1.1 	A bill for an act
1.2 	relating to education; amending charter school provisions;amending Minnesota 
1.3 	Statutes 2008, section 124D.10, subdivisions 3, 15.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. Minnesota Statutes 2008, section 124D.10, subdivision 3, is amended to 
1.6 	read:
1.7 		Subd. 3.Sponsor. (a) A school board; intermediate school district school board; 
1.8 	education district organized under sections 123A.15 to 123A.19; charitable organization 
1.9 	under section 501(c)(3) of the Internal Revenue Code of 1986 that is a member of the 
1.10 	Minnesota Council of Nonprofits or the Minnesota Council on Foundations, registered 
1.11 	with the attorney general's office, and reports an end-of-year fund balance of at least 
1.12 	$2,000,000; Minnesota private college that grants two- or four-year degrees and is 
1.13 	registered with the Minnesota Office of Higher Education under chapter 136A; community 
1.14 	college, state university, or technical college, governed by the Board of Trustees of the 
1.15 	Minnesota State Colleges and Universities; or the University of Minnesota may sponsor 
1.16 	one or more charter schools. 
1.17 	(b) A nonprofit corporation subject to chapter 317A, described in section 317A.905, 
1.18 	and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 
1.19 	of 1986, may sponsor one or more charter schools if the charter school has operated for 
1.20 	at least three years under a different sponsor and if the nonprofit corporation has existed 
1.21 	for at least 25 years. 
1.22 	(c) Based on the recommendation of New Schools Minnesota, the commissioner may 
1.23 	approve up to three charitable organizations formed under section 501(c)(3) of the Internal 
1.24 	Revenue Code of 1986 that will sponsor charter schools as their sole charitable purpose. 
2.1 	Eligible organizations interested in being approved as a sponsor under this paragraph must 
2.2 	submit a proposal to the commissioner that includes the provisions of paragraph (e).
2.3 	(d) All organizations provided for in this section shall have their sponsoring 
2.4 	plan reviewed by the commission on New Schools Minnesota and approved by the 
2.5 	commissioner consistent with the provisions of this section in order for these organizations 
2.6 	to sponsor chartered schools. Commissioner approval shall be up to a maximum of five 
2.7 	years. Organizations approved as sponsors shall have their authority renewed every five 
2.8 	years as provided for in this section in order for them to continue to sponsor chartered 
2.9 	schools. 
2.10 	(e) Effective July 1, 2010, an organization defined in this subdivision as being 
2.11 	eligible to grant charters to schools, but is not currently sponsoring any schools, shall have 
2.12 	its sponsoring plan approved by the commissioner prior to that organization becoming 
2.13 	eligible to grant charters. The plan to be submitted to the commissioner, and reviewed by 
2.14 	New Schools Minnesota, shall include at least the following:
2.15 	(1) how sponsoring schools is a way for the organization to carry out its mission. 
2.16 	If the organization is a private nonprofit, it shall identify its board of directors and 
2.17 	administration and the articles and bylaws of the organization;
2.18 	(2) a description of the capacity of the organization to serve as a sponsor including 
2.19 	the personnel who will perform the sponsoring duties, their qualifications, the amount of 
2.20 	time they will be assigned to this responsibility, and financial resources allocated by the 
2.21 	organization to this responsibility;
2.22 	(3) a description of the application and review process the sponsor will use to make 
2.23 	decisions regarding the granting of charters which will include at least the following:
2.24 	(i) how one or more of the statutory purposes defined in subdivision 1 are addressed;
2.25 	(ii) the mission, goals, program model, and student performance expectations;
2.26 	(iii) an evaluation plan for the school;
2.27 	(iv) the school's governance plan;
2.28 	(v) the financial management plan; and
2.29 	(vi) the administration and operations plan.
2.30 	(4) a description of the type of contract it will arrange with the schools it sponsors 
2.31 	that meets the provisions of subdivision 6;
2.32 	(5) the process to be used for providing ongoing oversight of the school consistent 
2.33 	with the contract expectations specified in clause (4) that assures that the schools sponsored 
2.34 	are complying with both the provisions of applicable law and rules, and with the contract;
2.35 	(6) the process for making decisions regarding the renewal or termination of the 
2.36 	schools charter based on it meeting the performance contract specified in clause (4); and
3.1 	(7) an assurance specifying that the organization is committed to serving as a 
3.2 	sponsor for the full five-year term.
3.3 	(f) Not later than June 30, 2011, all organizations that are sponsoring chartered 
3.4 	schools prior to June 30, 2010, and intend to continue to serve as a sponsor must be 
3.5 	approved by the commissioner based on the recommendations of New Schools Minnesota 
3.6 	consistent with the provisions of paragraph (e). The commissioner may grant an extension 
3.7 	of up to one year to a sponsoring organization to meet the sponsor requirements. If, 
3.8 	following a review by New Schools Minnesota, the commissioner determines that an 
3.9 	organization fails to meet the provisions of this section, the commissioner shall either 
3.10 	withdraw the authority of the organization to charter schools or shall place the sponsor 
3.11 	on probation for a maximum of one year while the organization modifies its sponsoring 
3.12 	process so that it is compliant with this section.
3.13 	(g) Following approval of an organization to serve as a sponsor, the commissioner 
3.14 	shall conduct oversight of the approved sponsors and may withdraw that authority for any 
3.15 	of the following reasons:
3.16 	(1) failure to conduct its sponsoring duties consistent with its approved application;
3.17 	(2) violations of law; or
3.18 	(3) other good cause shown by the commissioner.
3.19 	The commissioner may determine whether to place the sponsoring organization on 
3.20 	probation for a maximum of one year or to immediately withdraw the authority of the 
3.21 	organization to serve as a sponsor.
3.22 	(h) If the commissioner withdraws the authority of an organization to sponsor 
3.23 	schools, the commissioner will inform the sponsoring organization and schools sponsored 
3.24 	by the organization of this decision. The school may immediately request an approved 
3.25 	organization to serve as the school's sponsor. If no organization agrees to sponsor 
3.26 	the school, the commissioner shall assign the school to a sponsor approved under the 
3.27 	provisions of paragraph (c) which shall serve as the sponsor of the school.
3.28 	(i) Not later than June 30, 2010, the commissioner shall assign schools being 
3.29 	sponsored by the department to a sponsor approved under the provisions of paragraph 
3.30 	(c) which shall serve as the sponsor of the school if those schools have not entered into 
3.31 	agreements with other approved sponsors.

3.32 	Sec. 2. Minnesota Statutes 2008, section 124D.10, subdivision 15, is amended to read:
3.33 		Subd. 15.Review and comment. (a) The department must review and comment on 
3.34 	the evaluation, by the sponsor, of the performance of a charter school before the charter 
4.1 	school's contract is renewed for another contract term. The sponsor must submit to the 
4.2 	commissioner timely information for the review and comment.
4.3 	(b) A sponsor shall monitor and evaluate the fiscal and student performance of the 
4.4 	school and the provisions of the contract between the school and the sponsor. Sponsors 
4.5 	that have been approved by the commissioner as provided by subdivision 3, paragraph 
4.6 	(e) or (f), and may for this purpose annually assess a charter school as follows: (1) in its 
4.7 	first, second, or third year of operation up to $30 per student up to a maximum of $10,000; 
4.8 	and (2) in its fourth or a subsequent year of operation up to $10 per student up to a 
4.9 	maximum of $3,500. Sponsors that have been approved by the commissioner as provided 
4.10 	by subdivision (3), paragraph (e) or (f), may annually assess the school up to one percent 
4.11 	of the formula allowance with a minimum of $5,000 and a maximum of $10,000 for each 
4.12 	of the first five years of the schools operation with students and a minimum of $8,500 and 
4.13 	a maximum of $12,000 for the year the contract is being evaluated for renewal. 
4.14 	(c) If after the first contract renewal the school is meeting the requirements of the 
4.15 	contract, the sponsoring fee will be up to .75 percent of the formula allowance with a 
4.16 	minimum of $3,500 and a maximum of $7,500.
4.17 	(d) If after the contract renewal the commissioner determines that the school has not 
4.18 	fully met each of the provisions of the contract but has made significant progress toward 
4.19 	meeting the requirements of the contract, or if at some point in the future the school does 
4.20 	not meet the provisions of the contract, the fee will be as provided for in paragraph (b).
4.21 	(e) The minimum and maximum amounts in the above will be recalculated annually 
4.22 	by the commissioner based on the percentage change in the general education formula.
4.23 	(f) The annual fee is based on the average daily membership of the school for the 
4.24 	year. The commissioner shall deduct the sponsor fee from the general education revenue 
4.25 	payable to the charter school and shall pay that amount directly to the applicable sponsor 
4.26 	using a process and timeline to be determined by the commissioner.
4.27 	(g) The commissioner shall charge the schools sponsored by the Department of 
4.28 	Education the fees provided for in this section. Revenue from department sponsorship 
4.29 	shall be accrued to the department to be used for expenses relating to sponsorship duties 
4.30 	of the schools sponsored.
4.31 	(h) By August 1 of each year, a sponsor shall report to each of the schools it sponsors 
4.32 	and to the commissioner regarding its sponsoring activities and the amount it spent on 
4.33 	sponsoring activities for the previous fiscal year. The commissioner will determine the 
4.34 	format for this report.