cassette tapes of interviews with Minnesota authors, for the production and programming costs of the northern lights cable program on which the Minnesota authors are interviewed, and for operating costs the consortium incurs as a result of this provision:

$40,000 . . . . . 1999

Libraries that receive a copy of the series shall make the video cassettes readily available to teachers and other members of the public interested in learning about the work and lives of Minnesota authors.

ARTICLE 8

STATE AGENCIES

Section 1. Laws 1997, First Special Session chapter 4, article 10, section 3, subdivision 2, is amended to read:

Subd. 2. [DEPARTMENT.] For the department of children, families, and learning:

$24,360,000 . . . . . 1998

$23,978,000 $24,178,000 . . . . . 1999

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

(b) $21,000 each year is from the trunk highway fund.

(c) $622,000 in 1998 and $627,000 in 1999 is for the academic excellence foundation.

Up to $50,000 each year is contingent upon the match of $1 in the previous year from private sources consisting of either direct monetary contributions or in-kind contributions of related goods or services, for each $1 of the appropriation. The commissioner of children, families, and learning must certify receipt of the money or documentation for the private matching funds or in-kind contributions. The unencumbered balance from the amount actually appropriated from the contingent amount in 1998 does not cancel but is available in 1999. The amount carried forward must not be used to establish a larger annual base appropriation for later fiscal years.

(d) $207,000 in 1998 and $210,000 in 1999 is for the state board of education.


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(e) $230,000 in 1998 and $234,000 in 1999 is for the board of teaching.

(f) The expenditures of federal grants and aids as shown in the biennial budget document and its supplements are approved and appropriated and shall be spent as indicated.

(g) The department of children, families, and learning shall develop a performance report on the quality of its programs and services. The report must be consistent with the process specified in Minnesota Statutes, sections 15.90 to 15.92. The goals, objectives, and measures of this report must be developed in cooperation with the chairs of the finance divisions of the education committees of the house of representatives and senate, the department of finance, and the office of legislative auditor. The report must include data to indicate the progress of the department in meeting its goals and objectives.

(h) At least $50,000 is to ensure compliance with state and federal laws prohibiting discrimination because of race, religion, or sex. The department shall use the appropriation to provide state-level leadership on equal education opportunities which promote elimination of discriminatory practices in the areas of race, religion, and sex in public schools and public educational agencies under its general supervision and on activities including, at least, compliance monitoring and voluntary compliance when local school district deficiencies are found.

(i) Notwithstanding Minnesota Statutes, section 15.53, subdivision 2, the commissioner of children, families, and learning may contract with a school district for a period no longer than five consecutive years to work in the development or implementation of the graduation rule. The commissioner may contract for services and expertise as necessary. The contracts are not subject to Minnesota Statutes, sections 16B.06 to 16B.08.

(j) In preparing the department budget for fiscal years 2000-2001, the department shall shift all administrative funding from aids appropriations into the appropriation for the department.

(k) Reallocations of excesses under Minnesota Statutes, section 124.14, subdivision 7, from appropriations within this act shall only be made to deficiencies in programs with appropriations contained within this act.

(l) $850,000 each year is for litigation costs and may only be used for those purposes. These appropriations are one-time only.

(m) $200,000 in fiscal year 1999 is for mediation expenses associated with school funding lawsuits filed against the state.

(n) Collaborative efforts between the department of children, families, and learning and the office of technology, as specified in Minnesota Statutes, section 237A.015, include:

(1) advising the commissioner of children, families, and learning on new and emerging technologies, potential business partnerships, and technical standards;

(2) assisting the commissioner of children, families, and learning in the sharing of data between state agencies relative to children's programs; and

(3) as requested by the commissioner of children, families, and learning, assisting in collaborative efforts for joint prekindergarten through grade 12 and higher education projects, including the learning network.

The commissioner of children, families, and learning shall have final approval for prekindergarten through grade 12 programs and lifelong learning programs, grant awards, and funding decisions.

Sec. 2. Laws 1997, First Special Session chapter 4, article 10, section 4, is amended to read:

Sec. 4. [APPROPRIATIONS; LOLA AND RUDY PERPICH MINNESOTA CENTER FOR ARTS EDUCATION.]

The sums indicated in this section are appropriated from the general fund to the center for arts education for the fiscal years designated:

$5,541,000 $5,559,000 . . . . . 1998

$6,054,000 $6,120,000 . . . . . 1999


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Of the fiscal year 1998 appropriation, $154,000 is to fund artist and arts organization participation in the education residency and education technology projects, $75,000 is for school support for the residency project, and $121,000 is for further development of the partners: arts and school for students (PASS) program, including pilots. Of the fiscal year 1999 appropriation, $154,000 is to fund artist and arts organizations participation in the education residency project, $75,000 is for school support for the residency project, and $121,000 is to fund the PASS program, including additional pilots, and $30,000 is to enhance the implementation of the graduation rule and profile of learning for students attending the center for arts education. The guidelines for the education residency project and the pass program shall be developed and defined by the center for arts education in cooperation with the Minnesota arts board. The Minnesota arts board shall participate in the review and allocation process. The center for arts education and the Minnesota arts board shall cooperate to fund these projects.

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

Sec. 3. Laws 1997, First Special Session chapter 4, article 10, section 5, is amended to read:

Sec. 5. [APPROPRIATIONS; FARIBAULT ACADEMIES.]

The sums indicated in this section are appropriated from the general fund to the department of children, families, and learning for the Faribault academies for the fiscal years designated:

$8,910,000 $8,949,000 . . . . . 1998

$8,908,000 $8,986,000 . . . . . 1999

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

In the next biennial budget, the academies must assess their progress in meeting the established performance measures for the Faribault academies and inform the legislature on the content of that assessment. The information must include an assessment of its progress by consumers and employees.

Sec. 4. [EFFECTIVE DATE.]

Sections 1 to 3 are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to education; kindergarten through grade 12; providing for general education; special education; interagency services and lifelong learning; facilities and organization; policies promoting academic excellence; education policy issues; libraries; state agencies; appropriating money; amending Minnesota Statutes 1996, sections 43A.17, subdivisions 9 and 10; 120.03, subdivision 1; 120.06, subdivision 2a; 120.064, subdivisions 5 and 11; 120.101, subdivision 3; 120.17, subdivisions 1, 2, 3, 3a, 3b, 6, 7, 9, and 15; 120.1701, subdivisions 2, 5, 11, and 17; 120.173, subdivisions 1 and 6; 120.73, subdivision 1; 121.1115, by adding subdivisions; 121.908, subdivisions 2 and 3; 122.23, subdivision 6; 123.35, subdivision 19a; 123.39, subdivision 1, and by adding a subdivision; 123.935, subdivisions 1 and 2; 124.14, subdivision 7, and by adding a subdivision; 124.17, subdivision 2, and by adding a subdivision; 124.248, subdivisions 1 and 1a; 124.2713, subdivision 6a; 124.273, by adding a subdivision; 124.32, by adding a subdivision; 124.3201, subdivision 5; 124.323, by adding subdivisions; 124.646, subdivision 4; 124.755, subdivision 1; 124.95, subdivision 6; 124A.03, subdivision 3c; 124A.034, subdivision 2; 124A.036, subdivisions 1a, 4, 6, and by adding a subdivision; 124A.22, by adding a subdivision; 124A.292, subdivision 3; 124A.30; 124C.45, subdivision 2; 124C.47; 124C.48, by adding a subdivision; 125.191; 126.237; 127.27, subdivisions 2 and 4; 256B.0625, subdivision 26; 260.015, subdivision 19; and 260.132, subdivision 4; Minnesota Statutes 1997 Supplement, sections 120.101, subdivision 5; 120.1701, subdivision 3; 120.181; 121.11, subdivision 7c; 121.1113, subdivision 1; 121.904, subdivision 4a; 124.17, subdivisions 1d, 6, and 7; 124.248, subdivisions 2a and 6; 124.2601, subdivisions 3 and 6; 124.2711, subdivision 2a; 124.2713, subdivision 6; 124.3111, subdivisions 2 and 3; 124.3201, subdivisions 1, 2, and 4; 124.6475; 124.648, subdivision 3; 124.91, subdivisions 1 and 5; 124.916, subdivision 2; 124A.036, subdivision 5; 124A.22, subdivisions 1 and 11; 124A.23, subdivision 1; 124A.28, subdivisions 1 and 1a; 124C.46, subdivisions 1 and 2; 126.79, subdivisions 3,


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6, 7, 8, and 9; 127.27, subdivisions 10 and 11; 127.281; 127.31, subdivision 15; 127.32; 127.36, subdivision 1; and 127.38; Laws 1992, chapter 499, article 7, section 31; Laws 1997, First Special Session chapter 4, article 1, section 58; article 1, section 61, subdivision 3; article 2, section 51, subdivisions 2, 4, 5, and 29; article 3, section 23, by adding a subdivision; article 3, section 25, subdivisions 2 and 4; article 4, section 35, subdivision 9; article 5, section 24, subdivision 4; article 5, section 28, subdivisions 4, 9, and 12; article 6, section 20, subdivision 4; article 8, section 4, subdivision 3; article 9, section 11; article 9, section 12, subdivision 8; article 10, section 3, subdivision 2; article 10, section 4; and article 10, section 5; proposing coding for new law in Minnesota Statutes, chapters 120; 124; 124A; and 126; repealing Minnesota Statutes 1996, sections 124.2713, subdivision 6b; 124.647; 124A.292, subdivisions 2 and 4; 124A.697; 124A.698; 124A.70; 124A.71; 124A.711, subdivision 1; 124A.72; 124A.73; and 126.12; Minnesota Statutes 1997 Supplement, sections 124.2601, subdivisions 4 and 5; 124.912, subdivisions 2 and 3; 124A.711, subdivision 2; and 135A.081; Laws 1993, chapter 146, article 5, section 20, as amended; Laws 1997, chapter 231, article 1, section 17; Minnesota Rules, part 3525.2750, subpart 1, item B."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Taxes.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3057, A bill for an act relating to the organization and operation of state government; appropriating money for transportation, public safety, and other purposes; requiring studies; establishing a task force on dealer licensing and motor vehicle registration enforcement in the state patrol; requiring wheel flaps on truck-tractors; regulating weight restrictions on vehicle axles; providing an exemption from aircraft registration; regulating state air transportation charges; defining road or highway; requiring certain expenditures from the trunk highway fund; establishing transportation spending goals; requiring expenditures for activities of the state patrol to be from the general fund; amending Minnesota Statutes 1996, sections 160.02, subdivision 7, and by adding a subdivision; 161.04, by adding a subdivision; 169.733, subdivision 1; 169.825, subdivision 8; 174.01, by adding a subdivision; 174.02, by adding a subdivision; 299D.01, by adding a subdivision; 299D.03, subdivision 5; 360.024; and 360.653; Laws 1997, chapter 159, article 1, section 2, subdivision 2.

Reported the same back with the following amendments:

Page 9, line 33, delete "by fiscal year 2002"

Page 10, line 1, delete "by fiscal year 1999"

Page 10, line 5, delete "by fiscal year 1999"

Pages 10 to 12, delete sections 6 to 8

Page 12, line 26, delete "9." and insert "6. [296.0255]"

Page 12, line 35, delete "8, and 9" and insert "and 6"

Page 12, line 36, delete ", 5, 6, and 7" and insert "and 5"

Renumber the sections in sequence


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7398

Amend the title as follows:

Page 1, line 11, delete "road or highway" and insert "terms"

Page 1, delete lines 13 and 14 and insert "spending goals;"

Page 1, line 19, delete everything after the semicolon

Page 1, line 20, delete everything before "360.024"

Page 1, line 22, before the period, insert "; proposing coding for new law in Minnesota Statutes, chapter 296"

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 3138, A bill for an act relating to health; providing for the use of automatic external defibrillators; providing immunity from civil liability; amending Minnesota Statutes 1996, section 604A.01, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 145.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 604A.01, subdivision 2, is amended to read:

Subd. 2. [GENERAL IMMUNITY FROM LIABILITY.] (a) A person who, without compensation or the expectation of compensation, renders emergency care, advice, or assistance at the scene of an emergency or during transit to a location where professional medical care can be rendered, is not liable for any civil damages as a result of acts or omissions by that person in rendering the emergency care, advice, or assistance, unless the person acts in a willful and wanton or reckless manner in providing the care, advice, or assistance. This subdivision does not apply to a person rendering emergency care, advice, or assistance during the course of regular employment, and receiving compensation or expecting to receive compensation for rendering the care, advice, or assistance.

(b) For the purposes of this section, the scene of an emergency is an area outside the confines of a hospital or other institution that has hospital facilities, or an office of a person licensed to practice one or more of the healing arts under chapter 147, 147A, 148, 150A, or 153. The scene of an emergency includes areas threatened by or exposed to spillage, seepage, fire, explosion, or other release of hazardous materials, and includes ski areas and trails.

(c) For the purposes of this section, "person" includes a public or private nonprofit volunteer firefighter, volunteer police officer, volunteer ambulance attendant, volunteer first provider of emergency medical services, volunteer ski patroller, and any partnership, corporation, association, or other entity.

(d) For the purposes of this section, "compensation" does not include payments, reimbursement for expenses, or pension benefits paid to members of volunteer organizations.

(e) For purposes of this section, "emergency care" includes providing emergency medical care by using or providing an automatic external defibrillator, unless the person on whom the device is to be used objects. "Automatic external defibrillator" means a medical device heart monitor and defibrillator that:

(1) has received approval of its premarket notification, filed pursuant to United States Code, title 21, section 360(k), from the United States Food and Drug Administration;


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7399

(2) is capable of recognizing the presence or absence of ventricular fibrillation or rapid ventricular tachycardia, and is capable of determining, without intervention by an operator, whether defibrillation should be performed; and

(3) upon determining that defibrillation should be performed, automatically charges and requests delivery of an electrical impulse to an individual's heart."

Delete the title and insert:

"A bill for an act relating to civil actions; providing immunity from civil liability for the use of automatic external defibrillators under certain circumstances; amending Minnesota Statutes 1996, section 604A.01, subdivision 2."

With the recommendation that when so amended the bill pass.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 3593, A bill for an act relating to the Minnesota housing finance agency; making permanent a temporary provision about the agency's meetings; amending Laws 1997, chapter 154, section 5.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [REPEALER.]

Laws 1997, chapter 154, section 5, is repealed effective June 30, 1998."

Delete the title and insert:

"A bill for an act relating to state government; making permanent temporary provisions regarding meetings of the housing finance agency and rural finance authority; repealing Laws 1997, chapter 154, section 5."

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3691, A bill for an act relating to income taxation and higher education; extending the number of years of education provided by the state to 13; proposing coding for new law in Minnesota Statutes, chapters 135A; and 290.

Reported the same back with the following amendments:

Page 1, line 18, delete "the families of"

Page 1, line 19, after "graduates" insert "or the families"

Page 2, line 9, after "credit" insert "may qualify for a credit based on their own income, and otherwise"

Page 2, line 14, after the semicolon, insert "and"


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7400

Page 2, line 17, delete "; and" and insert a period

Page 2, delete lines 18 and 19 and insert:

"A Minnesota GED recipient who enrolls full time in an eligible institution in the fall immediately following receipt of the GED, and whose high school cohort graduated in the same year, is also an eligible student."

Page 2, line 20, delete "Taxpayers who claim"

Page 2, delete line 21

Page 2, line 22, delete everything before "any" and insert ""Eligible institution" means"

Page 3, line 17, delete "has the meaning" and insert "means the taxpayer, spouse, or person claimed as a dependent of the taxpayer under section 152 of the Internal Revenue Code. An "eligible student" must also meet the definition"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

S. F. No. 2532, A bill for an act relating to children; clarifying certain terms and applicability of certain programs; providing for licensing assistance, outreach, and training; allowing grants for school-age child care programs; allowing certain grants for statewide adult basic education; changing child care licensing requirements for employers; providing for review of certain orders by the commissioner of children, families, and learning; establishing a cash flow account for energy assistance funds; allowing migrant and seasonal farmworkers to carry out community action programs; changing provisions for family day care licensure; appropriating money; amending Minnesota Statutes 1996, sections 119B.10, by adding a subdivision; 119B.13, subdivision 3; 119B.18, subdivision 2, and by adding subdivisions; 119B.19, subdivisions 1, 4, and by adding subdivisions; 120.1701, subdivision 5; 121.8355, by adding a subdivision; 124.26, subdivision 1c; 245A.14, subdivision 4; 256.045, subdivision 6, and by adding a subdivision; 268.52, subdivisions 1 and 2; and 268.54, subdivision 2; Minnesota Statutes 1997 Supplement, sections 119B.01, subdivision 16; 119B.061, subdivisions 1, 2, 3, and 4; 119B.075; 119B.10, subdivision 1; 119B.13, subdivision 6; 119B.21, subdivisions 2, 4, 5, and 11; 256.045, subdivision 7; 268.53, subdivision 5; and 466.01, subdivision 1; Laws 1997, chapters 162, article 1, section 18, subdivision 8; article 3, section 8, subdivision 3; and article 4, section 63, subdivisions 2 and 3; 248, section 47, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 119B; and 268.

Reported the same back with the following amendments to the unofficial engrossment:

Page 42, delete lines 18 to 25

Page 44, line 8, delete "1999" and insert "1998"

Page 44, after line 17, insert:

"This appropriation is added to the lead abatement program's base appropriation for the 1998-1999 biennium and is available until June 30, 1999."

Page 45, line 1, delete "18 to 21" and insert "17 to 20"

Renumber the sections in sequence

With the recommendation that when so amended the bill pass.

The report was adopted.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7401

Solberg from the Committee on Ways and Means to which was referred:

S. F. No. 3297, A bill for an act relating to appropriations; appropriating money for higher education and related purposes, with certain conditions; requiring a study; amending Minnesota Statutes 1996, section 136A.101, subdivision 7b; Minnesota Statutes 1997 Supplement, section 136A.121, subdivision 5; Laws 1996, chapter 366, section 6, as amended; Laws 1997, chapter 183, article 1, section 2, subdivisions 6, 9, and 13; and article 2, section 19.

Reported the same back with the following amendments to the unofficial engrossment:

Page 1, after line 12, insert:

"ARTICLE 1

APPROPRIATIONS"

Page 7, after line 12, insert:

"ARTICLE 2

GRADE 13

Section 1. [LEGISLATIVE POLICY.]

The legislature has found that it is in the best interest of the state and its citizens to encourage more students to continue their education and training beyond high school. Additionally, the legislature has found that the changing society and economy have made it necessary for most students to continue their education in order to have productive careers that contribute to their personal well-being and to the economic growth and competitiveness of the state. Therefore, the legislature has chosen to extend the number of years of education that are provided to students by the state through grade 13. In order to accomplish this, new high school graduates or the families may claim an income tax credit of up to $500 per year for the cost of the student's tuition. This credit, coupled with the newly established $1,500 federal income tax credit, will provide the equivalent of the cost of the first year of tuition at any Minnesota public two-year college.

Sec. 2. [135A.60] [GRADE 13.]

Subdivision 1. [ESTABLISHED.] A program is established to provide new high school graduates with the first year of post-secondary education at a public two-year college tuition-free. The program also reduces the cost of the first year of post-secondary education at an eligible four-year college or university. The maximum credit allowed for each eligible student is $500. This maximum is subject to income limitations and adjusted for inflation as described in section 290.0675. Students whose family income falls below the level necessary to qualify for a full tax credit may qualify for a credit based on their own income, and otherwise shall receive similar benefits through state and federal financial aid.

Subd. 2. [ELIGIBLE STUDENTS.] To be eligible for the grade 13 program, students must:

(1) be Minnesota residents;

(2) graduate from a Minnesota high school in 1998 or later; and

(3) enroll full time in an eligible Minnesota post-secondary institution, as defined in subdivision 3, in the fall immediately following their high school graduation.

A Minnesota GED recipient who enrolls full time in an eligible institution in the fall immediately following receipt of the GED, and whose high school cohort graduated in the same year, is also an eligible student.

Subd. 3. [ELIGIBLE INSTITUTIONS.] "Eligible institution" means any of the following post-secondary institutions located in Minnesota:

(1) a two-year public community college, technical college, or consolidated community/technical college;


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7402

(2) a state university;

(3) the University of Minnesota; or

(4) a private nonprofit, degree granting, two- or four-year liberal arts or vocational technical school.

Subd. 4. [QUALIFYING HIGHER EDUCATION EXPENSES.] For purposes of this section and section 290.0675, "qualifying higher education expenses" means tuition and fees actually paid during the taxable year to an eligible institution by a taxpayer on behalf of an eligible student for the student's first year of post-secondary education, net of any refunds of tuition and fees received from the institution. In tax years in which the taxpayer pays qualifying higher education expenses that relate to only the first year of the student's post-secondary education, the taxpayer must subtract from qualifying higher education expenses any federal HOPE scholarship credit under section 25A of the Internal Revenue Code for which the student is eligible. Otherwise the taxpayer must subtract from qualifying higher education expenses any federal HOPE scholarship credit under section 25A of the Internal Revenue Code for which the student is eligible, net of tuition and fees paid for the second year of the student's post-secondary education.

Sec. 3. [290.0675] [MINNESOTA HIGHER EDUCATION CREDIT.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following terms have the meanings given.

(a) "Qualifying higher education expenses" has the meaning given in section 135A.60, subdivision 4.

(b) "Eligible student" means the taxpayer, spouse, or person claimed as a dependent of the taxpayer under section 152 of the Internal Revenue Code. An "eligible student" must also meet the definition given in section 135A.60, subdivision 2.

(c) "Income" means federal adjusted gross income as defined in section 62 of the Internal Revenue Code.

Subd. 2. [CREDIT ALLOWED.] An individual is allowed a credit against the tax imposed by this chapter equal to 100 percent of qualifying higher education expenses for an eligible student. The maximum credit allowed for each eligible student is $500. For married couples filing joint returns, the maximum credit is reduced by five percent for each $1,000 of income over a threshold. For all other taxpayers, the maximum credit is reduced by ten percent for each $1,000 of income over a threshold. For married couples filing joint returns, the threshold is $80,000. For all other taxpayers, the threshold is $40,000. In no case is the credit less than zero. This credit is allowed for only one taxable year with respect to each eligible student.

For a nonresident or part-year resident, the credit determined under this section must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

Subd. 3. [INFLATION ADJUSTMENT.] The maximum credit amount and the thresholds at which the credit begins to be reduced under subdivision 2 must be adjusted for inflation. The commissioner shall adjust the maximum credit and the threshold amounts by the percentage determined under section 290.06, subdivision 2d, for the taxable year.

Sec. 4. [EFFECTIVE DATE.]

Sections 1, 2, and 3, subdivisions 1 and 2, are effective for tax years beginning after December 31, 1997. Section 3, subdivision 3, is effective for tax years beginning after December 31, 2001."

Amend the title as follows:

Page 1, line 4, after the semicolon, insert "extending the number of years of education provided by the state to 13;"

Page 1, line 10, delete "chapter 137;" and insert "chapters 135A; 137; and 290;"

With the recommendation that when so amended the bill pass.

The report was adopted.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7403

SECOND READING OF HOUSE BILLS

H. F. Nos. 384, 1072, 1116, 1414, 2722, 2724, 2814, 3057, 3138, 3593 and 3691 were read for the second time.

SECOND READING OF SENATE BILLS

S. F. Nos. 2047, 2192, 2266, 2516, 2570, 2608, 2659, 2532 and 3297 were read for the second time.

INTRODUCTION AND FIRST READING OF HOUSE BILLS

The following House Files were introduced:

Trimble, Gunther, Jaros, Rhodes and Clark, K., introduced:

H. F. No. 3792, A bill for an act relating to public administration; authorizing spending to acquire and to better public land and buildings and other public improvements of a capital nature with certain conditions; authorizing issuance of bonds; appropriating money; amending Minnesota Statutes 1996, section 116.182, by adding a subdivision; Laws 1994, chapter 643, section 2, subdivision 13; Laws 1996, chapter 463, section 22, subdivision 7; proposing coding for new law in Minnesota Statutes, chapter 116J.

The bill was read for the first time and referred to the Committee on Capital Investment.

Mulder introduced:

H. F. No. 3793, A bill for an act relating to capital improvements; authorizing spending to acquire and to better public land and buildings and other public improvements of a capital nature; providing for a grant to Area II Board of Directors, Minnesota River Basin Projects, Inc. for installation of road retentions in Area II; authorizing issuance of bonds; appropriating money.

The bill was read for the first time and referred to the Committee on Transportation and Transit.

Dawkins introduced:

H. F. No. 3794, A bill for an act relating to taxation; providing a sales tax exemption for building materials purchased for use in constructing certain low-income housing to be built by offenders; amending Minnesota Statutes 1997 Supplement, section 297A.25, subdivision 11.

The bill was read for the first time and referred to the Committee on Taxes.

Erhardt, Harder, Paulsen and Macklin introduced:

H. F. No. 3795, A bill for an act relating to taxation; providing conformity to federal provisions providing for certain individual retirement accounts; amending Minnesota Statutes 1997 Supplement, section 290.01, subdivision 19.

The bill was read for the first time and referred to the Committee on Taxes.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7404

Otremba, M., introduced:

H. F. No. 3796, A bill for an act relating to state lands; authorizing public sale of certain tax-forfeited land that borders public water in Todd county.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Carruthers introduced:

H. F. No. 3797, A bill for an act relating to taxation; property; extending the time and qualifications for certain apartment valuation exclusion in the cities of Brooklyn Center, Richfield, and St. Louis Park; amending Laws 1997, chapter 231, article 2, section 63, subdivision 1.

The bill was read for the first time and referred to the Committee on Taxes.

MESSAGES FROM THE SENATE

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned:

H. F. No. 2590, A bill for an act relating to landlords and tenants; correcting a reference relating to certain civil penalties; providing for interest rates on security deposits; amending Minnesota Statutes 1996, sections 504.183, subdivision 6; and 504.20, subdivision 2.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 481, 2729, 3345, 2426, 2699, 3092, 2368, 2365 and 2182.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 2354, 2373, 2351, 1076, 2362, 2574, 2734, 2457, 2199, 2663 and 1001.

Patrick E. Flahaven, Secretary of the Senate


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7405

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 2572, 3063, 2609, 2669, 3118, 3353, 3346 and 3298.

Patrick E. Flahaven, Secretary of the Senate

FIRST READING OF SENATE BILLS

S. F. No. 481, A bill for an act relating to human services; establishing threshold limits for rehabilitative and therapeutic services covered under medical assistance.

The bill was read for the first time and referred to the Committee on Health and Human Services.

S. F. No. 2729, A bill for an act relating to highways; allowing advertisements, public art, and informational signs to be placed on bicycle racks and bicycle storage facilities on highway right-of-way; amending Minnesota Statutes 1996, section 160.27, subdivision 5, and by adding a subdivision.

The bill was read for the first time.

Long moved that S. F. No. 2729 and H. F. No. 3296, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 3345, A bill for an act relating to criminal justice; appropriating money for the judicial branch, public safety, corrections, criminal justice, crime prevention programs, and related purposes; modifying various fees, assessments, and surcharges; implementing, clarifying, and modifying certain criminal and juvenile provisions; prescribing, clarifying, and modifying certain penalty provisions; establishing, clarifying, expanding, and making permanent various pilot programs, grant programs, task forces, working groups, reports, and studies; providing for the collection, maintenance, and reporting of certain data; expanding, clarifying, and modifying the powers of the commissioner of corrections; making various changes to the 1997 omnibus criminal justice funding bill; providing for the coordination of services for disasters; clarifying and modifying certain laws involving public defenders; appropriating public defender reimbursements to the board of public defense; requesting the supreme court to amend the Rules of Criminal Procedure; accelerating the repeal of the automobile theft prevention program; limiting the entities that must have an affirmative action plan approved by the commissioner of human rights; conveying state land to the city of Faribault; amending Minnesota Statutes 1996, sections 3.739, subdivision 1; 12.09, by adding a subdivision; 13.99, by adding a subdivision; 168.042, subdivisions 12 and 15; 169.121, subdivision 5a; 171.16, subdivision 3; 241.01, subdivision 7, and by adding a subdivision; 242.32, subdivision 1; 244.05, subdivision 7; 299C.06; 299C.09; 299F.04, by adding a subdivision; 357.021, by adding subdivisions; 488A.03, subdivision 11; 588.01, subdivision 3; 609.3241; 611.14; 611.20, subdivision 3; 611.26, subdivisions 2 and 3; and 611.27, subdivisions 1 and 7; Minnesota Statutes 1997 Supplement, sections 97A.065, subdivision 2; 168.042, subdivision 11a; 171.29, subdivision 2; 241.277, subdivisions 6, 9, and by adding a subdivision; 357.021, subdivision 2; 363.073, subdivision 1; 401.13; 609.101, subdivision 5; 609.113, subdivision 3; and 611.25, subdivision 3; amending Laws 1996, chapter 408, article 2, section 16; and Laws 1997, chapter 239, article 1, sections 7 and 12; proposing coding for new law in Minnesota Statutes, chapters 169; 241; 299C; 609; and 611A; repealing Minnesota Statutes 1996, sections 609.101, subdivision 1; 609.563, subdivision 2; 611.216, subdivision 1a; 611.26, subdivision 9; 611.27, subdivision 2; and 626.861; Minnesota Statutes 1997 Supplement, section 611.27, subdivision 4.

The bill was read for the first time and referred to the Committee on Judiciary.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7406

S. F. No. 2426, A bill for an act relating to health; increasing the maximum financial reserves permitted for health maintenance organizations; removing misleading related language; amending Minnesota Statutes 1996, section 62D.042, subdivision 2; repealing Minnesota Statutes 1997 Supplement, section 62D.042, subdivision 3.

The bill was read for the first time and referred to the Committee on Health and Human Services.

S. F. No. 2699, A resolution memorializing the Congress of the United States to remove Medicaid policy barriers to employment for people with disabilities.

The bill was read for the first time.

Greenfield moved that S. F. No. 2699 and H. F. No. 3258, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 3092, A bill for an act relating to prescription drugs; requiring the dispensing of ephedrine through prescription; restricting the sale, marketing, and possession of ephedrine; providing criminal penalties; proposing coding for new law in Minnesota Statutes, chapter 152.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 2368, A bill for an act relating to crime prevention; expressly approving an addition to the sentencing guidelines commentary.

The bill was read for the first time.

Dawkins moved that S. F. No. 2368 and H. F. No. 3590, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2365, A bill for an act relating to juvenile justice; providing that a person adjudicated as an extended jurisdiction juvenile who has a stay of execution revoked shall not receive credit for time served in a juvenile facility; amending Minnesota Statutes 1996, section 260.126, subdivision 5.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 2182, A bill for an act relating to crime; clarifying and updating the language of the harassment statutes; amending Minnesota Statutes 1996, section 609.795; Minnesota Statutes 1997 Supplement, section 609.749, subdivision 2.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 2354, A bill for an act relating to employee relations; modifying provisions governing the public employees insurance program; amending Minnesota Statutes 1996, section 43A.316, subdivision 2.

The bill was read for the first time.

Mares moved that S. F. No. 2354 and H. F. No. 3734, now on the Consent Calendar, be referred to the Chief Clerk for comparison. The motion prevailed.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7407

S. F. No. 2373, A bill for an act relating to civil commitment; modifying provisions governing release on pass for persons committed as mentally ill and dangerous; allowing temporary jail confinement of persons subject to commitment as sexual psychopathic personalities or sexually dangerous persons; clarifying various provisions and making conforming and technical amendments; amending Minnesota Statutes 1996, sections 253B.15, subdivision 9; and 253B.185, by adding a subdivision; Minnesota Statutes 1997 Supplement, sections 253B.03, subdivision 7; 253B.045, subdivisions 2 and 3; 253B.05, subdivision 3; 253B.07, subdivisions 5 and 7; 253B.09, subdivision 1; 253B.092, subdivisions 6 and 8; 253B.0921; 253B.095, subdivision 3; 253B.12, subdivision 1; 253B.141, subdivision 1; 253B.15, subdivisions 2, 3, 3a, 3b, and 5; 253B.18, subdivisions 4a and 5; and 253B.19, subdivision 3.

The bill was read for the first time.

Entenza moved that S. F. No. 2373 and H. F. No. 2785, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2351, A bill for an act relating to natural resources; adding to and deleting from state parks; creating a new recreation area; providing for a state park permit exemption; amending Minnesota Statutes 1996, section 85.054, by adding a subdivision.

The bill was read for the first time.

Kalis moved that S. F. No. 2351 and H. F. No. 3140, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1076, A bill for an act relating to health; requiring health plan coverage for off-label use of drugs; proposing coding for new law in Minnesota Statutes, chapter 62Q.

The bill was read for the first time.

Hausman moved that S. F. No. 1076 and H. F. No. 1306, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2362, A bill for an act relating to natural resources; modifying membership of the forest resources council; amending Minnesota Statutes 1996, section 89A.03, subdivision 1.

The bill was read for the first time and referred to the Committee on Environment, Natural Resources and Agriculture Finance.

S. F. No. 2574, A bill for an act relating to regional development commissions; authorizing the headwaters regional development commission to establish a nonprofit housing corporation; proposing coding for new law in Minnesota Statutes, chapter 462.

The bill was read for the first time.

Skare moved that S. F. No. 2574 and H. F. No. 2635, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2734, A bill for an act relating to commerce; regulating collection agencies; exempting out-of-state agencies from regulation; amending Minnesota Statutes 1996, section 332.31, subdivisions 3, 6, and by adding a subdivision.

The bill was read for the first time and referred to the Committee on Economic Development and International Trade.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7408

S. F. No. 2457, A bill for an act relating to the Minnesota housing finance agency; making permanent a temporary provision about the agency's meetings; repealing Laws 1997, chapter 154, section 5.

The bill was read for the first time.

Larsen moved that S. F. No. 2457 and H. F. No. 3593, now on Technical General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2199, A bill for an act relating to crime; requiring professional bail bonding agents who perform bail bond enforcement services to be licensed as private detectives; clarifying an exemption to the private detective and protective agent licensing provisions; amending Minnesota Statutes 1996, sections 326.3341; and 326.338, subdivision 1.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 2663, A bill for an act relating to crime; expanding the stalking and harassment law to include certain acts involving injury to reputation; providing enhanced penalties for harassment of a peace officer in retaliation for the officer's performance of official duties in connection with a criminal investigation; amending Minnesota Statutes 1996, section 609.749, subdivision 3; Minnesota Statutes 1997 Supplement, section 609.749, subdivision 2.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 1001, A bill for an act relating to professions; providing immunity for activities of the board of psychology; amending Minnesota Statutes 1996, section 148.941, subdivision 6; proposing coding for new law in Minnesota Statutes, chapter 148.

The bill was read for the first time.

Mulder moved that S. F. No. 1001 and H. F. No. 1072, now on Technical General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 2572, A bill for an act relating to juveniles; clarifying the definition of child in need of protection or services; amending Minnesota Statutes 1997 Supplement, section 260.015, subdivision 2a.

The bill was read for the first time and referred to the Committee on Judiciary.

S. F. No. 3063, A bill for an act relating to state lands; authorizing the public sale of certain tax-forfeited land that borders public water in Mower county.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

S. F. No. 2609, A bill for an act relating to public administration; providing for design-build contracts; amending Minnesota Statutes 1996, sections 16B.31, subdivision 1; and 16B.33, subdivisions 1, 2, and by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 16B.

The bill was read for the first time and referred to the Committee on Governmental Operations.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7409

S. F. No. 2669, A bill for an act relating to human services; allowing greater use of arrangements with businesses when providing day training and habilitation services; directing the commissioner of human services to develop a more flexible rate variance mechanism for day training habilitation services vendors; amending Minnesota Statutes 1996, section 252.451, subdivision 5.

The bill was read for the first time.

Greenfield moved that S. F. No. 2669 and H. F. No. 2992, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 3118, A bill for an act relating to natural resources; modifying provisions for a timber permit extension; amending Minnesota Statutes 1996, section 90.193.

The bill was read for the first time and referred to the Committee on Environment, Natural Resources and Agriculture Finance.

S. F. No. 3353, A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; providing for regulation of certain activities and practices; amending Minnesota Statutes 1996, sections 3.737, subdivisions 1, 4, and by adding a subdivision; 41A.09, subdivision 1a; 84.83, subdivision 3; 84.871; 84.943, subdivision 3; 86B.415, by adding a subdivision; 97A.037, subdivision 1; 97A.245; 103C.315, subdivision 4; 103F.155, subdivision 2; 103F.161, subdivision 2; 103G.271, subdivision 6; 115B.175, subdivision 3; and 116.07, subdivision 4h; 116.49, by adding a subdivision; Minnesota Statutes 1997 Supplement, sections 17.101, subdivision 5; 41A.09, subdivision 3a; 84.8205; 84.86, subdivision 1; and 97A.485, subdivision 6; repealing Minnesota Statutes 1997 Supplement, section 85.015, subdivision 1c; Laws 1991, chapter 275, section 3.

The bill was read for the first time and referred to the Committee on Ways and Means.

S. F. No. 3346, A bill for an act relating to human services; appropriating money; changing provisions for long-term care, health care programs and provisions, including MA and GAMC, MinnesotaCare, welfare reform, and regional treatment centers; providing for the sale of certain nursing home property; regulating compulsive gambling; imposing penalties; amending Minnesota Statutes 1996, sections 119B.24; 144.701, subdivisions 1, 2, and 4; 144.702, subdivisions 1, 2, and 8; 144A.09, subdivision 1; 144A.44, subdivision 2; 214.03; 245.462, subdivisions 4 and 8; 245.4871, subdivision 4; 245A.03, by adding a subdivision; 245A.14, subdivision 4; 256.014, subdivision 1; 256.969, subdivisions 16 and 17; 256B.03, subdivision 3; 256B.04, by adding a subdivision; 256B.055, subdivision 7, and by adding a subdivision; 256B.057, subdivision 3a, and by adding subdivisions; 256B.0625, subdivisions 7, 17, 19a, 20, 34, and by adding subdivisions; 256B.0627, subdivision 4; 256B.0911, subdivision 4; 256B.0916; 256B.41, subdivision 1; 256B.431, subdivisions 2b, 4, 11, 22, and by adding a subdivision; 256B.501, subdivision 2; 256B.69, by adding subdivisions; 256D.03, subdivision 4, and by adding subdivisions; 256D.051, by adding a subdivision; 256D.46, subdivision 2; 256I.04, subdivisions 1, 3, and by adding a subdivision; 256I.05, subdivision 2; and 609.115, subdivision 9; Minnesota Statutes 1997 Supplement, sections 60A.15, subdivision 1; 62J.685; 62J.69, subdivisions 1, 2, and by adding a subdivision; 62J.75; 103I.208, subdivision 2; 144.1494, subdivision 1; 144A.071, subdivision 4a; 171.29, subdivision 2; 214.32, subdivision 1; 245B.06, subdivision 2; 256.01, subdivision 2; 256.031, subdivision 6; 256.9657, subdivision 3; 256.9685, subdivision 1; 256.9864; 256B.04, subdivision 18; 256B.056, subdivisions 1a and 4; 256B.06, subdivision 4; 256B.062; 256B.0625, subdivision 31a; 256B.0627, subdivision 5; 256B.0645; 256B.0911, subdivisions 2 and 7; 256B.0913, subdivision 14; 256B.0915, subdivisions 1d and 3; 256B.0951, by adding a subdivision; 256B.431, subdivisions 3f and 26; 256B.433, subdivision 3a; 256B.434, subdivision 10; 256B.69, subdivisions 2 and 3a; 256B.692, subdivisions 2 and 5; 256B.77, subdivisions 3, 7a, 10, and 12; 256D.05, subdivision 8; 256J.02, subdivision 4; 256J.03; 256J.08, subdivisions 11, 26, 28, 40, 60, 68, 73, 83, and by adding subdivisions; 256J.09, subdivisions 6 and 9; 256J.11, subdivision 2, as amended; 256J.12; 256J.14; 256J.15, subdivision 2; 256J.20, subdivisions 2 and 3; 256J.21; 256J.24, subdivisions 1, 2, 3, 4, and by adding subdivisions; 256J.26, subdivisions 1, 2, 3, and 4; 256J.28, subdivisions 1, 2, and by adding a subdivision; 256J.30, subdivisions 10 and 11; 256J.31, subdivisions 5 and 10; 256J.32, subdivisions 4, 6,


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7410

and by adding a subdivision; 256J.33, subdivisions 1 and 4; 256J.35; 256J.36; 256J.37, subdivisions 1, 2, 9, and by adding subdivisions; 256J.38, subdivision 1; 256J.39, subdivision 2; 256J.395; 256J.42; 256J.43; 256J.45, subdivisions 1, 2, and by adding a subdivision; 256J.46, subdivisions 1, 2, and 2a; 256J.47, subdivision 4; 256J.48, subdivisions 2, 3, and by adding a subdivision; 256J.49, subdivision 4; 256J.50, subdivision 5, and by adding a subdivision; 256J.52, subdivision 4; 256J.54, subdivisions 2, 3, 4, and 5; 256J.55, subdivision 5; 256J.56; 256J.57, subdivision 1; 256J.645, subdivision 3; 256J.74, subdivision 2, and by adding a subdivision; 256K.03, subdivision 5; 256L.01; 256L.02, subdivisions 2 and 3; 256L.03, subdivisions 1, 3, 4, 5, and by adding subdivisions; 256L.04, subdivisions 1, 2, 7, 8, 9, 10, and by adding subdivisions; 256L.05, subdivisions 2, 3, 4, and by adding subdivisions; 256L.06, subdivision 3; 256L.07; 256L.09, subdivisions 2, 4, and 6; 256L.11, subdivision 6; 256L.12, subdivision 5; 256L.15; 256L.17, by adding a subdivision; and 270A.03, subdivision 5; Laws 1994, chapter 633, article 7, section 3; Laws 1997, chapter 203, article 4, section 64; and article 9, section 21; chapter 207, section 7; chapter 225, article 2, section 64; and chapter 248, section 46, as amended; proposing coding for new law in Minnesota Statutes, chapters 144; 145; 245; 256; 256B; 256D; 256J; and 256L; repealing Minnesota Statutes 1996, sections 144.0721, subdivision 3a; 256.031, subdivisions 1, 2, 3, and 4; 256.032; 256.033, subdivisions 2, 3, 4, 5, and 6; 256.034; 256.035; 256.036; 256.0361; 256.047; 256.0475; 256.048; 256.049; and 256B.501, subdivision 3g; Minnesota Statutes 1997 Supplement, sections 62J.685; 144.0721, subdivision 3; 256.031, subdivisions 5 and 6; 256.033, subdivisions 1 and 1a; 256B.057, subdivision 1a; 256B.062; 256B.0913, subdivision 15; 256J.25; 256J.28, subdivision 4; 256J.32, subdivision 5; 256J.34, subdivision 5; 256J.76; 256L.04, subdivisions 3, 4, 5, and 6; 256L.06, subdivisions 1 and 2; 256L.08; 256L.09, subdivision 3; 256L.13; and 256L.14; Laws 1997, chapter 85, article 1, sections 61 and 71; and article 3, section 55; Minnesota Rules (Exempt), parts 9500.9100; 9500.9110; 9500.9120; 9500.9130; 9500.9140; 9500.9150; 9500.9160; 9500.9170; 9500.9180; 9500.9190; 9500.9200; 9500.9210; and 9500.9220.

The bill was read for the first time and referred to the Committee on Ways and Means.

S. F. No. 3298, A bill for an act relating to the organization and operation of state government; appropriating money for transportation, public safety, and other purposes; redistributing five percent of highway user tax distribution fund; creating flexible highway, town road, and town bridge accounts; exempting air ambulance aircraft from registration and tax; establishing midtown planning and coordination board; establishing dealer licensing and motor vehicle registration enforcement task force; requiring vehicle registration and insurance study; amending Minnesota Statutes 1996, sections 161.081, subdivision 1, and by adding a subdivision; 161.082, subdivisions 1 and 2a; 162.081, subdivision 1; 169.733, subdivision 1; 169.825, subdivision 8; and 360.653; Laws 1997, chapter 159, article 1, section 2, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 473.

The bill was read for the first time.

Lieder moved that S. F. No. 3298 and H. F. No. 3057, now on Technical General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

CONSENT CALENDAR

H. F. No. 2935, A bill for an act relating to agriculture; providing rulemaking authority in the warehouse and grain storage laws; proposing coding for new law in Minnesota Statutes, chapters 231; and 232.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Johnson, R. Mares Paulsen Stang
Anderson, B. Erickson Juhnke Mariani Pawlenty Sviggum
Anderson, I. Evans Kahn Marko Paymar Swenson, H.
Bakk Farrell Kalis McCollum Pelowski Sykora
Bettermann Finseth Kelso McElroy Peterson Tingelstad
Biernat Folliard Kielkucki McGuire Pugh Tomassoni
Boudreau Garcia Kinkel Milbert Rest Tompkins
Bradley Goodno Knight Molnau Reuter Trimble
Broecker Greenfield Knoblach Mulder Rhodes Tuma
Carlson Greiling Koskinen Mullery Rifenberg Tunheim
Chaudhary Gunther Kraus Munger Rostberg Van Dellen
Clark, J. Haas Krinkie Murphy Rukavina Vandeveer
Clark, K. Harder Kubly Ness Schumacher Wagenius
Commers Hasskamp Kuisle Nornes Seagren Weaver
Daggett Hausman Larsen Olson, E. Seifert Wejcman
Davids Hilty Leighton Olson, M. Sekhon Wenzel
Dawkins Holsten Leppik Opatz Skare Westfall
Dehler Huntley Lieder Orfield Skoglund Westrom

Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7411
Delmont Jaros Lindner Osskopp Slawik Winter
Dempsey Jefferson Long Osthoff Smith Wolf
Dorn Jennings Macklin Otremba, M. Solberg Workman
Entenza Johnson, A. Mahon Ozment Stanek Spk. Carruthers

The bill was passed and its title agreed to.

H. F. No. 2986, A bill for an act relating to taxation; income; requiring the commissioner of revenue to calculate the Minnesota working family credit for certain taxpayers; amending Minnesota Statutes 1996, section 290.0671, subdivision 5.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Marko Pelowski Tingelstad
Anderson, B. Erickson Kahn McCollum Peterson Tomassoni
Anderson, I. Evans Kalis McElroy Pugh Tompkins
Bakk Farrell Kelso McGuire Rest Trimble
Bettermann Finseth Kielkucki Milbert Reuter Tuma
Biernat Folliard Kinkel Molnau Rhodes Tunheim
Bishop Garcia Knight Mulder Rifenberg Van Dellen
Boudreau Goodno Knoblach Mullery Rostberg Vandeveer
Bradley Greenfield Koskinen Munger Rukavina Wagenius
Broecker Greiling Kraus Murphy Schumacher Weaver
Carlson Gunther Krinkie Ness Seagren Wejcman
Chaudhary Haas Kubly Nornes Seifert Wenzel
Clark, J. Harder Kuisle Olson, E. Sekhon Westfall
Clark, K. Hasskamp Larsen Olson, M. Skare Westrom
Commers Hausman Leighton Opatz Skoglund Winter
Daggett Hilty Leppik Orfield Slawik Wolf
Davids Holsten Lieder Osskopp Smith Workman
Dawkins Huntley Lindner Osthoff Solberg Spk. Carruthers
Dehler Jaros Long Otremba, M. Stanek
Delmont Jefferson Macklin Ozment Stang
Dempsey Jennings Mahon Paulsen Sviggum
Dorn Johnson, A. Mares Pawlenty Swenson, H.
Entenza Johnson, R. Mariani Paymar Sykora

The bill was passed and its title agreed to.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7412

S. F. No. 2302 was reported to the House.

Kuisle moved that S. F. No. 2302 be continued on the Consent Calendar. The motion prevailed.

S. F. No. 2315, A bill for an act relating to technology; making technical changes to show director of office of technology as member of various organizations; amending Minnesota Statutes 1996, sections 62J.451, subdivision 9; and 116O.03, subdivision 2; Minnesota Statutes 1997 Supplement, section 44A.01, subdivision 2; and Laws 1995, First Special Session chapter 3, article 12, section 7, subdivision 1, as amended.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Marko Pelowski Tingelstad
Anderson, B. Erickson Kahn McCollum Peterson Tomassoni
Anderson, I. Evans Kalis McElroy Pugh Tompkins
Bakk Farrell Kelso McGuire Rest Trimble
Bettermann Finseth Kielkucki Milbert Reuter Tuma
Biernat Folliard Kinkel Molnau Rhodes Tunheim
Bishop Garcia Knight Mulder Rifenberg Van Dellen
Boudreau Goodno Knoblach Mullery Rostberg Vandeveer
Bradley Greenfield Koskinen Munger Rukavina Wagenius
Broecker Greiling Kraus Murphy Schumacher Weaver
Carlson Gunther Krinkie Ness Seagren Wejcman
Chaudhary Haas Kubly Nornes Seifert Wenzel
Clark, J. Harder Kuisle Olson, E. Sekhon Westfall
Clark, K. Hasskamp Larsen Olson, M. Skare Westrom
Commers Hausman Leighton Opatz Skoglund Winter
Daggett Hilty Leppik Orfield Slawik Wolf
Davids Holsten Lieder Osskopp Smith Workman
Dawkins Huntley Lindner Osthoff Solberg Spk. Carruthers
Dehler Jaros Long Otremba, M. Stanek
Delmont Jefferson Macklin Ozment Stang
Dempsey Jennings Mahon Paulsen Sviggum
Dorn Johnson, A. Mares Pawlenty Swenson, H.
Entenza Johnson, R. Mariani Paymar Sykora

The bill was passed and its title agreed to.

S. F. No. 2525, A bill for an act relating to Ramsey county; authorizing the county to make certain purchases from or through a health care cooperative; proposing coding for new law in Minnesota Statutes, chapter 383A.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Marko Pelowski Tingelstad
Anderson, B. Erickson Kahn McCollum Peterson Tomassoni
Anderson, I. Evans Kalis McElroy Pugh Tompkins
Bakk Farrell Kelso McGuire Rest Trimble
Bettermann Finseth Kielkucki Milbert Reuter Tuma
Biernat Folliard Kinkel Molnau Rhodes Tunheim
Bishop Garcia Knight Mulder Rifenberg Van Dellen
Boudreau Goodno Knoblach Mullery Rostberg Vandeveer
Bradley Greenfield Koskinen Munger Rukavina Wagenius
Broecker Greiling Kraus Murphy Schumacher Weaver
Carlson Gunther Krinkie Ness Seagren Wejcman
Chaudhary Haas Kubly Nornes Seifert Wenzel
Clark, J. Harder Kuisle Olson, E. Sekhon Westfall
Clark, K. Hasskamp Larsen Olson, M. Skare Westrom
Commers Hausman Leighton Opatz Skoglund Winter
Daggett Hilty Leppik Orfield Slawik Wolf
Davids Holsten Lieder Osskopp Smith Workman
Dawkins Huntley Lindner Osthoff Solberg Spk. Carruthers

Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7413
Dehler Jaros Long Otremba, M. Stanek
Delmont Jefferson Macklin Ozment Stang
Dempsey Jennings Mahon Paulsen Sviggum
Dorn Johnson, A. Mares Pawlenty Swenson, H.
Entenza Johnson, R. Mariani Paymar Sykora

The bill was passed and its title agreed to.

S. F. No. 2685, A bill for an act relating to local government; allowing an officer of a local governmental unit to contract with the unit in certain circumstances; amending Minnesota Statutes 1996, section 471.88, subdivision 12.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 133 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Marko Pelowski Tingelstad
Anderson, B. Erickson Kahn McCollum Peterson Tomassoni
Anderson, I. Evans Kalis McElroy Pugh Tompkins
Bakk Farrell Kelso McGuire Rest Trimble
Bettermann Finseth Kielkucki Milbert Reuter Tuma
Biernat Folliard Kinkel Molnau Rhodes Tunheim
Bishop Garcia Knight Mulder Rifenberg Van Dellen
Boudreau Goodno Knoblach Mullery Rostberg Vandeveer
Bradley Greenfield Koskinen Munger Rukavina Wagenius
Broecker Greiling Kraus Murphy Schumacher Weaver
Carlson Gunther Krinkie Ness Seagren Wejcman
Chaudhary Haas Kubly Nornes Seifert Wenzel
Clark, J. Harder Kuisle Olson, E. Sekhon Westfall
Clark, K. Hasskamp Larsen Olson, M. Skare Westrom
Commers Hausman Leighton Opatz Skoglund Winter
Daggett Hilty Leppik Orfield Slawik Wolf
Davids Holsten Lieder Osskopp Smith Workman
Dawkins Huntley Lindner Osthoff Solberg Spk. Carruthers
Dehler Jaros Long Otremba, M. Stanek
Delmont Jefferson Macklin Ozment Stang
Dempsey Jennings Mahon Paulsen Sviggum
Dorn Johnson, A. Mares Pawlenty Swenson, H.
Entenza Johnson, R. Mariani Paymar Sykora

The bill was passed and its title agreed to.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7414

SPECIAL ORDERS

H. F. No. 3201 was reported to the House.

Otremba, M., moved that H. F. No. 3201 be returned to General Orders. The motion prevailed.

GENERAL ORDERS

Winter moved that the bills on General Orders for today be continued. The motion prevailed.

MOTIONS AND RESOLUTIONS

Mulder moved that his name be stricken as an author on H. F. No. 2320. The motion prevailed.

Leppik moved that her name be stricken as an author on H. F. No. 2588. The motion prevailed.

Delmont moved that the name of Evans be added as an author on H. F. No. 2598. The motion prevailed.

Evans moved that the name of Delmont be added as an author on H. F. No. 2826. The motion prevailed.

Larsen moved that the name of Broecker be added as an author on H. F. No. 3169. The motion prevailed.

Anderson, I., moved that his name be stricken as an author on H. F. No. 3265. The motion prevailed.

Stanek moved that the name of Broecker be added as an author on H. F. No. 3334. The motion prevailed.

Seifert moved that the names of Boudreau, Tuma and Daggett be added as authors on H. F. No. 3783. The motion prevailed.

Davids moved that the name of Stang be added as an author on H. F. No. 3786. The motion prevailed.

Vandeveer moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Monday, February 23, 1998, when the vote was taken on the final passage of H. F. No. 2309, as amended." The motion prevailed.

Ness moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Monday, February 23, 1998, when the vote was taken on the final passage of S. F. No. 2379." The motion prevailed.

Tunheim moved that H. F. No. 2435 be recalled from the Committee on Environment and Natural Resources and be re-referred to the Committee on Environment, Natural Resources and Agriculture Finance. The motion prevailed.

Jennings moved that H. F. No. 3761 be recalled from the Committee on Regulated Industries and Energy and be re-referred to the Committee on Taxes. The motion prevailed.

McElroy moved that H. F. No. 2354 be returned to its author. The motion prevailed.

McCollum moved that H. F. No. 2564 be returned to its author. The motion prevailed.

Rifenberg moved that H. F. No. 2592 be returned to its author. The motion prevailed.


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7415

Bradley moved that H. F. No. 2698 be returned to its author. The motion prevailed.

Mulder moved that H. F. No. 2727 be returned to its author. The motion prevailed.

Opatz moved that H. F. No. 2817 be returned to its author. The motion prevailed.

Kielkucki moved that H. F. No. 3289 be returned to its author. The motion prevailed.

Workman moved that H. F. No. 3716 be returned to its author. The motion prevailed.

Anderson, I., moved that H. F. No. 3780 be returned to its author. The motion prevailed.

ADJOURNMENT

Winter moved that when the House adjourns today it adjourn until 2:30 p.m., Thursday, February 26, 1998. The motion prevailed.

Winter moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 2:30 p.m., Thursday, February 26, 1998.

Edward A. Burdick, Chief Clerk, House of Representatives


Journal of the House - 80th Day - Wednesday, February 25, 1998 - Top of Page 7416