1.1 A bill for an act
1.2 relating to education finance; replacing local optional aid and levy with basic
1.3 supplemental revenue; increasing the basic supplemental aid amount; appropriating
1.4 money; amending Minnesota Statutes 2024, sections 124E.20, subdivision 1;
1.5 126C.10, subdivisions 1, 2e; 126C.13, subdivision 4; 126C.17, subdivisions 7a,
1.6 7b.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 124E.20, subdivision 1, is amended to read:
1.9 Subdivision 1.Revenue calculation.(a) General education revenue must be paid to a
1.10charter school as though it were a district. The general education revenue for each adjusted
1.11pupil unit is the state average general education revenue per pupil unit, plus the referendum
1.12equalization aid allowance and the first and second tier local optional basic supplemental
1.13aid allowance allowances in the pupil's district of residence, minus an amount equal to the
1.14product of the formula allowance according to section 126C.10, subdivision 2, times .0466,
1.15calculated without declining enrollment revenue, local optional basic supplemental revenue,
1.16basic skills revenue, extended time revenue, pension adjustment revenue, transition revenue,
1.17and transportation sparsity revenue, plus declining enrollment revenue, basic skills revenue,
1.18pension adjustment revenue, and transition revenue as though the school were a school
1.19district.
1.20 (b) For a charter school operating an extended day, extended week, or summer program,
1.21the general education revenue in paragraph (a) is increased by an amount equal to 25 percent
1.22of the statewide average extended time revenue per adjusted pupil unit.
1.23 (c) Notwithstanding paragraph (a), the general education revenue for an eligible special
1.24education charter school as defined in section 124E.21, subdivision 2, equals the sum of
1Section 1.
REVISOR CR/KR 25-0321302/04/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2388
NINETY-FOURTH SESSION
Authored by Bakeberg, Bennett, Mueller, Nadeau, Myers and others03/17/2025
The bill was read for the first time and referred to the Committee on Education Finance 2.1the amount determined under paragraph (a) and the school's unreimbursed cost as defined
2.2in section 124E.21, subdivision 2, for educating students not eligible for special education
2.3services.
2.4 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
2.5 Sec. 2. Minnesota Statutes 2024, section 126C.10, subdivision 1, is amended to read:
2.6 Subdivision 1.General education revenue.The general education revenue for each
2.7district equals the sum of the district's basic revenue, extended time revenue, gifted and
2.8talented revenue, declining enrollment revenue, local optional basic supplemental revenue,
2.9small schools revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity
2.10revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
2.11pension adjustment revenue, and transition revenue.
2.12 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
2.13 Sec. 3. Minnesota Statutes 2024, section 126C.10, subdivision 2e, is amended to read:
2.14 Subd. 2e.Local optional Basic supplemental revenue.(a) Local optional Basic
2.15supplemental revenue for a school district equals the sum of the district's first tier local
2.16optional basic supplemental revenue and, second tier local optional basic supplemental
2.17revenue, and third tier basic supplemental revenue. A district's first tier local optional basic
2.18supplemental revenue equals $100 times the adjusted pupil units of the district for that
2.19school year. A district's second tier basic supplemental revenue equals $300 times the
2.20adjusted pupil units of the district for that school year. A district's second third tier local
2.21optional basic supplemental revenue equals $424 times the adjusted pupil units of the district
2.22for that school year.
2.23 (b) A district's local optional basic supplemental levy equals the sum of the first second
2.24tier local optional basic supplemental levy and the second third tier local optional basic
2.25supplemental levy.
2.26 (c) A district's first second tier local optional basic supplemental levy equals the district's
2.27first second tier local optional basic supplemental revenue times the lesser of one or the
2.28ratio of the district's referendum market value per resident pupil unit to $880,000.
2.29 (d) For fiscal year 2023, a district's second tier local optional levy equals the district's
2.30second tier local optional revenue times the lesser of one or the ratio of the district's
2.31referendum market value per resident pupil unit to $548,842. For fiscal year 2024, a district's
2.32second tier local optional levy equals the district's second tier local optional revenue times
2Sec. 3.
REVISOR CR/KR 25-0321302/04/25 3.1the lesser of one or the ratio of the district's referendum market value per resident pupil unit
3.2to $510,000. For fiscal year 2025, a district's second third tier local optional basic
3.3supplemental levy equals the district's second third tier local optional basic supplemental
3.4revenue times the lesser of one or the ratio of the district's referendum market value per
3.5resident pupil unit to $626,450. For fiscal year 2026, a district's second third tier local
3.6optional basic supplemental levy equals the district's second third tier local optional basic
3.7supplemental revenue times the lesser of one or the ratio of the district's referendum market
3.8value per resident pupil unit to $642,038. For fiscal year 2027 and later, a district's second
3.9third tier local optional basic supplemental levy equals the district's second third tier local
3.10optional basic supplemental revenue times the lesser of one or the ratio of the district's
3.11referendum market value per resident pupil unit to $671,345.
3.12 (e) The local optional basic supplemental levy must be spread on referendum market
3.13value. A district may levy less than the permitted amount.
3.14 (f) A district's local optional basic supplemental aid equals its local optional basic
3.15supplemental revenue minus its local optional basic supplemental levy. If a district's actual
3.16levy for first or second tier local optional or third tier basic supplemental revenue is less
3.17than its maximum levy limit for that tier, its aid must be proportionately reduced.
3.18 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
3.19 Sec. 4. Minnesota Statutes 2024, section 126C.13, subdivision 4, is amended to read:
3.20 Subd. 4.General education aid.For fiscal year 2015 and later, A district's general
3.21education aid equals:
3.22 (1) general education revenue, excluding operating capital revenue, equity revenue, local
3.23optional basic supplemental revenue, and transition revenue; plus
3.24 (2) operating capital aid under section 126C.10, subdivision 13b;
3.25 (3) equity aid under section 126C.10, subdivision 30; plus
3.26 (4) transition aid under section 126C.10, subdivision 33; plus
3.27 (5) shared time aid under section 126C.01, subdivision 7; plus
3.28 (6) referendum aid under section 126C.17, subdivisions 7 and 7a; plus
3.29 (7) online learning aid under section 124D.096; plus
3.30 (8) local optional basic supplemental aid according to section 126C.10, subdivision 2e,
3.31paragraph (f).
3Sec. 4.
REVISOR CR/KR 25-0321302/04/25 4.1 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
4.2 Sec. 5. Minnesota Statutes 2024, section 126C.17, subdivision 7a, is amended to read:
4.3 Subd. 7a.Referendum tax base replacement aid.For each school district that had a
4.4referendum allowance for fiscal year 2002 exceeding $415, for each separately authorized
4.5referendum levy, the commissioner of revenue, in consultation with the commissioner of
4.6education, shall certify the amount of the referendum levy in taxes payable year 2001
4.7attributable to the portion of the referendum allowance exceeding $415 levied against
4.8property classified as class 2, noncommercial 4c(1), or 4c(4), under section 273.13, excluding
4.9the portion of the tax paid by the portion of class 2a property consisting of the house, garage,
4.10and surrounding one acre of land. The resulting amount must be used to reduce the district's
4.11referendum levy or first second tier local optional basic supplemental levy amount otherwise
4.12determined, and must be paid to the district each year that the referendum or first second
4.13tier local optional basic supplemental authority remains in effect, is renewed, or new
4.14referendum authority is approved. The aid payable under this subdivision must be subtracted
4.15from the district's referendum equalization aid under subdivision 7. The referendum
4.16equalization aid and the first second tier local optional basic supplemental aid after the
4.17subtraction must not be less than zero.
4.18 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
4.19 Sec. 6. Minnesota Statutes 2024, section 126C.17, subdivision 7b, is amended to read:
4.20 Subd. 7b.Referendum aid guarantee.(a) Notwithstanding subdivision 7, the sum of
4.21a district's referendum equalization aid and local optional aid under section 126C.10,
4.22subdivision 2e, for fiscal year 2015 must not be less than the sum of the referendum
4.23equalization aid the district would have received for fiscal year 2015 under Minnesota
4.24Statutes 2012, section 126C.17, subdivision 7, and the adjustment the district would have
4.25received under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a),
4.26(b), and (c).
4.27 (b) Notwithstanding subdivision 7, the sum of referendum equalization aid and local
4.28optional basic supplemental aid under section 126C.10, subdivision 2e, for fiscal year 2016
4.29and later, for a district qualifying for additional aid under Minnesota Statutes 2014, section
4.30126C.10, subdivision 2e, paragraph (a), for fiscal year 2015, must not be less than the product
4.31of (1) the sum of the district's referendum equalization aid and local optional aid under
4.32Minnesota Statutes 2014, section 126C.10, subdivision 2e, for fiscal year 2015, times (2)
4.33the lesser of one or the ratio of the sum of the district's referendum revenue and local optional
4Sec. 6.
REVISOR CR/KR 25-0321302/04/25 5.1basic supplemental revenue for that school year to the sum of the district's referendum
5.2revenue and local optional revenue for fiscal year 2015, times (3) the lesser of one or the
5.3ratio of the district's referendum market value used for fiscal year 2015 referendum
5.4equalization calculations to the district's referendum market value used for that year's
5.5referendum equalization calculations.
5.6 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2026 and later.
5.7 Sec. 7. APPROPRIATIONS; GENERAL EDUCATION AID.
5.8 Subdivision 1.Department of Education.The sums indicated in this section are
5.9appropriated from the general fund to the Department of Education in the fiscal years
5.10designated.
5.11 Subd. 2.Additional general education aid.For additional general education aid required
5.12under this act:
2026............5.13 $
2027............5.14 $
5.15 Sec. 8. REVISOR INSTRUCTION.
5.16 The revisor of statutes shall replace "local optional revenue," "local optional aid," and
5.17"local optional levy" with "basic supplemental revenue," "basic supplemental aid," and
5.18"basic supplemental levy" and correct all cross-references.
5Sec. 8.
REVISOR CR/KR 25-0321302/04/25