OPINION
ANDERSON, Justice.
This case arises from lawsuits filed by NewMech Companies, Inc. and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 126, and three of its members, Scott Anderson, Ron Haarstad and Leonard Johnson (Local 126). The plaintiffs alleged Independent School District No. 206 (the District) violated the Prevailing Wage Act (the PWA), Minn.Stat. §§ 177.41-44, by failing to require payment of the prevailing wage on the mechanical contract for the construction of a new junior high school building in Alexandria, Minnesota. Manning Mechanical, Inc. was the low and successful bidder on the mechanical contract for the school construction project. NewMech was the second low bidder. Local 126 represents the plumbers and pipefitters employed by NewMech for all its plumbing and pipefitting work.
NewMech and Local 126 filed separate lawsuits against the District on June 14, 1993. NewMech’s complaint also named Manning as a defendant. Each plaintiff alleged the PWA applied to the school construction project because the project was financed at least in part by state funds, specifically, Debt Service Equalization Aid (DSEA)1 and Homestead and Agricultural Credit Aid (HACA).2 The plaintiffs sought, among other things, a permanent injunction against performance of the mechanical contract.
The trial court issued a temporary restraining order on June 16 enjoining the District and Manning from performing the project’s mechanical contract. After a hearing, the trial court concluded the District’s receipt of DSEA and HACA did not result in the project being financed in whole or part by state funds, and dismissed both complaints. The court also concluded Local 126 did not have standing to challenge the mechanical contract.
NewMech’s and Local 126’s appeals were consolidated, and the Minnesota Court of Appeals held the District’s receipt of DSEA [803]*803resulted in the project being financed in part by state funds. Because it concluded DSEA payments received by the District constituted state financing of the school construction project, the court of appeals did not reach the issue of whether HACA payments to the District constituted state financing. In addition, the court of appeals affirmed the trial court’s determination that Local 126 lacked standing to challenge the mechanical contract.
We are asked to review three issues: (1) whether the District’s receipt of DSEA or HACA payments constitutes state financing of the school construction project within the purview of the PWA; (2) whether Local 126 has standing to challenge the project’s mechanical contract; and (3) if the PWA does apply to the project, whether our decision should have only a prospective effect, and should not apply to the parties in this case. DSEA or HACA payments to a school district are intended to provide property tax relief to taxpayers, not to pay for or subsidize construction costs. We hold, therefore, that DSEA or HACA payments to the District do not constitute state financing of the school construction project within the meaning of the PWA, and we reverse.
At issue in this case is the source of financing for the construction of a new junior high school by Independent School District 206. The construction project was expected to cost almost $16 million. Project-specific state aid, in the form of grants or loans, and nonproject-specific state aid, such as capital expenditure aid, is sometimes available to assist a school district in paying the costs of constructing a new school building. Minn. Stat. § 124.243 (1994); Minn.Stat. § 124.431 (1994); Minn.Stat. §§ 124.491-.495 (1994). The District, however, did not receive either type of state assistance on this construction project. Instead, to raise the money needed to construct the new school, the voters of the District approved the issuance of general obligation tax exempt bonds totalling $15,-888,000. The District sold bonds in that amount and thereby raised all the funds necessary to finance the construction project.
The Prevailing Wage Act, Minn.Stat. § 177.41 (1994), sets forth the policy supporting the statute:
It is in the public interest that public buildings and other public works be constructed and maintained by the best means and highest quality of labor reasonably available and that persons working on public works be compensated according to the real value of the services they perform. It is therefore the policy of this state that wages of laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in the community as a whole.
A “project” means “erection, construction, remodeling, or repairing of a public building or other public work financed in whole or in part by state funds.” Minn.Stat. § 177.42, subd. 2 (1994). The PWA does not define the term “financed.” Because violation of the PWA is a misdemeanor, Minn. Stat. § 177.43, subd. 5 (1994), it is a penal statute and therefore its terms must be narrowly or strictly construed so as not to go beyond the clear meaning or definite scope of the statute. Beck v. Groe, 245 Minn. 28, 34, 70 N.W.2d 886, 891 (1955); Anderson v. Burnquist, 216 Minn. 49, 11 N.W.2d 776 (1943); cf. Muskegon Bldg. and Constr. Trades v. Muskegon Area Intermediate Sch. Dist., 130 Mich.App. 420, 343 N.W.2d 579, 587 (1983) (narrowly construing Michigan’s prevailing wage law, containing language virtually identical to Minnesota’s PWA, because it contained penal provisions).
The term “financed” must be defined according to its common and approved usage in accordance with the applicable rules of statutory construction. Minn.Stat. § 645.08(1) (1994). The trial court noted that Webster’s New Lexicon of the English Language Dictionary defines the verb “finance” as follows: “to provide with money for; to raise the money for.” New Lexicon Dictionary, p. 352 (1988 ed.). The court reasoned that the “financing” for the project at issue here, the new junior high school, was accomplished by “raising the money for” its construction. The District raised the money for construction by selling bonds. Raising money for [804]*804construction of a specific project, such as a new school building, is different from receiving money year by year to pay the principal and interest due on a school district’s outstanding debt. The court found that in order to be used “in whole or in part” to finance a project, state funds must be available to be spent at the time the construction project’s costs are incurred.
We agree with the reasoning of the trial court. DSEA or HACA, scheduled to be received in a later period, are not available at the time the project’s costs are incurred. The term “financed” thus contemplates a direct relationship between the funding and the project. Funding that lacks this direct relationship to the project does not qualify as “financed in whole or in part by state funds” under the PWA.
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OPINION
ANDERSON, Justice.
This case arises from lawsuits filed by NewMech Companies, Inc. and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 126, and three of its members, Scott Anderson, Ron Haarstad and Leonard Johnson (Local 126). The plaintiffs alleged Independent School District No. 206 (the District) violated the Prevailing Wage Act (the PWA), Minn.Stat. §§ 177.41-44, by failing to require payment of the prevailing wage on the mechanical contract for the construction of a new junior high school building in Alexandria, Minnesota. Manning Mechanical, Inc. was the low and successful bidder on the mechanical contract for the school construction project. NewMech was the second low bidder. Local 126 represents the plumbers and pipefitters employed by NewMech for all its plumbing and pipefitting work.
NewMech and Local 126 filed separate lawsuits against the District on June 14, 1993. NewMech’s complaint also named Manning as a defendant. Each plaintiff alleged the PWA applied to the school construction project because the project was financed at least in part by state funds, specifically, Debt Service Equalization Aid (DSEA)1 and Homestead and Agricultural Credit Aid (HACA).2 The plaintiffs sought, among other things, a permanent injunction against performance of the mechanical contract.
The trial court issued a temporary restraining order on June 16 enjoining the District and Manning from performing the project’s mechanical contract. After a hearing, the trial court concluded the District’s receipt of DSEA and HACA did not result in the project being financed in whole or part by state funds, and dismissed both complaints. The court also concluded Local 126 did not have standing to challenge the mechanical contract.
NewMech’s and Local 126’s appeals were consolidated, and the Minnesota Court of Appeals held the District’s receipt of DSEA [803]*803resulted in the project being financed in part by state funds. Because it concluded DSEA payments received by the District constituted state financing of the school construction project, the court of appeals did not reach the issue of whether HACA payments to the District constituted state financing. In addition, the court of appeals affirmed the trial court’s determination that Local 126 lacked standing to challenge the mechanical contract.
We are asked to review three issues: (1) whether the District’s receipt of DSEA or HACA payments constitutes state financing of the school construction project within the purview of the PWA; (2) whether Local 126 has standing to challenge the project’s mechanical contract; and (3) if the PWA does apply to the project, whether our decision should have only a prospective effect, and should not apply to the parties in this case. DSEA or HACA payments to a school district are intended to provide property tax relief to taxpayers, not to pay for or subsidize construction costs. We hold, therefore, that DSEA or HACA payments to the District do not constitute state financing of the school construction project within the meaning of the PWA, and we reverse.
At issue in this case is the source of financing for the construction of a new junior high school by Independent School District 206. The construction project was expected to cost almost $16 million. Project-specific state aid, in the form of grants or loans, and nonproject-specific state aid, such as capital expenditure aid, is sometimes available to assist a school district in paying the costs of constructing a new school building. Minn. Stat. § 124.243 (1994); Minn.Stat. § 124.431 (1994); Minn.Stat. §§ 124.491-.495 (1994). The District, however, did not receive either type of state assistance on this construction project. Instead, to raise the money needed to construct the new school, the voters of the District approved the issuance of general obligation tax exempt bonds totalling $15,-888,000. The District sold bonds in that amount and thereby raised all the funds necessary to finance the construction project.
The Prevailing Wage Act, Minn.Stat. § 177.41 (1994), sets forth the policy supporting the statute:
It is in the public interest that public buildings and other public works be constructed and maintained by the best means and highest quality of labor reasonably available and that persons working on public works be compensated according to the real value of the services they perform. It is therefore the policy of this state that wages of laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in the community as a whole.
A “project” means “erection, construction, remodeling, or repairing of a public building or other public work financed in whole or in part by state funds.” Minn.Stat. § 177.42, subd. 2 (1994). The PWA does not define the term “financed.” Because violation of the PWA is a misdemeanor, Minn. Stat. § 177.43, subd. 5 (1994), it is a penal statute and therefore its terms must be narrowly or strictly construed so as not to go beyond the clear meaning or definite scope of the statute. Beck v. Groe, 245 Minn. 28, 34, 70 N.W.2d 886, 891 (1955); Anderson v. Burnquist, 216 Minn. 49, 11 N.W.2d 776 (1943); cf. Muskegon Bldg. and Constr. Trades v. Muskegon Area Intermediate Sch. Dist., 130 Mich.App. 420, 343 N.W.2d 579, 587 (1983) (narrowly construing Michigan’s prevailing wage law, containing language virtually identical to Minnesota’s PWA, because it contained penal provisions).
The term “financed” must be defined according to its common and approved usage in accordance with the applicable rules of statutory construction. Minn.Stat. § 645.08(1) (1994). The trial court noted that Webster’s New Lexicon of the English Language Dictionary defines the verb “finance” as follows: “to provide with money for; to raise the money for.” New Lexicon Dictionary, p. 352 (1988 ed.). The court reasoned that the “financing” for the project at issue here, the new junior high school, was accomplished by “raising the money for” its construction. The District raised the money for construction by selling bonds. Raising money for [804]*804construction of a specific project, such as a new school building, is different from receiving money year by year to pay the principal and interest due on a school district’s outstanding debt. The court found that in order to be used “in whole or in part” to finance a project, state funds must be available to be spent at the time the construction project’s costs are incurred.
We agree with the reasoning of the trial court. DSEA or HACA, scheduled to be received in a later period, are not available at the time the project’s costs are incurred. The term “financed” thus contemplates a direct relationship between the funding and the project. Funding that lacks this direct relationship to the project does not qualify as “financed in whole or in part by state funds” under the PWA. Statutes governing project-specific construction grants or loans and the statute governing capital expenditure aid demonstrate that, to establish this direct relationship and thereby constitute financing for purposes of the PWA, state funds must be available at the time of construction to pay directly the costs of constructing the project. See Minn.Stat. § 124.243; Minn.Stat. § 124.431; Minn.Stat. §§ 124.491-.495; see also Faribault County v. Minnesota Dept, of Transportation, 472 N.W.2d 166, 167 (Minn.App.1991) (holding that money awarded from state highway fund and municipal street fund triggers the PWA because such money directly pays construction costs on road projects), pet. for rev. denied (Minn., Aug. 29, 1991).
The District’s resolution authorizing the sale of the bonds requires that “[mjoney in the Debt Redemption Fund shall be used for no purpose other than payment of principal and interest on obligations of the [District], including Bonds issued pursuant to this resolution.” The resolution further provides that “all monies received for or appropriated to the payment of the bonds and interest thereon shall be paid into the Debt Redemption Fund.” These provisions are included in the District’s resolution pursuant to Minn.Stat. § 475.61, subd. 1 (1994), which requires that the bond “resolution should irrevocably appropriate the taxes so levied and any special assessments or other revenues so pledged to the [school district’s] debt service fund or a special debt service fund or account created for the payment of one or more issues of obligations.” “Debt service fund” is defined as “any money and investments in the treasury of a [school district] appropriated to pay the principal, interest or premiums for the redemption of any of its obligations.” Minn. Stat. § 475.51, subd. 6 (1994) (emphasis added).
The DSEA program provides property tax relief to taxpayers by providing eligible school districts with state aid to help repay the bonds that are issued to pay the costs of construction. DSEA payments must be placed in a debt service fund (debt redemption fund) and may be used only to reduce the school district’s debt service levy and to pay the principal and interest on obligations 3 of the District for eligible projects; they may not be used to pay costs of a construction project. Further, allocation of DSEA payments to a debt service fund does not mean that those payments will be applied to pay any specific obligation. The indirect relationship between DSEA payments and the construction project precludes the conclusion that such payments “financed” the construction project within the meaning contemplated by the PWA. See Wells v. Correctional Facilities Constr. Auth., 730 S.W.2d 951 (Ky.Ct.App.1987) (distinguishing between the proceeds obtained through the sale of revenue bonds and the state funds used to repay the bonds, the court concluded that a project funded by the bond proceeds was not financed by state funds, and consequently, the state prevailing wage act did not apply).
The present situation is analogous to financing the construction of or buying a new home. The prospective homeowner borrows the money to build or purchase the home from a commercial lender, such as a bank or [805]*805mortgage company. The loan proceeds from the commercial lender finance the construction or acquisition of the home. Future payments on the loan are made with funds from various sources, commonly including the homeowner’s salary or wages. It is unreasonable to conclude that the homeowner’s employer, who pays the salary or wages, financed the home’s construction or acquisition.
Further, the conclusion that DSEA payments trigger the requirements of the PWA creates the anomalous situation in which wealthy school districts, ineligible to receive DSEA, but financially better able to undertake construction projects and pay prevailing wages, are not subject to the PWA, while relatively poorer school districts receiving DSEA, financially less able to afford prevailing wages, are subject to the PWA.
A comparison with the Financial Assistance Limitations Act (FALA), Minn.Stat. § 116J.871 (1994), is instructive in determining whether the legislature intended DSEA payments to trigger the requirements of the PWA. Under qualifying circumstances, FALA provides state grants and loans for state economic development projects. In FALA, the legislature explicitly specified that the prevailing wage is required for qualifying contracts that receive assistance under this statute. Minn.Stat. § 116J.871, subd. 2. In significant contrast, when the legislature enacted the DSEA statute only one year after it enacted FALA, it declined to include any provision requiring the payment of prevailing wages as a result of receiving DSEA.
The HACA program replaces the former homestead and agricultural credit aid programs, and provides property tax relief to homestead and agricultural property. Like DSEA payments, HACA payments bear no direct relationship to a particular construction project. Nothing in the legislative history of HACA supports the conclusion that receipt of HACA payments was intended to trigger the PWA. As the trial court points out, every school district, municipality and county in Minnesota receives HACA payments — a form of tax relief that has been available since 1967. The PWA has been in effect since 1973. Each statute has been amended, HACA frequently; but never in the past 22 years has the legislature specifically provided that HACA payments trigger the requirements of the PWA. Because the legislature has not taken this step, we decline to do so.
Because DSEA and HACA payments do not bear a direct relationship to a particular construction project, we conclude that the meaning of “financed in whole or in part by state funds” does not encompass state aid payments to school districts through DSEA or HACA within the purview of the PWA. Because we hold state aid payments to the school district do not constitute “financing” a project in whole or in part by state funds, we need not decide whether Local 126 has standing to challenge the contract or whether the PWA would apply prospectively.
Reversed.