S.F. No. 3813 makes reductions in appropriations from the general fund, and transfers of balances into the general fund, in order to reduce the deficit for the current biennium.

The bill also raises non-tax revenues from fees and other charges of about $74 million.

Article 2

General Education

Section 1. Contract; duties. Changes the date and updates the language on the annual report on district passage rates and expenditures required to reflect that students must pass the GRAD to graduate.

Section 2. Tuition payments. Allows for enrollment transfers between Minnesota and adjoining states if an agreement is reached.

Section 3. Effective if reciprocal. Strikes language relating specifically to South Dakota and makes it more broadly apply to any bordering state for the purposes of enrollment reciprocity.

Section 4. Appeal to the commissioner. Modifies the language to conform with the current process of setting tuition rates.

Section 5. Reciprocity with Adjoining States.

Subdivision 1. Agreements. Allows the commissioner to enter into an agreement with a designated authority from an adjoining state to establish an enrollment reciprocity program. Defines what the agreement must specify; agreed upon terms beyond what is listed in statute must apply equally to both states.

Subdivision 2. Pupil Accounting. Allows for any student from an adjoining that is attending a Minnesota school district to generate average daily membership and pupil units. Allows for any Minnesota resident attending a district in an adjoining state to generate average daily membership and pupil units for that district.

Subdivision 3. Procedures. Requires the department of education to establish procedures relating to the application process, collection or payment of funds, and the collection of data necessary to implement the agreements in this section. States that if an agreement is reached between Minnesota and an adjoining state, the agreement applies to all enrollment transfers between Minnesota and the adjoining state. States how payments are made to adjoining state. Makes an exception for districts in an adjoining state with fewer than 150 pupils.

Section 6. Exception. Provides an exception for statutes governing attendance in another state and tuition for those states that have an agreement with Minnesota for enrollment reciprocity.

Section 7. Adjustments for tuition reciprocity with adjoining states. Allows special education payments to be made from the special education aid appropriation to an adjoining state that has an enrollment reciprocity agreement with Minnesota without increasing the special education aid for that year. Allows the special education aid appropriation to increase in an amount equal to the amount paid by the adjoining state. Allows a Minnesota school district serving a student with a disability from an adjoining state to receive alternative attendance program revenue.

Section 8. General education revenue. Changes the general education revenue calculation for fiscal year 2010 and later to reflect that the alternative teacher compensation revenue program has been moved from the general education program to an education categorical.

Section 9. Equity levy. Increases the equalizing factor to $487,950 in fiscal year 2010 and to $489,115 in fiscal years 2011 and later. Adjusts for tax base changes in Senate tax bill.

Section 10. Transition revenue.

Paragraph (c) changes the transition revenue for fiscal year 2010 and later to include tuition reciprocity.

Paragraph (d) allows the transition revenue for Independent School District, No. 356, Lancaster to include $361 times the district's adjusted marginal cost pupil units.

Section 11. Transition for tuition reciprocity revenue. Sets the new transition revenue component equal to the loss in revenue for a Minnesota school district because of the enrollment reciprocity agreement replacing the tuition billing between the Minnesota school district and the school district in the adjoining state.

Section 12. Transition levy. Increases the equalizing factor to $487,950 in fiscal year 2010 and to $489,115 in fiscal years 2011 and later. Adjusts for tax base changes in Senate tax bill.

Section 13. Basic alternative teacher compensation aid. Strikes obsolete language; recaptures growth in fiscal year 2009; limits alternative compensation aid in the general education statute to fiscal years 2008 and 2009.

Section 14. Alternative teacher compensation levy. Limits the calculation of the alternative teacher compensation levy in the general education program to fiscal years 2008 and 2009.

Section 15. Alternative teacher compensation aid. Limits the calculation of the alternative teacher compensation aid in the general education program to fiscal years 2008 and 2009.

Section 16. Referendum equalization levy. Increases the fist tier equalizing factor to $487,950 in fiscal year 2010 and to $489,115 in fiscal years 2011 and later. Adjusts for tax base changes in Senate tax bill.

Section 17. Referendum revenue. Alters the ballot language to read: "YOU ARE VOTING TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS SCHEDULED TO EXPIRE."

Section 18. To lease building or land. Increases the allowable lease levy amount from $100 to $150 times the resident pupil units. Increases the lease levy amount from $25 to $43 times the adjusted marginal cost pupil units of districts that are members of an intermediate school district.

Section 19. Application of Limiting Tax Legislation. Includes intermediate school districts in the sections relating to tax anticipation borrowing.

Section 20. Limitations. Makes technical changes.

Section 21. Intermediate school districts.

Paragraph (a) allows a board of an intermediate school district to borrow money in anticipation of the receipt of:

• state aids for schools as defined in statute;

• federal school aids to be distributed by or through the department; and

• membership fees and tuition payments from its member school districts.

Limits the aggregate of borrowings to 75 percent of the payments received by the intermediate school districts in the fiscal year in which the money is borrowed.

Paragraph (b) allows the intermediate board to pledge the member district's full faith and credit and unlimited taxing powers, upon receipt of a written resolution by each of its member school districts, to repay each member district's pro rata share of certificates issued if the revenues in paragraph (a) are insufficient.

Section 22. Enabling Resolution; Form of Certificates of Indebtedness. Allows intermediate school districts to authorize certificates of indebtedness upon passage of a resolution.

Section 23. State Payment of Debt Obligation Upon Potential Default; Repayment; State Obligation not Debt.

Subdivision 1. Definitions. Makes a technical change.

Subdivision 2. Notifications; payment; appropriation. Includes intermediate school districts in the notification procedures for tax anticipation borrowing.

Subdivision 3. School district bound; interest rate on state paid amount. Includes intermediate school districts in the binding obligations for the purposes of tax anticipation borrowing.

Subdivision 4. Pledge of district's full faith and credit. Includes intermediate school districts in the pledge of full faith and credit to repay the principal and interest on debt obligations for the purposes of tax anticipation borrowing.

Subdivision 4a. Aid reduction for repayment.

Paragraph (a) allows the state to reduce certain state aid payable to the school district or intermediate school district in the event of a default.

Paragraph (b) in the event of a default, requires that state aid payments to intermediate school districts must first be reduced before state aid payments to member school district are reduced.

Paragraph (c) provides the commissioner of finance with flexibility to adjust the aid withholding in the event of a financial hardship on the intermediate school district or member school district.

Subdivision 6. Tax levy for repayment. Permits member school districts to levy its pro rata share in the event of a default. Requires proceeds from the levy to be remitted to the intermediate school district.

Subdivision 7. Election as to mandatory application. Includes intermediate school districts in the election as to mandatory application statute for the purposes of tax anticipation borrowing.

Subdivision 8. Mandatory plan; technical assistance. Includes intermediate school districts in the mandatory plan statute for the purposes of tax anticipation borrowing.

Section 24. Payments to third parties. Includes payments made through the enrollment reciprocity program to be included in the allowable payments to third parties.

Section 25. Abatements. Makes a technical change.

Section 26. Excess tax increment. Makes a technical change.

Section 27. General education aid. See fiscal tracking sheets.

Sections 28 through 30. Updates the appropriations paid to districts affected by the floods of August 2007. See fiscal tracking sheets.

Section 31. Enrollment and Transportation Aid. Creates a formula for fiscal year 2010 only to provide school district flood enrollment aid to Independent School District No. 239, Rushford-Peterson.

Section 32. Limitation on New Alternative Compensation School Districts and Charter Schools, Fiscal Years 2009 to 2013. limits the participation in the alternative teacher pay program, for fiscal year 2009 through fiscal year 2013, to those district sites and charter schools that have submitted an application by February 28, 2008.

Section 33. Sparsity, Adjustment Aid, Lancaster. Makes Independent School District No. 356, Lancaster eligible to receive sparsity adjustment aid equal to $82,000 for fiscal year 2009 only.

Section 34. Sparsity transportation levy. Authorizes a district that is eligible to receive elementary or secondary sparsity revenue to levy up to $80 times its adjusted marginal cost pupil units for the year in which the levy is certified.

Section 35. Appropriations. See fiscal tracking sheets.

Section 36. Repealer.

Repeals section 126C.21, subdivision 21 (Permanent School Fund) for fiscal year 2009 and later.

Repeals section 126C.10 subdivisions 35 (Alternative Teacher Compensation Levy), and 36 (Alternative Teacher Compensation Aid) for fiscal year 2010 and later.

Repeals section 127A.45 subdivision 7a. (Advance Final Payment).

Repeals section 126C.10 subdivision 34 (Basic Alternative Teacher Compensation Aid) for fiscal year 2010 and later.

Repeals Laws 2007, First Special Session chapter 2, article 1, section 11, subdivisions 3 (Independent School District No. 238, Mabel-Canton) and 4 (Independent School District No. 294, Houston).

Article 3

Education Excellence

Section 1. Minnesota Virtual Education Program.

Subdivision 1. Program. A Minnesota virtual education program is established to improve teacher instruction and student learning through integration of technology and online learning. The Commissioner must develop a selection of online courses for students in grades 6 through 12 and lesson plans for teachers.

Subdivision 2. Scope and Requirements.

Paragraph (a) the content of the program must be developed by department staff, content experts, licensed Minnesota teachers, licensed administrators, and business representatives. The courses and lesson plans must be available no later than the 2009-2010 school year. Priority must be given to courses and lesson plans in science, technology, engineering, mathematics and advanced courses.

Paragraph (b) school districts and charter schools participating in the program must:

submit a letter of intent to the Commissioner; allow students to participate in the program; train teachers to monitor and deliver courses; allow students to receive graduation credit for successful completion of the courses; issue grades to students enrolled in online courses; and report progress to the department on student participation and completion rates.

Subdivision 3. Report. The Commissioner is required to report to the Education Committee Chairs by October 1, 2010 assessing the progress and development of the program.

Section 2. Definitions.

Subdivision 2. Growth. Defines "growth" as comparing the difference between a student's achievement score at two distinct points in time.

Subdivision 3. Value-Added. Defines "value-added" as the amount of achievement a student demonstrates above an established baseline.

Subdivision 4. "Growth-based value-added." Defines "growth-based value-added" as a value-added system of assessments that measures the difference between an established baseline of growth and a student's growth over time.

Subdivision 5. Adequate yearly progress. Defines "adequate yearly progress" as comparing the average achievement of two different groups of students at two different points in time.

Subdivision 6. State Growth Norm. Defines "state growth norm" as an established statewide percentile, or standard applicable to all students in a particular grade benchmarked to an established school year. States that the state growth norm is benchmarked to 2006-2007 school year data until the Commissioner changes the vertically linked scaled score. Each time the Commissioner changes the vertically linked scaled score, a Minnesota assessment group must recommend a new state growth norm. When a new state growth norm is established, the Commissioner must establish criteria for identifying schools and districts that demonstrate accelerated growth in order to advance educators' professional development and to replicate programs that succeed in meeting students' diverse learning needs.

[Effective Date.] Makes this section effective immediately.

Section 3. Statewide Testing and Reporting System.

Subdivision 1a. Statewide and local assessments; Results. Directs the Commissioner that the statewide assessment system must include a growth-based value-added indicator of student achievement.

[Effective Date.] Makes the section effective immediately.

Section 4. System Accountability

Subdivision 1. Educational Accountability and Public Reporting. States that the accountability system maintained by the Commissioner must promote greater academic achievement, preparation for higher academic education, preparation for the world of work, citizenship and the arts. Directs the Independent Office of Educational Accountability to report to the legislature on how effectively the Commissioner uses a growth-based value-added indicator of student achievement over time. Directs the Commissioner to report student performance and growth levels measured at the school, district and statewide level.

[Effective Date.] Makes this section effective immediately.

Section 5. Student Academic Achievement and Growth.

Subdivision 1. School and Student Indicators of Growth and Achievement. Directs the Commissioner to maintain a system for measuring and reporting individual student growth. The system must include statewide measures of academic growth that identify schools with high levels of growth and schools with low levels of growth.

Subdivision 2. Expectations for federally mandated student academic achievement. Clarifies that a school site that does not meet federally mandated expectations and has not made adequately yearly progress for two consecutive years must adopt a plan to raise student achievement levels to meet federally mandated expectations.

Subdivision 3. Student Growth; Other State Measures. Directs the Commissioner to use a growth-based value added system as the state's educational assessment system. The Commissioner is required to apply the state growth norm to students in grades 4 through 8 beginning in the 2008-2009 school year initially benchmarking the state growth norm to 2007-2008 school year data. The model used by the Commissioner must allow a user to:

report student growth at and above the state norm; and for student categories with a cell size of at least 20, report and compare aggregated and disaggregated state growth data using the nine student categories under No Child Left Behind and two student gender categories of male and female. The model is required to be able to measure the effect on student growth at the school level. A school district's own growth-based value-added analysis may be incorporated in determining whether the district or school site shows growth.

Beginning July 1, 2011, the Commissioner must annually report two core measures indicated the extent to which current high school graduates are being prepared for postsecondary academic and career opportunities. The core measure includes a preparation measure indicating the number and percentage of high school graduates who complete course work in preparation for postsecondary academic and career opportunities and a rigorous coursework measure indicating the number and percentage of high school graduates who complete a college-level advanced placement, international baccalaureate, postsecondary enrollment options, other rigorous course, or industry certification courses.

Subdivision 4. Improving Schools. Directs the Commissioner to report to the public and legislature on best practices learned from schools demonstrating accelerated growth compared to the state growth norm.

[Effective Date.] Makes Subdivision 3, paragraph (b) apply to students in 2009-2010 school year and later. Subdivision 3, paragraph (c) applies to students in 2010-2011 school year and later. Subdivision 4 applies in the 2011-2012 school year and later.

Section 6. School Accountability; Appeals Process.

Subdivision 1. School Performance Report Cards. States the school report cards must include student academic performance, a table showing the percentage of students at and above the state growth norm, school safety, rigorous coursework, student-to-teacher ratios, staff characteristics excluding salaries, student enrollment demographics, district mobility, and extracurricular activities.

Subdivision 2. Adequate Yearly Progress Data. States that all data used to determine adequate yearly progress, set state growth norms, and determine student growth are nonpublic data until the 10 days after the appeal procedure concludes. The Commissioner must post federally mandated adequate yearly progress data and state student growth data to its Web site no later than September 1.

[Effective Date.] Makes this section effective immediately.

Section 7. Growth-Based Value-Added Assessment Program. Strikes language that allowed schools to apply for a trial value-added assessment program. Strikes language allowing the Commissioner to contact with an organization that provides a value-added assessment model.

[Effective Date.] Makes this section effective immediately.

Section 8. Licensure Via Portfolio. Paragraph (b) A qualified candidate is permitted to obtain an initial teaching license or add a licensure field using licensure via portfolio. The initial licensure candidate must submit a portfolio demonstrating pedagogical competence and one demonstrating content competence. Revenue generated by the stated fee for licensure via portfolio must be deposited in an account in the special revenue fund. The board of Teaching may waive or reduce fees for candidates based on financial need.

Section 9. Basic Alternative Teacher Compensation Aid. The state total basic alternative compensation aid entitlement for fiscal year 2010 is $46,781,000 and for fiscal year 2011and later is $46,538,000.

[Effective Date.] Makes this section effective for revenue for fiscal year 2010 and later.

Section 10. Alternative Teacher Compensation Levy. For fiscal year 2010 and later, establishes a formula for a district's alternative teacher compensation levy.

[Effective Date.] Makes this section effective for revenue for fiscal year 2010 and later.

Section 11. Alternative Teacher Compensation Aid. For fiscal year 2010 and later, establishes a formula for a district's alternative teacher compensation aid.

[Effective Date.] Makes this section effective for revenue for fiscal year 2010 and later.

Section 12. Teacher Institute Functions. Teacher institutes are formed to provide advanced training for math and science teachers during the summer in the areas of content knowledge and effective instruction practices. A teacher is eligible for graduate-level credits after successful completion of the institute.

[Effective Date.] Makes this section effective for the 2008-2009 school year and later.

Section 13. Regional pupil transportation services. Allows three or more contiguous school districts in Hennepin County to enter into an agreement to provide pupil transportation services. Requires participating districts to provide transportation to all students who attend school in those districts. Requires participating districts to report to the Legislature in the third year following the initial agreement on the cost savings and operating efficiencies as well as the impacts to bus dribers and other workers assigned to bus duties.

Section 14. Authorization; Notification. A postsecondary institution enrolling a secondary student in a course through the Post Secondary Enrollment Options Program for postsecondary credit only is required to notify the student about payment.

Section 15. Authorization; Notice; Limitations on Enrollment. Clarifies the procedure for a student to enroll in supplemental online learning. An online learning provider is required to provide the enrolling district with the course syllabus, content outline, assessment requirements, expectations for teacher contact time, other student-to-teacher communication and academic support for supplemental online courses taken by students in the enrolling district. The enrolling school district has 15 days to notify the online provider whether the course meets the student's graduation requirements. An online learning provider is required to report student progress to the student, their parent, and the enrolling district.

Section 16. Online Learning Parameters. Language that the online learning provider has to make the course syllabus, standard alignment, content outline, assessment requirements and contact information for courses taken is stricken. Clarifies reporting requirements for full-time and supplemental online learning providers.

Section 17. Department of Education. An online learning provider is required to provide assurance that all the courses meet state academic standards, and that the curriculum, instruction and assessment, expectations for teacher contact time or other student-to-teacher communication and academic support meet professional standards and are demonstrated in the syllabus.

Section 18. Online Learning Advisory Council. The Online Learning Advisory Council's expiration date is extended for one year to June 30, 2009.

Sections 19 to 22. Appropriations. Appropriations from Laws 2007 are adjusted. See fiscal sheets.

Section 23. Report. Extends the special education task for one year to February 15, 2009. Amends the duties of the task force to include recommending rules governing the use of aversive and deprivation procedures. A parent advocate must be appointed to the task force to replace the Minnesota Department of Education member representing regulators.

[Effective Date.] Makes this section effective immediately.

Section 24. Special Education Task Force. Appropriates money in fiscal year 2009 for the task force. See fiscal tracking sheets.

Section 25. Implementing a Student Growth-Based Value-Added System. Directs the Commissioner to consult with a group of expert school district assessment and evaluation staff and stakeholders to examine the statewide performance of students using Minnesota's growth-based value-added system. Requires a report to the legislature describing criteria for identifying schools and school districts that demonstrate accelerated growth.

[Effective Date.] Makes this section effective immediately and applies to school report cards in the 2008-2009 school year and later.

Section 26. Growth-Based Value-Added System. Requires the system the Commissioner uses to be consistent with the model contained in the document labeled "Educational Report Card Growth Model, 2008," which must be filed with the Revisor, the Legislative Reference Library, and the state law library. The Minnesota assessment group must determine whether the growth-based value-added model the Commissioner uses complies with Minnesota Statutes and report the determination to the Education committees of the legislature by February 15, 2009.

[Effective Date.] Makes this section effective immediately.

Section 27. School District Plans to Improve Students' Academic Achievement. Requires a district experiencing disparities in academic achievement to submit a plan to improve student achievement.

[Effective Date.] Makes this section effective immediately.

Section 28. Advisory Task Force On Improving Students' Academic Achievement. Establishes a task force to review district academic achievement plans. Provides for the membership of the task force and administrative provisions for convening the first meeting.

[Effective Date.] Makes this section effective immediately.

Section 29. Appropriations. See fiscal tracking sheets.

Article 4

Facilities and Accounting

Section 1. Debt Service Appropriation. Updates the statutory appropriations for fiscal year 2008 - 2011 for payment of debt service equalization aid.

Section 2. Bonds for Certain Capital Facilities. Includes modifying buildings and equipment for security in the list of uses for bonds. Increases the bond payoff time from ten years to 15 years.

Section 3. Ice Arena Levy. Increases the amount a district may levy from 90 percent to 100 percent of the net actual costs of operation of the arena for the previous year.

Section 4. Fund Transfer.

Subdivision 1. Balaton. Authorizes Independent School District No. 411, Balaton, to transfer up to $70,000 from its reserved for operating capital account to its undesignated general fund balance without making a levy reduction.

Subdivision 2. East Central School District. Authorizes Independent School District No. 2580, East Central, to transfer up to $300,000 from its reserved for operating capital account to its undesignated general fund balance without making a levy reduction.

Subdivision 3. Hills-Beaver Creek.

Paragraph (a) authorizes Independent School District No. 671, Hills-Beaver Creek, to transfer up to $260,000 from its disabled accessibility fund to its undesignated general fund balance without making a levy reduction.

Paragraph (b) authorizes Independent School District No. 671, Hills-Beaver Creek, to transfer up to $100,000 from its reserved for operating capital account to its undesignated general fund balance without making a levy reduction.

Subdivision 4. Rocori. Authorizes Independent School District No. 750, Rocori, to transfer up to $82,000 from its disabled accessibility fund to its undesignated general fund balance without making a levy reduction.

Subdivision 5. Virginia. Authorizes Independent School District No. 706, Virginia, to transfer up to $100,000 from its debt redemption fund to its undesignated general fund balance without making a levy reduction.

[Effective Date.] Makes this section effective the day following final enactment.

Section 5. Alternative Facilities Revenue Program. Allows Independent School District No. 623, Roseville, to be eligible for the alternative facilities bonding and levy program as if the district has met the square foot requirements of that program.

Article 5

Nutrition

Section 1. Reimbursement. Increases the reimbursement for kindergarten milk from 14 to 20 cents.

Section 2. Traditional School Breakfast; Kindergarten Milk. See fiscal tracking sheets.

Article 6

State Agencies

Section 1. Committee on American Indian Education Programs. Requires the Commissioner to create an American Indian committee. The membership must include representatives of tribal bodies, community groups, parents of children eligible to be served by programs, American Indian administrators and teachers, persons experienced in the training of teachers for American Indian education programs, persons involved in programs for American Indian children in American Indian schools, and person knowledgeable in the field of American Indian education. Requires the committee to advise the Commissioner in the administration of it's duties under the American Indian Education Act.

Section 2. Appropriations. Adjusts the agencies appropriation. See fiscal tracking sheets.

Section 3. Outdoor Education Working Group. Directs the Commissioner of Natural Resources to coordinate a working group with the Commissioner of Education to report recommendations on the teaching of outdoor education in grades 7 through 12.

Article 7

Lifelong Learning

Section 1. Developmental Screening Aid. Increases the reimbursement for screening three, four, five, and six year olds prior to kindergarten.

Section 2. State Total Adult Basic Education Aid. Adjusts the formula for calculating state total adult basic education aid to include the lesser of 3 percent or the average growth in state total contact house over the prior 10 program years.

Section 3. Fiscal Year 2007 Replacement Aid. Clarifies that the Plainview-Elgin-Millville school district must receive replacement revenue, including a levy adjustment of $6,600 included as part of the district's property taxes for taxes payable in 2009.

Section 4. Health and Developmental Screening Aid Appropriation. See fiscal tracking sheets.

Section 5. State Advisory Board on Early Learning. A 12-member state advisory board on early learning to make recommendations on how to leverage state and federal funding streams and on the feasibility of coordinating or collocating early childhood and child care programs in one state Office of Early Learning. The board expires on January 1, 2013.

[Effective Date.] Makes this section effective immediately.

Makes forecast adjustments. See fiscal tracking sheets.

Sections 1 and 2 summarize appropriation reductions for FY 2009.

Section 3, subdivision 1, reduces the FY 09 appropriation to the Office of Higher Education.

Subdivisions 2, 3, 4, and 5 reduce the FY 09 appropriations for interstate tuition reciprocity, the Minnesota College Savings Plan, the Achieve Scholarship Program, and agency administration.

Subdivision 6 cancels a $90,000 appropriation made during the 2005 session to upgrade computer software.

Subdivision 7 directs the Commissioner of Finance to transfer money to the general fund.

Section 4, subdivision 1, reduces the FY 09 appropriation to MnSCU.

Subdivision 2 directs the MnSCU board to allocate reductions under this section to their general fund appropriation, and report to the Department of Finance and Legislature on the reductions made, and the activities receiving the reduction. Further directs the board to allocate reductions to central office activities that do not have a direct effect on instructional services to students and do not reduce campus allocations of state revenue.

The intent of the Legislature in limiting the reduction of appropriations to campuses is in support of the board's decision to limit tuition increases at two year institutions to two percent, and increases at state universities to three percent.

Subdivision 3 appropriates $500,000 for the elimination of nonresident undergraduate tuition at four MnSCU institutions. Specifies the manner in which the money should be allocated to the institutions.

Subdivision 4 appropriates money for MnSCU institutions that lost reciprocity tuition revenue due to the elimination of nonresident tuition. Specifies the manner in which the money should be allocated to the institutions.

Section 5, subdivision 1, reduces the FY 08 and FY 09 appropriation to the University of Minnesota.

Subdivision 2 directs the board of regents to allocate reductions under this section to their general fund appropriation, and report to the Department of Finance and Legislature on the reductions made, and the activities receiving the reduction.

Encourages the board of regents to avoid allocating reductions to programs and activities that would require increased tuition revenue to maintain instructional services to students.

Subdivision 3 appropriates $200,000 to develop a model to assess the impact of various health care reforms as described in section 17.

Subdivision 4 appropriates $300,000 to conduct a study and economic analysis of costs and benefits of various health care reform proposals as described in section 18.

Section 6 reduces the assigned family responsibility percentage in the formula used to calculate a student's state grant award amount.

Section 7 adds "a spouse or dependent of a veteran" to the list of individuals considered residents for the purpose of receiving a state grant.

Section 8 reduces the student share used in calculating the state grant award amount from 46 to 45 percent.

Section 9 makes permanent the use of the surplus in the state grant appropriation to increase the living and miscellaneous expense allowance in the second year of the biennium.

Section 10 authorizes the use of TEACH grant money for administrative costs.

Section 11 authorizes the MnSCU Board of Trustees to sell MnSCU facilities that were built on nonstate-owned lands.

Section 12 increases the MnSCU board's authority to issue revenue bonds from $150 million to $200 million.

Section 13 allows individuals eligible to receive the Safety Officer Survivor Grant to be eligible to receive the grant until the age of 30 if they go into the military.

Section 14 increases the tuition maximum for four-year programs in FY 09 to $10,133.

Section 15 eliminates language consistent with the reduction to the Achieve Scholarship Program in section 3.

Section 16 authorizes the transfer of an unencumbered balance to the Indian Scholarship appropriation.

Section 17 modifies the appropriation the University of Minnesota will receive upon fulfilling three of five performance goals.

Sections 18 and 19 delineate the economic model that must be developed, and the analyses that must be completed in conjunction with the appropriations made to the University of Minnesota in section 5, subdivisions 3 and 4.

Section 20 repeals Minnesota Statutes 2007 Supplement, section 136A.127 [Achieve Scholarship Program].

Section 1 [Summary of Appropriations] summarizes the net appropriations in this article. General fund appropriations are reduced by $2.95 million and natural resources fund appropriations are increased by $973,000.

Section 2 [Appropriations] provides that the changes in appropriations in this article are from the general fund or another named fund.

Section 3 [Pollution Control Agency] reduces the general fund appropriations to the PCA by $473,000.

Section 4 [Department of Natural Resources] provides an overall reduction to the DNR of $1.8 million. This includes a general fund reduction of about $2.8 million and a natural resources fund increase of $973,000. Specific program area budget changes are as follows:

Lands and Minerals: a general fund reduction of $541,000 for land asset management, iron ore cooperative agreements, minerals diversification, and decreased costs for land exchanges;

Water Resource Management: a general fund reduction of $90,000 for ring dikes, decreased reporting costs, and Red River mediation;

Forest Management: a general fund increase of $53,000 for a forest fragmentation and parcelization study;

Parks and Recreation Management: a general fund decrease of $220,000 for parks management, and an increase of $220,000 from the state parks account for parks management;

Trails and Waterways Management: a general fund reduction of $50,000 for nonmotorized trails and an increase of $185,000 from the all-terrain vehicle (ATV) account for ATV trails.

Fish and Wildlife Management: a general fund reduction of $427,000 for fish and wildlife management, operation of the Minnesota Shooting Sports Education Center, and licensing;

Ecological Services: a reduction of $200,000 for impaired waters and a transfer of $594,000 from the water recreation account to the invasive species account;

Enforcement: a general fund reduction of $458,000, an increase of $383,000 from the water recreation account, and an increase of $185,000 from the ATV account for county grants; and

General Agency Operations: a general fund reduction of $844,000 for general agency operations.

Section 5 [Board of Water and Soil Resources] appropriates a net general fund increase to the board that includes a $100,000 reduction from county cooperative weed management program, a reduction of $150,000 reduction in drainage assistance, a $450,000 increase for cost-share programs in the areas flooded in 2007, and a $100,000 increase for a grant to the Star Lakes Board.

Section 6 [Transfers] transfers $101,000 from the Minnesota future resources fund to the general fund, and $1.4 million from the stream protection and improvement fund to the general fund.

Section 7 [Expedited Exchanges of Public Land] contains the process of expedited exchanges of public land ownership from S.F. 2651 (Saxhaug). It provides a reduced cost process for exchanging:

1. state land, other than school trust or university trust land;

2. tax-forfeited land;

3. land owned in fee title by governmental subdivisions.

This section allows the valuation of land to be either:

1. by appraisal;

2. the current statutory process used for acquiring lands that have a value of less than $5,000; or

3. a market analysis from a qualified real estate broker.

This section also provides, as required by the Minnesota Constitution, that all exchanges must be approved unanimously by the Land Exchange Board (the governor, the attorney general, and the state auditor).

Section 8 [Bovine Tuberculosis Zone; Wildlife Feeding Restrictions] extends the wildlife feeding restrictions to a 30-mile radius for infected herds. This section also prohibits a person convicted of the feeding ban from obtaining a hunting license for two years. This is from S.F. No. 3728 (Skoe).

Section 9 [Outdoor Heritage Fund; Lessard Heritage Enhancement Council] creates the Lessard Heritage Enhancement Council to make recommendations for expenditures from the outdoor heritage fund, if the constitutional amendment passed earlier in the session is adopted by the voters. This is from S.F. No. 3488 (Chaudhary).

Section 10 [Water Report Elimination] eliminates a water needs assessment report requirement.

Section 11 [Star Lake and River Designation] provides for the designation of star lakes and rivers. This is from S.F. 2943 (M. Olson).

Section 12 [Star Lake Board] establishes the Star Lake Board as a 501(c)(3) nonprofit to approve star and river lake designation, and work with private and public entities to leverage the resources available to achieve maximum results for Minnesota star lakes or rivers. This is from S.F. 2943 (M. Olson).

Section 13 [Water Use Permit Fees] increases water appropriation fees to raise approximately $500,000 in revenue annually to the general fund.

Section 14 [Star Lake and River Signs] provides for the placement of star lake and river signs within the right-of-way of highways. This is from S.F. 2943 (M. Olson).

Section 15 [2007 Forest Management Appropriation Change] broadens the availability of two 2007 general fund appropriations to include all forest management activities.

Section 16 [Star Lake Board Meeting and Appointments] contains the provision for the initial appointments and meetings of the Star Lake Boards from S.F. 2943 (M. Olson).

Section 17 [DNR Rulemaking on Structures in Public Waters] contains the requirement for DNR rulemaking on structures in public waters from S.F. 3237 (M. Olson).

Section 1 [Summary of Appropriations] summarizes the net appropriations in this article. General Fund appropriations are reduced by $4.1 million.

Section 2 [Appropriations] provides that the changes in appropriations in this article are from the general fund or other named fund.

Section 3 [Commerce: Energy and Telecommunications]

Reduces hydrogen initiative grants by $2.8 million (from an original general fund appropriation of $3.25 million).

Eliminates the FY2009 appropriation of $1.5 million for E-85 pump cost share grants (the FY2008 $1.5 million is not changed).

Requires that the costs of the Green Economy Transformation Task Force and report in sections 8 and 9 of this article are to be paid from the existing appropriation for environmentally friendly manufacturing and assembly processes that was appropriated in 2007 from the renewable development fund.

Makes a onetime $200,000 appropriation from the general fund to develop sustainability standards for biodiesel feedstock.

Section 4 [Public Utilities Commission] makes a onetime $4 million transfer from the telephone assistance plan to the general fund.

Section 5 [Coordinating Economic Development and Environmental Policy] defines "green economy" for the purpose of the section. Requires the Commissioner of Employment and Economic Development and the Job Skills Partnership Board to cooperate to promote job training that complements green economy business development.

Section 6 [Priorities] adds a project that advances or promotes a green economy to the list of redevelopment projects that the Commissioner must prioritize when determining which projects will receive grants in the event that applications exceed appropriations.

Section 7 [Eligible Projects] adds a project that promotes or advances a green economy to the list of conditions that the Commissioner is required to consider when evaluating project eligibility for a grant through the Minnesota investment fund.

Section 8 [Report] requires the Commissioner of Commerce in consultation with the Commissioner of Employment and Economic Development to submit a report to the legislative committees with jurisdiction over energy, environment, and economic development policy or finance by January 15, 2009. The report must analyze all state grant and loan programs administered by a state agency so that a plan, specific to each program, may be developed to optimize the growth of a green economy.

Section 9 [Green Economy Transformation Task Force] establishes the Green Economy Transformation Task Force to advise and assist the Governor and Legislature regarding activities to transform the state's economy and to develop a statewide action plan. Provides the composition of the task force and requires the task force to present a statewide action plan to the Governor and the Legislature by January 15, 2009.

Section 1 [Summary of Appropriations] summarizes the net appropriations in this article. General fund appropriations are increased by almost $6 million.

Section 2 [Appropriations] provides that the changes in appropriations in this article are from the general fund or another named fund.

Section 3 [Department of Agriculture] reduces the overall general fund appropriation to the Department of Agriculture by $262,000, including:

(1) a general reduction of $652,000;

(2) a reduction of $310,000 in ethanol producer payments for an ethanol plant that ceased operations; and

(3) an increase of $700,000 for livestock investment grants.

This section also redirects ethanol producer payments in fiscal years 2010 and 2011 for any ethanol plant that ceased operation in 2004 to make the money available for unpaid claims against the producer.

Section 4 [Board of Animal Health] increases the general fund appropriations to the Board of Animal Health by over $6.2 million for activities related to bovine tuberculosis control and eradication. This includes $3.5 million for payments to cattle owners who remove cattle from the bovine tuberculosis management zone and to provide fencing assistance.

Section 5 [Livestock Investment Grant Program] establishes the Livestock Investment Grant Program in the Department of Agriculture. Farmers will receive a grant of ten percent of the first $500,000 in eligible investments. The minimum investment for the grant is $4,000. A farmer may receive multiple grants under the program up to a maximum from all grants of $50,000. This is from S.F. No. 2704 (Skogen).

Section 6 [Bovine Tuberculosis Management Zone; Herd Buyout and Restrictions] provides for payments of $500 per head for producers within the bovine tuberculosis management zone for cattle slaughtered and an additional yearly payment of $75 per head until the Board of Animal Health approves cattle in the zone. For cattle remaining in the zone, the board shall conduct a risk assessment and may require the owner to keep cattle in a manner that does not allow deer and cattle interface. An owner of cattle within the zone is eligible for cost-share assistance for 90 percent of the cost of approved fencing up to $75,000. This is from S.F. No. 3728 (Skoe).

Section 7 [Control of Bovine Tuberculosis] allows the Board of Animal Health to establish bovine tuberculosis zones in the state and provide specific requirements within the modified accredited zone. This is from S.F. No. 3728 (Skoe).

Section 8 [Bovine Tuberculosis Control; Temporary Assessment] establishes a $1 temporary assessment on cattle sold for slaughter in calendar year 2009. Money collected from the temporary assessment is appropriated to the Board of Animal Health for bovine tuberculosis control activities. Cattle owners in a modified accredited zone established by the board may apply for a refund. This is from S.F. No. 3728 (Skoe).

Section 1 [Summary of Appropriations] summarizes the net appropriations in this article. General fund appropriations are reduced by slightly more than $5.8 million for the biennium.

Section 2 [Appropriations] provides that the changes in appropriations from this article are from general fund or another named fund.

Section 3 [ Veterans Affairs] provides a net overall general fund reduction to the Department of Veterans Affairs of $5.2 million in fiscal year 2008 and $625,000 in fiscal year 2009, including:

(1) a $2.5 million appropriation in fiscal year 2009 for the state soldiers' assistance program;

(2) a $100,000 appropriation for operations of the LinkVET Linkage Line;

(3) a $250,000 appropriation for traumatic brain injury and posttraumatic stress disorder outreach education;

(4) a $500,000 appropriation for additional state veterans case workers;

(5) a contingent appropriation beginning in fiscal year 2010 of $325,000 each year for staffing a new veterans cemetery in northern Minnesota;

(6) a reduction of the amount appropriated in 2007 for higher education grants to eligible veterans or spouses or children of veterans by $5.2 million in fiscal year 2008, and $5 million in fiscal year 2009;

(7) a $250,000 appropriation for a grant to the Minnesota Assistance Council for Veterans for helping veterans and families affected by homelessness;

(8) a $125,000 appropriation in fiscal year 2009 for "state navigator" positions to support veterans and their families during and after the reintegration process;

(9) a $250,000 appropriation in fiscal year 2009 for the veterans claims office to add veterans service officer coordinating positions, including one position to assist female veterans;

(10) a $100,000 appropriation for a grant the Minnesota Ambulance Association for a veterans paramedic apprenticeship program; and

(11) a $100,000 appropriation for veterans affairs marketing;

(12) a $200,000 appropriation for a strategic planning study of the operations and capacity of the Minnesota veterans homes.

Section 4 [World War II Memorial Donation Match Account] appropriates money remaining in the World War II memorial donation match account after the World War II memorial has been paid in full to the Commissioner of Veterans Affairs for service programs for veterans and their families.

Section 5 [Support Our Troops Account] appropriates the Department of Veterans Affairs share of the money from the Minnesota "Support Our Troops" license plates for:

(1) grants to veterans service organizations; and

(2) outreach to underserved veterans.

Article 14

Military Affairs

Section 1 [Summary of Appropriations] summarizes the net appropriations in this article. General fund appropriations are increased by $375,000.

Section 2 [Appropriations] provides that the changes in appropriations in this article are from the general fund or another named fund.

Section 3 [Military Affairs] appropriates $375,000 from the general fund to the Department of Military Affairs, including:

(1) $75,000 for state enhancement of the employer support of the guard and reserve program;

(2) $135,000 for $1,000 biannual bonus payments to National Guard medics who meet recertification requirements;

(3) $150,000 for adding "state navigator" positions to coordinate agency programs for support and assistance to soldiers and families during the reintegration process; and

(4) $15,000 for a study of the National Guard Youth Challenge Program provided in section 10 of this article.

Sections 4 and 5 [Support Our Troops License Plate Account] provide a statutory appropriation of the money in the Minnesota support our troops account derived from "Support Our Troops" license plate sales. Divides the appropriation in equal shares between the Department of Military Affairs and the Department of Veterans Affairs. Provides that the Department of Military Affairs may expand uses of money from the support our troops account to include grants to family readiness groups.

Sections 6 and 7 [Timber Sales at Camp Ripley] removes a requirement for the Adjutant General to deposit proceeds from the sale of timber at Camp Ripley in the general fund and provides new authority for the Adjutant General to sell timber from Camp Ripley and deposit the proceeds in an account to be used to manage the timber resources at Camp Ripley in a manner consistent with the camp's purpose for training armed forces.

Section 8 [State Enhanced Employer Support of Guard and Reserve Program] authorizes the Adjutant General to administer a state enhancement to the federal Employer Support of Guard and Reserve Program.

Section 9 [Medic Recertification Bonus Program] allows the Adjutant General to establish a program to provide a recertification bonus to eligible members of the Minnesota National Guard who recertify as emergency medical technicians. The bonus payments are intended to encourage continuing certification as an EMT. Section 3 of this article provides a $135,000 payment for $1,000 individual biannual bonus payments for the purposes of this section.

Section 10 [National Guard Youth Challenge Program Study] requires the Adjutant General to study participation by the Minnesota National Guard in the National Guard Youth Challenge Program promoted by the National Guard Youth Foundation.

Section 1 [Summary of Appropriations] is the appropriations summary for the direct appropriations and reductions made in this article.

Section 2 [Jobs and Economic Development Appropriations and Reductions] provides information on the application and layout of the article.

Section 3 [Commerce] (Transfers In) transfers $2,000,000 from the unencumbered balance of the insurance fraud prevention account in the special revenue fund to the general fund. Transfers $25,000,000 from the balance in the workers' compensation assigned risk plan to the general fund.

Section 4 [Employment and Economic Development], subdivision 1 (Total Appropriation), makes a reduction of $3,375,000 in fiscal year 2009 to the Department of Employment and Economic Development.

Subdivision 2 (Business and Community Development) makes a reduction of $4,000,000 in fiscal year 2009 to the Minnesota Investment Fund. Appropriates $100,000 in fiscal year 2009 for a major economic design project that expands and strengthens nanotechnology in Minnesota.

Subdivision 3 (Workforce Development) appropriates $525,000 in fiscal year 2009 to Workforce Development. Specifies appropriations for a $75,000 grant to Lifetrack Resources for a onetime pilot project in Rochester, Minnesota; for a onetime $250,000 transfer to a new revolving loan account for the Military Reservist Economic Injury Loan Program; and for a $200,000 grant to HIRED to operate its industry sector training initiatives.

Subdivision 4 (Cancellations) requires the Commissioner of Finance to cancel the unencumbered balance of the appropriation to the foreign trade zone authority to the general fund. The Commissioner shall also cancel $500,000 of the balance in the Job Skills Partnership account to the general fund.

Subdivision 5 (Transfers In) transfers approximately $150,000 of the unencumbered balance in the methamphetamine laboratory cleanup revolving loan account to the general fund; $8,000,000 from the unencumbered balance in the workforce development fund to the general fund; and $2,700,000 from the unencumbered balance in the Minnesota investment revolving loan account to the general fund.

Section 5 [Explore Minnesota Tourism] appropriates $2,150,000 in fiscal year 2009 to Explore Minnesota Tourism. Appropriates $500,000 from the special marketing account for a onetime grant to the Minnesota Film and TV Board for the filming of a movie in Minnesota. Also, appropriates $2,200,000 for a onetime grant to the Minnesota Film and TV Board for the jobs production program.

Section 6 [Housing Finance Agency] makes a reduction of $200,000 in fiscal year 2009 to the Housing Finance Agency.

Section 7 [Labor and Industry] transfers $4,000,000 from the code consolidation fund to the general fund.

Section 8 [Minnesota Historical Society] appropriates a onetime $500,000 grant in fiscal year 2008 to the Minnesota Historical Society for the Minnesota Sesquicentennial Commission. Makes a $200,000 reduction in fiscal year 2009 to the Minnesota Historical Society.

Section 9 [Board of the Arts] makes a $175,000 reduction in fiscal year 2009 to the Board of the Arts.

Section 10, subdivision 1 (Registration or Notice Filing Fee), eliminates the requirement that the Commissioner of Commerce refund filing fees made in connection with federal covered securities when the total collected fees are in excess of $25,600,000.

Section 11, subdivision 2a (Grants Authorized) authorizes the Commissioner of Employment and Economic Development to use money in the Minnesota minerals 21st century fund to make grants to a county, or to a country regional rail authority for public infrastructure to support an eligible project as specified.

Section 12 [Military Reservist Economic Injury Loans], subdivision 1 (Definitions), defines "active service," "commissioner," "eligible business," "essential employee, "military reservist," "reserve component of the armed forces," and "substantial economic injury."

Subdivision 2 (Loan Program) authorizes the Commissioner of Employment and Economic Development to make onetime, interest-free loans of up to $20,000 per borrower for eligible businesses that have sustained or are likely to sustain substantial economy injury as result of the call to active service for 180 days or more of an essential employee.

Subdivision 3 (Revolving Loan Account) establishes a revolving loan account.

Subdivision 4 (Rules) requires the Commissioner of Employment and Economic Development to use the expedited rulemaking procedures to develop and publish rules for loan applications, use of funds, needed collateral, terms of loans, and other details of the loans.

Section 13, subdivision 1 (Partnership Program), requires each institution to provide for dissemination of summary results of a grant-funded project as specified.

Section 14, subdivision 3 (Use of Funds), authorizes the Job Skills Partnership Board to use some of its funds for information collection and dissemination to plan for the statewide distribution of the results of grant-funded projects under section 2.

Section 15, subdivision 5 (Use of Workforce Development Funds), eliminates a reference to the Hire Education loan program administered by the Job Skills Partnership Board as an eligible use of workforce development funds. This program which provides loans to employers for training of employees through public and private institutions is being repealed.

Section 16, [Distance-Work Grants] eliminates Hire Education loans from being packaged with grants that promote distance work projects in rural areas through technology. The loan program is being repealed.

Section 17, subdivision 1 (Definitions), clause (c), paragraph (6), extends the definition of "dislocated worker" to include a veteran, who has been discharged or released from active duty within the last 36 months and is either unemployed or employed in a job that pays less than what the veteran could verifiably earn.

Section 18, subdivision 2 (Disbursement of Special Assessment Funds), eliminates a reference to the Hire Education loan program administered by the Job Skills Partnership Board as an eligible use of workforce development funds. This program which provides loans to employers for training of employees through public and private institutions is being repealed.

Section 19 [Film Jobs Production Program], paragraph (c), authorizes the Minnesota Film and TV Board to make reimbursements of up to 20 percent of film production costs for films that incur production costs in excess of $5,000,000 in Minnesota within a 12-month period.

Section 20, subdivision 1 (Creation of Committee; Purpose) provides that the committee will advise the Iron Range Resources and Rehabilitation Board on providing higher education programs in the taconite assistance area. Current law requires the committee to advise the Commissioner.

Section 21, subdivision 2 (Iron Range Higher Education Committee; Membership), changes the composition of the committee by removing the Commissioner of Iron Range resources and rehabilitation and adding one member appointed by the Chancellor of the Minnesota State Colleges and Universities.

Section 22, subdivision 2 (Administration) specifies public works projects that are eligible for assistance through the taconite environmental protection fund.

Section 23 [Taconite Economic Development Fund] specifies requirements for distributions prior to January 1, 2009 in the taconite economic development fund.

Section 24, subdivision 2 (Use of Money) provides that property purchased under the section may be sold upon approval by a majority of the Iron Range Resources and Rehabilitation Board and specifies how the proceeds must be deposited.

Section 25, subdivision 2 (Projects; Approval) eliminates the requirement that projects funded by the taconite area environmental protection fund must be for haulage trucks and equipment and mining shovels.

Section 26, subdivision 3 (Program Administration), paragraph (d), requires the Public Facilities Authority (PFA) to make funds available for projects based on their ranking on the Pollution Control Agency's (PCA) project priority list. Provides that funds will be reserved for a project once the applicant receives a funding commitment from the United States Department of Agriculture Rural Development (USDA/RECD) or submits plans and specifications to the PCA. Specifies how the amount of funds to be reserved is calculated.

Section 27, subdivision 5a (Type and Amount of Assistance), raises the grant amount that the PFA may provide to a governmental unit receiving grant funding from the USDA/RECD from one-half to 65 percent of the eligible grant need determined by the USDA/RECD. Authorizes the PFA to provide assistance to a governmental unit not receiving grant funding from the USDA/RECD for eligible costs plus the outstanding balance on any existing wastewater system debt that together exceed five percent of the market value of properties in the project service area, less the amount of other grant funding. Makes technical changes.

Section 28 [State May Guarantee Governmental Unit Building Debt; Repayment], extends the definition of "debt obligation" to include a general obligation bond issued by a government unit and acquired under the credit enhanced bond program. Changes application fee requirements (see Section 93). Changes references to "counties" to "governmental units". Specifies when a deposit is due on revenue bonds. Makes technical changes.

Section 29 [Credit Enhanced Bond Program], subdivisions 1 and 2, establish the Credit Enhanced Bond Program to provide loans to governmental units through the purchase of general obligation bonds of governmental units issued to finance all or a portion of costs of a project.

Subdivision 3 (Definitions ) defines "applicant," "borrower," "commitment," "eligible cost," "general obligation bonds," "project," and "regulatory agreement" for purposes of the section.

Subdivision 4 (Establishment of Fund and Accounts) establishes the credit enhancement bond program fund as specified.

Subdivision 5 (Management of Fund and Accounts) authorizes the Public Facilities Authority to manage and administer the credit enhancement bond program fund and individual accounts in the fund.

Subdivision 6 (Applications) specifies the application process for the Credit Enhancement Bond Program.

Subdivision 7 (Loan Terms and Conditions) specifies the terms and conditions of the loans provided by the Public Facilities Authority pursuant to the Credit Enhanced Bond Program.

Subdivision 8 (Interest Rate Determination) specifies how the interest rate on the general obligation bonds will be determined.

Subdivision 9 (Market Considerations) authorizes the Public Facilities Authority to suspend offering loans when extreme or unusual events that impact the bond market.

Subdivision 10 (Fees) authorizes the Public Facilities Authority to charge a $1,000 application fee as specified.

Subdivision 11 (Authority Revenue Bonds) provides that the Public Facilities Authority is authorized to issue revenue bonds as specified.

Subdivision 12 (Reports, Disclosure, Audits) requires the borrower to provide reports, specified disclosures, and financial statements to the Public Facilities Authority

Section 30, subdivision 1 (Bonding Authority), excludes bonds issued under the Credit Enhanced Bond Program or refunding or crossover refunding bonds issued under the program from the requirement that the principal amount of bonds issued and outstanding may not exceed $1,500,000,000. Provides that the principal amount of bonds issued and outstanding under the program may not exceed $500,000,000, excluding bonds for which refunding bonds or crossover refunding bonds have been issued.

Section 31, subdivision 7 (Assistance to Prevent Mortgage Foreclosures) specifies the maximum amount of financial assistance an individual or family may receive to prevent a mortgage foreclosure or the cancellation of a contract for deed.

Section 32, subdivision 32 (Nonprofit Housing Bonds Account) authorizes the establishment of a nonprofit housing bond account as a separate account within the housing development fund.

Section 33, subdivision 1 (Debt Ceiling) establishes a $5,000,000,000 debt ceiling on the aggregate principal amount of bonds and notes outstanding at any time.

Section 34 [Nonprofit Housing Bonds; Authorization; Standing Appropriation], subdivision 1 (Definitions), defines "debt service," "Internal Revenue Code," and "nonprofit housing bonds" for purposes of the section.

Subdivision 2 (Appropriation of Debt Service; Payment to Agency or Trustee) appropriates up to $2,400,000 annually from the general fund for deposit in the nonprofit housing bond account to pay debt service on nonprofit housing bonds. The appropriation may be made for no more than 20 years.

Subdivision 3 (No Full Faith and Credit) provides that the nonprofit housing bonds are not the public debt of the state, and the full faith and credit and taxing powers of the state are not pledged to payment of the bonds.

Subdivision 4 (Authorization) authorizes the Housing Finance Agency to issue up to $30,000,000 of nonprofit housing bonds as specified.

Section 35 [Nashwauk Gas Utility] authorizes the city of Nashwauk to establish a municipal gas utility for the purpose of constructing, owning, and operating gas lines, and distributing gas to customers located within the municipal boundaries and to customers located within the neighboring municipalities.

Section 36, subdivision 6 (St. Paul RiverCentre Arena), makes changes to the debt payment schedule for the St. Paul RiverCentre Arena.

Section 37 [Upper Red Lake Business Loan Program] requires repayment loans to begin no later than one year after walleye fishing on Upper Red Lake is recovered to a regular bag limit of six.

Section 38, subdivision 14 (Itasca County - Infrastructure), provides for a grant to Itasca County for public infrastructure needed to support a steel plant in Itasca County and economic developments in contiguous counties. Eliminates the provision that allows for the grant to be used for an innovative energy project. Provides that Itasca County will work in cooperation with Nashwauk Municipal Utility to predesign, design, construct, and equip natural gas pipelines, electric infrastructure, water supply systems, and wastewater collection and treatment systems.

Section 39, subdivision 6 (Itasca County Infrastructure), provides that Itasca County will work in cooperation with Nashwauk Municipal Utility to predesign, design, construct, and equip electric infrastructure, natural gas pipelines, water supply systems, and wastewater collection and treatment systems for a steel plant in Itasca County.

Section 40, subdivision 2 (Business and Community Development), paragraph (j) provides that the appropriation to Minnesota Technology, Inc. does not cancel and is available until June 30, 2001.

Paragraph (bb) provides that the $5,000,000 appropriated during the 2007 legislative session for grants for the Minnesota Investment Fund Program is a onetime appropriation and available in either year of the biennium.

Section 41 [Distributions Only; Taconite Production Tax] specifies how distributions must be paid to the Hibbing Economic Development Authority and to the St. Louis County School Board.

Section 42 [Hardship Payments] provides extra benefits for hardship caused by delays in the receipt of unemployment payments due to the Department of Employment and Economic Development's new computerized unemployment insurance benefits system implemented in October 2007. Defines "economic hardship" and specifies notice and payment requirements.

Section 43 [Lumber Company Extra Benefits] provides an additional 26 weeks of unemployment insurance benefits to workers laid off from the Ainsworth Lumber Company in Cook, Minnesota. Specifies notice and eligibility requirements.

Section 1 lists the summary of all appropriations by fund. Total direct appropriations and reductions to the Department of Transportation and transportation-related activities of the Department of Public Safety for the 2008-09 biennium are $6.8 million.

Section 2 states that all appropriations or reductions in this article are from the trunk highway fund unless another fund is specified. All appropriations for FY 2008 are effective the day following final enactment.

Section 3. Department of Transportation.

Subdivision 1. Total Appropriations. Appropriates $6.85 million in FY 2008 from the trunk highway fund as spending authority for additional federal bridge funding. This is a onetime appropriation and does not add to the base appropriation for State Roads.

Subdivision 2. Transfers In. Directs the commissioner of finance to transfer $3 million in FY 2008 and $3 million in FY 2009 to the general fund from the rail service improvement account in the special revenue fund.

Section 4. Department of Public Safety. Reduces the general fund appropriation for a security coordinator for the Republican National Convention by $28,000 in FY 2009.

Section 5, subdivision 1, increases the fee for initial registration and subsequent transfer of title of a motor vehicle, from $10 to $20.

Subdivision 2 states that in FY 2009 and thereafter, revenue from $10 of the fee shall be credited to the general fund. The revenue from the remaining $10 of the fee shall continue to be credited to the environmental fund.

Section 1 is a summary of the appropriations in Article 17.

Section 2 explains the format of the appropriations and appropriation reductions of the article.

Section 3, subdivision 1, is the total appropriation and appropriation reduction for the Department of Public Safety.

Subdivision 2 makes the following appropriations and appropriation reductions to the Homeland Security and Emergency Management division of the Department of Public Safety:

• $360,000 the first year to provide the state match for federal disaster assistance money received for the 2006 Red River Valley flood;

• a fiscal year 2009 reduction of $40,000 for the reimbursement of Chemical Assessment and Hazardous Material Teams. Reimbursements will be made from the special revenue fund, which will, in turn bill the companies responsible for the incident; and



• a $36,000 reduction in fiscal year 2009 operating costs.

Subdivision 3 makes the following appropriation reductions from the Bureau of Criminal Apprehension:

• $659,000 in fiscal year 2009 operating costs; and



• $1,000,000 in the fiscal year 2009 appropriation for CrimNet.

Subdivision 4 reduces the operating costs of the Alcohol and Gambling Enforcement Division by $24,000.

Subdivision 5 reduces money available for grants from the Office of Justice Programs by $622,000.

Subdivision 6 makes a $150,00 agency-wide operating reduction to the Department of Public Safety. This is a onetime reduction.

Section 4 makes a $112,000 operating reduction to the Human Rights Department.

Section 5, subdivision 1, is the total appropriation reduction to the Department of Corrections.

Subdivision 2 makes a $4.3 million operating reduction to the Correctional Institutions Division.

Subdivision 3 makes the following reductions to the Community Services division:

• $1,568,000 in fiscal year 2009 operating costs and/or grant or subsidy reductions;



• $1,250,000 in fiscal year 2009 for reimbursement to the counties for the care and housing of short-term offenders; and



• $600,000 in fiscal year 2009 for sentencing-to-service crews.

Subdivision 4 makes a $181,000 operating reduction to the Operations Support Division.

Section 6 transfers an additional $1 million each year from the Fire Safety Account in the special revenue fund to the general fund.

Section 7 appropriates $50,000 from the special revenue fund to the Peace Officers' Standards and Training (POST) Board for fiscal year 2009.

Section 1 is the summary of the appropriations in Article 18.

Section 2 explains the format of the appropriation reductions of the article.

Section 3 makes the following appropriation reductions from the Supreme Court:

• $652,000 in fiscal year 2009 operating costs; and



• $100,000 in fiscal year 2009 for Civil Legal Services.

Section 4 makes a $213,000 operating reduction to the Court of Appeals.

Section 5 makes a $3.5 million operating reduction to the District Courts. Gives the courts complete discretion over where the cuts can be made.

Section 6 makes a $1.4 million operating reduction to the Board of Public Defense.

Section 7 increases the criminal and traffic offender surcharge from $72 to $75.

Section 8 allocates the revenue from the surcharge increase in section 7 to the general fund.

Section 9 authorizes the courts to impose a convenience fee for the on-line use of credit cards to pay fines, fees, and surcharges. Allocates the convenience fees to the courts that impose them.

Section 10 repeals Minnesota Statutes 1006, section 609.103, authorizing the court to allow the payment of fines, fees, and surcharges with a credit card. If enacted into law, section 9 would supersede this section, making it obsolete.

Section 1 [Summary of Appropriations] summarizes the net reductions made in this article. General fund appropriations are reduced by slightly more than $12.2 million.

Section 2 [Appropriations] provides that the changes in appropriations in this article are from the general fund or another named fund.

Section 3 [Legislature] reduces the appropriation for the Legislature by $2,141,000, including:

(1) a reduction from the Senate appropriation of $710,000;

(2) a reduction from the House of Representatives appropriation of $953,000; and

(3) a reduction from the Legislative Coordinating Commission appropriation of $478,000.

Section 4 [Governor] reduces the appropriation for the Governor by $138,000.

Section 5 [State Auditor] reduces the appropriation for the State Auditor by $42,000.

Section 6 [Attorney General] reduces the appropriation for the Attorney General by $749,000.

Section 7 [Secretary of State] reduces the appropriation for the Secretary of State by $195,000.

Section 8 [Office of Enterprise Technology] makes a general reduction of $313,000 from the budget for the Office of Enterprise Technology and provides for a transfer of $3,470,000 of the balance in the information and telecommunications technology systems and services account to the general fund.

Section 9 [Administration] reduces the overall general fund appropriation to the Department of Administration by $1,829,000, including:

(1) a reduction of $885,000 from the appropriation for Department of Public Safety relocation;

(2) a transfer of $1,500,000 from the balance in the facilities repair and replacement account to the general fund;

(3) a reduction of $155,000 from state and community services;

(4) $140,000 from the appropriation to the Council on Developmental Disabilities for a statewide self-advocacy network for persons with intellectual and developmental disabilities; and

(5) $335,000 from the appropriation for the Office of Strategic Planning and Results Management.

Section 10 [Finance] makes an overall general fund reduction to the Department of Finance of $1,024,000, including:

(1) $356,000 from the state financial management division; and

(2) a $668,000 reduction from information and management services, including $400,000 from the Minnesota Accounting and Procurement System appropriation.

This section also authorizes the Commissioner of Finance to reallocate 2009 general fund appropriation reductions made to the former Department of Employee Relations among programs in the Department of Finance.

Section 11 [Employee Relations] reduces the overall general fund appropriation to the Department of Employee Relations by $218,000.

Section 12 [Revenue] provides an overall general fund appropriation of $3,120,000 to the Department of Revenue, including:

(1) a $360,000 appropriation to administer the data match program for payments to financial institutions to perform data matches to assist in the collection of delinquent taxes;

(2) $4,000,000 to expand delinquent tax collection that is expected to yield additional general fund revenue of $16,000,000; and

(3) a reduction from the appropriation for the tax system management program of $1,240,000.

Section 13 [Tax Debtor Data Matches] establishes a tax debtor data matching program to allow the Commissioner of Revenue to request financial information from financial institutions doing business in this state to assist in the collection of delinquent taxes where the debtor is subject to a tax lien.

Sections 14 to 17, 19 to 24, 26, and 28 [Elimination of Certain Unclassified Positions]. These sections amend existing authorizations for unclassified positions in various state agencies to provide authorization for each agency to retain one deputy commissioner in the unclassified service and to remove the authorization for any assistant commissioner serving in the unclassified service. Section 24 contains additional requirements for reorganization of staff in the Department of Transportation that conform with the provisions of S.F. No. 2925 (Saltzman). This section requires the appointment of a deputy commissioner/chief engineer who is licensed as a professional engineer for the Department of Transportation and will be in the classified service. Section 28 provides that the total reduction resulting from these sections must be at least $3,694,000 for fiscal year 2009.

Section 18 [Blood Donation Leave] requires that state employees must be granted leave from work with 100 percent of pay for up to three hours in a 12-month period to donate blood at a location away from the employee's place of work.

Section 25 [Authorization for Blood Donation Leave] authorizes employers to grant paid leave from work to an employee to allow the employee to donate blood.

Section 27 [Statewide Electronic Licensing System Surcharge] requires state agencies to impose a surcharge of $10 on business or commercial licenses and a surcharge of $5 on professional or occupational licenses that are issued by the agency and until June 30, 2009, credits the revenue from these receipts to the general fund. After July 1, 2009, and until June 30, 2011, the receipts will be credited to a statewide electronic licensing system account appropriated to the Office of Enterprise Technology to develop a statewide electronic licensing system.

Section 29 [Budget Reserve Reduction] requires the Commissioner of Finance to cancel $100,000,000 of the balance in the budget reserve account to the general fund.

Section 30 [Cash Flow Account Reduction] requires the Commissioner of Finance to cancel $350,000,000 of the balance in the cash flow account to the general account.

Section 31 [Professional and Technical Contracts] requires the Commissioner of Finance to allocate a $5,000,000 general fund reduction among executive branch state agencies to be achieved through a reduction in expenditures for professional and technical contracts.

Section 32 [Nonessential Travel Reduction] provides that, to the extent possible, reductions in agency operating budgets must be achieved through savings resulting in elimination of all nonessential travel.

Section 33 [Repealer] repeals the statutory appropriation of $750,000 each year to the Minnesota Amateur Sports Commission for the Target Center, beginning July 1, 2009.

Section 1 (144E.45, subdivision 2) sets the value of each volunteer ambulance service credit at $447.19, effective July 1, 2008.

Section 2 (245.4682, subdivision 3) allows the Department of Human Services (DHS) to approve additional mental health demonstration projects with one or more county-based purchasing plans.

Section 3 (256.969, subdivision 2b) delays for one year the hospital cost rebasing scheduled for January 1, 2009.

Section 4 (256B.0571, subdivision 8) deletes the requirement that a person must exhaust the benefits of a qualifying long-term care insurance policy in order to qualify for the Long-Term Care Partnership Program.

Section 5 (256B.0571, subdivision 9) allows Medical Assistance (MA) applicants to protect assets up to the amount of claims paid by the long-term care insurer for purposes of determining MA eligibility for payment of long-term care services. As the MA recipient continues to utilize insurance policy benefits, additional assets may be protected from MA recovery.

Section 6 (256B.0625, subdivision 3c) requires the Health Services Policy Committee to recommend criteria for verifying centers of excellence for a specific aspect of medical care.

Section 7 ( 256B.0625, subdivision 13e) reduces the fee-for-service pharmacy reimbursement rate from the current rate of average wholesale price (AWP) minus12 percent to AWP minus 13 percent for fiscal year 2009, and AWP minus 12.75 percent for fiscal year 2010 and for fiscal years thereafter.

Sections 8 and 9 (256B.0631) limit MA co-payments to five percent of family income for individuals with income at or below 100 percent of federal poverty guidelines.

Section 10 (256B.69, subdivision 5a) increases the amount withheld from the MA and general assistance medical care managed care capitation rate by three percent of the total capitation. Authorizes a managed care plan or county-based purchasing plan to include the amount withheld as admitted assets.

Section 11 (256B.75) reduces fee-for-service outpatient hospital reimbursement rates by three percent, effective for services provided on or after July 1, 2008. Mental health services and Indian Health Service facilities are exempt.

Section 12 requires the Commissioner of Human Services to review the prioritized list from the Oregon Health Plan and services that have been assessed by the state of Washington's health technology assessment program, and identify at least 20 services or technologies that provide little or no benefit to the enrollee and require prior authorization for these services.

Section 13 requires the Commissioner of Human Services, in consultation with the Commissioner of Health, to determine the amount of excess surplus each health maintenance organization (HMO) and county-based purchasing plan had as of December 31, 2007. For those HMOs and county-based purchasing plans that are determined to have had an excess of surplus, the commissioner is required to reduce the capitation rate paid for administrative costs by an amount equal to 50 percent of the excess beginning January 1, 2009.

Article 21

Minnesota Sex Offender Program (MSOP)

Section 1 (246B.06) requires the Commissioner of Human Services to establish the Minnesota state industries at sex offender program facilities. The industrial and commercial activities for sex offender treatment patients must be for the primary purpose of sustaining and ensuring the State Industries' self sufficiency, providing educational training, meaningful employment, and for teaching proper work habits to patients of the sex offender program.

Sections 2 to 7 (253B.18, subdivisions 4c, 5, and 5a, 253B.185, subdivision 9, 253B.19, subdivisions 2 and 3) modify the process for an individual committed as a sexually dangerous person (SDP), or mentally ill and dangerous and a SDP, who is petitioning for a transfer out of a secure treatment facility, a provisional discharge, or a discharge from commitment, by requiring the recommendation of the special review board to be referred to the judicial appeal panel, instead of the Commissioner of Human Services.

Section 8 (626.5572, subdivision 21) clarifies that a person who is served in the sex offender program or is on a court hold order for commitment is not a "vulnerable adult" until it is determined that the individual possesses a physical or mental infirmity or other physical, mental, or emotional dysfunction.

Section 9 requires the Commissioner of Human Services to convene a working group to develop standards and guidelines for the operations of the Minnesota sex offender program by February 1, 2009, and report the proposed standards and guidelines to the Legislature.

Article 22

Children and Family Services

Section 1 (256.01, subdivision 2) requires the commissioner to allocate federal fiscal disallowances and sanctions that are based on a random sample for all affected programs, not just foster are, in direct proportion to each county's claim for that period.

Section 2 to 5 (256.741, subdivisions 1, 2, 2a, 3) modify child support provisions related to the assignment and distribution of certain child support arrears, in order to comply with federal law.

Section 6 (256J.20, subdivision 3) clarifies that the county agency determines the value of additional vehicles when determining eligibility for MFIP.

Section 7 (256J.24, subdivision 5) is technical; updates the MFIP transitional standard amounts.

Section 8 (256J.425, subdivision 1) requires that, in order to maintain eligibility for an MFIP hardship extension, the participant must develop and comply with either an employment plan or a family stabilization services plan.

Section 9 (256J.49, subdivision 13) modifies the definition of work activity, to make unpaid work voluntary, and allowing the participant to terminate the unpaid work arrangement in writing at any time.

Section 10 (256J.521, subdivision 4) is technical; strikes an obsolete reference.

Section 11 (256J.54, subdivision 2) requires the social services agency or job counselor to consult the participant's school in developing an educational plan.

Section 12 (256J.54, subdivision 5) is technical; strikes a reference to a repealed section of law.

Section 13 (256J.545) clarifies documentation related to a family violence waiver.

Section 14 (256J.621) makes the MFIP work participation bonus effective October 1, 2009, and makes technical modifications to the section.

Section 15 (256J.626, subdivision 3) prohibits a county or tribe from imposing residency requirements, other than the residency requirements in this chapter.

Section 16 (256J.626, subdivision 7) modifies the TANF performance base funds to align the calendar to the federal calendar, and to discontinue the 5% additional allocation.

Section 17 (256J.95, subdivision 3) is technical; corrects a cross reference.

Section 18 and 19 (518A.50 and 518A.53, subdivision 5) contain modifications to child support provisions in order to comply with federal law.

Section 20 amends a rider from last session, allowing the appropriation for supported work to be available until expended, reducing the fiscal year 2009 appropriation for prekindergarten exploratory projects, and clarifying the appropriation for long-term homelessness.

Section 21 repeals a statute necessary to comply with federal child support rules, and repeals the MFIP family cap.

Article 23

Continuing Care

Sections 1 to 4, 6, and 7 (256B.0621, subdivisions 2, 6, 10; 256B.0625, subdivision 20; and 256B.0924, subdivisions 4 and 6) modify targeted case management (TCM) relocation statutes to comply with federal rule. These sections reduce the number of days a person may receive TCM when relocating to the community.

Section 5 (256B.0658) authorizes grants to assist persons eligible for home and community-based services in finding housing. Assistance may include assessing housing suitability, accompanying a person to look at housing, filling out applications and rental agreements, and other activities.

Section 8 (256B.19, subdivision 1d) repeals a 2003 addition to the county nursing home intergovernmental transfer.

Section 9 (256B.431, subdivision 23) repeals a 2003 addition to the county nursing home payment adjustment.

Section 10 (256B.5012, subdivision 7) delays for three months, until October 1, 2008, a scheduled two percent rate increase for intermediate care facilities for persons with developmental disabilities.

Section 11 (256B.69, subdivision 6) modifies the prepaid MA statute by requiring demonstration providers that cover nursing home and community-based services to also provide relocation service coordination to enrolled persons age 65 and older.

Section 12 (256D.44, subdivision 2) expands eligibility for the Minnesota Supplemental Aid (MSA) program living-alone standard of assistance to include persons described in section 14.

Section 13 (256D.44, subdivision 5) expands eligibility of certain MSA recipients to receive the maximum Food Stamp allotment to include persons who are shelter needy and are relocating from the self-directed supports option or are home and community-based waiver recipients living in their own home or apartment. Persons who qualify as shelter needy under this paragraph are considered a household of one.

Section 14 requires counties that overspent their 2004 or 2005 allotments from the waivered services program for persons with developmental disabilities to repay the state by June 30, 2009.

Section 15 delays for three months, until October 1, 2008, a scheduled two percent rate increase for a variety of community-based service providers.

Article 24

Health and Human Services Forecast Adjustments

This article increases general fund appropriations and reduces appropriations from the health care access fund and the TANF fund to reflect changes in DHS spending for forecasted programs.

Article 25

Health and Human Services Appropriations

This article reduces appropriations from the general fund and the health care access fund, and it increases appropriations from the state government special revenue fund and the federal TANF fund.

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