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Minnesota Legislature
2019-2020 Regular Session

THIRTY-EIGHTH MEETING - Education Finance Division

March 04, 2020

STATE OF MINNESOTA THIRTY-EIGHTH
MN HOUSE OF REPRESENTATIVES NINETY FIRST SESSION

EDUCATION FINANCE DIVISION
MINUTES


Representative Jim Davnie, Chair of the Education Finance Division, called the meeting to order at 9:45am on March 4, 2020 in Room 5 of the State Office Building.

The Committee Legislative Assistant noted the roll.

Members present:

DAVNIE, Jim
SANDSTEDE, Julie
KRESHA, Ron
BENNETT, Peggy
DANIELS, Brian
DETTMER, Bob
DEMUTH, Lisa
EDELSON, Heather
ERICKSON, Sondra
HUOT, John
JURGENS, Tony
KOTYZA-WITTHUHN, Carlie
KUNESH-PODEIN, Mary
MARQUART, Paul
MURPHY, Mary
NORNES, Bud
PRYOR, Laurie
SANDELL, Steve
YOUAKIM, Cheryl

Excused:

RICHARDSON, Ruth

A quorum was present.

Rep. Huot moved that the minutes from March 3, 2020 be approved. Motion prevailed.

Presentation from the Office of the Legislative Auditor on the Compensatory Aid Report.

HF 3316 (Koegel) School districts receive more than $500 million per year in compensatory revenue. Compensatory revenue is calculated based on the free and reduced-price lunch eligible student characteristics of each school site and must be used to meet the educational needs of pupils whose progress toward meeting state or local content or performance standards is below the level that is appropriate for learners of their age.

Compensatory revenue must be reserved and spent according to the eligible uses set in statute which include providing: remedial services; direct instructional services; added teachers and aides to provide more individualized instruction; staff development; truancy reduction efforts; English learner programs; parental involvement programs; and extended time programs through a longer school day, week, or year including summer school. This extended time set aside is in addition to the extended time revenue school districts receive.

In 2017, the legislature required that an increasing portion of compensatory revenue be reserved for extended time activities. The extended time set aside equaled 1.7 percent in fiscal year 2018, 3.5 percent in fiscal year 2019, and the percentage increases as the formula allowance grows (5.5 percent in fiscal year 2020, 7.5 percent in fiscal year 2021, etc.).

Rep. Sandstede moved that HF 3316 be presented before the committee; be moved to the general register.

Rep. Koegel presented HF 3316.

Rep. Sandstede renewed the motion that HF 3316 be moved to the general register. Motion prevailed.

HF 3192 (Fabian) School districts are required to adopt and use a uniform system of records and accounting. The adopted system, a modified accrual accounting system, is known as Uniform Financial Accounting and Reporting System (UFARS). Under UFARS every district must maintain a number of operating funds (e.g., building construction, debt service, trust, and agency). UFARS, statutory reserves, and the state’s public indebtedness statute prohibit certain types of fund transfers between funds and from certain reserved accounts.

For fiscal years 2012 through 2017, a special law allowed districts to make transfers among reserved accounts as long as those transfers did not affect state aid payments or levy amounts.

This bill authorizes Independent School District No. 441, Marshall County Central, to transfer $45,000 from its Early Childhood Family Education (ECFE) reserve account to the School Readiness reserve account, both of which are located within the community service fund.

Rep. Kresha moved that HF 3192 be presented before the committee; be laid over for further consideration.

Rep. Fabian presented HF 3192.

Rep. Kresha renewed the motion that HF 3192 be laid over for further consideration. The bill was laid over.

Testifiers:

Judy Randall, Deputy Legislative Auditor, Office of the Legislative Auditor
Jody Hauer, Evaluation Coordinator, Office of the Legislative Auditor
David Law, Superintendent, Anoka-Hennepin Schools
Kathy Green, School Board Member, Austin Public Schools
Jeffrey Lund, Superintendent, Marshall County Central Schools

The meeting of the Education Finance Division was adjourned 11:16am.


______________________________________________
Representative Jim Davnie, Chair

______________________________________________
Brittney Sunderland, Committee Legislative Assistant

More Info On This Meeting..
Agenda:

Compensatory Education Revenue Report from the Office of the Legislative Auditor Informational Hearing Only - No public testimony will be taken Issues Covered: • To what extent do Minnesota’s public schools use compensatory education revenue for its designated purpose? • How and to what extent does Minnesota assess the effectiveness of programs and services funded with compensatory education revenue? Report copies will be available at: Wednesday, March 4, 9:00 a.m. at the Office of the Legislative Auditor, 140 Centennial Building, or on the Office of the Legislative Auditor website at: http://www.auditor.leg.state.mn.us/ HF 3316 (Koegel) Extended time programming requirement to set aside compensatory revenue eliminated. HF 3192 (Fabian) Independent School District No. 441, Marshall County Central Schools; money transfer authorized from early childhood and family education reserve account to school readiness reserve account. Other items may be added to the agenda.

Bills Added:
  • HF3316 (Koegel) - Extended time programming requirement to set aside compensatory revenue eliminated.
  • HF3192 (Fabian) - Independent School District No. 441, Marshall County Central Schools; money transfer authorized from early childhood and family education reserve account to school readiness reserve account.
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01:24 - Compensatory Education Revenue Report from the Office of the Legislative Auditor. 1:00:15 - HF3316 (Koegel) Extended time programming requirement to set aside compensatory revenue eliminated. 1:15:42 - HF3192 (Fabian) Independent School District #441, Marshall County Central Schools; money transfer authorized from early childhood and family education reserve account to school readiness reserve account. Runs 1 hour, 31 minutes.