SB 388 - This act makes several revisions to laws affecting school finance.

USE OF RIVERBOAT GAMING PROCEEDS - Excess riverboat receipts beyond those needed for School District Bond Fund shall be used as follows: the first fifty million dollars shall be used to fund formula entitlements, the next ten million dollars shall be transferred to the School Building Revolving Fund and any remainder shall be used to fund formula entitlements.

SCHOOL FINANCE DEFINITIONS - The act revises certain school aid formula definitions to be based upon the average of the second and third preceding years. "Operating levy" is redefined to allow districts making no lease purchase payments or transfers under 165.011 to include up to twenty cents of the debt service or capital projects fund levy as part of the operating levy and generate additional state aid. The "Guaranteed Tax Base" is redefined to be based upon the average of the third and second preceding years, and the multiplying factor (times state average assessed valuation) is reduced from 2.167 to 2.112. It is estimated that the guaranteed tax base for FY 98 will be the same under the current and new definitions. The act clarifies tax rate to be used in formula after reassessment rollbacks.

MINIMUM LEVY REQUIREMENTS - Minimum levy for 1997 and thereafter shall include no more than ten cents of the (up to twenty cents of) debt service or capital projects levy included in the operating levy under Section 163.011.

ELIGIBLE PUPIL COUNT - Districts are given a third option for determining the number of eligible pupils : the average number of eligible pupils during the third and second preceding years. The existing options, previous year or estimate for current year, are retained.

TRANSFERS BETWEEN SCHOOL FUNDS - A school district may borrow between funds so long as the transfer is repaid during the same school year.

SCHOOL BUILDING REVOLVING FUND - If the fund balance in insufficient to fund all projects, projects will be ranked and highest ranking projects funded first. Rankings shall be based on: 1) uninsured costs due to fire or natural disaster, 2) growth from fifth to third preceding year (must be over twelve percent), 3) growth from twelfth to third preceding year (must be over twenty percent), 4) age of construction or renovation of buildings in use and 5) fraction of bonding capacity used. Repayment terms and penalties are included.

OTTO FAJEN