HF 623

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:39am

A bill for an act
relating to education; modifying charter school provisions; reviving charter
school advisory council; amending Minnesota Statutes 2008, section 124D.10.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 124D.10, is amended to read:

124D.10 CHARTER SCHOOLS.

Subdivision 1.

Purposes.

(a) The purpose of this section is to:

(1) improve pupil learning new text begin and achievement new text end ;

(2) increase learning opportunities for pupils;

(3) encourage the use of different and innovative teaching methods;

(4) deleted text begin require the measurement of deleted text end new text begin measure new text end learning outcomes deleted text begin and create deleted text end new text begin through the
creation and use of new text end different and innovative forms of measuring outcomes;

(5) establish new forms of accountability for schools; or

(6) create new professional opportunities for teachers, including the opportunity to
be responsible for the learning program at the school site.

(b) This section does not provide a means to keep open a school that otherwise
would be closed. Applicants in these circumstances bear the burden of proving that
conversion to a charter school fulfills a purpose specified in this subdivision, independent
of the school's closing.

Subd. 2.

Applicability.

This section applies only to charter schools formed and
operated under this section.

Subd. 2a.

Charter School Advisory Council.

(a) A Charter School Advisory
Council is established under section 15.059 except that the term for each council member
shall be three years. The advisory council is composed of deleted text begin seven deleted text end new text begin nine new text end members deleted text begin from
throughout the state who have demonstrated experience with or interest in deleted text end new text begin which represent
authorizers, charter schools administrators, board members, teachers, parents, and
organizations that provide support to new text end charter schools. The members of the council shall
be appointed by the commissioner. The advisory council shall deleted text begin bring to the attention of deleted text end new text begin
advise new text end the commissioner deleted text begin any deleted text end new text begin on new text end matters related to charter schools deleted text begin that the council deems
necessary and shall deleted text end new text begin and authorization of charter schools including new text end :

(1) deleted text begin encourage school boards to make full use of charter school opportunities deleted text end new text begin the
guidelines and policies for the approval, review, and discipline processes for authorizers new text end ;

deleted text begin (2) encourage the creation of innovative schools;
deleted text end

deleted text begin (3) provide leadership and support for charter school sponsors to increase the
innovation in and the deleted text end new text begin (2) initiatives to support innovation, new text end effectiveness, accountability,
and fiscal soundness of charter schools;

deleted text begin (4) serve an ombudsman function in facilitating the operations of new and existing
charter schools;
deleted text end

deleted text begin (5) promote timely deleted text end new text begin (3) the new text end financial management training new text begin program new text end for deleted text begin newly elected
members of a deleted text end charter school board deleted text begin of directors and ongoing training for other deleted text end members
deleted text begin of a charter school board of directors deleted text end ; and

deleted text begin (6) deleted text end new text begin (4) new text end facilitate compliance with auditing and other reporting requirements. deleted text begin The
advisory council shall refer all its proposals to the commissioner who shall provide time
for reports from the council.
deleted text end

(b) The Charter School Advisory Council under this subdivision expires June 30,
deleted text begin 2007 deleted text end new text begin 2015 new text end .

Subd. 3.

deleted text begin Sponsor deleted text end new text begin Authorizers new text end .

(a) new text begin The following organizations are eligible to
authorize charter schools:
new text end

new text begin (1) new text end a school board; intermediate school district school board; education district
organized under sections 123A.15 to 123A.19;

new text begin (2) a new text end charitable organization under section 501(c)(3) of the Internal Revenue Code
of 1986 new text begin , except those that have received church status under sections 170(b)(1)(A)(i)
and 509(a)(a) of the Internal Revenue Code of 1986, that is registered with the attorney
general's office, new text end deleted text begin that deleted text end is a member of the Minnesota Council of Nonprofits or the Minnesota
Council on Foundations, deleted text begin registered with the attorney general's office, deleted text end and reports an
end-of-year fund balance of at least $2,000,000;

new text begin (3) new text end Minnesota private college that grants two- or four-year degrees and is registered
with the Minnesota Office of Higher Education under chapter 136A; community college,
state university, or technical college, governed by the Board of Trustees of the Minnesota
State Colleges and Universities; or the University of Minnesota may deleted text begin sponsor deleted text end new text begin authorize new text end
one or more charter schools deleted text begin . deleted text end new text begin ; or new text end

deleted text begin (b) deleted text end new text begin (4) new text end a nonprofit corporation subject to chapter 317A, described in section
317A.905, and exempt from federal income tax under section 501(c)(6) of the Internal
Revenue Code of 1986, may deleted text begin sponsor deleted text end new text begin authorize new text end one or more charter schools if the charter
school has operated for at least three years under a different deleted text begin sponsor deleted text end new text begin authorizer new text end and if the
nonprofit corporation has existed for at least 25 years.

new text begin (b) Upon demonstration of eligibility under paragraph (a), the potential authorizer
must make an application to the commissioner to be an approved authorizer prior to
submitting any affidavits to authorize schools. The application to authorize schools shall
demonstrate the organization's ability and capacity to perform the responsibilities of
an authorizer as demonstrated through standards developed by a national or Minnesota
nonprofit organization and approved by the commissioner. The commissioner may
approve standards of multiple organizations. The standards shall include:
new text end

new text begin (1) the capacity and infrastructure of the authorizer;
new text end

new text begin (2) the application criteria and process;
new text end

new text begin (3) the contracting process;
new text end

new text begin (4) ongoing oversight and evaluation processes; and
new text end

new text begin (5) renewal criteria and processes.
new text end

new text begin (c) The commissioner shall have 30 business days to approve or disapprove the
application of a potential authorizer. Upon approval by the commissioner, the authorizer
shall be required to attend and participate in training approved by the department.
Authorizers that have been authorizing schools on or before June 30, 2009, shall have until
June 30, 2012, to apply as an authorizer under this subdivision.
new text end

new text begin (d) The commissioner shall review an authorizer's capacity and performance every
five years in a manner and form prescribed by the commissioner. The commissioner shall
issue a report to the authorizer upon completion of the review. If the commissioner finds
that an authorizer has not maintained its capacity or has not demonstrated satisfactory
performance, the authorizer shall be subject to disciplinary action by the commissioner,
including the loss of authority to authorize schools. The commissioner shall notify the
authorizer of any disciplinary action in writing and the authorizer shall have 15 business
days to request a hearing subject to chapter 14, before the commissioner takes the
disciplinary action.
new text end

new text begin (e) The authority of the department to authorize schools it authorized previous to
June 30, 2009, shall expire on June 30, 2012.
new text end

new text begin (f) The commissioner shall have the authority to establish guidelines and policies to
implement the approval, review, and disciplinary processes for authorizers in consultation
with the Charter School Advisory Council.
new text end

Subd. 4.

Formation of school.

(a) deleted text begin A sponsor may authorize one or more licensed
teachers under section 122A.18, subdivision 1, to operate a charter school subject to
approval by the commissioner. A board must vote on charter school application for
sponsorship no later than 90 days after receiving the application. The school must be
organized and operated as a cooperative under chapter 308A or nonprofit corporation
under chapter 317A and the provisions under the applicable chapter shall apply to
the school except as provided in this section. Notwithstanding sections 465.717 and
465.719, a school district may create a corporation for the purpose of creating a charter
school. deleted text end new text begin An individual licensed teacher or a group of individuals may apply to establish
and operate a public charter school. The group must include at least one licensed teacher.
Notwithstanding sections 465.717 and 465.719, a school district may create a corporation
for the purpose of creating a charter school. The application for a charter is submitted to
the proposed authorizer for approval. The proposed authorizer has the responsibility for
reviewing and approving or disapproving the application for a charter.
new text end

(b) Before the operators may deleted text begin form deleted text end new text begin establish new text end and operate a school, the deleted text begin sponsor deleted text end new text begin
authorizer new text end must deleted text begin file deleted text end new text begin submit new text end an affidavit deleted text begin with deleted text end new text begin to new text end the commissioner deleted text begin stating its intent to
authorize a charter school. deleted text end new text begin for the charter school it proposes to authorize. A separate
affidavit must be filed for every individual school. The school developers signed statement
of legal assurances prescribed by the commissioner shall be submitted with the affidavit.
new text end The affidavit must deleted text begin state the terms and conditions under which the sponsor would authorize
a charter school and deleted text end new text begin document:
new text end

new text begin (1) the review process and due diligence the authorizer conducted of the application;
new text end

new text begin (2) new text end how the deleted text begin sponsor deleted text end new text begin authorizer new text end intends to oversee the fiscal and student performance
of the charter school new text begin ; new text end and deleted text begin to comply with
deleted text end

new text begin (3) new text end the new text begin proposed new text end terms of the written contract between the deleted text begin sponsor deleted text end new text begin authorizer new text end and
the charter school board of directors under subdivision 6.

new text begin (c) new text end The commissioner must approve or disapprove the deleted text begin sponsor's deleted text end new text begin authorizer's new text end
proposed authorization within deleted text begin 90 deleted text end new text begin 30 business new text end days of receipt of the affidavit. new text begin If the
commissioner disapproves the affidavit, the commissioner shall notify the authorizer of
the deficiencies in the affidavit. The authorizer shall have 20 business days to address the
deficiencies. If the deficiencies are not addressed to the satisfaction of the commissioner,
the disapproval is final. new text end Failure to obtain commissioner approval new text begin of the affidavit new text end precludes
deleted text begin a sponsor deleted text end new text begin an authorizer new text end from authorizing the charter school that deleted text begin was deleted text end new text begin is new text end the subject of the
affidavit. new text begin Upon approval of the affidavit, the proposed school must be organized and
operated as a cooperative under chapter 308A, or nonprofit corporation under chapter
317A, and the provisions under the applicable chapter shall apply to the school except as
provided in this section.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end The operators authorized to organize and operate a school, before entering
into a contract or other agreement for professional or other services, goods, or facilities,
must incorporate as a cooperative under chapter 308A or as a nonprofit corporation
under chapter 317A new text begin . new text end deleted text begin and must establish a board of directors composed of at least five
members until a timely election for members of the charter school board of directors
is held according to deleted text end new text begin If the first board is not named in the articles of incorporation, the
incorporators must within a reasonable time hold an organizational meeting to elect the
first board composed of at least five nonrelated members that includes at least one licensed
teacher under section 122A.18, subdivision 1, held in accordance with new text end the school's articles
and bylaws. deleted text begin A
deleted text end

new text begin (e) The ongoing new text end charter school board of directors must be composed of at least five
new text begin nonrelated new text end members. Any staff members who are employed at the school, including
teachers providing instruction under a contract with a cooperative, and all parents new text begin or legal
guardians new text end of children enrolled in the school deleted text begin may deleted text end new text begin are eligible to new text end participate in the election
for members of the school's board of directors. deleted text begin Licensed teachers employed at the school,
including teachers providing instruction under a contract with a cooperative, must be a
majority of the members of the board of directors before the school completes its third
year of operation, unless the commissioner waives the requirement for a majority of
licensed teachers on the board. deleted text end new text begin Eligible voters must be notified of the election dates and
voting procedures at least 30 days before the election.
new text end

new text begin (f) The ongoing board must be elected before the school completes its third year
of operation. The board of directors shall be composed of one of the following: (1) a
teacher majority board, (2) a board composed of an equal number of teachers, parents,
and community members, or (3) a board with at least 20 percent of its members licensed
teachers. Licensed teachers employed by the school, or those providing instruction under
a contract with a cooperative are eligible to be members of the board of directors. The
chief financial officer and chief administrator may not be voting members of the board.
The bylaws of the board shall outline the internal process and procedures for changing the
model of governance. The model of governance may only be changed in conjunction with
the renewal of the charter contract and the majority votes of the board of directors and of
the licensed teachers employed or contracted with a cooperative.
new text end

new text begin (g) new text end Board of director meetings must comply with chapter 13D. new text begin Upon the request of
an individual, the charter school must make available in a timely fashion the minutes of
meetings of members, the board of directors, and committees having any of the authority
of the board of directors, and statements showing the financial result of all operations
and transactions affecting income and surplus during the school's last annual accounting
period and a balance sheet containing a summary of its assets and liabilities as of the
closing date of the accounting period.
new text end

new text begin (h) Every charter school board member shall attend training on charter school
governance and the role and responsibilities of a charter school board, and training
on the basics of charter school finances and the board role and responsibilities in
financial management and oversight. A board member who does not complete these
basic requirements within 12 months of being seated on the board shall be ineligible for
continued service on the board.
new text end

deleted text begin (d) deleted text end new text begin (i) new text end The granting or renewal of a charter by deleted text begin a sponsoring deleted text end new text begin an authorizing new text end entity
must not be conditioned upon the bargaining unit status of the employees of the school.

new text begin (j) The granting or renewal of a charter school by an authorizer must not be
contingent on the charter school being required to contract, lease, or purchase services
from the authorizer. Any potential contract, lease, or purchase of service from an
authorizer must be done through an open bidding process and must be a separate contract
from the charter. The school must document the open bidding process. An authorizer is
prohibited from entering into a contract to provide management and financial services
for a school that it authorizes, unless the school has documented that it has received
at least two competitive bids and the proposed contract has been reviewed by the
commissioner prior to the board entering into the contract. A contract entered into prior
to the review and comment of the commissioner shall be void. The commissioner shall
have 20 business days from receipt of the proposed contract to review and comment
on the proposed contract.
new text end

deleted text begin (e) A sponsor deleted text end new text begin (k) An authorizer new text end may authorize the deleted text begin operators of a deleted text end charter school
new text begin board of directors new text end to expand the operation of the charter school to additional sites or to
add additional grades at the school beyond those described in the deleted text begin sponsor's application
as approved deleted text end new text begin authorizer's original affidavit. The authorizer shall submit a supplementary
affidavit for approval new text end by the commissioner deleted text begin only after submitting a supplemental
application to the commissioner deleted text end in a form and manner prescribed by the commissioner.
The supplemental deleted text begin application must provide evidence deleted text end new text begin affidavit shall attest new text end that:

(1) new text begin the authorizer has reviewed new text end the expansion new text begin plans new text end of the charter school deleted text begin is
supported by deleted text end new text begin and that there is sufficient supporting documentation of the new text end need and
projected enrollment;

(2) new text begin the authorizer has reviewed the financial plan of the school and new text end the charter
school is fiscally sound;

(3) the deleted text begin sponsor supports the expansion; and deleted text end new text begin authorizer has reviewed the management
plan and that the charter has the management capacity to carry out the expansion plan.
new text end

deleted text begin (4) the building of the additional site meets all health and safety requirements to
be eligible for lease aid.
deleted text end

new text begin (l) The commissioner shall have 30 business days to review and comment the
supplementary affidavit. The commissioner shall notify the authorizer of any deficiencies
in the supplementary affidavit. The authorizer shall have 30 business days to address any
deficiencies in the supplementary affidavit to the satisfaction of the commissioner. The
school may not proceed to expand the grades or add additional sites until the commissioner
has reviewed and commented on the supplementary affidavit.
new text end

deleted text begin (f) deleted text end new text begin (m) new text end The commissioner deleted text begin annually must provide timely financial management
training to newly elected members of a charter school board of directors and ongoing
training to other members of a deleted text end new text begin shall approve or offer financial management, and public
record-keeping training for members of new text end charter school deleted text begin board of directors deleted text end new text begin boards new text end . new text begin The
new text end training must address ways new text begin for charter schools new text end to:

(1) deleted text begin proactively assess opportunities for a charter school to deleted text end maximize new text begin and effectively
use new text end all available new text begin public new text end revenue sources;

(2) establish and maintain complete, auditable new text begin financial new text end records deleted text begin for the charter
school deleted text end ;

(3) establish proper new text begin procedures for new text end filing deleted text begin techniques deleted text end new text begin and archiving state-required
reports and documents new text end ;

(4) document formal actions of the charter school, including meetings of the charter
school board of directors;

(5) properly manage and retain deleted text begin charter school and deleted text end student records;

(6) comply with state and federal payroll record-keeping requirements deleted text begin ; deleted text end and new text begin
employment records.
new text end

deleted text begin (7) address other similar factors that facilitate establishing and maintaining complete
records on the charter school's operations.
deleted text end

Subd. 4a.

Conflict of interest.

(a) deleted text begin A member of a charter school board of directors deleted text end
new text begin An individual new text end is prohibited from serving as a member of the new text begin charter school new text end board of
directors deleted text begin or as deleted text end new text begin if the individual, an immediate family member, or the individual's partner is new text end
an new text begin owner, new text end employee new text begin , new text end or agent of or a contractor with a for-profit new text begin or nonprofit new text end entity with
whom the charter school contracts, directly or indirectly, for professional services, goods,
or facilities. A violation of this prohibition renders a contract deleted text begin voidable at the option of the
commissioner deleted text end new text begin void new text end . A member of a charter school board of directors who violates this
prohibition shall be individually liable to the charter school for any damage caused by the
violation. new text begin A violation of this requirement renders a contract void. The charter school's aid
may be reduced by the commissioner under section 127A.42 if the charter school fails to
correct violations under this subdivision in a timely manner.
new text end

new text begin (b) No employee, officer, or agent of the charter school shall participate in the
selection, award, or administration of a contract if a conflict of interest would be involved.
A conflict exists when: (1) the employee, officer, or agent, (2) the immediate family of the
employee, officer, or agent, (3) the partner of the employee, officer, or agent, or (4) an
organization which employs, or is about to employ, any individual in clauses (1) to (3),
has a financial or other interest in the organization selected for the contract. A violation
of this prohibition renders the contract void. The charter school's aid may be reduced by
the commissioner under section 127A.42 if the charter school fails to correct violations
under this subdivision in a timely manner.
new text end

new text begin (c) No employee, agent, or board member of the authorizer who is involved in
the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
nonrenewal process or decision is eligible to serve on the board of directors of a school
authorized by that authorizer.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end An individual may serve as a member of the board of directors if no conflict
of interest under paragraph (a) exists.

deleted text begin (c) A member of a charter school board of directors that serves as a member of the
board of directors or as an employee or agent of or a contractor with a nonprofit entity
with whom the charter school contracts, directly or indirectly, for professional services,
goods, or facilities, must disclose all potential conflicts to the commissioner.
deleted text end

deleted text begin (d) deleted text end new text begin (e) new text end The conflict of interest provisions under this subdivision do not apply to
compensation paid to a teacher employed by the charter school who also serves as a
member of the board of directors.

deleted text begin (e) deleted text end new text begin (f) new text end The conflict of interest provisions under this subdivision do not apply to a
teacher who provides services to a charter school through a cooperative formed under
chapter 308A when the teacher also serves on the charter school board of directors.

Subd. 5.

Conversion of existing schools.

A board new text begin of an independent school district
new text end may convert one or more of its existing schools to charter schools under this section if
60 percent of the full-time teachers at the school sign a petition seeking conversion. The
conversion must occur at the beginning of an academic year.

Subd. 6.

new text begin Charter new text end contract.

The deleted text begin sponsor's deleted text end authorization for a charter school must
be in the form of a written contract signed by the deleted text begin sponsor deleted text end new text begin authorizer new text end and the board of
directors of the charter school. The contract must be completed within deleted text begin 90 deleted text end new text begin 45 business new text end
days of the commissioner's approval of the deleted text begin sponsor's proposed authorization deleted text end new text begin authorizer's
affidavit new text end . new text begin The authorizer shall submit a copy of the signed contract within ten business
days of its execution to the commissioner. new text end The contract for a charter school must be in
writing and contain at least the following:

(1) a deleted text begin description of a program that carries out one or more of the purposes deleted text end
new text begin declaration of the purposes new text end in subdivision 1 new text begin which the school is going to carry out and the
way in which the school will report implementation of those purposes new text end ;

(2) new text begin a clear description of the school program and the new text end specific new text begin academic and
nonacademic new text end outcomes pupils are to achieve deleted text begin under subdivision 10 deleted text end ;

(3) new text begin the statement of new text end admission policies and procedures;

(4) new text begin the governance, new text end management new text begin , new text end and administration deleted text begin of deleted text end new text begin plan for new text end the school;

(5) new text begin signed assurances of charter school board members for compliance with all
federal and state laws for organizational, program, and financial new text end requirements deleted text begin and
procedures for program and financial audits deleted text end new text begin that apply to charter schools new text end ;

(6) deleted text begin how the school will comply with subdivisions 8, 13, 16, and 23 deleted text end new text begin the criteria,
processes, and procedures that the authorizer will use for ongoing oversight of academic,
operational, and academic performance new text end ;

(7) deleted text begin assumption of liability by the charter school deleted text end new text begin the performance evaluation for
charter renewal decisions under subdivision 15 new text end ;

(8) types and amounts of insurance new text begin liability new text end coverage to be obtained by the charter
school;

(9) the term of the contract, which may be up to deleted text begin three deleted text end new text begin five new text end years new text begin with an additional
preoperational planning year. Renewal contracts shall be based on the academic, financial,
and operational performance of the school new text end ; new text begin and
new text end

(10) deleted text begin if deleted text end new text begin how new text end the board of directors or the operators of the charter school provide
special instruction and services for children with a disability under sections 125A.03
to 125A.24, and 125A.65, a description of the financial parameters within which the
charter school will operate to provide the special instruction and services to children
with a disability deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (11) the process and criteria the sponsor intends to use to monitor and evaluate the
fiscal and student performance of the charter school, consistent with subdivision 15.
deleted text end

Subd. 6a.

Audit report.

The charter school must submit an audit report to the
commissioner by December 31 each year. new text begin The commissioner shall notify the authorizer
within ten business days if the school has not submitted the audit. The charter school's
state aid may be withheld by the commissioner if the audit is not submitted by January 31.
new text end The charter school, with the assistance of the auditor conducting the audit, must include
with the report a copy of all charter school agreements for corporate management services.
If the entity that provides the professional services to the charter school is exempt from
taxation under section 501 of the Internal Revenue Code of 1986, that entity must file with
the commissioner by February 15 a copy of the annual return required under section 6033
of the Internal Revenue Code of 1986. If the commissioner receives deleted text begin as part of the deleted text end new text begin an new text end audit
report deleted text begin a management letter deleted text end indicating that a material weakness exists in the financial
reporting systems of a charter school, the charter school must submit a written report to
the commissioner explaining how the material weakness will be resolved. deleted text begin Upon the
request of an individual, the charter school must make available in a timely fashion the
minutes of meetings of members, the board of directors, and committees having any of
the authority of the board of directors, and statements showing the financial result of all
operations and transactions affecting income and surplus during the school's last annual
accounting period and a balance sheet containing a summary of its assets and liabilities as
of the closing date of the accounting period.
deleted text end

Subd. 7.

Public status; exemption from statutes and rules.

A charter school is a
public school and is part of the state's system of public education. deleted text begin Except as provided in
this section, deleted text end A charter school is exempt from all statutes and rules applicable to a school, deleted text begin a deleted text end
new text begin school new text end board, or deleted text begin a deleted text end district, deleted text begin although it may elect to comply with one or more provisions deleted text end new text begin
unless required by this section or in another section new text end of statutes or rules.

Subd. 8.

State and local requirements.

(a) A charter school shall meet all
applicable new text begin federal, new text end state new text begin , new text end and local health and safety requirements.

(b) A school sponsored by a school board may be located in any district, unless the
school board of the district of the proposed location disapproves by written resolution.

(c) A charter school must be nonsectarian in its programs, admission policies,
employment practices, and all other operations. A sponsor may not authorize a charter
school deleted text begin or program deleted text end that is affiliated with a nonpublic sectarian school or a religious
institution.

(d) Charter schools must not be used as a method of providing education or
generating revenue for students who are being home-schooled.

(e) The primary focus of a charter school must be to provide a comprehensive
program of instruction for at least one grade or age group from five through 18 years
of age. Instruction may be provided to people younger than five years and older than
18 years of age.

(f) A charter school may not charge tuition new text begin to students who reside in Minnesota new text end .

(g) A charter school is subject to and must comply with chapter 363A and section
121A.04.

(h) A charter school is subject to and must comply with the Pupil Fair Dismissal
Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
123B.34 to 123B.39.

(i) A charter school is subject to the same financial audits, audit procedures, and
audit requirements as a district. Audits must be conducted in compliance with generally
accepted governmental auditing standards, the Federal Single Audit Act, if applicable,
and section 6.65. A charter school is subject to and must comply with sections 15.054;
118A.01; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; deleted text begin 123B.52, subdivision 5;
deleted text end 471.38; 471.391; 471.392; new text begin and new text end 471.425 deleted text begin ; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6, 12,
13, and 15; 471.881; and 471.89 deleted text end . The audit must comply with the requirements of sections
123B.75 to 123B.83, except to the extent deviations are necessary because of the program
at the school. Deviations must be approved by the commissioner. The Department
of Education, state auditor, or legislative auditor may conduct financial, program, or
compliance audits. A charter school determined to be in statutory operating debt under
sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4.

(j) A charter school is a district for the purposes of tort liability under chapter 466.

(k) A charter school must comply with sections 13.32; 120A.22, subdivision 7;
121A.75; and 260B.171, subdivisions 3 and 5.

(l) A charter school is subject to the Pledge of Allegiance requirement under section
121A.11, subdivision 3.

Subd. 9.

deleted text begin Admission requirements deleted text end new text begin Pupil admissions new text end .

A charter school may limit
admission to:

(1) pupils within an age group or grade level;

(2) people who are eligible to participate in the graduation incentives program
under section 124D.68; or

(3) residents of a specific geographic area where the percentage of the population
of non-Caucasian people of that area is greater than the percentage of the non-Caucasian
population in the congressional district in which the geographic area is located, and as
long as the school reflects the racial and ethnic diversity of the specific area.

A charter school shall enroll an eligible pupil who submits a timely application,
unless the number of applications exceeds the capacity of a program, class, grade level,
or building. In this case, pupils must be accepted by lot. deleted text begin If a charter school is the only
school located in a town serving pupils within a particular grade level, then pupils that
are residents of the town must be given preference for enrollment before accepting pupils
by lot. If a pupil lives within two miles of a charter school and the next closest public
school is more than five miles away, the charter school must give those pupils preference
for enrollment before accepting other pupils by lot. deleted text end new text begin The charter school must develop
and publish its lottery policy and process.
new text end

A charter school shall give preference for enrollment to a sibling of an enrolled pupil
and to a foster child of that pupil's parents new text begin and to children of school employee's new text end before
accepting other pupils by lot.

A charter school may not limit admission to pupils on the basis of intellectual ability,
measures of achievement or aptitude, or athletic ability new text begin and may not establish any criteria
or requirements for admission new text end .

Subd. 10.

Pupil performance.

A charter school must design its programs to at least
meet the outcomes adopted by the commissioner for public school students. In the absence
of the commissioner's requirements, the school must meet the outcomes contained in the
new text begin charter new text end contract with the sponsor. The achievement levels of the outcomes contained in
the new text begin charter new text end contract may exceed the achievement levels of any outcomes adopted by the
commissioner for public school students.

Subd. 11.

Employment and other operating matters.

A charter school must
employ or contract with necessary teachers, as defined by section 122A.15, subdivision
1, who hold valid licenses to perform the particular service for which they are employed
in the school. The charter school's state aid may be reduced under section 127A.42
if the school employs a teacher who is not appropriately licensed or approved by the
board of teaching. The school may employ necessary employees who are not required to
hold teaching licenses to perform duties other than teaching and may contract for other
services. The school may discharge teachers and nonlicensed employees. A person,
without holding a valid administrator's license, may perform administrative, supervisory,
or instructional leadership duties.

The board of directors also shall decide matters related to the operation of the school,
including budgeting, curriculum and operating procedures.

Subd. 12.

Pupils with a disability.

A charter school must comply with sections
125A.02, 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils
with a disability as though it were a district.

Subd. 13.

Length of school year.

A charter school must provide instruction
each year for at least the number of days required by section 120A.41. It may provide
instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.

Subd. 14.

Annual public reports.

A charter school must new text begin publish an annual new text end report deleted text begin at
least annually to its sponsor and the commissioner the information required by the sponsor
or the commissioner. deleted text end new text begin approved by the board of directors. The annual report shall include
information on enrollment, governance and management, staffing, finances, academic
performance, operational performance, innovative practices and implementation, future
plans, and the authorizer. The annual report shall be distributed to the commissioner,
authorizer, school employees, and parents and legal guardians. new text end The reports are public
data under chapter 13.

Subd. 15.

new text begin School new text end review and comment.

(a) new text begin The authorizer shall ensure that a
formal evaluation of the performance of a school is conducted prior to the renewal of
the charter contract.
new text end

new text begin (b) new text end The department must review and comment on the evaluation deleted text begin , by the sponsor, of
the performance of a charter school before the charter school's contract is renewed for
another contract term. The sponsor must submit to the commissioner timely information
for the review and comment. deleted text end new text begin process at the time the authorizer submits its application and
when the authorizer is up for its five-year review.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end A sponsor shall monitor and evaluate the fiscal new text begin , operational, new text end and student
performance of the school, and may for this purpose annually assess a charter school deleted text begin : (1)
in its first, second, or third year of operation up to $30 per student up to a maximum of
$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up
to a maximum of $3,500. deleted text end new text begin an agreed upon fee that is stated in the charter contract of 1.0
percent of the formula allowance of one pupil unit per student up to a maximum of 1.25
pupil units in 2009-2010. The maximum shall rise to 1.5 pupil units in 2010-2011, 2.0
pupil units in 2011-2012, 3.0 pupil units in 2012-2013, and 4.0 pupil units in 2013-2014
and thereafter. The authorizer has the right to assess a minimum fee of the formula
allowance for one pupil unit in any one year.
new text end

new text begin (d) For the preoperational planning period, the authorizer may assess a charter
school the formula allowance for one pupil unit.
new text end

new text begin (e) Annually on or before September 30, an authorizer shall submit to the
commissioner a statement of expenditures related to authorization activities during the
previous school year ending on June 30. A copy of the statement shall be given to all
schools authorized by the authorizer.
new text end

Subd. 16.

Transportation.

(a) A charter school after its first fiscal year of operation
by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of
operation must notify the district in which the school is located and the Department of
Education if it will provide its own transportation or use the transportation services of the
district in which it is located for the fiscal year.

(b) If a charter school elects to provide transportation for pupils, the transportation
must be provided by the charter school within the district in which the charter school is
located. The state must pay transportation aid to the charter school according to section
124D.11, subdivision 2.

For pupils who reside outside the district in which the charter school is located, the
charter school is not required to provide or pay for transportation between the pupil's
residence and the border of the district in which the charter school is located. A parent
may be reimbursed by the charter school for costs of transportation from the pupil's
residence to the border of the district in which the charter school is located if the pupil is
from a family whose income is at or below the poverty level, as determined by the federal
government. The reimbursement may not exceed the pupil's actual cost of transportation
or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for
more than 250 miles per week.

At the time a pupil enrolls in a charter school, the charter school must provide the
parent or guardian with information regarding the transportation.

(c) If a charter school does not elect to provide transportation, transportation for
pupils enrolled at the school must be provided by the district in which the school is
located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a
pupil residing in the same district in which the charter school is located. Transportation
may be provided by the district in which the school is located, according to sections
123B.88, subdivision 6, and 124D.03, subdivision 8, for a pupil residing in a different
district. If the district provides the transportation, the scheduling of routes, manner and
method of transportation, control and discipline of the pupils, and any other matter relating
to the transportation of pupils under this paragraph shall be within the sole discretion,
control, and management of the district.

Subd. 17.

Leased space.

A charter school may lease space from deleted text begin a deleted text end new text begin an independent
school new text end board eligible to be deleted text begin a sponsor or deleted text end new text begin an authorizer, new text end other public deleted text begin or deleted text end new text begin organization, new text end private new text begin , new text end
nonprofit nonsectarian organization new text begin , private property owner, or a sectarian organization
if the space to be leased from sectarian organization is constructed as a school facility.
Leases are to be reviewed and approved by the Department of Education in a timely
manner new text end . deleted text begin If a charter school is unable to lease appropriate space from an eligible board or
other public or private nonprofit nonsectarian organization, the school may lease space
from another nonsectarian organization if the Department of Education, in consultation
with the Department of Administration, approves the lease. If the school is unable to lease
appropriate space from public or private nonsectarian organizations, the school may lease
space from a sectarian organization if the leased space is constructed as a school facility
and the Department of Education, in consultation with the Department of Administration,
approves the lease. deleted text end new text begin Charter schools that have been in operation for more than five years
may form a separate nonprofit building company upon approval of the authorizer.
new text end

deleted text begin Subd. 18. deleted text end

deleted text begin Authority to raise initial working capital. deleted text end

deleted text begin A sponsor may authorize
a charter school before the applicant has secured its space, equipment, facilities, and
personnel if the applicant indicates the authority is necessary for it to raise working
capital. A sponsor may not authorize a school before the commissioner has approved the
authorization.
deleted text end

Subd. 19.

Disseminate information.

deleted text begin The sponsor, the operators, deleted text end new text begin Authorizers new text end and
the Department of Education must disseminate information to the public on how to form
and operate a charter school deleted text begin and deleted text end new text begin . Charter schools must disseminate information about new text end
how to utilize the offerings of a charter school. Particular groups to be targeted include
low-income families and communities, deleted text begin and deleted text end students of color new text begin , and students who are at-risk
of academic failure new text end .

Subd. 20.

Leave to teach in a charter school.

If a teacher employed by a district
makes a written request for an extended leave of absence to teach at a charter school,
the district must grant the leave. The district must grant a leave not to exceed a total of
five years. Any request to extend the leave shall be granted only at the discretion of the
school board. The district may require that the request for a leave or extension of leave be
made deleted text begin up to 90 days deleted text end new text begin by February 1 new text end before the teacher would otherwise have to report for
duty. Except as otherwise provided in this subdivision and except for section 122A.46,
subdivision 7, the leave is governed by section 122A.46, including, but not limited to,
reinstatement, notice of intention to return, seniority, salary, and insurance.

During a leave, the teacher may continue to aggregate benefits and credits in the
Teachers' Retirement Association deleted text begin account by paying both the employer and employee
contributions based upon the annual salary of the teacher for the last full pay period before
the leave began. The retirement association may impose reasonable requirements to
efficiently administer this subdivision deleted text end new text begin under chapters 354 and 354A in accordance with
subdivision 22 new text end .

Subd. 21.

Collective bargaining.

Employees of the board of directors of a charter
school may, if otherwise eligible, organize under chapter 179A and comply with its
provisions. The board of directors of a charter school is a public employer, for the
purposes of chapter 179A, upon formation of one or more bargaining units at the school.
Bargaining units at the school must be separate from any other units within the sponsoring
district, except that bargaining units may remain part of the appropriate unit within the
sponsoring district, if the employees of the school, the board of directors of the school,
the exclusive representative of the appropriate unit in the sponsoring district, and the
board of the sponsoring district agree to include the employees in the appropriate unit
of the sponsoring district.

Subd. 22.

Teacher and other employee retirement.

(a) Teachers in a charter
school must be public school teachers for the purposes of chapters 354 and 354a.

(b) Except for teachers under paragraph (a), employees in a charter school must be
public employees for the purposes of chapter 353.

Subd. 23.

deleted text begin Causes for deleted text end Nonrenewal or termination of charter school contract.

(a)
The duration of the contract with a deleted text begin sponsor deleted text end new text begin authorizer new text end must be for the term contained in
the contract according to subdivision 6. The deleted text begin sponsor deleted text end new text begin authorizer new text end may or may not renew
a contract at the end of the term for any ground listed in paragraph (b). A deleted text begin sponsor deleted text end
new text begin authorizer new text end may unilaterally terminate a contract during the term of the contract for any
ground listed in paragraph (b). At least 60 days before not renewing or terminating a
contract, the deleted text begin sponsor deleted text end new text begin authorizer new text end shall notify the board of directors of the charter school
of the proposed action in writing. The notice shall state the grounds for the proposed
action in reasonable detail and that the charter school's board of directors may request
in writing an informal hearing before the deleted text begin sponsor deleted text end new text begin authorizer new text end within deleted text begin 14 deleted text end new text begin 15 business new text end days
of receiving notice of nonrenewal or termination of the contract. Failure by the board of
directors to make a written request for a hearing within the deleted text begin 14-day deleted text end new text begin 15-day new text end period shall be
treated as acquiescence to the proposed action. Upon receiving a timely written request
for a hearing, the deleted text begin sponsor deleted text end new text begin authorizer new text end shall give deleted text begin reasonable deleted text end new text begin ten business days' new text end notice to
the charter school's board of directors of the hearing date. The deleted text begin sponsor deleted text end new text begin authorizer new text end shall
conduct an informal hearing before taking final action. The deleted text begin sponsor deleted text end new text begin authorizer new text end shall
take final action to renew or not renew a contract deleted text begin by the last day of classes in the school
year. If the sponsor is a local board, the school's board of directors may appeal the
sponsor's decision to the commissioner deleted text end new text begin no later than 15 business days before the proposed
termination date or the end of the contract new text end .

(b) A contract may be terminated or not renewed upon any of the following grounds:

(1) failure to meet the requirements for pupil performance contained in the contract;

(2) failure to meet generally accepted standards of fiscal management;

(3) violations of law; or

(4) other good cause shown.

If a contract is terminated or not renewed under this paragraph, the school must be
dissolved according to the applicable provisions of chapter 308A or 317A deleted text begin , except when
the commissioner approves the decision of a different eligible sponsor to authorize the
charter school deleted text end .

(c) If deleted text begin at the end of a contract term, either deleted text end the deleted text begin sponsor deleted text end new text begin authorizer new text end or the charter school
board of directors deleted text begin wants deleted text end new text begin mutually agree new text end to voluntarily terminate the contract, a change
in deleted text begin sponsors deleted text end new text begin authorizers new text end is allowed if the commissioner approves the deleted text begin decision of deleted text end new text begin transfer
to new text end a different deleted text begin eligible sponsor deleted text end new text begin approved authorizer new text end to authorize the charter school. deleted text begin The
party intending to terminate the contract must notify the other party and the commissioner
of its intent at least 90 days before the date on which the contract ends. deleted text end new text begin Both parties
must jointly submit in writing to the commissioner intent to mutually terminate the
contract. new text end The deleted text begin sponsor deleted text end new text begin authorizer new text end that is a party to the existing contract deleted text begin at least deleted text end must inform
the approved deleted text begin different eligible sponsor deleted text end new text begin new authorizer new text end about the fiscal and new text begin operational
status, and new text end student performance of the school. If no deleted text begin different eligible sponsor deleted text end new text begin transfer of
authorizer new text end is approved, the school must be dissolved according to applicable law and
the terms of the contract.

(d) The commissioner, after providing reasonable notice to the board of directors of
a charter school and the existing deleted text begin sponsor deleted text end new text begin authorizer new text end , and after providing an opportunity for
a public hearing new text begin under chapter 14 new text end , may terminate deleted text begin the deleted text end new text begin an new text end existing deleted text begin sponsorial relationship deleted text end new text begin
charter contract between a charter school and an authorizer new text end if new text begin :
new text end

new text begin (1) new text end the charter school has a history of:

deleted text begin (1) deleted text end new text begin (i) failure to meet generally accepted standards of fiscal management or new text end financial
mismanagement; or

deleted text begin (2) deleted text end new text begin (ii) new text end repeated new text begin or major new text end violations of the law deleted text begin . deleted text end new text begin ; or
new text end

new text begin (2) the authorizer has:
new text end

new text begin (i) failure to perform its duties and responsibilities as an approved authorizer; or
new text end

new text begin (ii) violations of law.
new text end

new text begin (e) If the commissioner terminates a charter contract as a result of the performance
or violation of the law on the part of the authorizer, the commissioner shall assist the
school in finding a new authorizer.
new text end

Subd. 23a.

Related party lease costs.

(a) A charter school is prohibited from
entering a lease of real property with a related party as defined in subdivision 26, unless
the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter
308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).

(b) A lease of real property to be used for a charter school, not excluded in paragraph
(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
section 124D.10, subdivision 23a."

(c) If a charter school enters into as lessee a lease with a related party and the
charter school subsequently closes, the commissioner has the right to recover from the
lessor any lease payments in excess of those that are reasonable under section 124D.11,
subdivision 4, clause (1).

Subd. 24.

Pupil enrollment upon nonrenewal or termination of charter school
contract.

If a contract is not renewed or is terminated according to subdivision 23, a
pupil who attended the school, siblings of the pupil, or another pupil who resides in the
same place as the pupil may enroll in the resident district or may submit an application
to a nonresident district according to section 124D.03 at any time. Applications and
notices required by section 124D.03 must be processed and provided in a prompt manner.
The application and notice deadlines in section 124D.03 do not apply under these
circumstances. The closed charter school must transfer the student's educational records
within ten business days of closure to the student's school district of residence where the
records must be retained or transferred under section 120A.22, subdivision 7.

Subd. 25.

Extent of specific legal authority.

(a) The board of directors of a charter
school may sue and be sued.

(b) The board may not levy taxes or issue bonds.

(c) The commissioner, a sponsor, members of the board of a sponsor in their official
capacity, and employees of a sponsor are immune from civil or criminal liability with
respect to all activities related to a charter school they approve or sponsor. The board
of directors shall obtain at least the amount of and types of insurance required deleted text begin by the
contract, according to subdivision 6 deleted text end new text begin to cover tort liability limits under chapter 466 new text end .

Subd. 26.

Definitions.

For purposes of this section and section 124D.11:

(1) A "related party" is an affiliate or deleted text begin close deleted text end new text begin immediate new text end relative of the other party in
question, an affiliate of deleted text begin a close deleted text end new text begin an immediate new text end relative, or deleted text begin a close deleted text end new text begin an immediate new text end relative
of an affiliate.

(2) "Affiliate" means a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, another
person.

(3) deleted text begin "Close relative" deleted text end new text begin "Immediate family" new text end means an individual whose relationship
by blood, marriage, deleted text begin or deleted text end adoption new text begin , or partnering new text end deleted text begin to another individual deleted text end is no more remote
than first cousin.

(4) "Person" means an individual or entity of any kind.

(5) "Control" includes the terms "controlling," "controlled by," and "under common
control with" and means the possession, direct or indirect, of the power to direct or cause
the direction of the management, operations, or policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.

new text begin (6) "Application" means the charter school business plan documents that school
developers submit to an authorizer for approval which includes, the mission, purposes,
program design, finances, governance and management structure, school developers
background and experience, and other information the authorizer may request. The
application shall also include a statement of assurances of legal compliance that the
commissioner may prescribe.
new text end

new text begin (7) "Affidavit" means the written statement documenting the process and findings of
the review conducted by the authorizer that is submitted to the commissioner as described
in subdivision 4, paragraphs (b) and (i).
new text end

Sec. 2. new text begin REVIVAL AND REENACTMENT.
new text end

new text begin Minnesota Statutes, section 124D.10, subdivision 2a, is revived and reenacted
effective retroactively and without interruption from June 30, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall renumber Minnesota Statutes, section 124D.10,
subdivision 26, as section 124D.10, subdivision 1a. The revisor shall also make necessary
cross-reference changes in Minnesota Statutes and Minnesota Rules consistent with the
renumbering.
new text end