1.1                          A bill for an act 
  1.2             relating to education; authorizing capital loans to 
  1.3             acquire and better public land and buildings for 
  1.4             charter schools; appropriating money; authorizing the 
  1.5             sale of state bonds; amending Minnesota Statutes 1998, 
  1.6             sections 124D.10, subdivision 6; and 124D.11, 
  1.7             subdivision 7; proposing coding for new law in 
  1.8             Minnesota Statutes, chapter 124D. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 124D.10, 
  1.11  subdivision 6, is amended to read: 
  1.12     Subd. 6.  [CONTRACT.] The sponsor's authorization for a 
  1.13  charter school must be in the form of a written contract signed 
  1.14  by the sponsor and the board of directors of the charter 
  1.15  school.  The contract for a charter school must be in writing 
  1.16  and contain at least the following: 
  1.17     (1) a description of a program that carries out one or more 
  1.18  of the purposes in subdivision 1; 
  1.19     (2) specific outcomes pupils are to achieve under 
  1.20  subdivision 10; 
  1.21     (3) admission policies and procedures; 
  1.22     (4) management and administration of the school; 
  1.23     (5) requirements and procedures for program and financial 
  1.24  audits; 
  1.25     (6) how the school will comply with subdivisions 8, 13, 16, 
  1.26  and 23, 
  1.27     (7) assumption of liability by the charter school; 
  2.1      (8) types and amounts of insurance coverage to be obtained 
  2.2   by the charter school; 
  2.3      (9) the term of the contract, which may be up to three five 
  2.4   years; and 
  2.5      (10) if the board of directors or the operators of the 
  2.6   charter school provide special instruction and services for 
  2.7   children with a disability under sections 125A.03 to 125A.24, 
  2.8   and 125A.65, a description of the financial parameters within 
  2.9   which the charter school will operate to provide the special 
  2.10  instruction and services to children with a disability. 
  2.11     Sec. 2.  Minnesota Statutes 1998, section 124D.11, 
  2.12  subdivision 7, is amended to read: 
  2.13     Subd. 7.  [USE OF STATE MONEY.] Money received from the 
  2.14  state may not be used to purchase land or buildings, except as 
  2.15  provided in section 3.  The school may own land and buildings if 
  2.16  obtained through nonstate sources. 
  2.17     Sec. 3.  [124D.105] [CAPITAL LOANS FOR CHARTER SCHOOLS.] 
  2.18     Subdivision 1.  [LOANS AUTHORIZED.] The commissioner may 
  2.19  make a capital loan to the sponsor of a charter school governed 
  2.20  by section 124D.10, other than a private college, to acquire and 
  2.21  better public lands and buildings for the charter school.  The 
  2.22  charter school must have completed at least three years of 
  2.23  operation.  The principal amount of loans outstanding for the 
  2.24  benefit of a given charter school may not exceed $........ 
  2.25     Subd. 2.  [REVIEW AND COMMENT BY COMMISSIONER.] (a) A 
  2.26  sponsor that intends to apply for a capital loan must submit a 
  2.27  proposal to the commissioner for review and comment according to 
  2.28  section 123B.71 by July 1 of an odd-numbered year.  The 
  2.29  commissioner must prepare a review and comment on the proposed 
  2.30  facility, regardless of the amount of the capital expenditure 
  2.31  required to construct the facility.  In addition to the 
  2.32  information provided under section 123B.71, subdivision 9, the 
  2.33  commissioner shall require that predesign packages comparable to 
  2.34  those required under section 16B.335 be prepared by the 
  2.35  applicant sponsor.  The predesign packages must be sufficient to 
  2.36  define the scope, cost, and schedule of the project and must 
  3.1   demonstrate that the project has been analyzed according to 
  3.2   appropriate space needs standards and also consider the 
  3.3   following criteria in determining whether to make a positive 
  3.4   review and comment.  
  3.5      (b) To grant a positive review and comment the commissioner 
  3.6   must determine that all of the following conditions are met: 
  3.7      (1) the facilities are needed for pupils for whom no 
  3.8   adequate facilities exist or will exist; 
  3.9      (2) the school will serve, on average, at least 80 pupils 
  3.10  per grade or is eligible for elementary or secondary sparsity 
  3.11  revenue; 
  3.12     (3) no form of cooperation with another sponsor would 
  3.13  provide the necessary facilities; 
  3.14     (4) the facilities are comparable in size and quality to 
  3.15  facilities recently constructed in other school districts that 
  3.16  have similar enrollments; 
  3.17     (5) the facilities are comparable in size and quality to 
  3.18  facilities recently constructed in other school districts that 
  3.19  were financed without a capital loan; 
  3.20     (6) the school is projected to maintain or increase its 
  3.21  average daily membership over the next five years or is eligible 
  3.22  for elementary or secondary sparsity revenue; 
  3.23     (7) the current facility poses a threat to the life, 
  3.24  health, and safety of pupils, and cannot reasonably be brought 
  3.25  into compliance with fire, health, or life safety codes; 
  3.26     (8) the school has made a good faith effort, as evidenced 
  3.27  by its maintenance expenditures, to adequately maintain the 
  3.28  existing facility during the previous three years and to comply 
  3.29  with fire, health, and life safety codes and state and federal 
  3.30  requirements for handicapped accessibility; and 
  3.31     (9) the school has made a good faith effort to encourage 
  3.32  integration of social service programs within the new facility. 
  3.33     (c) The commissioner may grant a negative review and 
  3.34  comment if: 
  3.35     (1) the school's plans do not include cooperation and 
  3.36  collaboration with health and human services agencies and other 
  4.1   political subdivisions; or 
  4.2      (2) if the application is for new construction, an existing 
  4.3   facility that would meet the school's needs could be purchased 
  4.4   at a comparable cost from any other source within the area. 
  4.5      Subd. 3.  [APPLICATION FOR CAPITAL LOAN.] The governing 
  4.6   board of a sponsor desiring a capital loan shall adopt a 
  4.7   resolution stating the amount proposed to be borrowed, the 
  4.8   purpose for which the debt is to be incurred, and an estimate of 
  4.9   the dates when the facilities for which the loan is requested 
  4.10  will be contracted for and completed.  An application for a loan 
  4.11  must be accompanied by a copy of the adopted board resolution.  
  4.12  The application must be in the form and accompanied by the 
  4.13  additional data required by the commissioner.  The application 
  4.14  must be received by the commissioner by September 1 of an 
  4.15  odd-numbered year.  
  4.16     Subd. 4.  [STATE BOARD REVIEW; SPONSOR PROPOSALS.] By 
  4.17  November 1 of each odd-numbered year, the state board must 
  4.18  review all applications for capital loans that have received a 
  4.19  positive review and comment.  When reviewing applications, the 
  4.20  state board shall consider whether the criteria in subdivision 2 
  4.21  have been met.  The state board may not approve an application 
  4.22  if all of the required deadlines have not been met.  The state 
  4.23  board may either approve or reject an application for a capital 
  4.24  loan. 
  4.25     Subd. 5.  [RECOMMENDATIONS OF THE COMMISSIONER.] The 
  4.26  commissioner shall examine and consider applications for capital 
  4.27  loans that have been approved by the state board of education, 
  4.28  and promptly notify any sponsor rejected by the state board of 
  4.29  the state board's decision.  The commissioner shall report each 
  4.30  capital loan that has been approved by the state board to the 
  4.31  education committees of the legislature by January 1 of each 
  4.32  even-numbered year.  The commissioner shall also report on the 
  4.33  money remaining in the capital loan account and, if necessary, 
  4.34  request that another bond issue be authorized. 
  4.35     Subd. 6.  [LEGISLATIVE ACTION.] A capital loan may not be 
  4.36  made unless it has been approved in a law.  If the aggregate 
  5.1   amount of the capital loans approved exceeds the amount that is 
  5.2   or can be made available, the commissioner shall allot the 
  5.3   available amount among any number of qualified applicant 
  5.4   sponsors, according to the commissioner's judgment and 
  5.5   discretion, based upon the sponsors' respective needs. 
  5.6      Subd. 7.  [LOANS NOT APPROVED.] A capital loan application 
  5.7   that is not approved in law cancels July 1 of the year following 
  5.8   application.  A sponsor that desires the application to be 
  5.9   considered again must resubmit it in an odd-numbered year. 
  5.10     Subd. 8.  [CONTRACT.] Each capital loan must be evidenced 
  5.11  by a contract between the school, the sponsor, and the state 
  5.12  acting through the commissioner.  The contract must obligate the 
  5.13  state to reimburse the sponsor, from the charter school capital 
  5.14  loan account, for eligible capital expenses for construction of 
  5.15  the facility for which the loan is granted.  The commissioner 
  5.16  must receive from the sponsor a certified resolution of the 
  5.17  governing board estimating the costs of construction and 
  5.18  reciting that contracts have been awarded for construction of 
  5.19  the facilities for which the loan is granted.  The contract must 
  5.20  obligate the school to repay the loan out of the building lease 
  5.21  aid it receives under section 124.248, subdivision 2a, including 
  5.22  interest at a rate equal to the weighted average annual rate 
  5.23  payable on the bonds issued for the project and disbursed to the 
  5.24  sponsor on a reimbursement basis, but in no event less than 
  5.25  3-1/2 percent per year on the principal amount from time to time 
  5.26  unpaid. 
  5.27     Subd. 9.  [PAYMENT; COLLECTION.] On receipt of the 
  5.28  resolution, the commissioner shall draw warrants on the charter 
  5.29  school capital loan account in accordance with the schedule in 
  5.30  the contract.  Interest on each disbursement of the capital loan 
  5.31  accrues from the date on which the state treasurer issues the 
  5.32  warrant.  The charter school must pay principal and interest due 
  5.33  on the capital loan by December 15 of each year after the year 
  5.34  the loan is granted.  The commissioner shall supervise the 
  5.35  collection of outstanding amounts due the capital loan account 
  5.36  and may reduce or eliminate the amount paid to a charter school 
  6.1   as building lease aid as necessary to ensure that the amounts 
  6.2   are paid when due.  
  6.3      Subd. 10.  [CAPITAL LOAN ACCOUNT.] A charter school capital 
  6.4   loan account is created in the state treasury.  Money 
  6.5   appropriated to the commissioner for the purpose of making 
  6.6   charter school capital loans under this section and money 
  6.7   received in repayment of loans under this section must be 
  6.8   credited to the account.  All money in the account is 
  6.9   appropriated to the commissioner to make the capital loans and 
  6.10  administer the capital loan program.  No more than $.......  
  6.11  each year may be paid from the account for administrative costs. 
  6.12     Sec. 4.  [APPROPRIATION; BOND SALE.] 
  6.13     Subdivision 1.  [APPROPRIATION.] $....... is appropriated 
  6.14  from the bond proceeds fund for transfer to the charter school 
  6.15  capital loan account created in section 3. 
  6.16     Notwithstanding the deadlines in section 3, a capital loan 
  6.17  to each of the following charter schools is approved, if the 
  6.18  commissioner of children, families, and learning gives the 
  6.19  proposal a positive review and comment under section 3, 
  6.20  subdivision 2, and the state board of education approves the 
  6.21  application under section 3, subdivision 4: 
  6.22     (1) ....................................... 
  6.23     (2) ....................................... 
  6.24     (3) ....................................... 
  6.25     Subd. 2.  [BOND SALE.] To provide the money appropriated in 
  6.26  this section from the bond proceeds fund, the commissioner of 
  6.27  finance, on request of the governor, shall sell and issue bonds 
  6.28  of the state in an amount up to $....... in the manner, upon the 
  6.29  terms, and with the effect prescribed by Minnesota Statutes, 
  6.30  sections 16A.631 to 16A.675, and by the Minnesota Constitution, 
  6.31  article XI, sections 4 to 7. 
  6.32     Sec. 5.  [EFFECTIVE DATE.] 
  6.33     This act is effective the day following final enactment.