Laws of Minnesota 1988 

                        CHAPTER 486-H.F.No. 2029 
           An act relating to education; modifying provisions 
          related to general education revenue and foundation 
          revenue; correcting erroneous and obsolete references 
          and text; providing instructions to the revisor; 
          making miscellaneous corrections to statutes and other 
          laws; amending Minnesota Statutes 1986, sections 3.866;
          120.17, subdivisions 6 and 7; 120.181; 120.80, 
          subdivision 1; 121.151; 121.904, subdivision 5; 
          121.931, subdivision 5; 122.45, subdivision 3a; 
          122.531, subdivisions 1 and 6; 123.32, subdivision 29; 
          123.3514, subdivision 6; 123.933, subdivision 3; 
          124.15, subdivisions 5 and 6; 124.18, subdivision 2, 
          and by adding a subdivision; 124.19, subdivisions 1, 
          3, and 6; 124.274, subdivision 1; 124.32, subdivisions 
          4 and 6; 124A.02, subdivision 21; 124A.03, subdivision 
          2; 124A.034, subdivisions 1 and 1b; 124A.035, 
          subdivisions 2 and 4; 124A.036, subdivisions 1 and 2; 
          126.70, subdivision 2; 129B.40, subdivision 1; 
          273.138, subdivision 6; 275.125, subdivision 1; 
          275.128; 298.39; and 475.61, subdivision 4; Minnesota 
          Statutes 1987 Supplement, sections 120.17, 
          subdivisions 5a and 7a; 121.912, subdivision 1; 
          123.3515, subdivision 9; 124.01, subdivision 1; 
          124.14, subdivision 7; 124.155, subdivision 2; 124.17, 
          subdivisions 1 and 1b; 124.195, subdivisions 8 and 9; 
          124.217, subdivision 1; 124.223; 124.225, subdivisions 
          1 and 4b; 124.245, subdivision 3b; 124.271, 
          subdivision 7; 124.2711, subdivision 1; 124.32, 
          subdivisions 1c, 1d, and 5; 124A.02, subdivisions 8 
          and 16; 124A.032; 124A.035, subdivision 5; 124A.22, 
          subdivision 1, and by adding subdivisions; 124A.23, 
          subdivisions 2, 3, 4, and by adding a subdivision; 
          124A.24; 124A.26, subdivision 2; 124A.27, subdivisions 
          7 and 10; 124A.30; 126.23; 126.661, subdivision 1; 
          126.666, subdivision 1; 126.70, subdivision 2a; 
          129B.11, subdivision 1; 129B.39; 129B.55, subdivision 
          2; 136D.27; 136D.74, subdivision 2; 136D.87; 275.125, 
          subdivisions 5e, 6e, 8c, 9, 9b, and 15; and 298.28, 
          subdivision 4; Laws 1987, chapter 398, article 1, 
          section 25, subdivision 3; article 1, section 26, 
          subdivision 2; article 7, section 40, subdivision 4; 
          article 8, section 39, subdivision 2; and article 8, 
          section 44, subdivision 5; repealing Minnesota 
          Statutes 1986, sections 121.904, subdivision 7; 
          122.531, subdivision 8; 124.245, subdivision 4; and 
          124A.031, subdivision 3; Minnesota Statutes 1987 
          Supplement, sections 121.904, subdivision 11b; 
          124A.02, subdivision 5a; 124A.03, subdivision 3a; and 
          124A.25. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 3.866, is 
amended to read:  
    3.866 [SCHOOL DISTRICT REVENUE STUDY.] 
    The legislative commission on public education is 
encouraged to conduct a study of school district foundation and 
retirement general education revenue.  The study may address at 
least the following topics: 
    (1) alternative means of funding school district retirement 
costs, including means of funding retirement costs through the 
foundation revenue formulas; 
    (2) the financial constraints and costs faced by districts 
with highly educated and experienced staff, the adequacy of the 
current training and experience allowance and revenue in tiers 
two through five in recognizing these constraints and costs, and 
the impact of the training and experience allowance revenue on 
program differences among districts and on incentives for 
district personnel decisions; 
    (3) the financial constraints and costs faced by small and 
isolated districts, and the adequacy of the current sparsity 
allowance revenue in recognizing these constraints and costs; 
    (4) an analysis of the financial constraints and costs 
faced by districts with low salaries, and the need for 
additional revenue to enable such districts to raise salaries; 
    (5) an analysis of the financial constraints and costs 
faced by districts with declining enrollments, and the need for 
additional revenue in such districts; 
    (6) an analysis of the financial constraints and costs 
faced by districts with large concentrations of low-income and 
disadvantaged pupils, the adequacy of the current AFDC pupil 
unit formula in providing compensatory education revenue in 
these districts, and possible alternative formulas for education 
overburden revenue; 
    (7) differences in the average costs of educating 
elementary and secondary pupils, and the adequacy of the current 
pupil unit weightings in addressing these differences; 
    (8) trends in the degree of equalization of school district 
revenues and tax rates; 
    (9) the relationship of the basic formula allowance and 
foundation general education revenue to school district 
operating expenditures; 
    (10) the adequacy of unappropriated balances in school 
district operating funds, including the implications of fund 
balances regarding the revenue needs of school districts; 
    (11) the advantages, disadvantages, and cost implications 
of program-based funding; and 
    (12) means to simplify and improve understanding of school 
district funding formulas and laws. 
    The department of finance and the department of education 
shall provide assistance to the commission upon request. 
    Sec. 2.  Minnesota Statutes 1987 Supplement, section 
120.17, subdivision 5a, is amended to read:  
    Subd. 5a.  [SUMMER PROGRAMS.] A district may provide summer 
programs for handicapped children living within the district and 
nonresident children temporarily placed in the district pursuant 
to subdivision 6 or 7.  Prior to March 31 or 30 days after the 
handicapped child is placed in the district, whichever is later, 
the providing district shall give notice to the district of 
residence of any nonresident children temporarily placed in the 
district pursuant to subdivision 6 or 7, of its intention to 
provide these programs.  Notwithstanding any contrary provisions 
in subdivisions 6 and 7, the school district providing the 
special instruction and services shall apply for special 
education aid for the summer program.  For the purposes of 
computing the summer program revenue allowance as provided in 
section 124A.033, pupils enrolled in these programs shall be 
counted by the district of residence and not by the district 
providing the programs.  The unreimbursed actual cost of 
providing the program for nonresident handicapped children, 
including the cost of board and lodging, may be billed to the 
district of the child's residence and shall be paid by the 
resident district.  Transportation costs shall be paid by the 
district responsible for providing transportation pursuant to 
subdivision 6 or 7 and transportation aid shall be paid to that 
district. 
    Sec. 3.  Minnesota Statutes 1986, 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 
handicapped child 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 education if neither parent nor guardian is 
living within the state. 
    (b) When a child is temporarily placed for care and 
treatment in a day program located in another district and the 
child continues to live within the district of residence during 
the care and treatment, the district of residence is responsible 
for providing transportation and an appropriate educational 
program for the child.  The district may provide the educational 
program at a school within the district of residence, at the 
child's residence, or in the district in which the day treatment 
center is located by paying tuition to that district. 
    (c) When a child is temporarily placed in a residential 
program for care and treatment, the nonresident district in 
which the child is placed is responsible for providing an 
appropriate educational program for the child and necessary 
transportation within the district while the child is attending 
the educational program; and shall bill the district of the 
child's residence for the actual cost of providing the program, 
as outlined in subdivision 4, except that the board, lodging, 
and treatment costs incurred in behalf of a handicapped child 
placed outside of the school district of residence by the 
commissioner of human services or the commissioner of 
corrections or their agents, for reasons other than for making 
provision for the child's special educational needs shall not 
become the responsibility of either the district providing the 
instruction or the district of the child's residence. 
    (d) The district of residence shall pay tuition and other 
program costs, not including transportation costs, to the 
district providing the instruction and services.  The district 
of residence may claim foundation 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. 4.  Minnesota Statutes 1986, section 120.17, 
subdivision 7, is amended to read:  
    Subd. 7.  [PLACEMENT IN STATE INSTITUTION; RESPONSIBILITY.] 
Responsibility for special instruction and services for a 
handicapped child 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; 
    (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; 
    (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 education 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 foundation 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. 5.  Minnesota Statutes 1987 Supplement, section 
120.17, subdivision 7a, is amended to read:  
    Subd. 7a.  [ATTENDANCE AT SCHOOL FOR THE HANDICAPPED.] 
Responsibility for special instruction and services for a 
visually disabled or hearing impaired child attending the 
Minnesota state academy for the deaf or the Minnesota state 
academy for the blind shall be determined in the following 
manner: 
    (a) The legal residence of the child shall be the school 
district in which the child's parent or guardian resides. 
    (b) When it is determined pursuant to section 128A.05, 
subdivision 1 or 2 that the child is entitled to attend either 
school, the state board shall provide the appropriate 
educational program for the child.  The state board shall make a 
tuition charge to the child's district of residence for the 
actual cost of providing the program; provided, however, that 
effective for the 1983-1984 school year and thereafter,.  The 
amount of tuition charged shall not exceed the sum of $1,000 
plus the foundation aid formula allowance basic revenue of the 
district for that child, for an entire school year, or a 
prorated amount based on the portion of the school year for 
which the child is a resident of the district or is actually in 
membership for the amount of time the child is in the program.  
For purposes of this subdivision, "foundation aid formula 
allowance" shall have "basic revenue" has the meaning attributed 
to given it in section 124.32, subdivision 1a 124A.22, 
subdivision 2.  The district of the child's residence shall pay 
the tuition and may claim foundation general education aid for 
the child.  The district of the child's residence shall not 
receive aid pursuant to section 124.32, subdivision 5, for 
tuition paid pursuant to this subdivision.  All tuition received 
by the state board shall be deposited in the state treasury. 
    (c) When it is determined that the child can benefit from 
public school enrollment but that the child should also remain 
in attendance at the applicable school, the school district 
where the institution is located shall provide an appropriate 
educational program for the child and shall make a tuition 
charge to the state board for the actual cost of providing the 
program, less any amount of aid received pursuant to section 
124.32.  The state board shall pay the tuition and other program 
costs including the unreimbursed transportation costs.  Aids for 
handicapped children shall be paid to the district providing the 
special instruction and services.  Special transportation shall 
be provided by the district providing the educational program 
and the state shall reimburse such district within the limits 
provided by law.  
    (d) Notwithstanding the provisions of clauses (b) and (c), 
the state board may agree to make a tuition charge for less than 
the amount specified in clause (b) for pupils attending the 
applicable school who are residents of the district where the 
institution is located and who do not board at the institution, 
if that district agrees to make a tuition charge to the state 
board for less than the amount specified in clause (c) for 
providing appropriate educational programs to pupils attending 
the applicable school. 
    (e) Notwithstanding the provisions of clauses (b) and (c), 
the state board may agree to supply staff from the Minnesota 
state academy for the deaf and the Minnesota state academy for 
the blind to participate in the programs provided by the 
district where the institutions are located when the programs 
are provided to students in attendance at the state schools.  
    Sec. 6.  Minnesota Statutes 1986, section 120.181, is 
amended to read:  
    120.181 [TEMPORARY PLACEMENTS FOR CARE AND TREATMENT OF 
NONHANDICAPPED PUPILS.] 
    The responsibility for providing instruction and 
transportation for a nonhandicapped pupil 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 in the following manner:  
    (a) The school district of residence of the pupil shall be 
the district in which the pupil's parent or guardian resides or 
the district designated by the commissioner of education if 
neither parent nor guardian is living within the state.  
    (b) Prior to the placement of a pupil for care and 
treatment, the district of residence shall be notified and 
provided an opportunity to participate in the placement 
decision.  When an immediate emergency placement is necessary 
and time does not permit resident district participation in the 
placement decision, the district in which the pupil is 
temporarily placed, if different from the district of residence, 
shall notify the district of residence of the emergency 
placement within 15 days of the placement.  
    (c) When a nonhandicapped pupil 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.  
    (d) When a nonhandicapped pupil is temporarily placed in a 
residential program for care and treatment, the district in 
which the pupil is placed shall provide instruction for the 
pupil and necessary transportation within that district while 
the pupil is receiving instruction, and in the case of a 
placement outside of the district of residence, the nonresident 
district shall bill the district of residence for the actual 
cost of providing the instruction, excluding transportation 
costs.  
    (e) The district of residence shall receive foundation 
general education aid for the pupil and pay tuition and other 
instructional costs, excluding transportation costs, to the 
district providing the instruction.  Transportation costs shall 
be paid by the district providing the transportation and the 
state shall pay transportation aid to that district.  For 
purposes of computing state transportation aid, pupils governed 
by this subdivision shall be included in the handicapped 
transportation category.  
    Sec. 7.  Minnesota Statutes 1986, section 120.80, 
subdivision 1, is amended to read:  
    Subdivision 1.  Notwithstanding any law to the contrary, 
any secondary school student who has completed all required 
courses may, with the approval of the student, the student's 
parent or guardian, and local school officials, graduate prior 
to the completion of the school year.  All aid which such 
student, had the student not graduated, would have earned for 
the district pursuant to section 124A.02, plus that portion of 
the amount raised by the local tax levy which results from such 
transitional year students shall continue to be earned by the 
district General education revenue attributable to the student 
must be paid as though the student was in attendance for the 
entire year. 
    Sec. 8.  Minnesota Statutes 1986, section 121.151, is 
amended to read:  
    121.151 [STANDARDS FOR REMOVAL OF HAZARDOUS SUBSTANCES.] 
    Prior to using the revenue obtained according to sections 
123.36, subdivision 13, 124.244, 124.245, subdivisions 2 and 3, 
and 275.125, subdivisions 11b and subdivision 11c, a school 
district shall obtain approval from the department of education 
for its method of removal or encapsulation of asbestos or 
cleanup or disposal of polychlorinated biphenyls.  The 
department of education shall consult with the pollution control 
agency, health department, environmental protection agency, or 
other appropriate governmental agency in approving or 
disapproving a district's method.  If the pollution control 
agency or other appropriate governmental agency adopts rules 
establishing standards for asbestos removal or encapsulation or 
cleanup or disposal of polychlorinated biphenyls, the department 
of education shall approve only those district methods which are 
in compliance with the adopted rules.  
    Sec. 9.  Minnesota Statutes 1986, section 121.904, 
subdivision 5, is amended to read:  
    Subd. 5.  Foundation General education aid, and endowment 
fund apportionment, and guarantee aid shall be recognized as 
revenue of the fiscal year for which the aids are designated by 
statute. 
    Sec. 10.  Minnesota Statutes 1987 Supplement, section 
121.912, subdivision 1, is amended to read:  
    Subdivision 1.  [LIMITATIONS.] Except as provided in this 
subdivision, sections 121.9121, 123.36, 475.61, and 475.65, a 
school district may not permanently transfer money from (1) an 
operating fund to a nonoperating fund; (2) a nonoperating fund 
to another nonoperating fund; or (3) a nonoperating fund to an 
operating fund.  Permanent transfers may be made from any fund 
to any other fund to correct for prior fiscal years' errors 
discovered after the books have been closed for that year.  
Permanent transfers may be made from the general fund to any 
other operating funds if the resources of the other fund are not 
adequate to finance approved expenditures from that other fund.  
Permanent transfers may also be made from the general fund to 
eliminate deficits in another fund when that other fund is being 
discontinued.  When a district discontinues operation of a 
district-owned bus fleet or a substantial portion of a fleet, 
permanent transfers may be made from the fund balance account 
entitled "pupil transportation fund appropriated for bus 
purchases" to the capital expenditure fund, with the approval of 
the commissioner.  The levy authorized pursuant to section 
275.125, subdivision 11a 124.244, shall be reduced by an amount 
equal to the amount transferred.  Any school district may 
transfer any amount from the unappropriated fund balance account 
in its transportation fund to any other operating fund or to the 
appropriated fund balance account for bus purchases in its 
transportation fund. 
    Sec. 11.  Minnesota Statutes 1986, section 121.931, 
subdivision 5, is amended to read:  
    Subd. 5.  [SOFTWARE DEVELOPMENT.] The state board, with the 
advice of the ESV computer council, shall provide for the 
development of applications software for ESV-IS and SDE-IS.  The 
state board may provide state or federal funds for the 
development of software for an alternative management 
information system only if it determines that this system may 
have statewide applicability.  Notwithstanding the foregoing, 
the state board may, for innovative projects involving computers 
, approve grants to districts pursuant to section 129B.04, Title 
IV of the Elementary and Secondary Education Act of 1965 as 
amended, or any other appropriate statute.  
    Sec. 12.  Minnesota Statutes 1986, section 122.45, 
subdivision 3a, is amended to read:  
    Subd. 3a.  (a) Liabilities of a dissolved district existing 
at the time of the attachment other than bonded debt within the 
purview of subdivision 2 shall be obligations of the 
consolidated district after attachment (in the amount and kind 
determined by the commissioner according to subdivision 1, where 
a dissolved district is divided), for the payment of which the 
consolidated district has a right to reimbursement by special 
levy or levies.  The amount of reimbursement will be equal to 
the liabilities of the dissolved district for which the 
consolidated district is obligated less the aggregate of the 
following which has been or will be received by the consolidated 
district at or after the time of attachment from or as a result 
of the dissolution and attachment of the dissolved district: 
    (1) All taxes inuring to the consolidating district upon 
levies made by the dissolved district; 
    (2) All cash, bank accounts, investments, and other current 
assets; 
    (3) Earned state aids of the dissolved districts; 
    (4) Returns from the sale of property of the dissolved 
district. 
    (b) The amount of such special levy so computed shall be 
certified to the county auditor with the other tax requirements 
of the consolidated district but separately stated and 
identified.  The auditor shall add the amount of special levy so 
certified to the school rate for the territory in the 
consolidated district which came from the dissolved district and 
include it in the levy on the taxable property in that 
territory; provided, the county auditor shall not spread more of 
the amount certified for special levy in any year than will 
amount to 20 percent of the school levy without the special 
levy, leaving the remaining part of the certified amount for 
levy in successive years without further certification.  Any 
amount of reimbursement to which it is entitled omitted by the 
consolidated district from its initial certification for special 
levy may be certified in a subsequent year for levy in the same 
manner as the levy upon initial certification. 
    The levy authorized by this subdivision shall be in 
addition to those otherwise authorized by sections 124A.03, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
5a, and 275.125 for a school district. 
    Sec. 13.  Minnesota Statutes 1986, section 122.531, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the terms defined in sections 124.01, 124A.02, 124A.03, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
5a, and 275.125 shall have the meanings ascribed to them in 
those sections The terms defined in chapters 124 and 124A and in 
section 275.125 have the same meaning when they are used in this 
section, unless otherwise clearly indicated.  
    Sec. 14.  Minnesota Statutes 1986, section 122.531, 
subdivision 6, is amended to read:  
    Subd. 6.  [AID DEDUCTIONS.] (1) For purposes of determining 
deductions from foundation general education aid pursuant to 
section 124A.035, subdivision 1, of, if any, required by section 
124A.23, subdivision 4, for a district newly created through 
consolidation or enlarged through the dissolution of a district 
and its attachment to one or more other districts, in the year 
when the consolidation or dissolution and attachment becomes 
effective, there shall be used in lieu of the ratio of the 
district's actual levy to its permitted levy in the applicable 
year, the quotient obtained by dividing: 
    (a) the sum of the products derived for each component 
district by multiplying the component district's actual levy in 
the applicable year pursuant to the applicable subdivision, 
times the ratio of the amount of the adjusted assessed valuation 
of the property from the component district which that is 
included in the new district to the total amount of the adjusted 
assessed valuation of the new district; by 
    (b) the sum of the products derived for each component 
district by multiplying the component district's permitted levy 
in the applicable year pursuant to the applicable subdivision, 
times the ratio of the amount of the adjusted assessed valuation 
of the property from the component district which that is 
included in the new district to the total amount of the adjusted 
assessed valuation of the new district. 
    Sec. 15.  Minnesota Statutes 1986, section 123.32, 
subdivision 29, is amended to read:  
    Subd. 29.  [REQUIREMENTS FOR PETITIONS.] Any petition to a 
school board authorized in this section or sections 124A.03, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
5a, and 275.125 or by any other law which that requires the 
board to submit an issue to referendum or election shall meet 
the following requirements to be valid.  
    (1) Each page of the petition shall contain a heading at 
its top which specifies the particular action the board is being 
petitioned to take.  The signatures on any page which does not 
contain such a heading shall all be invalidated.  All pages of 
the petition shall be assembled and filed with the board as a 
single instrument.  
    (2) Each page of the petition shall contain an 
authentication signed by the circulator of the petition 
specifying as follows:  
    I personally have circulated this page of the petition, all 
signatures were made in my presence, I believe that the signers 
signed their own names and that each person who has signed is 
eligible to vote in a school district election according to 
Minnesota Statutes, section 123.32.  
    Signed:  ................................ Signature of 
Petition Circulator 
    Date:  ................................. 
    The signatures on any page which does not contain such an 
authentication shall all be invalidated.  
    (3)  Signers of the petition shall personally sign their 
own names in ink or indelible pencil and shall indicate after 
the name the place of residence by street and number, or other 
description sufficient to identify the place.  Except as 
provided in clause (4) of this subdivision, any signature which 
does not meet these requirements shall be invalidated.  
    (4)  Individuals who are unable to write their names shall 
be required to make their marks on the petition.  The circulator 
of the petition shall certify the mark by signing the 
individual's name and address and shall thereafter print the 
phrase "mark certified by petition circulator."  
    (5) A petition to be valid must contain the minimum number 
of valid signatures of eligible voters specified in the law 
authorizing the petition and election.  
    Sec. 16.  Minnesota Statutes 1986, section 123.3514, 
subdivision 6, is amended to read:  
    Subd. 6.  [FINANCIAL ARRANGEMENTS.] At the end of each 
school year, the department of education shall pay the tuition 
reimbursement amount within 30 days to the post-secondary 
institutions for courses that were taken for secondary credit.  
The amount of tuition reimbursement shall equal the lesser of: 
    (1) the actual costs of tuition, textbooks, materials, and 
fees directly related to the course or program taken by the 
secondary pupil; or 
    (2) an amount equal to the difference between the formula 
allowance plus the total tier basic revenue attributable to of 
the district for that pupil and an amount computed by 
multiplying the formula allowance plus the total tier basic 
revenue attributable to of the district for that pupil by a 
ratio.  The ratio to be used is the total number of hours that 
the pupil is enrolled in courses in the secondary school during 
the regular school year over the total number of secondary 
instructional hours per pupil in that pupil's resident district. 
    The amount paid for each pupil shall be subtracted from the 
foundation general education aid paid to the pupil's resident 
district.  If the amount to be subtracted is greater than the 
amount of foundation general education aid due the district, the 
excess reduction shall be made from other state aids due to the 
district.  If a pupil is enrolled in a course for post-secondary 
credit, the school district shall include the pupil in the 
average daily membership only for the portion of time during 
which the pupil is enrolled in courses at the secondary school 
and enrolled in courses at a post-secondary institution for 
secondary credit. 
    The department shall not pay any tuition reimbursement or 
other costs of a course taken for post-secondary credit only.  
    Sec. 17.  Minnesota Statutes 1987 Supplement, section 
123.3515, subdivision 9, is amended to read:  
    Subd. 9.  [AID.] Payment of foundation aid or general 
education aid for pupils enrolled in a nonresident district must 
be made according to section 124A.036, subdivision 5. 
    Sec. 18.  Minnesota Statutes 1986, section 123.933, 
subdivision 3, is amended to read:  
    Subd. 3.  [COST OF TEXTBOOKS; LIMITATION.] (a) The cost per 
pupil of the textbooks, individualized instructional materials 
and standardized tests provided for in this section for each 
school year shall not exceed the statewide average expenditure 
per pupil, adjusted pursuant to clause (b), by the Minnesota 
public elementary and secondary schools for textbooks, 
individualized instructional materials and standardized tests as 
computed and established by the department of education by March 
1 of the preceding school year from the most recent public 
school year data then available. 
    (b) The cost computed in clause (a) shall be increased by 
an inflation adjustment equal to the percent of increase in the 
foundation aid formula allowance, pursuant to section 124A.02, 
subdivision 9 124A.22, subdivision 2, from the second preceding 
school year to the current school year. 
    (c) The commissioner shall allot to the school districts or 
intermediary service areas the total cost for each school year 
of providing or loaning the textbooks, individualized 
instructional materials and standardized tests for the pupils in 
each nonpublic school.  The allotment shall not exceed the 
product of the statewide average expenditure per pupil, adjusted 
pursuant to clause (b), multiplied by the number of nonpublic 
school pupils who make requests pursuant to this section and who 
are enrolled as of September 15 of the current school year. 
    (d) For the 1982-1983 school year, 85 percent of a 
district's nonpublic pupil aid shall be distributed prior to 
December 31 of that school year.  The final aid distribution to 
each district shall be made prior to December 31 of the 
following school year.  
    Sec. 19.  Minnesota Statutes 1987 Supplement, section 
124.01, subdivision 1, is amended to read:  
    Subdivision 1.  [GENERALLY.] For purposes of this chapter 
and chapter 124A, the words defined in section 120.02 have the 
same meaning and the terms defined in sections 124A.02 and 
124A.033 have the meanings attributed to them in those 
sections The terms defined in section 120.02 and chapter 124A 
have the same meaning when they are used in this chapter, unless 
otherwise clearly indicated. 
    Sec. 20.  Minnesota Statutes 1987 Supplement, 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 
education for any education aid or grant authorized in this 
chapter and chapters 121, 123, 124A, 125, 126, 129B, and 134 
exceeds the amount required, the commissioner of education 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 foundation 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 education.  The 
commissioner of education shall report appropriation transfers 
to the education committees of the legislature each year by 
January 15.  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. 21.  Minnesota Statutes 1986, section 124.15, 
subdivision 5, is amended to read:  
    Subd. 5.  [VIOLATION; AID REDUCTION.] If the violation 
specified is corrected within the time permitted, or if the 
commissioner on being notified of the district board's decision 
to dispute decides the violation does not exist, or if the state 
board decides after hearing no violation specified in the 
commissioner's notice existed at the time of it, or that any 
which that existed were corrected within the time permitted, 
there shall be no reduction of special state aids payable to the 
school district.  Otherwise special state aids payable to the 
district for the year in which the violation occurred shall be 
reduced as follows:  The total amount of special state aids to 
which the district may be entitled shall be reduced in the 
proportion that the period during which a specified violation 
continued, computed from the last day of the time permitted for 
correction, bears to the total number of days school is held in 
the district during the year in which a violation exists, 
multiplied by 60 percent of the product of the foundation aid 
formula allowance times its total pupil units basic revenue, as 
defined in section 124A.22, subdivision 2, of the district for 
that year. 
    Sec. 22.  Minnesota Statutes 1986, section 124.15, 
subdivision 6, is amended to read:  
    Subd. 6.  Reductions in special aid under this section and 
section 124.19 shall be from foundation general education aid.  
If there is not sufficient foundation general education aid 
remaining to be paid for the school year in which the violation 
occurred, the reduction shall be from the other special aids 
listed in section 124.155, subdivision 2, that are payable to 
the district for that year in the order in which special state 
the aids are listed in this code section 124.155, subdivision 
2.  If there is not a sufficient amount of special state aids 
remaining payable to the district for the school year in which 
the violation occurred to permit the full amount of reduction 
required, that part of the required reduction not taken from 
that school year's aids will be taken from the special state 
aids payable to the district for the next school year, and the 
reduction will be made from the various aids payable for the 
next year in the order above specified. 
    Sec. 23.  Minnesota Statutes 1987 Supplement, section 
124.155, subdivision 2, is amended to read:  
    Subd. 2.  [ADJUSTMENT TO AIDS.] The amount specified in 
subdivision 1 shall be used to adjust the following state aids 
and credits in the order listed: 
    (a) foundation general education aid as defined authorized 
in section 124A.01 124A.23;  
    (b) secondary vocational aid authorized in section 124.573; 
    (c) special education aid authorized in section 124.32;  
    (d) secondary vocational aid for handicapped children 
authorized in section 124.574;  
    (e) gifted and talented aid authorized in section 124.247;  
    (f) aid for pupils of limited English proficiency 
authorized in section 124.273;  
    (g) aid for chemical use programs authorized in section 
124.246;  
    (h) interdistrict cooperation aid authorized in section 
124.272; 
    (i) summer program aid authorized in section 124A.033; 
    (j) (f) transportation aid authorized in section 124.225;  
    (k) (g) community education programs aid authorized in 
section 124.271;  
    (l) (h) adult education aid authorized in section 124.26;  
    (m) (i) early childhood family education aid authorized in 
section 124.2711; 
    (n) (j) capital expenditure equalization aid authorized in 
section sections 124.244 and 124.245;  
    (o) (k) homestead credit replacement aid authorized in 
section 273.1394;  
    (p) (l) agricultural credit replacement aid authorized in 
section 273.1395; and 
    (q) (m) attached machinery aid authorized in section 
273.138, subdivision 3; and 
    (r) teacher retirement and F.I.C.A. aid authorized in 
sections 124.2162 and 124.2163.  
    The commissioner of education shall schedule the timing of 
the adjustments to state aids and credits specified in 
subdivision 1, as close to the end of the fiscal year as 
possible. 
    Sec. 24.  Minnesota Statutes 1987 Supplement, section 
124.17, subdivision 1, is amended to read:  
    Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
pupil in average daily membership shall be counted according to 
this subdivision.  
    (a) A handicapped prekindergarten pupil who is enrolled for 
the entire school year in a program approved by the commissioner 
and has an individual education plan that requires up to 437 
hours of assessment and education services in the school year is 
counted as one-half of a pupil unit.  If the plan requires more 
than 437 hours of assessment and education services, the pupil 
is counted as the ratio of the number of hours of assessment and 
education service to 875, but not more than one. 
    (b) A handicapped prekindergarten pupil who is enrolled for 
less than the entire school year in a program approved by the 
commissioner is counted as the greater of (1) one-half times the 
ratio of the number of instructional days from the date the 
pupil is enrolled to the date the pupil withdraws to the number 
of instructional days in the school year, or (2) the ratio of 
the number of hours of assessment and education service required 
in the school year by the pupil's individual education program 
plan to 875, but not more than one. 
    (c) A prekindergarten pupil who is assessed but determined 
not to be handicapped is counted as the ratio of the number of 
hours of assessment service to 875.  
    (d) A handicapped kindergarten pupil who is enrolled in a 
program approved by the commissioner is counted as the ratio of 
the number of hours of assessment and education services 
required in the school year by the pupil's individual education 
program plan to 875, but not more than one. 
    (e) A kindergarten pupil who is not included in paragraph 
(d) is counted as one-half of a pupil unit. 
    (f) A pupil who is in any of grades one to six is counted 
as one pupil unit. 
    (g) For the 1987-1988 school year, a pupil who is in any of 
grades seven to 12 is counted as 1.4 pupil units.  For the 
1988-1989 and later school years, A pupil who is in any of 
grades seven to 12 is counted as 1.35 pupil units.  
    Sec. 25.  Minnesota Statutes 1987 Supplement, section 
124.17, subdivision 1b, is amended to read:  
    Subd. 1b.  [AFDC PUPIL UNITS.] In a district in which the 
number of pupils from families receiving aid to families with 
dependent children on October 1 of the previous school year 
equals six percent or more of the actual pupil units in the 
district for the same year, as computed in subdivision 1, each 
such pupil shall be counted as an additional one-tenth of a 
pupil unit for each percent of concentration over five percent 
of such pupils in the district.  The percent of concentration 
shall be rounded down to the nearest whole percent.  In a 
district in which the percent of concentration is less than six, 
additional pupil units may not be counted for such pupils.  A 
pupil may not be counted as more than .6 additional pupil unit 
under this subdivision.  The weighting in this subdivision is in 
addition to the weighting provided in subdivision 1.  
    Sec. 26.  Minnesota Statutes 1986, section 124.18, 
subdivision 2, is amended to read:  
    Subd. 2.  [TUITION.] Every district which that provides for 
the instruction of a nonhandicapped pupil in other districts and 
which receives foundation program aid a nonresident district 
shall pay to the nonresident district furnishing this elementary 
and secondary school instruction the actual cost thereof 
chargeable to maintenance exclusive of the instruction, 
excluding transportation costs.  Tuition for a nonresident 
handicapped pupil must be determined according to section 
120.17, subdivision 4.  
    There The resident district shall also be paid pay to the 
nonresident district, for capital outlay expenditures and debt 
service to the district providing such instruction, $10 
per actual pupil unit in average daily membership for each 
nonresident pupil unit, except that every.  However, a 
nonresident district educating nonresident pupils may charge and 
include in its tuition, for capital outlay expenditures and debt 
service, an amount per actual pupil unit in average daily 
membership based on the amount that the average expenditure for 
capital outlay expenditures and debt service determined by 
dividing such annual expenditure by the total number of pupil 
units in average daily membership in the district exceeds $10 
per actual pupil unit.  If the nonresident district has no 
capital outlay expenditures or debt service the district 
receiving such funds, it may use them the money for any purpose 
for which it is authorized to spend money.  Provided further 
that if a district provides instruction for nonresident 
handicapped and trainable children, tuition shall be as 
specified in section 120.17, subdivision 4.  
     Sec. 27.  Minnesota Statutes 1986, section 124.18, is 
amended by adding a subdivision to read:  
    Subd. 3.  [TUITION AS AGREED.] Notwithstanding subdivision 
2, a resident district may pay a nonresident district the amount 
for tuition that is agreed upon by the districts. 
    Sec. 28.  Minnesota Statutes 1986, section 124.19, 
subdivision 1, is amended to read:  
    Subdivision 1.  [INSTRUCTIONAL TIME.] Every district which 
receives special state aid shall maintain school in session or 
provide instruction in other districts, in state university 
laboratory school or in the university laboratory school, for at 
least 175 days, not including summer school, or the equivalent 
in a district operating a flexible school year program.  A 
district which that holds school for the required minimum number 
of days and is otherwise qualified is entitled to special state 
aid as provided by law.  If school is not held for the required 
minimum number of days, special state aid shall be reduced by 
the ratio that the difference between 175 days and the number of 
days school is held bears to 175 days, multiplied by 60 percent 
of the product of the foundation aid formula allowance times its 
pupil units basic revenue, as defined in section 124A.22, 
subdivision 2, of the district for that year.  However, 
districts maintaining school for fewer than the required minimum 
number of days do not lose special state aid, (1) if the 
circumstances causing loss of school days below the required 
minimum number of days are beyond the control of the board and, 
(2) if proper evidence is submitted, and (3) if a good faith 
attempt made to make up time lost due to these circumstances.  
The loss of school days resulting from a lawful employee strike 
shall not be considered a circumstance beyond the control of the 
board.  Days devoted to teachers' institutes or other meetings 
authorized or called by the commissioner may not be included as 
part of the required minimum number of days of school.  For 
grades 1 to 12, not more than five days may be devoted to 
parent-teacher conferences, teachers' workshops, or other staff 
development opportunities as part of the required minimum number 
of days, except that,.  For kindergarten classes, not more than 
ten days may be devoted to parent-teacher conferences, teachers' 
workshops, or other staff development opportunities as part of 
the required minimum number of days. 
    Sec. 29.  Minnesota Statutes 1986, section 124.19, 
subdivision 3, is amended to read:  
    Subd. 3.  [UNCERTIFIED UNLICENSED TEACHERS; AID REDUCTION.] 
When a district employs one or more teachers who do not hold a 
valid teaching certificate license, special state aid shall be 
withheld in the proportion that the number of such teachers is 
to the total number of teachers employed by the district, 
multiplied by 60 percent of the product of the foundation aid 
formula allowance times its total pupil units basic revenue, as 
defined in section 124A.22, subdivision 2, of the district for 
the year in which the employment occurred. 
    Sec. 30.  Minnesota Statutes 1986, section 124.19, 
subdivision 6, is amended to read:  
    Subd. 6.  [INSTRUCTIONAL HOURS.] To be eligible for the 
full entitlement amount of foundation aid general education 
revenue, a district must provide to students at least the 
minimum number of instructional hours per day prescribed in the 
rules of the state board, except as provided for in subdivision 
5 of this section.  Part of the school day may be provided in 
employment-related or community-based instruction, but only 
within a program which that receives annual approval by 
the local district school board, is in compliance with state 
board rules, and is on file with the commissioner of education.  
The information on the employment-related or community-based 
instruction submitted to the commissioner shall contain at least 
an estimate of the number of students involved, a description of 
the alternative instruction, and the percentage of the students' 
instructional year involved.  
    Sec. 31.  Minnesota Statutes 1987 Supplement, section 
124.195, subdivision 8, is amended to read:  
    Subd. 8.  [PAYMENT PERCENTAGE FOR REIMBURSEMENT AIDS.] One 
hundred percent of the aid for the last fiscal year must be paid 
for the following aids shall be paid at 100 percent of the 
entitlement for the prior fiscal year:  summer program aid 
according to section 124A.033; abatement aid according to 
section 124.214, subdivision 2; special education residential 
aid according to section 124.32, subdivision 5; special 
education summer school aid, according to section 124.32, 
subdivision 10; and planning, evaluating, and reporting process 
aid according to section 124.274; and extended leave aid 
according to chapters 354 and 354A.  
    Sec. 32.  Minnesota Statutes 1987 Supplement, section 
124.195, subdivision 9, is amended to read:  
    Subd. 9.  [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] One 
hundred percent of the aid for the current fiscal year must be 
paid for the following aids shall be paid at 100 percent of the 
entitlement for the current fiscal year:  management information 
center subsidies, according to section 121.935,; reimbursement 
for transportation to post-secondary institutions, according to 
section 123.3514, subdivision 8; handicapped adult program aid, 
according to section 124.271, subdivision 7; arts education aid 
according to section 124.275; school lunch aid, according to 
section 124.646; hearing impaired support services aid, 
according to section 121.201; Indian post-secondary preparation 
grants according to section 124.481; and desegregation grants 
according to Laws 1987, chapter 398, article 6, section 18. 
    Sec. 33.  Minnesota Statutes 1987 Supplement, section 
124.217, subdivision 1, is amended to read:  
    Subdivision 1.  [ELIGIBILITY.] A district is eligible for 
exceptional need revenue if all of the following apply to the 
district: 
    (a) The ratio of the average daily membership of pupils 
enrolled in the district to the number of licensed staff, 
measured in full-time equivalents, is greater than 17. 
    (b) The ratio of the referendum levy certified according to 
section 124A.02, subdivision 2, 124A.03 to the adjusted assessed 
valuation is greater than .006. 
    (c) The ratio of the total levy certified by the district 
to the adjusted assessed valuation is greater than .05. 
    (d) The ratio of the adjusted assessed valuation to the 
actual pupil units is less than $38,500. 
    (e) The unappropriated operating fund balance is less than 
$100 times the number of actual pupil units. 
    Before a school board certifies levies to the county 
auditor, the commissioner shall determine the district's 
eligibility for exceptional need revenue for the following 
school year.  Eligibility must be based on pupil and staff data 
from the prior year, levies certified in the prior year, 
adjusted assessed valuation in the prior year, and fund balances 
on June 30 of the same year. 
    Sec. 34.  Minnesota Statutes 1987 Supplement, section 
124.223, is amended to read:  
    124.223 [TRANSPORTATION AID AUTHORIZATION.] 
    School transportation and related services for which state 
transportation aid is authorized are: 
    (1)  [TO AND FROM SCHOOL; BETWEEN SCHOOLS.] Transportation 
or board of resident elementary pupils who reside one mile or 
more from the public schools which they could attend; 
transportation or board of resident secondary pupils who reside 
two miles or more from the public schools which they could 
attend; transportation to, from, or between the schools the 
resident pupils attend pursuant to a program approved by the 
commissioner of education; transportation of resident elementary 
pupils who reside one mile or more from a nonpublic school 
actually attended; transportation of resident secondary pupils 
who reside two miles or more from a nonpublic school actually 
attended; but with respect to transportation of pupils to 
nonpublic schools actually attended, only to the extent 
permitted by sections 123.76 to 123.79; 
    For the purposes of this clause, a district may designate a 
licensed day care facility or the residence of a relative as the 
home of a pupil for part or all of the day, if requested by the 
pupil's parent or guardian and if that facility or residence is 
within the attendance area of the school the pupil attends.  
    (2)  [OUTSIDE DISTRICT.] Transportation to and from or 
board and lodging in another district, of resident pupils of a 
district without a secondary school; the pupils may attend a 
classified secondary school in another district and shall 
receive board and lodging in or transportation to and from a 
district having a classified secondary school at the expense of 
the district of the pupil's residence; 
    (3)  [SECONDARY VOCATIONAL CENTERS.] Transportation to and 
from a state board approved secondary vocational center for 
secondary vocational classes for resident pupils of any of the 
districts who are members of or participating in programs at 
that center; 
    (4)  [HANDICAPPED.] Transportation or board and lodging of 
a handicapped pupil when that pupil cannot be transported on a 
regular school bus, the conveying of handicapped pupils between 
home and school and within the school plant, necessary 
transportation of handicapped pupils from home or from school to 
other buildings, including centers such as developmental 
achievement centers, hospitals and treatment centers where 
special instruction or services required by section 120.17 are 
provided, within or outside the district where services are 
provided, and necessary transportation for resident handicapped 
pupils required by section 120.17, subdivision 4a.  
Transportation of handicapped pupils between home and school 
shall not be subject to any distance requirement for children 
not yet enrolled in kindergarten or to the requirement in clause 
(1) that elementary pupils reside at least one mile from school 
and secondary pupils reside at least two miles from school in 
order for the transportation to qualify for aid; 
    (5)  [BOARD AND LODGING; NONRESIDENT HANDICAPPED.] When 
necessary, board and lodging for nonresident handicapped pupils 
in a district maintaining special classes; 
    (6)  [SHARED TIME.] Transportation from one educational 
facility to another within the district for resident pupils 
enrolled on a shared time basis in educational programs approved 
by the commissioner of education, and necessary transportation 
required by section 120.17, subdivision 9, for resident 
handicapped pupils who are provided special instruction and 
services on a shared time basis; 
    (7)  [FARIBAULT STATE ACADEMIES.] Transportation for 
residents to and from the Minnesota state academy for the deaf 
or the Minnesota state academy for the blind; 
    (8)  [SUMMER INSTRUCTIONAL PROGRAMS.] Services described in 
clauses (1) to (7), (9), and (10) when provided in conjunction 
with a summer program eligible for aid and levy under sections 
124A.03 and 124A.033 that meets the requirements of section 
124A.27, subdivision 9; 
    (9)  [COOPERATIVE ACADEMIC AND VOCATIONAL.] Transportation 
to, from or between educational facilities located in any of two 
or more school districts jointly offering academic classes 
approved by the commissioner or secondary vocational classes not 
provided at a secondary vocational center which are approved by 
the commissioner for resident pupils of any of these districts; 
and 
    (10)  [NONPUBLIC SUPPORT SERVICES.] Necessary 
transportation within district boundaries between a nonpublic 
school and a public school or a neutral site for nonpublic 
school pupils who are provided pupil support services pursuant 
to section 123.935. 
    Sec. 35.  Minnesota Statutes 1987 Supplement, section 
124.225, subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the terms defined in this subdivision have the meanings 
given to them. 
    (a) "FTE" means a transported full-time equivalent pupil 
whose transportation is authorized for aid purposes by section 
124.223. 
    (b) "Authorized cost for regular transportation" means the 
sum of: 
    (1) all expenditures for transportation in the regular 
category, as defined in clause (e)(1), for which aid is 
authorized in section 124.223, plus 
    (2) an amount equal to one year's depreciation on the 
district's school bus fleet and mobile units computed on a 
straight line basis at the rate of 12-1/2 percent per year of 
the cost of the fleet, plus 
    (3) an amount equal to one year's depreciation on district 
school buses reconditioned by the department of corrections 
computed on a straight line basis at the rate of 33-1/3 percent 
per year of the cost to the district of the reconditioning, plus 
    (4) an amount equal to one year's depreciation on the 
district's type three school buses, as defined in section 
169.44, subdivision 15, which were purchased after July 1, 1982, 
for authorized transportation of pupils, with the prior approval 
of the commissioner, computed on a straight line basis at the 
rate of 20 percent per year of the cost of the type three school 
buses.  
    (c) "Adjusted authorized predicted cost per FTE" means the 
authorized cost predicted by a multiple regression formula 
determined by the department of education, and adjusted pursuant 
to subdivision 7a. 
    (d) "Aid entitlement per FTE" means the adjusted authorized 
predicted cost per FTE, inflated pursuant to subdivision 7b.  
    (e) "Transportation category" means a category of 
transportation service provided to pupils.  
    (1) For the purposes of this section, transportation 
categories for the 1986-1987 and 1987-1988 school years are as 
follows: 
    (i) regular transportation is transportation services 
provided during the regular school year under section 124.223, 
clauses (1) and (2), excluding transportation between schools 
under section 124.223, clause (1); and 
    (ii) nonregular transportation is transportation services 
provided between schools under section 124.223, clause (1); and 
transportation services provided under section 124.223, clauses 
(3), (4), (5), (6), (7), (8), (9), and (10). 
    (2) For purposes of this section, for the 1988-1989 school 
year and after: 
    (i) regular transportation is transportation services 
provided during the regular school year under section 124.223, 
clauses (1) and (2), excluding the following transportation 
services provided under section 124.223, clause (1):  
transportation between schools; noon transportation to and from 
school for kindergarten pupils attending half-day sessions; late 
transportation home from school for pupils involved in after 
school activities; transportation of pupils to and from schools 
located outside their normal attendance areas under the 
provisions of a plan for desegregation mandated by the state 
board of education or under court order; and 
    (ii) nonregular transportation is transportation services 
provided under section 124.223, clause (1) that are excluded 
from the regular category, and transportation services provided 
under section 124.223, clauses (3), (4), (5), (6), (7), (8), 
(9), and (10). 
    (f) "Mobile unit" means a vehicle or trailer designed to 
provide facilities for educational programs and services, 
including diagnostic testing, guidance and counseling services, 
and health services.  A mobile unit located off nonpublic school 
premises is a neutral site as defined in section 123.932, 
subdivision 9. 
    (g) "Current year" means the school year for which aid will 
be paid.  
    (h) "Base year" means the second school year preceding the 
school year for which aid will be paid.  
    (i) "Base cost" for the 1984-1985 and 1985-1986 base years 
means the authorized regular transportation cost per FTE in the 
base year in the regular transportation category, excluding 
summer school transportation.  Base cost for the 1986-1987 base 
year and after means the ratio of: 
    (1) the sum of: 
    (i) the authorized cost in the base year for regular 
transportation as defined in clause (b), plus 
    (ii) the actual cost in the base year for transportation to 
and from school of secondary pupils who live more than one mile 
but less than two miles from the public school that they could 
attend or from the nonpublic school actually attended, plus 
    (iii) the actual cost in the base year for transportation 
costs which are necessary because of extraordinary traffic 
hazards, 
    (2) to the sum of: 
    (i) the number of FTE pupils transported in the regular 
category in the base year, plus 
    (ii) the number of secondary FTE pupils transported to and 
from school in the base year who live more than one mile but 
less than two miles from the public school that they could 
attend or from the nonpublic school actually attended, plus 
    (iii) the number of FTE pupils residing less than one mile 
from school who were transported to and from school in the base 
year because of extraordinary traffic hazards. 
    (j) "Predicted base cost" means the base cost as predicted 
by subdivision 3.  
    Sec. 36.  Minnesota Statutes 1987 Supplement, section 
124.225, subdivision 4b, is amended to read:  
    Subd. 4b.  [FORMULA TERMS.] (a) To predict the logarithm of 
the base cost for each district pursuant to subdivision 3 for 
the 1985-1986 base year, the multiple regression formula shall 
use the following terms for each district: 
    (1) the logarithm of the lesser of (a) the number of 
authorized FTE's per square mile transported by the district in 
the regular transportation category, or (b) 200; 
    (2) whether the district is nonrural, based upon criteria 
established by the department of education; and 
    (3) the logarithm of the percentage of all FTE's 
transported in the regular category using buses that are not 
owned by the district.  
    (b) To predict the logarithm of the base cost for each 
district according to subdivision 3 for the 1986-1987 base year 
and thereafter, the multiple regression formula shall use the 
following terms for each district: 
    (1) the logarithm of the lesser of: 
    (A) 200; or 
    (B) the quotient obtained by dividing the sum of: 
    (i) the number of FTE pupils transported in the regular 
category in the base year, plus 
    (ii) the number of secondary FTE pupils transported to and 
from school in the base year who live more than one mile but 
less than two miles from the public school that they could 
attend or from the nonpublic school actually attended, plus 
    (iii) the number of FTE pupils residing less than one mile 
from school who were transported to and from school in the base 
year because of extraordinary traffic hazards, 
    (C) by the area of the district in square miles; 
    (2) whether the district is nonrural, based upon criteria 
established by the department of education; and 
    (3) the logarithm of the percentage of all FTE's 
transported in the regular category using buses that are not 
owned by the district. 
    Sec. 37.  Minnesota Statutes 1987 Supplement, section 
124.245, subdivision 3b, is amended to read:  
    Subd. 3b.  [HAZARDOUS SUBSTANCE REVENUE AND AID.] (a) A 
district's "hazardous substance revenue" equals the approved 
cost of the hazardous substance plan for the school year to 
which the levy is attributable, minus the unexpended portion of 
levies certified by the district in earlier years under section 
275.125, subdivision 11c. 
    (b) A district's "hazardous substance levy limitation" 
means its levy limitation computed according to section 275.125, 
subdivision 11c. 
    (c) A district's "hazardous substance aid" for 1988-1989 
and later school years equals: 
    (i) the difference between its hazardous substance revenue 
and its hazardous substance levy limitation for the levy for 
that school year, multiplied by 
    (ii) the ratio of the amount actually levied to the amount 
of its hazardous substance by levy limitation. 
    (d) Aid paid under this subdivision may be used only for 
the purposes for which the proceeds of the levy authorized in 
section 275.125, subdivision 11c, may be used. 
    (e) In the event that the aid available for any year is 
prorated, a district having its aid prorated may levy an 
additional amount equal to the amount not paid by the state due 
to proration. 
    Sec. 38.  Minnesota Statutes 1987 Supplement, section 
124.271, subdivision 7, is amended to read:  
    Subd. 7.  [HANDICAPPED ADULT PROGRAM AID.] A district or 
group of districts offering an approved program for handicapped 
adults shall receive aid equal to the lesser of $30,000 or 
one-half of the actual expenditures for approved programs.  A 
district or group of districts shall provide the remaining half 
from other public or private sources, the levy authorized in 
section 275.125, subdivision 8, paragraph (d) (e), or 
combinations of sources. 
    Sec. 39.  Minnesota Statutes 1987 Supplement, section 
124.2711, subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITION OF MAXIMUM REVENUE.] For fiscal 
year 1987 the "maximum revenue" for early childhood family 
education programs for a school year means the amount of revenue 
equal to the product of five percent of the foundation aid 
formula allowance for the prior school year, times the greater 
of (a) 150, or (b) the number of people under five years of age 
residing in the district on September 1 of the preceding school 
year.  For fiscal year 1988 and each year thereafter, The "maximum 
revenue" for early childhood family education programs 
for a school year means is the amount of revenue derived by 
multiplying $84.50 times the greater of (a) 150, or (b) the 
number of people under five years of age residing in the 
district on September 1 of the preceding school year. 
    Sec. 40.  Minnesota Statutes 1986, section 124.274, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ELIGIBILITY.] Each school district 
which that completes the planning, evaluation, and reporting 
process pursuant to the requirements of sections 126.66 126.661 
and 126.67 and which that receives approval from the 
commissioner of education is eligible to receive state aid each 
year.  An eligible school district shall receive $1 times the 
number of pupils in average daily membership for the prior 
school year.  No district which that is eligible for aid shall 
receive less than $1,500.  
    Sec. 41.  Minnesota Statutes 1987 Supplement, section 
124.32, subdivision 1c, is amended to read:  
    Subd. 1c.  [FOUNDATION AID FORMULA ALLOWANCE BASIC 
REVENUE.] For purposes of this section, "foundation aid formula 
allowance" shall have "basic revenue" has the meaning attributed 
to given it in section 124A.02, subdivision 9, and "summer 
program revenue allowance" shall have the meaning attributed to 
it in section 124A.033 124A.22, subdivision 2.  For the purposes 
of computing foundation aid formula allowances basic revenue 
pursuant to this section, each handicapped child shall be 
counted as prescribed in section 124.17, subdivision 1. 
    Sec. 42.  Minnesota Statutes 1987 Supplement, section 
124.32, subdivision 1d, is amended to read:  
    Subd. 1d.  [CONTRACT SERVICES.] (1) For special instruction 
and services provided during the regular school year to any 
pupil pursuant to section 120.17, subdivision 2, clause (i), by 
contract contracting with public, private, or voluntary agencies 
other than school districts, the state shall pay each district 
52 percent of the difference between the amount of the contract 
and the foundation aid formula allowance basic revenue of the 
district for that pupil or a pro rata portion of the foundation 
aid formula allowance for pupils who receive services by for the 
amount of time the pupil receives services under the contract on 
less than a full-time basis.  
    (2) For special instruction and services provided for a 
pupil by such a contract as part of a summer school program, the 
state shall pay each district 52 percent of the difference 
between the amount of the contract and the summer school revenue 
allowance of the district attributable to that pupil.  
    Sec. 43.  Minnesota Statutes 1986, section 124.32, 
subdivision 4, is amended to read:  
    Subd. 4.  The aids provided for handicapped children shall 
be paid to the district providing the special instruction and 
services.  Foundation General education aid shall be paid to the 
district of the pupils' pupil's residence.  The total amount of 
aid paid may not exceed the amount expended for handicapped 
children in the school year for which the aid is paid. 
    Sec. 44.  Minnesota Statutes 1987 Supplement, section 
124.32, subdivision 5, is amended to read:  
    Subd. 5.  [RESIDENTIAL AID.] When a handicapped child is 
placed in a residential facility approved by the commissioner 
and established primarily to serve handicapped children and when 
the child's educational program is approved by the commissioner, 
the state shall pay aid to the resident district under the 
provisions of this subdivision.  The aid shall be an amount not 
to exceed 57 percent of the difference between the instructional 
costs charged to the resident district and the foundation aid 
formula allowance, for each handicapped child placed in a 
residential facility.  The aid for summer school programs for 
each handicapped child placed in a residential facility shall be 
an amount not to exceed 57 percent of the difference between the 
instructional costs charged to the resident district and the 
summer school revenue allowance in the resident district 
attributable to that child basic revenue of the district for 
that child.  No aid shall be paid pursuant to this subdivision 
for tuition charged a resident district, pursuant to section 
120.17, subdivision 7a, for a child placed at the Minnesota 
state academy for the deaf or the Minnesota state academy for 
the blind. 
    The following types of facilities may be approved by the 
commissioner: 
    (a) a residential facility operated by the state or public 
a school district and, designed to serve the low incidence 
handicapped, the multiple handicapped, or the most severely 
handicapped children within the state; 
    (b) a private, nonsectarian residential facility designed 
to provide educational services for handicapped children within 
the state; and 
    (c) a state hospital or private nonsectarian residential 
center designed to provide care and treatment for handicapped 
children. 
    Sec. 45.  Minnesota Statutes 1986, section 124.32, 
subdivision 6, is amended to read:  
    Subd. 6.  [FULL STATE PAYMENT.] The state shall pay each 
district the actual cost incurred in providing instruction and 
services for a handicapped child whose district of residence has 
been determined by section 120.17, subdivision 8a, and who is 
temporarily placed in a state institution or a licensed 
residential facility for care and treatment.  This section does 
not apply for to a child placed in a foster home or a foster 
group home. 
    Upon following the procedure specified by the commissioner 
of education, the district may bill the state the actual cost 
incurred in providing the services including transportation 
costs and a proportionate amount of capital outlay expenditures 
and debt service, minus the amount of the foundation aid formula 
allowance basic revenue, as defined in section 124A.22, 
subdivision 2, of the district for the child and the special 
education aid, transportation aid, and any other aid earned in 
on behalf of the child.  The limit set forth in subdivision 4 
shall apply to aid paid pursuant to this subdivision.  
    To the extent possible, the commissioner shall obtain 
reimbursement from another state for the cost of serving any 
child whose parent or guardian resides in that state.  The 
commissioner may contract with the appropriate authorities of 
other states to effect reimbursement.  All money received from 
other states shall be paid to the state treasury and placed in 
the general fund.  
    Sec. 46.  Minnesota Statutes 1987 Supplement, section 
124A.02, subdivision 8, is amended to read:  
    Subd. 8.  [EQUALIZING FACTOR.] "Equalizing factor" means a 
number equal to the minimum adjusted assessed valuation per 
total pupil unit which disqualifies a district from earning any 
basic foundation aid.  The equalizing factor for the 1987-1988 
school year and for levies for use in that school year equals 
$74,890.  The equalizing factor for each school year, except the 
1987-1988 school year, and for levies for use in that school 
year equals the ratio, rounded to the nearest dollar, of 
the foundation aid formula allowance for that school year to the 
basic maintenance general education mill rate for that 
school the corresponding year.  
    Sec. 47.  Minnesota Statutes 1987 Supplement, section 
124A.02, subdivision 16, is amended to read:  
    Subd. 16.  [PUPIL UNITS, AFDC.] For the 1986-1987 and 
1987-1988 school years, "AFDC pupil units" means pupil units 
identified in section 124.17, subdivision 1a.  For the 1988-1989 
school year and each year thereafter, "AFDC pupil units" means 
pupil units identified in section 124.17, subdivision 1b. 
    Sec. 48.  Minnesota Statutes 1986, section 124A.02, 
subdivision 21, is amended to read:  
    Subd. 21.  [SHARED TIME FOUNDATION AID.] Foundation Aid for 
shared time pupils shall equal the formula allowance times the 
full-time equivalent actual pupil units for shared time pupils.  
Foundation Aid for shared time pupils shall be in addition to 
any other aid to which the district is otherwise entitled and.  
Shared time average daily membership shall not be used in the 
computation of pupil units under section 124.17, subdivision 1, 
for any purpose other than the computation of shared 
time foundation aid pursuant to subdivisions 20 to 22 and 
section 124A.034, subdivisions 1 to 1b. 
    Sec. 49.  Minnesota Statutes 1986, section 124A.03, 
subdivision 2, is amended to read:  
    Subd. 2.  [REFERENDUM LEVY.] (1) The levy authorized by 
subdivision 1 section 124A.23, subdivision 2, may be increased 
in any amount which that is approved by the voters of the 
district at a referendum called for the purpose.  The referendum 
may be called by the school board or shall be called by the 
school board upon written petition of qualified voters of the 
district.  The referendum shall be held on a date set by the 
school board.  Only two elections may be held to approve a levy 
increase which that will commence in a specific school year.  
The ballot shall state the maximum amount of the increased levy 
in mills, the amount that will be raised by that millage in the 
first year it is to be levied, and that the millage shall be 
used to finance school operations.  The ballot may designate a 
specific number of years for which the referendum authorization 
shall apply.  The ballot may contain a textual portion with the 
information required in this subdivision and a question stating 
substantially the following:  
    "Shall the increase in the levy proposed by (petition to) 
the board of ........., School District No. .., be approved?"  
    If approved, the amount provided by the approved millage 
applied to each year's taxable valuation shall be authorized for 
certification for the number of years approved, if applicable, 
or until revoked or reduced by the voters of the district at a 
subsequent referendum. 
    (2) A referendum on the question of revoking or reducing 
the increased levy amount authorized pursuant to clause (1) of 
this subdivision may be called by the school board and shall be 
called by the school board upon the written petition of 
qualified voters of the district.  A levy approved by the voters 
of the district pursuant to clause (1) of this subdivision must 
be made at least once before it is subject to a referendum on 
its revocation or reduction for subsequent years.  Only one such 
revocation or reduction election may be held to revoke or reduce 
a levy for any specific year and for years thereafter. 
    (3) A petition authorized by clause (1) shall be effective 
if signed by a number of qualified voters in excess of 15 
percent, or ten percent if the school board election is held in 
conjunction with a general election, of the average number of 
voters at the two most recent district wide school elections.  A 
referendum invoked by petition shall be held within three months 
of submission of the petition to the school board. 
    (4) A petition authorized by clause (2) shall be effective 
if signed by a number of qualified voters in excess of five 
percent of the residents of the school district as determined by 
the most recent census.  A revocation or reduction referendum 
invoked by petition shall be held within three months of 
submission of the petition to the school board.  
    (5) Notwithstanding any law to the contrary, the approval 
of 50 percent plus one of those voting on the question is 
required to pass a referendum. 
    (6) Within 30 days after the district holds a referendum 
pursuant to this clause, the district shall notify the 
commissioner of education of the results of the referendum. 
    Sec. 50.  Minnesota Statutes 1987 Supplement, section 
124A.032, is amended to read:  
    124A.032 [ANNUAL FOUNDATION ON GENERAL EDUCATION AID 
APPROPRIATION.] 
    There is annually appropriated from the general fund to the 
department of education the amount necessary for foundation aid 
or general education aid.  This amount shall be reduced by the 
amount of any funds money specifically appropriated for the same 
purpose in any year from any state fund.  
    Sec. 51.  Minnesota Statutes 1986, section 124A.034, 
subdivision 1, is amended to read:  
    Subdivision 1.  [TO RESIDENT DISTRICT.] Foundation Aid for 
shared time pupils shall be paid to the district of the pupil's 
residence.  If a pupil attends shared time classes in another 
district, the resident district shall pay to the district of 
attendance an amount of tuition equal to the ratio in section 
124A.02, subdivision 20 times the amount of tuition which would 
be charged and paid for a nonresident public school pupil in a 
similar circumstance.  The district of residence shall not be 
obligated for tuition except by previous agreement. 
    Sec. 52.  Minnesota Statutes 1986, section 124A.034, 
subdivision 1b, is amended to read:  
    Subd. 1b.  [SECTION 123.935 SERVICES.] Minutes of 
enrollment in a public school during which a nonpublic school 
pupil receives services pursuant to section 123.935 shall not be 
used in the computation of shared time foundation aid pursuant 
to this subdivision. 
    Sec. 53.  Minnesota Statutes 1986, section 124A.035, 
subdivision 2, is amended to read:  
    Subd. 2.  [PERMANENT SCHOOL FUND.] The amount of money 
received by a school district as income from the permanent 
school fund for any year, shall be deducted from the foundation 
general education aid earned by the district for the same year 
or from aid earned from other state sources.  
    Sec. 54.  Minnesota Statutes 1986, section 124A.035, 
subdivision 4, is amended to read:  
    Subd. 4.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
amount of money apportioned to a school district for that year 
pursuant to section 124.10, subdivision 2, shall be deducted 
from the foundation general education aid earned by that 
district for the same year.  
    Sec. 55.  Minnesota Statutes 1987 Supplement, section 
124A.035, subdivision 5, is amended to read:  
    Subd. 5.  [TACONITE DEDUCTIONS.] (1) Notwithstanding any 
provisions of any other law to the contrary, the adjusted 
assessed valuation used in calculating foundation general 
education aid shall include only that property which is 
currently taxable in the district.  
    (2) For districts which that received payments under 
sections 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 
298.396; 298.405; any law imposing a tax upon severed mineral 
values, or recognized revenue pursuant to section 477A.15; 
the foundation general education aid shall be reduced in the 
October final adjustment payment by the difference between the 
dollar amount of the payments received pursuant to those 
sections, or revenue recognized pursuant to section 477A.15 in 
the fiscal year to which the October final adjustment is 
attributable and the amount which was calculated, pursuant to 
section 275.125, subdivision 9, as a reduction of the levy 
attributable to the fiscal year to which the October final 
adjustment is attributable.  If the October final adjustment of 
a district's foundation general education aid for a fiscal year 
is a negative amount because of this clause, the next fiscal 
year's foundation general education aid to that district shall 
be reduced by this negative amount in the following manner:  
there shall be withheld from each monthly scheduled foundation 
general education aid payment due the district in such fiscal 
year, 15 percent of the total negative amount, until the total 
negative amount has been withheld.  The amount reduced from 
foundation general education aid pursuant to this clause shall 
be recognized as revenue in the fiscal year to which the October 
final adjustment payment is attributable.  
    Sec. 56.  Minnesota Statutes 1986, section 124A.036, 
subdivision 1, is amended to read:  
    Subdivision 1.  [AID TO DISTRICT OF RESIDENCE.] Foundation 
aids General education aid shall be paid to the district of 
residence unless otherwise specifically provided by law.  
    Sec. 57.  Minnesota Statutes 1986, section 124A.036, 
subdivision 2, is amended to read:  
    Subd. 2.  [DISTRICT WITHOUT SCHOOLS.] Any district not 
maintaining classified elementary or secondary schools shall pay 
the tuition required in order to enable resident pupils to 
attend school in another district when necessary, and shall 
receive foundation general education aid pursuant to this 
section on the same basis as other districts.  The aid shall be 
computed as if the pupils were enrolled in the district of 
residence.  
    Sec. 58.  Minnesota Statutes 1987 Supplement, section 
124A.22, subdivision 1, is amended to read:  
    Subdivision 1.  [GENERAL EDUCATION REVENUE.] The general 
education revenue for each district equals the sum of the 
district's basic revenue, compensatory education revenue, 
training and experience revenue, and sparsity revenue, and 
supplemental revenue. 
    Sec. 59.  Minnesota Statutes 1987 Supplement, section 
124A.22, is amended by adding a subdivision to read: 
    Subd. 7.  [DEFINITIONS FOR SUPPLEMENTAL REVENUE.] (a) The 
definitions in this subdivision apply only to subdivision 8. 
    (b) "1987-1988 revenue" means the sum of the following 
categories of revenue for a district for the 1987-1988 school 
year: 
    (1) basic foundation revenue, tier revenue, and declining 
pupil unit revenue, according to Minnesota Statutes 1986, as 
supplemented by Minnesota Statutes 1987 Supplement, chapter 
124A, plus any reduction to second tier revenue, according to 
Minnesota Statutes 1986, section 124A.08, subdivision 5; 
    (2) teacher retirement and FICA aid, according to Minnesota 
Statutes 1986, sections 124.2162 and 124.2163; 
    (3) chemical dependency aid, according to Minnesota 
Statutes 1986, section 124.246; 
    (4) gifted and talented education aid, according to 
Minnesota Statutes 1986, section 124.247; 
    (5) interdistrict cooperation aid and levy, according to 
Minnesota Statutes 1986, sections 124.272 and 275.125, 
subdivision 8a; 
    (6) arts education aid, according to Minnesota Statutes 
1986, section 124.275; 
    (7) summer program aid and levy, according to Minnesota 
Statutes 1986, sections 124A.03 and 124A.033; 
    (8) programs of excellence grants, according to Minnesota 
Statutes 1986, section 126.60; and 
    (9) liability insurance levy, according to Minnesota 
Statutes 1986, section 466.06. 
    For the purpose of this subdivision, intermediate districts 
and other employing units, as defined in Minnesota Statutes 
1986, section 124.2161, shall allocate the amount of their 
teacher retirement and FICA aid for fiscal year 1988 among their 
participating school districts.  
    (c) "Minimum allowance" for a district means: 
    (1) the district's 1987-1988 revenue, according to 
subdivision 1; divided by 
    (2) the district's 1987-1988 actual pupil units, adjusted 
for the change in secondary pupil unit weighting from 1.4 to 
1.35 made by Laws 1987, chapter 398; plus 
    (3) $40. 
    Sec. 60.  Minnesota Statutes 1987 Supplement, section 
124A.22, is amended by adding a subdivision to read: 
    Subd. 8.  [SUPPLEMENTAL REVENUE.] If a district's minimum 
allowance exceeds the sum of its basic revenue, compensatory 
revenue, training and experience revenue, and sparsity revenue 
per actual pupil unit for a school year, the district shall 
receive supplemental revenue equal to the amount of the excess 
times the actual pupil units for the school year. 
    Sec. 61.  Minnesota Statutes 1987 Supplement, section 
124A.23, subdivision 2, is amended to read:  
    Subd. 2.  [GENERAL EDUCATION LEVY.] To obtain general 
education revenue, excluding supplemental revenue, a district 
may levy an amount not to exceed the general education mill rate 
times the adjusted assessed valuation of the district for the 
preceding year.  If the amount of the general education levy 
would exceed the general education revenue, excluding 
supplemental revenue, the general education levy shall be 
determined according to subdivision 3.  The adjusted assessed 
valuation must be determined each year by the equalization aid 
review committee according to section 124.2131. 
    Sec. 62.  Minnesota Statutes 1987 Supplement, section 
124A.23, is amended by adding a subdivision to read: 
    Subd. 2a.  [SUPPLEMENTAL REVENUE LEVY.] To obtain 
supplemental revenue, a district may levy an amount not more 
than the product of its supplemental revenue for the school year 
times the lesser of one or the ratio of its general education 
levy to its general education revenue, excluding supplemental 
revenue, for the same year. 
    Sec. 63.  Minnesota Statutes 1987 Supplement, section 
124A.23, subdivision 3, is amended to read:  
    Subd. 3.  [GENERAL EDUCATION LEVY; DISTRICTS OFF THE 
FORMULA.] If the amount of the general education levy for a 
district exceeds the district's general education 
revenue, excluding supplemental revenue, the amount of the 
general education levy shall be limited to the following: 
    (1) the district's general education revenue, excluding 
supplemental revenue; plus 
    (2) the amount of the aid reduction for the same school 
year according to section 124A.24; minus 
    (3) payments made for the same school year according to 
section 124A.035, subdivision 4. 
    For purposes of statutory cross-reference, a levy made 
according to this subdivision shall be construed to be the levy 
made according to subdivision 2. 
    Sec. 64.  Minnesota Statutes 1987 Supplement, section 
124A.23, subdivision 4, is amended to read:  
    Subd. 4.  [GENERAL EDUCATION AID.] A district's general 
education aid is the sum of the following amounts:  
    (1) the product of (i) the difference between the general 
education revenue, excluding supplemental revenue, and the 
general education levy, multiplied times (ii) the ratio of the 
actual amount levied to the permitted levy; and 
    (2) the product of (i) the difference between the 
supplemental revenue and the supplemental levy, times (ii) the 
ratio of the actual amount levied to the permitted levy.  
    Sec. 65.  Minnesota Statutes 1987 Supplement, section 
124A.24, is amended to read:  
    124A.24 [GENERAL EDUCATION LEVY EQUITY.] 
    If a district's general education levy is determined 
according to section 124A.23, subdivision 3, an amount must be 
deducted from state aid authorized in this chapter and chapter 
124, receivable for the same school year, and from other state 
payments receivable for the same school year authorized in 
sections 273.115; 273.116; 273.123, subdivision 6; 273.13, 
subdivision 15a; and Laws 1983, chapter 342, article 8, section 
8.  The aid in section 124.646 must not be reduced. 
    The amount of the deduction equals the difference between: 
    (1) the general education mill rate, according to section 
124A.23, times the district's adjusted assessed valuation used 
to determine the general education aid for the same school year; 
and 
    (2) the district's general education revenue, excluding 
supplemental revenue, for the same school year, according to 
section 124A.22. 
    However, for fiscal year 1989, the amount of the deduction 
shall be one-fourth of the difference between clauses (1) and 
(2); for fiscal year 1990, the amount of the deduction shall be 
one-half of the difference between clauses (1) and (2); and for 
fiscal year 1991, the amount of the deduction shall be 
three-fourths of the difference between clauses (1) and (2). 
    Sec. 66.  Minnesota Statutes 1987 Supplement, section 
124A.26, subdivision 2, is amended to read:  
    Subd. 2.  [LEVY REDUCTION.] If a district's general 
education revenue is reduced, the general education levy shall 
be reduced by the following amount: 
    (1) the reduction specified in subdivision 1, times 
    (2) the lesser of one or the ratio of the district's 
general education levy to its general education revenue, 
excluding supplemental revenue.  
    Sec. 67.  Minnesota Statutes 1987 Supplement, section 
124A.27, subdivision 7, is amended to read:  
    Subd. 7.  [INTERDISTRICT COOPERATION TO EXPAND CURRICULUM.] 
A school board may use the reserved revenue to expand curricular 
offerings in secondary mathematics, secondary science, foreign 
languages, and computer usage, and other programs recommended by 
the state board by entering into cooperation agreements with 
other school boards.  The agreements shall emphasize instruction 
and minimize administrative costs.  
    Sec. 68.  Minnesota Statutes 1987 Supplement, section 
124A.27, subdivision 10, is amended to read:  
    Subd. 10.  [LIABILITY INSURANCE.] Except as provided in 
this subdivision, a school board may use the reserved revenue to 
procure liability insurance, according to section 466.06.  The 
school board may not use the reserved revenue for premiums for 
motor vehicle insurance protecting against injuries or damages 
arising from operating district owned, operated, leased, or 
controlled vehicles to transport pupils for which state aid is 
authorized under section 124.223.  The board may not use the 
reserved revenue for any purpose for which the district may levy 
under section 275.125, subdivision 5e.  
    Sec. 69.  Minnesota Statutes 1987 Supplement, 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 foundation revenue or general education 
revenue per actual pupil unit and provide that information to 
all school districts. 
    Sec. 70.  Minnesota Statutes 1987 Supplement, section 
126.23, is amended to read:  
    126.23 [AID FOR PRIVATE ALTERNATIVE PROGRAMS.] 
    If a pupil enrolls in a nonsectarian alternative program 
operated by a private organization that has contracted with a 
school district to provide educational services for high school 
drop outs or other eligible students under section 126.22, 
subdivision 2, the resident district must reimburse the provider 
an amount equal to at least 50 percent of the formula allowance 
plus the total tier revenue attributable to that basic revenue 
of the district for each pupil. 
    Sec. 71.  Minnesota Statutes 1987 Supplement, section 
126.661, subdivision 1, is amended to read:  
    Subdivision 1.  [APPLICABILITY.] For the purposes of Laws 
1987, chapter 398, article 8, sections 126.661 to 126.666 and 
section 126.67, the following terms have the meanings given them.
    Sec. 72.  Minnesota Statutes 1987 Supplement, section 
126.666, subdivision 1, is amended to read:  
    Subdivision 1.  [ADOPTING POLICIES.] A school board shall 
adopt each year a written PER policy that includes the following:
    (1) district curriculum goals; 
    (2) learner outcomes for each subject area at each grade 
level that include the essential learner outcomes adopted by the 
state board under section 126.663, subdivision 2; 
    (3) a process for evaluating each student's progress toward 
attaining learner outcomes and for identifying strengths and 
weaknesses of the curriculum; 
    (4) a system for establishing a review cycle for all 
curriculum; 
    (5) curriculum and instruction improvement plans; and 
    (6) an instruction plan that includes education 
effectiveness processes developed according to section 121.608 
and integration of curriculum and technology developed under 
section 129B.33. 
    Sec. 73.  Minnesota Statutes 1986, section 126.70, 
subdivision 2, is amended to read:  
    Subd. 2.  [CONTENTS OF THE PLAN.] The plan may include: 
    (1) procedures the district will use to analyze and 
identify teaching and curricular needs, including the need for 
mentor teachers; 
    (2) short- and long-term curriculum and staff development 
needs; 
    (3) integration with in-service and curricular efforts 
already in progress; 
    (4) goals to be achieved and the means to be used; 
    (5) procedures for evaluating progress; and 
    (6) whether the school board intends to offer contracts 
under the excellence in teaching program; and 
    (7) integration of areas listed under section 126.71. 
    Sec. 74.  Minnesota Statutes 1987 Supplement, section 
126.70, subdivision 2a, is amended to read:  
    Subd. 2a.  [PERMITTED USES.] A school board may approve a 
plan for any of the following purposes: 
    (1) to participate in the educational effectiveness program 
according to section 121.609; 
    (2) to provide in-service education for elementary and 
secondary teachers to improve the use of technology in education;
    (3) to provide subject area in-service education 
emphasizing the academic content of curricular areas determined 
by the district to be a priority area; 
    (4) to use experienced teachers, as mentors, to assist in 
the continued development of new teachers; 
    (5) to increase the involvement of parents, business, and 
the community in education; 
    (6) for experimental delivery systems; 
    (7) for in-service education to increase the effectiveness 
of principals and administrators; 
    (8) for in-service education or curriculum development for 
programs for gifted and talented pupils; 
    (9) for in-service education or curriculum development for 
cooperative efforts to increase curriculum offerings, as set 
forth in section 124.272; 
    (10) for improving curriculum, according to the needs 
identified under the planning, evaluation, and reporting process 
set forth in section 126.666; 
    (11) for in-service education and curriculum development 
designed to promote sex equity in all aspects of education, with 
emphasis on curricular areas such as mathematics, science, and 
technology programs; 
    (12) for in-service education or curriculum modification 
for handicapped pupils and low-achieving pupils;  
    (13) for short-term contracts as described in section 
126.72; or 
    (14) to employ teachers for an extended year to perform 
duties directly related to improving curriculum or teaching 
skills. 
     Sec. 75.  Minnesota Statutes 1987 Supplement, section 
129B.11, subdivision 1, is amended to read:  
    Subdivision 1.  [PLANS; GRANT AWARDS.] The state board of 
education, with the advice of the state curriculum advisory 
committee and the advisory committee on technology in education 
for projects involving technology, shall make grants to groups 
of school districts to implement plans to improve 
education.  The board shall consult with the state curriculum 
advisory committee and other appropriate groups.  The board may 
award grants to groups of districts which submit plans that 
include at least the following: 
    (1) program and curriculum changes which provide more 
learning opportunities for students;  
    (2) demonstration of a local commitment to the plan and, in 
the case of plans utilizing technology, local financial support 
including public and private partnerships; 
    (3) involvement of school district teaching staff in 
development of the plan; 
    (4) demonstration that the plan is consistent with school 
district goals established under section 126.666; and 
    (5) the structural criteria established in subdivision 2. 
    The board may establish additional criteria and shall 
establish time lines and the grant application procedure for 
making grants. 
    Sec. 76.  Minnesota Statutes 1987 Supplement, section 
129B.39, is amended to read:  
    129B.39 [PURCHASE OF COURSEWARE PACKAGE DUPLICATION 
RIGHTS.] 
    Rights to duplication of courseware packages may be 
purchased, and volume purchase agreements may be established by 
the department of education, if the department determines that 
the courseware packages qualify as high quality according to 
section 129B.37, and if the courseware packages are available to 
the state at a lower cost than if purchased by school districts 
individually.  The department shall contract with any company 
that submits the lowest bid and that has the capability to 
duplicate and distribute courseware packages obtained by the 
department under this section.  The materials shall be available 
to districts at cost, including nominal costs of reproduction 
and distribution.  Money from the sale of courseware packages is 
annually appropriated to the department of education to purchase 
additional courseware packages according to this section. 
    Sec. 77.  Minnesota Statutes 1986, section 129B.40, 
subdivision 1, is amended to read:  
    Subdivision 1.  [NEW COURSEWARE PACKAGES.] The department 
of education may contract with various organizations, commercial 
or nonprofit, for the design and development of courseware 
packages which will meet the needs of school districts and which 
otherwise are unavailable or too expensive for individual 
districts or the state to purchase.  The department may:  
    (a) contract with school districts, private entrepreneurs, 
and other public or private agencies for the development of a 
specified courseware package;  
    (b) assist entrepreneurs to develop their own ideas for 
courseware packages that could be used in school districts, by 
providing funds for that purpose;  
    (c) secure copyrights for those materials in which it has a 
whole or part interest;  
    (d) contract to distribute courseware packages to school 
districts at cost under section 129B.39; and 
    (e) contract for the marketing of courseware packages.  
    The department of education shall evaluate whether the 
courseware packages qualify as high quality according to the 
criteria and procedures established in section 129B.37 by the 
state board of education. 
    Courseware packages developed according to this subdivision 
shall become the property of the state.  Revenue from the sale 
of these courseware packages shall be annually appropriated from 
the general fund to the department of education and shall be 
used to develop additional courseware packages according to this 
section and to evaluate the other commercial courseware under 
section 129B.37.  
    Sec. 78.  Minnesota Statutes 1987 Supplement, section 
129B.55, subdivision 2, is amended to read:  
    Subd. 2.  [FOUNDATION REVENUE GENERAL EDUCATION AID.] 
Payment of foundation or general education aid for nonresident 
pupils enrolled in the center must be made according to section 
124A.036, subdivision 5. 
    Sec. 79.  Minnesota Statutes 1987 Supplement, section 
136D.27, is amended to read:  
    136D.27 [TAX LEVIES, CERTIFICATES OF INDEBTEDNESS.] 
    Each year the joint school board may certify to each 
participating school district tax levies that shall not in any 
year exceed .6 mills on each dollar of adjusted assessed 
valuation for special education and .7 mills on each dollar of 
adjusted assessed valuation for expenses for secondary 
vocational education.  Each participating school district shall 
include such tax levies in the next tax roll which it shall 
certify to the county auditor or auditors, and shall remit the 
collections of such levies to the board promptly when received.  
Such levies shall not be included in computing the limitations 
upon the levy of any participating district under sections 
124A.03, 124A.06, subdivision 3a, 124A.08, subdivision 3a, 
124A.10, subdivision 3a, 124A.12, subdivision 3a, 124A.14, 
subdivision 5a, and 275.125.  The board may, any time after such 
levies have been certified to the participating school 
districts, issue and sell certificates of indebtedness in 
anticipation of the collection of such levies, but in aggregate 
amounts such as will not exceed the portion of the levies which 
is then not collected and not delinquent. 
    Sec. 80.  Minnesota Statutes 1987 Supplement, section 
136D.74, subdivision 2, is amended to read:  
    Subd. 2.  [TAX LEVY.] Each year the intermediate school 
board may certify to each county auditor of each county in which 
said intermediate school district shall lie, as a single taxing 
district, tax levies that shall not in any year exceed .6 mills 
on each dollar of adjusted assessed valuation for expenses for 
special education and .7 mills on each dollar of adjusted 
assessed valuation for expenses for secondary vocational 
education.  Said annual tax levies shall be certified pursuant 
to section 275.07.  Upon such certification the county auditor 
or auditors and other appropriate county officials shall levy 
and collect such levies and remit the proceeds of collection 
thereof to the intermediate school district as in the case with 
independent school districts.  Such levies shall not be included 
in computing the limitations, if any, upon the levy of the 
intermediate district or any of the participating districts 
under sections 124A.03, 124A.06, subdivision 3a, 124A.08, 
subdivision 3a, 124A.10, subdivision 3a, 124A.12, subdivision 
3a, 124A.14, subdivision 5a, and 275.125. 
    Sec. 81.  Minnesota Statutes 1987 Supplement, section 
136D.87, is amended to read:  
    136D.87 [TAX LEVIES, CERTIFICATES OF INDEBTEDNESS.] 
    Each year the joint school board may certify to each 
participating school district tax levies that shall not in any 
year exceed .6 mills on each dollar of adjusted assessed 
valuation for expenses for special education and .7 mills on 
each dollar of adjusted assessed valuation for expenses for 
secondary vocational education.  Each participating school 
district shall include such tax levies in the next tax roll 
which it shall certify to the county auditor or auditors and 
shall remit the collections of such levies to the board promptly 
when received.  Such levies shall not be included in computing 
the limitations upon the levy of any participating district 
under sections 124A.03, 124A.06, subdivision 3a, 124A.08, 
subdivision 3a, 124A.10, subdivision 3a, 124A.12, subdivision 
3a, 124A.14, subdivision 5a, and 275.125.  The board may, any 
time after such levies have been certified to the participating 
school districts, issue and sell certificates of indebtedness in 
anticipation of the collection of such levies, but in aggregate 
amounts such as will not exceed the portion of the levies which 
is then not collected and not delinquent. 
    Sec. 82.  Minnesota Statutes 1986, section 273.138, 
subdivision 6, is amended to read:  
    Subd. 6.  The amount of aid calculated for a school 
district pursuant to subdivision 3, clauses (2), (3), (4), and 
(5) shall be deducted from the school district's maintenance 
levy limitation established pursuant to section 124A.03, 
subdivision 1, 124A.23 in determining the amount of taxes the 
school district may levy for general and special purposes. 
    Sec. 83.  Minnesota Statutes 1986, section 275.125, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] Except as may otherwise be 
provided in this section, the words and phrases defined in 
sections 120.02, 124.201, 124.225, 124A.02, and 124A.033, when 
used in this section shall have the meanings ascribed to them in 
those sections The terms defined in section 120.02 and in 
chapters 124 and 124A have the same meaning when they are used 
in this section, unless otherwise clearly indicated. 
    Sec. 84.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 5e, is amended to read:  
    Subd. 5e.  [EXCESS TRANSPORTATION LEVY.] A school district 
may make a levy for excess transportation costs according to 
this subdivision.  The amount of the levy shall be the result of 
the following computation: 
    (a) Multiply the base cost computed using data for the 
current school year according to section 124.225, subdivision 1, 
paragraph (k) (i), by the sum of the number of secondary FTE 
pupils transported to and from school in the current year who 
live more than one mile but less than two miles from the public 
school which they could attend or the nonpublic school actually 
attended, plus the number of FTE pupils residing less than one 
mile from school who were transported to and from school in the 
current year due to extraordinary traffic hazards. 
    (b) Add to the result in paragraph (a) the actual cost in 
the current year of other related services that are necessary 
because of extraordinary traffic hazards. 
    Sec. 85.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 6e, is amended to read:  
    Subd. 6e.  [DESEGREGATION LEVY.] Each year, school district 
No. 625, St. Paul, may levy an amount not to exceed one mill 
times the adjusted assessed valuation of the district.  
Notwithstanding section 121.904, the entire amount of this levy 
shall be recognized as revenue for the fiscal year in which the 
levy is certified.  This levy shall not be considered in 
computing the aid reduction under section 124.155.  If the 
district levies under this subdivision, it may not place the 
proceeds of the 1983 payable 1984 levy authorized by subdivision 
9a, in the general fund.  
    Sec. 86.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 8c, is amended to read:  
    Subd. 8c.  [SPECIAL EDUCATION LEVY.] Each year, a district, 
excluding intermediate school district Nos. 287, 916, and 917, 
may levy an amount that may not exceed 66 percent of salaries 
paid to essential personnel in that district minus the amount of 
state aid and any federal aid, if applicable, paid to that 
district for salaries of these essential personnel under 
sections 124.32, subdivisions 1b and 10, and 124.574, 
subdivision 2b, plus 61 percent of salaries paid to essential 
personnel in that district minus the amount of state aid and any 
federal aid, if applicable, paid to that district for salaries 
of these essential personnel under section 124.273, subdivision 
1b, for the year to which the levy is attributable. 
    For purposes of this subdivision, a special education 
cooperative or an intermediate school district each year shall 
allocate an amount equal to 66 percent of salaries paid to 
essential personnel in that intermediate district or cooperative 
minus the amount of state aid and any federal aid, if 
applicable, paid to that intermediate district or cooperative 
for salaries of these essential personnel under sections 124.32, 
subdivisions 1b and 10, and 124.574, subdivision 2b, plus 61 
percent of salaries paid to essential personnel in that 
intermediate district or cooperative minus the amount of state 
aid and any federal aid, if applicable, paid to that 
intermediate district or cooperative for salaries of these 
essential personnel under section 124.273, subdivision 1b, for 
the year to each of the member participating districts of the 
cooperative or the intermediate district.  The member 
participating districts may make a levy in the amount of the 
costs allocated to them by the cooperative or intermediate 
district.  
    Special education cooperatives and intermediate school 
districts that allocate unreimbursed portions of salaries of 
special education essential personnel among member participating 
districts, for purposes of the member participating districts 
making a levy under this subdivision, shall provide information 
to the state department of education on the amount of 
unreimbursed costs of salaries they allocated to the member 
participating districts.  
    Sec. 87.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 9, is amended to read:  
    Subd. 9.  [LEVY REDUCTIONS; TACONITE.] (1) Reductions in 
levies pursuant to subdivision 10, and section 273.138, shall be 
made prior to the reductions in clause (2). 
    (2) Notwithstanding any other law to the contrary, 
districts which received payments pursuant to sections 298.018; 
298.23 to 298.28, except an amount distributed under section 
298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
upon severed mineral values, or recognized revenue pursuant to 
section 477A.15; shall not include a portion of these aids in 
their permissible levies pursuant to those sections, but instead 
shall reduce the permissible levies authorized by this section 
and chapters 124 and 124A by the greater of the following: 
    (a) an amount equal to 50 percent of the total dollar 
amount of the payments received pursuant to those sections or 
revenue recognized pursuant to section 477A.15 in the previous 
fiscal year; or 
    (b) an amount equal to the total dollar amount of the 
payments received pursuant to those sections or revenue 
recognized pursuant to section 477A.15 in the previous fiscal 
year less the product of the same dollar amount of payments or 
revenue times the ratio of the maximum levy allowed the district 
under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
subdivision 5a, to the total levy allowed the district under 
this section and Minnesota Statutes 1986, sections 124A.03, 
124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
5a, and 124A.20, subdivision 2, for levies certified in 1986. 
    (3) No reduction pursuant to this subdivision shall reduce 
the levy made by the district pursuant to section 124A.23, to an 
amount less than the amount raised by a levy of 12.5 mills times 
the adjusted assessed valuation of that district for the 
preceding year as determined by the commissioner.  The amount of 
any increased levy authorized by referendum pursuant to section 
124A.03, subdivision 2 shall not be reduced pursuant to this 
subdivision.  The amount of any levy authorized by subdivision 
4, to make payments for bonds issued and for interest thereon, 
shall not be reduced pursuant to this subdivision.  
    (4) Before computing the reduction pursuant to this 
subdivision of the capital expenditure levy authorized by 
section 124.244, subdivision 2, and subdivisions 11c, 12, and 
12a, and the community service education levy authorized by 
subdivisions 8 and 8b, the commissioner shall ascertain from 
each affected school district the amount it proposes to levy for 
capital expenditures pursuant to section 124.244, subdivision 2, 
and subdivisions 11c, 12, and 12a, and for community services 
education pursuant to subdivisions 8 and 8b.  The reduction of 
the capital expenditure levy and the community services 
education levy shall be computed on the basis of the amount so 
ascertained. 
    (5) Notwithstanding any law to the contrary, any amounts 
received by districts in any fiscal year pursuant to sections 
298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
298.405; or any law imposing a tax on severed mineral values; 
and not deducted from foundation general education aid pursuant 
to section 124A.035, subdivision 5, clause (2), and not applied 
to reduce levies pursuant to this subdivision shall be paid by 
the district to the St. Louis county auditor in the following 
amount by March 15 of each year except 1986 and 1987, the amount 
required to be subtracted from the previous fiscal year's 
foundation general education aid pursuant to section 124A.035, 
subdivision 5, which is in excess of the foundation general 
education aid earned for that fiscal year.  The county auditor 
shall deposit any amounts received pursuant to this clause in 
the St. Louis county treasury for purposes of paying the 
taconite homestead credit as provided in section 273.135. 
    Sec. 88.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 9b, is amended to read:  
    Subd. 9b.  [OPERATING DEBT LEVY.] (1) Each year, a district 
may make an additional levy to eliminate a deficit in the net 
unappropriated operating funds of the district, determined as of 
June 30, 1983, and certified and adjusted by the commissioner.  
This levy may in each year be an amount not to exceed the amount 
raised by a levy of 1.5 mills times the adjusted assessed 
valuation of the district for the preceding year as determined 
by the commissioner.  However, the total amount of this levy for 
all years it is made shall not exceed the lesser of (a) the 
amount of the deficit in the net unappropriated operating funds 
of the district as of June 30, 1983, or (b) the amount of the 
aid reduction, according to Laws 1981, Third Special Session 
chapter 2, article 2, section 2, but excluding clauses (l), (m), 
(n), (o), and (p), and Laws 1982, Third Special Session chapter 
1, article 3, section 6, to the district in fiscal year 1983.  
When the cumulative levies made pursuant to this subdivision 
equal the total amount permitted by this subdivision, the levy 
shall be discontinued.  
    (2) The proceeds of this levy shall be used only for cash 
flow requirements and shall not be used to supplement district 
revenues or income for the purposes of increasing the district's 
expenditures or budgets.  
    (3) Any district which that levies pursuant to this 
subdivision shall certify the maximum levy allowable under 
section 124A.03, subdivision 1 or 3 124A.23, subdivisions 2 and 
2a, in that same year. 
    Sec. 89.  Minnesota Statutes 1987 Supplement, section 
275.125, subdivision 15, is amended to read:  
    Subd. 15.  [ADJUSTMENTS.] If any school district levy is 
found to be excessive as a result of a decision of the tax court 
or a redetermination by the commissioner of revenue under 
section 124.2131, subdivisions 2 to 11 or for any other reason, 
the amount of the excess shall be deducted from the levy 
certified in the next year for the same purpose; provided that 
if no levy is certified in the next year for the same purpose or 
if the amount certified is less than the amount of the excess, 
the excess shall be deducted from that levy and the levy 
certified pursuant to section 124A.03, subdivision 1 124A.23, 
subdivision 2.  If the amount of any aid entitlement pursuant to 
sections 124.225, 124.245, and 124A.02 would have been increased 
in a prior year as a result of a decision of the tax court or a 
redetermination by the commissioner, the amount of the increase 
shall be added to the amount of current aid entitlement for the 
same purposes. 
    Sec. 90.  Minnesota Statutes 1986, section 275.128, is 
amended to read:  
    275.128 [EXPENSES FOR ASBESTOS AND POLYCHLORINATED 
BIPHENYLS.] 
    Notwithstanding any law to the contrary, a district that 
incurred expenses for removal of asbestos, asbestos 
encapsulation, or cleanup or disposal of polychlorinated 
biphenyls may use the revenue authorized by sections 123.36, 
subdivision 13; 124.244; 124.245; and 275.125, subdivisions 11b 
and subdivision 11c to meet contractual obligations or to 
reimburse the fund from which expenses were paid, regardless of 
when the authorized revenue was received by the district.  
    Sec. 91.  Minnesota Statutes 1987 Supplement, section 
298.28, subdivision 4, is amended to read:  
    Subd. 4.  [SCHOOL DISTRICTS.] (a) 27.5 cents per taxable 
ton plus the increase provided in paragraph (d) must be 
allocated to qualifying school districts to be distributed, 
based upon the certification of the commissioner of revenue, 
under paragraphs (b) and (c). 
    (b) 5.5 cents per taxable ton must be distributed to the 
school districts in which the lands from which taconite was 
mined or quarried were located or within which the concentrate 
was produced.  The distribution must be based on the 
apportionment formula prescribed in subdivision 2. 
    (c)(i) 22 cents per taxable ton, less any amount 
distributed under paragraph (e), shall be distributed to a group 
of school districts comprised of those school districts wherein 
the taconite was mined or quarried or the concentrate produced 
or in which there is a qualifying municipality as defined by 
section 273.134 in direct proportion to school district indexes 
as follows:  for each school district, its pupil units 
determined under section 124.17 for the prior school year shall 
be multiplied by the ratio of the average adjusted assessed 
value per pupil unit for school districts receiving aid under 
this clause as calculated pursuant to chapter 124A for the 
school year ending prior to distribution to the adjusted 
assessed value per pupil unit of the district.  Each district 
shall receive that portion of the distribution which its index 
bears to the sum of the indices for all school districts that 
receive the distributions.  
    (ii) Notwithstanding clause (i), each school district that 
receives a distribution under sections 298.018; 298.23 to 
298.28, exclusive of any amount received under this clause; 
298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
imposing a tax on severed mineral values that is less than the 
amount of its levy reduction under section 275.125, subdivision 
9, for the second year prior to the year of the distribution 
shall receive a distribution equal to the difference; the amount 
necessary to make this payment shall be derived from 
proportionate reductions in the initial distribution to other 
school districts under clause (i).  
    (d) On July 15, in years prior to 1988, an amount equal to 
the increase derived by increasing the amount determined by 
paragraph (c) in the same proportion as the increase in the 
steel mill products index over the base year of 1977 as provided 
in section 298.24, subdivision 1, clause (a), shall be 
distributed to any school district described in paragraph (c) 
where a levy increase pursuant to section 124A.03, subdivision 
2, is authorized by referendum, according to the following 
formula.  On July 15, 1988, the increase over the amount 
established for 1987 shall be determined as if there had been an 
increase in the tax rate under section 298.24, subdivision 1, 
paragraph (b), according to the increase in the implicit price 
deflator.  On July 15, 1989, and subsequent years, the increase 
over the amount established for the prior year shall be 
determined according to the increase in the implicit price 
deflator as provided in section 298.24, subdivision 1, paragraph 
(a).  Each district shall receive the product of: 
    (i) $150 times the pupil units identified in section 
124.17, subdivision 1, enrolled in the second previous year or 
the 1983-1984 school year, whichever is greater, less the 
product of 1-3/4 mills times the district's taxable valuation in 
the second previous year; times 
    (ii) the lesser of: 
    (A) one, or 
    (B) the ratio of the amount certified pursuant to section 
124A.03, subdivision 2, in the previous year, to the product of 
1-3/4 mills times the district's taxable valuation in the second 
previous year. 
    If the total amount provided by paragraph (d) is 
insufficient to make the payments herein required then the 
entitlement of $150 per pupil unit shall be reduced uniformly so 
as not to exceed the funds available.  Any amounts received by a 
qualifying school district in any fiscal year pursuant to 
paragraph (d) shall not be applied to reduce foundation aids 
general education aid which the district is entitled to 
receive receives pursuant to section 124A.02 124A.23 or the 
permissible levies of the district.  Any amount remaining after 
the payments provided in this paragraph shall be paid to the 
commissioner of iron range resources and rehabilitation who 
shall deposit the same in the taconite environmental protection 
fund and the northeast Minnesota economic protection trust fund 
as provided in subdivision 11. 
    (e) There shall be distributed to any school district the 
amount which the school district was entitled to receive under 
section 298.32 in 1975. 
    Sec. 92.  Minnesota Statutes 1986, section 298.39, is 
amended to read:  
    298.39 [DISTRIBUTION OF PROCEEDS.] 
    The proceeds of the tax collected under section 298.35 
shall be distributed by the state treasurer, upon certificate of 
the commissioner of revenue to the general fund of the state and 
to the various taxing districts in which the lands from which 
the semitaconite was mined or quarried were located in the 
following proportions:  22 percent thereof to the city or town; 
50 percent thereof to the school district; 22 percent thereof to 
the county; six percent thereof to the state.  If the mining and 
concentration, or different steps in either thereof are carried 
on in more than one taxing district, the commissioner shall 
apportion equitably the proceeds of the part of the tax going to 
cities or towns among such subdivisions, and the part going to 
school districts among such districts, and the part going to 
counties among such counties, upon the basis of attributing 40 
percent of the proceeds of the tax to the operation of mining or 
quarrying the semitaconite, and the remainder to the 
concentrating plant and to the processes of concentration, and 
with respect to each thereof giving due consideration to the 
relative extent of such operations performed in each such taxing 
district.  The commissioner's order making such apportionment 
shall be subject to review by the tax court at the instance of 
any of the interested taxing districts, in the same manner as 
other orders of the commissioner.  The amount so distributed 
shall be divided among the various funds of the state, or of the 
taxing districts in the same proportion as the general ad 
valorem tax thereof.  If in any year the state shall not spread 
any general ad valorem tax levy against real property, the 
state's proportion of the tax shall be paid into the general 
fund.  The amount distributed to any city shall be included in 
computing the permissible levies of such city under section 
275.11, but shall not be included in computing mill rate 
limitations, including cost of living adjustments thereof, so 
long as the levies do not exceed the limitations provided by 
section 275.11.  On or before October 10 of each calendar year 
each producer of semitaconite subject to taxation under section 
298.35, hereinafter called "taxpayer," shall file with the 
commissioner of revenue and with the county auditor of each 
county in which such taxpayer operates, and with the chief 
clerical officer of each school district or city which is 
entitled to participate in the distribution of the tax, an 
estimate of the amount of tax which would be payable by such 
taxpayer under said law for such calendar year; provided such 
estimate shall be in an amount not less than the amount due on 
the mining and production of concentrates up to September 30 of 
said year plus the amount becoming due because of probable 
production between September 30 and December 31 of said year, 
less any credit allowable as hereinafter provided.  Such 
estimate shall list the taxing districts entitled to participate 
in the distribution of such tax, and the amount of the estimated 
tax which would be distributable to each such district in such 
next ensuing calendar year on the basis of the last percentage 
distribution certified by the commissioner of revenue.  If there 
be no such prior certification, the taxpayer shall set forth its 
estimate of the proper distribution of such tax under the law, 
which estimate may be corrected by the commissioner on deeming 
it improper, notice of such correction being given by the 
commissioner to the taxpayer and the public officers receiving 
such estimate.  The officers with whom such report is so filed 
shall use the amount so indicated as being distributable to each 
taxing district in computing, pursuant to section 275.11, the 
permissible tax levy of such city in the year in which such 
estimate is made, and payable in the next ensuing calendar 
year.  Such taxpayer shall then pay, at the times payments are 
required to be made pursuant to section 298.36, as the amount of 
tax payable under section 298.35, the greater of (a) the amount 
shown by such estimate, or (b) the amount due under said section 
as finally determined by the commissioner of revenue pursuant to 
law.  If, as a result of the payment of the amount of such 
estimate, the taxpayer has paid in any calendar year an amount 
of tax in excess of the amount due in such year under section 
298.35, after application of credits for any excess payments 
made in previous years, all as determined by the commissioner of 
revenue, the taxpayer shall be given credit for such excess 
amount against any taxes which, under said section, may become 
due from the taxpayer in subsequent years.  In any calendar year 
in which a general property tax levy subject to chapter 124 or 
124A or section 275.11 or sections 124A.03, 124A.06, subdivision 
3a, 124A.08, subdivision 3a, 124A.10, subdivision 3a, 124A.12, 
subdivision 3a, 124A.14, subdivision 5a, and 275.125 has been 
made, if the taxes distributable to any such city or school 
district are greater than the amount estimated to be paid to any 
such city or school district in such year, the excess of such 
distribution shall be held in a special fund by the city or 
school district and shall not be expended until the succeeding 
calendar year, and shall be included in computing the 
permissible levies under chapter 124 or 124A or section 275.11 
or sections 124A.03, 124A.06, subdivision 3a, 124A.08, 
subdivision 3a, 124A.10, subdivision 3a, 124A.12, subdivision 
3a, 124A.14, subdivision 5a, and 275.125 of such city or school 
district payable in such year.  If the amounts distributable to 
any such city or school district, after final determination by 
the commissioner of revenue under this section are less than the 
amounts indicated by such estimates, such city or school 
district may issue certificates of indebtedness in the amount of 
the shortage, and may include in its next tax levy, in excess of 
the limitations of section chapters 124 and 124A and sections 
275.11 or sections 124A.03, 124A.06, subdivision 3a, 124A.08, 
subdivision 3a, 124A.10, subdivision 3a, 124A.12, subdivision 
3a, 124A.14, subdivision 5a, and 275.125 an amount sufficient to 
pay such certificates of indebtedness and interest thereon, or, 
if no certificates were issued, an amount equal to such shortage.
    There is hereby appropriated to such taxing districts as 
are stated herein, from any fund or account in the state 
treasury to which the money was credited, an amount sufficient 
to make the payment or transfer. 
    Sec. 93.  Minnesota Statutes 1986, section 475.61, 
subdivision 4, is amended to read:  
    Subd. 4.  [SURPLUS FUNDS.] All such taxes shall be 
collected and remitted to the municipality by the county 
treasurer as other taxes are collected and remitted, and shall 
be used only for payment of the obligations on account of which 
levied or to repay advances from other funds used for such 
payments, except that any surplus remaining in the debt service 
fund when the obligations and interest thereon are paid may be 
appropriated to any other general purpose by the municipality.  
However, the amount of any surplus remaining in the debt service 
fund of a school district when the obligations and interest 
thereon are paid shall be used to reduce the maintenance general 
education levy authorized pursuant to section 124A.03, 
subdivision 1 except that from July 1, 1982 to June 30, 1983, a 
school district which has discontinued its levy for debt service 
may transfer to its general fund the amount of any surplus 
remaining in its debt service fund when the obligations and 
interest thereon are paid or when an escrow account for 
defeasance of the entire amount of the obligations and interest 
thereon has been established 124A.23. 
    Sec. 94.  Laws 1987, chapter 398, article 1, section 25, 
subdivision 3, is amended to read:  
    Subd. 3.  [AID REDUCTION FOR ADMINISTRATION COSTS.] By 
October 1, 1987, the commissioner of employee relations shall 
certify to the commissioner of education the school districts 
that have not complied with subdivision 1.  For each of these 
school districts, the commissioner of education shall reduce 
foundation general education aid for the 1988-1989 school year 
by an amount equal to five percent of the district's 
administration costs for the 1986-1987 school year.  If the 
reduction exceeds the district's foundation general education 
aid, the reduction shall be made from other aids paid to the 
district. 
    Sec. 95.  Laws 1987, chapter 398, article 1, section 26, 
subdivision 2, is amended to read:  
    Subd. 2.  [FOUNDATION AID.] For foundation aid there is 
appropriated:  
    $851,283,900 ..... 1988, 
    $126,482,100 ..... 1989. 
    The appropriation for aid for fiscal year 1988 includes 
$121,712,400 for aid for fiscal year 1987 payable in fiscal year 
1988 and $729,571,500 for aid for fiscal year 1988 payable in 
fiscal year 1989 1988.  
    The appropriation for aid for fiscal year 1989 is for aid 
for fiscal year 1988 payable in fiscal year 1989.  
    Sec. 96.  Laws 1987, chapter 398, article 7, section 40, 
subdivision 4, is amended to read:  
    Subd. 4.  [COMPREHENSIVE ARTS PLANNING PROGRAM.] For grants 
for the comprehensive arts planning program according to 
Minnesota Statutes, section 129B.20, there is appropriated:  
    $37,500 ..... 1988. 
    $37,500 ..... 1989.  
    Any unexpended balance remaining in fiscal year 1988 does 
not cancel but is available for fiscal year 1989.  
    Sec. 97.  Laws 1987, chapter 398, article 8, section 39, 
subdivision 2, is amended to read:  
    Subd. 2.  [ELIGIBILITY REQUIREMENTS.] To qualify for a 
planning grant, an existing program must have the following:  
    (1) an educational program that includes at least some of 
the programs in section 19, subdivision 2 35; 
    (2) outreach activities; and 
    (3) an established policy of accepting nonresident pupils.  
    Sec. 98.  Laws 1987, chapter 398, article 8, section 44, 
subdivision 5, is amended to read:  
    Subd. 5.  [MENTORSHIP PROGRAMS.] There is appropriated for 
the mentorship programs under section 10 13: 
    $250,000 ..... 1988, 
    $250,000 ..... 1989. 
    Any unexpended balance remaining in fiscal year 1988 does 
not cancel but is available for fiscal year 1989.  
    Sec. 99.  [1987-1988 AND 1988-1989 ABATEMENT AID.] 
    Notwithstanding Minnesota Statutes, section 124.214, 
subdivision 2, if a district qualifies for basic foundation aid 
for the 1987-1988 school year only because of Minnesota Statutes 
1987 Supplement, section 124A.02, subdivision 5a, clause (2), or 
if a district qualifies for general education aid for fiscal 
year 1989 only because of Laws 1987, chapter 398, article 1, 
section 23, subdivision 2, as amended by Laws 1987, First 
Special Session chapter 4, article 1, section 7, it does not 
qualify for abatement aid for the applicable year under 
Minnesota Statutes, section 124.214, subdivision 2. 
    Sec. 100.  [ADJUSTMENT FOR TEXTBOOK EXPENDITURES.] 
    Notwithstanding Minnesota Statutes 1986, section 123.933, 
subdivision 3, clause (b), the department of education shall use 
7.5 percent as the inflation adjustment for the formula 
allowance for each of the 1988-1989 and the 1989-1990 school 
years when the department establishes the statewide average 
expenditure, per pupil in public schools, for textbooks, 
individualized instructional materials, and standardized tests. 
    Sec. 101.  [INSTRUCTION TO THE REVISOR.] 
    Subdivision 1.  [CHAPTER AND SECTION HEADINGS.] In the next 
edition of Minnesota Statutes, the revisor of statutes is 
requested to change the name of chapter 124A from "School 
Foundation Revenue" to "General Education Revenue," the first 
grade head before section 129B.52 from "Area Learning and 
Reporting Process" to "Area Learning Centers," the heading of 
section 124.245 from "Capital Expenditure Aid" to "Hazardous 
Substance Revenue," the heading of section 124A.03 from 
"Foundation Related Levies" to "Referendum Levy," the heading of 
section 124.2131 from "Equalization Aid Review Committee" to 
"Adjustment of Assessed Valuations," the heading of section 
124A.031 from "Dates of Aid Payments" to "Aid for Agricultural 
Credits," the heading of section 124A.034 from "Shared Time 
Foundation Aid," to "Shared Time Aid," the heading of section 
124A.035 from "Deductions from Foundation Aid" to "Deductions 
from General Education Aid," the heading of section 124A.036 
from "Foundation Aid; Resident and Nonresident Districts" to 
"Payments to Resident and Nonresident Districts," and the 
heading of section 126.64 from "Foundation Revenue for Pupils" 
to "General Education Revenue for Pupils." 
    Subd. 2.  [CROSS-REFERENCES.] In each section of Minnesota 
Statutes referred to in column A, the revisor of statutes shall 
delete the reference in column B and insert the reference in 
column C.  
     Column A             Column B             Column C 
     275.125, subd. 9a    124A.03, subd. 1     124A.23, subd. 2 
     275.125, subd. 9c    124A.03, subd. 1     124A.23, subd. 2 
                             or 3                 
     122.87, subd. 4      126.66               126.666 
     126.72, subd. 2      126.66, subd. 6      126.666, subd. 4 
     129B.32, subd. 1     129B.33              129B.39 
     121.15, subd. 1      275.125, subd. 11a,  124.244, subd. 4, 
                             clause (c)           clause (2) 
    Sec. 102.  [REPEALER.] 
    Minnesota Statutes 1986, sections 121.904, subdivision 7; 
122.531, subdivision 8; 124.245, subdivision 4; and 124A.031, 
subdivision 3; Minnesota Statutes 1987 Supplement, sections 
121.904, subdivision 11b; 124A.02, subdivision 5a; 124A.03, 
subdivision 3a; and 124A.25, are repealed. 
    Sec. 103.  [EFFECTIVE DATES.] 
    Sections 8, 35, 36, 40, 61, 62, 63, 66, 84, 86, 90, 95, and 
99 are effective the day following final enactment.  The 
remaining sections are effective July 1, 1988. 
    Approved April 12, 1988