1.1                          A bill for an act 
  1.2             relating to education; providing for a state board for 
  1.3             charter schools; appropriating money; amending 
  1.4             Minnesota Statutes 2000, sections 124D.10, 
  1.5             subdivisions 1, 3, 4, 6, 8, 10, 14, 15, 17, 19, 23, 
  1.6             25, and by adding a subdivision.  
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 124D.10, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [PURPOSES.] (a) The purpose of this section 
  1.11  is to: 
  1.12     (1) improve pupil learning; 
  1.13     (2) increase learning opportunities for pupils; 
  1.14     (3) encourage the use of different and innovative teaching 
  1.15  methods; 
  1.16     (4) require the measurement of learning outcomes and create 
  1.17  different and innovative forms of measuring outcomes; 
  1.18     (5) establish new forms of accountability for schools; or 
  1.19     (6) create new professional opportunities for teachers, 
  1.20  including the opportunity to be responsible for the learning 
  1.21  program at the school site; 
  1.22     (7) test new and more accountable, results-based forms of 
  1.23  oversight and accountability for schools; 
  1.24     (8) focus state oversight on the role of sponsors of 
  1.25  charter schools; or 
  1.26     (9) encourage school boards to make full use of the 
  2.1   opportunities provided by this section. 
  2.2      (b) This section does not provide a means to keep open a 
  2.3   school that otherwise would be closed.  Applicants in these 
  2.4   circumstances bear the burden of proving that conversion to a 
  2.5   charter school fulfills a purpose specified in this subdivision, 
  2.6   independent of the school's closing. 
  2.7      Sec. 2.  Minnesota Statutes 2000, section 124D.10, is 
  2.8   amended by adding a subdivision to read: 
  2.9      Subd. 2a.  [STATE BOARD FOR CHARTER SCHOOLS.] (a) The state 
  2.10  board for charter schools shall administer laws governing 
  2.11  charter schools.  The state board shall: 
  2.12     (1) perform the state role in sponsorship of charter 
  2.13  schools; 
  2.14     (2) encourage the creation of innovative schools; 
  2.15     (3) provide leadership and support for sponsors to increase 
  2.16  innovation, effectiveness, accountability, and fiscal soundness 
  2.17  of schools authorized under this section; and 
  2.18     (4) administer state and federal start-up aid. 
  2.19     The board may establish advisory groups. 
  2.20     (b) The state board shall consist of seven members 
  2.21  appointed by the governor with the advice and consent of the 
  2.22  senate.  Persons appointed to the board shall have demonstrated 
  2.23  experience or interest in charter schools.  Members must be 
  2.24  appointed for staggered terms of six years, with terms beginning 
  2.25  August 1 of each year.  The terms of the initial board members 
  2.26  must be determined by lot as follows:  one member must be 
  2.27  appointed for a term that expires August 1, 2004; two members 
  2.28  must be appointed for terms that expire August 1, 2005; two 
  2.29  members must be appointed for terms that expire August 1, 2006; 
  2.30  and two members must be appointed to terms that expire August 1, 
  2.31  2007. 
  2.32     (c) The initial chair of the board must be appointed by the 
  2.33  governor and successor chairs must be elected by the board 
  2.34  members.  The chair shall serve a .......-year term. 
  2.35     (d) Except as otherwise provided in this section, the 
  2.36  membership terms, compensation, removal of members, and filling 
  3.1   of vacancies shall be as provided for in section 15.0575. 
  3.2      (e) The state board shall appoint an executive director who 
  3.3   shall serve in the unclassified service and may appoint other 
  3.4   staff. 
  3.5      Sec. 3.  Minnesota Statutes 2000, section 124D.10, 
  3.6   subdivision 3, is amended to read: 
  3.7      Subd. 3.  [SPONSOR.] A school board; intermediate school 
  3.8   district school board; education district organized under 
  3.9   sections 123A.15 to 123A.19; charitable organization under 
  3.10  section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
  3.11  member of the Minnesota council of nonprofits or the Minnesota 
  3.12  council on foundations, registered with the attorney general's 
  3.13  office, and reports an end-of-year fund balance of at least 
  3.14  $2,000,000; Minnesota private college that grants two- or 
  3.15  four-year degrees and is registered with the higher education 
  3.16  services office under chapter 136A; community college, state 
  3.17  university, or technical college, governed by the board of 
  3.18  trustees of the Minnesota state colleges and universities; or 
  3.19  the University of Minnesota; or the state board for charter 
  3.20  schools may sponsor one or more charter schools. 
  3.21     Sec. 4.  Minnesota Statutes 2000, section 124D.10, 
  3.22  subdivision 4, is amended to read: 
  3.23     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
  3.24  authorize one or more licensed teachers under section 122A.18, 
  3.25  subdivision 1, to operate a charter school subject to approval 
  3.26  by the commissioner state board for charter schools.  A board 
  3.27  must vote on charter school application for sponsorship no later 
  3.28  than 90 days after receiving the application.  After 90 days, 
  3.29  the applicant may apply to the commissioner state board for 
  3.30  charter schools.  If a board elects not to sponsor a charter 
  3.31  school, the applicant may appeal the board's decision to 
  3.32  the commissioner state board for charter schools.  If 
  3.33  the commissioner state board for charter schools authorizes the 
  3.34  school, the commissioner state board must sponsor the school 
  3.35  according to this section.  The school must be organized and 
  3.36  operated as a cooperative under chapter 308A or nonprofit 
  4.1   corporation under chapter 317A.  
  4.2      (b) Before the operators may form and operate a school, the 
  4.3   sponsor must file an affidavit with the commissioner state board 
  4.4   for charter schools stating its intent to authorize a charter 
  4.5   school.  The affidavit must state the terms and conditions under 
  4.6   which the sponsor would authorize a charter school.  
  4.7   The commissioner state board for charter schools must approve or 
  4.8   disapprove the sponsor's proposed authorization within 60 days 
  4.9   of receipt of the affidavit.  Failure to obtain commissioner 
  4.10  state board approval precludes a sponsor from authorizing the 
  4.11  charter school that was the subject of the affidavit.  
  4.12     (c) The operators authorized to organize and operate a 
  4.13  school must hold an election for members of the school's board 
  4.14  of directors in a timely manner after the school is operating.  
  4.15  Any staff members who are employed at the school, including 
  4.16  teachers providing instruction under a contract with a 
  4.17  cooperative, and all parents of children enrolled in the school 
  4.18  may participate in the election.  Licensed teachers employed at 
  4.19  the school, including teachers providing instruction under a 
  4.20  contract with a cooperative, must be a majority of the members 
  4.21  of the board of directors, unless the commissioner state board 
  4.22  for charter schools waives the requirement for the school.  A 
  4.23  provisional board may operate before the election of the 
  4.24  school's board of directors.  Board of director meetings must 
  4.25  comply with chapter 13D. 
  4.26     (d) The granting or renewal of a charter by a sponsoring 
  4.27  entity must not be conditioned upon the bargaining unit status 
  4.28  of the employees of the school.  
  4.29     Sec. 5.  Minnesota Statutes 2000, section 124D.10, 
  4.30  subdivision 6, is amended to read: 
  4.31     Subd. 6.  [CONTRACT.] The sponsor's authorization for a 
  4.32  charter school must be in the form of a written contract signed 
  4.33  by the sponsor and the board of directors of the charter 
  4.34  school.  The contract must be completed within 90 days of the 
  4.35  commissioner's approval by the state board of charter schools of 
  4.36  the sponsor's proposed authorization.  The contract for a 
  5.1   charter school must be in writing and contain at least the 
  5.2   following: 
  5.3      (1) a description of a program that carries out one or more 
  5.4   of the purposes in subdivision 1; 
  5.5      (2) specific outcomes pupils are to achieve under 
  5.6   subdivision 10; 
  5.7      (3) admission policies and procedures; 
  5.8      (4) management and administration of the school; 
  5.9      (5) requirements and procedures for program and financial 
  5.10  audits; 
  5.11     (6) how the school will comply with subdivisions 8, 13, 16, 
  5.12  and 23; 
  5.13     (7) assumption of liability by the charter school; 
  5.14     (8) types and amounts of insurance coverage to be obtained 
  5.15  by the charter school; 
  5.16     (9) the term of the contract, which may be up to three 
  5.17  years; and 
  5.18     (10) if the board of directors or the operators of the 
  5.19  charter school provide special instruction and services for 
  5.20  children with a disability under sections 125A.03 to 125A.24, 
  5.21  and 125A.65, a description of the financial parameters within 
  5.22  which the charter school will operate to provide the special 
  5.23  instruction and services to children with a disability. 
  5.24     Sec. 6.  Minnesota Statutes 2000, section 124D.10, 
  5.25  subdivision 8, is amended to read: 
  5.26     Subd. 8.  [STATE AND LOCAL REQUIREMENTS.] (a) A charter 
  5.27  school shall meet all applicable state and local health and 
  5.28  safety requirements. 
  5.29     (b) A school sponsored by a school board may be located in 
  5.30  any district, unless the school board of the district of the 
  5.31  proposed location disapproves by written resolution.  If such a 
  5.32  board denies a request to locate within its boundaries a charter 
  5.33  school sponsored by another school board, the sponsoring school 
  5.34  board may appeal to the commissioner state board for charter 
  5.35  schools.  If the commissioner state board for charter schools 
  5.36  authorizes the school, the commissioner state board must sponsor 
  6.1   the school. 
  6.2      (c) A charter school must be nonsectarian in its programs, 
  6.3   admission policies, employment practices, and all other 
  6.4   operations.  A sponsor may not authorize a charter school or 
  6.5   program that is affiliated with a nonpublic sectarian school or 
  6.6   a religious institution. 
  6.7      (d) Charter schools must not be used as a method of 
  6.8   providing education or generating revenue for students who are 
  6.9   being home-schooled. 
  6.10     (e) The primary focus of a charter school must be to 
  6.11  provide a comprehensive program of instruction for at least one 
  6.12  grade or age group from five through 18 years of age.  
  6.13  Instruction may be provided to people younger than five years 
  6.14  and older than 18 years of age. 
  6.15     (f) A charter school may not charge tuition. 
  6.16     (g) A charter school is subject to and must comply with 
  6.17  chapter 363 and section 121A.04. 
  6.18     (h) A charter school is subject to and must comply with the 
  6.19  Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the 
  6.20  Minnesota Public School Fee Law, sections 123B.34 to 123B.39. 
  6.21     (i) A charter school is subject to the same financial 
  6.22  audits, audit procedures, and audit requirements as a district.  
  6.23  The audit must comply with the requirements of sections 123B.75 
  6.24  to 123B.83, except to the extent deviations are necessary 
  6.25  because of the program at the school.  The department of 
  6.26  children, families, and learning, state board for charter 
  6.27  schools, state auditor, or legislative auditor may conduct 
  6.28  financial, program, or compliance audits.  A charter school 
  6.29  determined to be in statutory operating debt under sections 
  6.30  123B.81 to 123B.83 must submit a plan under section 123B.81, 
  6.31  subdivision 4. 
  6.32     (j) A charter school is a district for the purposes of tort 
  6.33  liability under chapter 466. 
  6.34     Sec. 7.  Minnesota Statutes 2000, section 124D.10, 
  6.35  subdivision 10, is amended to read: 
  6.36     Subd. 10.  [PUPIL PERFORMANCE.] A charter school must 
  7.1   design its programs to at least meet the outcomes adopted by the 
  7.2   commissioner of children, families, and learning for public 
  7.3   school students.  In the absence of the commissioner's 
  7.4   requirements, the school must meet the outcomes contained in the 
  7.5   contract with the sponsor.  The achievement levels of the 
  7.6   outcomes contained in the contract may exceed the achievement 
  7.7   levels of any outcomes adopted by the commissioner for public 
  7.8   school students.  
  7.9      Sec. 8.  Minnesota Statutes 2000, section 124D.10, 
  7.10  subdivision 14, is amended to read: 
  7.11     Subd. 14.  [ANNUAL PUBLIC REPORTS.] A charter school must 
  7.12  report at least annually to its sponsor and the 
  7.13  commissioner state board for charter schools the information 
  7.14  required by the sponsor or the commissioner state board.  The 
  7.15  reports are public data under chapter 13.  
  7.16     Sec. 9.  Minnesota Statutes 2000, section 124D.10, 
  7.17  subdivision 15, is amended to read: 
  7.18     Subd. 15.  [REVIEW AND COMMENT.] The department state board 
  7.19  for charter schools must review and comment on the evaluation, 
  7.20  by the sponsor, of the performance of a charter school before 
  7.21  the charter school's contract is renewed.  A sponsor shall 
  7.22  monitor and evaluate the fiscal and student performance of the 
  7.23  school, and may for this purpose annually assess the school up 
  7.24  to $10 per student up to a maximum of $3,500.  The information 
  7.25  for the review and comment shall be reported by the sponsor to 
  7.26  the commissioner of children, families, and learning state board 
  7.27  in a timely manner.  Periodically, the commissioner state board 
  7.28  shall report trends or suggestions based on the evaluation of 
  7.29  charter school contracts to the education committees of the 
  7.30  state legislature.  Annually, the state board shall report to 
  7.31  the governor and education committees of the legislature on the 
  7.32  status of the charter schools formed and operated under this 
  7.33  section. 
  7.34     Sec. 10.  Minnesota Statutes 2000, section 124D.10, 
  7.35  subdivision 17, is amended to read: 
  7.36     Subd. 17.  [LEASED SPACE.] A charter school may lease space 
  8.1   from a board eligible to be a sponsor or other public or private 
  8.2   nonprofit nonsectarian organization.  If a charter school is 
  8.3   unable to lease appropriate space from an eligible board or 
  8.4   other public or private nonprofit nonsectarian organization, the 
  8.5   school may lease space from another nonsectarian organization if 
  8.6   the department of children, families, and learning state board 
  8.7   for charter schools, in consultation with the department of 
  8.8   administration, approves the lease.  If the school is unable to 
  8.9   lease appropriate space from public or private nonsectarian 
  8.10  organizations, the school may lease space from a sectarian 
  8.11  organization if the leased space is constructed as a school 
  8.12  facility and the department of children, families, and learning 
  8.13  state board for charter schools, in consultation with the 
  8.14  department of administration, approves the lease. 
  8.15     Sec. 11.  Minnesota Statutes 2000, section 124D.10, 
  8.16  subdivision 19, is amended to read: 
  8.17     Subd. 19.  [DISSEMINATE INFORMATION.] The sponsor, the 
  8.18  operators, and the department of children, families, and 
  8.19  learning state board for charter schools must disseminate 
  8.20  information to the public on how to form and operate a charter 
  8.21  school and how to utilize the offerings of a charter school.  
  8.22  Particular groups to be targeted include low-income families and 
  8.23  communities, and students of color. 
  8.24     Sec. 12.  Minnesota Statutes 2000, section 124D.10, 
  8.25  subdivision 23, is amended to read: 
  8.26     Subd. 23.  [CAUSES FOR NONRENEWAL OR TERMINATION OF CHARTER 
  8.27  SCHOOL CONTRACT.] (a) The duration of the contract with a 
  8.28  sponsor must be for the term contained in the contract according 
  8.29  to subdivision 6.  The sponsor may or may not renew a contract 
  8.30  at the end of the term for any ground listed in paragraph (b).  
  8.31  A sponsor may unilaterally terminate a contract during the term 
  8.32  of the contract for any ground listed in paragraph (b).  At 
  8.33  least 60 days before not renewing or terminating a contract, the 
  8.34  sponsor shall notify the board of directors of the charter 
  8.35  school of the proposed action in writing.  The notice shall 
  8.36  state the grounds for the proposed action in reasonable detail 
  9.1   and that the charter school's board of directors may request in 
  9.2   writing an informal hearing before the sponsor within 14 days of 
  9.3   receiving notice of nonrenewal or termination of the contract.  
  9.4   Failure by the board of directors to make a written request for 
  9.5   a hearing within the 14-day period shall be treated as 
  9.6   acquiescence to the proposed action.  Upon receiving a timely 
  9.7   written request for a hearing, the sponsor shall give reasonable 
  9.8   notice to the charter school's board of directors of the hearing 
  9.9   date.  The sponsor shall conduct an informal hearing before 
  9.10  taking final action.  The sponsor shall take final action to 
  9.11  renew or not renew a contract by the last day of classes in the 
  9.12  school year.  If the sponsor is a local board, the school's 
  9.13  board of directors may appeal the sponsor's decision to 
  9.14  the commissioner state board for charter schools. 
  9.15     (b) A contract may be terminated or not renewed upon any of 
  9.16  the following grounds: 
  9.17     (1) failure to meet the requirements for pupil performance 
  9.18  contained in the contract; 
  9.19     (2) failure to meet generally accepted standards of fiscal 
  9.20  management; 
  9.21     (3) violations of law; or 
  9.22     (4) other good cause shown. 
  9.23     If a contract is terminated or not renewed, the school must 
  9.24  be dissolved according to the applicable provisions of chapter 
  9.25  308A or 317A, except when the commissioner state board for 
  9.26  charter schools approves the decision of a different eligible 
  9.27  sponsor to authorize the charter school. 
  9.28     (c) The commissioner or state board for charter schools, 
  9.29  after providing reasonable notice to the board of directors of a 
  9.30  charter school and the existing sponsor, and after providing an 
  9.31  opportunity for a public hearing, may terminate the existing 
  9.32  sponsorial relationship if the charter school has a history of: 
  9.33     (1) financial mismanagement; or 
  9.34     (2) repeated violations of the law. 
  9.35     Sec. 13.  Minnesota Statutes 2000, section 124D.10, 
  9.36  subdivision 25, is amended to read: 
 10.1      Subd. 25.  [EXTENT OF SPECIFIC LEGAL AUTHORITY.] (a) The 
 10.2   board of directors of a charter school may sue and be sued. 
 10.3      (b) The board may not levy taxes or issue bonds.  
 10.4      (c) The commissioner state board for charter schools, a 
 10.5   sponsor, members of the board of a sponsor in their official 
 10.6   capacity, and employees of a sponsor are immune from civil or 
 10.7   criminal liability with respect to all activities related to a 
 10.8   charter school they approve or sponsor.  The board of directors 
 10.9   shall obtain at least the amount of and types of insurance 
 10.10  required by the contract, according to subdivision 6.  
 10.11     Sec. 14.  [TRANSFER; DEPARTMENT ASSISTANCE.] 
 10.12     The powers and duties of the department of children, 
 10.13  families, and learning with respect to charter schools are 
 10.14  transferred to the state board for charter schools under section 
 10.15  15.039, subdivisions 1, 2, 3, 4, 5, 5a, 6, and 8.  The 
 10.16  department shall provide all necessary materials and assistance 
 10.17  for the transfer from the department to the state board. 
 10.18     Sec. 15.  [APPROPRIATION.] 
 10.19     $....... is appropriated in fiscal year 2002 from the 
 10.20  general fund to the state board for charter schools for the 
 10.21  purposes of sections 2 and 14.