relating to BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.3    Section 1. Minnesota Statutes 2012, section 124D.11, subdivision 5, is amended to read:
1.4    Subd. 5. Special education aid. (a) Except as provided in subdivision 2, special
1.5education aid must be paid to a charter school according to section 125A.76, as though
1.6it were a school district.
1.7(b) For fiscal year 2006, the charter school may charge tuition to the district of
1.8residence as follows:
1.9(1) if the charter school does not receive general education revenue on behalf of
1.10the student according to subdivision 1, tuition shall be charged as provided in section
1.11125A.11; or
1.12(2) if the charter school receives general education revenue on behalf of the student
1.13according to subdivision 1, tuition shall be charged as provided in section 127A.47,
1.14subdivision 7 , paragraph (d).
1.15(c) (b) For fiscal year 2007 2015 and later, the special education aid paid to the
1.16charter school shall be adjusted as follows:
1.17(1) if the charter school does not receive general education revenue on behalf of
1.18the student according to subdivision 1, the aid shall be adjusted as provided in section
1.19125A.11 ; or
1.20(2) if the charter school receives general education revenue on behalf of the student
1.21according to subdivision 1, the aid shall be adjusted as provided in section 127A.47,
1.22subdivision 7 , paragraph paragraphs (b) to (d).
1.23EFFECTIVE DATE.This section is effective for fiscal year 2015 and later.

1.24    Sec. 2. Minnesota Statutes 2012, section 125A.11, subdivision 1, is amended to read:
1.25    Subdivision 1. Nonresident tuition rate; other costs. (a) For fiscal year 2006,
1.26when a school district provides instruction and services outside the district of residence,
1.27board and lodging, and any tuition to be paid, shall be paid by the district of residence.
1.28The tuition rate to be charged for any child with a disability, excluding a pupil for whom
1.29tuition is calculated according to section 127A.47, subdivision 7, paragraph (d), must be
1.30the sum of (1) the actual cost of providing special instruction and services to the child
1.31including a proportionate amount for special transportation and unreimbursed building
1.32lease and debt service costs for facilities used primarily for special education, plus (2)
1.33the amount of general education revenue and referendum aid attributable to the pupil,
1.34minus (3) the amount of special education aid for children with a disability received
2.1on behalf of that child, minus (4) if the pupil receives special instruction and services
2.2outside the regular classroom for more than 60 percent of the school day, the amount of
2.3general education revenue and referendum aid, excluding portions attributable to district
2.4and school administration, district support services, operations and maintenance, capital
2.5expenditures, and pupil transportation, attributable to that pupil for the portion of time
2.6the pupil receives special instruction and services outside of the regular classroom. If
2.7the boards involved do not agree upon the tuition rate, either board may apply to the
2.8commissioner to fix the rate. Notwithstanding chapter 14, the commissioner must then set
2.9a date for a hearing or request a written statement from each board, giving each board
2.10at least ten days' notice, and after the hearing or review of the written statements the
2.11commissioner must make an order fixing the tuition rate, which is binding on both school
2.12districts. General education revenue and referendum equalization aid attributable to a
2.13pupil must be calculated using the resident district's average general education revenue
2.14and referendum equalization aid per adjusted pupil unit.
2.15    (b) (a) For fiscal year 2007 2015 and later, when a school district provides special
2.16instruction and services for a pupil with a disability as defined in section 125A.02 outside
2.17the district of residence, excluding a pupil for whom an adjustment to special education
2.18aid is calculated according to section 127A.47, subdivision 7, paragraph (e) paragraphs (b)
2.19to (d), special education aid paid to the resident district must be reduced by an amount
2.20equal to (1) the actual cost of providing special instruction and services to the pupil,
2.21including a proportionate amount for special transportation and unreimbursed building
2.22lease and debt service costs for facilities used primarily for special education, plus (2)
2.23the amount of general education revenue and referendum equalization aid attributable
2.24to that pupil, calculated using the resident district's average general education revenue
2.25and referendum equalization aid per adjusted pupil unit excluding basic skills revenue,
2.26elementary sparsity revenue and secondary sparsity revenue, minus (3) the amount of
2.27special education aid for children with a disability under section 125A.76 received on
2.28behalf of that child, minus (4) if the pupil receives special instruction and services outside
2.29the regular classroom for more than 60 percent of the school day, the amount of general
2.30education revenue and referendum equalization aid, excluding portions attributable to
2.31district and school administration, district support services, operations and maintenance,
2.32capital expenditures, and pupil transportation, attributable to that pupil for the portion of
2.33time the pupil receives special instruction and services outside of the regular classroom,
2.34calculated using the resident district's average general education revenue and referendum
2.35equalization aid per adjusted pupil unit excluding basic skills revenue, elementary sparsity
2.36revenue and secondary sparsity revenue and the serving district's basic skills revenue,
3.1elementary sparsity revenue and secondary sparsity revenue per adjusted pupil unit.
3.2Notwithstanding clauses (1) and (4), for pupils served by a cooperative unit without a
3.3fiscal agent school district, the general education revenue and referendum equalization
3.4aid attributable to a pupil must be calculated using the resident district's average general
3.5education revenue and referendum equalization aid excluding compensatory revenue,
3.6elementary sparsity revenue, and secondary sparsity revenue. Special education aid paid
3.7to the district or cooperative providing special instruction and services for the pupil
3.8must be increased by the amount of the reduction in the aid paid to the resident district.
3.9Amounts paid to cooperatives under this subdivision and section 127A.47, subdivision
3.107 , shall be recognized and reported as revenues and expenditures on the resident school
3.11district's books of account under sections 123B.75 and 123B.76. If the resident district's
3.12special education aid is insufficient to make the full adjustment, the remaining adjustment
3.13shall be made to other state aid due to the district.
3.14    (c) (b) Notwithstanding paragraphs paragraph (a) and (b) and section 127A.47,
3.15subdivision 7 , paragraphs (b) to (d) and (e), a charter school where more than 30 percent
3.16of enrolled students receive special education and related services, a site approved under
3.17section 125A.515, an intermediate district, a special education cooperative, or a school
3.18district that served as the applicant agency for a group of school districts for federal
3.19special education aids for fiscal year 2006 may apply to the commissioner for authority to
3.20charge the resident district an additional amount to recover any remaining unreimbursed
3.21costs of serving pupils with a disability. The application must include a description of the
3.22costs and the calculations used to determine the unreimbursed portion to be charged to the
3.23resident district. Amounts approved by the commissioner under this paragraph must be
3.24included in the tuition billings or aid adjustments under paragraph (a) or (b), or section
3.25127A.47, subdivision 7 , paragraph (d) or (e) paragraphs (b) to (d), as applicable.
3.26    (d) (c) For purposes of this subdivision and section 127A.47, subdivision 7,
3.27paragraphs (d) and (e), "general education revenue and referendum equalization aid"
3.28means the sum of the general education revenue according to section 126C.10, subdivision
3.291, excluding alternative teacher compensation revenue and teacher development and
3.30evaluation revenue, plus the referendum equalization aid according to section 126C.17,
3.31subdivision 7, as adjusted according to section 127A.47, subdivision 7, paragraphs (a)
3.32to (c).
3.33EFFECTIVE DATE.This section is effective for fiscal year 2015 and later.

3.34    Sec. 3. Minnesota Statutes 2012, section 125A.76, subdivision 4, is amended to read:
4.1    Subd. 4. State total special education aid. The state total special education aid
4.2equals $529,247,000 for fiscal year 2007, $694,063,000 for fiscal year 2008, $719,470,000
4.3for fiscal year 2009, $735,693,000 for fiscal year 2010, and $786,586,000 for fiscal year
4.42011 $...,...,000 for fiscal year 2013, $...,...,000 for fiscal year 2014, $...,...,000 for fiscal
4.5year 2015, $...,...,000 for fiscal year 2016, and $...,...,000 for fiscal year 2017. The state
4.6total special education aid for later fiscal years equals:
4.7    (1) the state total special education aid for the preceding fiscal year; times
4.8    (2) the program growth factor; times
4.9    (3) the greater of one, or the ratio of the state total average daily membership for the
4.10current fiscal year to the state total average daily membership for the preceding fiscal year.

4.11    Sec. 4. Minnesota Statutes 2012, section 125A.79, subdivision 1, is amended to read:
4.12    Subdivision 1. Definitions. For the purposes of this section, the definitions in this
4.13subdivision apply.
4.14    (a) "Unreimbursed special education cost" means the sum of the following:
4.15    (1) expenditures for teachers' salaries, contracted services, supplies, equipment, and
4.16transportation services eligible for revenue under section 125A.76; plus
4.17    (2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and
4.18125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus
4.19    (3) revenue for teachers' salaries, contracted services, supplies, equipment, and
4.20transportation services under section 125A.76; minus
4.21    (4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services
4.22eligible for revenue under section 125A.76, subdivision 2.
4.23    (b) "General revenue" for a school district means the sum of the general education
4.24revenue according to section 126C.10, subdivision 1, excluding alternative teacher
4.25compensation revenue teacher development and evaluation revenue, minus transportation
4.26sparsity revenue minus total operating capital revenue. "General revenue" for a charter
4.27school means the sum of the general education revenue according to section 124D.11,
4.28subdivision 1 , and transportation revenue according to section 124D.11, subdivision 2,
4.29excluding alternative teacher compensation revenue, minus referendum equalization aid
4.30minus transportation sparsity revenue minus operating capital revenue.
4.31    (c) "Average daily membership" has the meaning given it in section 126C.05.
4.32    (d) "Program growth factor" means 1.02 for fiscal year 2012 and later.
4.33EFFECTIVE DATE.This section is effective for fiscal year 2015 and later.

4.34    Sec. 5. Minnesota Statutes 2012, section 125A.79, subdivision 8, is amended to read:
5.1    Subd. 8. Out-of-state tuition. For children who are residents of the state, receive
5.2services under section 125A.76, subdivisions 1 and 2, and are placed in a care and
5.3treatment facility by court action in a state that does not have a reciprocity agreement
5.4with the commissioner under section 125A.155, the resident school district shall submit
5.5the balance of the tuition bills, minus the general education revenue, excluding basic
5.6skills revenue and alternative teacher compensation revenue, and teacher development
5.7and evaluation revenue, and referendum equalization aid attributable to the pupil,
5.8calculated using the resident district's average general education revenue and referendum
5.9equalization aid per adjusted pupil unit minus the special education contracted services
5.10initial revenue attributable to the pupil.
5.11EFFECTIVE DATE.This section is effective for fiscal year 2015 and later.

5.12    Sec. 6. APPROPRIATIONS.
5.13    Subdivision 1. Department of Education. The sums indicated in this section are
5.14appropriated from the general fund to the Department of Education for the fiscal years
5.15designated.
5.16    Subd. 2. Special education; regular. For special education aid under Minnesota
5.17Statutes, section 125A.75:

5.18		$	,000	.....	2014
5.19		$	,000	.....	2015

5.20The 2014 appropriation includes $.......,000 for 2013 and $.......,000 for 2014.
5.21The 2015 appropriation includes $.......,000 for 2014 and $.......,000 for 2015.
5.22    Subd. 3. Aid for children with disabilities. For aid under Minnesota Statutes,
5.23section 125A.75, subdivision 3, for children with disabilities placed in residential facilities
5.24within the district boundaries for whom no district of residence can be determined:

5.25		$	,000	.....	2014
5.26		$	,000	.....	2015

5.27If the appropriation for either year is insufficient, the appropriation for the other
5.28year is available.
5.29    Subd. 4. Travel for home-based services. For aid for teacher travel for home-based
5.30services under Minnesota Statutes, section 125A.75, subdivision 1:

5.31		$	,000	.....	2014
5.32		$	,000	.....	2015

5.33The 2014 appropriation includes $...,000 for 2013 and $...,000 for 2014.
6.1The 2015 appropriation includes $...,000 for 2014 and $...,000 for 2015.
6.2    Subd. 5. Special education; excess costs. For excess cost aid under Minnesota
6.3Statutes, section 125A.79, subdivision 7:

6.4		$	,000	.....	2014
6.5		$	,000	.....	2015

6.6The 2014 appropriation includes $......,000 for 2013 and $......,000 for 2014.
6.7The 2015 appropriation includes $......,000 for 2014 and $0 for 2015.
6.8    Subd. 6. Court-placed special education revenue. For reimbursing serving school
6.9districts for unreimbursed eligible expenditures attributable to children placed in the serving
6.10school district by court action under Minnesota Statutes, section 125A.79, subdivision 4:

6.11		$	,000	.....	2014
6.12		$	,000	.....	2015

6.13    Subd. 7. Special education out-of-state tuition. For special education out-of-state
6.14tuition according to Minnesota Statutes, section 125A.79, subdivision 8:

6.15		$	,000	.....	2014
6.16		$	,000	.....	2015

6.17    Sec. 7. REPEALER.
6.18Minnesota Statutes 2012, sections 124D.454, subdivisions 10 and 11; and 125A.76,
6.19subdivision 7, are repealed.