HF 2420

as introduced - 87th Legislature (2011 - 2012) Posted on 02/22/2012 02:43pm

A bill for an act
relating to education; modifying certain charter school provisions; amending
Minnesota Statutes 2011 Supplement, section 124D.10, subdivisions 3, 4, 6,
11, 15, 17a, 23, 25.

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

Section 1.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 3,
is amended to read:

Subd. 3.

Authorizer.

(a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.

"Application" to receive approval as an authorizer means the proposal an eligible
authorizer submits to the commissioner under paragraph (c) before that authorizer is able
to submit any affidavit to charter to a school.

"Application" under subdivision 4 means the charter school business plan a
school developer submits to an authorizer for approval to establish a charter school that
documents the school developer's mission statement, school purposes, program design,
financial plan, governance and management structure, and background and experience,
plus any other information the authorizer requests. The application also shall include a
"statement of assurances" of legal compliance prescribed by the commissioner.

"Affidavit" means a written statement the authorizer submits to the commissioner
for approval to establish a charter school under subdivision 4 attesting to its review and
approval process before chartering a school.

(b) The following organizations may authorize one or more charter schools:

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

(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code
of 1986, excluding a nonpublic sectarian or religious institution, any person other than a
natural person that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with the nonpublic sectarian or religious
institution, and any other charitable organization under this clause that in the federal IRS
Form 1023, Part IV, describes activities indicating a religious purpose, that:

(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
Foundations;

(ii) is registered with the attorney general's office; and

(iii) is incorporated in the state of Minnesota and has been operating continuously
for at least five years but does not operate a charter school;

(3) a Minnesota private college, notwithstanding clause (2), 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;

(4) 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 authorize one or more charter schools if the charter school has operated
for at least three years under a different authorizer and if the nonprofit corporation has
existed for at least 25 years; or

(5) single-purpose authorizers that are charitable, nonsectarian organizations formed
under section 501(c)(3) of the Internal Revenue Code of 1986 and incorporated in the state
of Minnesota whose sole purpose is to charter schools. Eligible organizations interested
in being approved as an authorizer under this paragraph must submit a proposal to the
commissioner that includes the provisions of paragraph (c) and a five-year financial plan.
Such authorizers shall consider and approve applications using the criteria provided in
subdivision 4 and shall not limit the applications it solicits, considers, or approves to any
single curriculum, learning program, or method.

(c) An eligible authorizer under this subdivision must apply to the commissioner for
approval as an authorizer before submitting any affidavit to the commissioner to charter
a school. The application for approval as a charter school authorizer must demonstrate
the applicant's ability to implement the procedures and satisfy the criteria for chartering a
school under this section. The commissioner must approve or disapprove an application
within 45 business days of the application deadline. If the commissioner disapproves
the application, the commissioner must notify the applicant of the specific deficiencies
in writing and the applicant then has 20 business days to address the deficiencies to the
commissioner's satisfaction. After the 20 business days expire, the commissioner has 15
business days to make a final decision to approve or disapprove the application. Failing to
address the deficiencies to the commissioner's satisfaction makes an applicant ineligible to
be an authorizer. The commissioner, in establishing criteria for approval, must consider
the applicant's:

(1) capacity and infrastructure;

(2) application criteria and process;

(3) contracting process;

(4) ongoing oversight and evaluation processes; and

(5) renewal criteria and processes.

(d) An applicant must include in its application to the commissioner to be an
approved authorizer at least the following:

(1) how chartering schools is a way for the organization to carry out its mission;

(2) a description of the capacity of the organization to serve as an authorizer,
including the personnel who will perform the authorizing duties, their qualifications, the
amount of time they will be assigned to this responsibility, and the financial resources
allocated by the organization to this responsibility;

(3) a description of the application and review process the authorizer will use to
make decisions regarding the granting of charters;

(4) a description of the type of contract it will arrange with the schools it charters
that meets the provisions of subdivision 6;

(5) the process to be used for providing ongoing oversight of the school consistent
with the contract expectations specified in clause (4) that assures that the schools chartered
are complying with both the provisions of applicable law and rules, and with the contract;

(6) a description of the criteria and process the authorizer will use to grant expanded
applications under subdivision 4, paragraph (j);

(7) the process for making decisions regarding the renewal or termination of
the school's charter based on evidence that demonstrates the academic, organizational,
and financial competency of the school, including its success in increasing student
achievement and meeting the goals of the charter school agreement; and

(8) an assurance specifying that the organization is committed to serving as an
authorizer for the full five-year term.

(e) A disapproved applicant under this section may resubmit an application during a
future application period.

(f) If the governing board of an approved authorizer deleted text begin that has chartered multiple
schools deleted text end votes to withdraw as an approved authorizer for a reason unrelated to any
cause under subdivision 23, the authorizer must notify all its chartered schools and the
commissioner in writing by July 15 of its intent to withdraw as an authorizer on June 30 in
the next calendar year. The commissioner may approve the transfer of a charter school
to a new authorizer under this paragraph after the new authorizer submits an affidavit to
the commissioner.

(g) The authorizer must participate in department-approved training.

(h) An authorizer that chartered a school before August 1, 2009, must apply by
June 30, 2012, to the commissioner for approval, under paragraph (c), to continue as an
authorizer under this section. For purposes of this paragraph, an authorizer that fails to
submit a timely application is ineligible to charter a school.

(i) The commissioner shall review an authorizer's performance every five years in
a manner and form determined by the commissioner and may review an authorizer's
performance more frequently at the commissioner's own initiative or at the request of a
charter school operator, charter school board member, or other interested party. The
commissioner, after completing the review, shall transmit a report with findings to the
authorizer. If, consistent with this section, the commissioner finds that an authorizer has
not fulfilled the requirements of this section, the commissioner may subject the authorizer
to corrective action, which may include terminating the contract with the charter school
board of directors of a school it chartered. The commissioner must notify the authorizer
in writing of any findings that may subject the authorizer to corrective action and
the authorizer then has 15 business days to request an informal hearing before the
commissioner takes corrective action. If the commissioner terminates a contract between
an authorizer and a charter school under this paragraph, the commissioner may assist the
charter school in acquiring a new authorizer.

(j) The commissioner may at any time take corrective action against an authorizer,
including terminating an authorizer's ability to charter a school for:

(1) failing to demonstrate the criteria under paragraph (c) under which the
commissioner approved the authorizer;

(2) violating a term of the chartering contract between the authorizer and the charter
school board of directors;

(3) unsatisfactory performance as an approved authorizer; or

(4) any good cause shown that provides the commissioner a legally sufficient reason
to take corrective action against an authorizer.

Sec. 2.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 4, is
amended to read:

Subd. 4.

Formation of school.

(a) An authorizer, after receiving an application from
a school developer, may charter a licensed teacher under section 122A.18, subdivision
1, or a group of individuals that includes one or more licensed teachers under section
122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the
authorizer's affidavit under paragraph (b). The school must be organized and operated as a
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, subject to this
section and section 124D.11, may create a corporation for the purpose of establishing a
charter school.

(b) Before the operators may establish and operate a school, the authorizer must file
an affidavit with the commissioner stating its intent to charter a school. An authorizer
must file a separate affidavit for each school it intends to charter. The affidavit must
state the terms and conditions under which the authorizer would charter a school and
how the authorizer intends to oversee the fiscal and student performance of the charter
school and to comply with the terms of the written contract between the authorizer
and the charter school board of directors under subdivision 6. The commissioner must
approve or disapprove the authorizer's affidavit within 60 business days of receipt of the
affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify
the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business
days to address the deficiencies. If the authorizer does not address deficiencies to the
commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain
commissioner approval precludes an authorizer from chartering the school that is the
subject of this affidavit.

(c) The authorizer may prevent an approved charter school from opening for
operation if, among other grounds, the charter school violates this section or does not meet
the ready-to-open standards that are part of the authorizer's oversight and evaluation
process or are stipulated in the charter school contract.

(d) 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 nonprofit corporation under chapter 317A and must establish a board of
directors composed of at least five members who are not related parties until a timely
election for members of the ongoing charter school board of directors is held according to
the school's articles and bylaws under paragraph (f). A charter school board of directors
must be composed of at least five members who are not related parties. Staff members
employed at the school, including teachers providing instruction under a contract with a
cooperative, and all parents or legal guardians of children enrolled in the school are the
voters eligible to elect the members of the school's board of directors. A charter school
must notify eligible voters of the school board election dates at least 30 days before the
election. Board of director meetings must comply with chapter 13D.

(e) Upon the request of an individual, the charter school must make available in
a timely fashion the minutes of meetings of the board of directors, and of members
and committees having any board-delegated authority; financial statements showing all
operations and transactions affecting income, surplus, and deficit during the school's last
annual accounting period; and a balance sheet summarizing assets and liabilities on the
closing date of the accounting period. A charter school also must post on its official Web
site information identifying its authorizer and indicate how to contact that authorizer and
include that same information about its authorizer in other school materials that it makes
available to the public.

(f) Every charter school board member shall attend deleted text begin department-approved deleted text end ongoing
training throughout the member's term on board governance, including training on
the board's role and responsibilities, employment policies and practices, and financial
management. A board member who does not begin the required initial training within six
months after being seated and complete that training within 12 months of being seated on
the board is ineligible to continue to serve as a board member. new text begin The school shall include in
its annual report the training attended by each board member during the previous year.
new text end

(g) The ongoing board must be elected before the school completes its third year of
operation. Board elections must be held during the school year but may not be conducted
on days when the school is closed for holidays or vacations. The charter school board of
directors shall be composed of at least five nonrelated members and include: (i) at least one
licensed teacher employed at the school or a licensed teacher providing instruction under
contract between the charter school and a cooperative; (ii) the parent or legal guardian
of a student enrolled in the charter school who is not an employee of the charter school;
and (iii) an interested community member who is not employed by the charter school and
does not have a child enrolled in the school. The board may be a teacher majority board
composed of teachers described in this paragraph. The chief financial officer and the chief
administrator may only serve as ex-officio nonvoting board members and may not serve
as a voting member of the board. Charter school employees shall not serve on the board
unless item (i) applies. Contractors providing facilities, goods, or services to a charter
school shall not serve on the board of directors of the charter school. Board bylaws shall
outline the process and procedures for changing the board's governance model, consistent
with chapter 317A. A board may change its governance model only:

(1) by a majority vote of the board of directors and the licensed teachers employed
by the school, including licensed teachers providing instruction under a contract between
the school and a cooperative; and

(2) with the authorizer's approval.

Any change in board governance must conform with the board structure established
under this paragraph.

(h) The granting or renewal of a charter by an authorizer must not be conditioned
upon the bargaining unit status of the employees of the school.

(i) 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 disclosed to the commissioner, accepted through an open bidding
process, and be a separate contract from the charter contract. The school must document
the open bidding process. An authorizer must not enter into a contract to provide
management and financial services for a school that it authorizes, unless the school
documents that it received at least two competitive bids.

(j) An authorizer may permit the board of directors of a charter school to expand
the operation of the charter school to additional sites or to add additional grades at the
school beyond those described in the authorizer's original affidavit as approved by
the commissioner only after submitting a supplemental affidavit for approval to the
commissioner in a form and manner prescribed by the commissioner. The supplemental
affidavit must document that:

(1) the proposed expansion plan demonstrates need and projected enrollment;

(2) the expansion is warranted, at a minimum, by longitudinal data demonstrating
students' improved academic performance and growth on statewide assessments under
chapter 120B;

(3) the charter school is financially sound and the financing it needs to implement
the proposed expansion exists; and

(4) the charter school has the governance structure and management capacity to
carry out its expansion.

(k) The commissioner shall have 30 business days to review and comment on the
supplemental affidavit. deleted text begin The commissioner shall notify the authorizer of any deficiencies in
the supplemental affidavit and the authorizer then has 20 business days to address, to the
commissioner's satisfaction, any deficiencies in the supplemental affidavit. deleted text end The new text begin authorizer
may not give final approval to the new text end school deleted text begin may not deleted text end new text begin to new text end expand grades or add sites until the
commissioner deleted text begin has approved the supplemental affidavit. The commissioner's approval or
disapproval of a supplemental affidavit is final deleted text end new text begin completes the review and comment process new text end .

new text begin (l) A charter school operating under this section may merge with another charter
school. The merger must comply with chapter 317A and section 124D.11, subdivision
9, paragraph (g). Upon a formal vote of the board of directors of each charter school
involved and written notice of intent to the authorizer of each school, the schools may
negotiate a merger plan that must include at least the following:
new text end

new text begin (1) a merger budget, a multiyear operating budget for the merged charter school, a
long-range financial plan, and a plan for the transfer of assets and liabilities to the merged
charter school;
new text end

new text begin (2) a process for transitioning responsibility of governance, administration, and all
operations to the merged charter school;
new text end

new text begin (3) a statement of academic, student engagement, and organizational operations
goals for the merged charter school; and
new text end

new text begin (4) an agreement between involved authorizers on the authorizing plan for the
merged charter school.
new text end

new text begin The approval of the boards of directors of the merging charter schools, the
authorizers of those schools, and the authorizer of the merged charter school is required
to adopt the merger plan. After the merger plan is adopted, the authorizer of the merged
charter school must submit the plan to the commissioner for review and comment. The
commissioner must complete the review and comment of the plan within 30 business days.
The merger may not take effect until the commissioner completes the review and comment.
new text end

Sec. 3.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 6, is
amended to read:

Subd. 6.

Charter contract.

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

(1) a declaration of the purposes in subdivision 1 that the school intends to carry out
and how the school will report its implementation of those purposes;

(2) a description of the school program and the specific academic and nonacademic
outcomes that pupils must achieve;

(3) a statement of admission policies and procedures;

(4) a governance, management, and administration plan for the school;

(5) signed agreements from charter school board members to comply with all
federal and state laws governing organizational, programmatic, and financial requirements
applicable to charter schools;

(6) the criteria, processes, and procedures that the authorizer will use for ongoing
oversight of operational, financial, and academic performance;

(7) the performance evaluation that is a prerequisite for reviewing a charter contract
under subdivision 15;

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

(9) consistent with subdivision 25, paragraph (d), a provision to indemnify and hold
harmless the authorizer and its officers, agents, and employees from any suit, claim,
or liability arising from any operation of the charter school, and the commissioner and
department officers, agents, and employees notwithstanding section 3.736;

(10) the term of the initial contract, which may be up to three years plus an additional
preoperational planning year, and up to five years for a renewed contract or a contract with
a new authorizer after a transfer of authorizers, if warranted by the school's academic,
financial, and operational performance;

(11) how the board of directors or the operators of the charter school will 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;

new text begin (12) the process the authorizer will use for making decisions regarding the renewal
or termination of the school's charter based on evidence that demonstrates the academic,
organizational, and financial competency of the school, including its success in increasing
student achievement and meeting the goals of the charter school agreement;
new text end

new text begin (13) a dispute resolution process agreed upon by the authorizer and the charter
school that includes the following:
new text end

new text begin (i) a written notice process to invoke the dispute resolution process and a description
of the matter in dispute;
new text end

new text begin (ii) a time limit for response;
new text end

new text begin (iii) a procedure for selecting a neutral party to assist in resolution of the dispute;
new text end

new text begin (iv) a process for apportioning costs related to the process; and
new text end

new text begin (v) a process for final resolution of the issue in dispute;
new text end

deleted text begin (12) deleted text end new text begin (14) new text end the process and criteria the authorizer intends to use to monitor and
evaluate the fiscal and student performance of the charter school, consistent with
subdivision 15; and

deleted text begin (13) deleted text end new text begin (15) new text end the plan for an orderly closing of the school under chapter 317A, if the
closure is a termination for cause, a voluntary termination, or a nonrenewal of the contract,
and that includes establishing the responsibilities of the school board of directors and the
authorizer and notifying the commissioner, authorizer, school district in which the charter
school is located, and parents of enrolled students about the closure, the transfer of student
records to students' resident districts, and procedures for closing financial operations.

Sec. 4.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 11, is
amended to read:

Subd. 11.

Employment and other operating matters.

(a) 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.43 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. The charter school board
is subject to section 181.932. When offering employment to a prospective employee, a
charter school must give that employee a written description of the terms and conditions
of employment and the school's personnel policies.

(b) A person, without holding a valid administrator's license, may perform
administrative, supervisory, or instructional leadership duties. The board of directors shall
establish qualifications for persons that hold administrative, supervisory, or instructional
leadership roles. The qualifications shall include at least the following areas: instruction
and assessment; human resource and personnel management; financial management;
legal and compliance management; effective communication; and board, authorizer, and
community relationships. The board of directors shall use those qualifications as the basis
for job descriptions, hiring, and performance evaluations of those who hold administrative,
supervisory, or instructional leadership roles. The board of directors and an individual
who does not hold a valid administrative license and who serves in an administrative,
supervisory, or instructional leadership position shall develop a professional development
plan. Documentation of the implementation of the professional development plan of these
persons shall be included in the school's annual report.

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

new text begin (d) The board of directors shall adopt and implement a performance evaluation
process for all employees of the school. The performance evaluation process for teachers
and administrators must be designed to support and improve pupil learning and student
achievement, instructional leadership, enhancing school outcomes, and be linked to
professional development.
new text end

Sec. 5.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 15, is
amended to read:

Subd. 15.

Review and comment.

(a) The authorizer shall provide a formal written
evaluation of the school's performance before the authorizer renews the charter contract.
The department must review and comment on the authorizer's evaluation process at the
time the authorizer submits its application for approval and each time the authorizer
undergoes its five-year review under subdivision 3, paragraph (e).

(b) An authorizer shall monitor and evaluate the fiscal, operational, and student
performance of the school, and may for this purpose annually assess a charter school
a fee according to paragraph (c). The agreed-upon fee structure must be stated in the
charter school contract.

(c) The fee that each charter school pays to an authorizer each year is the greater of:

(1) the basic formula allowance for that year; or

(2) the lesser of:

(i) the maximum fee factor times the basic formula allowance for that year; or

(ii) the fee factor times the basic formula allowance for that year times the charter
school's adjusted marginal cost pupil units for that year. The fee factor equals .005 in fiscal
year 2010, .01 in fiscal year 2011, .013 in fiscal year 2012, and .015 in fiscal years 2013
and later. The maximum fee factor equals 1.5 in fiscal year 2010, 2.0 in fiscal year 2011,
3.0 in fiscal year 2012, and 4.0 in fiscal years 2013 and later.

(d) deleted text begin The department and any charter school it charters must not assess or pay a
fee under paragraphs (b) and (c) deleted text end new text begin An authorizer may not assess a school a fee for the
consideration of an authorizer transfer new text end .

(e) For the preoperational planning period, the authorizer may assess a charter school
a fee equal to the basic formula allowance.

(f) By September 30 of each year, an authorizer shall submit to the commissioner
a statement of expenditures related to chartering activities during the previous school
year ending June 30. A copy of the statement shall be given to all schools chartered by
the authorizer.

Sec. 6.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 17a,
is amended to read:

Subd. 17a.

Affiliated nonprofit building corporation.

(a) Before a charter school
may organize an affiliated nonprofit building corporation (i) to renovate or purchase an
existing facility to serve as a school or (ii) to construct a new school facility, an authorizer
must submit an affidavit to the commissioner for approval in the form and manner the
commissioner prescribes, and consistent with paragraphs (b) and (c) or (d).

(b) An affiliated nonprofit building corporation under this subdivision must:

(1) be incorporated under section 317A deleted text begin and comply with applicable Internal
Revenue Service regulations deleted text end ;

new text begin (2) comply with applicable Internal Revenue Service regulations, including
regulations for "supporting organizations" as defined by the Internal Revenue Service;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end submit to the commissioner each fiscal year a list of current board members
and a copy of its annual audit; and

deleted text begin (3) deleted text end new text begin (4) new text end comply with government data practices law under chapter 13.

An affiliated nonprofit building corporation must not serve as the leasing agent for
property or facilities it does not own. A charter school that leases a facility from an
affiliated nonprofit building corporation that does not own the leased facility is ineligible
to receive charter school lease aid. The state is immune from liability resulting from a
contract between a charter school and an affiliated nonprofit building corporation.

(c) A charter school may organize an affiliated nonprofit building corporation to
renovate or purchase an existing facility to serve as a school if the charter school:

(1) has been operating for at least five consecutive school years;

(2) has had a net positive unreserved general fund balance as of June 30 in the
preceding five fiscal years;

(3) has a long-range strategic and financial plan;

(4) completes a feasibility study of available buildings; and

(5) documents enrollment projections and the need to use an affiliated building
corporation to renovate or purchase an existing facility to serve as a school.

(d) A charter school may organize an affiliated nonprofit building corporation to
construct a new school facility if the charter school:

(1) demonstrates the lack of facilities available to serve as a school;

(2) has been operating for at least eight consecutive school years;

(3) has had a net positive unreserved general fund balance as of June 30 in the
preceding deleted text begin eight deleted text end new text begin five new text end fiscal years;

(4) completes a feasibility study of facility options;

(5) has a long-range strategic and financial plan that includes enrollment projections
and demonstrates the need for constructing a new school facility; and

(6) has a positive review and comment from the commissioner under section
123B.71.

Sec. 7.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 23, is
amended to read:

Subd. 23.

Causes for nonrenewal or termination of charter school contract.

(a)
The duration of the contract with an authorizer must be for the term contained in the
contract according to subdivision 6. The authorizer may or may not renew a contract at
the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally
terminate a contract during the term of the contract for any ground listed in paragraph (b).
At least 60 business days before not renewing or terminating a contract, the authorizer
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
authorizer within 15 business days of receiving notice of nonrenewal or termination of
the contract. Failure by the board of directors to make a written request for an informal
hearing within the 15-business-day period shall be treated as acquiescence to the proposed
action. Upon receiving a timely written request for a hearing, the authorizer shall give ten
business days' notice to the charter school's board of directors of the hearing date. The
authorizer shall conduct an informal hearing before taking final action. The authorizer
shall take final action to renew or not renew a contract no later than 20 business days
before the proposed date for terminating the contract or the end date of the contract.

(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 317A.

(c) If the authorizer and the charter school board of directors mutually agree to
terminate or not renew the contract, new text begin for reasons other than paragraph (b), new text end a deleted text begin change in deleted text end new text begin
transfer of new text end authorizers is allowed deleted text begin if the commissioner approves the change to a different
eligible authorizer to authorize the charter school. Both parties deleted text end new text begin after review and comment
of the commissioner. The school and current authorizer new text end must jointly submit their intent
in writing to the commissioner to mutually terminate the contract. The authorizer that is
a party to the existing contract must inform the proposed authorizer about the fiscal and
operational status deleted text begin and deleted text end new text begin , new text end student performance new text begin level, and any unresolved issues related to
the contract or oversight new text end of the school. deleted text begin Before the commissioner determines whether to
approve a change in authorizer, the proposed authorizer must identify any outstanding
issues in the proposed charter contract that were unresolved in the previous charter
contract and have the charter school agree to resolve those issues. If no change in
authorizer is approved, the school must be dissolved according to applicable law and the
terms of the contract. deleted text end new text begin The proposed authorizer must submit to the commissioner a copy
of the proposed new contract for comment and review. The contract must identify all
unresolved contract or oversight issues that exist and include a plan that the charter school
and authorizer have agreed upon to resolve those issues. The commissioner shall have 20
business days to conduct the review and comment of the contract. The transfer may not go
into effect until the review and comment of the commissioner is completed.
new text end

(d) The commissioner, after providing reasonable notice to the board of directors of
a charter school and the existing authorizer, and after providing an opportunity for a public
hearing, may terminate the existing contract between the authorizer and the charter school
board if the charter school has a history of:

(1) failure to meet pupil performance requirements consistent with state law;

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

(3) repeated or major violations of the law.

Sec. 8.

Minnesota Statutes 2011 Supplement, section 124D.10, subdivision 25, is
amended to read:

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, an authorizer, members of the board of an authorizer in
their official capacity, and employees of an authorizer are immune from civil or criminal
liability with respect to all activities related to a charter school they approve or authorize.
The board of directors shall obtain at least the amount of and types of insurance up to the
applicable tort liability limits under chapter 466. The charter school board must submit
a copy of the insurance policy to its authorizer and the commissioner before starting
operations. The charter school board must deleted text begin submit deleted text end new text begin notify its authorizer of new text end changes in its
insurance carrier or policy deleted text begin to its authorizer and the commissioner deleted text end new text begin amount limits new text end within
20 business days of the change.

(d) Notwithstanding section 3.736, the charter school shall assume full liability for
its activities and indemnify and hold harmless the authorizer and its officers, agents, and
employees from any suit, claim, or liability arising from any operation of the charter school
and the commissioner and department officers, agents, and employees. A charter school
is not required to indemnify or hold harmless a state employee if the state would not be
required to indemnify and hold the employee harmless under section 3.736, subdivision 9.