1.1 A bill for an act
1.2 relating to education finance; increasing local optional revenue for school districts;
1.3 appropriating money; amending Minnesota Statutes 2024, section 126C.10,
1.4 subdivision 2e.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 126C.10, subdivision 2e, is amended to read:
1.7 Subd. 2e.Local optional revenue.(a) Local optional revenue for a school district equals
1.8the sum of the district's first tier local optional revenue and second tier local optional revenue.
1.9a district's first tier local optional revenue equals $300 the first tier local optional allowance
1.10times the adjusted pupil units of the district for that school year. A district's second tier local
1.11optional revenue equals $424 the second tier local optional allowance times the adjusted
1.12pupil units of the district for that school year.
1.13 (b) The first tier local optional allowance equals $300 for fiscal years 2025 and 2026,
1.14and $550 for fiscal year 2027. For fiscal year 2028 and later, the first tier local optional
1.15allowance equals the first tier local optional allowance for the previous year times the ratio
1.16of the general education basic formula allowance for the current year to the general education
1.17revenue basic formula allowance for the previous school year. The second tier local optional
1.18allowance equals $424 for fiscal years 2025 through 2027. For fiscal year 2028 and later,
1.19the second tier local optional allowance equals the second tier local optional allowance for
1.20the previous year times the ratio of the general education basic formula allowance for the
1.21current year to the general education revenue basic formula allowance for the previous
1.22school year.
1Section 1.
REVISOR CR/HL 25-0417702/21/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1989
NINETY-FOURTH SESSION
Authored by Rehrauer, Bakeberg, Youakim, Engen and Myers03/06/2025
The bill was read for the first time and referred to the Committee on Education Finance 2.1 (b) (c) A district's local optional levy equals the sum of the first tier local optional levy
2.2and the second tier local optional levy.
2.3 (c) (d) A district's first tier local optional levy equals the district's first tier local optional
2.4revenue times the lesser of one or the ratio of the district's referendum market value per
2.5resident pupil unit to the first tier local optional equalizing factor. For fiscal years 2025 and
2.62026, the first tier local optional equalizing factor is $880,000. For fiscal year 2027, a
2.7district's first tier local optional equalizing factor is $1,957,000. For fiscal year 2028, a
2.8district's first tier local optional equalizing factor is $2,270,000. For fiscal year 2029 and
2.9later, a district's first tier local optional equalizing factor is $2,347,000.
2.10 (d) For fiscal year 2023, a district's second tier local optional levy equals the district's
2.11second tier local optional revenue times the lesser of one or the ratio of the district's
2.12referendum market value per resident pupil unit to $548,842. For fiscal year 2024, a district's
2.13second tier local optional levy equals the district's second tier local optional revenue times
2.14the lesser of one or the ratio of the district's referendum market value per resident pupil unit
2.15to $510,000. For fiscal year 2025, (e) A district's second tier local optional levy equals the
2.16district's second tier local optional revenue times the lesser of one or the ratio of the district's
2.17referendum market value per resident pupil unit to the second tier local optional equalizing
2.18factor. For fiscal year 2025, the second tier local optional equalizing factor is $626,450. For
2.19fiscal year 2026, a district's the second tier local optional levy equals the district's second
2.20tier local optional revenue times the lesser of one or the ratio of the district's referendum
2.21market value per resident pupil unit to equalizing factor is $642,038. For fiscal year 2027
2.22and later, a district's, the second tier local optional levy equals the district's second tier local
2.23optional revenue times the lesser of one or the ratio of the district's referendum market value
2.24per resident pupil unit to equalizing factor is $671,345. For fiscal year 2028, the second tier
2.25local optional equalizing factor is $830,000. For fiscal year 2029 and later, the second tier
2.26local optional equalizing factor is $940,000.
2.27 (e) (f) The local optional levy must be spread on referendum market value. A district
2.28may levy less than the permitted amount.
2.29 (f) (g) A district's local optional aid equals its local optional revenue minus its local
2.30optional levy. If a district's actual levy for first or second tier local optional revenue is less
2.31than its maximum levy limit for that tier, its aid must be proportionately reduced.
2.32 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2027 and later.
2Section 1.
REVISOR CR/HL 25-0417702/21/25 3.1 Sec. 2. APPROPRIATION; GENERAL EDUCATION AID.
3.2 Subdivision 1.Department of Education.The sum indicated in this section is
3.3appropriated from the general fund to the Department of Education in the fiscal year
3.4designated.
3.5 Subd. 2.Additional local optional aid.For additional local optional aid under section
3.61:
2027............3.7 $
3Sec. 2.
REVISOR CR/HL 25-0417702/21/25