SF 55

1st Unofficial Engrossment - 87th Legislature (2011 - 2012) Posted on 04/11/2011 03:10pm

1.1A bill for an act

1.2relating to education; modifying charter school provisions;amending Minnesota
1.3Statutes 2010, sections 120B.30, subdivision 3; 124D.10; 124D.11, subdivision 9.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5    Section 1. Minnesota Statutes 2010, section 120B.30, subdivision 3, is amended to read:
1.6    Subd. 3. Reporting. The commissioner shall report test data publicly and to
1.7stakeholders, including the performance achievement levels developed from students'
1.8unweighted test scores in each tested subject and a listing of demographic factors that
1.9strongly correlate with student performance. The commissioner shall also report data that
1.10compares performance results among school sites, school districts, Minnesota and other
1.11states, and Minnesota and other nations. The commissioner shall disseminate to schools
1.12and school districts a more comprehensive report containing testing information that
1.13meets local needs for evaluating instruction and curriculum. The commissioner shall
1.14disseminate to charter school authorizers a more comprehensive report containing testing
1.15information that contains only summary data on student performance outcomes that meet
1.16the authorizer's needs in fulfilling its obligations under section 124D.10.

1.17    Sec. 2. Minnesota Statutes 2010, section 124D.10, is amended to read:
1.18124D.10 CHARTER SCHOOLS.
1.19    Subdivision 1. Purposes. (a) The purpose of this section is to:
1.20(1) improve pupil learning and student achievement;
1.21(2) increase learning opportunities for pupils;
1.22(3) encourage the use of different and innovative teaching methods;
2.1(4) measure learning outcomes and create different and innovative forms of
2.2measuring outcomes;
2.3(5) establish new forms of accountability for schools; and
2.4(6) create new professional opportunities for teachers, including the opportunity to
2.5be responsible for the learning program at the school site.
2.6(b) This section does not provide a means to keep open a school that otherwise would
2.7be closed or to reestablish a school that has been closed. Applicants in these circumstances
2.8bear the burden of proving that conversion to a charter school or establishment of a new
2.9charter school fulfills the purposes specified in this subdivision, independent of the
2.10school's closing a school board decides to close. However, a school board may endorse
2.11or authorize the establishing of a charter school to replace the school the board decided
2.12to close. Applicants seeking a charter under this circumstance must demonstrate to the
2.13authorizer that the charter sought is substantially different in purpose and program from
2.14the school the board closed and that the proposed charter satisfies the requirements of this
2.15subdivision. If the school board that closed the school authorizes the charter, it must
2.16document in its affidavit to the commissioner that the charter is substantially different in
2.17program and purpose from the school it closed.
2.18An authorizer shall not approve an application submitted by a charter school
2.19developer under subdivision 4, paragraph (a), if the application does not comply with this
2.20subdivision. The commissioner shall not approve an affidavit submitted by an authorizer
2.21under subdivision 4, paragraph (b), if the affidavit does not comply with this subdivision.
2.22    Subd. 2. Applicability. This section applies only to charter schools formed and
2.23operated under this section.
2.24    Subd. 3. Authorizer. (a) For purposes of this section, the terms defined in this
2.25subdivision have the meanings given them.
2.26"Application" to receive approval as an authorizer means the proposal an eligible
2.27authorizer submits to the commissioner under paragraph (c) before that authorizer is able
2.28to submit any affidavit to charter to a school.
2.29"Application" under subdivision 4 means the charter school business plan a
2.30school developer submits to an authorizer for approval to establish a charter school that
2.31documents the school developer's mission statement, school purposes, program design,
2.32financial plan, governance and management structure, and background and experience,
2.33plus any other information the authorizer requests. The application also shall include a
2.34"statement of assurances" of legal compliance prescribed by the commissioner.
3.1"Affidavit" means a written statement the authorizer submits to the commissioner
3.2for approval to establish a charter school under subdivision 4 attesting to its review and
3.3approval process before chartering a school.
3.4"Affidavit" means the form an authorizer submits to the commissioner that is a
3.5precondition to a charter school organizing an affiliated nonprofit building corporation
3.6under subdivision 17a.
3.7(b) The following organizations may authorize one or more charter schools:
3.8(1) a school board; intermediate school district school board; education district
3.9organized under sections 123A.15 to 123A.19;
3.10(2) a charitable organization under section 501(c)(3) of the Internal Revenue
3.11Code of 1986, excluding a nonpublic sectarian or religious institution, without an
3.12affidavit approved by the commissioner before July 1, 2009, and any person other than a
3.13natural person that directly or indirectly, through one or more intermediaries, controls,
3.14is controlled by, or is under common control with the nonpublic sectarian or religious
3.15institution, and any other charitable organization under this clause that in the federal IRS
3.16Form 1023, Part IV, describes activities indicating a religious purpose, that:
3.17(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
3.18Foundations;
3.19(ii) is registered with the attorney general's office; and
3.20(iii) reports an end-of-year fund balance of at least $2,000,000; and
3.21(iv) is incorporated in the state of Minnesota and has been operating continuously
3.22for at least five years but does not operate a charter school;
3.23(3) a Minnesota private college, notwithstanding clause (2), that grants two- or
3.24four-year degrees and is registered with the Minnesota Office of Higher Education under
3.25chapter 136A; community college, state university, or technical college governed by the
3.26Board of Trustees of the Minnesota State Colleges and Universities; or the University of
3.27Minnesota; or
3.28(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905,
3.29and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code
3.30of 1986, may authorize one or more charter schools if the charter school has operated
3.31for at least three years under a different authorizer and if the nonprofit corporation has
3.32existed for at least 25 years.
3.33(5) no more than three ten single-purpose authorizers that are charitable, nonsectarian
3.34organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and
3.35incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible
3.36organizations interested in being approved as an authorizer under this paragraph must
4.1submit a proposal to the commissioner that includes the provisions of paragraph (c) and
4.2a five-year financial plan. Such authorizers shall consider and approve applications
4.3using the criteria provided in subdivision 4 and shall not limit the applications it solicits,
4.4considers, or approves to any single curriculum, learning program, or method.
4.5(c) An eligible authorizer under this subdivision must apply to the commissioner for
4.6approval as an authorizer before submitting any affidavit to the commissioner to charter
4.7a school. The application for approval as a charter school authorizer must demonstrate
4.8the applicant's ability to implement the procedures and satisfy the criteria for chartering a
4.9school under this section. The commissioner must approve or disapprove an application
4.10within 60 45 business days of the application deadline. If the commissioner disapproves
4.11the application, the commissioner must notify the applicant of the specific deficiencies
4.12in writing and the applicant then has 20 business days to address mitigate the deficiencies
4.13to the commissioner's satisfaction. After the 20 business days expire, the commissioner
4.14has 15 business days to make a final decision to approve or disapprove the application.
4.15Failing to address the deficiencies to the commissioner's satisfaction makes an applicant
4.16ineligible to be an authorizer. The commissioner, in establishing criteria for approval,
4.17must consider the applicant's:
4.18(1) capacity and infrastructure;
4.19(2) application criteria and process;
4.20(3) contracting process;
4.21(4) ongoing oversight and evaluation processes; and
4.22(5) renewal criteria and processes.
4.23(d) The affidavit to be submitted to and evaluated by An applicant must include in
4.24its application to the commissioner must include to be an approved authorizer at least
4.25the following:
4.26(1) how chartering schools is a way for the organization to carry out its mission;
4.27(2) a description of the capacity of the organization to serve as an authorizer,
4.28including the personnel who will perform the authorizing duties, their qualifications, the
4.29amount of time they will be assigned to this responsibility, and the financial resources
4.30allocated by the organization to this responsibility;
4.31(3) a description of the application and review process the authorizer will use to make
4.32decisions regarding the granting of charters, which will include at least the following:
4.33(i) how the statutory purposes defined in subdivision 1 are addressed;
4.34(ii) the mission, goals, program model, and student performance expectations;
4.35(iii) an evaluation plan for the school that includes criteria for evaluating educational,
4.36organizational, and fiscal plans;
5.1(iv) the school's governance plan;
5.2(v) the financial management plan; and
5.3(vi) the administration and operations plan;
5.4(4) a description of the type of contract it will arrange with the schools it charters
5.5that meets the provisions of subdivision 6 and defines the rights and responsibilities of the
5.6charter school for governing its educational program, controlling its funds, and making
5.7school management decisions;
5.8(5) the process to be used for providing ongoing oversight of the school consistent
5.9with the contract expectations specified in clause (4) that assures that the schools chartered
5.10are complying with both the provisions of applicable law and rules, and with the contract;
5.11(6) a description of the criteria and process the authorizer will use to grant expanded
5.12applications under subdivision 4, paragraph (j);
5.13(7) the process for making decisions regarding the renewal or termination of
5.14the school's charter based on evidence that demonstrates the academic, organizational,
5.15and financial competency of the school, including its success in increasing student
5.16achievement and meeting the goals of the charter school agreement; and
5.17(7) (8) an assurance specifying that the organization is committed to serving as
5.18an authorizer for the full five-year term.
5.19(e) A disapproved applicant under this paragraph section may resubmit an
5.20application during a future application period.
5.21(f) If the governing board of an approved authorizer that has chartered multiple
5.22schools votes to withdraw as an approved authorizer for a reason unrelated to any
5.23cause under subdivision 23, the authorizer must notify all its chartered schools and the
5.24commissioner in writing by July 15 of its intent to withdraw as an authorizer on June 30 in
5.25the next calendar year. The commissioner shall approve the transfer of a charter school
5.26to a new authorizer under this paragraph after the new authorizer submits an affidavit to
5.27the commissioner.
5.28(e) (g) The authorizer must participate in department-approved training.
5.29(f) (h) An authorizer that chartered a school before August 1, 2009, must apply by
5.30June 30, 2011 September 30, 2011, to the commissioner for approval, under paragraph
5.31(c), to continue as an authorizer under this section. For purposes of this paragraph, an
5.32authorizer that fails to submit a timely application for commissioner approval is ineligible
5.33to charter authorize a school.
5.34(g) (i) The commissioner shall review an authorizer's performance every five years
5.35in a manner and form determined by the commissioner and may review an authorizer's
5.36performance more frequently at the commissioner's own initiative or at the request of a
6.1charter school operator, charter school board member, or other interested party. The
6.2commissioner, after completing the review, shall transmit a report with findings to the
6.3authorizer. If, consistent with this section, the commissioner finds that an authorizer has
6.4not fulfilled the requirements of this section, the commissioner may subject the authorizer
6.5to corrective action, which may include terminating the contract with the charter school
6.6board of directors of a school it chartered. The commissioner must notify the authorizer
6.7in writing of any findings that may subject the authorizer to corrective action and
6.8the authorizer then has 15 business days to request an informal hearing before the
6.9commissioner takes corrective action. If the commissioner terminates a contract between
6.10an authorizer and a charter school under this paragraph, the commissioner shall assist the
6.11charter school in acquiring a new authorizer.
6.12(h) (j) The commissioner may at any time take corrective action against an
6.13authorizer, including terminating an authorizer's ability to charter a school for:
6.14(1) failing to demonstrate the criteria under paragraph (c) under which the
6.15commissioner approved the authorizer;
6.16(2) violating a term of the chartering contract between the authorizer and the charter
6.17school board of directors; or
6.18(3) unsatisfactory performance as an approved authorizer; or
6.19(4) any good cause shown.
6.20    Subd. 4. Formation of school. (a) An authorizer, after receiving an application from
6.21a school developer, may charter a licensed teacher under section 122A.18, subdivision
6.221 , or a group of individuals that includes one or more licensed teachers under section
6.23122A.18, subdivision 1 , to operate a school subject to the commissioner's approval of the
6.24authorizer's affidavit under paragraph (b). The school must be organized and operated
6.25as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and
6.26the provisions under the applicable chapter shall apply to the school except as provided
6.27in this section.
6.28Notwithstanding sections 465.717 and 465.719, a school district, subject to this
6.29section and section 124D.11, may create a corporation for the purpose of establishing a
6.30charter school.
6.31    (b) Before the operators may establish and operate a school, the authorizer must file
6.32an affidavit with the commissioner stating its intent to charter a school. An authorizer
6.33must file a separate affidavit for each school it intends to charter. The affidavit must
6.34state the terms and conditions under which the authorizer would charter a school and
6.35how the authorizer intends to oversee the fiscal and student performance of the charter
6.36school and to comply with the terms of the written contract between the authorizer
7.1and the charter school board of directors under subdivision 6. The commissioner must
7.2approve or disapprove the authorizer's affidavit within 60 business days of receipt of the
7.3affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify
7.4the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business
7.5days to address the deficiencies. If the authorizer does not address deficiencies to the
7.6commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain
7.7commissioner approval precludes an authorizer from chartering the school that is the
7.8subject of this affidavit.
7.9    (c) The authorizer may prevent an approved charter school from opening for
7.10operation if, among other grounds, the charter school violates this section or does not meet
7.11the ready-to-open standards that are part of the authorizer's oversight and evaluation
7.12process or are stipulated in the charter school contract.
7.13(d) The operators authorized to organize and operate a school, before entering into a
7.14contract or other agreement for professional or other services, goods, or facilities, must
7.15incorporate as a cooperative under chapter 308A or as a nonprofit corporation under
7.16chapter 317A and must establish a board of directors composed of at least five members
7.17who are not related parties until a timely election for members of the ongoing charter
7.18school board of directors is held according to the school's articles and bylaws under
7.19paragraph (f). A charter school board of directors must be composed of at least five
7.20members who are not related parties. Staff members employed at the school, including
7.21teachers providing instruction under a contract with a cooperative, and all parents or legal
7.22guardians of children enrolled in the school are the voters eligible to elect the members
7.23of the school's board of directors. A charter school must notify eligible voters of the
7.24school board election dates at least 30 days before the election. Board of director meetings
7.25must comply with chapter 13D.
7.26    (e) Upon the request of an individual, the charter school must make available in
7.27a timely fashion the minutes of meetings of the board of directors, and of members
7.28and committees having any board-delegated authority; financial statements showing all
7.29operations and transactions affecting income, surplus, and deficit during the school's last
7.30annual accounting period; and a balance sheet summarizing assets and liabilities on the
7.31closing date of the accounting period. A charter school also must post on its official Web
7.32site information identifying its authorizer and indicate how to contact that authorizer and
7.33include that same information about its authorizer in other school materials that it makes
7.34available to the public.
7.35(f) Every charter school board member shall attend department-approved ongoing
7.36training throughout the member's term on board governance, including training on the
8.1board's role and responsibilities, employment policies and practices, and financial
8.2management. A board member who does not begin the required initial training within six
8.3months of after being seated and complete the required that training within 12 months of
8.4being seated on the board is ineligible to continue to serve as a board member.
8.5(g) The ongoing board must be elected before the school completes its third year of
8.6operation. Board elections must be held at a convenient time during a time when the school
8.7is in session year but may not be conducted on days when the school is closed for holidays
8.8or vacations. The charter school board of directors shall be composed of at least five
8.9nonrelated members and include: (i) at least one licensed teacher employed as a teacher
8.10at the school or a licensed teacher providing instruction under a contact an employment
8.11agreement between the charter school and a cooperative; (ii) the parent or legal guardian
8.12of a student enrolled in the charter school who is not an employee of the charter school;
8.13and (iii) an interested community member who is not employed by the charter school and
8.14does not have a child enrolled in the school. The board may be a teacher majority board
8.15composed of teachers described in this paragraph. The chief financial officer and the
8.16chief administrator are may only serve as ex-officio nonvoting board members and may
8.17not serve as a voting member of the board. Charter school employees shall not serve on
8.18the board unless item (i) applies. Contractors providing facilities, goods, or services to a
8.19charter school shall not serve on the board of directors of the charter school. Board bylaws
8.20shall outline the process and procedures for changing the board's governance model,
8.21consistent with chapter 317A. A board may change its governance model only:
8.22(1) by a majority vote of the board of directors and the licensed teachers employed
8.23by the school, including licensed teachers providing instruction under a contract between
8.24the school and a cooperative; and
8.25(2) with the authorizer's approval.
8.26Any change in board governance must conform with the board structure established
8.27under this paragraph.
8.28(h) The granting or renewal of a charter by an authorizer must not be conditioned
8.29upon the bargaining unit status of the employees of the school.
8.30(i) The granting or renewal of a charter school by an authorizer must not be
8.31contingent on the charter school being required to contract, lease, or purchase services
8.32from the authorizer. Any potential contract, lease, or purchase of service from an
8.33authorizer must be disclosed to the commissioner, accepted through an open bidding
8.34process, and be a separate contract from the charter contract. The school must document
8.35the open bidding process. An authorizer must not enter into a contract to provide
9.1management and financial services for a school that it authorizes, unless the school
9.2documents that it received at least two competitive bids.
9.3    (j) An authorizer may permit the board of directors of a charter school to expand
9.4the operation of the charter school to additional sites or to add additional grades at the
9.5school beyond those described in the authorizer's original affidavit as approved by
9.6the commissioner only after submitting a supplemental affidavit for approval to the
9.7commissioner in a form and manner prescribed by the commissioner. The supplemental
9.8affidavit must show document that:
9.9    (1) the expansion proposed by the charter school is supported by expansion plan
9.10demonstrates need and projected enrollment;
9.11(2) the charter school expansion is warranted, at a minimum, by longitudinal data
9.12demonstrating students' improved academic performance and growth on statewide
9.13assessments under chapter 120B;
9.14    (3) the charter school is fiscally financially sound and has the financial capacity the
9.15financing needed to implement the proposed expansion exists; and
9.16    (4) the authorizer finds that the charter school has the governance structure and
9.17management capacity to carry out its expansion.
9.18    (k) The commissioner shall have 30 business days to review and comment on the
9.19supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies
9.20in the supplemental affidavit and the authorizer then has 30 20 business days to address
9.21mitigate, to the commissioner's satisfaction, any deficiencies in the supplemental affidavit.
9.22The school may not expand grades or add sites until the commissioner has approved the
9.23supplemental affidavit. The commissioner's approval or disapproval of a supplemental
9.24affidavit is final.
9.25(l) A charter school operating under this section may merge with another charter
9.26school only after the board of directors and the authorizer of each charter school formally
9.27approve the merger. The merger must comply with chapter 317A and section 124D.11,
9.28subdivision 9, paragraph (g). After the affected boards of directors and authorizers
9.29formally approve the merger, the charter schools may negotiate a merger plan that
9.30includes at least the following:
9.31(1) a merger budget, a multiyear operating budget for the merged charter school,
9.32and a long-range financial plan that provides for the transfer of assets and liabilities to
9.33the merged charter school;
9.34(2) a process for transferring responsibility for governing, administering, and
9.35operating the merged charter school; and
9.36(3) a statement of academic and student engagement goals.
10.1The boards of directors of the merging charter schools and the authorizer that agrees to
10.2charter the merged charter school must approve the merger plan. After the merger plan is
10.3approved, the authorizer of the merged charter school must submit a supplemental affidavit
10.4to the commissioner. The commissioner must approve or disapprove the supplemental
10.5affidavit within 30 business days. The authorizer must not give final approval for the
10.6merger to take effect until the commissioner approves the supplemental affidavit.
10.7    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving as a
10.8member of the charter school board of directors if the individual, an immediate family
10.9member, or the individual's partner is an owner, employee or agent of, or a contractor
10.10with a for-profit or nonprofit entity or individual with whom the charter school contracts,
10.11directly or indirectly, for professional services, goods, or facilities. A violation of this
10.12prohibition renders a contract voidable at the option of the commissioner or the charter
10.13school board of directors. A member of a charter school board of directors who violates
10.14this prohibition is individually liable to the charter school for any damage caused by
10.15the violation.
10.16(b) No member of the board of directors, employee, officer, or agent of a charter
10.17school shall participate in selecting, awarding, or administering a contract if a conflict
10.18of interest exists. A conflict exists when:
10.19(1) the board member, employee, officer, or agent;
10.20(2) the immediate family of the board member, employee, officer, or agent;
10.21(3) the partner of the board member, employee, officer, or agent; or
10.22(4) an organization that employs, or is about to employ any individual in clauses
10.23(1) to (3),
10.24has a financial or other interest in the entity with which the charter school is contracting.
10.25A violation of this prohibition renders the contract void.
10.26(c) Any employee, agent, or board member of the authorizer who participates
10.27in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
10.28nonrenewal process or decision is ineligible to serve on the board of directors of a school
10.29chartered by that authorizer.
10.30(d) An individual may serve as a member of the board of directors if no conflict of
10.31interest under paragraph (a) exists.
10.32(e) The conflict of interest provisions under this subdivision do not apply to
10.33compensation paid to a teacher employed by the charter school who also serves as a
10.34member of the board of directors.
11.1(f) The conflict of interest provisions under this subdivision do not apply to a teacher
11.2who provides services to a charter school through a cooperative formed under chapter
11.3308A when the teacher also serves on the charter school board of directors.
11.4    Subd. 5. Conversion of existing schools. A board of an independent or special
11.5school district may convert one or more of its existing schools to charter schools under
11.6this section if 60 percent of the full-time teachers at the school sign a petition seeking
11.7conversion. The conversion must occur at the beginning of an academic year.
11.8    Subd. 6. Charter contract. The authorization for a charter school must be in the
11.9form of a written contract signed by the authorizer and the board of directors of the charter
11.10school. The contract must be completed within 45 business days of the commissioner's
11.11approval of the authorizer's affidavit. The authorizer shall submit to the commissioner a
11.12copy of the signed charter contract within ten business days of its execution. The contract
11.13for a charter school must be in writing and contain at least the following:
11.14(1) a declaration of the purposes in subdivision 1 that the school intends to carry out
11.15and how the school will report its implementation of those purposes;
11.16(2) a description of the school program and the specific academic and nonacademic
11.17outcomes that pupils must achieve;
11.18(3) a statement of admission policies and procedures;
11.19(4) a governance, management, and administration plan for the school;
11.20(5) signed agreements from charter school board members to comply with all
11.21federal and state laws governing organizational, programmatic, and financial requirements
11.22applicable to charter schools;
11.23(6) the criteria, processes, and procedures that the authorizer will use for ongoing
11.24oversight of operational, financial, and academic performance;
11.25(7) the performance evaluation that is a prerequisite for reviewing a charter contract
11.26under subdivision 15;
11.27(8) types and amounts of insurance liability coverage to be obtained by the charter
11.28school;
11.29(9) a provision to indemnify and hold harmless the commissioner and the authorizer,
11.30and their officers, agents, and employees from any suit, claim, or liability arising under
11.31the contract or from the operation of the charter school;
11.32(10) the term of the contract, which may be up to three years for an initial contract
11.33plus an additional preoperational planning year, and up to five years for a renewed contract
11.34if warranted by the school's academic, financial, and operational performance;
11.35(10) (11) how the board of directors or the operators of the charter school will
11.36provide special instruction and services for children with a disability under sections
12.1125A.03 to 125A.24, and 125A.65, a description of the financial parameters within
12.2which the charter school will operate to provide the special instruction and services to
12.3children with a disability;
12.4(11) (12) the process and criteria the authorizer intends to use to monitor and
12.5evaluate the fiscal and student performance of the charter school, consistent with
12.6subdivision 15; and
12.7(12) (13) the plan for an orderly closing of the school under chapter 308A or 317A,
12.8if the closure is a termination for cause, a voluntary termination, or a nonrenewal of
12.9the contract, and that includes establishing the responsibilities of the school board of
12.10directors and the authorizer and notifying the commissioner, authorizer, school district in
12.11which the charter school is located, and parents of enrolled students about the closure,
12.12the transfer of student records to students' resident districts, and procedures for closing
12.13financial operations.
12.14    Subd. 6a. Audit report. (a) The charter school must submit an audit report to the
12.15commissioner and its authorizer by December 31 each year.
12.16(b) The charter school, with the assistance of the auditor conducting the audit, must
12.17include with the report a copy of all charter school agreements for corporate management
12.18services. If the entity that provides the professional services to the charter school is
12.19exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity
12.20must file with the commissioner by February 15 a copy of the annual return required under
12.21section 6033 of the Internal Revenue Code of 1986.
12.22(c) If the commissioner receives an audit report indicating finds that a material
12.23weakness exists in the financial reporting systems of a charter school, the charter school
12.24must submit a written report to the commissioner explaining how the material weakness
12.25will be resolved mitigated. An entity, as a condition of providing financial services to a
12.26charter school, must agree to make available information about a charter school's financial
12.27audit to the commissioner upon request.
12.28    Subd. 7. Public status; exemption from statutes and rules. A charter school is
12.29a public school and is part of the state's system of public education. A charter school is
12.30exempt from all statutes and rules applicable to a school, school board, or school district
12.31unless a statute or rule is made specifically applicable to a charter school or is included
12.32in this section.
12.33    Subd. 8. Federal, state, and local requirements. (a) A charter school shall meet all
12.34federal, state, and local health and safety requirements applicable to school districts.
12.35(b) A school must comply with statewide accountability requirements governing
12.36standards and assessments in chapter 120B.
13.1(c) A school authorized by a school board may be located in any district, unless the
13.2school board of the district of the proposed location disapproves by written resolution.
13.3(d) A charter school must be nonsectarian in its programs, admission policies,
13.4employment practices, and all other operations. An authorizer may not authorize a charter
13.5school or program that is affiliated with a nonpublic sectarian school or a religious
13.6institution. A charter school student must be released for religious instruction, consistent
13.7with section 120A.22, subdivision 12, clause (3).
13.8(e) Charter schools must not be used as a method of providing education or
13.9generating revenue for students who are being home-schooled.
13.10(f) The primary focus of a charter school must be to provide a comprehensive
13.11program of instruction for at least one grade or age group from five through 18 years
13.12of age. Instruction may be provided to people younger than five years and older than
13.1318 years of age.
13.14(g) A charter school may not charge tuition.
13.15(h) A charter school is subject to and must comply with chapter 363A and section
13.16121A.04 .
13.17(i) A charter school is subject to and must comply with the Pupil Fair Dismissal
13.18Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
13.19123B.34 to 123B.39.
13.20(j) A charter school is subject to the same financial audits, audit procedures, and
13.21audit requirements as a district. Audits must be conducted in compliance with generally
13.22accepted governmental auditing standards, the federal Single Audit Act, if applicable,
13.23and section 6.65. A charter school is subject to and must comply with sections 15.054;
13.24118A.01 ; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 471.38; 471.391; 471.392; and
13.25471.425 . The audit must comply with the requirements of sections 123B.75 to 123B.83,
13.26except to the extent deviations are necessary because of the program at the school.
13.27Deviations must be approved by the commissioner and authorizer. The Department of
13.28Education, state auditor, legislative auditor, or authorizer may conduct financial, program,
13.29or compliance audits. A charter school determined to be in statutory operating debt under
13.30sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4.
13.31(k) A charter school is a district for the purposes of tort liability under chapter 466.
13.32(l) A charter school must comply with chapters 13 and 13D; and sections 120A.22,
13.33subdivision 7 ; 121A.75; and 260B.171, subdivisions 3 and 5.
13.34(m) A charter school is subject to the Pledge of Allegiance requirement under
13.35section 121A.11, subdivision 3.
14.1(n) A charter school offering online courses or programs must comply with section
14.2124D.095 .
14.3(o) A charter school and charter school board of directors are subject to chapter 181.
14.4(p) A charter school must comply with section 120A.22, subdivision 7, governing
14.5the transfer of students' educational records and sections 138.163 and 138.17 governing
14.6the management of local records.
14.7(q) A charter school that provides early childhood health and developmental
14.8screening must comply with sections 121A.16 to 121A.19.
14.9    Subd. 8a. Aid reduction. The commissioner may reduce a charter school's state aid
14.10under section 127A.42 or 127A.43 if the charter school board fails to correct a violation
14.11under this section.
14.12    Subd. 8b. Aid reduction for violations. The commissioner may reduce a charter
14.13school's state aid by an amount not to exceed 60 percent of the charter school's basic
14.14revenue for the period of time that a violation of law occurs.
14.15    Subd. 9. Admission requirements. A charter school may limit admission to:
14.16(1) pupils within an age group or grade level;
14.17(2) pupils who are eligible to participate in the graduation incentives program under
14.18section 124D.68; or
14.19(3) residents of a specific geographic area in which the school is located when the
14.20majority of students served by the school are members of underserved populations.
14.21A charter school shall enroll an eligible pupil who submits a timely application,
14.22unless the number of applications exceeds the capacity of a program, class, grade level, or
14.23building. In this case, pupils must be accepted by lot. The charter school must develop
14.24and publish a lottery policy and process that it must use when accepting pupils by lot.
14.25A charter school shall give enrollment preference for enrollment to a sibling of an
14.26enrolled pupil and to a foster child of that pupil's parents and may give preference for
14.27enrolling children of the school's teachers staff before accepting other pupils by lot.
14.28A charter school may not limit admission to pupils on the basis of intellectual ability,
14.29measures of achievement or aptitude, or athletic ability and may not establish any criteria
14.30or requirements for admission that are inconsistent with this subdivision.
14.31The charter school shall not distribute any services or goods of value to students,
14.32parents, or guardians as an inducement, term, or condition of enrolling a student in a
14.33charter school.
14.34    Subd. 10. Pupil performance. A charter school must design its programs to at
14.35least meet the outcomes adopted by the commissioner for public school students. In
14.36the absence of the commissioner's requirements, the school must meet the outcomes
15.1contained in the contract with the authorizer. The achievement levels of the outcomes
15.2contained in the contract may exceed the achievement levels of any outcomes adopted by
15.3the commissioner for public school students.
15.4    Subd. 11. Employment and other operating matters. (a) A charter school must
15.5employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
15.6who hold valid licenses to perform the particular service for which they are employed in
15.7the school. The charter school's state aid may be reduced under section 127A.43 if the
15.8school employs a teacher who is not appropriately licensed or approved by the board of
15.9teaching. The school may employ necessary employees who are not required to hold
15.10teaching licenses to perform duties other than teaching and may contract for other services.
15.11The school may discharge teachers and nonlicensed employees. The charter school board
15.12is subject to section 181.932. When offering employment to a prospective employee, a
15.13charter school must give that employee a written description of the terms and conditions
15.14of employment and the school's personnel policies.
15.15(b) A person, without holding a valid administrator's license, may perform
15.16administrative, supervisory, or instructional leadership duties. The board of directors shall
15.17establish qualifications for persons that hold administrative, supervisory, or instructional
15.18leadership roles. The qualifications shall include at least the following areas: instruction
15.19and assessment; human resource and personnel management; financial management;
15.20legal and compliance management; effective communication; and board, authorizer, and
15.21community relationships. The board of directors shall use those qualifications as the basis
15.22for job descriptions, hiring, and performance evaluations of those who hold administrative,
15.23supervisory, or instructional leadership roles. The board of directors and an individual
15.24who does not hold a valid administrative license and who serves in an administrative,
15.25supervisory, or instructional leadership position shall develop a professional development
15.26plan. Documentation of the implementation of the professional development plan of these
15.27persons shall be included in the school's annual report.
15.28(c) The board of directors also shall decide matters related to the operation of the
15.29school, including budgeting, curriculum and operating procedures.
15.30    Subd. 12. Pupils with a disability. A charter school must comply with sections
15.31125A.02 , 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils
15.32with a disability as though it were a district.
15.33    Subd. 13. Length of school year. A charter school must provide instruction
15.34each year for at least the number of days required by section 120A.41. It may provide
15.35instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
16.1    Subd. 14. Annual public reports. A charter school must publish an annual report
16.2approved by the board of directors. The annual report must at least include information
16.3on school enrollment, student attrition, governance and management, staffing, finances,
16.4academic performance, operational performance, innovative practices and implementation,
16.5and future plans. A charter school must distribute the annual report by publication, mail,
16.6or electronic means to the commissioner, authorizer, school employees, and parents and
16.7legal guardians of students enrolled in the charter school and must also post the report on
16.8the charter school's official Web site. The reports are public data under chapter 13.
16.9    Subd. 15. Review and comment. (a) The authorizer shall provide a formal written
16.10evaluation of the school's performance before the authorizer renews the charter contract.
16.11The department must review and comment on the authorizer's evaluation process at the
16.12time the authorizer submits its application for approval and each time the authorizer
16.13undergoes its five-year review under subdivision 3, paragraph (e).
16.14(b) An authorizer shall monitor and evaluate the fiscal, operational, and student
16.15performance of the school, and may for this purpose annually assess a charter school
16.16a fee according to paragraph (c). The agreed-upon fee structure must be stated in the
16.17charter school contract.
16.18(c) The fee that each charter school pays to an authorizer each year is the greater of:
16.19(1) the basic formula allowance for that year; or
16.20(2) the lesser of:
16.21(i) the maximum fee factor times the basic formula allowance for that year; or
16.22(ii) the fee factor times the basic formula allowance for that year times the charter
16.23school's adjusted marginal cost pupil units for that year. The fee factor equals .005 in fiscal
16.24year 2010, .01 in fiscal year 2011, .013 in fiscal year 2012, and .015 in fiscal years 2013
16.25and later. The maximum fee factor equals 1.5 in fiscal year 2010, 2.0 in fiscal year 2011,
16.263.0 in fiscal year 2012, and 4.0 in fiscal years 2013 and later.
16.27(d) The department and any charter school it charters must not assess or pay a fee
16.28under paragraphs (b) and (c).
16.29(e) For the preoperational planning period, the authorizer may assess a charter school
16.30a fee equal to the basic formula allowance.
16.31(f) By September 30 of each year, an authorizer shall submit to the commissioner
16.32a statement of expenditures related to chartering activities during the previous school
16.33year ending June 30. A copy of the statement shall be given to all schools chartered by
16.34the authorizer.
16.35    Subd. 16. Transportation. (a) A charter school after its first fiscal year of operation
16.36by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of
17.1operation must notify the district in which the school is located and the Department of
17.2Education if it will provide its own transportation or use the transportation services of the
17.3district in which it is located for the fiscal year.
17.4(b) If a charter school elects to provide transportation for pupils, the transportation
17.5must be provided by the charter school within the district in which the charter school is
17.6located. The state must pay transportation aid to the charter school according to section
17.7124D.11, subdivision 2 .
17.8For pupils who reside outside the district in which the charter school is located, the
17.9charter school is not required to provide or pay for transportation between the pupil's
17.10residence and the border of the district in which the charter school is located. A parent
17.11may be reimbursed by the charter school for costs of transportation from the pupil's
17.12residence to the border of the district in which the charter school is located if the pupil is
17.13from a family whose income is at or below the poverty level, as determined by the federal
17.14government. The reimbursement may not exceed the pupil's actual cost of transportation
17.15or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for
17.16more than 250 miles per week.
17.17At the time a pupil enrolls in a charter school, the charter school must provide the
17.18parent or guardian with information regarding the transportation.
17.19(c) If a charter school does not elect to provide transportation, transportation for
17.20pupils enrolled at the school must be provided by the district in which the school is
17.21located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a
17.22pupil residing in the same district in which the charter school is located. Transportation
17.23may be provided by the district in which the school is located, according to sections
17.24123B.88, subdivision 6 , and 124D.03, subdivision 8, for a pupil residing in a different
17.25district. If the district provides the transportation, the scheduling of routes, manner and
17.26method of transportation, control and discipline of the pupils, and any other matter relating
17.27to the transportation of pupils under this paragraph shall be within the sole discretion,
17.28control, and management of the district.
17.29    Subd. 17. Leased space. A charter school may lease space from an independent
17.30or special school board eligible to be an authorizer, other public organization, private,
17.31nonprofit nonsectarian organization, private property owner, or a sectarian organization
17.32if the leased space is constructed as a school facility. The department must review and
17.33approve or disapprove leases in a timely manner.
17.34    Subd. 17a. Affiliated nonprofit building corporation. (a) Before a charter school
17.35may organize an affiliated nonprofit building corporation (i) to renovate or purchase an
17.36existing facility to serve as a school or (ii) to construct a new school facility, an authorizer
18.1must submit an affidavit to the commissioner for approval in the form and manner the
18.2commissioner prescribes, and consistent with paragraphs (b) and (c) or (d).
18.3(b) An affiliated nonprofit building corporation under this subdivision must:
18.4(1) be incorporated under section 317A and comply with applicable Internal
18.5Revenue Service regulations;
18.6(2) submit to the commissioner each fiscal year a list of current board members
18.7and a copy of its annual audit; and
18.8(3) comply with government data practices law under chapter 13.
18.9An affiliated nonprofit building corporation must not serve as the leasing agent for
18.10property or facilities it does not own. A charter school that leases a facility from an
18.11affiliated nonprofit building corporation that does not own the leased facility is ineligible
18.12to receive charter school lease aid. The state is immune from liability resulting from a
18.13contract between a charter school and an affiliated nonprofit building corporation.
18.14(c) A charter school may organize an affiliated nonprofit building corporation to
18.15renovate or purchase an existing facility to serve as a school if the charter school:
18.16(1) has been operating for at least five consecutive school years and the school's
18.17charter has been renewed for a five-year term;
18.18(2) has had a net positive unreserved general fund balance as of June 30 in the
18.19preceding five fiscal years;
18.20(3) has a long-range strategic and financial plan;
18.21(4) completes a feasibility study of available buildings; and
18.22(5) documents sustainable enrollment projections and the need to use an affiliated
18.23building corporation to renovate or purchase an existing facility to serve as a school.
18.24(d) A charter school may organize an affiliated nonprofit building corporation to
18.25construct a new school facility if the charter school:
18.26(1) demonstrates the lack of facilities available to serve as a school;
18.27(2) has been operating for at least eight consecutive school years;
18.28(3) has had a net positive unreserved general fund balance as of June 30 in the
18.29preceding eight fiscal years;
18.30(4) completes a feasibility study of facility options;
18.31(5) has a long-range strategic and financial plan that includes sustainable enrollment
18.32projections and demonstrates the need for constructing a new school facility; and
18.33(6) has a positive review and comment from the commissioner under section
18.34123B.71 .
18.35    Subd. 19. Disseminate information. (a) The authorizer, the operators, and the
18.36department must disseminate information to the public on how to form and operate
19.1a charter school. Charter schools must disseminate information about how to use
19.2the offerings of a charter school. Targeted groups include low-income families and
19.3communities, students of color, and students who are at risk of academic failure.
19.4(b) Authorizers, operators, and the department also may disseminate information
19.5about the successful best practices in teaching and learning demonstrated by charter
19.6schools.
19.7    Subd. 20. Leave to teach in a charter school. If a teacher employed by a district
19.8makes a written request for an extended leave of absence to teach at a charter school,
19.9the district must grant the leave. The district must grant a leave not to exceed a total of
19.10five years. Any request to extend the leave shall be granted only at the discretion of the
19.11school board. The district may require that the request for a leave or extension of leave
19.12be made before February 1 in the school year preceding the school year in which the
19.13teacher intends to leave, or February 1 of the calendar year in which the teacher's leave is
19.14scheduled to terminate. Except as otherwise provided in this subdivision and except for
19.15section 122A.46, subdivision 7, the leave is governed by section 122A.46, including, but
19.16not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
19.17During a leave, the teacher may continue to aggregate benefits and credits in the
19.18Teachers' Retirement Association account under chapters 354 and 354A, consistent with
19.19subdivision 22.
19.20    Subd. 21. Collective bargaining. Employees of the board of directors of a charter
19.21school may, if otherwise eligible, organize under chapter 179A and comply with its
19.22provisions. The board of directors of a charter school is a public employer, for the
19.23purposes of chapter 179A, upon formation of one or more bargaining units at the school.
19.24Bargaining units at the school must be separate from any other units within an authorizing
19.25district, except that bargaining units may remain part of the appropriate unit within an
19.26authorizing district, if the employees of the school, the board of directors of the school,
19.27the exclusive representative of the appropriate unit in the authorizing district, and the
19.28board of the authorizing district agree to include the employees in the appropriate unit of
19.29the authorizing district.
19.30    Subd. 22. Teacher and other employee retirement. (a) Teachers in a charter
19.31school must be public school teachers for the purposes of chapters 354 and 354a.
19.32(b) Except for teachers under paragraph (a), employees in a charter school must be
19.33public employees for the purposes of chapter 353.
19.34    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a)
19.35The duration of the contract with an authorizer must be for the term contained in the
19.36contract according to subdivision 6. The authorizer may or may not renew a contract at
20.1the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally
20.2terminate a contract during the term of the contract for any ground listed in paragraph (b).
20.3At least 60 business days before not renewing or terminating a contract, the authorizer
20.4shall notify the board of directors of the charter school of the proposed action in writing.
20.5The notice shall state the grounds for the proposed action in reasonable detail and that the
20.6charter school's board of directors may request in writing an informal hearing before the
20.7authorizer within 15 business days of receiving notice of nonrenewal or termination of
20.8the contract. Failure by the board of directors to make a written request for a an informal
20.9hearing within the 15-business-day period shall be treated as acquiescence to the proposed
20.10action. Upon receiving a timely written request for a hearing, the authorizer shall give ten
20.11business days' notice to the charter school's board of directors of the hearing date. The
20.12authorizer shall conduct an informal hearing before taking final action. The authorizer
20.13shall take final action to renew or not renew a contract no later than 20 business days
20.14before the proposed date for terminating the contract or the end date of the contract.
20.15(b) A contract may be terminated or not renewed upon any of the following grounds:
20.16(1) failure to meet the requirements for pupil performance contained in the contract;
20.17(2) failure to meet generally accepted standards of fiscal management;
20.18(3) violations of law; or
20.19(4) other good cause shown.
20.20If a contract is terminated or not renewed under this paragraph, the school must be
20.21dissolved according to the applicable provisions of chapter 308A or 317A.
20.22(c) If the authorizer and the charter school board of directors mutually agree to
20.23terminate or not renew the contract, a change in transfer of authorizers is allowed if the
20.24commissioner approves the transfer to a different eligible authorizer to authorize the
20.25charter school. Both parties must jointly submit their intent in writing to the commissioner
20.26to mutually terminate the contract. The authorizer that is a party to the existing contract
20.27at least must inform the approved different eligible proposed authorizer about the fiscal
20.28and operational status and student performance of the school. Before the commissioner
20.29determines whether to approve a transfer of authorizer, the commissioner first proposed
20.30authorizer must determine whether the charter school and prospective new authorizer can
20.31identify and effectively resolve those circumstances causing the previous authorizer and
20.32the charter school to mutually agree to terminate the contract identify and mitigate any
20.33outstanding issues in the proposed charter contract that were unresolved in the previous
20.34charter contract. If no transfer of authorizer is approved, the school must be dissolved
20.35according to applicable law and the terms of the contract.
21.1(d) The commissioner, after providing reasonable notice to the board of directors of
21.2a charter school and the existing authorizer, and after providing an opportunity for a public
21.3hearing, may terminate the existing contract between the authorizer and the charter school
21.4board if the charter school has a history of:
21.5(1) failure failed to meet pupil performance requirements contained in the contract
21.6consistent with state law;
21.7(2) displayed financial mismanagement or failure to meet generally accepted
21.8standards of fiscal management; or
21.9(3) repeated or major committed multiple violations of the law; or
21.10(4) committed a major violation of the law, including a violation of the Minnesota or
21.11United States Constitution, among other major violations.
21.12    (e) If the commissioner terminates a charter school contract under subdivision 3,
21.13paragraph (g), the commissioner shall provide the charter school with information about
21.14other eligible authorizers.
21.15    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
21.16entering a lease of real property with a related party unless the lessor is a nonprofit
21.17corporation under chapter 317A or a cooperative under chapter 308A, and the lease cost is
21.18reasonable under section 124D.11, subdivision 4, clause (1).
21.19    (b) For purposes of this section and section 124D.11:
21.20(1) "related party" means an affiliate or immediate relative of the other party in
21.21question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
21.22(2) "affiliate" means a person that directly or indirectly, through one or more
21.23intermediaries, controls, is controlled by, or is under common control with another person;
21.24(3) "immediate family" means an individual whose relationship by blood, marriage,
21.25adoption, or partnering is no more remote than first cousin;
21.26(4) "person" means an individual or entity of any kind; and
21.27(5) "control" means the ability to affect the management, operations, or policy
21.28actions or decisions of a person, whether through ownership of voting securities, by
21.29contract, or otherwise.
21.30(c) A lease of real property to be used for a charter school, not excluded in paragraph
21.31(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
21.32section 124D.10, subdivision 23a."
21.33    (d) If a charter school enters into as lessee a lease with a related party and the
21.34charter school subsequently closes, the commissioner has the right to recover from the
21.35lessor any lease payments in excess of those that are reasonable under section 124D.11,
21.36subdivision 4 , clause (1).
22.1    Subd. 24. Pupil enrollment upon nonrenewal or termination of charter school
22.2contract. If a contract is not renewed or is terminated according to subdivision 23, a
22.3pupil who attended the school, siblings of the pupil, or another pupil who resides in the
22.4same place as the pupil may enroll in the resident district or may submit an application
22.5to a nonresident district according to section 124D.03 at any time. Applications and
22.6notices required by section 124D.03 must be processed and provided in a prompt manner.
22.7The application and notice deadlines in section 124D.03 do not apply under these
22.8circumstances. The closed charter school must transfer the student's educational records
22.9within ten business days of closure to the student's school district of residence where the
22.10records must be retained or transferred under section 120A.22, subdivision 7.
22.11    Subd. 25. Extent of specific legal authority. (a) The board of directors of a charter
22.12school may sue and be sued.
22.13(b) The board may not levy taxes or issue bonds.
22.14(c) The commissioner, an authorizer, members of the board of an authorizer in
22.15their official capacity, and employees of an authorizer are immune from civil or criminal
22.16liability with respect to all activities related to a charter school they approve or authorize.
22.17The charter school shall assume full liability for its activities and indemnify and hold
22.18harmless the commissioner and the authorizer, and their officers, agents, and employees
22.19from any suit, claim, or liability arising under the contract or from the operation of the
22.20charter school. The board of directors shall obtain at least the amount of and types of
22.21insurance up to the applicable tort liability limits under chapter 466. The charter school
22.22board must submit a copy of the insurance policy to its authorizer and the commissioner
22.23before starting operations. The charter school board must submit changes in its insurance
22.24carrier or policy to notify its authorizer and the commissioner of a change in insurance
22.25carrier or policy amount limits within 20 business days of the change.

22.26    Sec. 3. Minnesota Statutes 2010, section 124D.11, subdivision 9, is amended to read:
22.27    Subd. 9. Payment of aids to charter schools. (a) Notwithstanding section 127A.45,
22.28subdivision 3 , aid payments for the current fiscal year to a charter school shall be of an
22.29equal amount on each of the 24 payment dates.
22.30(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing
22.31operation on or prior to June 30 of a school year, for the payment periods occurring after
22.32the school ceases serving students, the commissioner shall withhold the estimated state aid
22.33owed the school. The charter school board of directors and authorizer must submit to the
22.34commissioner a closure plan under chapter 308A or 317A, and financial information about
22.35the school's liabilities and assets. After receiving the closure plan, financial information,
23.1an audit of pupil counts, documentation of lease expenditures, and monitoring of special
23.2education expenditures, the commissioner may release cash withheld and may continue
23.3regular payments up to the current year payment percentages if further amounts are
23.4owed. If, based on audits and monitoring, the school received state aid in excess of the
23.5amount owed, the commissioner shall retain aid withheld sufficient to eliminate the aid
23.6overpayment. For a charter school ceasing operations prior to, or at the end of, a school
23.7year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may
23.8be made after receiving the closure plan, audit of pupil counts, monitoring of special
23.9education expenditures, documentation of lease expenditures, and school submission of
23.10Uniform Financial Accounting and Reporting Standards (UFARS) financial data for the
23.11final year of operation. Final payment may be made upon receipt of audited financial
23.12statements under section 123B.77, subdivision 3.
23.13(c) If a charter school fails to comply with the commissioner's directive to return,
23.14for cause, federal or state funds administered by the department, the commissioner may
23.15withhold an amount of state aid sufficient to satisfy the directive.
23.16(d) If, within the timeline under section 471.425, a charter school fails to pay the state
23.17of Minnesota, a school district, intermediate school district, or service cooperative after
23.18receiving an undisputed invoice for goods and services, the commissioner may withhold
23.19an amount of state aid sufficient to satisfy the claim and shall distribute the withheld
23.20aid to the interested state agency, school district, intermediate school district, or service
23.21cooperative. An interested state agency, school district, intermediate school district, or
23.22education cooperative shall notify the commissioner when a charter school fails to pay an
23.23undisputed invoice within 75 business days of when it received the original invoice.
23.24(e) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent
23.25of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day
23.26of student attendance for that school year.
23.27(f) In order to receive state aid payments under this subdivision, a charter school in
23.28its first three years of operation must submit a school calendar in the form and manner
23.29requested by the department and a quarterly report to the Department of Education. The
23.30report must list each student by grade, show the student's start and end dates, if any,
23.31with the charter school, and for any student participating in a learning year program,
23.32the report must list the hours and times of learning year activities. The report must be
23.33submitted not more than two weeks after the end of the calendar quarter to the department.
23.34The department must develop a Web-based reporting form for charter schools to use
23.35when submitting enrollment reports. A charter school in its fourth and subsequent year of
24.1operation must submit a school calendar and enrollment information to the department in
24.2the form and manner requested by the department.
24.3(g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
24.4school and satisfaction of creditors, cash and investment balances remaining shall be
24.5returned to the state.
24.6(h) A charter school must have a valid, signed contract under section 124D.10,
24.7subdivision 6, on file at the department at least 15 days before the date the department
24.8makes the first state aid payment for the fiscal year.

24.9    Sec. 4. TRANSITIONAL AUTHORIZER.
24.10(a) Notwithstanding other law to the contrary, an authorizer that chartered a school
24.11before August 1, 2009, and is ineligible to authorize a charter school under Minnesota
24.12Statutes, section 124D.10, subdivision 3, paragraph (c) or (f), after September 30, 2011,
24.13because:
24.14(1) the education commissioner did not approve the authorizer's application;
24.15(2) the authorizer did not apply to the commissioner for approval as an authorizer; or
24.16(3) the authorizer did not submit a timely application for approval as an authorizer
24.17may continue to authorize that charter school until June 30, 2012.
24.18(b) A charter school operating under a contract with an authorizer described in
24.19paragraph (a) after August 3, 2011, must enter into another charter school contract with an
24.20eligible approved authorizer by June 30, 2012, or cease operating. A charter school that
24.21continues to operate after June 30, 2012, with an authorizer under paragraph (a) commits
24.22a major violation of law under Minnesota Statutes, section 124D.10, subdivision 23,
24.23paragraph (d), clause (4).
24.24EFFECTIVE DATE.This section is effective the day following final enactment.