1.1 	A bill for an act
1.2 	relating to education; providing for alternative
1.3 	compensation for teachers and staff development;
1.4 	amending Minnesota Statutes 2004, sections 122A.414;
1.5 	122A.415, subdivisions 1, 3; 126C.10, by adding
1.6 	subdivisions.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 122A.414, is
1.9 	amended to read:
1.10 	122A.414 ALTERNATIVE TEACHER COMPENSATION.
1.11 		Subdivision 1.Restructured pay system. A restructured
1.12 	teacher compensation system is established under subdivision 2
1.13 	to provide incentives for teachers to improve their knowledge
1.14 	and skills and for school districts and charter schools to
1.15 	recruit and retain highly qualified teachers, and to support
1.16 	teachers' roles in improving students' educational achievement.
1.17 		Subd. 2.Alternative teacher professional pay system.
 1.18 	(a) To participate in this program, a school district must have
1.19 	an educational improvement plan as described in section 122A.413
1.20 	and an alternative teacher professional pay system as described
1.21 	in paragraph (b).
1.22 	(b) The alternative teacher professional pay system must:
1.23 	(1) describe the conditions necessary for how teachers can
1.24 	achieve career advancement and additional compensation;
1.25 	(2) describe how the school district or charter school will 
1.26 	provide career advancement options for teachers retaining that
2.1 	allow them to retain primary roles in student instruction,
2.2 	including options for multiple career paths such as a master or
2.3 	mentor teacher who helps peers improve their teaching skills;
2.4 	(3) use a professional pay system that replaces the step
2.5 	and lane salary schedule and is not based on years of service;
2.6 	(4) encourage teachers' continuous improvement in content
2.7 	knowledge, pedagogy, and use of best practices; and 
2.8 	(5) implement an objective evaluation system, including
2.9 	classroom observation, that is aligned with the district's or
2.10 	the site's educational improvement plan as described in section
2.11 	122A.413 eliminate the "steps and lanes" salary schedule and
2.12 	compensate teachers for performing satisfactory service,
2.13 	achieving professional teaching goals, and undergoing
2.14 	evaluations under clause (6);
2.15 	(4) compensate teachers for their performance based on, at
2.16 	a minimum:
2.17 	(i) school achievement gains under section 120B.35 or
2.18 	locally selected standardized assessment outcomes, or both;
2.19 	(ii) student achievement gains, where available, under
2.20 	section 120B.35 or locally selected standardized assessment
2.21 	outcomes, or both; and 
2.22 	(iii) results of individual teacher evaluations by a
2.23 	locally selected evaluation team under clause (6);
2.24 	(5) provide integrated ongoing site-based and teacher-led
2.25 	professional development activities during the school day that
2.26 	are aligned with student needs under sections 122A.413 and
2.27 	122A.601, if enacted; and 
2.28 	(6) provide an objective and comprehensive teacher
2.29 	evaluation system based on the educational improvement plan
2.30 	under section 122A.413, the staff development plan under section
2.31 	122A.601, if enacted, and multiple evaluations of a teacher's
2.32 	performance by the locally selected evaluation team during the
2.33 	school year that include classroom observations.
2.34 		Subd. 3.Report. Participating districts and ,school
2.35 	sites, and charter schools must report on the implementation and
2.36 	effectiveness of the alternative teacher compensation plan,
3.1 	particularly addressing each requirement under subdivision 2 and
3.2 	make biennial recommendations by January 1 to their school
3.3 	boards.  The school boards shall transmit a copy of the report
3.4 	with a summary of the findings and recommendations of their
3.5 	district or charter school to the commissioner.

3.6 	Sec. 2. Minnesota Statutes 2004, section 122A.415,
3.7 	subdivision 1, is amended to read:
3.8 		Subdivision 1.aid revenue amount.  (a) A school district
3.9 	that meets the conditions of section 122A.414 and submits an
3.10 	application approved by the commissioner is eligible for
3.11 	alternative compensation aid revenue.
3.12 	(b) The commissioner must consider only applications
3.13 	submitted jointly by a school district and the exclusive
3.14 	representative of the teachers for participation in the
3.15 	program.  The application must contain a formally adopted
3.16 	collective bargaining agreement, memorandum of understanding, or
3.17 	other binding agreement that:
3.18 	(1) implements an alternative teacher professional pay
3.19 	system consistent with section 122A.414;
3.20 	(2) complies with the Public Employment Labor Relations Act
3.21 	under chapter 179A, except that notwithstanding section 179A.20,
3.22 	subdivision 3, a district may enter into a contract for a term
3.23 	of between two and four years;and
3.24 	(3) includes all teachers in a district, all teachers at a
3.25 	school site, or at least 25 percent of the teachers in a
3.26 	district.  The commissioner, in approving applications, may give
3.27 	preference to applications involving entire districts or sites
3.28 	or to applications that align measures of teacher performance
3.29 	with student academic achievement and progress under section
3.30 	120B.35, subdivision 1.
3.31 	(b) (c) The revenue is only available to school districts
3.32 	and charter schools that implement an alternative teacher
3.33 	compensation system before the school year begins.
3.34 	(d) Alternative teacher compensation aid revenue for a
3.35 	qualifying school district, site, or portion of a district or
3.36 	school site is as follows:
4.1 	(1) for a school district or charter school in which the
4.2 	school board and the exclusive representative of the teachers
4.3 	agree to place all teachers in the district or at the site on
4.4 	the alternative compensation schedule, alternative
4.5 	compensation aid revenue equals $150 $260 times the district's
4.6 	or the site's number of pupils enrolled on October 1 of the
4.7 	previous fiscal year; or 
4.8 	(2) for a district in which the school board and the
4.9 	exclusive representative of the teachers agree that at least 25
4.10 	percent of the district's licensed teachers will be paid on the
4.11 	alternative compensation schedule, alternative compensation aid
4.12 	equals $150 times the percentage of participating teachers times
4.13 	the district's number of pupils enrolled as of October 1 of the
4.14 	previous fiscal year.
4.15 	(e) The charter school board of directors must submit to
4.16 	the commissioner an application that contains:
4.17 	(1) an agreement to implement an alternative teacher
4.18 	compensation program under section 122A.414;
4.19 	(2) a resolution by the charter school board of directors
4.20 	adopting the agreement; and 
4.21 	(3) the record of a formal vote by the teachers employed at
4.22 	the charter school indicating that at least 70 percent of all
4.23 	teachers agree to implement the alternative teacher compensation
4.24 	program, unless the charter school submits an alternative
4.25 	compensation plan under section 122A.414 before the first year
4.26 	of operation.
4.27 	(f) Alternative compensation revenue for a qualifying
4.28 	charter school must be calculated under section 126C.10,
4.29 	subdivision 34, paragraph (b).

4.30 	Sec. 3. Minnesota Statutes 2004, section 122A.415,
4.31 	subdivision 3, is amended to read:
4.32 		Subd. 3.aid revenue timing.  (a) Districts or , school 
4.33 	sites, or charter schools with approved applications must
4.34 	receive alternative compensation aid revenue for each school
4.35 	year that the district or , school site, or charter school 
4.36 	participates in the program as described in this subdivision.
5.1 	Districts or , school sites, or charter schools with applications
5.2 	received approved by the commissioner before June 1 of the first
5.3 	year of a two-year contract shall receive alternative
5.4 	compensation aid revenue for both school years of the
5.5 	contract.  Districts or sites with applications received by the
5.6 	commissioner after June 1 of the first year of a two-year
5.7 	contract shall receive alternative compensation aid only for the
5.8 	second year of the contract in which the alternative teacher
5.9 	compensation program is implemented for the full school
5.10 	year. For fiscal year 2007 and later,a qualifying district or ,
5.11 	school site, or charter school that received alternative
5.12 	compensation aid for the previous fiscal year must receive at
5.13 	least an amount of alternative teacher compensation revenue 
5.14 	equal to the lesser of the amount it received for the previous
5.15 	fiscal year or its proportionate share of the previous year's
5.16 	appropriation the amount it qualifies for under subdivision 1
5.17 	for the current fiscal year if the district or , school site, or
5.18 	charter school submits a timely application and the commissioner
5.19 	determines that the district or , school site, or charter school 
5.20 	continues to implement an alternative teacher professional pay
5.21 	system, consistent with its application under this section. The
5.22 	commissioner must approve initial applications for school
5.23 	districts qualifying under subdivision 1, paragraph (b), clause
5.24 	(1), by January 15 of each year.  If any money remains, the
5.25 	commissioner must approve aid amounts for school districts
5.26 	qualifying under subdivision 1, paragraph (b), clause (2), by
5.27 	February 15 of each year.
5.28 	(b) The commissioner shall select applicants that qualify
5.29 	for this program, notify school districts and school sites about
5.30 	the program, develop and disseminate application materials, and
5.31 	carry out other activities needed to implement this section.

5.32 	Sec. 4. Minnesota Statutes 2004, section 126C.10, is
5.33 	amended by adding a subdivision to read:
5.34 		Subd. 34.Basic alternative compensation aid. (a) For
5.35 	fiscal year 2006, the basic alternative compensation aid for a
5.36 	district or charter school with an alternative compensation plan
6.1 	approved under section 122A.415 equals the alternative
6.2 	compensation revenue according to section 122A.415, subdivision
6.3 	1.
6.4 	(b) For fiscal year 2007 and later, the basic alternative
6.5 	compensation aid for a district with an alternative compensation
6.6 	plan approved under section 122A.415 equals 73.1 percent of the
6.7 	alternative compensation revenue according to section 122A.415,
6.8 	subdivision 1.  The basic alternative compensation aid for a
6.9 	charter school with an alternative compensation plan approved
6.10 	under section 122A.415 equals the school's alternative
6.11 	compensation revenue according to section 122A.415, subdivision
6.12 	1, times the ratio of the sum of the alternative compensation
6.13 	aid and alternative compensation levy for all participating
6.14 	school districts to the maximum alternative compensation revenue
6.15 	for those districts according to section 122A.415, subdivision 1.
6.16 	(c) Notwithstanding paragraphs (a) and (b) and section
6.17 	122A.415, subdivision 1, the state total basic alternative
6.18 	compensation aid entitlement must not exceed $19,329,000 for
6.19 	fiscal year 2006 and $75,636,000 for fiscal year 2007 and
6.20 	later.  The commissioner must limit the amount of alternative
6.21 	compensation aid approved under section 122A.415 so as not to
6.22 	exceed these limits.

6.23 	Sec. 5. Minnesota Statutes 2004, section 126C.10, is
6.24 	amended by adding a subdivision to read:
6.25 		Subd. 35.Alternative compensation levy. For fiscal year
6.26 	2007 and later, the alternative compensation levy for a district
6.27 	receiving basic alternative compensation aid equals the product
6.28 	of (1) the difference between the district's alternative
6.29 	compensation revenue and the district's basic alternative
6.30 	compensation aid times (2) the lesser of one or the ratio of the
6.31 	district's adjusted net tax capacity per adjusted pupil unit to
6.32 	$6,900.

6.33 	Sec. 6. Minnesota Statutes 2004, section 126C.10, is
6.34 	amended by adding a subdivision to read:
6.35 		Subd. 36.Alternative compensation aid. (a) For fiscal
6.36 	year 2007 and later, a district's alternative compensation
7.1 	equalization aid equals the district's alternative compensation
7.2 	revenue minus the district's basic alternative compensation aid
7.3 	minus the district's alternative compensation levy.  If a
7.4 	district does not levy the entire amount permitted, the
7.5 	alternative compensation equalization aid must be reduced in
7.6 	proportion to the actual amount levied.
7.7 	(b) A district's alternative compensation aid equals the
7.8 	sum of the district's basic alternative compensation aid and the
7.9 	district's alternative compensation equalization aid.

7.10 	Sec. 7. ALTERNATIVE COMPENSATION REVENUE GUARANTEE.
 7.11 	Notwithstanding Minnesota Statutes, sections 122A.415,
7.12 	subdivision 1, and 126C.10, subdivision 34, a school district
7.13 	that received alternative compensation aid for fiscal year 2005,
7.14 	but does not qualify for alternative compensation revenue for
7.15 	all sites in the district for fiscal year 2006 or 2007, shall
7.16 	receive additional basic alternative compensation aid for that
7.17 	fiscal year equal to the lesser of the amount of alternative
7.18 	compensation aid it received for fiscal year 2005 or the amount
7.19 	it would have received for that fiscal year under Minnesota
7.20 	Statutes 2004, section 122A.415, subdivision 1, for teachers at
7.21 	sites not qualifying for alternative compensation revenue for
7.22 	that fiscal year, if the district submits a timely application
7.23 	and the commissioner determines that the district continues to
7.24 	implement an alternative professional pay system, consistent
7.25 	with its application under Minnesota Statutes 2004, section
7.26 	122A.415, for fiscal year 2005.  The additional basic
7.27 	alternative compensation aid under this section must not be used
7.28 	in calculating the alternative compensation levy under Minnesota
7.29 	Statutes, section 126C.10, subdivision 35.  This section applies
7.30 	only to fiscal years 2006 and 2007 and does not apply to later
7.31 	fiscal years.