1.1                          A bill for an act 
  1.2             relating to education; modifying charter school board 
  1.3             of directors; providing for charter school student 
  1.4             participation in school district extracurricular 
  1.5             activities; increasing number of eligible sponsors for 
  1.6             charter schools; providing for charter school 
  1.7             submission of school calendar to the Department of 
  1.8             Education; amending Minnesota Statutes 2002, section 
  1.9             123B.49, subdivision 4; Minnesota Statutes 2003 
  1.10            Supplement, sections 124D.10, subdivisions 3, 4; 
  1.11            124D.11, subdivision 9. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2002, section 123B.49, 
  1.14  subdivision 4, is amended to read: 
  1.15     Subd. 4.  [BOARD CONTROL OF EXTRACURRICULAR ACTIVITIES.] 
  1.16  (a) The board may take charge of and control all extracurricular 
  1.17  activities of the teachers and children of the public schools in 
  1.18  the district.  Extracurricular activities means all direct and 
  1.19  personal services for pupils for their enjoyment that are 
  1.20  managed and operated under the guidance of an adult or staff 
  1.21  member.  The board shall allow all resident pupils receiving 
  1.22  instruction in a home school as defined in section 123B.36, 
  1.23  subdivision 1, paragraph (a), and all resident pupils receiving 
  1.24  instruction in a charter school as defined in section 124D.10 to 
  1.25  be eligible to fully participate in extracurricular activities 
  1.26  on the same basis as public school students enrolled in the 
  1.27  district's schools.  Charter school students participating in 
  1.28  extracurricular activities must meet the charter school's 
  2.1   academic and student conduct requirements. 
  2.2      (b) Extracurricular activities have all of the following 
  2.3   characteristics: 
  2.4      (1) they are not offered for school credit nor required for 
  2.5   graduation; 
  2.6      (2) they are generally conducted outside school hours, or 
  2.7   if partly during school hours, at times agreed by the 
  2.8   participants, and approved by school authorities; 
  2.9      (3) the content of the activities is determined primarily 
  2.10  by the pupil participants under the guidance of a staff member 
  2.11  or other adult. 
  2.12     (c) If the board does not take charge of and control 
  2.13  extracurricular activities, these activities shall be 
  2.14  self-sustaining with all expenses, except direct salary costs 
  2.15  and indirect costs of the use of school facilities, met by dues, 
  2.16  admissions, or other student fund-raising events.  The general 
  2.17  fund must reflect only those salaries directly related to and 
  2.18  readily identified with the activity and paid by public funds.  
  2.19  Other revenues and expenditures for extra curricular activities 
  2.20  must be recorded according to the "Manual of Instruction for 
  2.21  Uniform Student Activities Accounting for Minnesota School 
  2.22  Districts and Area Vocational-Technical Colleges."  
  2.23  Extracurricular activities not under board control must have an 
  2.24  annual financial audit and must also be audited annually for 
  2.25  compliance with this section. 
  2.26     (d) If the board takes charge of and controls 
  2.27  extracurricular activities, any or all costs of these activities 
  2.28  may be provided from school revenues and all revenues and 
  2.29  expenditures for these activities shall be recorded in the same 
  2.30  manner as other revenues and expenditures of the district.  
  2.31     (e) If the board takes charge of and controls 
  2.32  extracurricular activities, the teachers or pupils in the 
  2.33  district must not participate in such activity, nor shall the 
  2.34  school name or any allied name be used in connection therewith, 
  2.35  except by consent and direction of the board. 
  2.36     (f) School districts may charge charter schools their 
  3.1   proportional share associated with costs of the extracurricular 
  3.2   activities that are not covered by student fees under section 
  3.3   123B.36, subdivision 1. 
  3.4      <b>[EFFECTIVE DATE.]</b> This section is effective for the 
  3.5   2004-2005 school year and later. 
  3.6      Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  3.7   124D.10, subdivision 3, is amended to read: 
  3.8      Subd. 3.  [SPONSOR.] (a) A school board; intermediate 
  3.9   school district school board; education district organized under 
  3.10  sections 123A.15 to 123A.19; charitable organization under 
  3.11  section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
  3.12  member of the Minnesota Council of Nonprofits or the Minnesota 
  3.13  Council on Foundations, registered with the attorney general's 
  3.14  office, and reports an end-of-year fund balance of at least 
  3.15  $2,000,000; Minnesota private college that grants two- or 
  3.16  four-year degrees and is registered with the Higher Education 
  3.17  Services Office under chapter 136A; community college, state 
  3.18  university, or technical college, governed by the Board of 
  3.19  Trustees of the Minnesota State Colleges and Universities; or 
  3.20  the University of Minnesota; or the Department of Education may 
  3.21  sponsor one or more charter schools.  
  3.22     (b) A nonprofit corporation subject to chapter 317A, 
  3.23  described in section 317A.905, and exempt from federal income 
  3.24  tax under section 501(c)(6) of the Internal Revenue Code of 
  3.25  1986, may sponsor one or more charter schools if the charter 
  3.26  school has operated for at least three years under a different 
  3.27  sponsor and if the nonprofit corporation has existed for at 
  3.28  least 25 years.  
  3.29     (c) The commissioner of education may approve up to five 
  3.30  charitable organizations under section 501(c)(3) of the Internal 
  3.31  Revenue Code of 1986 which have as their primary activity the 
  3.32  sponsoring of charter schools.  Proposals of the charitable 
  3.33  organizations to the commissioner must contain: 
  3.34     (1) the articles, bylaws, and initial board membership; 
  3.35     (2) the sources of financing for its operation; 
  3.36     (3) the areas of specialization of its sponsorship; and 
  4.1      (4) other information requested by the department. 
  4.2   Sponsors approved under this paragraph shall report annually to 
  4.3   the commissioner on the types of charter schools sponsored, 
  4.4   their effectiveness in promoting student achievement; the 
  4.5   development of alternative school governance structures, and 
  4.6   other information requested by the department.  The commissioner 
  4.7   may terminate its authorization for a charitable organization to 
  4.8   sponsor a charter school under this paragraph if the charitable 
  4.9   organization demonstrates persistent financial mismanagement or 
  4.10  repeated violations of law. 
  4.11     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  4.12  124D.10, subdivision 4, is amended to read: 
  4.13     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
  4.14  authorize one or more licensed teachers under section 122A.18, 
  4.15  subdivision 1, to operate a charter school subject to approval 
  4.16  by the commissioner.  A board must vote on charter school 
  4.17  application for sponsorship no later than 90 days after 
  4.18  receiving the application.  After 90 days, the applicant may 
  4.19  apply to the commissioner.  If a board elects not to sponsor a 
  4.20  charter school, the applicant may appeal the board's decision to 
  4.21  the commissioner.  The commissioner may elect to sponsor the 
  4.22  charter school or assist the applicant in finding an eligible 
  4.23  sponsor.  The school must be organized and operated as a 
  4.24  cooperative under chapter 308A or nonprofit corporation under 
  4.25  chapter 317A and the provisions under the applicable chapter 
  4.26  shall apply to the school except as provided in this section.  
  4.27  Notwithstanding sections 465.717 and 465.719, a school district 
  4.28  may create a corporation for the purpose of creating a charter 
  4.29  school.  
  4.30     (b) Before the operators may form and operate a school, the 
  4.31  sponsor must file an affidavit with the commissioner stating its 
  4.32  intent to authorize a charter school.  The affidavit must state 
  4.33  the terms and conditions under which the sponsor would authorize 
  4.34  a charter school.  The commissioner must approve or disapprove 
  4.35  the sponsor's proposed authorization within 60 days of receipt 
  4.36  of the affidavit.  Failure to obtain commissioner approval 
  5.1   precludes a sponsor from authorizing the charter school that was 
  5.2   the subject of the affidavit.  
  5.3      (c) The operators authorized to organize and operate a 
  5.4   school, before entering into a contract or other agreement for 
  5.5   professional or other services, goods, or facilities, must 
  5.6   incorporate as a cooperative under chapter 308A or as a 
  5.7   nonprofit corporation under chapter 317A and must establish a 
  5.8   board of directors composed of at least five members until a 
  5.9   timely election for members of the charter school board of 
  5.10  directors is held according to the school's articles and 
  5.11  bylaws.  A charter school board of directors must be composed of 
  5.12  at least five members.  Any staff members who are employed at 
  5.13  the school, including teachers providing instruction under a 
  5.14  contract with a cooperative, and all parents of children 
  5.15  enrolled in the school may participate in the election for 
  5.16  members of the school's board of directors.  Licensed teachers 
  5.17  employed at the school, including teachers providing instruction 
  5.18  under a contract with a cooperative, must may be a majority of 
  5.19  the members of the board of directors before the school 
  5.20  completes its third year of operation, unless the commissioner 
  5.21  waives the requirement for a majority of licensed teachers on 
  5.22  the board.  Board of director meetings must comply with chapter 
  5.23  13D. 
  5.24     (d) The granting or renewal of a charter by a sponsoring 
  5.25  entity must not be conditioned upon the bargaining unit status 
  5.26  of the employees of the school.  
  5.27     (e) A sponsor may authorize the operators of a charter 
  5.28  school to expand the operation of the charter school to 
  5.29  additional sites or to add additional grades at the school 
  5.30  beyond those described in the sponsor's application as approved 
  5.31  by the commissioner only after submitting a supplemental 
  5.32  application to the commissioner in a form and manner prescribed 
  5.33  by the commissioner.  The supplemental application must provide 
  5.34  evidence that: 
  5.35     (1) the expansion of the charter school is supported by 
  5.36  need and projected enrollment; 
  6.1      (2) the charter school is fiscally sound; 
  6.2      (3) the sponsor supports the expansion; and 
  6.3      (4) the building of the additional site meets all health 
  6.4   and safety requirements to be eligible for lease aid. 
  6.5      (f) The commissioner annually must provide timely financial 
  6.6   management training to newly elected members of a charter school 
  6.7   board of directors and ongoing training to other members of a 
  6.8   charter school board of directors.  Training must address ways 
  6.9   to: 
  6.10     (1) proactively assess opportunities for a charter school 
  6.11  to maximize all available revenue sources; 
  6.12     (2) establish and maintain complete, auditable records for 
  6.13  the charter school; 
  6.14     (3) establish proper filing techniques; 
  6.15     (4) document formal actions of the charter school, 
  6.16  including meetings of the charter school board of directors; 
  6.17     (5) properly manage and retain charter school and student 
  6.18  records; 
  6.19     (6) comply with state and federal payroll record-keeping 
  6.20  requirements; and 
  6.21     (7) address other similar factors that facilitate 
  6.22  establishing and maintaining complete records on the charter 
  6.23  school's operations. 
  6.24     Sec. 4.  Minnesota Statutes 2003 Supplement, section 
  6.25  124D.11, subdivision 9, is amended to read: 
  6.26     Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
  6.27  Notwithstanding section 127A.45, subdivision 3, aid payments for 
  6.28  the current fiscal year to a charter school not in its first 
  6.29  year of operation shall be of an equal amount on each of the 23 
  6.30  payment dates.  A charter school in its first year of operation 
  6.31  shall receive, on its first payment date, ten percent of its 
  6.32  cumulative amount guaranteed for the year and 22 payments of an 
  6.33  equal amount thereafter the sum of which shall be 90 percent of 
  6.34  the cumulative amount guaranteed. 
  6.35     (b) Notwithstanding paragraph (a), for a charter school 
  6.36  ceasing operation prior to the end of a school year, 80 percent 
  7.1   of the amount due for the school year may be paid to the school 
  7.2   after audit of prior fiscal year and current fiscal year pupil 
  7.3   counts. 
  7.4      (c) Notwithstanding section 127A.45, subdivision 3, and 
  7.5   paragraph (a), 80 percent of the start-up cost aid under 
  7.6   subdivision 8 shall be paid within 45 days after the first day 
  7.7   of student attendance for that school year. 
  7.8      (d) In order to receive state aid payments under this 
  7.9   subdivision, a charter school in its first three years of 
  7.10  operation must submit a school calendar in the form and manner 
  7.11  requested by the department and a quarterly report to the 
  7.12  Department of Education.  The report must list each student by 
  7.13  grade, show the student's start and end dates, if any, with the 
  7.14  charter school, and for any student participating in a learning 
  7.15  year program, the report must list the hours and times of 
  7.16  learning year activities.  The report must be submitted not more 
  7.17  than two weeks after the end of the calendar quarter to the 
  7.18  department.  The department must develop a Web-based reporting 
  7.19  form for charter schools to use when submitting enrollment 
  7.20  reports.  A charter school in its fourth and subsequent year of 
  7.21  operation must submit a school calendar and enrollment 
  7.22  information to the department in the form and manner requested 
  7.23  by the department.