Journal of the House - 45th Day - Thursday, April 23, 2015

All members answered to the call and it was so ordered.

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

RECESS

RECONVENED

The House reconvened and was called to order by Speaker pro tempore Davids.

CALL OF THE HOUSE LIFTED

Peppin moved that the call of the House be lifted. The motion prevailed and it was so ordered.

Daudt was excused for the remainder of today's session.

REPORTS OF STANDING COMMITTEES AND DIVISIONS

Davids from the Committee on Taxes to which was referred:

H. F. No. 303, A bill for an act relating to state government; appropriating money from the outdoor heritage fund, clean water fund, parks and trails fund, and arts and cultural heritage fund; establishing policy on milkweed; modifying provisions of Lessard-Sams Outdoor Heritage Council and Clean Water Council; modifying Water Law;

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modifying use of legacy funds; modifying previous appropriations; modifying certain grant eligibility; requiring a report; amending Minnesota Statutes 2014, sections 16B.24, by adding a subdivision; 85.53, subdivision 2; 97A.056, subdivisions 2, 8, 11, by adding subdivisions; 103A.206; 103B.101, by adding a subdivision; 103C.101, by adding a subdivision; 103C.401, subdivision 1; 103C.501, subdivision 5; 114D.30, subdivision 2; 114D.50, subdivision 4; 129D.17, subdivision 2; Laws 2012, chapter 264, article 1, section 2, subdivision 5; Laws 2013, chapter 137, article 2, section 6; article 3, section 4; Laws 2014, chapter 256, article 1, section 2, subdivision 5; Laws 2014, chapter 295, section 10, subdivision 12; proposing coding for new law in Minnesota Statutes, chapters 84; 103B.

Reported the same back with the following amendments:

Page 78, line 14, delete "61,192,000" and insert "61,292,000" and delete "62,823,000" and insert "62,923,000"

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

The report was adopted.

Knoblach from the Committee on Ways and Means to which was referred:

H. F. No. 844, A bill for an act relating to education; providing for funding and policy in early childhood, kindergarten through grade 12, and adult education, including general education, education excellence, standards and assessments, charter schools, special education, facilities and technology, nutrition and accounting, libraries, early childhood education, prevention, self-sufficiency and lifelong learning, state agencies, and forecast adjustments; requiring rulemaking; appropriating money; amending Minnesota Statutes 2014, sections 5A.03; 16A.103, subdivision 1c; 120A.41; 120B.02, subdivision 2; 120B.021, subdivision 4; 120B.022, subdivisions 1, 1a, 1b; 120B.024, subdivision 2; 120B.11, subdivision 1a; 120B.12, subdivision 4a; 120B.125; 120B.13, subdivision 4; 120B.30, subdivisions 1, 1a, 3; 120B.31, subdivision 4; 120B.36, subdivision 1; 121A.17, subdivision 5; 122A.09, subdivision 4, by adding subdivisions; 122A.14, subdivisions 3, 9, by adding a subdivision; 122A.18, subdivisions 2, 7c, 8; 122A.20, subdivision 1; 122A.21, subdivisions 1, 2; 122A.23; 122A.245, subdivisions 1, 3, 7; 122A.25; 122A.30; 122A.31, subdivisions 1, 2; 122A.40, subdivisions 5, 8, 10, 11, 13; 122A.41, subdivisions 2, 5, 6, 14; 122A.414, subdivision 2; 122A.60; 122A.61, subdivision 1; 122A.69; 122A.70, subdivision 1; 123A.24, subdivision 1; 123A.75, subdivision 1; 123B.045; 123B.59, subdivisions 6, 7; 123B.77, subdivision 3; 123B.88, subdivision 1, by adding a subdivision; 124D.041, subdivisions 1, 2; 124D.09, subdivisions 5, 5a, 8, 9, 12; 124D.091, subdivision 1; 124D.10, subdivisions 1, 3, 4, 8, 9, 12, 14, 16, 23, by adding a subdivision; 124D.11, subdivisions 1, 9; 124D.121; 124D.122; 124D.126, subdivision 1; 124D.127; 124D.128, subdivision 1; 124D.13; 124D.135; 124D.16; 124D.165; 124D.531, subdivisions 1, 2, 3; 124D.73, subdivisions 3, 4; 124D.74, subdivisions 1, 3, 6; 124D.75, subdivisions 1, 3, 9; 124D.76; 124D.78; 124D.79, subdivisions 1, 2; 124D.791, subdivision 4; 124D.861; 124D.862; 125A.01; 125A.023, subdivisions 3, 4; 125A.027; 125A.03; 125A.08; 125A.085; 125A.0942, subdivision 3; 125A.21; 125A.28; 125A.63, subdivisions 2, 3, 4, 5; 125A.75, subdivision 9; 125A.76, subdivisions 1, 2c; 125B.26, subdivision 2; 126C.10, subdivisions 1, 2, 2a, 2e, 3, 13a, 18, 24; 126C.13, subdivision 4; 126C.15, subdivisions 1, 2, 3; 126C.17, subdivisions 1, 2; 127A.05, subdivision 6; 127A.49, subdivision 1; 134.355, subdivisions 8, 9, 10; 135A.101, by adding a subdivision; 179A.20, by adding a subdivision; Laws 2013, chapter 116, article 1, section 58, subdivisions 2, as amended, 3, as amended, 4, as amended, 5, as amended, 6, as amended, 7, as amended, 11, as amended; article 3, section 37, subdivisions 3, as amended, 4, as amended, 5, as amended, 20, as amended; article 4, section 9, subdivision 2, as amended; article 5, section 31, subdivisions 2, as amended, 3, as amended, 4, as amended; article 6, section 12, subdivisions 2, as amended, 6, as amended; article 7, sections 19; 21, subdivisions 2, as amended, 3, as amended, 4, as amended; article 8, section 5, subdivisions 3, as amended, 4, as amended, 14, as

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amended; Laws 2014, chapter 312, article 16, section 15; proposing coding for new law in Minnesota Statutes, chapters 119A; 122A; 124D; 125A; repealing Minnesota Statutes 2014, sections 120B.128; 122A.40, subdivision 11; 125A.63, subdivision 1; 126C.12, subdivision 6; 126C.13, subdivisions 3a, 3b, 3c; 126C.41, subdivision 1; Minnesota Rules, part 3500.1000.

Reported the same back with the recommendation that the bill be placed on the General Register.

MINORITY REPORT

April 22, 2015

We, the undersigned, being a minority of the Committee on Ways and Means, recommend that H. F. No. 844 be amended as follows and placed on the General Register.

Delete everything after the enacting clause and insert:

"ARTICLE 1

GENERAL EDUCATION

Section 1. Minnesota Statutes 2014, section 120A.41, is amended to read:

120A.41 LENGTH OF SCHOOL YEAR; HOURS OF INSTRUCTION.

A school board's annual school calendar must include at least 425 hours of instruction for a kindergarten student without a disability, 935 hours of instruction for a student in grades 1 though 6, and 1,020 hours of instruction for a student in grades 7 though 12, not including summer school. The school calendar for all-day kindergarten must include at least 850 hours of instruction for the school year. The school calendar for prekindergarten, if offered by the district, must include at least 850 hours of instruction for the school year and at least 200 hours of instruction for the summer. A school board's annual calendar must include at least 165 days of instruction for a student in grades 1 through 11 unless a four-day week schedule has been approved by the commissioner under section 124D.126.

EFFECTIVE DATE. This section is effective for the 2016-2017 school year and later.

Sec. 2. Minnesota Statutes 2014, section 122A.415, subdivision 1, is amended to read:

Subdivision 1. Revenue amount. (a) A school district, intermediate school district, school site, or charter school that meets the conditions of section 122A.414 and submits an application approved by the commissioner is eligible for alternative teacher compensation revenue.

(b) For school district and intermediate school district applications, the commissioner must consider only those applications to participate that are submitted jointly by a district and the exclusive representative of the teachers. The application must contain an alternative teacher professional pay system agreement that:

(1) implements an alternative teacher professional pay system consistent with section 122A.414; and

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(2) is negotiated and adopted according to the Public Employment Labor Relations Act under chapter 179A, except that notwithstanding section 179A.20, subdivision 3, a district may enter into a contract for a term of two or four years.

Alternative teacher compensation revenue for a qualifying school district or site in which the school board and the exclusive representative of the teachers agree to place teachers in the district or at the site on the alternative teacher professional pay system equals ~~$260~~ the alternative teacher compensation allowance times the number of pupils enrolled at the district or site on October 1 of the previous fiscal year. The alternative teacher compensation allowance equals $260 for fiscal years 2015 through 2017, $246 for fiscal year 2018, and $244 for fiscal year 2019 and later. Alternative teacher compensation revenue for a qualifying intermediate school district must be calculated under subdivision 4, paragraph (a).

(c) For a newly combined or consolidated district, the revenue shall be computed using the sum of pupils enrolled on October 1 of the previous year in the districts entering into the combination or consolidation. The commissioner may adjust the revenue computed for a site using prior year data to reflect changes attributable to school closings, school openings, or grade level reconfigurations between the prior year and the current year.

(d) The revenue is available only to school districts, intermediate school districts, school sites, and charter schools that fully implement an alternative teacher professional pay system by October 1 of the current school year.

Sec. 3. Minnesota Statutes 2014, section 124D.11, subdivision 1, is amended to read:

Subdivision 1. General education revenue. (a) General education revenue must be paid to a charter school as though it were a district. The general education revenue for each adjusted pupil unit is the state average general education revenue per pupil unit, plus the referendum equalization aid allowance in the pupil's district of residence, minus an amount equal to the product of the formula allowance according to section 126C.10, subdivision 2, times .0466, calculated without declining enrollment revenue, local optional revenue, basic skills revenue, extended ~~time~~ support revenue, pension adjustment revenue, transition revenue, and transportation sparsity revenue, plus declining enrollment revenue, basic skills revenue, extended ~~time~~ support revenue, pension adjustment revenue, and transition revenue as though the school were a school district.

(b) For a charter school operating an extended day, extended week, or summer program, the general education revenue ~~for each extended time pupil unit equals $4,794~~ in paragraph (a) is increased by an amount equal to 25 percent of the statewide average extended support revenue per pupil unit.

EFFECTIVE DATE. This section is effective for fiscal year 2016 and later.

Sec. 4. [124D.171] PREKINDERGARTEN PROGRAM.

Subdivision 1. Programs authorized. A school district may offer a voluntary prekindergarten program for all four-year-old children.

Subd. 2. Program characteristics. (a) High-quality, state-funded prekindergarten must prepare children for kindergarten and meet the state prekindergarten program criteria which include the following:

(1) compensatory instruction that accelerates children's language and literacy skills, mathematical thinking, and social skills;

(2) instructional content and activities that are of sufficient length and intensity to address learning needs;

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(3) measurement of each child's cognitive and social skills using a formative measure when the child enters and again before the child leaves the program, screening measures such as literacy, and others from the state-approved menu of kindergarten entrance measures;

(4) class size of 20 or fewer children and child-staff ratios of ten-to-one or less;

(5) an individualized learning plan for each child created by the family and teacher, which includes a transition plan to kindergarten;

(6) a lead classroom teacher that is an appropriately licensed teacher trained in child development, language and literacy development, early education instruction, and native and English language development;

(7) prekindergarten instructional staff salaries comparable to the salaries of local kindergarten through grade 12 instructional staff;

(8) community collaboration and planning, including community health and social service agencies to ensure children have access to comprehensive services;

(9) coordination with all relevant school district programs and services, for example, special education, homeless, and English learners;

(10) parent engagement strategies that include culturally and linguistically responsive activities in prekindergarten through third grade;

(11) development and implementation of curriculum, assessment, and instructional strategies aligned with the state's early learning guidelines and academic standards, prekindergarten through third grade;

(12) inclusion of children with disabilities in the prekindergarten program;

(13) coordinated professional development and training for both school district and community-based early learning providers that is informed by a measure of adult-child interactions; and

(14) a plan for mixed delivery that may include partnerships with child care centers, family child care programs licensed under section 245A.03 and Head Start programs that comply with the state prekindergarten program requirements. Plan components include strategies for recruitment, contracting, and monitoring of fiscal compliance and program quality.

(b) Districts must include their strategy for implementing and measuring the impact of their state-funded prekindergarten program in their World's Best Workforce Plan.

(c) Notwithstanding paragraph (a), clause (6), for fiscal year 2017, every district receiving prekindergarten funding under Minnesota Statutes, section 126C.05, subdivision 1, must ensure at least 25 percent of classroom teachers have the required license or special permission, 50 percent for fiscal year 2018, 75 percent for fiscal year 2019, and 100 percent for each classroom by fiscal year 2020 and thereafter.

Subd. 3. Child eligibility. A child may participate in a prekindergarten program if the child:

(1) is not yet in kindergarten and is four years old on September 1 of that school year;

(2) has completed the early childhood health and development screening under sections 121A.16 to 121A.19 within 45 days of enrollment; and

(3) provides documentation of required immunizations under section 121A.15.

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Subd. 4. Hours of instruction. A school board's annual school calendar for prekindergarten must meet the minimum hours requirement in section 120A.41.

Subd. 5. Phase-in. For fiscal years 2017 and 2018, if more students apply for admission to a prekindergarten program operated under this section than for whom funding is available, a school district must grant priority to students from low income families.

EFFECTIVE DATE. This section is effective July 1, 2016.

Sec. 5. Minnesota Statutes 2014, section 124D.59, subdivision 2, is amended to read:

Subd. 2. English learner. (a) "English learner" means a pupil in ~~kindergarten~~ prekindergarten through grade 12 who meets the requirements under subdivision 2a or the following requirements:

(1) the pupil, as declared by a parent or guardian first learned a language other than English, comes from a home where the language usually spoken is other than English, or usually speaks a language other than English; and

(2) the pupil is determined by a valid assessment measuring the pupil's English language proficiency and by developmentally appropriate measures, which might include observations, teacher judgment, parent recommendations, or developmentally appropriate assessment instruments, to lack the necessary English skills to participate fully in academic classes taught in English.

(b) A pupil enrolled in a Minnesota public school in any grade 4 through 12 who in the previous school year took a commissioner-provided assessment measuring the pupil's emerging academic English, shall be counted as an English learner in calculating English learner pupil units under section 126C.05, subdivision 17, and shall generate state English learner aid under section 124D.65, subdivision 5, if the pupil scored below the state cutoff score or is otherwise counted as a nonproficient participant on the assessment measuring the pupil's emerging academic English, or, in the judgment of the pupil's classroom teachers, consistent with section 124D.61, clause (1), the pupil is unable to demonstrate academic language proficiency in English, including oral academic language, sufficient to successfully and fully participate in the general core curriculum in the regular classroom.

(c) Notwithstanding paragraphs (a) and (b), a pupil in ~~kindergarten~~ prekindergarten through grade 12 shall not be counted as an English learner in calculating English learner pupil units under section 126C.05, subdivision 17, and shall not generate state English learner aid under section 124D.65, subdivision 5, if:

(1) the pupil is not enrolled during the current fiscal year in an educational program for English learners under sections 124D.58 to 124D.64; or

(2) the pupil has generated ~~six~~ seven or more years of average daily membership in Minnesota public schools since July 1, 1996.

EFFECTIVE DATE. This section is effective for revenue for fiscal year 2017 and later, except that the amendment to paragraph (c), clause (2), is effective for fiscal year 2016 and later.

Sec. 6. Minnesota Statutes 2014, section 126C.05, subdivision 1, is amended to read:

Subdivision 1. Pupil unit. Pupil units for each Minnesota resident pupil under the age of 21 or who meets the requirements of section 120A.20, subdivision 1, paragraph (c), in average daily membership enrolled in the district of residence, in another district under sections 123A.05 to 123A.08, 124D.03, 124D.08, or 124D.68; in a charter school under section 124D.10; or for whom the resident district pays tuition under section 123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 125A.65, shall be counted according to this subdivision.

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(a) A prekindergarten pupil with a disability who is enrolled in a program approved by the commissioner and has an individualized education program is counted as the ratio of the number of hours of assessment and education service to 825 times 1.0 with a minimum average daily membership of 0.28, but not more than 1.0 pupil unit.

(b) A prekindergarten pupil who is assessed but determined not to be disabled is counted as the ratio of the number of hours of assessment service to 825 times 1.0.

(c) A kindergarten pupil with a disability who is enrolled in a program approved by the commissioner is counted as the ratio of the number of hours of assessment and education services required in the fiscal year by the pupil's individualized education program to 875, but not more than one.

(d) A prekindergarten pupil who is not included in paragraph (a) or (b) is counted as 1.0 pupil unit if the pupil is enrolled in a free all-day, every day prekindergarten program available to all prekindergarten pupils at the pupil's school that meets the minimum hours requirement in section 120A.41 and meets the requirements in section 124D.171. For fiscal year 2017 only, a district's prekindergarten pupil count under this paragraph must not exceed the lesser of the number of students served, or a number equal to 25 percent of the kindergarten pupils served during the previous fiscal year. For fiscal year 2018 only, a district's prekindergarten pupil count under this paragraph must not exceed the lesser of the number of students served, or a number equal to 60 percent of the kindergarten pupils served during the previous fiscal year.

~~(d)~~ (e) A kindergarten pupil who is not included in paragraph (c) is counted as 1.0 pupil unit if the pupil is enrolled in a free all-day, every day kindergarten program available to all kindergarten pupils at the pupil's school that meets the minimum hours requirement in section 120A.41, or is counted as .55 pupil unit, if the pupil is not enrolled in a free all-day, every day kindergarten program available to all kindergarten pupils at the pupil's school.

~~(e)~~ (f) A pupil who is in any of grades 1 to 6 is counted as 1.0 pupil unit.

~~(f)~~ (g) A pupil who is in any of grades 7 to 12 is counted as 1.2 pupil units.

~~(g)~~ (h) A pupil who is in the postsecondary enrollment options program is counted as 1.2 pupil units.

EFFECTIVE DATE. This section is effective for revenue for fiscal year 2017 and later.

Sec. 7. Minnesota Statutes 2014, section 126C.10, subdivision 1, is amended to read:

Subdivision 1. General education revenue. (a) For fiscal years 2013 and 2014, the general education revenue for each district equals the sum of the district's basic revenue, extended time revenue, gifted and talented revenue, small schools revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue, transportation sparsity revenue, total operating capital revenue, equity revenue, alternative teacher compensation revenue, and transition revenue.

~~(b)~~ For fiscal year 2015 and later, the general education revenue for each district equals the sum of the district's basic revenue, extended ~~time~~ support revenue, gifted and talented revenue, declining enrollment revenue, local optional revenue, small schools revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue, transportation sparsity revenue, total operating capital revenue, equity revenue, pension adjustment revenue, and transition revenue.

Sec. 8. Minnesota Statutes 2014, section 126C.10, subdivision 2, is amended to read:

Subd. 2. Basic revenue. ~~For fiscal year 2014, the basic revenue for each district equals the formula allowance times the adjusted marginal cost pupil units for the school year.~~ For fiscal year 2015 and later, the basic revenue for each district equals the formula allowance times the adjusted pupil units for the school year. ~~The formula allowance~~

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~~for fiscal year 2013 is $5,224. The formula allowance for fiscal year 2014 is $5,302.~~ The formula allowance for fiscal year 2015 ~~and later~~ is $5,831. The formula allowance for fiscal year 2016 is $5,948. The formula allowance for fiscal year 2017 and later is $6,065.

Sec. 9. Minnesota Statutes 2014, section 126C.10, subdivision 2a, is amended to read:

Subd. 2a. Extended ~~time~~ support revenue. (a) A school district's extended time revenue for fiscal year 2014 is equal to the product of $4,601 and the sum of the adjusted marginal cost pupil units of the district for each pupil in average daily membership in excess of 1.0 and less than 1.2 according to section 126C.05, subdivision 8. A school district's extended ~~time~~ support revenue ~~for fiscal year 2015 and later~~ is equal to the product of ~~$5,017~~ $5,117 and the sum of the adjusted pupil units of the district for each pupil in average daily membership in excess of 1.0 and less than 1.2 according to section 126C.05, subdivision 8.

(b) A school district's extended ~~time~~ support revenue may be used for extended day programs, extended week programs, summer school, vacation break academies such as spring break academies and summer term academies, and other programming authorized under the learning year program. Extended support revenue may also be used by alternative learning centers serving high school students for academic purposes during the school day.

EFFECTIVE DATE. This section is effective for fiscal year 2016 and later.

Sec. 10. Minnesota Statutes 2014, section 126C.10, subdivision 2d, is amended to read:

Subd. 2d. Declining enrollment revenue. (a) A school district's declining enrollment revenue equals the greater of zero or the product of: (1) 28 percent of the formula allowance for that year and (2) the difference between the adjusted pupil units for the preceding year and the adjusted pupil units for the current year.

(b) Notwithstanding paragraph (a), for fiscal years 2015, 2016, and 2017 only, a pupil enrolled at the Crosswinds school shall not generate declining enrollment revenue for the district or charter school in which the pupil was last counted in average daily membership.

(c) Notwithstanding paragraph (a), for fiscal years 2017, 2018, and 2019 only, prekindergarten pupil units under section 126C.05, subdivision 1, paragraph (d), must be excluded from the calculation of declining enrollment revenue.

Sec. 11. Minnesota Statutes 2014, section 126C.10, subdivision 2e, is amended to read:

Subd. 2e. Local optional revenue. (a) Local optional revenue for a school district equals $424 times the adjusted pupil units of the district for that school year.

(b) A district's local optional levy equals its local optional revenue times the lesser of one or the ratio of its referendum market value per resident pupil unit to ~~$510,000~~ the local optional equalizing factor. The local optional revenue levy must be spread on referendum market value. A district may levy less than the permitted amount.

(c) A district's local optional aid equals its local optional revenue less its local optional levy, times the ratio of the actual amount levied to the permitted levy.

(d) A district's local optional equalizing factor equals $510,000 times the greater of one or the ratio of the district's seasonal recreational factor to 0.30.

(e) A district's seasonal recreational factor equals the ratio of the market value of property in the district classified as 4(c)12 under section 273.13 to the district's total taxable market value under section 273.13.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and later.

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Sec. 12. Minnesota Statutes 2014, section 126C.10, subdivision 13a, is amended to read:

Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal year 2015 and later, a district may levy an amount not more than the product of its operating capital revenue for the fiscal year times the lesser of one or the ratio of its adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital equalizing factor. The operating capital equalizing factor equals $14,500 for fiscal years 2015 and 2016, $38,650 for fiscal year 2017, $47,700 for fiscal year 2018, and $50,550 for fiscal year 2019 and later.

Sec. 13. Minnesota Statutes 2014, section 126C.10, subdivision 18, is amended to read:

Subd. 18. Transportation sparsity revenue allowance. (a) A district's transportation sparsity allowance equals the greater of zero or the result of the following computation:

(i) Multiply the formula allowance according to subdivision 2, by .141.

(ii) Multiply the result in clause (i) by the district's sparsity index raised to the 26/100 power.

(iii) Multiply the result in clause (ii) by the district's density index raised to the 13/100 power.

(iv) Multiply the formula allowance according to subdivision 2, by .0466.

(v) Subtract the result in clause (iv) from the result in clause (iii).

(vi) Multiply the result in clause (v) by the greater of (1) one or (2) the ratio of the square mile area of the district to 3,000.

(vii) For a district that does not qualify for secondary sparsity revenue under subdivision 7 or elementary sparsity revenue under subdivision 8, multiply the result in clause (vi) by the greater of (1) one or (2) the ratio of the square mile area of the district to 525.

(b) Transportation sparsity revenue is equal to the transportation sparsity allowance times the adjusted pupil units.

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2016 and later.

Sec. 14. RECIPROCITY AGREEMENT EXEMPTION; HENDRICKS.

Notwithstanding Minnesota Statutes, sections 124D.04, subdivision 6, paragraph (b); 124D.041, subdivision 3, paragraph (b); and 124D.05, subdivision 2a, the provisions of Minnesota Statutes, section 124D.041 and the agreement shall not apply to Independent School District No. 402, Hendricks.

EFFECTIVE DATE. This section is effective for the 2015-2016 school year and later.

Sec. 15. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

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Subd. 2. General education aid. For general education aid under Minnesota Statutes, section 126C.13, subdivision 4:

		$6,624,575,000	. . . . .	2016
		$6,871,717,000	. . . . .	2017

The 2016 appropriation includes $622,907,000 for 2015 and $6,001,523,000 for 2016.

The 2017 appropriation includes $638,816,000 for 2016 and $6,232,902,000 for 2017.

Subd. 3. Enrollment options transportation. For transportation of pupils attending postsecondary institutions under Minnesota Statutes, section 124D.09, or for transportation of pupils attending nonresident districts under Minnesota Statutes, section 124D.03:

		$39,000	. . . . .	2016
		$42,000	. . . . .	2017

Subd. 4. Abatement revenue. For abatement aid under Minnesota Statutes, section 127A.49:

		$2,740,000	. . . . .	2016
		$2,932,000	. . . . .	2017

The 2016 appropriation includes $278,000 for 2015 and $2,462,000 for 2016.

The 2017 appropriation includes $273,000 for 2016 and $2,659,000 for 2017.

Subd. 5. Consolidation transition. For districts consolidating under Minnesota Statutes, section 123A.485:

		$292,000	. . . . .	2016
		$165,000	. . . . .	2017

The 2016 appropriation includes $22,000 for 2015 and $270,000 for 2016.

The 2017 appropriation includes $30,000 for 2016 and $135,000 for 2017.

Subd. 6. Nonpublic pupil education aid. For nonpublic pupil education aid under Minnesota Statutes, sections 123B.40 to 123B.43 and 123B.87:

		$16,756,000	. . . . .	2016
		$17,527,000	. . . . .	2017

The 2016 appropriation includes $1,575,000 for 2015 and $15,181,000 for 2016.

The 2017 appropriation includes $1,686,000 for 2016 and $15,841,000 for 2017.

Subd. 7. Nonpublic pupil transportation. For nonpublic pupil transportation aid under Minnesota Statutes, section 123B.92, subdivision 9:

		$17,322,000	. . . . .	2016
		$17,444,000	. . . . .	2017

The 2016 appropriation includes $1,816,000 for 2015 and $15,506,000 for 2016.

The 2017 appropriation includes $1,722,000 for 2016 and $15,722,000 for 2017.

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Subd. 8. One-room schoolhouse. For a grant to Independent School District No. 690, Warroad, to operate the Angle Inlet School:

		$65,000	. . . . .	2016
		$65,000	. . . . .	2017

Subd. 9. Compensatory revenue pilot project. For grants for participation in the compensatory revenue pilot program under Laws 2005, First Special Session chapter 5, article 1, section 50:

		$7,325,000	. . . . .	2016
		$7,325,000	. . . . .	2017

Of this amount, $4,730,000 in each year is for a grant to Independent School District No. 11, Anoka-Hennepin; $240,000 in each year is for a grant to Independent School District No. 286, Brooklyn Center; $660,000 in each year is for a grant to Independent School District No. 279, Osseo; $500,000 in each year is for a grant to Independent School District No. 281, Robbinsdale; $520,000 in each year is for a grant to Independent School District No. 535, Rochester; $205,000 in each year is for a grant to Independent School District No. 833, South Washington; and $470,000 in each year is for a grant to Independent School District No. 241, Albert Lea.

If a grant to a specific school district is not awarded, the commissioner may increase the aid amounts to any of the remaining participating school districts.

Subd. 10. Career and technical aid. For career and technical aid under Minnesota Statutes, section 124D.4531, subdivision 1b:

		$5,420,000	. . . . .	2016
		$4,405,000	. . . . .	2017

The 2016 appropriation includes $574,000 for 2015 and $4,846,000 for 2016.

The 2017 appropriation includes $538,000 for 2016 and $3,867,000 for 2017.

ARTICLE 2

EDUCATION EXCELLENCE

Section 1. Minnesota Statutes 2014, section 5A.03, is amended to read:

5A.03 ORGANIZATION APPLICATION FOR REGISTRATION.

Subdivision 1. Placing high school students in Minnesota. (a) An application for registration as an international student exchange visitor placement organization must be submitted in the form prescribed by the secretary of state. The application must include:

(1) evidence that the organization meets the standards established by the secretary of state by rule;

(2) the name, address, and telephone number of the organization, its chief executive officer, and the person within the organization who has primary responsibility for supervising placements within the state;

(3) the organization's unified business identification number, if any;

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(4) the organization's Office of Exchange Coordination and Designation, United States Department of State number, if any;

(5) evidence of Council on Standards for International Educational Travel listing, if any;

(6) whether the organization is exempt from federal income tax; and

(7) a list of the organization's placements in Minnesota for the previous academic year including the number of students placed, their home countries, the school districts in which they were placed, and the length of their placements.

(b) The application must be signed by the chief executive officer of the organization and the person within the organization who has primary responsibility for supervising placements within Minnesota. If the secretary of state determines that the application is complete, the secretary of state shall file the application and the applicant is registered.

(c) Organizations that have registered shall inform the secretary of state of any changes in the information required under paragraph (a), clause (1), within 30 days of the change. There is no fee to amend a registration.

(d) Registration under this chapter is valid for one year. The registration may be renewed annually. The fee to renew a registration is $50 per year.

(e) Organizations registering for the first time in Minnesota must pay an initial registration fee of $150.

(f) Fees collected by the secretary of state under this section must be deposited in the state treasury and credited to the general fund.

Subd. 2. Placing Minnesota students in travel abroad programs. (a) A school district or charter school with enrolled students who participate in a foreign exchange or study or other travel abroad program under a written agreement between the district or charter school and the program provider must use a form developed by the Department of Education to annually report to the department by November 1 the following data from the previous school year:

(1) the number of Minnesota student deaths that occurred while Minnesota students were participating in the foreign exchange or study or other travel abroad program and that resulted from Minnesota students participating in the program;

(2) the number of Minnesota students hospitalized due to accidents and the illnesses that occurred while Minnesota students were participating in the foreign exchange or study or other travel abroad program and that resulted from Minnesota students participating in the program; and

(3) the name and type of the foreign exchange or study or other travel abroad program and the city or region where the reported death, hospitalization due to accident, or the illness occurred.

(b) School districts and charter schools must ask but must not require enrolled eligible students and the parents or guardians of other enrolled students who complete a foreign exchange or study or other travel abroad program to disclose the information under paragraph (a).

(c) When reporting the data under paragraph (a), a school district or charter school may supplement the data with a brief explanatory statement. The Department of Education annually must aggregate and publish the reported data on the department Web site in a format that facilitates public access to the aggregated data and include links to both

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the United States Department of State's Consular Information Program that informs the public of conditions abroad that may affect students' safety and security and the publicly available reports on sexual assaults and other criminal acts affecting students participating in a foreign exchange or study or other travel abroad program.

(d) School districts and charter schools with enrolled students who participate in foreign exchange or study or other travel abroad programs under a written agreement between the district or charter school and the program provider are encouraged to adopt policies supporting the programs and to include program standards in their policies to ensure students' health and safety.

(e) To be eligible under this subdivision to provide a foreign exchange or study or other travel abroad program to Minnesota students enrolled in a school district or charter school, a program provider annually must register with the secretary of state and provide the following information on a form developed by the secretary of state: the name, address, and telephone number of the program provider, its chief executive officer, and the person within the provider's organization who is primarily responsible for supervising programs within the state; the program provider's unified business identification number, if any; evidence of Council on Standards for International Educational Travel listing, if any; whether the program provider is exempt from federal income tax; a list of the program provider's placements in foreign countries for the previous school year including the number of Minnesota students placed, where Minnesota students were placed, and the length of their placement; the terms and limits of the medical and accident insurance available to cover participating students and the process for filing a claim; and the signatures of the program provider's chief executive officer and the person primarily responsible for supervising Minnesota students' placements in foreign countries. If the secretary of state determines the registration is complete, the secretary of state shall file the registration and the program provider is registered. Registration with the secretary of state must not be considered or represented as an endorsement of the program provider by the secretary of state. The secretary of state annually must publish on its Web site aggregated data under paragraph (c) received from the Department of Education.

(f) Program providers, annually by August 1, must provide the data required under paragraph (a), clauses (1) to (3), to the districts and charter schools with enrolled students participating in the provider's program.

(g) The school district, the charter school, the Department of Education, and their respective employees, when acting in their official capacity, are immune from civil and criminal liability with respect to all activities related to implementing this subdivision.

EFFECTIVE DATE. This section is effective for the 2015-2016 school year and later.

Sec. 2. Minnesota Statutes 2014, section 119B.011, subdivision 15, is amended to read:

Subd. 15. Income. "Income" means earned or unearned income received by all family members, including public assistance cash benefits and at-home infant child care subsidy payments, unless specifically excluded and child support and maintenance distributed to the family under section 256.741, subdivision 15. The following are excluded from income: funds used to pay for health insurance premiums for family members, Supplemental Security Income, scholarships, work-study income, ~~and~~ grants, and other financial assistance, including loan forgiveness, that cover costs or reimbursement for tuition, fees, books, and educational supplies; student loans for tuition, fees, books, supplies, and living expenses; state and federal earned income tax credits; assistance specifically excluded as income by law; in-kind income such as food support, energy assistance, foster care assistance, medical assistance, child care assistance, and housing subsidies; earned income of full-time or part-time students up to the age of 19, who have not earned a high school diploma or GED high school equivalency diploma including earnings from summer employment; grant awards under the family subsidy program; nonrecurring lump-sum income only to the extent that it is earmarked and used for the purpose for which it is paid; and any income assigned to the public authority according to section 256.741.

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Sec. 3. Minnesota Statutes 2014, section 122A.63, subdivision 4, is amended to read:

Subd. 4. Grant amount. The commissioner may award a joint grant in the amount it determines to be appropriate. The grant shall include money for the postsecondary institution, school district, and student scholarships~~, and student loans~~. The commissioner may reallocate any unspent funds to one or more of the four joint grant recipients identified in subdivision 1.

Sec. 4. Minnesota Statutes 2014, section 122A.63, subdivision 5, is amended to read:

Subd. 5. Information to student applicants. At the time a student applies for a scholarship ~~and loan~~, the student shall be provided information about the fields of licensure needed by school districts in the part of the state within which the district receiving the joint grant is located. The information shall be acquired and periodically updated by the recipients of the joint grant. Information provided to students shall clearly state that scholarship ~~and loan~~ decisions are not based upon the field of licensure selected by the student.

Sec. 5. Minnesota Statutes 2014, section 122A.63, subdivision 6, is amended to read:

Subd. 6. Eligibility for scholarships ~~and loans~~. The following American Indian people are eligible for scholarships:

(1) a student, including a teacher aide employed by a district receiving a joint grant, who intends to become a teacher and who is enrolled in a postsecondary institution receiving a joint grant;

(2) a licensed employee of a district receiving a joint grant, who is enrolled in a master of education program; and

(3) a student who, after applying for federal and state financial aid and an the Minnesota Indian scholarship according to section 136A.126, has ~~financial needs that remain~~ unmet. financial need ~~shall be determined according to the congressional methodology for needs determination or as otherwise set in federal law~~ as defined by section 136A.101.

A person who has actual living expenses in addition to those addressed by the congressional methodology for needs determination, or as otherwise set in federal law, may receive a loan according to criteria established by the commissioner. A contract shall be executed between the state and the student for the amount and terms of the loan.

Sec. 6. [122A.80] TEACHMN.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "High needs area" means a high needs area as defined in the Department of Education biannual teacher supply and demand report under section 127A.05, subdivision 6, or other surveys conducted by the Department of Education that provide indicators for teacher supply and demand needs not captured by the teacher supply and demand report.

(1) is a focus or priority school under the multiple measurement rating;

(2) has a concentration of students above the state average for free and reduced-price lunch; or

(3) is geographically isolated and experiencing a teacher shortage.

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(d) "Qualified candidate" means a teacher candidate enrolled in a Minnesota teacher licensure program who meets the program eligibility requirements in subdivision 3 and in rules or procedures adopted under subdivision 7.

Subd. 2. Account. An account is created within the Office of Higher Education to disburse fixed-rate forgivable loans to qualified candidates under this section. Unused funds appropriated to the Department of Education and transferred to the Office of Higher Education in a given fiscal year will be carried over for loans and program administrative costs in future years. Principal and interest payments on unforgiven loans shall be credited to the account and shall be carried over and do not cancel and may be used for administrative program costs not covered by the appropriated amount and for issuing new loans.

Subd. 3. Eligibility. A candidate may apply to the commissioner of the Office of Higher Education to receive a forgivable loan under this section. The commissioner must award loans to candidates enrolling in programs in high needs areas and to candidates expressing interest in teaching in high needs schools based on shortages and geographical distribution, and must take into consideration diversifying the teacher workforce. The application must include a letter of support or character reference from a professional supervisor or colleague or academic professor who is not related to the applicant.

Subd. 4. Loan requirements. Interest accrues both during and after a borrower's postsecondary enrollment and is capitalized at the time of repayment. At the time of receiving the loan, a candidate must commit to seeking a qualified position in a Minnesota school district for four years upon completion of teacher preparation as a full-time teacher as verified through the Staff Automated Reporting (STAR) system. Candidates who do not complete the four-year service commitment may be required to repay the loan.

Subd. 5. Usage. The loan may only be used for tuition and related living and miscellaneous expenses required to complete teacher preparation and attain licensure.

Subd. 6. Forgiveness and repayment. (a) If a borrower's eligibility for the loan is based on the candidate's enrollment in a program in a high needs area, the borrower's student loan payment shall be deferred if the candidate completed the program and obtains a full-time position in that discipline. Upon completing four years of teaching in that discipline, the loan obligation shall be forgiven in the full amount of principal plus accrued interest. Except as allowed under paragraph (c), a student borrower has up to five years from graduation or school termination to fulfill the teaching obligation.

(b) If a borrower's eligibility for the loan is based on the candidate's employment in a high needs school, the borrower's student loan payment shall be deferred if the candidate obtains a full-time position in a high needs school at the time of hire. Upon completing four years of teaching at that school or another high needs school at the time of hire, the loan obligation shall be forgiven in the full amount of principal plus accrued interest. Except as allowed under paragraph (c), a student borrower has up to five years from graduation or school termination to fulfill the teaching obligation.

(c) An appeals process shall be established for special circumstances, such as a temporary medical leave of absence or layoff, which may allow the qualifying term to be extended.

(d) For loans not in deferral under paragraph (a) or (b), loan payments are deferred for up to 12 months or until the borrower obtains employment in a nonqualified position, whichever is first. At that time, monthly loan payments will be required from the borrower until the loan is paid in full or the loan is deferred under paragraph (a) or (b).

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Subd. 7. Rulemaking. The commissioner of education shall adopt rules or procedures, in consultation with the Office of Higher Education, to implement this section, including:

(1) additional eligibility and renewal criteria;

(2) annual and lifetime maximum awards per student;

(3) how the loan funds will be disbursed;

(4) the interest rate for the loans;

(5) service fulfillment and repayment criteria; and

(6) an appeals process consistent with subdivision 6.

Sec. 7. [122A.81] STEPPING UP FOR KIDS; FINANCIAL ASSISTANCE.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(1) is a focus or priority school under the multiple measurement rating;

(2) has a concentration of students above the state average for free and reduced-price lunch; or

(3) is geographically isolated and experiencing a teacher shortage.

(d) "Qualified candidate" means a paraprofessional currently employed in a Minnesota school who has been admitted to a Minnesota teacher licensure program and meets the program eligibility requirements in subdivision 3 and in rules adopted under subdivision 5.

Subd. 2. Account. An account is created within the Office of Higher Education to disburse financial assistance for paraprofessionals when enrolled in a program in Minnesota leading to teacher licensure. Unused funds appropriated to the Department of Education in a given fiscal year shall be transferred to the Office of Higher Education and carried over for stepping up for kids financial assistance and program and administrative costs in future years.

Subd. 3. Eligibility. (a) A qualified candidate may apply to the commissioner of the Office of Higher Education to receive financial assistance under this section. The commissioner of the Office of Higher Education shall award financial assistance in high needs areas and high needs schools based on shortages, geographical distribution, or other surveys conducted by the Department of Education and must take into consideration diversifying the teacher workforce. The application must include a letter of support from the school district administrator where the paraprofessional is employed.

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(b) Candidates must commit to remain employed in a Minnesota school district for four years upon completion of teacher preparation as verified through the Staff Automated Reporting (STAR) system. Candidates who do not complete the four-year service commitment may be required to repay the financial assistance.

Subd. 4. Usage. The financial assistance may only be used for tuition and related living and miscellaneous expenses required to complete teacher preparation and attain licensure.

Subd. 5. Rulemaking. The commissioner of education shall adopt rules or procedures, in consultation with the Office of Higher Education, to implement this section, including:

(1) additional eligibility and renewal criteria;

(2) annual and lifetime maximum awards per student; and

(3) service fulfillment and repayment criteria.

Sec. 8. [124D.231] FULL-SERVICE COMMUNITY SCHOOLS.

Subdivision 1. Definitions. For the purposes of this section, the following terms have the meanings given them.

(a) "Community organization" means a nonprofit organization that has been in existence for three years or more and serves persons within the community surrounding the covered school site on education and other issues.

(b) "Community school consortium" means a group of schools and community organizations that propose to work together to plan and implement community school programming.

(c) "Community school programming" means services, activities, and opportunities described under subdivision 2, paragraph (g).

(d) "High-quality child care or early childhood education programming" means educational programming for preschool-aged children that is grounded in research, consistent with best practices in the field, and provided by licensed teachers.

(e) "School site" means a school site at which an applicant has proposed or has been funded to provide community school programming.

(f) "Site coordinator" is an individual who is responsible for aligning programming with the needs of the school community identified in the baseline analysis.

Subd. 2. Full-service community school program. (a) The commissioner shall provide funding to eligible school sites to plan, implement, and improve full-service community schools. Eligible school sites must meet one of the following criteria:

(1) the school is on a development plan for continuous improvement under section 120B.35, subdivision 2; or

(2) the school is in a district that has an achievement and integration plan approved by the commissioner of education under sections 124D.861 and 124D.862.

(b) An eligible school site may receive up to $100,000 annually. School sites receiving funding under this section shall hire or contract with a partner agency to hire a site coordinator to coordinate services at each covered school site.

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(c) Implementation funding of up to $20,000 must be available for up to one year for planning for school sites. At the end of this period, the school must submit a full-service community school plan, pursuant to paragraph (g).

(d) The commissioner shall dispense the funds to schools with significant populations of students receiving free or reduced-price lunches. Schools with significant homeless and highly mobile students shall also be a priority. The commissioner must also dispense the funds in a manner to ensure equity among urban, suburban, and greater Minnesota schools.

(e) A school site must establish a school leadership team responsible for developing school-specific programming goals, assessing program needs, and overseeing the process of implementing expanded programming at each covered site. The school leadership team shall have between 12 to 15 members and shall meet the following requirements:

(1) at least 30 percent of the members are parents and 30 percent of the members are teachers at the school site and must include the school principal and representatives from partner agencies; and

(2) the school leadership team must be responsible for overseeing the baseline analyses under paragraph (f). A school leadership team must have ongoing responsibility for monitoring the development and implementation of full service community school operations and programming at the school site and shall issue recommendations to schools on a regular basis and summarized in an annual report. These reports shall also be made available to the public at the school site and on school and district Web sites.

(f) School sites must complete a baseline analysis prior to beginning programming as a full-service community school. The analysis shall include:

(1) a baseline analysis of needs at the school site, led by the school leadership team, which shall include the following elements:

(i) identification of challenges facing the school;

(ii) analysis of the student body, including:

(A) number and percentage of students with disabilities and needs of these students;

(B) number and percentage of students who are English learners and the needs of these students;

(D) number and percentage of students receiving free or reduced-price lunch and the needs of these students; and

(iii) analysis of enrollment and retention rates for students with disabilities, English learners, homeless and highly mobile students, and students receiving free or reduced-price lunch;

(iv) analysis of suspension and expulsion data, including the justification for such disciplinary actions and the degree to which particular populations, including, but not limited to, students of color, students with disabilities, students who are English learners, and students receiving free or reduced-price lunch are represented among students subject to such actions;

(v) analysis of school achievement data disaggregated by major demographic categories, including, but not limited to, race, ethnicity, English learner status, disability status, and free or reduced-price lunch status;

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(vi) analysis of current parent engagement strategies and their success; and

(vii) evaluation of the need for and availability of wraparound services, including, but not limited to:

(A) mechanisms for meeting students' social, emotional, and physical health needs, which may include coordination of existing services as well as the development of new services based on student needs; and

(B) strategies to create a safe and secure school environment and improve school climate and discipline, such as implementing a system of positive behavioral supports, and taking additional steps to eliminate bullying;

(2) a baseline analysis of community assets and a strategic plan for utilizing and aligning identified assets. This analysis should include, but is not limited to, a documentation of individuals in the community, faith-based organizations, community and neighborhood associations, colleges, hospitals, libraries, businesses, and social service agencies who may be able to provide support and resources; and

(3) a baseline analysis of needs in the community surrounding the school, led by the school leadership team, including, but not limited to:

(i) the need for high-quality, full-day child care and early childhood education programs;

(ii) the need for physical and mental health care services for children and adults; and

(iii) the need for job training and other adult education programming.

(g) Each school site receiving funding under this section must establish at least two of the following types of programming:

(1) early childhood:

(i) early childhood education; and

(ii) child care services;

(2) academic:

(i) academic support and enrichment activities, including expanded learning time;

(ii) summer or after-school enrichment and learning experiences;

(iii) job training, internship opportunities, and career counseling services;

(iv) programs that provide assistance to students who have been truant, suspended, or expelled; and

(v) specialized instructional support services;

(3) parental involvement:

(i) programs that promote parental involvement and family literacy, including the Reading First and Early Reading First programs authorized under part B of title I of the Elementary and Secondary Education Act of 1965, United States Code, title 20, section 6361, et seq.;

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(ii) parent leadership development activities; and

(iii) parenting education activities;

(4) mental and physical health:

(i) mentoring and other youth development programs, including peer mentoring and conflict mediation;

(ii) juvenile crime prevention and rehabilitation programs;

(iii) home visitation services by teachers and other professionals;

(iv) developmentally appropriate physical education;

(v) nutrition services;

(vi) primary health and dental care; and

(vii) mental health counseling services;

(5) community involvement:

(i) service and service-learning opportunities;

(ii) adult education, including instruction in English as a second language; and

(iii) homeless prevention services;

(6) positive discipline practices; and

(7) other programming designed to meet school and community needs identified in the baseline analysis and reflected in the full-service community school plan.

(h) The school leadership team at each school site must develop a full-service community school plan detailing the steps the school leadership team will take, including:

(1) timely establishment and consistent operation of the school leadership team;

(2) maintenance of attendance records in all programming components;

(3) maintenance of measurable data showing annual participation and the impact of programming on the participating children and adults;

(4) documentation of meaningful and sustained collaboration between the school and community stakeholders, including local governmental units, civic engagement organizations, businesses, and social service providers;

(5) establishment and maintenance of partnerships with institutions, such as universities, hospitals, museums, or not-for-profit community organizations to further the development and implementation of community school programming;

(6) ensuring compliance with the district nondiscrimination policy; and

(7) plan for school leadership team development.

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Subd. 3. Full-service community school review. (a) Every three years, a full-service community school site must submit to the commissioner, and make available at the school site and online, a report describing efforts to integrate community school programming at each covered school site and the effect of the transition to a full-service community school on participating children and adults. This report shall include, but is not limited to, the following:

(1) an assessment of the effectiveness of the school site in development or implementing the community school plan;

(2) problems encountered in the design and execution of the community school plan, including identification of any federal, state, or local statute or regulation impeding program implementation;

(3) the operation of the school leadership team and its contribution to successful execution of the community school plan;

(4) recommendations for improving delivery of community school programming to students and families;

(5) the number and percentage of students receiving community school programming who had not previously been served;

(6) the number and percentage of nonstudent community members receiving community school programming who had not previously been served;

(7) improvement in retention among students who receive community school programming;

(8) improvement in academic achievement among students who receive community school programming;

(9) changes in student's readiness to enter school, active involvement in learning and in their community, physical, social and emotional health, and student's relationship with the school and community environment;

(10) an accounting of anticipated local budget savings, if any, resulting from the implementation of the program;

(11) improvements to the frequency or depth of families' involvement with their children's education;

(12) assessment of community stakeholder satisfaction;

(13) assessment of institutional partner satisfaction;

(14) the ability, or anticipated ability, of the school site and partners to continue to provide services in the absence of future funding under this section;

(15) increases in access to services for students and their families; and

(16) the degree of increased collaboration among participating agencies and private partners.

(b) Reports submitted under this section shall be evaluated by the commissioner with respect to the following criteria:

(1) the effectiveness of the school or the community school consortium in implementing the full-service community school plan, including the degree to which the school site navigated difficulties encountered in the design and operation of the full-service community school plan, including identification of any federal, state, or local statute or regulation impeding program implementation;

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(2) the extent to which the project has produced lessons about ways to improve delivery of community school programming to students;

(3) the degree to which there has been an increase in the number or percentage of students and nonstudents receiving community school programming;

(4) the degree to which there has been an improvement in retention of students and improvement in academic achievement among students receiving community school programming;

(5) local budget savings, if any, resulting from the implementation of the program;

(6) the degree of community stakeholder and institutional partner engagement;

(7) the ability, or anticipated ability, of the school site and partners to continue to provide services in the absence of future funding under this section;

(8) increases in access to services for students and their families; and

(9) the degree of increased collaboration among participating agencies and private partners.

Sec. 9. Minnesota Statutes 2014, section 124D.42, subdivision 8, is amended to read:

Subd. 8. Minnesota reading corps program. (a) A Minnesota reading corps program is established to provide ServeMinnesota AmeriCorps members with a data-based problem-solving model of literacy instruction to use in helping to train local Head Start program providers, other prekindergarten program providers, and staff in schools with students in kindergarten through grade 3 to evaluate and teach early literacy skills, including comprehensive, scientifically based reading instruction under section 122A.06, subdivision 4, to children age 3 to grade 3. Priority shall be given to placing AmeriCorps members in prekindergarten, kindergarten, and first grade programs in any of the following: (1) "Focus" or "Priority" schools under the multiple measurements rating; or (2) federal School Improvement Grant recipients.

(b) Literacy programs under this subdivision must comply with the provisions governing literacy program goals and data use under section 119A.50, subdivision 3, paragraph (b).

(c) The commission must submit a biennial report to the committees of the legislature with jurisdiction over kindergarten through grade 12 education that records and evaluates program data to determine the efficacy of the programs under this subdivision.

Sec. 10. Minnesota Statutes 2014, section 124D.81, is amended to read:

124D.81 ~~CONTINUATION OF~~ AMERICAN INDIAN EDUCATION ~~GRANTS~~ AID.

Subdivision 1. ~~Grants;~~ Procedures. Each fiscal year the commissioner of education must make grants to no fewer than six American Indian education programs. At least three programs must be in urban areas and at least three must be on or near reservations. The board of a local district, a participating school or a group of boards may develop a proposal for grants in support of American Indian education programs. Proposals (a) A school district, charter school, or American Indian-controlled tribal contract or grant school enrolling at least 20 American Indian students on October 1 of the previous school year and operating an American Indian education program according to section 124D.74 is eligible for Indian education aid if it meets the requirements of this section. Programs may provide for contracts for the provision of program components by nonsectarian nonpublic, community, tribal, charter, or alternative schools. The commissioner shall prescribe the form and manner of application for ~~grants~~ aids, and no ~~grant~~ aid shall be made for a ~~proposal~~ program not complying with the requirements of sections 124D.71 to 124D.82.

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Subd. 2. Plans. ~~Each~~ To qualify for aid, an eligible district, charter school, or ~~participating~~ tribal contract school ~~submitting a proposal under subdivision 1~~ must develop and submit ~~with the proposal~~ a plan for approval by the Indian education director ~~which~~ that shall:

(a) Identify the measures to be used to meet the requirements of sections 124D.71 to 124D.82;

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

(c) Describe how district goals and objectives as well as the objectives of sections 124D.71 to 124D.82 are to be achieved;

(d) Demonstrate that required and elective courses as structured do not have a discriminatory effect within the meaning of section 124D.74, subdivision 5;

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

(f) Project expenditures for programs under sections 124D.71 to 124D.82.

Subd. 2a. American Indian education aid. (a) The American Indian education aid for an eligible district or tribal contract school equals the greater of (1) the sum of $20,000 plus the product of $405 times the difference between the number of American Indian students enrolled on October 1 of the previous school year and 20; or (2) if the district or school received a grant under this section for fiscal year 2015, the amount of the grant for fiscal year 2015.

(b) Notwithstanding paragraph (a), the American Indian education aid must not exceed the district or tribal contract school's actual expenditure according to the approved plan under subdivision 2.

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

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

Subd. 5. Records. Participating schools and districts must keep records and afford access to them as the commissioner finds necessary to ensure that American Indian education programs are implemented in conformity with sections 124D.71 to 124D.82. Each school district or participating school must keep accurate, detailed, and separate revenue and expenditure accounts for pilot American Indian education programs funded under this section.

Subd. 6. Money from other sources. A district or participating school providing American Indian education programs shall be eligible to receive moneys for these programs from other government agencies and from private sources when the moneys are available.

Subd. 7. Exceptions. Nothing in sections 124D.71 to 124D.82 shall be construed as prohibiting a district or school from implementing an American Indian education program which is not in compliance with sections 124D.71 to 124D.82 if the proposal and plan for that program is not funded pursuant to this section.

EFFECTIVE DATE. This section is effective for revenue for fiscal year 2016 and later.

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Sec. 11. Minnesota Statutes 2014, section 124D.83, subdivision 2, is amended to read:

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

(1) multiplying the formula allowance under section 126C.10, subdivision 2, less $170, times the difference between (i) the resident pupil units as defined in section 126C.05, subdivision 6, in average daily membership, excluding section 126C.05, subdivision 13, and (ii) the number of pupils for the current school year, weighted according to section 126C.05, subdivision 1, receiving benefits under section 123B.42 or 123B.44 or for which the school is receiving reimbursement under section 124D.69;

(2) adding to the result in clause (1) an amount equal to the product of the formula allowance under section 126C.10, subdivision 2, less $300 times the tribal contract compensation revenue pupil units;

(3) subtracting from the result in clause (2) the amount of money allotted to the school by the federal government through Indian School Equalization Program of the Bureau of Indian Affairs, according to Code of Federal Regulations, title 25, part 39, subparts A to E, for the basic program as defined by section 39.11, paragraph (b), for the base rate as applied to kindergarten through twelfth grade, excluding small school adjustments and additional weighting, but not money allotted through subparts F to L for contingency funds, school board training, student training, interim maintenance and minor repair, interim administration cost, prekindergarten, and operation and maintenance, and the amount of money that is received according to section 124D.69;

(4) dividing the result in clause (3) by the sum of the resident pupil units in average daily membership, excluding section 126C.05, subdivision 13, plus the tribal contract compensation revenue pupil units; and

(5) multiplying the sum of the resident pupil units, including section 126C.05, subdivision 13, in average daily membership plus the tribal contract compensation revenue pupil units by ~~the lesser of $1,500 or~~ the result in clause (4).

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2016 and later.

Sec. 12. Minnesota Statutes 2014, section 136A.162, is amended to read:

136A.162 CLASSIFICATION OF DATA.

(a) Except as provided in paragraphs (b) and (c), data on applicants for financial assistance collected and used by the office for student financial aid programs administered by that office, including the programs under sections 122A.80 and 122A.81, are private data on individuals as defined in section 13.02, subdivision 12.

(b) Data on applicants may be disclosed to the commissioner of human services to the extent necessary to determine eligibility under section 136A.121, subdivision 2, clause (5).

(c) The following data collected in the Minnesota supplemental loan program under section 136A.1701 may be disclosed to a consumer credit reporting agency only if the borrower and the cosigner give informed consent, according to section 13.05, subdivision 4, at the time of application for a loan:

(1) the lender-assigned borrower identification number;

(2) the name and address of borrower;

(3) the name and address of cosigner;

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(4) the date the account is opened;

(5) the outstanding account balance;

(6) the dollar amount past due;

(7) the number of payments past due;

(8) the number of late payments in previous 12 months;

(9) the type of account;

(10) the responsibility for the account; and

(11) the status or remarks code.

Sec. 13. Minnesota Statutes 2014, section 256J.21, subdivision 2, is amended to read:

Subd. 2. Income exclusions. The following must be excluded in determining a family's available income:

(1) payments for basic care, difficulty of care, and clothing allowances received for providing family foster care to children or adults under Minnesota Rules, parts 9555.5050 to 9555.6265, 9560.0521, and 9560.0650 to 9560.0655, payments for family foster care for children under section 260C.4411 or chapter 256N, and payments received and used for care and maintenance of a third-party beneficiary who is not a household member;

(2) reimbursements for employment training received through the Workforce Investment Act of 1998, United States Code, title 20, chapter 73, section 9201;

(3) reimbursement for out-of-pocket expenses incurred while performing volunteer services, jury duty, employment, or informal carpooling arrangements directly related to employment;

(4) all educational assistance, including loan forgiveness, except the county agency must count graduate student teaching assistantships, fellowships, and other similar paid work as earned income and, after allowing deductions for any unmet and necessary educational expenses, shall count scholarships or grants awarded to graduate students that do not require teaching or research as unearned income;

(5) loans, regardless of purpose, from public or private lending institutions, governmental lending institutions, or governmental agencies;

(6) loans from private individuals, regardless of purpose, provided an applicant or participant documents that the lender expects repayment;

(7)(i) state income tax refunds; and

(ii) federal income tax refunds;

(8)(i) federal earned income credits;

(ii) Minnesota working family credits;

(iii) state homeowners and renters credits under chapter 290A; and

(iv) federal or state tax rebates;

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(9) funds received for reimbursement, replacement, or rebate of personal or real property when these payments are made by public agencies, awarded by a court, solicited through public appeal, or made as a grant by a federal agency, state or local government, or disaster assistance organizations, subsequent to a presidential declaration of disaster;

(10) the portion of an insurance settlement that is used to pay medical, funeral, and burial expenses, or to repair or replace insured property;

(11) reimbursements for medical expenses that cannot be paid by medical assistance;

(12) payments by a vocational rehabilitation program administered by the state under chapter 268A, except those payments that are for current living expenses;

(13) in-kind income, including any payments directly made by a third party to a provider of goods and services;

(14) assistance payments to correct underpayments, but only for the month in which the payment is received;

(15) payments for short-term emergency needs under section 256J.626, subdivision 2;

(16) funeral and cemetery payments as provided by section 256.935;

(17) nonrecurring cash gifts of $30 or less, not exceeding $30 per participant in a calendar month;

(18) any form of energy assistance payment made through Public Law 97-35, Low-Income Home Energy Assistance Act of 1981, payments made directly to energy providers by other public and private agencies, and any form of credit or rebate payment issued by energy providers;

(19) Supplemental Security Income (SSI), including retroactive SSI payments and other income of an SSI recipient, except as described in section 256J.37, subdivision 3b;

(20) Minnesota supplemental aid, including retroactive payments;

(21) proceeds from the sale of real or personal property;

(22) adoption or kinship assistance payments under chapter 256N or 259A;

(23) state-funded family subsidy program payments made under section 252.32 to help families care for children with developmental disabilities, consumer support grant funds under section 256.476, and resources and services for a disabled household member under one of the home and community-based waiver services programs under chapter 256B;

(24) interest payments and dividends from property that is not excluded from and that does not exceed the asset limit;

(25) rent rebates;

(26) income earned by a minor caregiver, minor child through age 6, or a minor child who is at least a half-time student in an approved elementary or secondary education program;

(27) income earned by a caregiver under age 20 who is at least a half-time student in an approved elementary or secondary education program;

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(28) MFIP child care payments under section 119B.05;

(29) all other payments made through MFIP to support a caregiver's pursuit of greater economic stability;

(30) income a participant receives related to shared living expenses;

(31) reverse mortgages;

(32) benefits provided by the Child Nutrition Act of 1966, United States Code, title 42, chapter 13A, sections 1771 to 1790;

(33) benefits provided by the women, infants, and children (WIC) nutrition program, United States Code, title 42, chapter 13A, section 1786;

(34) benefits from the National School Lunch Act, United States Code, title 42, chapter 13, sections 1751 to 1769e;

(35) relocation assistance for displaced persons under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, United States Code, title 42, chapter 61, subchapter II, section 4636, or the National Housing Act, United States Code, title 12, chapter 13, sections 1701 to 1750jj;

(36) benefits from the Trade Act of 1974, United States Code, title 19, chapter 12, part 2, sections 2271 to 2322;

(37) war reparations payments to Japanese Americans and Aleuts under United States Code, title 50, sections 1989 to 1989d;

(38) payments to veterans or their dependents as a result of legal settlements regarding Agent Orange or other chemical exposure under Public Law 101-239, section 10405, paragraph (a)(2)(E);

(39) income that is otherwise specifically excluded from MFIP consideration in federal law, state law, or federal regulation;

(40) security and utility deposit refunds;

(41) American Indian tribal land settlements excluded under Public Laws 98-123, 98-124, and 99-377 to the Mississippi Band Chippewa Indians of White Earth, Leech Lake, and Mille Lacs reservations and payments to members of the White Earth Band, under United States Code, title 25, chapter 9, section 331, and chapter 16, section 1407;

(42) all income of the minor parent's parents and stepparents when determining the grant for the minor parent in households that include a minor parent living with parents or stepparents on MFIP with other children;

(43) income of the minor parent's parents and stepparents equal to 200 percent of the federal poverty guideline for a family size not including the minor parent and the minor parent's child in households that include a minor parent living with parents or stepparents not on MFIP when determining the grant for the minor parent. The remainder of income is deemed as specified in section 256J.37, subdivision 1b;

(44) payments made to children eligible for relative custody assistance under section 257.85;

(45) vendor payments for goods and services made on behalf of a client unless the client has the option of receiving the payment in cash;

(46) the principal portion of a contract for deed payment;

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(47) cash payments to individuals enrolled for full-time service as a volunteer under AmeriCorps programs including AmeriCorps VISTA, AmeriCorps State, AmeriCorps National, and AmeriCorps NCCC; and

(48) housing assistance grants under section 256J.35, paragraph (a).

Sec. 14. Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:

Subd. 19b. Subtractions from federal taxable income. For individuals, estates, and trusts, there shall be subtracted from federal taxable income:

(1) net interest income on obligations of any authority, commission, or instrumentality of the United States to the extent includable in taxable income for federal income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income tax to Minnesota or to any other state, for any previous taxable year, whether the amount is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used to claim the credit allowed under section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and transportation of each qualifying child in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, "textbooks" includes books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. Equipment expenses qualifying for deduction includes expenses as defined and limited in section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for, or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs. No deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle to provide such transportation for a qualifying child. For purposes of the subtraction provided by this clause, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on disposition of property exempt from tax under section 290.491;

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) of the Internal Revenue Code in determining federal taxable income by an individual who does not itemize deductions for federal income tax purposes for the taxable year, an amount equal to 50 percent of the excess of charitable contributions over $500 allowable as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, under the provisions of Public Law 109-1 and Public Law 111-126;

(7) for individuals who are allowed a federal foreign tax credit for taxes that do not qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover of subnational foreign taxes for the taxable year, but not to exceed the total subnational foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, "federal foreign tax credit" means the credit allowed under section 27 of the Internal Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed under section 904(c) of the Internal Revenue Code minus national level foreign taxes to the extent they exceed the federal foreign tax credit;

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(8) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, clause (12), in the case of a shareholder of an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. The resulting delayed depreciation cannot be less than zero;

(9) job opportunity building zone income as provided under section 469.316;

(10) to the extent included in federal taxable income, the amount of compensation paid to members of the Minnesota National Guard or other reserve components of the United States military for active service, including compensation for services performed under the Active Guard Reserve (AGR) program. For purposes of this clause, "active service" means (i) state active service as defined in section 190.05, subdivision 5a, clause (1); or (ii) federally funded state active service as defined in section 190.05, subdivision 5b, and "active service" includes service performed in accordance with section 190.08, subdivision 3;

(11) to the extent included in federal taxable income, the amount of compensation paid to Minnesota residents who are members of the armed forces of the United States or United Nations for active duty performed under United States Code, title 10; or the authority of the United Nations;

(12) an amount, not to exceed $10,000, equal to qualified expenses related to a qualified donor's donation, while living, of one or more of the qualified donor's organs to another person for human organ transplantation. For purposes of this clause, "organ" means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; "human organ transplantation" means the medical procedure by which transfer of a human organ is made from the body of one person to the body of another person; "qualified expenses" means unreimbursed expenses for both the individual and the qualified donor for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses may be subtracted under this clause only once; and "qualified donor" means the individual or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An individual may claim the subtraction in this clause for each instance of organ donation for transplantation during the taxable year in which the qualified expenses occur;

(13) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the case of a shareholder of a corporation that is an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. If the net operating loss exceeds the addition for the tax year, a subtraction is not allowed under this clause;

(14) to the extent included in the federal taxable income of a nonresident of Minnesota, compensation paid to a service member as defined in United States Code, title 10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);

(15) to the extent included in federal taxable income, the amount of national service educational awards received from the National Service Trust under United States Code, title 42, sections 12601 to 12604, for service in an approved Americorps National Service program;

(16) to the extent included in federal taxable income, discharge of indebtedness income resulting from reacquisition of business indebtedness included in federal taxable income under section 108(i) of the Internal Revenue Code. This subtraction applies only to the extent that the income was included in net income in a prior year as a result of the addition under subdivision 19a, clause (13);

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(17) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due to claiming the railroad track maintenance credit under section 45G(a) of the Internal Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of the Internal Revenue Code; ~~and~~

(21) to the extent included in federal taxable income, the amount of qualified transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal Revenue Code. The subtraction is limited to the lesser of the amount of qualified transportation fringe benefits received in excess of the limitations under section 132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A) of the Internal Revenue Code;

(22) to the extent included in federal taxable income, the amount of any loan forgiveness under section 122A.80 for the TeachMN program; and

(23) to the extent included in federal taxable income, the amount of any financial assistance paid under section 122A.81 for the stepping up for kids program.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 15. APPROPRIATIONS.

Subdivision 1. Department. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Charter school building lease aid. For building lease aid under Minnesota Statutes, section 124D.11, subdivision 4:

		$66,787,000	. . . . .	2016
		$77,148,000	. . . . .	2017

The 2016 appropriation includes $6,032,000 for 2015 and $60,755,000 for 2016.

The 2017 appropriation includes $6,750,000 for 2016 and $70,398,000 for 2017.

Subd. 3. Achievement and integration aid. For integration aid under Minnesota Statutes, section 124D.862:

		$65,539,000	. . . . .	2016
		$71,464,000	. . . . .	2017

The 2016 appropriation includes $6,382,000 for 2015 and $59,157,000 for 2016.

The 2017 appropriation includes $6,573,000 for 2016 and $64,891,000 for 2017.

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Subd. 4. Literacy incentive aid. For literacy incentive aid under Minnesota Statutes, section 124D.98:

		$44,552,000	. . . . .	2016
		$45,508,000	. . . . .	2017

The 2016 appropriation includes $4,683,000 for 2015 and $39,869,000 for 2016.

The 2017 appropriation includes $4,429,000 for 2016 and $41,079,000 for 2017.

Subd. 5. Interdistrict desegregation or integration transportation grants. For interdistrict desegregation or integration transportation grants under Minnesota Statutes, section 124D.87:

		$15,023,000	. . . . .	2016
		$15,825,000	. . . . .	2017

Subd. 6. Success for the future. For American Indian success for the future grants under Minnesota Statutes, section 124D.81:

$213,000

. . . . .

2016

The 2016 appropriation includes $213,000 for 2015 and $0 for 2016.

Subd. 7. American Indian education aid. For American Indian education aid under Minnesota Statutes, section 124D.81, subdivision 2a:

		$9,281,000	. . . . .	2016
		$9,665,000	. . . . .	2017

Subd. 8. American Indian teacher preparation grants. For joint grants to assist American Indian people to become teachers under Minnesota Statutes, section 122A.63:

		$280,000	. . . . .	2016
		$280,000	. . . . .	2017

Subd. 9. Tribal contract schools. For tribal contract school aid under Minnesota Statutes, section 124D.83:

		$4,457,000	. . . . .	2016
		$5,201,000	. . . . .	2017

The 2016 appropriation includes $204,000 for 2015 and $4,253,000 for 2016.

The 2017 appropriation includes $688,000 for 2016 and $4,513,000 for 2017.

Subd. 10. Early childhood programs at tribal schools. For early childhood family education programs at tribal contract schools under Minnesota Statutes, section 124D.83, subdivision 4:

		$68,000	. . . . .	2016
		$68,000	. . . . .	2017

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Subd. 11. Statewide testing and reporting system. For the statewide testing and reporting system under Minnesota Statutes, section 120B.30:

		$21,001,000	. . . . .	2016
		$21,001,000	. . . . .	2017

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

Subd. 12. Examination fees; teacher training and support programs. (a) For students' advanced placement and international baccalaureate examination fees under Minnesota Statutes, section 120B.13, subdivision 3, and the training and related costs for teachers and other interested educators under Minnesota Statutes, section 120B.13, subdivision 1:

		$4,500,000	. . . . .	2016
		$4,500,000	. . . . .	2017

(b) The advanced placement program shall receive 75 percent of the appropriation each year and the international baccalaureate program shall receive 25 percent of the appropriation each year. The department, in consultation with representatives of the advanced placement and international baccalaureate programs selected by the Advanced Placement Advisory Council and IBMN, respectively, shall determine the amounts of the expenditures each year for examination fees and training and support programs for each program.

(c) Notwithstanding Minnesota Statutes, section 120B.13, subdivision 1, at least $500,000 each year is for teachers to attend subject matter summer training programs and follow-up support workshops approved by the advanced placement or international baccalaureate programs. The amount of the subsidy for each teacher attending an advanced placement or international baccalaureate summer training program or workshop shall be the same. The commissioner shall determine the payment process and the amount of the subsidy.

(d) The commissioner shall pay all examination fees for all students of low-income families under Minnesota Statutes, section 120B.13, subdivision 3, and to the extent of available appropriations shall also pay examination fees for students sitting for an advanced placement examination, international baccalaureate examination, or both.

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

Subd. 13. Concurrent enrollment programs. For concurrent enrollment programs under Minnesota Statutes, section 124D.091:

		$5,000,000	. . . . .	2016
		$8,000,000	. . . . .	2017

If the appropriation is insufficient, the commissioner must proportionately reduce the aid payment to each district.

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

Subd. 14. Collaborative urban educator. For the collaborative urban educator grant program:

		$780,000	. . . . .	2016
		$780,000	. . . . .	2017

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$195,000 each year is for the Southeast Asian teacher program at Concordia University, St. Paul; $175,000 each year is for the collaborative urban educator program at the University of St. Thomas; $195,000 each year is for the Center for Excellence in Urban Teaching at Hamline University; and $195,000 each year is for the East Africa Student to Teacher program at Augsburg College.

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

Each institution shall prepare for the legislature, by January 15 of each year, a detailed report regarding the funds used. The report must include the number of teachers prepared as well as the diversity for each cohort of teachers produced.

Subd. 15. ServeMinnesota program. For funding ServeMinnesota programs under Minnesota Statutes, sections 124D.37 to 124D.45:

		$900,000	. . . . .	2016
		$900,000	. . . . .	2017

A grantee organization may provide health and child care coverage to the dependents of each participant enrolled in a full-time ServeMinnesota program to the extent such coverage is not otherwise available.

Subd. 16. Student organizations. For student organizations:

		$725,000	. . . . .	2016
		$725,000	. . . . .	2017

$96,000 each year is for student organizations serving health occupations.

$43,000 each year is for student organizations serving service occupations.

$100,000 each year is for student organizations serving trade and industry occupations.

$95,000 each year is for student organizations serving business occupations.

$150,000 each year is for student organizations serving agriculture occupations.

$142,000 each year is for student organizations serving family and consumer science occupations.

$109,000 each year is for student organizations serving marketing occupations.

$40,000 each year is for the Minnesota Foundation for Student Organizations.

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

Subd. 17. Early childhood literacy programs. For early childhood literacy programs under Minnesota Statutes, section 119A.50, subdivision 3:

		$9,375,000	. . . . .	2016
		$9,375,000	. . . . .	2017

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

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Subd. 18. Minnesota math corps program. For the Minnesota math corps program under Minnesota Statutes, section 124D.42, subdivision 9:

		$250,000	. . . . .	2016
		$250,000	. . . . .	2017

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

Subd. 19. Alternative compensation. For alternative teacher compensation aid under Minnesota Statutes, section 122A.415, subdivision 4:

		$78,331,000	. . . . .	2016
		$77,647,000	. . . . .	2017

The 2016 appropriation includes $7,766,000 for 2015 and $70,565,000 for 2016.

The 2017 appropriation includes $7,840,000 for 2016 and $69,807,000 for 2017.

Subd. 20. Starbase MN. For a grant to Starbase MN for rigorous science, technology, engineering, and math (STEM) program providing students in grades 4 to 6 with a multisensory learning experience and a hands-on curriculum in an aerospace environment using state-of-the-art technology:

		$500,000	. . . . .	2016
		$500,000	. . . . .	2017

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

Subd. 21. Civic education grants. For grants to the Minnesota Civic Education Coalition: Kids Voting St. Paul, Learning Law and Democracy Foundation, and YMCA Youth in Government to provide civic education programs for Minnesota youth age 18 and younger. Civic education is the study of constitutional principles and the democratic foundation of our national, state, and local institutions and the study of political processes and structures of government, grounded in the understanding of constitutional government under the rule of law:

		$125,000	. . . . .	2016
		$125,000	. . . . .	2017

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

Subd. 22. Teacher development and evaluation. For teacher development and evaluation revenue under Laws 2014, chapter 312, article 16, section 16, subdivision 7:

		$10,000,000	. . . . .	2016
		$10,000,000	. . . . .	2017

The 2016 appropriation includes $1,000,000 for 2015 and $9,000,000 for 2016.

The 2017 appropriation includes $1,000,000 for 2016 and $9,000,000 for 2017.

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Subd. 23. Recovery program grants. For recovery program grants under Minnesota Statutes, section 124D.695:

		$500,000	. . . . .	2016
		$500,000	. . . . .	2017

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

Subd. 24. TeachMN. For the TeachMN account under Minnesota Statutes, section 122A.80, subdivision 2:

		$10,000,000	. . . . .	2016
		$10,000,000	. . . . .	2017

Up to six percent of the amount each year may be used for administrative costs of the Department of Education and the Office of Higher Education for administering the TeachMN loan program.

$9,827,000 in fiscal year 2016 and $9,867,000 in fiscal year 2017 are for a transfer to the Office of Higher Education for loan disbursement and administrative costs.

Unused funds appropriated to the Department of Education and transferred to the Office of Higher Education in a given fiscal year are carried over for the TeachMN loan program and program and administrative costs in future years.

Subd. 25. Stepping up for kids. For a transfer to the Office of Higher Education for the stepping up for kids financial assistance account under Minnesota Statutes, section 122A.81, subdivision 2:

		$2,000,000	. . . . .	2016
		$2,000,000	. . . . .	2017

Up to six percent of the amount each year may be used for administrative costs of the Office of Higher Education to administer the stepping up for kids financial assistance program.

Unused funds appropriated to the Department of Education and transferred to the Office of Higher Education in a given fiscal year are carried over for stepping up for kids financial assistance and program and administrative costs in future years.

Subd. 26. STEM grants. For school districts to provide STEM-based courses:

		$1,000,000	. . . . .	2016
		$1,000,000	. . . . .	2017

The commissioner must determine the form and manner of application and award criteria. Grant awards are limited to $50,000 per course. Any balance in the first year does not cancel but is available in the second year of the biennium.

This is a onetime appropriation.

Subd. 27. Teacher-powered school grants. For grants to teacher-powered schools under Minnesota Statutes, section 123B.045, subdivision 7:

		$1,000,000	. . . . .	2016
		$1,000,000	. . . . .	2017

The base appropriation in fiscal year 2018 is $0. Any balance in the first year does not cancel but is available in the second year.

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Subd. 28. Full-service community schools. For full-service community schools under Minnesota Statutes, section 124D.231:

		$2,000,000	. . . . .	2016
		$2,000,000	. . . . .	2017

This is a onetime appropriation. Any balance in the first year does not cancel but is available in the second year.

Subd. 29. Northwestern Online College in the High School program. For the Northwestern Online College in the High School program:

		$50,000	. . . . .	2016
		$50,000	. . . . .	2017

This is a onetime appropriation. Any balance from the first year may carry forward into the second year.

Subd. 30. School counselors. For school counseling aid:

$8,000,000

. . . . .

2017

Beginning fiscal year 2017, a school district is eligible for school counseling aid equal to $8,000,000 times the ratio of its number of full-time equivalent licensed school counselors employed or under contract to the school district to the number of full-time equivalent licensed school counselors employed or under contract by school districts in the state.

Sec. 16. REPEALER.

Minnesota Statutes 2014, section 122A.63, subdivisions 3, 7, and 8, are repealed for fiscal year 2016 and later.

ARTICLE 3

SPECIAL EDUCATION

Section 1. Minnesota Statutes 2014, section 125A.0942, subdivision 3, is amended to read:

Subd. 3. Physical holding or seclusion. (a) Physical holding or seclusion may be used only in an emergency. A school that uses physical holding or seclusion shall meet the following requirements:

(1) physical holding or seclusion is the least intrusive intervention that effectively responds to the emergency;

(2) physical holding or seclusion is not used to discipline a noncompliant child;

(3) physical holding or seclusion ends when the threat of harm ends and the staff determines the child can safely return to the classroom or activity;

(4) staff directly observes the child while physical holding or seclusion is being used;

(5) each time physical holding or seclusion is used, the staff person who implements or oversees the physical holding or seclusion documents, as soon as possible after the incident concludes, the following information:

(i) a description of the incident that led to the physical holding or seclusion;

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(ii) why a less restrictive measure failed or was determined by staff to be inappropriate or impractical;

(iii) the time the physical holding or seclusion began and the time the child was released; and

(iv) a brief record of the child's behavioral and physical status;

(6) the room used for seclusion must:

(i) be at least six feet by five feet;

(ii) be well lit, well ventilated, adequately heated, and clean;

(iii) have a window that allows staff to directly observe a child in seclusion;

(iv) have tamperproof fixtures, electrical switches located immediately outside the door, and secure ceilings;

(v) have doors that open out and are unlocked, locked with keyless locks that have immediate release mechanisms, or locked with locks that have immediate release mechanisms connected with a fire and emergency system; and

(vi) not contain objects that a child may use to injure the child or others;

(7) before using a room for seclusion, a school must:

(i) receive written notice from local authorities that the room and the locking mechanisms comply with applicable building, fire, and safety codes; and

(ii) register the room with the commissioner, who may view that room; and

(8) until August 1, 2015, a school district may use prone restraints with children age five or older if:

(i) the district has provided to the department a list of staff who have had specific training on the use of prone restraints;

(ii) the district provides information on the type of training that was provided and by whom;

(iii) only staff who received specific training use prone restraints;

(iv) each incident of the use of prone restraints is reported to the department within five working days on a form provided by the department; and

(v) the district, before using prone restraints, must review any known medical or psychological limitations that contraindicate the use of prone restraints.

The department must collect data on districts' use of prone restraints and publish the data in a readily accessible format on the department's Web site on a quarterly basis.

(b) By February 1, 2015, and annually thereafter, stakeholders ~~must~~ may, as necessary, recommend to the commissioner specific and measurable implementation and outcome goals for reducing the use of restrictive procedures and the commissioner must submit to the legislature a report on districts' progress in reducing the use of restrictive procedures that recommends how to further reduce these procedures and eliminate the use of prone

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restraints. The statewide plan includes the following components: measurable goals; the resources, training, technical assistance, mental health services, and collaborative efforts needed to significantly reduce districts' use of prone restraints; and recommendations to clarify and improve the law governing districts' use of restrictive procedures. The commissioner must consult with interested stakeholders when preparing the report, including representatives of advocacy organizations, special education directors, teachers, paraprofessionals, intermediate school districts, school boards, day treatment providers, county social services, state human services department staff, mental health professionals, and autism experts. By June 30 each year, districts must report summary data on their use of restrictive procedures to the department, in a form and manner determined by the commissioner. The summary data must include information about the use of restrictive procedures, including use of reasonable force under section 121A.582.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2014, section 125A.76, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For the purposes of this section and section 125A.79, the definitions in this subdivision apply.

(b) "Basic revenue" has the meaning given it in section 126C.10, subdivision 2. For the purposes of computing basic revenue pursuant to this section, each child with a disability shall be counted as prescribed in section 126C.05, subdivision 1.

(c) "Essential personnel" means teachers, cultural liaisons, related services, and support services staff providing services to students. Essential personnel may also include special education paraprofessionals or clericals providing support to teachers and students by preparing paperwork and making arrangements related to special education compliance requirements, including parent meetings and individualized education programs. Essential personnel does not include administrators and supervisors.

(d) "Average daily membership" has the meaning given it in section 126C.05.

(e) "Program growth factor" means 1.046 for fiscal years 2012 through 2015, 1.0 for fiscal year 2016, 1.046 for fiscal year 2017, and the product of 1.046 and the program growth factor for the previous year for fiscal year 2018 and later.

(f) "Nonfederal special education expenditure" means all direct expenditures that are necessary and essential to meet the district's obligation to provide special instruction and services to children with a disability according to sections 124D.454, 125A.03 to 125A.24, 125A.259 to 125A.48, and 125A.65 as submitted by the district and approved by the department under section 125A.75, subdivision 4, excluding expenditures:

(1) reimbursed with federal funds;

(2) reimbursed with other state aids under this chapter;

(3) for general education costs of serving students with a disability;

(4) for facilities;

(5) for pupil transportation; and

(6) for postemployment benefits.

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(g) "Old formula special education expenditures" means expenditures eligible for revenue under Minnesota Statutes 2012, section 125A.76, subdivision 2.

(h) For the Minnesota State Academy for the Deaf and the Minnesota State Academy for the Blind, expenditures under paragraphs (f) and (g) are limited to the salary and fringe benefits of one-to-one instructional and behavior management aides and one-to-one licensed, certified professionals assigned to a child attending the academy, if the aides or professionals are required by the child's individualized education program.

(i) "Cross subsidy reduction aid percentage" means 1.0 percent for fiscal year 2014 and 2.27 percent for fiscal year 2015.

(j) "Cross subsidy reduction aid limit" means $20 for fiscal year 2014 and $48 for fiscal year 2015.

(k) "Special education aid increase limit" means $80 for fiscal year 2016, ~~$100~~ $160 for fiscal year 2017, $204 for fiscal year 2018 and, for fiscal year ~~2018~~ 2019 and later, the sum of the special education aid increase limit for the previous fiscal year and ~~$40~~ $44.

Sec. 3. Minnesota Statutes 2014, section 125A.76, subdivision 2a, is amended to read:

Subd. 2a. Special education initial aid. ~~For fiscal year 2016 and later,~~ A district's special education initial aid equals the sum of:

(1) the least of 62 percent for fiscal year 2016 or 70 percent for fiscal year 2017 and later of the district's old formula special education expenditures for the prior fiscal year, excluding pupil transportation expenditures, 50 percent for fiscal year 2016 or 54 percent for fiscal year 2017 and later of the district's nonfederal special education expenditures for the prior year, excluding pupil transportation expenditures, or 56 percent for fiscal year 2016 or 60 percent for fiscal year 2017 and later of the product of the sum of the following amounts, computed using prior fiscal year data, and the program growth factor:

(i) the product of the district's average daily membership served and the sum of:

(A) $450; plus

(B) $400 times the ratio of the sum of the number of pupils enrolled on October 1 who are eligible to receive free lunch plus one-half of the pupils enrolled on October 1 who are eligible to receive reduced-price lunch to the total October 1 enrollment; plus

(ii) $10,400 times the December 1 child count for the primary disability areas of autism spectrum disorders, developmental delay, and severely multiply impaired; plus

(iii) $18,000 times the December 1 child count for the primary disability areas of deaf and hard-of-hearing and emotional or behavioral disorders; plus

(iv) $27,000 times the December 1 child count for the primary disability areas of developmentally cognitive mild-moderate, developmentally cognitive severe-profound, physically impaired, visually impaired, and deafblind; plus

(2) the cost of providing transportation services for children with disabilities under section 123B.92, subdivision 1, paragraph (b), clause (4).

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Sec. 4. Minnesota Statutes 2014, section 125A.79, subdivision 1, is amended to read:

Subdivision 1. Definitions. For the purposes of this section, the definitions in this subdivision apply.

(a) "Unreimbursed old formula special education expenditures" means:

(1) old formula special education expenditures for the prior fiscal year; minus

(2) for fiscal years 2014 and 2015, the sum of the special education aid under section 125A.76, subdivision 5, for the prior fiscal year and the cross subsidy reduction aid under section 125A.76, subdivision 2b, and for fiscal year 2016 and later, the special education initial aid under section 125A.76, subdivision 2a; minus

(3) for fiscal year 2016 and later, the amount of general education revenue, excluding local optional revenue, plus local optional aid and referendum equalization aid for the prior fiscal year attributable to pupils receiving special instruction and services outside the regular classroom for more than 60 percent of the school day for the portion of time the pupils receive special instruction and services outside the regular classroom, excluding portions attributable to district and school administration, district support services, operations and maintenance, capital expenditures, and pupil transportation.

(b) "Unreimbursed nonfederal special education expenditures" means:

(1) nonfederal special education expenditures for the prior fiscal year; minus

(2) special education initial aid under section 125A.76, subdivision 2a; minus

(3) the amount of general education revenue and referendum equalization aid for the prior fiscal year attributable to pupils receiving special instruction and services outside the regular classroom for more than 60 percent of the school day for the portion of time the pupils receive special instruction and services outside of the regular classroom, excluding portions attributable to district and school administration, district support services, operations and maintenance, capital expenditures, and pupil transportation.

(c) "General revenue" for a school district means the sum of the general education revenue according to section 126C.10, subdivision 1, excluding transportation sparsity revenue, local optional revenue, and total operating capital revenue. "General revenue" for a charter school means the sum of the general education revenue according to section 124D.11, subdivision 1, and transportation revenue according to section 124D.11, subdivision 2, excluding referendum equalization aid, transportation sparsity revenue, and operating capital revenue.

Sec. 5. Minnesota Statutes 2014, section 125A.79, subdivision 5, is amended to read:

Subd. 5. Excess cost aid. (a) For fiscal year 2016 ~~and later~~, a district's excess cost aid equals the greater of:

(1) 56 percent of the difference between (i) the district's unreimbursed nonfederal special education expenditures and (ii) 7.0 percent of the district's general revenue;

(2) 62 percent of the difference between (i) the district's unreimbursed old formula special education expenditures and (ii) 2.5 percent of the district's general revenue; or

(3) zero.

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(b) For fiscal year 2017 and later, a district's excess cost aid equals the greater of:

(1) 60 percent of the difference between (i) the district's unreimbursed nonfederal special education expenditures and (ii) 7.0 percent of the district's general revenue for fiscal year 2017 or 6.8 percent for fiscal year 2018 and later;

(2) 70 percent for fiscal year 2017, 71 percent for fiscal year 2018, and 72 percent for fiscal year 2019 and later of the difference between (i) the district's unreimbursed old formula special education expenditures and (ii) 2.23 percent for fiscal year 2017 and two percent for fiscal year 2018 and later of the district's general revenue; or

(3) zero.

Sec. 6. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Special education; regular. For special education aid under Minnesota Statutes, section 125A.75:

		$1,170,508,000	. . . . .	2016
		$1,269,172,000	. . . . .	2017

The 2016 appropriation includes $137,932,000 for 2015 and $1,032,576,000 for 2016.

The 2017 appropriation includes $145,356,000 for 2016 and $1,123,816,000 for 2017.

Subd. 3. Aid for children with disabilities. For aid under Minnesota Statutes, section 125A.75, subdivision 3, for children with disabilities placed in residential facilities within the district boundaries for whom no district of residence can be determined:

		$1,406,000	. . . . .	2016
		$1,629,000	. . . . .	2017

If the appropriation for either year is insufficient, the appropriation for the other year is available.

Subd. 4. Travel for home-based services. For aid for teacher travel for home-based services under Minnesota Statutes, section 125A.75, subdivision 1:

		$361,000	. . . . .	2016
		$371,000	. . . . .	2017

The 2016 appropriation includes $35,000 for 2015 and $326,000 for 2016.

The 2017 appropriation includes $36,000 for 2016 and $335,000 for 2017.

Subd. 5. Court-placed special education revenue. For reimbursing serving school districts for unreimbursed eligible expenditures attributable to children placed in the serving school district by court action under Minnesota Statutes, section 125A.79, subdivision 4:

		$56,000	. . . . .	2016
		$57,000	. . . . .	2017

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Subd. 6. Special education out-of-state tuition. For special education out-of-state tuition according to Minnesota Statutes, section 125A.79, subdivision 8:

		$250,000	. . . . .	2016
		$250,000	. . . . .	2017

Subd. 7. Positive Behavioral Interventions and Supports (PBIS). For implementation of schoolwide Positive Behavioral Interventions and Supports (PBIS) in schools and districts throughout Minnesota:

		$2,300,000	. . . . .	2016
		$2,300,000	. . . . .	2017

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

Subd. 8. Training and technical assistance to reduce district use of seclusion and restraint. (a) For providing school districts with training and technical assistance to reduce district use of seclusion and restraint on students with complex needs:

$750,000

. . . . .

2016

(b) Of this appropriation, $500,000 is available to the commissioner to reimburse school districts for the cost of hiring experts to provide staff training in reducing district use of seclusion and restraint on students with complex needs.

(c) Of this appropriation, $250,000 is available to the commissioner for the costs of providing specialized training and assistance to school districts with a high use of seclusion and restraint on students with complex needs.

(d) The commissioner may contract with experts from intermediate school district teams or level four programs to provide the specialized training and technical assistance.

(e) Any funds unexpended in fiscal year 2016 do not cancel but carry forward into the next fiscal year.

ARTICLE 4

FACILITIES AND TECHNOLOGY

Section 1. Minnesota Statutes 2014, section 123A.482, is amended to read:

123A.482 JOINT POWERS ~~COOPERATIVE~~ FACILITY PROGRAM.

Subdivision 1. Schools may be jointly operated. Two or more member school districts of Education Innovation Partners Cooperative Center No. 6091 may agree to jointly operate a secondary facility, or otherwise agree to a qualifying cooperative program under subdivision 1a. The districts may choose to operate the facility according to a joint powers agreement under section 123A.78 or 471.59.

Subd. 1a. Qualifying cooperative program. A "qualifying cooperative program" means a program operated through a joint powers agreement that utilizes technology and other options to increase the availability and number of curriculum offerings for students.

Subd. 2. Expanded program offerings. A qualifying cooperative program under subdivision 1a, or a jointly operated secondary program seeking funding under section 123A.485 must demonstrate to the commissioner's satisfaction that the jointly operated program provides enhanced learning opportunities and broader curriculum offerings to the students attending that program. The commissioner must approve or disapprove a cooperative secondary program or qualifying cooperative program within 60 days of receipt of an application.

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Subd. 3. Transfer of employees. If an employee is transferred between two employer members of the joint powers agreement under this section, the employee's length of service under section 122A.40, subdivision 5, remains uninterrupted. The employee shall receive credit on the receiving district's salary schedule for the employee's educational attainment and years of continuous service in the sending district, or shall receive a comparable salary, whichever is greater. The employee shall receive credit for accrued sick leave and rights to severance benefits as if the employee had been employed by the receiving district during the employee's years of employment in the sending district.

~~Subd. 4.~~ ~~Revenue.~~ ~~An approved program that is jointly operated under this section is eligible for aid under section 123A.485 and qualifies for a facilities grant under sections 123A.44 to 123A.446.~~

Subd. 5. Duty to maintain elementary and secondary schools met. A school district operating a qualifying cooperative program or a joint facility under this section meets the requirements of section 123A.64.

Subd. 6. Estimated market value limit exclusion. Bonds for a cooperative facility operated under this section or a qualifying cooperative program approved under this section issued by a member school district are not subject to the net debt limit under section 475.53, subdivision 4.

Subd. 7. Allocation of levy authority for joint facility. For purposes of determining each member district's school levy, a qualifying cooperative program or a jointly operated secondary program may allocate program costs to each member district according to the joint powers agreement and each member district may include those costs in its tax levy. The joint powers agreement may choose to allocate costs on any basis adopted as part of the joint powers agreement.

Subd. 8. Effect of consolidation. The joint powers agreement may allow member school districts that choose to consolidate to continue to certify levies separately based on each component district's characteristics.

Subd. 9. Bonds. A joint powers district formed under this section may issue bonds according to section 123A.78 or its member districts may issue bonds individually after complying with this subdivision. The joint powers board must submit the project for review and comment under section 123B.71. The joint powers board must hold a hearing on the proposal. If the bonds are not issued under section 123A.78, each member district of the joint powers district must submit the question of authorizing borrowing of funds for the project to the voters of the district at a special election. The question submitted shall state the total amount of funding needed from that district. The member district may issue the bonds according to chapter 475 and certify the levy required by section 475.61 only if a majority of those voting on the question in that district vote in the affirmative and only after the board has adopted a resolution pledging the full faith and credit of that unit. The resolution must irrevocably commit that unit to pay an agreed-upon share of any debt levy shortages that, together with other funds available, would allow the member school board to pay the principal and interest on the obligations. The clerk of the joint powers board must certify the vote of any bond elections to the commissioner. Bonds issued under this section first qualify for debt service equalization aid in fiscal year ~~2018~~ 2020.

Subd. 10. Election. A district entering into a joint powers agreement under this section may conduct a referendum seeking approval for a new facility. This election may be held separately or at the same time as a bond election under subdivision 9. If the election is held at the same time, the questions may be asked separately or as a conjunctive question. The question must be approved by a majority of those voting on the question. If asked separately and the question fails, a district may not proceed with the sale of bonds according to subdivision 9.

EFFECTIVE DATE. This section is effective July 1, 2015.

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Sec. 2. Minnesota Statutes 2014, section 123B.57, is amended to read:

123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.

~~Subdivision 1.~~ ~~Health and safety revenue application.~~ (a) To receive health and safety revenue for any fiscal year a district must submit to the commissioner a capital expenditure health and safety revenue application by the date determined by the commissioner. The application must include a health and safety budget adopted and confirmed by the school district board as being consistent with the district's health and safety policy under subdivision 2. The budget must include the estimated cost of the program per Uniform Financial Accounting and Reporting Standards (UFARS) finance code, by fiscal year. Upon approval through the adoption of a resolution by each of an intermediate district's member school district boards and the approval of the Department of Education, a school district may include its proportionate share of the costs of health and safety projects for an intermediate district in its application.

(b) Health and safety projects with an estimated cost of $500,000 or more per site are not eligible for health and safety revenue. Health and safety projects with an estimated cost of $500,000 or more per site that meet all other requirements for health and safety funding, are eligible for alternative facilities bonding and levy revenue according to section 123B.59. A school board shall not separate portions of a single project into components to qualify for health and safety revenue, and shall not combine unrelated projects into a single project to qualify for alternative facilities bonding and levy revenue.

(c) The commissioner of education shall not make eligibility for health and safety revenue contingent on a district's compliance status, level of program development, or training. The commissioner shall not mandate additional performance criteria such as training, certifications, or compliance evaluations as a prerequisite for levy approval.

~~Subd. 2.~~ ~~Health and safety policy.~~ To qualify for health and safety revenue, a school board must adopt a health and safety policy. The policy must include provisions for implementing a health and safety program that complies with health, safety, and environmental regulations and best practices including indoor air quality management.

~~Subd. 3.~~ ~~Health and safety revenue.~~ ~~A district's health and safety revenue for a fiscal year equals the district's alternative facilities levy under section 123B.59, subdivision 5, paragraph (b), plus the greater of zero or:~~

(1) the sum of (a) the total approved cost of the district's hazardous substance plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's health and safety program for fiscal year 1990 through the fiscal year to which the levy is attributable, excluding expenditures funded with bonds issued under section 123B.59 or 123B.62, or chapter 475; certificates of indebtedness or capital notes under section 123B.61; levies under section 123B.58, 123B.59, 123B.63, or 126C.40, subdivision 1 or 6; and other federal, state, or local revenues, minus

(2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years 1985 through 1989 under sections 124.245 and 275.125, subdivision 11c, plus (b) the district's health and safety revenue under this subdivision, for years before the fiscal year to which the levy is attributable.

~~Subd. 4.~~ ~~Health and safety levy.~~ To receive health and safety revenue, a district may levy an amount equal to the district's health and safety revenue as defined in subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by dividing the adjusted net tax capacity of the district for the year preceding the year the levy is certified by the adjusted pupil units in the district for the school year to which the levy is attributable, to $3,165.

~~Subd. 5.~~ ~~Health and safety aid.~~ A district's health and safety aid is the difference between its health and safety revenue and its health and safety levy. If a district does not levy the entire amount permitted, health and safety aid must be reduced in proportion to the actual amount levied. Health and safety aid may not be reduced as a result of reducing a district's health and safety levy according to section 123B.79.

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Subd. 6. ~~Uses of~~ Health and safety ~~revenue~~ capital projects. (a) Health and safety ~~revenue may be used only for approved~~ capital projects may include expenditures necessary for the correction of fire and life safety hazards; design, purchase, installation, maintenance, and inspection of fire protection and alarm equipment; purchase or construction of appropriate facilities for the storage of combustible and flammable materials; inventories and facility modifications not related to a remodeling project to comply with lab safety requirements under section 121A.31; inspection, testing, repair, removal or encapsulation, and disposal of asbestos-containing building materials; cleanup and disposal of polychlorinated biphenyls; cleanup and disposal of hazardous and infectious wastes; cleanup, removal, disposal, and repairs related to storing heating fuel or transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined in section 296A.01; correction of occupational safety and health administration regulated hazards; indoor air quality inspections, investigations, and testing; mold abatement; upgrades or replacement of mechanical ventilation systems to meet American Society of Heating, Refrigerating and Air Conditioning Engineers standards and State Mechanical Code; design, materials, and installation of local exhaust ventilation systems, including required make-up air for controlling regulated hazardous substances; correction of Department of Health Food Code violations; correction of swimming pool hazards excluding depth correction; playground safety inspections, repair of unsafe outdoor playground equipment, and the installation of impact surfacing materials; bleacher repair or rebuilding to comply with the order of a building code inspector under section 326B.112; testing and mitigation of elevated radon hazards; lead testing; copper in water testing; cleanup after major weather-related disasters or flooding; reduction of excessive organic and inorganic levels in wells and capping of abandoned wells; installation and testing of boiler backflow valves to prevent contamination of potable water; vaccinations, titers, and preventative supplies for bloodborne pathogen compliance; costs to comply with the Janet B. Johnson Parents' Right to Know Act; automated external defibrillators and other emergency plan equipment and supplies specific to the district's emergency action plan; compliance with the National Emission Standards for Hazardous Air Pollutants for school generators established by the United States Environmental Protection Agency; and health, safety, and environmental management costs associated with implementing the district's health and safety program including costs to establish and operate safety committees, in school buildings or property owned or being acquired by the district. Testing and calibration activities are permitted for existing mechanical ventilation systems at intervals no less than every five years.

(b) For fiscal years 2014 through 2017, a school district must not include expenses related to emission compliance projects for school generators in its health and safety ~~revenue~~ capital projects unless it reduces its approved spending on other qualified health and safety projects by the same amount.

~~Subd. 6a.~~ ~~Restrictions on health and safety revenue.~~ ~~Notwithstanding subdivision 6, health and safety revenue must not be used:~~

~~(1) to finance a lease purchase agreement, installment purchase agreement, or other deferred payments agreement;~~

~~(2) for the construction of new facilities, remodeling of existing facilities, or the purchase of portable classrooms;~~

~~(3) for interest or other financing expenses;~~

(4) for energy-efficiency projects under section 123B.65, for a building or property or part of a building or property used for postsecondary instruction or administration or for a purpose unrelated to elementary and secondary education;

(5) for replacement of building materials or facilities including roof, walls, windows, internal fixtures and flooring, nonhealth and safety costs associated with demolition of facilities, structural repair or replacement of facilities due to unsafe conditions, violence prevention and facility security, ergonomics, or public announcement systems and emergency communication devices; or

~~Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2838~~

(6) for building and heating, ventilating and air conditioning supplies, maintenance, and cleaning activities. All assessments, investigations, inventories, and support equipment not leading to the engineering or construction of a project shall be included in the health, safety, and environmental management costs in subdivision 8, paragraph (a).

~~Subd. 6b.~~ ~~Health and safety projects.~~ (a) Health and safety revenue applications defined in subdivision 1 must be accompanied by a description of each project for which funding is being requested. Project descriptions must provide enough detail for an auditor to determine if the work qualifies for revenue. For projects other than fire and life safety projects, playground projects, and health, safety, and environmental management activities, a project description does not need to include itemized details such as material types, room locations, square feet, names, or license numbers. The commissioner may request supporting information and shall approve only projects that comply with subdivisions 6 and 8, as defined by the Department of Education.

(b) Districts may request funding for allowable projects based on self-assessments, safety committee recommendations, insurance inspections, management assistance reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph (b), and subdivision 8, paragraph (b), for projects under $500,000, individual project size for projects authorized by this subdivision is not limited and may include related work in multiple facilities. Health and safety management costs from subdivision 8 may be reported as a single project.

~~(c) All costs directly related to a project shall be reported in the appropriate Uniform Financial Accounting and Reporting Standards (UFARS) finance code.~~

~~(d) For fire and life safety egress and all other projects exceeding $20,000, cited under the Minnesota Fire Code, a fire marshal plan review is required.~~

(e) Districts shall update project estimates with actual expenditures for each fiscal year. If a project's final cost is significantly higher than originally approved, the commissioner may request additional supporting information.

~~Subd. 6c.~~ ~~Appeals process.~~ In the event a district is denied funding approval for a project the district believes complies with subdivisions 6 and 8, and is not otherwise excluded, a district may appeal the decision. All such requests must be in writing. The commissioner shall respond in writing. A written request must contain the following: project number; description and amount; reason for denial; unresolved questions for consideration; reasons for reconsideration; and a specific statement of what action the district is requesting.

~~Subd. 7.~~ ~~Proration.~~ In the event that the health and safety 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.

Subd. 8. Health, safety, and environmental management ~~cost~~. ~~(a) "Health, safety, and environmental management" is defined in section 123B.56.~~

~~(b) A district's cost for health, safety, and environmental management is limited to the lesser of:~~

~~(1) actual cost to implement their plan; or~~

~~(2) an amount determined by the commissioner, based on enrollment, building age, and size.~~

~~(c)~~ The department may contract with regional service organizations, private contractors, Minnesota Safety Council, or state agencies to provide management assistance to school districts for health and safety capital projects. Management assistance is the development of written programs for the identification, recognition and control of hazards, and prioritization and scheduling of district health and safety capital projects. The commissioner shall not mandate management assistance or exclude private contractors from the opportunity to provide any health and safety services to school districts.

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2017 and later.

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Sec. 3. [123B.595] LONG-TERM FACILITIES MAINTENANCE REVENUE.

Subdivision 1. Long-term facilities maintenance revenue. For fiscal year 2017 and later, long-term facilities maintenance revenue equals the greater of (1) $200 times the district's adjusted pupil units times the lesser of one or the ratio of the district's average building age to 35 years, plus the cost approved by the commissioner for indoor air quality, fire alarm and suppression, and asbestos abatement projects under section 123B.57, subdivision 6, with an estimated cost of $100,000 or more per site or (2) the sum of the amount the district would have qualified for under Minnesota Statutes 2014, section 123B.57, Minnesota Statutes 2014, section 123B.59, and Minnesota Statutes 2014, section 123B.591.

Subd. 2. Long-term facilities maintenance revenue for a charter school. For fiscal year 2017 and later, long‑term facilities maintenance revenue for a charter school equals $38 times the adjusted pupil units.

Subd. 3. Intermediate districts and other cooperative units. Upon approval through the adoption of a resolution by each member district school board of an intermediate district or other cooperative units under section 123A.24, subdivision 2, and the approval of the commissioner of education, a school district may include in its authority under this section a proportionate share of the long-term maintenance costs of the intermediate district or cooperative unit. The cooperative unit may issue bonds to finance the project costs or levy for the costs, using long‑term maintenance revenue transferred from member districts to make debt service payments or pay project costs. Authority under this subdivision is in addition to the authority for individual district projects under subdivision 1.

Subd. 4. Facilities plans. (a) To qualify for revenue under this section, a school district or intermediate district, not including a charter school, must have a ten-year facility plan adopted by the school board and approved by the commissioner. The plan must include provisions for implementing a health and safety program that complies with health, safety, and environmental regulations and best practices, including indoor air quality management.

(b) The district must annually update the plan, biennially submit a facility maintenance plan to the commissioner, and indicate whether the district will issue bonds to finance the plan or levy for the costs.

Subd. 5. Bond authorization. (a) A school district may issue general obligation bonds under this section to finance facilities plans approved by its board and the commissioner. Chapter 475, except sections 475.58 and 475.59, must be complied with. The authority to issue bonds under this section is in addition to any bonding authority authorized by this chapter or other law. The amount of bonding authority authorized under this section must be disregarded in calculating the bonding or net debt limits of this chapter, or any other law other than section 475.53, subdivision 4.

(b) At least 20 days before the earliest of solicitation of bids, the issuance of bonds, or the final certification of levies under subdivision 6, the district must publish notice of the intended projects, the amount of the bond issue, and the total amount of district indebtedness.

Subd. 6. Levy authorization. A district may levy for costs related to an approved plan under subdivision 4 as follows:

(1) if the district has indicated to the commissioner that bonds will be issued, the district may levy for the principal and interest payments on outstanding bonds issued under subdivision 5 after reduction for any aid receivable under subdivision 9; or

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(2) if the district has indicated to the commissioner that the plan will be funded through levy, the district may levy according to the schedule approved in the plan after reduction for any aid receivable under subdivision 9.

Subd. 7. Long-term facilities maintenance equalization revenue. For fiscal year 2017 and later, a district's long-term facilities maintenance equalization revenue equals the lesser of (1) $200 times the adjusted pupil units or (2) the district's revenue under subdivision 1.

Subd. 8. Long-term facilities maintenance equalization levy. For fiscal year 2017 and later, a district's long‑term facilities maintenance equalization levy equals the lesser of (1) its long-term facilities maintenance equalization revenue times the lesser of one or the ratio of its adjusted net tax capacity per adjusted pupil unit in the year preceding the year the levy is certified to 125 percent of the state average adjusted net tax capacity per adjusted pupil unit in the year preceding the year the levy is certified or (2) the greater of zero or the district's long-term facilities maintenance equalization revenue minus the amount of aid the district received for fiscal year 2015 under Minnesota Statutes 2014, section 123B.59, subdivision 6.

Subd. 9. Long-term facilities maintenance equalization aid. A district's long-term facilities maintenance equalization aid equals the difference between its long-term facilities maintenance equalization revenue and its long‑term facilities maintenance equalization levy.

Subd. 10. Long-term facilities maintenance unequalized levy. Each year, a district may levy an amount equal to the difference between its total long-term facilities maintenance revenue under subdivision 1 and its long-term facilities maintenance equalization revenue.

Subd. 11. Allowed uses for long-term facilities maintenance revenue. (a) A district may use revenue under this section for any of the following:

(1) deferred capital expenditures and maintenance projects necessary to prevent further erosion of facilities;

(2) increasing accessibility of school facilities; or

(3) health and safety capital projects under section 123B.57.

(b) A charter school may use revenue under this section for any purpose related to the school.

Subd. 12. Restrictions on long-term facilities maintenance revenue. Notwithstanding subdivision 11, long‑term facilities maintenance revenue may not be used:

(1) for the construction of new facilities, remodeling of existing facilities, or the purchase of portable classrooms;

(2) to finance a lease purchase agreement, installment purchase agreement, or other deferred payments agreement;

(3) for energy-efficiency projects under section 123B.65, for a building or property or part of a building or property used for postsecondary instruction or administration or for a purpose unrelated to elementary and secondary education; or

(4) for violence prevention and facility security, ergonomics, or public announcement systems and emergency communication devices.

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Subd. 13. Reserve account. The portion of long-term facilities maintenance revenue not recognized under subdivision 5, paragraph (c), must be maintained in a reserve account within the general fund.

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2017 and later.

Sec. 4. Minnesota Statutes 2014, section 126C.01, subdivision 2, is amended to read:

Subd. 2. Adjusted net tax capacity. (a) Except as provided in paragraph (b), "adjusted net tax capacity" means the net tax capacity of the taxable property of the district as adjusted by the commissioner of revenue under sections 127A.48 and 273.1325. The adjusted net tax capacity for any given calendar year must be used to compute levy limitations for levies certified in the succeeding calendar year and aid for the school year beginning in the second succeeding calendar year.

(b) For purposes of the long-term maintenance facilities equalization levy under section 123B.595, subdivision 8, "adjusted net tax capacity" means the value described in paragraph (a) reduced by 50 percent of the value of class 2a agricultural land determined under that paragraph before the application of the growth limit under section 127A.48, subdivision 7.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and later.

Sec. 5. Minnesota Statutes 2014, section 127A.33, is amended to read:

127A.33 SCHOOL ENDOWMENT FUND; APPORTIONMENT.

(a) The commissioner shall apportion the school endowment fund semiannually on the first Monday in March and September in each year, to districts whose schools have been in session at least nine months. The apportionment shall be in proportion to each district's adjusted average daily membership during the preceding year. The apportionment shall not be paid to a district for pupils for whom tuition is received by the district.

(b) For fiscal year 2016 and later, a district must reserve for school technology and telecommunications infrastructure, programs, and training an amount equal to the greater of (1) zero or (2) the total fiscal year apportionment per prior year pupil in adjusted average daily membership minus $31.62.

EFFECTIVE DATE. This section is effective July 1, 2015.

Sec. 6. COMMISSIONER OF EDUCATION; 1:1 DEVICE PROGRAM GUIDELINES.

The commissioner of education must research existing 1:1 device programs in Minnesota and across the country to determine best practices for Minnesota schools implementing 1:1 device programs. By February 15, 2016, the commissioner must develop and publish guidelines to ensure maximum effectiveness of 1:1 device programs and make a report on the research findings to the committees of the legislature with jurisdiction over kindergarten through grade 12 education.

Sec. 7. FAIR SCHOOL CRYSTAL TRANSITION.

Subdivision 1. Student enrollment. A student enrolled in the FAIR School Crystal during the 2014-2015 school year and a student accepted for enrollment during the 2015-2016 school year may continue to enroll in the FAIR School Crystal in any year through the 2019-2020 school year. For the 2015-2016 school year and later, other students may apply for enrollment under Minnesota Statutes, section 124D.03.

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Subd. 2. Compensatory revenue; literacy aid; alternative compensation revenue. For the 2015-2016 school year only, the Department of Education must calculate compensatory revenue, literacy aid, and alternative compensation revenue for the FAIR School Crystal based on the October 1, 2014, enrollment counts.

Subd. 3. Pupil transportation. The district may transport a pupil enrolled in the 2014-2015 school year and a pupil accepted for enrollment during the 2015-2016 school year to and from the FAIR School Crystal in succeeding school years regardless of the pupil's district of residence. Pupil transportation expenses under this section are reimbursable under Minnesota Statutes, section 124D.87.

EFFECTIVE DATE. This section is effective the day following the date on which the real and personal property of the FAIR School Crystal in Crystal is conveyed to Independent School District No. 281, Robbinsdale.

Sec. 8. FAIR SCHOOL DOWNTOWN TRANSITION.

Subdivision 1. Student enrollment. A student enrolled in the FAIR School downtown during the 2014-2015 school year and a student accepted for enrollment during the 2015-2016 school year may continue to enroll in the FAIR School downtown in any year through the 2018-2019 school year. For the 2015-2016 school year and later, other students may apply for enrollment under Minnesota Statutes, section 124D.03.

Subd. 2. Compensatory revenue; literacy aid; alternative compensation revenue. For the 2015-2016 school year only, the Department of Education must calculate compensatory revenue, literacy aid, and alternative compensation revenue for the FAIR School downtown based on the October 1, 2014, enrollment counts.

Subd. 3. Pupil transportation. The district may transport a pupil enrolled in the 2014-2015 school year and a pupil accepted for enrollment during the 2015-2016 school year to and from the FAIR School downtown in succeeding school years regardless of the pupil's district of residence. Pupil transportation expenses under this section are reimbursable under Minnesota Statutes, section 124D.87.

EFFECTIVE DATE. This section is effective the day following the date on which the real and personal property of the FAIR School downtown in Minneapolis is conveyed to Special School District No. 1, Minneapolis.

Sec. 9. INFORMATION TECHNOLOGY CERTIFICATION PARTNERSHIP.

Subdivision 1. Request for proposals. The commissioner of education shall issue a request for proposals no later than July 1, 2015, and award a contract no later than September 1, 2015, to a provider for the program under subdivision 3.

Subd. 2. Eligible schools. A school district, intermediate district, or charter school is eligible to participate in the program under this section, as long as funds are available.

Subd. 3. Program description; provider duties. (a) The provider must partner with eligible schools to make available a program to teach information technology skills and competencies that are essential for career and college readiness. By December 1, 2015, the provider must contact each eligible school and indicate how the school can access program services under this section.

(b) The provider shall recruit up to 200 schools to participate in the program as long as funds are available. The provider must engage schools on a first-come, first-served basis, except that no more than half of the total funds available may be used to deliver the program to schools located in the seven-county metropolitan area.

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(1) a research-based information technology curriculum;

(2) online access to the curriculum;

(3) instructional software for classroom and student use;

(4) training for teachers who will be using the curriculum or instructional software;

(5) industry-recognized certification of skills and competencies in a broad array of information technology‑related skill areas; and

(6) project management, deployment, and program support, including, but not limited to, integration with academic standards under Minnesota Statutes, section 120B.021 or 120B.022.

Subd. 4. Department support. The Department of Education must make support available to the provider, including acting as the primary liaison between schools and the provider and providing direction and oversight, consistent with the purposes of this section.

Subd. 5. Report required. By February 1, 2018, the provider and commissioner must jointly develop and deliver to the committees of the legislature with jurisdiction over kindergarten through grade 12 education, a summary report on program activities and outcomes, including a description of the number and location of participating schools and students, and the number and type of certifications earned by students.

Sec. 10. CANCELLATION OF PREVIOUS BIENNIUM APPROPRIATION.

The appropriation made by Laws 2014, chapter 312, article 16, section 16, subdivision 5, is canceled.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 11. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Long-term maintenance equalization aid. For long-term maintenance equalization aid under Minnesota Statutes, section 123B.595:

		$0	. . . . .	2016
		$63,440,000	. . . . .	2017

The 2017 appropriation includes $0 for 2016 and $63,440,000 for 2017.

Subd. 3. Debt service equalization. For debt service aid according to Minnesota Statutes, section 123B.53, subdivision 6:

		$20,349,000	. . . . .	2016
		$22,171,000	. . . . .	2017

The 2016 appropriation includes $2,295,000 for 2015 and $18,054,000 for 2016.

The 2017 appropriation includes $2,005,000 for 2016 and $20,166,000 for 2017.

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Subd. 4. Alternative facilities bonding aid. For alternative facilities bonding aid, according to Minnesota Statutes, section 123B.59, subdivision 1:

		$19,287,000	. . . . .	2016
		$1,928,000	. . . . .	2017

The 2016 appropriation includes $1,928,000 for 2015 and $17,359,000 for 2016.

The 2017 appropriation includes $1,928,000 for 2016 and $0 for 2017.

Subd. 5. Equity in telecommunications access. For equity in telecommunications access:

		$5,250,000	. . . . .	2016
		$5,250,000	. . . . .	2017

If the appropriation amount is insufficient, the commissioner shall reduce the reimbursement rate in Minnesota Statutes, section 125B.26, subdivisions 4 and 5, and the revenue for fiscal years 2016 and 2017 shall be prorated.

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

Subd. 6. Deferred maintenance aid. For deferred maintenance aid, according to Minnesota Statutes, section 123B.591, subdivision 4:

		$3,520,000	. . . . .	2016
		$345,000	. . . . .	2017

The 2016 appropriation includes $409,000 for 2015 and $3,111,000 for 2016.

The 2017 appropriation includes $345,000 for 2016 and $0 for 2017.

Subd. 7. Health and safety revenue. For health and safety aid according to Minnesota Statutes, section 123B.57, subdivision 5:

		$501,000	. . . . .	2016
		$48,000	. . . . .	2017

The 2016 appropriation includes $66,000 for 2015 and $435,000 for 2016.

The 2017 appropriation includes $48,000 for 2016 and $0 for 2017.

Subd. 8. Information technology certification partnership. For an information technology certification partnership:

		$500,000	. . . . .	2016
		$0	. . . . .	2017

This is a onetime appropriation. Any balance in the first year does not cancel but is available in the second year. Of this appropriation, five percent is for departmental costs related to providing support for the information technology certification partnership.

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Subd. 9. Northwest mobile manufacturing lab. For a grant to the Pine to Prairie Cooperative Center:

		$100,000	. . . . .	2016
		$100,000	. . . . .	2017

The grant must be used to establish a northwest mobile manufacturing lab program, containing two manufacturing labs and two welding labs, operated by Pine to Prairie Cooperative Center in collaboration with Northland Community and Technical College.

Any balance in the first year does not cancel but is available in the second year. The base for this program in fiscal year 2018 is $0.

Subd. 10. Anoka-Hennepin School District fabrication lab. For a grant to Independent School District No. 11, Anoka-Hennepin, to purchase equipment and software for a fabrication lab at its Secondary Technical Education Program in collaboration with Anoka Technical College and private program partners.

$100,000

. . . . .

2016

This is a onetime appropriation.

Subd. 11. Cancellation; IT certificates. All unspent funds, estimated at $299,000 for the information technology certificate partnership appropriation under Laws 2014, chapter 312, article 16, section 16, subdivision 5, are canceled to the general fund on June 30, 2015.

Sec. 12. REPEALER.

Minnesota Statutes 2014, sections 123B.59; and 123B.591, are repealed.

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2017 and later.

ARTICLE 5

NUTRITION AND ACCOUNTING

Section 1. Minnesota Statutes 2014, section 124D.1158, subdivision 3, is amended to read:

Subd. 3. Program reimbursement. Each school year, the state must reimburse each participating school
30 cents for each reduced-price breakfast, 55 cents for each fully paid breakfast served to students in grades ~~1 to~~
4 through 12, and $1.30 for each fully paid breakfast served to ~~a kindergarten student~~ students in prekindergarten through grade 3. A final claim for reimbursement shall be submitted to the commissioner not later than 60 days following the last day of the full month covered by the claim. Claims not submitted within 60 days following the last day of the full month covered by the claim shall not be eligible for reimbursement, unless otherwise authorized by the commissioner.

Sec. 2. Minnesota Statutes 2014, section 127A.41, subdivision 8, is amended to read:

Subd. 8. Appropriation transfers. (a) If a direct appropriation from the general fund to the department for any education aid or grant authorized in this chapter and chapters 122A, 123A, 123B, 124D, 125A, 126C, and 134, excluding appropriations under sections 124D.135, ~~124D.16,~~ 124D.20, 124D.22, 124D.52, 124D.531, 124D.55, and 124D.56, exceeds the amount required, the commissioner may transfer the excess to any education aid or grant appropriation that is insufficient. However, section 126C.20 applies to a deficiency in the direct appropriation for general education aid. Excess appropriations must be allocated proportionately among aids or grants that have

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insufficient appropriations. The commissioner of management and budget shall make the necessary transfers among appropriations according to the determinations of the commissioner. 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.

(b) Transfers for aids paid under section 127A.45, subdivisions 12, paragraph (a), 12a, paragraph (a), and 13, shall be made during the fiscal year after the fiscal year of the entitlement. Transfers for aids paid under section 127A.45, subdivisions 11, 12, paragraph (b), and 12a, paragraph (b), shall be made during the fiscal year of the appropriation.

EFFECTIVE DATE. This section is effective for fiscal year 2017 and later.

Sec. 3. Minnesota Statutes 2014, section 127A.41, subdivision 9, is amended to read:

Subd. 9. Appropriation transfers for community education programs. If a direct appropriation from the general fund to the Department of Education for an education aid or grant authorized under section 124D.135, ~~124D.16,~~ 124D.20, 124D.22, 124D.52, 124D.531, 124D.55, or 124D.56 exceeds the amount required, the commissioner of education may transfer the excess to any education aid or grant appropriation that is insufficiently funded under these sections. Excess appropriations shall be allocated proportionately among aids or grants that have insufficient appropriations. The commissioner of management and budget shall make the necessary transfers among appropriations according to the determinations of the commissioner of education. 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.

EFFECTIVE DATE. This section is effective for fiscal year 2017 and later.

Sec. 4. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. School lunch. For school lunch aid according to Minnesota Statutes, section 124D.111, and Code of Federal Regulations, title 7, section 210.17:

		$15,661,000	. . . . .	2016
		$16,791,000	. . . . .	2017

Subd. 3. School breakfast. For traditional school breakfast aid under Minnesota Statutes, section 124D.1158:

		$22,646,000	. . . . .	2016
		$26,340,000	. . . . .	2017

Subd. 4. Kindergarten milk. For kindergarten milk aid under Minnesota Statutes, section 124D.118:

		$942,000	. . . . .	2016
		$942,000	. . . . .	2017

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Subd. 5. Summer school service replacement aid. For summer food service replacement aid under Minnesota Statutes, section 124D.119:

		$150,000	. . . . .	2016
		$150,000	. . . . .	2017

ARTICLE 6

LIBRARIES

Section 1. Minnesota Statutes 2014, section 134.355, subdivision 5, is amended to read:

Subd. 5. Base aid distribution. ~~Five~~ Thirteen percent of the available aid funds shall be paid to each system as base aid for basic system services.

EFFECTIVE DATE. This section is effective July 1, 2015.

Sec. 2. Minnesota Statutes 2014, section 134.355, subdivision 8, is amended to read:

Subd. 8. Eligibility. A regional public library system may apply for regional library telecommunications aid on behalf of itself and member public libraries. The aid must be used for ~~data and video access maintenance, equipment, or installation of telecommunication lines.~~ connections and other eligible nonvoice related e-rate program category 1 services. Aid may be used for e-rate program category 2 services, if sufficient funds remain once category 1 needs are met in each funding year. To be eligible, a regional public library system must be officially designated by the commissioner of education as a regional public library system as defined in section 134.34, subdivision 3, and each of its participating cities and counties must meet local support levels defined in section 134.34, subdivision 1. A public library building that receives aid under this section must be open a minimum of 20 hours per week. Exceptions to the minimum open hours requirement may be granted by the Department of Education on request of the regional public library system for the following circumstances: short‑term closing for emergency maintenance and repairs following a natural disaster; in response to exceptional economic circumstances; building repair or maintenance that requires public services areas to be closed; or to adjust hours of public service to respond to documented seasonal use patterns.

Sec. 3. Minnesota Statutes 2014, section 134.355, subdivision 9, is amended to read:

Subd. 9. Telecommunications aid. An application for regional library telecommunications aid must, at a minimum, contain information to document the following:

(1) the connections are adequate and employ an open network architecture that will ensure interconnectivity and interoperability with school districts, postsecondary education, or other governmental agencies;

(2) that the connection is established through the most cost-effective means and that the regional library has explored and coordinated connections through school districts, postsecondary education, or other governmental agencies;

(3) that the regional library system ~~has~~ and all member libraries included in the application have filed an e-rate application; and

(4) other information, as determined by the commissioner of education, to ensure that connections are coordinated, efficient, and cost-effective, take advantage of discounts, and meet applicable state standards.

The library system may include costs associated with cooperative arrangements with postsecondary institutions, school districts, and other governmental agencies.

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Sec. 4. Minnesota Statutes 2014, section 134.355, subdivision 10, is amended to read:

Subd. 10. Award of funds. The commissioner of education shall develop an application and a reporting form and procedures for regional library telecommunications aid. Aid shall be based on actual costs of including, but not limited to, connections as documented in e-rate funding commitment decision letters and funds available for this purpose. The commissioner shall make payments directly to the regional public library system.

Sec. 5. DEPARTMENT OF EDUCATION; LIBRARY APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Regional library basic system support. For regional library basic system support aid under Minnesota Statutes, section 134.355:

		$14,920,000	. . . . .	2016
		$15,070,000	. . . . .	2017

The 2016 appropriation includes $1,357,000 for 2015 and $13,563,000 for 2016.

The 2017 appropriation includes $1,507,000 for 2016 and $13,563,000 for 2017.

Subd. 3. Multicounty, multitype library systems. For aid under Minnesota Statutes, sections 134.353 and 134.354, to multicounty, multitype library systems:

		$1,300,000	. . . . .	2016
		$1,300,000	. . . . .	2017

The 2016 appropriation includes $130,000 for 2015 and $1,170,000 for 2016.

The 2017 appropriation includes $130,000 for 2016 and $1,170,000 for 2017.

Subd. 4. Electronic library for Minnesota. For statewide licenses to online databases selected in cooperation with the Minnesota Office of Higher Education for school media centers, public libraries, state government agency libraries, and public or private college or university libraries:

		$900,000	. . . . .	2016
		$900,000	. . . . .	2017

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

Subd. 5. Regional library telecommunications aid. For regional library telecommunications aid under Minnesota Statutes, section 134.355:

		$2,300,000	. . . . .	2016
		$2,300,000	. . . . .	2017

The 2016 appropriation includes $230,000 for 2015 and $2,070,000 for 2016.

The 2017 appropriation includes $230,000 for 2016 and $2,070,000 for 2017.

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ARTICLE 7

EARLY CHILDHOOD EDUCATION

Section 1. Minnesota Statutes 2014, section 124D.162, is amended to read:

124D.162 KINDERGARTEN READINESS ASSESSMENT.

The commissioner of education may implement a kindergarten readiness assessment representative of incoming kindergartners. The assessment must be based on the Department of Education Kindergarten Readiness Assessment at kindergarten entrance study. The commissioner of education must provide a process for measuring the kindergarten readiness of incoming kindergartners. Districts must choose from a menu of valid and reliable measurement instruments provided by the Department of Education that are aligned to the state early childhood indicators of progress and kindergarten standards that are based on the Department of Education Kindergarten Readiness Study and meet the World's Best Workforce goal of measuring school readiness.

Sec. 2. Minnesota Statutes 2014, section 124D.165, subdivision 2, is amended to read:

Subd. 2. Family eligibility. (a) For a family to receive an early learning scholarship, parents or guardians must meet the following eligibility requirements:

(1) have a child ~~three or four~~ under the age of five years ~~of age~~ old on September 1 of the current school year, who has not yet started kindergarten and is not currently enrolled in a prekindergarten program under section 124D.171; and

(2) have income equal to or less than 185 percent of federal poverty level income in the current calendar year, or be able to document their child's current participation in the free and reduced-price lunch program or child and adult care food program, National School Lunch Act, United States Code, title 42, sections 1751 and 1766; the Food Distribution Program on Indian Reservations, Food and Nutrition Act, United States Code, title 7, sections 2011‑2036; Head Start under the federal Improving Head Start for School Readiness Act of 2007; Minnesota family investment program under chapter 256J; child care assistance programs under chapter 119B; the supplemental nutrition assistance program; or placement in foster care under section 260C.212.

(b) Notwithstanding the other provisions of this section, a parent under age 21 who is pursuing a high school or general education equivalency diploma is eligible for an early learning scholarship if the parent has a child age zero to five years old and meets the income eligibility guidelines in this subdivision.

(c) Any siblings between the ages zero to five years old of a child who has been awarded a scholarship under this section must be awarded a scholarship upon request, provided the sibling attends the same program as long as funds are available.

(d) A child who has received a scholarship under this section must continue to receive a scholarship each year until that child is eligible for kindergarten under section 120A.20 and as long as funds are available.

(e) Early learning scholarships may not be counted as earned income for the purposes of medical assistance under chapter 256B, MinnesotaCare under chapter 256L, Minnesota family investment program under chapter 256J, child care assistance programs under chapter 119B, or Head Start under the federal Improving Head Start for School Readiness Act of 2007.

EFFECTIVE DATE. This section is effective for fiscal year 2017 and later.

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Sec. 3. [124D.173] HELP ME GROW.

Subdivision 1. Purpose. The purpose of this section is to develop and implement a comprehensive, collaborative resource and referral system for children, prenatal through age eight, and their families.

Subd. 2. Establishment and administration. The commissioner of education shall provide funding and shall work collaboratively through interagency agreement with the commissioners of human services and health to implement this section and maintain annual affiliate status with the Help Me Grow National Center.

Subd. 3. Duties. (a) The Help Me Grow program shall facilitate collaboration across sectors, including child health, early learning and education, and family supports by:

(1) providing child health care provider outreach to support early detection, intervention, and knowledge about local resources;

(2) identifying and providing access to detection tools used to identify young children at risk for developmental and behavioral problems; and

(3) linking children and families to appropriate community-based services.

(b) The Help Me Grow program shall provide community outreach that includes support for, and participation in, the Help Me Grow system, including disseminating information on the system and compiling and maintaining a resource directory that includes, but is not limited to:

(1) primary and specialty medical care providers;

(2) early childhood education and child care programs;

(3) developmental disabilities assessment and intervention programs;

(4) mental health services;

(5) family and social support programs;

(6) child advocacy and legal services;

(7) public health services and resources; and

(8) other appropriate early childhood information.

(c) The Help Me Grow program shall develop a centralized access point for parents and professionals to obtain information, resources, and other support services.

(d) The Help Me Grow program shall collect data to increase understanding of all aspects of the current and ongoing system under this section, including identification of gaps in service, barriers to finding and receiving appropriate service, and lack of resources.

Subd. 4. Review. The Department of Education shall annually review the following:

(1) outcomes achieved by this system;

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(2) alignment with overall early childhood goals and objectives; and

(3) impacts on young children.

Sec. 4. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. School readiness. For revenue for school readiness programs under Minnesota Statutes, sections 124D.15 and 124D.16:

		$12,170,000	. . . . .	2016
		$12,170,000	. . . . .	2017

The 2016 appropriation includes $1,217,000 for 2015 and $10,953,000 for 2016.

The 2017 appropriation includes $1,217,000 for 2016 and $10,953,000 for 2017.

Subd. 3. Early childhood family education aid. For early childhood family education aid under Minnesota Statutes, section 124D.135:

		$28,046,000	. . . . .	2016
		$29,095,000	. . . . .	2017

The 2016 appropriation includes $2,713,000 for 2015 and $25,333,000 for 2016.

The 2017 appropriation includes $2,814,000 for 2016 and $26,281,000 for 2017.

Subd. 4. Developmental screening aid. For developmental screening aid under Minnesota Statutes, sections 121A.17 and 121A.19:

		$3,363,000	. . . . .	2016
		$3,369,000	. . . . .	2017

The 2016 appropriation includes $337,000 for 2015 and $3,021,000 for 2016.

The 2017 appropriation includes $335,000 for 2016 and $3,017,000 for 2017.

Subd. 5. Head Start program. For Head Start programs under Minnesota Statutes, section 119A.52:

		$20,100,000	. . . . .	2016
		$39,542,000	. . . . .	2017

Subd. 6. Educate parents partnership. For the educate parents partnership under Minnesota Statutes, section 124D.129:

		$49,000	. . . . .	2016
		$49,000	. . . . .	2017

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2852

Subd. 7. Kindergarten entrance assessment initiative and intervention program. For the kindergarten entrance assessment initiative and intervention program under Minnesota Statutes, section 124D.162:

		$1,881,000	. . . . .	2016
		$1,881,000	. . . . .	2017

Subd. 8. Early learning scholarships. For the early learning scholarship program under Minnesota Statutes, section 124D.165:

		$40,384,000	. . . . .	2016
		$50,384,000	. . . . .	2017

Up to $950,000 each year is for administration of this program.

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

Subd. 9. Parent-child home program. For a grant to the parent-child home program:

		$350,000	. . . . .	2016
		$350,000	. . . . .	2017

The grant must be used for an evidence-based and research-validated early childhood literacy and school readiness program for children ages 16 months to four years at its existing suburban program location.

Subd. 10. Northside Achievement Zone. For a grant to the Northside Achievement Zone.

		$1,200,000	. . . . .	2016
		$1,200,000	. . . . .	2017

Funds appropriated in this section are to reduce multigenerational poverty and the educational achievement gap through increased enrollment of families within the zone, and may be used for Northside Achievement Zone programming and services consistent with federal Promise Neighborhood program agreements and requirements.

Subd. 11. St. Paul Promise Neighborhood. For a grant to the St. Paul Promise Neighborhood.

		$1,200,000	. . . . .	2016
		$1,200,000	. . . . .	2017

Funds appropriated in this section are to reduce multigenerational poverty and the educational achievement gap through increased enrollment of families within the zone, and may be used for St. Paul Promise Neighborhood programming and services consistent with federal Promise Neighborhood program agreements and requirements.

ARTICLE 8

PREVENTION

Section 1. APPROPRIATION.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

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Subd. 2. Community education aid. For community education aid under Minnesota Statutes, section 124D.20:

		$788,000	. . . . .	2016
		$554,000	. . . . .	2017

The 2016 appropriation includes $107,000 for 2015 and $681,000 for 2016.

The 2017 appropriation includes $75,000 for 2016 and $479,000 for 2017.

Subd. 3. Adults with disabilities program aid. For adults with disabilities programs under Minnesota Statutes, section 124D.56:

		$710,000	. . . . .	2016
		$710,000	. . . . .	2017

The 2016 appropriation includes $71,000 for 2015 and $639,000 for 2016.

The 2017 appropriation includes $71,000 for 2016 and $639,000 for 2017.

Subd. 4. Hearing-impaired adults. For programs for hearing-impaired adults under Minnesota Statutes, section 124D.57:

		$70,000	. . . . .	2016
		$70,000	. . . . .	2017

Subd. 5. School-age care revenue. For extended day aid under Minnesota Statutes, section 124D.22:

		$1,000	. . . . .	2016
		$1,000	. . . . .	2017

The 2016 appropriation includes $0 for 2015 and $1,000 for 2016.

The 2017 appropriation includes $0 for 2016 and $1,000 for 2017.

ARTICLE 9

SELF-SUFFICIENCY AND LIFELONG LEARNING

Section 1. APPROPRIATIONS.

Subdivision 1. Department of Education. The sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Adult basic education aid. For adult basic education aid under Minnesota Statutes, section 124D.531:

		$49,118,000	. . . . .	2016
		$50,592,000	. . . . .	2017

The 2016 appropriation includes $4,782,000 for 2015 and $44,336,000 for 2016.

The 2017 appropriation includes $4,926,000 for 2016 and $45,666,000 for 2017.

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Subd. 3. GED tests. For payment of 60 percent of the costs of GED tests under Minnesota Statutes, section 124D.55:

		$125,000	. . . . .	2016
		$125,000	. . . . .	2017

ARTICLE 10

STATE AGENCIES

Section 1. Minnesota Statutes 2014, section 122A.18, subdivision 8, is amended to read:

Subd. 8. Background checks. (a) The Board of Teaching and the commissioner of education must request a criminal history background check from the superintendent of the Bureau of Criminal Apprehension on all applicants for initial licenses under their jurisdiction. An application for a license under this section must be accompanied by:

(1) an executed criminal history consent form, including fingerprints; and

(2) ~~a money order or cashier's check payable to the Bureau of Criminal Apprehension for the fee for conducting the~~ payment to conduct a criminal history background check. Proceeds from this fee are annually appropriated to the commissioner for costs associated with processing licensure applications.

(b) The superintendent of the Bureau of Criminal Apprehension shall perform the background check required under paragraph (a) by retrieving criminal history data as defined in section 13.87 and shall also conduct a search of the national criminal records repository. The superintendent is authorized to exchange fingerprints with the Federal Bureau of Investigation for purposes of the criminal history check. The superintendent shall recover the cost to the bureau of a background check through the fee charged to the applicant under paragraph (a).

(c) The Board of Teaching or the commissioner of education may issue a license pending completion of a background check under this subdivision, but must notify the individual that the individual's license may be revoked based on the result of the background check.

Sec. 2. RULEMAKING AUTHORITY.

(a) The Board of Teaching shall adopt rules for a process for approving certificates of advanced professional study. A certificate of advanced professional study is a credential available only to a teacher with a full license in at least one discipline that allows for teaching without further waiver or variance when a licensure program in the discipline does not exist or when a teacher with a full license in the discipline cannot be found. The certificate of advanced professional study must:

(1) have fewer requirements than the full license in the discipline;

(2) set the specific qualifications required to attain it; and

(3) maintain professional standards for teaching in that discipline.

(b) The rules adopted under paragraph (a) must limit certificates of advanced professional study to:

(1) disciplines in which at least one geographic area of the state has a demonstrated shortage of fully licensed teachers; and

(2) emerging disciplines where full licenses or licensure programs do not exist.

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2855

Sec. 3. APPROPRIATIONS; DEPARTMENT OF EDUCATION.

Subdivision 1. Department of Education. Unless otherwise indicated, the sums indicated in this section are appropriated from the general fund to the Department of Education for the fiscal years designated.

Subd. 2. Department. (a) For the Department of Education:

		$31,294,000	. . . . .	2016
		$31,121,000	. . . . .	2017

Of these amounts:

(1) $260,000 each year is for the Minnesota Children's Museum;

(2) $41,000 each year is for the Minnesota Academy of Science;

(3) $50,000 each year is for the Duluth Children's Museum;

(4) $1,020,000 in fiscal year 2016 and $718,000 in fiscal year 2017 are for the Board of Teaching;

(5) $228,000 in fiscal year 2016 and $231,000 in fiscal year 2017 are for the Board of School Administrators;

(6) $25,000 each year is for administration of the Innovative Education Pilot under Laws 2012, chapter 263, section 1;

(7) $7,000,000 each year is for Regional Centers of Excellence under Minnesota Statutes, section 120B.115;

(8) $500,000 each year is for the School Safety Technical Assistance Center under Minnesota Statutes, section 127A.052;

(9) $1,000,000 each year is for activities related to the statewide Help Me Grow program under Minnesota Statutes, section 124D.173;

(10) $250,000 each year is for the School Finance Division to enhance financial data analysis; and

(11) $23,000 each year is for collecting data on the number of deaths and hospitalizations for students who participate in travel abroad programs.

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

(d) The expenditures of federal grants and aids as shown in the biennial budget document and its supplements are approved and appropriated and shall be spent as indicated.

(e) This appropriation includes funds for information technology project services and support subject to the provisions of Minnesota Statutes, section 16E.0466. Any ongoing information technology costs will be incorporated into the service level agreement and will be paid to the Office of MN.IT Services by the Department of Education under the rates and mechanism specified in that agreement.

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Sec. 4. APPROPRIATIONS; MINNESOTA STATE ACADEMIES.

The sums indicated in this section are appropriated from the general fund to the Minnesota State Academies for the Deaf and the Blind for the fiscal years designated:

		$12,853,000	. . . . .	2016
		$12,819,000	. . . . .	2017

Of the amount appropriated, $708,000 in fiscal year 2016 and $490,000 in fiscal year 2017 are for technology enhancements and may be used for: (1) computer hardware; (2) computer software; (3) connectivity, communications, and infrastructure; (4) assistive technology; (5) access to electronic books and other online materials, licenses, and subscriptions; and (6) technology staff and training costs.

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

The base appropriation for the Minnesota State Academies for the Deaf and Blind in fiscal year 2018 and later is $12,804,000.

Sec. 5. APPROPRIATIONS; PERPICH CENTER FOR ARTS EDUCATION.

The sums in this section are appropriated from the general fund to the Perpich Center for Arts Education for the fiscal years designated:

		$7,422,000	. . . . .	2016
		$7,523,000	. . . . .	2017

Of the amount appropriated, $500,000 in fiscal year 2016 and $500,000 in fiscal year 2017 are for upgrading classrooms, public spaces, and performance areas within the high school and the professional development center on the Golden Valley campus.

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

The base appropriation for the Perpich Center for Arts Education in fiscal year 2018 and later is $7,123,000."

Amend the title as follows:

Page 1, line 4, delete "standards and assessments, charter schools,"

Correct the title numbers accordingly

Signed:

Mary Murphy

Lyndon Carlson

Murphy, M., moved that the Minority Report from the Committee on Ways and Means relating to H. F. No. 844 be substituted for the Majority Report and that the Minority Report be now adopted.

A roll call was requested and properly seconded.

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2857

LAY ON THE TABLE

Peppin moved that the Minority Report from the Committee on Ways and Means relating to H. F. No. 844 be laid on the table.

A roll call was requested and properly seconded.

The question was taken on the Peppin motion and the roll was called. There were 69 yeas and 59 nays as follows:

Those who voted in the affirmative were:

The Majority Report from the Committee on Ways and Means relating to H. F. No. 844 was adopted.

Davids from the Committee on Taxes to which was referred:

H. F. No. 848, A bill for an act relating to taxation; providing for tax reductions to middle class families; closing loopholes; providing tax fairness; appropriating money; amending Minnesota Statutes 2014, sections 16D.08, subdivision 2; 270.80, subdivisions 1, 2, 3, 4, by adding subdivisions; 270.81, subdivisions 1, 3, by adding a subdivision; 270.82; 270.83, subdivisions 1, 2; 270.84; 270.86; 270.87; 270C.03, subdivision 1; 270C.33, subdivision 6; 272.02, subdivision 9; 275.025, subdivisions 1, 4; 289A.60, by adding a subdivision; 290.01, subdivision 4a, by adding a subdivision; 290.067, subdivisions 1, 2, 2b, 3; 290.0671, subdivision 1; 290.0674, subdivision 2, by adding a subdivision; 290.068, subdivision 2; 290.17, subdivision 4; 290.191, subdivision 5; 290.21, subdivision 4; 290A.03, subdivision 13; 290B.03, subdivision 1; 290B.04, subdivision 1; 291.03, by adding a subdivision; 296A.01, subdivision 12; 296A.08, subdivision 2; 297A.815, subdivision 3; 297A.94; 297H.04, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 270C; repealing Minnesota Statutes 2014, sections 270.81, subdivision 4; 270.83, subdivision 3; 290.067, subdivision 2a; Minnesota Rules, parts 8106.0100, subparts 1, 2, 3, 4, 5, 6, 7, 8, 10, 12, 13, 14, 17, 17a, 18, 19, 20, 21; 8106.0300, subparts 1, 3; 8106.0400; 8106.0500; 8106.0600; 8106.0700; 8106.0800; 8106.9900.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2859

"ARTICLE 1

INCOME AND FRANCHISE TAXES

Section 1. [16A.728] LONG-TERM CARE SAVINGS PLAN.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Long-term care expense" means the cost of long-term care in a long-term care facility and the cost of care provided in a person's home when the person receiving the care is unable to perform multiple basic life functions independently.

(c) "Long-term care insurance premiums" means premiums paid for a long-term care insurance policy, as defined in section 290.0672.

(d) "Participant" means an individual who has entered into a participation agreement or established an account under the plan with a financial institution with which the commissioner has an agreement under subdivision 2, paragraph (a).

(e) "Qualified individual" means a person who:

(1) incurred long-term care expenses during the taxable year; or

(2) turned 50 years of age or older during the taxable year and who made payments for long-term care insurance premiums during the taxable year.

Subd. 2. Commissioner duties; participation agreement. (a) The Minnesota long-term care savings plan is created. The commissioner shall select the administrator of the plan. If the commissioner receives no acceptable responses to a request for proposals for an administrator for the plan by November 1, 2015, the commissioner may enter into agreements with state chartered or federally chartered banks, savings banks, savings associations, trust companies, or credit unions, or a subsidiary of such an entity, to receive contributions in the form of account deposits. The commissioner may adopt and promulgate rules and regulations to carry out the duties under this subdivision.

(b) If an administrator is selected, participants must enter into participation agreements with the commissioner, and if an administrator is not selected, participants may make contributions to an account with a financial institution with which the commissioner has an agreement under paragraph (a). A lifetime maximum of $200,000 may be contributed by a participant. The commissioner must adjust the dollar limitation annually for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.

(c) Each participation agreement must provide that the agreement may be canceled or transferred to a spouse upon the terms and conditions set by the commissioner. If the participation agreement is canceled or the Minnesota long-term care savings plan is terminated, a participant may receive the principal amount of all contributions made by the participant or on behalf of the participant plus the actual investment earnings on the contributions, less any losses incurred on the contributions. A participant must not receive more than the fair market value of the account under the participation agreement on the applicable liquidation date.

(d) A participant retains ownership of all contributions up to the date of use.

(e) State income tax treatment of contributions and investment earnings is as provided in section 290.01, subdivisions 19a and 19b.

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2860

Subd. 3. Long-term care savings plan trust. If an administrator for the Minnesota long-term care savings plan is selected under subdivision 2, the Minnesota long-term care savings plan trust is created. The commissioner is the trustee of the trust and is responsible for the administration, operation, and maintenance of the plan and has all the powers necessary to carry out and effectuate the purposes, objectives, and provisions of the Minnesota long-term care savings plan for the administration, operation, and maintenance of the trust, except that the investment officer has fiduciary responsibility to make all decisions regarding the investment of the money in the trust, including the selection of all investment options and the approval of all fees and other costs charged to trust assets, except costs for administration, operation, and maintenance of the trust, under the directions, guidelines, and policies established by the State Board of Investment. The commissioner may adopt and promulgate rules for the efficient administration, operation, and maintenance of the trust. The commissioner must not adopt and promulgate rules and regulations that in any way interfere with the fiduciary responsibility of the state investment officer to make all decisions regarding the investment of money in the trust. The State Board of Investment may adopt and promulgate rules and regulations to provide for the prudent investment of the assets of the trust. The State Board of Investment or its designee may select and enter into agreements with individuals and entities to provide investment advice and management of the assets held by the trust, establish investment guidelines, objectives, and performance standards for the assets held by the trust, and approve any fees, commissions, and expenses which directly or indirectly affect the return on assets.

Subd. 4. Authorized withdrawals. A qualified individual may make withdrawals as a participant in the Minnesota long-term care savings plan to pay or reimburse long-term care expenses or long-term care insurance premiums. Any participant who is not a qualified individual or who makes a withdrawal for any reason other than a transfer of funds to a spouse, payment of long-term care expenses or long-term care insurance premiums, or the death of the participant is subject to a ten percent penalty on the amount withdrawn. The commissioner shall collect the penalty.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2014, section 62V.05, subdivision 5, is amended to read:

Subd. 5. Health carrier and health plan requirements; participation. (a) Beginning January 1, 2015, the board may establish certification requirements for health carriers and health plans to be offered through MNsure that satisfy federal requirements under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(b) Paragraph (a) does not apply if by June 1, 2013, the legislature enacts regulatory requirements that:

(1) apply uniformly to all health carriers and health plans in the individual market;

(2) apply uniformly to all health carriers and health plans in the small group market; and

(3) satisfy minimum federal certification requirements under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(c) In accordance with section 1311(e) of the Affordable Care Act, Public Law 111-148, the board shall establish policies and procedures for certification and selection of health plans to be offered as qualified health plans through MNsure. The board shall certify and select a health plan as a qualified health plan to be offered through MNsure, if:

(1) the health plan meets the minimum certification requirements established in paragraph (a) or the market regulatory requirements in paragraph (b);

(2) the board determines that making the health plan available through MNsure is in the interest of qualified individuals and qualified employers;

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(3) the health carrier applying to offer the health plan through MNsure also applies to offer health plans at each actuarial value level and service area that the health carrier currently offers in the individual and small group markets; and

(4) the health carrier does not apply to offer health plans in the individual and small group markets through MNsure under a separate license of a parent organization or holding company under section 60D.15, that is different from what the health carrier offers in the individual and small group markets outside MNsure.

(d) In determining the interests of qualified individuals and employers under paragraph (c), clause (2), the board may not exclude a health plan for any reason specified under section 1311(e)(1)(B) of the Affordable Care Act, Public Law 111-148. The board may consider:

(1) affordability;

(2) quality and value of health plans;

(3) promotion of prevention and wellness;

(4) promotion of initiatives to reduce health disparities;

(5) market stability and adverse selection;

(6) meaningful choices and access;

(7) alignment and coordination with state agency and private sector purchasing strategies and payment reform efforts; and

(8) other criteria that the board determines appropriate.

(e) For qualified health plans offered through MNsure on or after January 1, 2015, the board shall establish policies and procedures under paragraphs (c) and (d) for selection of health plans to be offered as qualified health plans through MNsure by February 1 of each year, beginning February 1, 2014. The board shall consistently and uniformly apply all policies and procedures and any requirements, standards, or criteria to all health carriers and health plans. For any policies, procedures, requirements, standards, or criteria that are defined as rules under section 14.02, subdivision 4, the board may use the process described in subdivision 9.

(f) For 2014, the board shall not have the power to select health carriers and health plans for participation in MNsure. The board shall permit all health plans that meet the certification requirements under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148, to be offered through MNsure.

(g) Under this subdivision, the board shall have the power to verify that health carriers and health plans are properly certified to be eligible for participation in MNsure.

(h) The board has the authority to decertify health carriers and health plans that fail to maintain compliance with section 1311(c)(1) of the Affordable Care Act, Public Law 111-148.

(i) For qualified health plans offered through MNsure beginning January 1, 2015, health carriers must use the most current addendum for Indian health care providers approved by the Centers for Medicare and Medicaid Services and the tribes as part of their contracts with Indian health care providers. MNsure shall comply with all future changes in federal law with regard to health coverage for the tribes.

Journal of the House - 45th Day - Thursday, April 23, 2015 - Top of Page 2862

(j) Health carriers offering coverage through MNsure shall provide a premium advance to qualified individuals eligible for a state tax credit under section 290.0661, equal to the amount of the tax credit calculated under that section. Individuals receiving a premium advance under this paragraph must pay to the health carrier the full amount of the premium advance by April 15 of the year following the coverage year for which the premium advance was provided. The MNsure eligibility system must automatically notify health carriers:

(1) if an enrollee is eligible for a state tax credit under section 290.0661; and

(2) the amount of the applicable state tax credit.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 3. Minnesota Statutes 2014, section 116J.8737, subdivision 5, is amended to read:

Subd. 5. Credit allowed. (a)(1) A qualified investor or qualified fund is eligible for a credit equal to 25 percent of the qualified investment in a qualified small business. Investments made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The commissioner must not allocate more than $15,000,000 in credits to qualified investors or qualified funds for taxable years beginning after December 31, 2013, and before January 1, ~~2017~~ 2015, and must not allocate more than $18,000,000 in credits to qualified investors or qualified funds for taxable years beginning after December 31, 2014, and before January 1, 2019; and

(2) for taxable years beginning after December 31, 2014, and before January 1, 2017, ~~$7,500,000~~ 50 percent of the amount available for the taxable year must be allocated to credits for qualifying investments in qualified greater Minnesota businesses and minority- or women-owned qualified small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for qualifying investments in greater Minnesota businesses and minority- or women-owned qualified small businesses in Minnesota that is not allocated by September 30 of the taxable year is available for allocation to other credit applications beginning on October 1. Any portion of a taxable year's credits that is not allocated by the commissioner does not cancel and may be carried forward to subsequent taxable years until all credits have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits for a taxable year to a qualified investor for the investor's cumulative qualified investments as an individual qualified investor and as an investor in a qualified fund; for married couples filing joint returns the maximum is $250,000, and for all other filers the maximum is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an individual qualified investor or as an investor in a qualified fund if, at the time the investment is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the investor's family, owns, controls, or holds the power to vote 20 percent or more of the outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a credit under this section. For a married couple filing a joint return, the limitations in this paragraph apply collectively to the investor and spouse. For purposes of determining the ownership interest of an investor under this paragraph, the rules under section 267(c) and 267(e) of the Internal Revenue Code apply.

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(d) Applications for tax credits for 2010 must be made available on the department's Web site by September 1, 2010, and the department must begin accepting applications by September 1, 2010. Applications for subsequent years must be made available by November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. Tax credits must be allocated to qualified investors or qualified funds in the order that the tax credit request applications are filed with the department. The commissioner must approve or reject tax credit request applications within 15 days of receiving the application. The investment specified in the application must be made within 60 days of the allocation of the credits. If the investment is not made within 60 days, the credit allocation is canceled and available for reallocation. A qualified investor or qualified fund that fails to invest as specified in the application, within 60 days of allocation of the credits, must notify the commissioner of the failure to invest within five business days of the expiration of the 60-day investment period.

(f) All tax credit request applications filed with the department on the same day must be treated as having been filed contemporaneously. If two or more qualified investors or qualified funds file tax credit request applications on the same day, and the aggregate amount of credit allocation claims exceeds the aggregate limit of credits under this section or the lesser amount of credits that remain unallocated on that day, then the credits must be allocated among the qualified investors or qualified funds who filed on that day on a pro rata basis with respect to the amounts claimed. The pro rata allocation for any one qualified investor or qualified fund is the product obtained by multiplying a fraction, the numerator of which is the amount of the credit allocation claim filed on behalf of a qualified investor and the denominator of which is the total of all credit allocation claims filed on behalf of all applicants on that day, by the amount of credits that remain unallocated on that day for the taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their behalf, must notify the commissioner when an investment for which credits were allocated has been made, and the taxable year in which the investment was made. A qualified fund must also provide the commissioner with a statement indicating the amount invested by each investor in the qualified fund based on each investor's share of the assets of the qualified fund at the time of the qualified investment. After receiving notification that the investment was made, the commissioner must issue credit certificates for the taxable year in which the investment was made to the qualified investor or, for an investment made by a qualified fund, to each qualified investor who is an investor in the fund. The certificate must state that the credit is subject to revocation if the qualified investor or qualified fund does not hold the investment in the qualified small business for at least three years, consisting of the calendar year in which the investment was made and the two following years. The three-year holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange before the end of the three‑year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates issued under this section.

EFFECTIVE DATE. This section is effective the day following final enactment for taxable years beginning after December 31, 2014.

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Sec. 4. Minnesota Statutes 2014, section 116J.8737, subdivision 12, is amended to read:

Subd. 12. Sunset. This section expires for taxable years beginning after December 31, ~~2016~~ 2018, except that reporting requirements under subdivision 6 and revocation of credits under subdivision 7 remain in effect through ~~2018~~ 2020 for qualified investors and qualified funds, and through ~~2020~~ 2022 for qualified small businesses, reporting requirements under subdivision 9 remain in effect through ~~2021~~ 2023, and the appropriation in subdivision 11 remains in effect through ~~2020~~ 2022.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 5. [116J.8739] TECHNOLOGY CORPORATE TAX BENEFIT REFUND PROGRAM.

Subdivision 1. Program established. The commissioner shall establish a corporate tax benefit refund program to allow new or expanding technology and biotechnology companies in this state with unused net operating loss carryovers under section 290.095 to surrender those tax benefits for refunds. The refunds must be used to assist in the funding of costs incurred by the new or expanding technology and biotechnology company.

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Biotechnology" means the continually expanding body of fundamental knowledge about the functioning of biological systems from the macro level to the molecular and subatomic levels, as well as novel products, services, technologies, and subtechnologies developed as a result of insights gained from research advances that add to that body of fundamental knowledge.

(1) has its headquarters or base of operations in this state;

(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and

(3) is engaged in the research, development, production, or provision of biotechnology to develop or provide products or processes for specific commercial or public purposes including, but not limited to, medical, pharmaceutical, nutritional, and other health-related purposes, agricultural purposes, and environmental purposes.

(d) "Full-time employee" means a person employed by a new or expanding technology or biotechnology company for consideration for at least 35 hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment and whose wages are subject to withholding under section 290.92; or who is a partner of a new or expanding technology or biotechnology company who works for the partnership for at least 35 hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or any combination of them, is subject to the payment of estimated taxes, under section 289A.25. To qualify as a full-time employee, an employee must also receive from the new or expanding technology or biotechnology company group health benefits under a health plan as defined under section 62A.011, subdivision 3, or under a self-insured employee welfare benefit plan as defined in United States Code, title 29, section 1002. Full‑time employee excludes any person who works as an independent contractor or on a consulting basis for the new or expanding technology or biotechnology company.

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(e) "New or expanding" means a technology or biotechnology company that:

(1) on June 30 of the year in which the corporation files an application for surrender of tax benefits under this section and on the date of the grant of the corporate tax benefit certificate, has fewer than 250 employees in the United States;

(2) on June 30 of the year in which the corporation files the application, has at least one full-time employee working in this state if the company has been incorporated for less than three years, has at least five full-time employees working in this state if the company has been incorporated for more than three years but fewer than five years, and has at least ten full-time employees working in this state if the company has been incorporated for more than five years; and

(3) on the date of the grant of the corporate tax benefit certificate, the corporation has the number of full-time employees in this state required by clause (2).

(f) "Technology company" means a corporation that:

(1) has its headquarters or base of operations in this state;

(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and

(3) employs some combination of the following: highly educated or trained managers and workers, or both, employed in this state who use sophisticated scientific research service or production equipment, processes, or knowledge to discover, develop, test, transfer, or manufacture a product or service.

Subd. 3. Allocation of tax benefits; annual limit. (a) The commissioner, in cooperation with the commissioner of revenue, shall review and approve applications by new or expanding technology and biotechnology companies with unused but otherwise allowable net operating loss carryovers under section 290.095 to surrender those tax benefits for the grant of a refund. The amount of the qualifying tax benefit is the amount of the net operating loss carryover multiplied by the new or expanding technology or biotechnology company's anticipated apportionment percentage, as determined under section 290.191, for the taxable year in which the benefit is surrendered and then multiplied by the corporate franchise tax rate under section 290.06, subdivision 1.

(b) The commissioner must approve the grant of no more than $15,000,000 of tax benefit refunds in each fiscal year. If the total amount of tax benefits requested to be surrendered by approved applicants exceeds $15,000,000 for a fiscal year, the commissioner, in cooperation with the commissioner of revenue, must not approve the grant of more than $15,000,000 of tax benefits for that fiscal year and shall allocate the grant of tax benefit refunds by approved corporations using the following method:

(1) an eligible applicant with $250,000 or less of qualifying tax benefits may surrender the entire amount of its tax benefits;

(2) an eligible applicant with more than $250,000 of qualifying tax benefits may surrender a minimum of $250,000 of its tax benefits; and

(3) an eligible applicant with more than $250,000 of qualifying tax benefits may surrender additional tax benefits determined by multiplying the applicant's tax benefits, less the minimum tax benefits that corporation is authorized to surrender under clause (2), by a fraction, the numerator of which is the total amount of tax benefit grants that the commissioner is authorized to approve less the total amount of tax benefits approved under clauses (1) and (2), and the denominator of which is the total amount of tax benefits requested to be surrendered by all eligible applicants less the total amount of tax benefit grants approved under clauses (1) and (2).

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(c) If the total amount of tax benefit grants that would be authorized using the method under paragraph (b) exceeds $15,000,000 for a fiscal year, then the commissioner, in cooperation with the commissioner of revenue, shall limit the total amount of tax benefit grants authorized to $15,000,000 by applying the above method on an apportioned basis.

Subd. 4. Qualifying tax benefits and corporations. (a) For purposes of this section, qualifying tax benefits include an eligible applicant's unused but otherwise allowable carryover of net operating losses multiplied by the applicant's anticipated allocation factor as determined under section 290.191 for the taxable year in which the benefit is surrendered and subsequently multiplied by the corporation franchise tax rate under section 290.06, subdivision 1. An eligible applicant's qualifying tax benefits are limited to net operating losses that the applicant requests to surrender in its application to the authority and must not, in total, exceed the maximum amount of tax benefits that the applicant is eligible to surrender. No application for a corporate tax benefit certificate must be approved in which the new or expanding technology or biotechnology company:

(1) has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board; or

(2) is directly or indirectly at least 50 percent owned or controlled by another corporation that has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board or is part of a consolidated group of affiliated corporations, as filed for federal income tax purposes, that in the aggregate has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its combined financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board.

(b) The maximum lifetime value of surrendered tax benefits that a corporation may surrender under the program is $5,000,000.

Subd. 5. Recapture of tax benefits. The commissioner, in consultation with the commissioner of revenue, shall establish procedures for the recapture of all of, or a portion of, the amount of a grant of a corporate tax benefit certificate from the new or expanding technology or biotechnology company receiving a grant for a refund of surrendered tax benefits under this section if the taxpayer fails to use the refund as required by this section or fails to maintain a headquarters or a base of operation in this state during the five years following receipt of the refund, except if the failure to maintain a headquarters or a base of operation in this state is due to the liquidation of the new or expanding technology or biotechnology company.

Subd. 6. Approval of acquisition of tax benefits; purposes; required agreement. (a) The commissioner must not issue a corporate tax benefit certificate unless the applicant certifies that as of the date of the grant of the certificate that it is operating as a new or expanding technology or biotechnology company in this state and does not intend to cease operating as a new or expanding technology or biotechnology company in this state.

(b) The recipient of a grant under this section must use the refund to pay expenses incurred for the operation of the new or expanding technology or biotechnology company in this state including, but not limited to, the expenses of fixed assets, such as the construction and acquisition and development of real estate, materials, start-up, tenant fit‑out, working capital, salaries, research and development expenditures, and any other expenses determined by the commissioner to be necessary to carry out technology or biotechnology company operations in this state.

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(c) The commissioner shall enter into a written agreement with the new or expanding technology or biotechnology company specifying the terms and conditions of the grant of the certificate of tax benefits. The written agreement may require the maintenance by the new or expanding technology or biotechnology company of a headquarters or a base of operation in this state.

EFFECTIVE DATE. This section is effective the day following final enactment and applies to taxable years beginning after December 31, 2015.

Sec. 6. Minnesota Statutes 2014, section 289A.02, subdivision 7, as amended by Laws 2015, chapter 1, section 1, is amended to read:

Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through ~~December 31, 2014~~ April 1, 2015.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 7. Minnesota Statutes 2014, section 289A.12, is amended by adding a subdivision to read:

Subd. 19. Charity health care services. (a) A medical professional, dentist, or chiropractor claiming the subtraction under section 290.01, subdivision 19b, clause (23), must file an informational report with the commissioner documenting the value of charity health care services that the individual provided during the taxable year. A business that employs a medical professional, dentist, or chiropractor may also file an informational report with the commissioner documenting the value of charity health care services its employees provided during the taxable year. The charity health care services reported to the commissioner must be limited to those services covered under medical assistance and for which a federal Medicaid match is available and must be calculated at the reimbursement rates provided in section 256B.76.

(b) For purposes of this subdivision, the following terms have the meanings given:

(1) "chiropractor" means an individual licensed under chapter 148;

(2) "dentist" means an individual licensed under chapter 150A; and

(3) "medical professional" means an individual licensed under chapter 147, an individual licensed under chapter 147B, and a mental health professional as defined under section 245.462, subdivision 18, or section 245.4871, subdivision 27.

(c) The commissioner shall define charity health care services for purposes of this subdivision. In developing this definition, the commissioner shall consider the criteria specified in Minnesota Rules, part 4650.0115, subpart 2.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 8. Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:

Subd. 7. Resident. (a) The term "resident" means any individual domiciled in Minnesota, except that an individual is not a "resident" for the period of time that the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal Revenue Code, if the qualified individual notifies the county within three months of moving out of the country that homestead status be revoked for the Minnesota residence of the qualified individual, and the property is not classified as a homestead while the individual remains a qualified individual.

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(b) "Resident" also means any individual domiciled outside the state who maintains a place of abode in the state and spends in the aggregate more than one-half of the tax year in Minnesota, unless:

(1) the individual or the spouse of the individual is in the armed forces of the United States; or

(2) the individual is covered under the reciprocity provisions in section 290.081.

For purposes of this subdivision, presence within the state for any part of a calendar day constitutes a day spent in the state, except that a day spent in Minnesota for the primary purpose of receiving medical treatment by the taxpayer, or the spouse, child, or parent of the taxpayer, is not treated as a day spent in Minnesota. "Medical treatment" means treatment as defined in section 213(d)(1)(A) of the Internal Revenue Code. Individuals shall keep adequate records to substantiate the days spent outside the state.

The term "abode" means a dwelling maintained by an individual, whether or not owned by the individual and whether or not occupied by the individual, and includes a dwelling place owned or leased by the individual's spouse.

(1) charitable contributions made by an the individual within or without the state ~~in determining if the individual is domiciled in Minnesota.~~;

(2) the location of the individual's attorney, certified public accountant, or financial adviser; or

(3) the place of business of a financial institution at which the individual applies for any new type of credit or at which the individual opens or maintains any type of account.

(d) For purposes of this subdivision, the following terms have the meanings given them:

(1) "financial adviser" means a financial institution or an individual engaged in business as a certified financial planner, registered investment adviser, licensed insurance agent, or securities broker-dealer; and

(2) "financial institution" means a financial institution as defined in section 47.015, subdivision 1; a state or nationally chartered credit union; or a registered broker-dealer under the Securities and Exchange Act of 1934.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 9. Minnesota Statutes 2014, section 290.01, subdivision 19, as amended by Laws 2015, chapter 1, section 2, is amended to read:

Subd. 19. Net income. The term "net income" means the federal taxable income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through the date named in this subdivision, incorporating the federal effective dates of changes to the Internal Revenue Code and any elections made by the taxpayer in accordance with the Internal Revenue Code in determining federal taxable income for federal income tax purposes, and with the modifications provided in subdivisions 19a to 19f.

In the case of a regulated investment company or a fund thereof, as defined in section 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

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(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue Code must be applied by allowing a deduction for capital gain dividends and exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and

(3) the deduction for dividends paid must also be applied in the amount of any undistributed capital gains which the regulated investment company elects to have treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.

The net income of a real estate investment trust as defined and limited by section 856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

The net income of a designated settlement fund as defined in section 468B(d) of the Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal Revenue Code.

The Internal Revenue Code of 1986, as amended through ~~December 31, 2014~~ April 1, 2015, shall be in effect for taxable years beginning after December 31, 1996.

Except as otherwise provided, references to the Internal Revenue Code in subdivisions 19 to 19f mean the code in effect for purposes of determining net income for the applicable year.

EFFECTIVE DATE. This section is effective retroactively for taxable years beginning after December 31, 2013.

Sec. 10. Minnesota Statutes 2014, section 290.01, subdivision 19a, is amended to read:

Subd. 19a. Additions to federal taxable income. For individuals, estates, and trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political or governmental subdivision, municipality, or governmental agency or instrumentality of any state other than Minnesota exempt from federal income taxes under the Internal Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under the laws of the United States; and

(B) the portion of the exempt-interest dividends derived from interest income on obligations of the state of Minnesota or its political or governmental subdivisions, municipalities, governmental agencies or instrumentalities, but only if the portion of the exempt-interest dividends from such Minnesota sources paid to all shareholders represents 95 percent or more of the exempt-interest dividends, including any dividends exempt under subitem (A), that are paid by the regulated investment company as defined in section 851(a) of the Internal Revenue Code, or the fund of the regulated investment company as defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal government described in section 7871(c) of the Internal Revenue Code shall be treated as interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or accrued within the taxable year under this chapter and the amount of taxes based on net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any province or territory of Canada, to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not be more than the amount by which the

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state itemized deduction exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code, minus any addition that would have been required under clause (17) if the taxpayer had claimed the standard deduction. For the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under clause (15);

(3) the capital gain amount of a lump-sum distribution to which the special tax under section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this chapter and taxes based on net income paid to any other state or any province or territory of Canada, to the extent allowed as a deduction in determining federal adjusted gross income. For the purpose of this paragraph, income taxes do not include the taxes imposed by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 other than expenses or interest used in computing net interest income for the subtraction allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow through to the partner because the partnership elected to pay the tax on the income under section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that in the taxable year generates a deduction for depreciation under section 168(k) and the activity generates a loss for the taxable year that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is limited to excess of the depreciation claimed by the activity under section 168(k) over the amount of the loss from the activity that is not allowed in the taxable year. In succeeding taxable years when the losses not allowed in the taxable year are allowed, the depreciation under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the deduction allowable under section 199 of the Internal Revenue Code;

(10) the amount of expenses disallowed under section 290.10, subdivision 2;

(11) for taxable years beginning before January 1, 2010, the amount deducted for qualified tuition and related expenses under section 222 of the Internal Revenue Code, to the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted from gross income;

(13) discharge of indebtedness income resulting from reacquisition of business indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) changes to federal taxable income attributable to a net operating loss that the taxpayer elected to carry back for more than two years for federal purposes but for which the losses can be carried back for only two years under section 290.095, subdivision 11, paragraph (c);

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(15) the amount of disallowed itemized deductions, but the amount of disallowed itemized deductions plus the addition required under clause (2) may not be more than the amount by which the itemized deductions as allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code, and reduced by any addition that would have been required under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a married individual filing a separate return. Each dollar amount shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code for the calendar year in which the taxable year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable year exceeds the threshold amount. In the case of a married individual filing a separate return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

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(C) $100,000 in the case of an individual who is not married and who is not a surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(17) to the extent deducted in the computation of federal taxable income, for taxable years beginning after December 31, 2010, and before January 1, 2014, the difference between the standard deduction allowed under section 63(c) of the Internal Revenue Code and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue Code as amended through December 1, 2010.; and

(18) the amount withdrawn by a participant in the Minnesota long-term care savings plan under section 16A.128 by a person who is not a qualified individual or for any reason other than a transfer of funds to a spouse, payment of long-term care expenses or long-term care insurance premiums, or the death of the participant, including withdrawals made by reason of cancellation of the participation agreement or termination of the plan.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 11. Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:

Subd. 19b. Subtractions from federal taxable income. For individuals, estates, and trusts, there shall be subtracted from federal taxable income:

(3) the amount paid to others, less the amount used to claim the credit allowed under section 290.0674, and amounts used to claim the credit under section 290.067, not to exceed ~~$1,625~~ $2,500 for each qualifying child in ~~grades~~ a prekindergarten educational program or in kindergarten to through grade 6 and ~~$2,500~~ $3,750 for each qualifying child in grades 7 to through 12, for tuition, textbooks, and transportation of each qualifying child in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, "textbooks" includes books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. Equipment expenses qualifying for deduction includes expenses as defined and limited in section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which

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is to instill such tenets, doctrines, or worship, nor does it include books or materials for, or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs. No deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle to provide such transportation for a qualifying child education-related expenses, as defined in section 290.0674, subdivision 1. For purposes of the subtraction provided by this clause, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code; and "prekindergarten educational program" has the meaning given in section 290.0674, subdivision 1. The maximum amounts allowed for each qualifying child under this clause must be adjusted for inflation. The commissioner shall adjust the maximum amount by the percentage determined under the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent year, from the 12 months ending August 31, 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The amounts as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the commissioner under this subdivision is not a rule subject to the Administrative Procedure Act in chapter 14, including section 14.386;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on disposition of property exempt from tax under section 290.491;

(9) job opportunity building zone income as provided under section 469.316;

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(17) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due to claiming the railroad track maintenance credit under section 45G(a) of the Internal Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of the Internal Revenue Code; ~~and~~

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(22) to the extent included in federal taxable income, an amount not to exceed $40 per employee per calendar month, provided that:

(i) for an individual, the subtraction equals the value of the use of an on-premises fitness facility provided by an employer to the individual, or the value of any fees, dues, or membership expenses paid by an employer on behalf of the individual to a fitness facility;

(ii) for an S corporation, sole proprietor, or partnership, the subtraction equals the value of any fees, dues, or membership expenses paid on behalf of its employees to a fitness facility;

(iii) the subtraction under this clause applies only if the use of on-premises fitness facilities or the payment of fees, dues, or membership expenses to a fitness facility are available on substantially the same terms to each member of a group of employees defined under a reasonable classification by the employer, but no classification may include only highly compensated employees, as defined under section 414(q) of the Internal Revenue Code, or any other group that includes only executives, directors, or other managerial employees;

(iv) the subtraction under this clause is only allowed to employers and employees for months in which the employee uses the fitness facility for the preservation, maintenance, encouragement, or development of physical fitness on at least eight days; and

(v) for purposes of this clause, "fitness facility" means a facility located in the state:

(A) that provides instruction in a program of physical exercise; offers facilities for the preservation, maintenance, encouragement, or development of physical fitness; or is the site of such a program of a state or local government;

(B) that is not a private club owned and operated by its members;

(D) whose fitness facility is not incidental to its overall function and purpose; and

(E) that is compliant with antidiscrimination laws under chapter 363A and applicable federal antidiscrimination laws;

(23) to the extent not deducted in computing federal taxable income, the value of charity health care services provided by a medical professional as defined under section 289A.12, subdivision 19, paragraph (b), clause (3), a dentist licensed under chapter 150A, or a chiropractor licensed under chapter 148, and acting within the scope of the individual's license. For the purposes of this clause, the value of charity health care services must be calculated at the applicable reimbursement rate provided under section 256B.76 for the medical professional, dentist, or chiropractor for services for which a federal Medicaid match is available;

(24) for an individual who does not claim the credit under section 290.0677, subdivision 1a, and receives compensation from a pension or other retirement pay from the federal government for service in the military, as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455, or 12732 to 12733, $1,000 for each year or portion of a year of military service, up to a maximum of 20 years of military service and a maximum subtraction of $20,000. In the case of a married couple filing jointly, each spouse is eligible for this subtraction. The subtraction under this clause is not limited to the amount of compensation received from a pension or other retirement pay;

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(25) to the extent included in federal taxable income, a percentage of Social Security benefits. For purposes of this clause, for the taxable year beginning after December 31, 2014, and before January 1, 2016, the percentage is 20 percent, and the percentage increases by 20 percentage points in each taxable year thereafter until the percentage of Social Security benefits allowed as a subtraction under this clause is 100 percent;

(26) the amount equal to the contributions made during the taxable year to a college savings plan account qualifying under section 529 of the Internal Revenue Code, not including amounts rolled over from other college savings plan accounts, and not to exceed $3,000 for married couples filing joint returns and $1,500 for all other filers. The subtraction must not include any amount used to claim the credit allowed under section 290.0684;

(27) to the extent not deducted in determining federal taxable income, an amount equal to contributions made to the Minnesota long-term care savings plan under section 16A.728, up to a maximum of $2,000 for married individuals filing joint returns and $1,000 for any other individual, and any investment earnings made as a participant in the Minnesota long-term care savings plan; and

(28) for an individual who is a first responder, an amount equal to the sum of:

(i) $7.50 per day of deemed meal expenses for two days in each week during the taxable year that the eligible individual was on call for fewer than 21 hours; plus

(ii) $7.50 per day of deemed meal expenses for four days in each week during the taxable year that the eligible individual was on call for 21 or more hours.

For purposes of this clause, "first responder" means an individual who meets the definition of:

(A) ambulance service personnel in section 144E.001, subdivision 3a;

(B) an emergency medical responder in section 144E.001, subdivision 6;

(D) a full-time firefighter in section 299N.03, subdivision 5; or

(E) a volunteer firefighter in section 299N.03, subdivision 7.