1.1 	A bill for an act
1.2 	relating to education; modifying charter school provisions;amending Minnesota 
1.3 	Statutes 2008, sections 124D.10; 124D.11, subdivision 9.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. Minnesota Statutes 2008, section 124D.10, is amended to read:
1.6 	124D.10 CHARTER SCHOOLS.
1.7 		Subdivision 1.Purposes. (a) The purpose of this section is to:
1.8 	(1) improve pupil learning and achievement;
1.9 	(2) increase learning opportunities for pupils;
1.10 	(3) encourage the use of different and innovative teaching methods;
1.11 	(4) require the measurement ofmeasure learning outcomes and create through the 
1.12 	creation and use of different and innovative forms of measuring outcomes;
1.13 	(5) establish new forms of accountability for schools; or
1.14 	(6) create new professional opportunities for teachers, including the opportunity to 
1.15 	be responsible for the learning program at the school site.
1.16 	(b) This section does not provide a means to keep open a school that otherwise 
1.17 	would be closed. Applicants in these circumstances bear the burden of proving that 
1.18 	conversion to a charter school fulfills a purpose specified in this subdivision, independent 
1.19 	of the school's closing.
1.20 		Subd. 2.Applicability. This section applies only to charter schools formed and 
1.21 	operated under this section.
1.22 		Subd. 2a.Charter School Advisory Council. (a) A Charter School Advisory 
1.23 	Council is established under section 15.059 except that the term for each council member 
1.24 	shall be three years. The advisory council is composed of seven members from throughout 
2.1 	the state who have demonstrated experience with or interest in charter schools. The 
2.2 	members of the council shall be appointed by the commissioner. The advisory council 
2.3 	shall bring to the attention of the commissioner any matters related to charter schools 
2.4 	that the council deems necessary and shall:
2.5 	(1) encourage school boards to make full use of charter school opportunities;
2.6 	(2) encourage the creation of innovative schools;
2.7 	(3) provide leadership and support for charter school sponsors to increase the 
2.8 	innovation in and the effectiveness, accountability, and fiscal soundness of charter schools;
2.9 	(4) serve an ombudsman function in facilitating the operations of new and existing 
2.10 	charter schools;
2.11 	(5) promote timely financial management training for newly elected members of 
2.12 	a charter school board of directors and ongoing training for other members of a charter 
2.13 	school board of directors; and
2.14 	(6) facilitate compliance with auditing and other reporting requirements. The 
2.15 	advisory council shall refer all its proposals to the commissioner who shall provide time 
2.16 	for reports from the council.
2.17 	(b) The Charter School Advisory Council under this subdivision expires June 30, 
2.18 	2007.
2.19 		Subd. 3.Sponsor Authorizer. (a) For purposes of this section, the terms defined in 
2.20 	this subdivision have the meanings given them.
2.21 	"Application" to receive approval as an authorizer means the proposal an eligible 
2.22 	authorizer submits to the commissioner under paragraph (c) before that authorizer is able 
2.23 	to submit any affidavit to charter to a school.
2.24 	"Application" to form a school under subdivision 4 means the charter school 
2.25 	business plan a school developer submits to an authorizer for approval that documents the 
2.26 	school developer's mission statement, school purposes, program design, financial plan, 
2.27 	governance and management structure, and background and experience, plus any other 
2.28 	information the authorizer requests. The application also shall include a "statement of 
2.29 	assurances" of legal compliance prescribed by the commissioner.
2.30 	"Affidavit" means a written statement the authorizer submits to the commissioner 
2.31 	for approval under subdivision 4 attesting to its review and approval of a school charter.
2.32 	(b) The following organizations may authorize one or more charter schools:
2.33 	(1) a school board; intermediate school district school board; education district 
2.34 	organized under sections 123A.15 to 123A.19;
2.35 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code 
2.36 	of 1986, excluding a nonpublic sectarian or religious institution, any person other than a 
3.1 	natural person that directly or indirectly, through one or more intermediaries, controls, 
3.2 	is controlled by, or is under common control with the nonpublic sectarian or religious 
3.3 	institution, and any other charitable organization under this clause that in the federal IRS 
3.4 	Form 1023, Part IV, describes activities indicating a religious purpose, that:
3.5 	(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 
3.6 	Foundations,;
3.7 	(ii) is registered with the attorney general's office, and;
3.8 	(iii) reports an end-of-year fund balance of at least $2,000,000; and 
3.9 	(iv) is incorporated in the state of Minnesota;
3.10 	(3) a Minnesota private college, notwithstanding clause (2), that grants two- or 
3.11 	four-year degrees and is registered with the Minnesota Office of Higher Education under 
3.12 	chapter 136A; community college, state university, or technical college, governed by the 
3.13 	Board of Trustees of the Minnesota State Colleges and Universities; or the University of 
3.14 	Minnesota may sponsor one or more charter schools.; or
3.15 	(b) (4) a nonprofit corporation subject to chapter 317A, described in section 
3.16 	317A.905, and exempt from federal income tax under section 501(c)(6) of the Internal 
3.17 	Revenue Code of 1986, may sponsor authorize one or more charter schools if the charter 
3.18 	school has operated for at least three years under a different sponsor authorizer and if the 
3.19 	nonprofit corporation has existed for at least 25 years.
3.20 	(c) An eligible authorizer under this subdivision must apply to the commissioner for 
3.21 	approval as an authorizer before submitting any affidavit to the commissioner to charter 
3.22 	a school. The application for approval as a charter school authorizer must demonstrate 
3.23 	the applicant's ability to implement the procedures and satisfy the criteria for chartering a 
3.24 	school under this section. The commissioner must approve or disapprove an application 
3.25 	within 60 business days of the application deadline. If the commissioner disapproves 
3.26 	the application, the commissioner must notify the applicant of the deficiencies and the 
3.27 	applicant then has 20 business days to address the deficiencies to the commissioner's 
3.28 	satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes 
3.29 	an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for 
3.30 	approval, must consider the applicant's:
3.31 	(1) capacity and infrastructure;
3.32 	(2) application criteria and process;
3.33 	(3) contracting process;
3.34 	(4) ongoing oversight and evaluation processes; and 
3.35 	(5) renewal criteria and processes.
4.1 	A disapproved applicant under this paragraph may resubmit an application during a 
4.2 	future application period.
4.3 	(d) The authorizer must participate in ongoing department-approved training.
4.4 	(e) An authorizer that chartered a school before August 1, 2009, must apply by 
4.5 	June 30, 2012, to the commissioner for approval under paragraph (c) to continue as an 
4.6 	authorizer under this section. For purposes of this paragraph, an authorizer that fails to 
4.7 	submit a timely application is ineligible to charter a school.
4.8 	(f) The commissioner shall review an authorizer's performance at least once every 
4.9 	five years in a manner and form determined by the commissioner, and may review an 
4.10 	authorizer's performance more frequently at the commissioner's own initiative or at the 
4.11 	request of a charter school developer, operator, board member, or other interested party. 
4.12 	The commissioner, after completing the review, shall transmit a report with findings to the 
4.13 	authorizer. If, consistent with this section, the commissioner finds that an authorizer has 
4.14 	not performed satisfactorily, the commissioner may subject the authorizer to corrective 
4.15 	action, which may include terminating the contract with the board of a school it chartered. 
4.16 	The commissioner must notify the authorizer in writing of any findings that may subject 
4.17 	the authorizer to corrective action and the authorizer then has 15 business days to request 
4.18 	an informal hearing before the commissioner takes corrective action.
4.19 	(g) The commissioner may take corrective action against an authorizer, including 
4.20 	terminating an authorizer's eligibility to charter a school for:
4.21 	(1) failing to satisfy the criteria under which the commissioner approved the 
4.22 	authorizer;
4.23 	(2) failing to perform satisfactorily as an approved authorizer; or
4.24 	(3) violating a term of the chartering contract between the authorizer and charter 
4.25 	school board.
4.26 		Subd. 4.Formation of school. (a) A sponsor An authorizer, after receiving an 
4.27 	application from a school developer, may authorize charter a licensed teacher under 
4.28 	section 122A.18, subdivision 1, or a group of individuals that includes one or more 
4.29 	licensed teachers under section 122A.18, subdivision 1, to operate a charter school subject 
4.30 	to the commissioner's approval by the commissionerof the authorizer's affidavit under 
4.31 	paragraph (b). A board must vote on charter school application for sponsorship no later 
4.32 	than 90 days after receiving the application. The school must be organized and operated 
4.33 	as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and 
4.34 	the provisions under the applicable chapter shall apply to the school except as provided 
4.35 	in this section. 
5.1 	An authorizer must not locate a newly chartered school or relocate an existing 
5.2 	charter school within (i) a one-mile radius of a public school site that a school board 
5.3 	closed under section 123B.51, (ii) the boundaries of a school district newly consolidated 
5.4 	under section 123A.48, or (iii) the boundaries of a dissolved school district under section 
5.5 	123A.46 for at least 36 months from the date the school board acted to close the school, or 
5.6 	consolidate or dissolve the school district unless the school board of the school district in 
5.7 	which the charter school would be located gives the authorizer written approval to do so.
5.8 	Notwithstanding sections 465.717 and 465.719, a school district, subject to this 
5.9 	section and section 124D.11, may create a corporation for the purpose of creating
5.10 	establishing a charter school.
5.11 	(b) Before the operators may form establish and operate a school, the sponsor
5.12 	authorizer must file an affidavit with the commissioner stating its intent to authorize a
5.13 	charter a school. An authorizer must file a separate affidavit for each school it intends 
5.14 	to charter. The affidavit must state the terms and conditions under which the sponsor
5.15 	authorizer would authorize a charter a school and how the sponsor authorizer intends 
5.16 	to oversee the fiscal and student performance of the charter school and to comply with 
5.17 	the terms of the written contract between the sponsor authorizer and the charter school 
5.18 	board of directors under subdivision 6. The commissioner must approve or disapprove 
5.19 	the sponsor's proposed authorizationauthorizer's affidavit within 9060 business days of 
5.20 	receipt of the affidavit. If the commissioner disapproves the affidavit, the commissioner 
5.21 	shall notify the authorizer of the deficiencies in the affidavit and the authorizer then has 20 
5.22 	business days to address the deficiencies. If the authorizer does not address deficiencies to 
5.23 	the commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain 
5.24 	commissioner approval precludes a sponsoran authorizer from authorizing chartering the 
5.25 	charter school that was is the subject of the this affidavit.
5.26 	(c) The authorizer may prevent an approved charter school from opening for 
5.27 	operation if, among other grounds, the charter school violates this section or does not meet 
5.28 	the ready-to-open standards that are part of the authorizer's oversight and evaluation 
5.29 	process or are stipulated in the charter school contract.
5.30 	(d) The operators authorized to organize and operate a school, before entering into 
5.31 	a contract or other agreement for professional or other services, goods, or facilities, 
5.32 	must incorporate as a cooperative under chapter 308A or as a nonprofit corporation 
5.33 	under chapter 317A and must establish a board of directors composed of at least five 
5.34 	members who are not related parties until a timely election for members of the ongoing 
5.35 	charter school board of directors is held according to the school's articles and bylaws
5.36 	under paragraph (f). A charter school board of directors must be composed of at least 
6.1 	five members who are not related parties. Any Staff members who are employed at the 
6.2 	school, including teachers providing instruction under a contract with a cooperative, and 
6.3 	all parents or legal guardians of children enrolled in the school may participate in the 
6.4 	election for are the voters eligible to elect the members of the school's board of directors. 
6.5 	Licensed teachers employed at the school, including teachers providing instruction under 
6.6 	a contract with a cooperative, must be a majority of the members of the board of directors 
6.7 	before the school completes its third year of operation, unless the commissioner waives 
6.8 	the requirement for a majority of licensed teachers on the board. A charter school must 
6.9 	notify eligible voters of the school board election dates at least 30 days before the election.
6.10 	Board of director meetings must comply with chapter 13D.
6.11 	(d) (e) Upon the request of an individual, the charter school must make available 
6.12 	in a timely fashion the minutes of meetings of the board of directors, and of members 
6.13 	and committees having any board-delegated authority; financial statements showing all 
6.14 	operations and transactions affecting income, surplus, and deficit during the school's last 
6.15 	annual accounting period; and a balance sheet summarizing assets and liabilities on the 
6.16 	closing date of the accounting period. A charter school also must post on its official Web 
6.17 	site information identifying its authorizer and indicate how to contact that authorizer and 
6.18 	include that same information about its authorizer in other school materials that it makes 
6.19 	available to the public.
6.20 	(f) Every charter school board member shall attend department-approved training 
6.21 	on board governance, the board's role and responsibilities, employment policies and 
6.22 	practices, and financial management. A board member who does not complete the 
6.23 	required training within 12 months of being seated on the board is ineligible to continue to 
6.24 	serve as a board member.
6.25 	(g) The ongoing board must be elected before the school completes its third year 
6.26 	of operation. The board of directors shall be (i) a teacher majority board made up of 
6.27 	licensed teachers employed at the school or (ii) a board having at least 20 percent of its 
6.28 	members as licensed teachers employed at the school and must include charter school 
6.29 	parents or guardians and interested community members. Licensed teachers employed 
6.30 	by the school, or those providing instruction under a contract with a cooperative, may be 
6.31 	members of the board of directors. The chief financial officer and chief administrator are 
6.32 	nonvoting board members. Board bylaws shall outline the internal process and procedures 
6.33 	for changing the board's governance model. A board may change its governance model 
6.34 	only with approval from the authorizer and a voting majority of the board of directors and 
6.35 	the licensed teachers employed at the school, including teachers providing instruction 
6.36 	under a contract with a cooperative.
7.1 	(h) The granting or renewal of a charter by a sponsoring entity an authorizer must 
7.2 	not be conditioned upon the bargaining unit status of the employees of the school.
7.3 	(e) A sponsor (i) The granting or renewal of a charter school by an authorizer must 
7.4 	not be contingent on the charter school being required to contract, lease, or purchase 
7.5 	services from the authorizer. Any potential contract, lease, or purchase of service from 
7.6 	an authorizer must be disclosed to the commissioner, accepted through an open bidding 
7.7 	process, and be a separate contract from the charter contract. The school must document 
7.8 	the open bidding process. An authorizer must not enter into a contract to provide 
7.9 	management and financial services for a school that it authorizes, unless the school 
7.10 	documents that it received at least two competitive bids.
7.11 	(j) The charter school shall not offer any services or goods of value to students, 
7.12 	parents, or guardians as an inducement, term, or condition of enrolling a student in a 
7.13 	charter school.
7.14 	(k) An authorizer may authorize permit the operators board of directors of a charter 
7.15 	school to expand the operation of the charter school to additional sites or to add additional 
7.16 	grades at the school beyond those described in the sponsor's application authorizer's 
7.17 	original affidavit as approved by the commissioner only after submitting a supplemental 
7.18 	application affidavit for approval to the commissioner in a form and manner prescribed by 
7.19 	the commissioner. The supplemental application affidavit must provide evidence show
7.20 	that:
7.21 	(1) the expansion of proposed by the charter school is supported by need and 
7.22 	projected enrollment;
7.23 	(2) the charter school expansion is warranted, at a minimum, by longitudinal data 
7.24 	demonstrating students' improved academic performance and growth on statewide 
7.25 	assessments under chapter 120B;
7.26 	(2) (3) the charter school is fiscally sound and has the financial capacity to implement 
7.27 	the proposed expansion; and
7.28 	(3) (4) the sponsor supports the authorizer finds that the charter school has the 
7.29 	management capacity to carry out its expansion; and.
7.30 	(4) the building of the additional site meets all health and safety requirements to 
7.31 	be eligible for lease aid.
7.32 	(f) The commissioner annually must provide timely financial management training 
7.33 	to newly elected members of a charter school board of directors and ongoing training to 
7.34 	other members of a charter school board of directors. Training must address ways to:
7.35 	(1) proactively assess opportunities for a charter school to maximize all available 
7.36 	revenue sources;
8.1 	(2) establish and maintain complete, auditable records for the charter school;
8.2 	(3) establish proper filing techniques;
8.3 	(4) document formal actions of the charter school, including meetings of the charter 
8.4 	school board of directors;
8.5 	(5) properly manage and retain charter school and student records;
8.6 	(6) comply with state and federal payroll record-keeping requirements; and
8.7 	(7) address other similar factors that facilitate establishing and maintaining complete 
8.8 	records on the charter school's operations.
8.9 	(l) The commissioner shall have 30 business days to review and comment on the 
8.10 	supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies 
8.11 	in the supplemental affidavit and the authorizer then has 30 business days to address, 
8.12 	to the commissioner's satisfaction, any deficiencies in the supplemental affidavit. The 
8.13 	school may not expand grades or add sites until the commissioner has reviewed and 
8.14 	commented on the supplemental affidavit. The commissioner's approval or disapproval of 
8.15 	a supplemental affidavit is final.
8.16 		Subd. 4a.Conflict of interest. (a) A member of a charter school board of directors
8.17 	An individual is prohibited from serving as a member of the charter school board of 
8.18 	directors or as if the individual, an immediate family member, or the individual's partner is
8.19 	an owner, employee or agent of or a contractor with a for-profit or nonprofit entity with 
8.20 	whom the charter school contracts, directly or indirectly, for professional services, goods, 
8.21 	or facilities. A violation of this prohibition renders a contract voidable at the option of 
8.22 	the commissioner or the charter school board of directors. A member of a charter school 
8.23 	board of directors who violates this prohibition shall be is individually liable to the charter 
8.24 	school for any damage caused by the violation.
8.25 	(b) No member of the board of directors, employee, officer, or agent of a charter 
8.26 	school shall participate in selecting, awarding, or administering a contract if a conflict 
8.27 	of interest exists. A conflict exists when:
8.28 	(1) the board member, employee, officer, or agent;
8.29 	(2) the immediate family of the board member, employee, officer, or agent;
8.30 	(3) the partner of the board member, employee, officer, or agent; or
8.31 	(4) an organization that employs, or is about to employ any individual in clauses 
8.32 	(1) to (3),
8.33 	has a financial or other interest in the entity with which the charter school is contracting. 
8.34 	A violation of this prohibition renders the contract void.
8.35 	(c) Any employee, agent, or board member of the authorizer who participates 
8.36 	in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or 
9.1 	nonrenewal process or decision is ineligible to serve on the board of directors of a school 
9.2 	chartered by that authorizer.
9.3 	(b) (d) An individual may serve as a member of the board of directors if no conflict 
9.4 	of interest under paragraph (a) exists.
9.5 	(c) A member of a charter school board of directors that serves as a member of the 
9.6 	board of directors or as an employee or agent of or a contractor with a nonprofit entity 
9.7 	with whom the charter school contracts, directly or indirectly, for professional services, 
9.8 	goods, or facilities, must disclose all potential conflicts to the commissioner.
9.9 	(d) (e) The conflict of interest provisions under this subdivision do not apply to 
9.10 	compensation paid to a teacher employed by the charter school who also serves as a 
9.11 	member of the board of directors.
9.12 	(e) (f) The conflict of interest provisions under this subdivision do not apply to a 
9.13 	teacher who provides services to a charter school through a cooperative formed under 
9.14 	chapter 308A when the teacher also serves on the charter school board of directors.
9.15 		Subd. 5.Conversion of existing schools. A board of an independent or special 
9.16 	school district may convert one or more of its existing schools to charter schools under 
9.17 	this section if 60 percent of the full-time teachers at the school sign a petition seeking 
9.18 	conversion. The conversion must occur at the beginning of an academic year.
9.19 		Subd. 6.Charter contract. The sponsor's authorization for a charter school must 
9.20 	be in the form of a written contract signed by the sponsor authorizer and the board of 
9.21 	directors of the charter school. The contract must be completed within 90 45 business
9.22 	days of the commissioner's approval of the sponsor's proposed authorization.authorizer's 
9.23 	affidavit. The authorizer shall submit to the commissioner a copy of the signed charter 
9.24 	contract within ten business days of its execution. The contract for a charter school must 
9.25 	be in writing and contain at least the following:
9.26 	(1) a description of a program that carries out one or more of the purposes
9.27 	declaration of the purposes in subdivision 1 that the school intends to carry out and how 
9.28 	the school will report its implementation of those purposes;
9.29 	(2) a description of the school program and the specific academic and nonacademic 
9.30 	outcomes that pupils are to must achieve under subdivision 10;
9.31 	(3) a statement of admission policies and procedures;
9.32 	(4) a governance, management, and administration of plan for the school;
9.33 	(5) signed agreements from charter school board members to comply with all federal 
9.34 	and state laws governing organizational, programmatic, and financial requirements and 
9.35 	procedures for program and financial audits applicable to charter schools;
10.1 	(6) how the school will comply with subdivisions 8, 13, 16, and 23 the criteria, 
10.2 	processes, and procedures that the authorizer will use for ongoing oversight of operational, 
10.3 	financial, and academic performance;
10.4 	(7) assumption of liability by the charter school the performance evaluation that is a 
10.5 	prerequisite for reviewing a charter contract under subdivision 15;
10.6 	(8) types and amounts of insurance liability coverage to be obtained by the charter 
10.7 	school;
10.8 	(9) the term of the contract, which may be up to three years for an initial contract 
10.9 	plus an additional preoperational planning year, and up to five years for a renewed contract 
10.10 	if warranted by the school's academic, financial, and operational performance;
10.11 	(10) if how the board of directors or the operators of the charter school will provide 
10.12 	special instruction and services for children with a disability under sections 125A.03
10.13 	to 125A.24, and 125A.65, a description of the financial parameters within which the 
10.14 	charter school will operate to provide the special instruction and services to children 
10.15 	with a disability; and
10.16 	(11) the process and criteria the sponsor authorizer intends to use to monitor 
10.17 	and evaluate the fiscal and student performance of the charter school, consistent with 
10.18 	subdivision 15.; and
10.19 	(12) the plan for an orderly closing of the school under chapter 308A or 317A, if the 
10.20 	closure is a termination for cause, a voluntary termination, or a nonrenewal of the contract, 
10.21 	and that includes establishing the responsibilities of the school board of directors and the 
10.22 	authorizer and notifying the commissioner, authorizer, school district in which the charter 
10.23 	school is located, and parents of enrolled students about the closure, the transfer of student 
10.24 	records to students' resident districts, and procedures for closing financial operations.
10.25 		Subd. 6a.Audit report. (a) The charter school must submit an audit report to the 
10.26 	commissioner and its authorizer by December 31 each year. The commissioner may 
10.27 	withhold the charter school's state aid if the charter school does not submit an audit by 
10.28 	January 31.
10.29 	(b) The charter school, with the assistance of the auditor conducting the audit, must 
10.30 	include with the report a copy of all charter school agreements for corporate management 
10.31 	services. If the entity that provides the professional services to the charter school is 
10.32 	exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 
10.33 	must file with the commissioner by February 15 a copy of the annual return required under 
10.34 	section 6033 of the Internal Revenue Code of 1986.
10.35 	(c) If the commissioner receives as part of the an audit report a management letter
10.36 	indicating that a material weakness exists in the financial reporting systems of a charter 
11.1 	school, the charter school must submit a written report to the commissioner explaining 
11.2 	how the material weakness will be resolved.
11.3 	 Upon the request of an individual, the charter school must make available in a timely 
11.4 	fashion the minutes of meetings of members, the board of directors, and committees 
11.5 	having any of the authority of the board of directors, and statements showing the financial 
11.6 	result of all operations and transactions affecting income and surplus during the school's 
11.7 	last annual accounting period and a balance sheet containing a summary of its assets and 
11.8 	liabilities as of the closing date of the accounting period.
11.9 		Subd. 7.Public status; exemption from statutes and rules. A charter school is a 
11.10 	public school and is part of the state's system of public education. Except as provided in 
11.11 	this section, a charter school is exempt from all statutes and rules applicable to a school, a 
11.12 	board, or a district, although it may elect to comply with one or more provisions of statutes 
11.13 	or rules. A charter school is exempt from all statutes and rules applicable to a school, 
11.14 	school board, or school district unless a statute or rule is made specifically applicable to a 
11.15 	charter school or is included in this section.
11.16 		Subd. 8.State and local requirements. (a) A charter school shall meet all 
11.17 	applicable federal, state, and local health and safety requirements applicable to school 
11.18 	districts.
11.19 	(b) A school must comply with statewide education accountability requirements 
11.20 	governing standards and assessments in chapter 120B and must work with the Department 
11.21 	of Education to make available to the public valid and highly reliable comparisons 
11.22 	of student academic growth and achievement across schools consistent with school 
11.23 	performance report card information under section 120B.36.
11.24 	(c) A school sponsored authorized by a school board may be located in any district, 
11.25 	unless the school board of the district of the proposed location disapproves by written 
11.26 	resolution.
11.27 	(c) (d) A charter school must be nonsectarian in its programs, admission policies, 
11.28 	employment practices, and all other operations. A sponsor An authorizer may not 
11.29 	authorize a charter a school or program that is affiliated with a nonpublic sectarian 
11.30 	school or a religious institution. A charter school student must be released for religious 
11.31 	instruction, consistent with section 120A.22, subdivision 12, clause (3).
11.32 	(d) (e) Charter schools must not be used as a method of providing education or 
11.33 	generating revenue for students who are being home-schooled.
11.34 	(e) (f) The primary focus of a charter school must be to provide a comprehensive 
11.35 	program of instruction for at least one grade or age group from five through 18 years 
12.1 	of age. Instruction may be provided to people younger than five years and older than 
12.2 	18 years of age.
12.3 	(f) (g) A charter school may not charge tuition to students who reside in Minnesota.
12.4 	(g) (h) A charter school is subject to and must comply with chapter 363A and 
12.5 	section 121A.04.
12.6 	(h) (i) A charter school is subject to and must comply with the Pupil Fair Dismissal 
12.7 	Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections 
12.8 	123B.34 to 123B.39.
12.9 	(i) (j) A charter school is subject to the same financial audits, audit procedures, and 
12.10 	audit requirements as a district. Audits must be conducted in compliance with generally 
12.11 	accepted governmental auditing standards, the Federal Single Audit Act, if applicable, 
12.12 	and section 6.65. A charter school is subject to and must comply with sections 15.054; 
12.13 	118A.01; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 123B.52, subdivision 5;
12.14 	471.38; 471.391; 471.392; and471.425; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6, 
12.15 	12, 13, and 15; 471.881; and 471.89. The audit must comply with the requirements of 
12.16 	sections 123B.75 to 123B.83, except to the extent deviations are necessary because of the 
12.17 	program at the school. Deviations must be approved by the commissioner and authorizer. 
12.18 	The Department of Education, state auditor, or legislative auditor, or authorizer may 
12.19 	conduct financial, program, or compliance audits. A charter school determined to be in 
12.20 	statutory operating debt under sections 123B.81 to 123B.83 must submit a plan under 
12.21 	section 123B.81, subdivision 4.
12.22 	(j) (k) A charter school is a district for the purposes of tort liability under chapter 466.
12.23 	(k) (l) A charter school must comply with chapters 13 and 13D; and sections 13.32;
12.24 	120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3 and 5.
12.25 	(l) (m) A charter school is subject to the Pledge of Allegiance requirement under 
12.26 	section 121A.11, subdivision 3.
12.27 	(n) A charter school is subject to chapter 181.
12.28 		Subd. 8a.Aid reduction. The commissioner may reduce a charter school's state aid 
12.29 	under section 127A.42 or 127A.43 if the charter school board fails to correct a violation 
12.30 	under this section.
12.31 		Subd. 8b.Aid reduction for violations. The commissioner may reduce a charter 
12.32 	school's state aid by an amount not to exceed 60 percent of the charter school's basic 
12.33 	revenue for the period of time that a violation of law occurs.
12.34 		Subd. 9.Admission requirements. A charter school may limit admission to:
12.35 	(1) pupils within an age group or grade level; or
13.1 	(2) people who are eligible to participate in the graduation incentives program 
13.2 	under section 124D.68; or.
13.3 	(3) residents of a specific geographic area where the percentage of the population 
13.4 	of non-Caucasian people of that area is greater than the percentage of the non-Caucasian 
13.5 	population in the congressional district in which the geographic area is located, and as 
13.6 	long as the school reflects the racial and ethnic diversity of the specific area.
13.7 	A charter school shall enroll an eligible pupil who submits a timely application, 
13.8 	unless the number of applications exceeds the capacity of a program, class, grade level, 
13.9 	or building. In this case, pupils must be accepted by lot. If a charter school is the only 
13.10 	school located in a town serving pupils within a particular grade level, then pupils that 
13.11 	are residents of the town must be given preference for enrollment before accepting pupils 
13.12 	by lot. If a pupil lives within two miles of a charter school and the next closest public 
13.13 	school is more than five miles away, the charter school must give those pupils preference 
13.14 	for enrollment before accepting other pupils by lot. The charter school must develop and 
13.15 	publish a lottery policy and process that it must use when accepting pupils by lot.
13.16 	A charter school shall give preference for enrollment to a sibling of an enrolled pupil 
13.17 	and to a foster child of that pupil's parents and may give preference for enrolling children 
13.18 	of the school's employees before accepting other pupils by lot.
13.19 	A charter school may not limit admission to pupils on the basis of intellectual ability, 
13.20 	measures of achievement or aptitude, or athletic ability and may not establish any criteria 
13.21 	or requirements for admission that are inconsistent with this subdivision.
13.22 		Subd. 10.Pupil performance. A charter school must design its programs to at 
13.23 	least meet the outcomes adopted by the commissioner for public school students. In the 
13.24 	absence of the commissioner's requirements, the school must meet the outcomes contained 
13.25 	in the contract with the sponsor authorizer. The achievement levels of the outcomes 
13.26 	contained in the contract may exceed the achievement levels of any outcomes adopted by 
13.27 	the commissioner for public school students.
13.28 		Subd. 11.Employment and other operating matters. A charter school must 
13.29 	employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1, 
13.30 	who hold valid licenses to perform the particular service for which they are employed in 
13.31 	the school. The charter school's state aid may be reduced under section 127A.42 127A.43
13.32 	if the school employs a teacher who is not appropriately licensed or approved by the 
13.33 	board of teaching. The school may employ necessary employees who are not required to 
13.34 	hold teaching licenses to perform duties other than teaching and may contract for other 
13.35 	services. The school may discharge teachers and nonlicensed employees. The charter 
13.36 	school board is subject to section 181.932. When offering employment to a prospective 
14.1 	employee, a charter school must give that employee a written description of the terms and 
14.2 	conditions of employment and the school's personnel policies. A person, without holding 
14.3 	a valid administrator's license, may perform administrative, supervisory, or instructional 
14.4 	leadership duties.
14.5 	The board of directors also shall decide matters related to the operation of the school, 
14.6 	including budgeting, curriculum and operating procedures.
14.7 		Subd. 12.Pupils with a disability. A charter school must comply with sections 
14.8 	125A.02, 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils 
14.9 	with a disability as though it were a district.
14.10 		Subd. 13.Length of school year. A charter school must provide instruction 
14.11 	each year for at least the number of days required by section 120A.41. It may provide 
14.12 	instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
14.13 		Subd. 14.Annual public reports. A charter school must publish an annual report at 
14.14 	least annually to its sponsor and the commissioner the information required by the sponsor 
14.15 	or the commissioner approved by the charter school board of directors. The annual report 
14.16 	must at least include information on school enrollment, governance and management, 
14.17 	staffing, finances, academic performance, operational performance, innovative practices 
14.18 	and implementation, and future plans. A charter school must distribute the annual 
14.19 	report by publication, mail, or electronic means to the commissioner, authorizer, school 
14.20 	employees, and parents and legal guardians of students enrolled in the charter school and 
14.21 	also must post the report on the charter school's official Web site. The reports are public 
14.22 	data under chapter 13.
14.23 		Subd. 15.Review and comment. (a) The department must review and comment on 
14.24 	the evaluation, by the sponsor, of the performance of a charter school before the charter 
14.25 	school's contract is renewed for another contract term. The sponsor must submit to 
14.26 	the commissioner timely information for the review and comment. The commissioner 
14.27 	must review and comment on the authorizer's performance evaluation process at the 
14.28 	time the authorizer submits its application for approval as an authorizer and each time 
14.29 	the authorizer undergoes its five-year review under subdivision 3, paragraph (f). Before 
14.30 	renewing a charter contract, the authorizer shall provide the commissioner with a formal, 
14.31 	written evaluation of the school's performance.
14.32 	(b) A sponsor An authorizer shall monitor and evaluate the fiscal and student 
14.33 	performance of the school, and may for this purpose annually assess a charter school: (1) 
14.34 	in its first, second, or third year of operation up to $30 per student up to a maximum of 
14.35 	$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up to 
14.36 	a maximum of $3,500 a fee according to paragraph (c).
15.1 	(c) The minimum fee that each charter school must pay to an authorizer is the 
15.2 	basic formula allowance for that year. Beginning in fiscal year 2013, the maximum fee 
15.3 	is four times the formula allowance for that year. Beginning in fiscal year 2013, each 
15.4 	charter school's fee, subject to the minimum and maximum fees, equals the product of 
15.5 	.015, the formula allowance for that year, and the charter school's adjusted marginal cost 
15.6 	pupil units for that year.
15.7 	(d) Notwithstanding paragraph (c), the following charter school fees apply, subject 
15.8 	to the minimum and maximum fee in paragraph (c):
15.9 	(1) for fiscal year 2010 only, each charter school's fee equals the product of .01, the 
15.10 	formula allowance for that year, and the charter school's adjusted marginal cost pupil units 
15.11 	for that year and the maximum fee is two times the basic formula allowance for that year;
15.12 	(2) for fiscal year 2011 only, each charter school's fee equals the product of .01, the 
15.13 	formula allowance for that year, and the charter school's adjusted marginal cost pupil 
15.14 	units for that year and the maximum fee is three times the basic formula allowance for 
15.15 	that year; and
15.16 	(3) for fiscal year 2012 only, the product of .013, the formula allowance for that year, 
15.17 	and the charter school's adjusted marginal cost pupil units for that year and the maximum 
15.18 	fee is four times the basic formula allowance for that year.
15.19 	(e) For the preoperational planning period, the authorizer may assess a charter school 
15.20 	the formula allowance for one pupil unit.
15.21 	(f) Each year by September 30, an authorizer shall submit to the commissioner a 
15.22 	statement of expenditures related to authorizing activities during the previous school year 
15.23 	ending on June 30. The authorizer must transmit a copy of the statement to all schools 
15.24 	chartered by the authorizer.
15.25 		Subd. 16.Transportation. (a) A charter school after its first fiscal year of operation 
15.26 	by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of 
15.27 	operation must notify the district in which the school is located and the Department of 
15.28 	Education if it will provide its own transportation or use the transportation services of the 
15.29 	district in which it is located for the fiscal year.
15.30 	(b) If a charter school elects to provide transportation for pupils, the transportation 
15.31 	must be provided by the charter school within the district in which the charter school is 
15.32 	located. The state must pay transportation aid to the charter school according to section 
15.33 	124D.11, subdivision 2.
15.34 	For pupils who reside outside the district in which the charter school is located, the 
15.35 	charter school is not required to provide or pay for transportation between the pupil's 
15.36 	residence and the border of the district in which the charter school is located. A parent 
16.1 	may be reimbursed by the charter school for costs of transportation from the pupil's 
16.2 	residence to the border of the district in which the charter school is located if the pupil is 
16.3 	from a family whose income is at or below the poverty level, as determined by the federal 
16.4 	government. The reimbursement may not exceed the pupil's actual cost of transportation 
16.5 	or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for 
16.6 	more than 250 miles per week.
16.7 	At the time a pupil enrolls in a charter school, the charter school must provide the 
16.8 	parent or guardian with information regarding the transportation.
16.9 	(c) If a charter school does not elect to provide transportation, transportation for 
16.10 	pupils enrolled at the school must be provided by the district in which the school is 
16.11 	located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a 
16.12 	pupil residing in the same district in which the charter school is located. Transportation 
16.13 	may be provided by the district in which the school is located, according to sections 
16.14 	123B.88, subdivision 6, and 124D.03, subdivision 8, for a pupil residing in a different 
16.15 	district. If the district provides the transportation, the scheduling of routes, manner and 
16.16 	method of transportation, control and discipline of the pupils, and any other matter relating 
16.17 	to the transportation of pupils under this paragraph shall be within the sole discretion, 
16.18 	control, and management of the district.
16.19 		Subd. 17.Leased space. (a) A charter school may lease space from a an independent 
16.20 	school board eligible to be a sponsor or an authorizer, other public or organization, private,
16.21 	nonprofit nonsectarian organization, private property owner, or a sectarian organization 
16.22 	if the leased space is constructed as a school facility. The department must review and 
16.23 	approve or disapprove leases in a timely manner. If a charter school is unable to lease 
16.24 	appropriate space from an eligible board or other public or private nonprofit nonsectarian 
16.25 	organization, the school may lease space from another nonsectarian organization if 
16.26 	the Department of Education, in consultation with the Department of Administration, 
16.27 	approves the lease. If the school is unable to lease appropriate space from public or private 
16.28 	nonsectarian organizations, the school may lease space from a sectarian organization if 
16.29 	the leased space is constructed as a school facility and the Department of Education, in 
16.30 	consultation with the Department of Administration, approves the lease.
16.31 	(b) Upon approval of the authorizer, a charter school that has operated at least five 
16.32 	consecutive years may form a separate affiliated nonprofit building company to provide a 
16.33 	school facility. The authorizer shall submit a supplemental affidavit to the commissioner 
16.34 	stating that the authorizer has reviewed:
16.35 	(1) the school's feasibility study on facility options;
17.1 	(2) documents showing the school's need and projected enrollment for such a 
17.2 	facility; and
17.3 	(3) the school's financial plan and financial status.
17.4 	The school is prohibited from organizing the nonprofit building company until the 
17.5 	authorizer files a supplementary affidavit with the commissioner and receives approval 
17.6 	from the commissioner.
17.7 		Subd. 18.Authority to raise initial working capital. A sponsor may authorize 
17.8 	a charter school before the applicant has secured its space, equipment, facilities, and 
17.9 	personnel if the applicant indicates the authority is necessary for it to raise working 
17.10 	capital. A sponsor may not authorize a school before the commissioner has approved the 
17.11 	authorization.
17.12 		Subd. 19.Disseminate information. (a) The sponsor authorizer, the operators, and 
17.13 	the Department of Education department must disseminate information to the public 
17.14 	on how to form and operate a charter school and. Charter schools must disseminate 
17.15 	information about how to utilize use the offerings of a charter school. Particular Targeted
17.16 	groups to be targeted include low-income families and communities, and students of 
17.17 	color, and students who are at risk of academic failure.
17.18 	(b) Authorizers, operators, and the department also may disseminate information 
17.19 	about the successful best practices in teaching and learning demonstrated by charter 
17.20 	schools.
17.21 		Subd. 20.Leave to teach in a charter school. If a teacher employed by a district 
17.22 	makes a written request for an extended leave of absence to teach at a charter school, 
17.23 	the district must grant the leave. The district must grant a leave not to exceed a total of 
17.24 	five years. Any request to extend the leave shall be granted only at the discretion of the 
17.25 	school board. The district may require that the request for a leave or extension of leave 
17.26 	be made up to 90 days before the teacher would otherwise have to report for duty before 
17.27 	February 1 in the school year preceding the school year in which the teacher intends 
17.28 	to leave, or February 1 of the calendar year in which the teacher's leave is scheduled 
17.29 	to terminate. Except as otherwise provided in this subdivision and except for section 
17.30 	122A.46, subdivision 7, the leave is governed by section 122A.46, including, but not 
17.31 	limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
17.32 	During a leave, the teacher may continue to aggregate benefits and credits in the 
17.33 	Teachers' Retirement Association account by paying both the employer and employee 
17.34 	contributions based upon the annual salary of the teacher for the last full pay period before 
17.35 	the leave began. The retirement association may impose reasonable requirements to 
18.1 	efficiently administer this subdivision under chapters 354 and 354A, consistent with 
18.2 	subdivision 22.
18.3 		Subd. 21.Collective bargaining. Employees of the board of directors of a charter 
18.4 	school may, if otherwise eligible, organize under chapter 179A and comply with its 
18.5 	provisions. The board of directors of a charter school is a public employer, for the 
18.6 	purposes of chapter 179A, upon formation of one or more bargaining units at the school. 
18.7 	Bargaining units at the school must be separate from any other units within the sponsoring
18.8 	an authorizing district, except that bargaining units may remain part of the appropriate 
18.9 	unit within the sponsoring an authorizing district, if the employees of the school, the 
18.10 	board of directors of the school, the exclusive representative of the appropriate unit in the 
18.11 	sponsoring authorizing district, and the board of the sponsoring authorizing district agree 
18.12 	to include the employees in the appropriate unit of the sponsoring authorizing district.
18.13 		Subd. 22.Teacher and other employee retirement. (a) Teachers in a charter 
18.14 	school must be public school teachers for the purposes of chapters 354 and 354a.
18.15 	(b) Except for teachers under paragraph (a), employees in a charter school must be 
18.16 	public employees for the purposes of chapter 353.
18.17 		Subd. 23.Causes for nonrenewal or termination of charter school contract. (a) 
18.18 	The duration of the contract with a sponsorauthorizer must be for the term contained in 
18.19 	the contract according to subdivision 6. The sponsorauthorizer may or may not renew a 
18.20 	contract at the end of the term for any ground listed in paragraph (b). A sponsorauthorizer 
18.21 	may unilaterally terminate a contract during the term of the contract for any ground 
18.22 	listed in paragraph (b). At least 60 days before not renewing or terminating a contract, 
18.23 	the sponsor authorizer shall notify the board of directors of the charter school of the 
18.24 	proposed action in writing. The notice shall state the grounds for the proposed action in 
18.25 	reasonable detail and that the charter school's board of directors may request in writing an 
18.26 	informal hearing before the sponsorauthorizer within 14 15 business days of receiving 
18.27 	notice of nonrenewal or termination of the contract. Failure by the board of directors to 
18.28 	make a written request for a hearing within the 14-day 15-business-day period shall be 
18.29 	treated as acquiescence to the proposed action. Upon receiving a timely written request 
18.30 	for a hearing, the sponsorauthorizer shall give reasonable ten business days' notice to 
18.31 	the charter school's board of directors of the hearing date. The sponsorauthorizer shall 
18.32 	conduct an informal hearing before taking final action. The sponsor authorizer shall take 
18.33 	final action to renew or not renew a contract by the last day of classes in the school year. 
18.34 	If the sponsor is a local board, the school's board of directors may appeal the sponsor's 
18.35 	decision to the commissioner no later than 20 business days before the proposed date for 
18.36 	terminating the contract or the end date of the contract.
19.1 	(b) A contract may be terminated or not renewed upon any of the following grounds:
19.2 	(1) failure to meet the requirements for pupil performance contained in the contract;
19.3 	(2) failure to meet generally accepted standards of fiscal management;
19.4 	(3) violations of law; or
19.5 	(4) other good cause shown.
19.6 	If a contract is terminated or not renewed under this paragraph, the school must be 
19.7 	dissolved according to the applicable provisions of chapter 308A or 317A, except when 
19.8 	the commissioner approves the decision of a different eligible sponsor to authorize the 
19.9 	charter school.
19.10 	(c) If at the end of a contract term, either the sponsor orauthorizer and the charter 
19.11 	school board of directors wants mutually agree to voluntarily terminate or not renew 
19.12 	the contract, a change in sponsors authorizers is allowed if the commissioner approves 
19.13 	the decision of transfer to a different eligible sponsor approved authorizer to authorize
19.14 	charter the charter school. The party intending to terminate the contract must notify the 
19.15 	other party and the commissioner of its intent at least 90 days before the date on which the 
19.16 	contract ends. Both parties jointly must submit their intent in writing to the commissioner 
19.17 	to mutually terminate the contract. The sponsor authorizer that is a party to the existing 
19.18 	contract at least must inform the approved different eligible sponsor new authorizer about 
19.19 	the fiscal and operational status, and student performance of the school. If no different 
19.20 	eligible sponsor transfer of authorizer is approved, the school must be dissolved according 
19.21 	to applicable law and the terms of the contract.
19.22 	(d) The commissioner, after providing reasonable notice to the board of directors of 
19.23 	a charter school and the existing sponsor authorizer, and after providing an opportunity for 
19.24 	a public hearing, may terminate the existing sponsorial relationship contract between the 
19.25 	authorizer and the charter school board if the charter school has a history of:
19.26 	(1) failure to meet pupil performance requirements contained in the contract;
19.27 	(2) financial mismanagement or failure to meet generally accepted standards of 
19.28 	fiscal management; or
19.29 	(2) (3) repeated or major violations of the law.
19.30 	(e) If the commissioner terminates a charter school contract because the authorizer 
19.31 	fails to comply with subdivision 3, paragraph (g), the commissioner shall provide the 
19.32 	charter school with information about other eligible authorizers.
19.33 		Subd. 23a.Related party lease costs. (a) A charter school is prohibited from 
19.34 	entering a lease of real property with a related party as defined in subdivision 26, unless 
19.35 	the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter 
19.36 	308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).
20.1 	(b) For purposes of this section and section 124D.11:
20.2 	(1) "related party" means an affiliate or immediate relative of the other party in 
20.3 	question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
20.4 	(2) "affiliate" means a person that directly or indirectly, through one or more 
20.5 	intermediaries, controls, is controlled by, or is under common control with another person;
20.6 	(3) "immediate family" means an individual whose relationship by blood, marriage, 
20.7 	adoption, or partnering is no more remote than first cousin;
20.8 	(4) "person" means an individual or entity of any kind; and
20.9 	(5) "control" means the ability to affect the management, operations, or policy 
20.10 	actions or decisions of a person, whether through ownership of voting securities, by 
20.11 	contract, or otherwise.
20.12 	(c) A lease of real property to be used for a charter school, not excluded in paragraph 
20.13 	(a), must contain the following statement: "This lease is subject to Minnesota Statutes, 
20.14 	section 124D.10, subdivision 23a."
20.15 	(c) (d) If a charter school enters into as lessee a lease with a related party and the 
20.16 	charter school subsequently closes, the commissioner has the right to recover from the 
20.17 	lessor any lease payments in excess of those that are reasonable under section 124D.11, 
20.18 	subdivision 4, clause (1).
20.19 		Subd. 24.Pupil enrollment upon nonrenewal or termination of charter school 
20.20 	contract. If a contract is not renewed or is terminated according to subdivision 23, a 
20.21 	pupil who attended the school, siblings of the pupil, or another pupil who resides in the 
20.22 	same place as the pupil may enroll in the resident district or may submit an application 
20.23 	to a nonresident district according to section 124D.03 at any time. Applications and 
20.24 	notices required by section 124D.03 must be processed and provided in a prompt manner. 
20.25 	The application and notice deadlines in section 124D.03 do not apply under these 
20.26 	circumstances. The closed charter school must transfer the student's educational records 
20.27 	within ten business days of closure to the student's school district of residence where the 
20.28 	records must be retained or transferred under section 120A.22, subdivision 7.
20.29 		Subd. 25.Extent of specific legal authority. (a) The board of directors of a charter 
20.30 	school may sue and be sued.
20.31 	(b) The board may not levy taxes or issue bonds.
20.32 	(c) The commissioner, a sponsor an authorizer, members of the board of a sponsor
20.33 	an authorizer in their official capacity, and employees of a sponsor an authorizer are 
20.34 	immune from civil or criminal liability with respect to all activities related to a charter 
20.35 	school they approve or sponsor authorize. The board of directors shall obtain at least 
20.36 	the amount of and types of insurance required by the contract, according to subdivision 
21.1 	6. up to the applicable tort liability limits under chapter 466. The charter school board 
21.2 	must submit a copy of the insurance policy to its authorizer before starting operations. 
21.3 	The charter school board must submit changes in its insurance carrier or policy to its 
21.4 	authorizer within 20 business days of the change.
21.5 		Subd. 26.Definitions. For purposes of this section and section 124D.11:
21.6 	(1) A "Related party" is an affiliate or close relative of the other party in question, an 
21.7 	affiliate of a close relative, or a close relative of an affiliate.
21.8 	(2) "Affiliate" means a person that directly, or indirectly through one or more 
21.9 	intermediaries, controls, or is controlled by, or is under common control with, another 
21.10 	person.
21.11 	(3) "Close relative" means an individual whose relationship by blood, marriage, or 
21.12 	adoption to another individual is no more remote than first cousin.
21.13 	(4) "Person" means an individual or entity of any kind.
21.14 	(5) "Control" includes the terms "controlling," "controlled by," and "under common 
21.15 	control with" and means the possession, direct or indirect, of the power to direct or cause 
21.16 	the direction of the management, operations, or policies of a person, whether through the 
21.17 	ownership of voting securities, by contract, or otherwise.

21.18 	Sec. 2. Minnesota Statutes 2008, section 124D.11, subdivision 9, is amended to read:
21.19 		Subd. 9.Payment of aids to charter schools. (a) Notwithstanding section 
21.20 	127A.45, subdivision 3, aid payments for the current fiscal year to a charter school not in 
21.21 	its first year of operation shall be of an equal amount on each of the 23 24 payment dates. 
21.22 	A charter school in its first year of operation shall receive, on its first payment date, ten 
21.23 	percent of its cumulative amount guaranteed for the year and 22 payments of an equal 
21.24 	amount thereafter the sum of which shall equal the current year aid payment percentage 
21.25 	multiplied by the cumulative amount guaranteed.
21.26 	(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing 
21.27 	operation on or prior to the end of a school year, the current year aid payment percentage 
21.28 	multiplied by the amount due for the school year may be paid to the school after audit 
21.29 	of prior fiscal year and current fiscal year pupil counts. June 30 of a school year, for the 
21.30 	payment periods occurring after the school ceases serving students, the commissioner shall 
21.31 	withhold the estimated state aid owed the school. The charter school board of directors 
21.32 	and authorizer must submit to the commissioner a closure plan under chapter 308A or 
21.33 	317A, and financial information about the school's liabilities and assets. After receiving 
21.34 	the closure plan, financial information, an audit of pupil counts, documentation of lease 
21.35 	expenditures, and monitoring of special education expenditures, the commissioner may 
22.1 	release cash withheld and may continue regular payments up to the current year payment 
22.2 	percentages if further amounts are owed. If, based on audits and monitoring, the school 
22.3 	received state aid in excess of the amount owed, the commissioner shall retain aid withheld 
22.4 	sufficient to eliminate the aid overpayment. For a charter school ceasing operations 
22.5 	prior to, or at the end of, a school year, notwithstanding section 127A.45, subdivision 
22.6 	3, preliminary final payments may be made after receiving the closure plan, audit of 
22.7 	pupil counts, monitoring of special education expenditures, and documentation of lease 
22.8 	expenditures, and school submission of Uniform Financial Accounting and Reporting 
22.9 	Standards (UFARS) financial data for the final year of operation. Final payment may be 
22.10 	made upon receipt of audited financial statements under section 123B.77, subdivision 3.
22.11 	(c) If a charter school fails to comply with the commissioner's directive to return, 
22.12 	for cause, federal or state funds administered by the department, the commissioner may 
22.13 	withhold an amount of state aid sufficient to satisfy the directive.
22.14 	(d) If, within the timeline under section 471.425, a charter school fails to pay the state 
22.15 	of Minnesota, a school district, intermediate school district, or service cooperative after 
22.16 	receiving an undisputed invoice for goods and services, the commissioner may withhold 
22.17 	an amount of state aid sufficient to satisfy the claim and shall distribute the withheld 
22.18 	aid to the interested state agency, school district, intermediate school district, or service 
22.19 	cooperative. An interested state agency, school district, intermediate school district, or 
22.20 	education cooperative shall notify the commissioner when a charter school fails to pay an 
22.21 	undisputed invoice within 75 business days of when it received the original invoice.
22.22 	(e) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent 
22.23 	of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day 
22.24 	of student attendance for that school year. 
22.25 	(d) (f) In order to receive state aid payments under this subdivision, a charter school 
22.26 	in its first three years of operation must submit a school calendar in the form and manner 
22.27 	requested by the department and a quarterly report to the Department of Education. The 
22.28 	report must list each student by grade, show the student's start and end dates, if any, 
22.29 	with the charter school, and for any student participating in a learning year program, 
22.30 	the report must list the hours and times of learning year activities. The report must be 
22.31 	submitted not more than two weeks after the end of the calendar quarter to the department. 
22.32 	The department must develop a Web-based reporting form for charter schools to use 
22.33 	when submitting enrollment reports. A charter school in its fourth and subsequent year of 
22.34 	operation must submit a school calendar and enrollment information to the department in 
22.35 	the form and manner requested by the department.
23.1 	(e) (g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter 
23.2 	school and satisfaction of creditors, cash and investment balances remaining shall be 
23.3 	returned to the state.

23.4 	Sec. 3. EFFECTIVE DATE.
 23.5 	(a) This act is effective the day following final enactment and applies beginning 
23.6 	August 1, 2009, unless otherwise specified in this section.
23.7 	(b) Section 1, subdivision 3, paragraph (b), clause (2), applies to an authorizer 
23.8 	seeking approval to charter a school after the effective date of this act. The changes in 
23.9 	section 1, subdivision 3, paragraph (b), clause (2), shall not apply to a sponsor under 
23.10 	Minnesota Statutes 2008, section 124D.10, that is a party to a charter contract on the 
23.11 	effective date of this act except that section 1, subdivision 3, paragraph (b), clause (2), 
23.12 	item (iv), applies to such sponsors beginning July 1, 2012.
23.13 	(c) Section 1, subdivision 4, paragraph (a), applies to a school board action to close, 
23.14 	consolidate, or dissolve a school district taken after the effective the date of this act.