1.1 	A bill for an act
1.2 	relating to education; modifying certain provisions of charter school law;
1.3 	amending Minnesota Statutes 2006, section 124D.10, subdivisions 3, 4, 4a, 6, 
1.4 	9, 14, 20.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2006, section 124D.10, subdivision 3, is amended to 
1.7 	read:
1.8 		Subd. 3.Sponsor. (a) A school board; intermediate school district school board; 
1.9 	education district organized under sections 123A.15 to 123A.19; charitable organization 
1.10 	under section 501(c)(3) of the Internal Revenue Code of 1986, except a church or house 
1.11 	of worship, that is a member of the Minnesota Council of Nonprofits or the Minnesota 
1.12 	Council on Foundations, registered with the attorney general's office, and reports an 
1.13 	end-of-year fund balance of at least $2,000,000; Minnesota private college that grants 
1.14 	two- or four-year degrees and is registered with the Minnesota Office of Higher Education 
1.15 	under chapter 136A; community college, state university, or technical college, governed 
1.16 	by the Board of Trustees of the Minnesota State Colleges and Universities; or the 
1.17 	University of Minnesota may sponsor one or more charter schools. 
1.18 	(b) A nonprofit corporation subject to chapter 317A, described in section 317A.905, 
1.19 	and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 
1.20 	of 1986, may sponsor one or more charter schools if the charter school has operated for 
1.21 	at least three years under a different sponsor and if the nonprofit corporation has existed 
1.22 	for at least 25 years. 

1.23 	Sec. 2. Minnesota Statutes 2006, section 124D.10, subdivision 4, is amended to read:
2.1 		Subd. 4.Formation of school. (a) A sponsor may authorize one or more licensed 
2.2 	teachers under section 122A.18, subdivision 1, to operate a charter school subject to 
2.3 	approval by the commissioner. A board must vote on charter school application for 
2.4 	sponsorship no later than 90 days after receiving the application. After 90 days, the 
2.5 	applicant may apply to the commissioner. If a board elects not to sponsor a charter school, 
2.6 	the applicant may appeal the board's decision to the commissioner who may elect to 
2.7 	assist the applicant in finding an eligible sponsor. The school must be organized and 
2.8 	operated as a cooperative under chapter 308A or nonprofit corporation under chapter 
2.9 	317A and the provisions under the applicable chapter shall apply to the school except as 
2.10 	provided in this section. A nonprofit corporation or cooperative that has operated a charter 
2.11 	school successfully for a minimum of six years may apply to operate up to two additional 
2.12 	charter schools that replicate the original school under the same nonprofit corporation or 
2.13 	cooperative. Notwithstanding sections 465.717 and 465.719, a school district may create a 
2.14 	corporation for the purpose of creating a charter school.
2.15 	(b) Before the operators may form and operate a school, the sponsor must file an 
2.16 	affidavit with the commissioner stating its intent to authorize a charter school. The 
2.17 	affidavit must state the terms and conditions under which the sponsor would authorize a 
2.18 	charter school and how the sponsor intends to oversee the fiscal and student performance 
2.19 	of the charter school and to comply with the terms of the written contract between the 
2.20 	sponsor and the charter school board of directors under subdivision 6. The commissioner 
2.21 	must approve or disapprove the sponsor's proposed authorization within 90 60 days of 
2.22 	receipt of the affidavit. Failure to obtain commissioner approval precludes a sponsor from 
2.23 	authorizing the charter school that was the subject of the affidavit.
2.24 	(c) The operators authorized to organize and operate a school, before entering into a 
2.25 	contract or other agreement for professional or other services, goods, or facilities, must 
2.26 	incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 
2.27 	chapter 317A and must establish athe first board of directors composed of at least five 
2.28 	nonrelated members until a timely election for members of the charter school board of 
2.29 	directors is held according to the school's articles and bylaws. 
2.30 	(d) A The permanent  charter school board of directors must be composed of at least 
2.31 	five nonrelated members. A board member must be a resident of Minnesota or a bordering 
2.32 	state. Any staff members who are employed at the school, including teachers providing 
2.33 	instruction under a contract with a cooperative, and all parents of children enrolled in the 
2.34 	school may are eligible to participate in the election for members of the school's board 
2.35 	of directors. Licensed teachers employed at the school, including teachers providing 
2.36 	instruction under a contract with a cooperative, must be a majority of the members of 
3.1 	the board of directors before the school completes its third year of operation, unless the 
3.2 	commissioner waives the requirement for a majority of licensed teachers on the board.
3.3 	The board shall establish and publish election procedures for members of the school's 
3.4 	board of directors in compliance with chapter 13D. The permanent board must be in 
3.5 	place before the school completes its second year of operation. The permanent board of 
3.6 	directors shall be composed of either a teacher majority board or a board composed of an 
3.7 	equal number of teachers, parents, and community members. Licensed teachers employed 
3.8 	by the school, or those providing instruction under a contract with a cooperative are 
3.9 	eligible to be members of the board of directors. The chief financial officer and chief 
3.10 	administrator may not be voting members of a charter school board. The commissioner 
3.11 	may grant a waiver for another innovative governance model. The bylaws of the nonprofit 
3.12 	corporation or cooperative shall outline the internal process and procedures for changing 
3.13 	the model of governance. The model of governance may only be changed in conjunction 
3.14 	with the renewal of a chart contract and a majority vote of the licensed teachers employed 
3.15 	at the school. Board of director meetings must comply with chapter 13D.
3.16 	(d) (e) The granting or renewal of a charter by a sponsoring entity must not be 
3.17 	conditioned upon the bargaining unit status of the employees of the school.
3.18 	(e) (f) A sponsor may authorize the operators of a charter school to expand the 
3.19 	operation of the charter school to additional sites or to add additional grades at the school 
3.20 	beyond those described in the sponsor's application original affidavit as approved by 
3.21 	the commissioner only after submitting the sponsor submits a supplemental application
3.22 	affidavit to the commissioner in a form and manner prescribed by the commissioner. The 
3.23 	supplemental application affidavit must provide evidence that:
3.24 	(1) the expansion of the charter school is supported by need and projected enrollment;
3.25 	(2) the charter school is fiscally sound;
3.26 	(3) the sponsor supports the expansion; and
3.27 	(4) the building of the additional site meets all health and safety requirements to 
3.28 	be eligible for lease aid.
3.29 	(f) (g) The commissioner annually must provide timely financial management
3.30 	training for financial management, financial record keeping, and public record keeping 
3.31 	to newly elected members of a charter school board of directors and ongoing training to 
3.32 	other members of a charter school board of directors. Training must address ways to:
3.33 	(1) proactively assess opportunities for a charter school to maximize all available 
3.34 	revenue sources;
3.35 	(2) establish and maintain complete, auditable records for of the charter school
3.36 	cooperative or nonprofit corporation;
4.1 	(3) establish proper procedures for filing techniques state required reports;
4.2 	(4) document formal actions of the charter school, including meetings of the charter 
4.3 	school board of directors;
4.4 	(5) properly manage and retain charter school financial, personnel, and student 
4.5 	records;
4.6 	(6) comply with state and federal payroll record-keeping requirements; and
4.7 	(7) address other similar factors that facilitate establishing and maintaining complete 
4.8 	records on the charter school's operations other topics related to the effective operations of 
4.9 	charter school operations.

4.10 	Sec. 3. Minnesota Statutes 2006, section 124D.10, subdivision 4a, is amended to read:
4.11 		Subd. 4a.Conflict of interest. (a) A member of a charter school board of directors 
4.12 	is prohibited from serving as a member of the board of directors or as an employee or 
4.13 	agent of or a contractor with a for-profit or entity with whom the charter school contracts, 
4.14 	directly or indirectly, for professional services, goods, or facilities. A violation of this 
4.15 	prohibition renders a contract voidable at the option of the commissioner void. A member 
4.16 	of a charter school board of directors who violates this prohibition shall be individually 
4.17 	liable to the charter school for any damage caused by the violation.
4.18 	(b) An individual may serve as a member of the board of directors if no conflict of 
4.19 	interest under paragraph (a) exists.
4.20 	(c) A member of a charter school board of directors that serves as a member of the 
4.21 	board of directors or as an employee or agent of or a contractor with a nonprofit entity 
4.22 	with whom the charter school contracts, directly or indirectly, for professional services, 
4.23 	goods, or facilities, must disclose all potential conflicts to the commissioner. A sponsor is 
4.24 	prohibited from selling management or financial services to the charter school or schools it 
4.25 	sponsors. Other services of the sponsor may be purchased only through a bidding process.
4.26 	(d) Employees of the sponsor who are directly involved in the approval, oversight, or 
4.27 	renewal of the charter may not serve on the charter school board of directors. The conflict 
4.28 	of interest provisions under this subdivision do not apply to compensation paid to a teacher 
4.29 	employed by the charter school who also serves as a member of the board of directors.
4.30 	(e) (d) The conflict of interest provisions under this subdivision do not apply to a 
4.31 	teacher who provides services to a charter school through a cooperative formed under 
4.32 	chapter 308A when the teacher also serves on the charter school board of directors.

4.33 	Sec. 4. Minnesota Statutes 2006, section 124D.10, subdivision 6, is amended to read:
5.1 		Subd. 6.Contract. The sponsor's authorization for a charter school must be in the 
5.2 	form of a written contract signed by the sponsor and the board of directors of the charter 
5.3 	school. The contract must be completed within 90 days of the commissioner's approval 
5.4 	of the sponsor's proposed authorization. The contract for a charter school must be in 
5.5 	writing and contain at least the following:
5.6 	(1) a description of a program that carries out one or more of the purposes in 
5.7 	subdivision 1;
5.8 	(2) specific outcomes pupils are to achieve under subdivision 10;
5.9 	(3) admission policies and procedures;
5.10 	(4) management and administration of plan for  the school;
5.11 	(5) requirements and procedures for program and financial audits;
5.12 	(6) how the school will comply with subdivisions 8, 13, 16, and 23;
5.13 	(7) assumption of liability by the charter school;
5.14 	(8) types and amounts of insurance coverage to be obtained by the charter school;
5.15 	(9) the term of the contract, which may be up to three years include a planning 
5.16 	period and up to three operational years for the initial contract and up to five years for 
5.17 	renewal contracts;
5.18 	(10) if how the board of directors or the operators of the charter school provide 
5.19 	special instruction and services for children with a disability under sections 125A.03
5.20 	to 125A.24, and 125A.65, a description of the financial parameters within which the 
5.21 	charter school will operate to provide the special instruction and services to children 
5.22 	with a disability; and
5.23 	(11) the process and criteria the sponsor intends to use to monitor and evaluate the 
5.24 	fiscal and student performance of the charter school, consistent with subdivision 15.;
5.25 	(12) the process and criteria the sponsor will use to determine whether to renew 
5.26 	the charter; and
5.27 	(13) the process the board of directors will follow to end the business of the nonprofit 
5.28 	corporation or cooperative, including such legal responsibilities as transferring as required: 
5.29 	student records to the resident school district, personnel records, financial reports and 
5.30 	audits, and the necessary legal actions to dissolve the nonprofit corporation or cooperative.

5.31 	Sec. 5. Minnesota Statutes 2006, section 124D.10, subdivision 9, is amended to read:
5.32 		Subd. 9.Admission requirements. A charter school may limit admission to:
5.33 	(1) pupils within an age group or grade level;
5.34 	(2) people who are eligible to participate in the graduation incentives program 
5.35 	under section 124D.68; or 
6.1 	(3) residents of a specific geographic area where the percentage of the population 
6.2 	of non-Caucasian people of that area is greater than the percentage of the non-Caucasian 
6.3 	population in the congressional district in which the geographic area is located, and as 
6.4 	long as the school reflects the racial and ethnic diversity of the specific area.
6.5 	A charter school shall enroll an eligible pupil who submits a timely application, 
6.6 	unless the number of applications exceeds the capacity of a program, class, grade level, or 
6.7 	building. In this case, pupils must be accepted by lot. The charter school must develop 
6.8 	and publish the lottery process. If a charter school is the only school located in a town 
6.9 	serving pupils within a particular grade level, then pupils that are residents of the town 
6.10 	must be given preference for enrollment before accepting pupils by lot. If a pupil lives 
6.11 	within two miles of a charter school and the next closest public school is more than five 
6.12 	miles away, the charter school must give those pupils preference for enrollment before 
6.13 	accepting other pupils by lot.
6.14 	A charter school shall give preference for enrollment to a sibling of an enrolled pupil 
6.15 	and to a foster child of that pupil's parents and to children of the school's employees before 
6.16 	accepting other pupils by lot.
6.17 	A charter school may not limit admission to pupils on the basis of intellectual ability, 
6.18 	measures of achievement or aptitude, or athletic ability.

6.19 	Sec. 6. Minnesota Statutes 2006, section 124D.10, subdivision 14, is amended to read:
6.20 		Subd. 14.Annual public reports. A charter school must publish an annual report 
6.21 	at least annually to its sponsor and the commissioner of the information required by the 
6.22 	sponsor or the commissioner and distribute the report to the commissioner, the school's 
6.23 	sponsor, the school's employees, and the parents and guardians of the school's pupils. The 
6.24 	reports are public data under chapter 13.

6.25 	Sec. 7. Minnesota Statutes 2006, section 124D.10, subdivision 20, is amended to read:
6.26 		Subd. 20.Leave to teach in a charter school. If a teacher or other licensed person 
6.27 	employed by a district makes a written request for an extended leave of absence to teach 
6.28 	or work at a charter school, the district must grant the leave. The district must grant a 
6.29 	leave not to exceed a total of five years. Any request to extend the leave shall be granted 
6.30 	only at the discretion of the school board. The district may require that the request for 
6.31 	a leave or extension of leave be made up to 90 days before the teacher would otherwise 
6.32 	have to report for duty. Except as otherwise provided in this subdivision and except for 
6.33 	section 122A.46, subdivision 7, the leave is governed by section 122A.46, including, but 
6.34 	not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance. 
7.1 	During a leave, the teacher may continue to aggregate benefits and credits in the 
7.2 	Teachers' Retirement Association account by paying both the employer and employee 
7.3 	contributions based upon the annual salary of the teacher for the last full pay period before 
7.4 	the leave began. The retirement association may impose reasonable requirements to 
7.5 	efficiently administer this subdivision.