1.1 	A bill for an act
1.2 	relating to education; providing for policy for prekindergarten through grade 12 
1.3 	education, including general education, education excellence, special programs, 
1.4 	facilities and technology, and student transportation;amending Minnesota 
1.5 	Statutes 2010, sections 11A.16, subdivision 5; 120B.30, subdivisions 1, 3, 4; 
1.6 	120B.31, subdivision 4; 120B.36, subdivisions 1, 2; 122A.16, as amended; 
1.7 	123B.41, subdivisions 2, 5; 123B.57; 123B.63, subdivision 3; 123B.71, 
1.8 	subdivision 5; 123B.72, subdivision 3; 123B.75, subdivision 5; 123B.92, 
1.9 	subdivision 5; 124D.091, subdivision 2; 124D.10, subdivisions 3, 4, 6a; 124D.11, 
1.10 	subdivision 9; 125A.02, subdivision 1; 125A.15; 125A.51; 125A.79, subdivision 
1.11 	1; 126C.10, subdivision 8a; 126C.41, subdivision 2; 127A.42, subdivision 2; 
1.12 	127A.43; 127A.45, by adding a subdivision; repealing Minnesota Statutes 2010, 
1.13 	sections 125A.54; 126C.457.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	GENERAL EDUCATION

1.17 	Section 1. Minnesota Statutes 2010, section 11A.16, subdivision 5, is amended to read:
1.18 		Subd. 5.Calculation of income. As of the end of each fiscal year, the state 
1.19 	board shall calculate the investment income earned by the permanent school fund. The 
1.20 	investment income earned by the fund shall equal the amount of interest on debt securities 
1.21 	and, dividends on equity securities, and interest earned on certified monthly earnings prior 
1.22 	to the transfer to the Department of Education. Gains and losses arising from the sale of 
1.23 	securities shall be apportioned as follows:
1.24 	(a) If the sale of securities results in a net gain during a fiscal year, the gain shall 
1.25 	be apportioned in equal installments over the next ten fiscal years to offset net losses in 
1.26 	those years. If any portion of an installment is not needed to recover subsequent losses 
1.27 	identified in paragraph (b) it shall be added to the principal of the fund.
2.1 	(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall 
2.2 	be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these 
2.3 	gains are insufficient, any remaining net loss shall be recovered from interest and dividend 
2.4 	income in equal installments over the following ten fiscal years.

2.5 	Sec. 2. Minnesota Statutes 2010, section 123B.41, subdivision 2, is amended to read:
2.6 		Subd. 2.Textbook. "Textbook" means any book or book substitute, including 
2.7 	electronic books as well as other printed materials delivered electronically, which a 
2.8 	pupil uses as a text or text substitute in a particular class or program in the school 
2.9 	regularly attended and a copy of which is expected to be available for the individual use 
2.10 	of each pupil in this class or program. The term shall be limited to books, workbooks, 
2.11 	or manuals, whether bound or in loose-leaf form, as well as electronic books and other 
2.12 	printed materials delivered electronically, intended for use as a principal source of study 
2.13 	material for a given class or a group of students. The term includes only such secular, 
2.14 	neutral and nonideological textbooks as are available, used by, or of benefit to Minnesota 
2.15 	public school pupils.

2.16 	Sec. 3. Minnesota Statutes 2010, section 123B.41, subdivision 5, is amended to read:
2.17 		Subd. 5.Individualized instructional or cooperative learning materials.
 2.18 	"Individualized instructional or cooperative learning materials" means educational 
2.19 	materials which:
2.20 	(a) are designed primarily for individual pupil use or use by pupils in a cooperative 
2.21 	learning group in a particular class or program in the school the pupil regularly attends;
2.22 	(b) are secular, neutral, nonideological and not capable of diversion for religious 
2.23 	use; and
2.24 	(c) are available, used by, or of benefit to Minnesota public school pupils.
2.25 	Subject to the requirements in clauses (a), (b), and (c), "individualized instructional 
2.26 	or cooperative learning materials" include, but are not limited to, the following if they 
2.27 	do not fall within the definition of "textbook" in subdivision 2: published materials; 
2.28 	periodicals; documents; pamphlets; photographs; reproductions; pictorial or graphic 
2.29 	works; prerecorded video programs; prerecorded tapes, cassettes and other sound 
2.30 	recordings; manipulative materials; desk charts; games; study prints and pictures; desk 
2.31 	maps; models; learning kits; blocks or cubes; flash cards; individualized multimedia 
2.32 	systems; prepared instructional computer software programs; choral and band sheet music; 
2.33 	electronic books and other printed materials delivered electronically; and CD-Rom.
3.1 	"Individualized instructional or cooperative learning materials" do not include 
3.2 	instructional equipment, instructional hardware, or ordinary daily consumable classroom 
3.3 	supplies.

3.4 	Sec. 4. Minnesota Statutes 2010, section 123B.63, subdivision 3, is amended to read:
3.5 		Subd. 3.Capital project levy referendum. A district may levy the local tax 
3.6 	rate approved by a majority of the electors voting on the question to provide funds for 
3.7 	an approved project. The election must take place no more than five years before the 
3.8 	estimated date of commencement of the project. The referendum must be held on a date 
3.9 	set by the board. A district must meet the requirements of section 123B.71 for projects 
3.10 	funded under this section. If a review and comment is required under section 123B.71, 
3.11 	subdivision 8, a referendum for a project not receiving a positive review and comment by 
3.12 	the commissioner under section 123B.71 must be approved by at least 60 percent of the 
3.13 	voters at the election. The referendum may be called by the school board and may be held:
3.14 	(1) separately, before an election for the issuance of obligations for the project 
3.15 	under chapter 475; or
3.16 	(2) in conjunction with an election for the issuance of obligations for the project 
3.17 	under chapter 475; or
3.18 	(3) notwithstanding section 475.59, as a conjunctive question authorizing both the 
3.19 	capital project levy and the issuance of obligations for the project under chapter 475. Any 
3.20 	obligations authorized for a project may be issued within five years of the date of the 
3.21 	election.
3.22 	The ballot must provide a general description of the proposed project, state the 
3.23 	estimated total cost of the project, state whether the project has received a positive or 
3.24 	negative review and comment from the commissioner, state the maximum amount of the 
3.25 	capital project levy as a percentage of net tax capacity, state the amount that will be raised 
3.26 	by that local tax rate in the first year it is to be levied, and state the maximum number of 
3.27 	years that the levy authorization will apply.
3.28 	The ballot must contain a textual portion with the information required in this 
3.29 	section and a question stating substantially the following:
3.30 	"Shall the capital project levy proposed by the board of .......... School District 
3.31 	No. .......... be approved?"
3.32 	If approved, the amount provided by the approved local tax rate applied to the net 
3.33 	tax capacity for the year preceding the year the levy is certified may be certified for the 
3.34 	number of years, not to exceed ten, approved.
4.1 	In the event a conjunctive question proposes to authorize both the capital project 
4.2 	levy and the issuance of obligations for the project, appropriate language authorizing the 
4.3 	issuance of obligations must also be included in the question.
4.4 	The district must notify the commissioner of the results of the referendum.

4.5 	Sec. 5. Minnesota Statutes 2010, section 123B.75, subdivision 5, is amended to read:
4.6 		Subd. 5.Levy recognition. (a) For fiscal years 2009 and 2010, in June of each 
4.7 	year, the school district must recognize as revenue, in the fund for which the levy was 
4.8 	made, the lesser of:
4.9 	(1) the sum of May, June, and July school district tax settlement revenue received in 
4.10 	that calendar year, plus general education aid according to section 126C.13, subdivision 
4.11 	4, received in July and August of that calendar year; or
4.12 	(2) the sum of:
4.13 	(i) 31 percent of the referendum levy certified according to section 126C.17, in 
4.14 	calendar year 2000; and
4.15 	(ii) the entire amount of the levy certified in the prior calendar year according to 
4.16 	section 124D.86, subdivision 4, for school districts receiving revenue under sections 
4.17 	124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph 
4.18 	(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457; and 126C.48, 
4.19 	subdivision 6; plus
4.20 	(iii) zero percent of the amount of the levy certified in the prior calendar year for the 
4.21 	school district's general and community service funds, plus or minus auditor's adjustments, 
4.22 	not including the levy portions that are assumed by the state, that remains after subtracting 
4.23 	the referendum levy certified according to section 126C.17 and the amount recognized 
4.24 	according to item (ii).
4.25 	(b) For fiscal year 2011 and later years, in June of each year, the school district must 
4.26 	recognize as revenue, in the fund for which the levy was made, the lesser of:
4.27 	(1) the sum of May, June, and July school district tax settlement revenue received in 
4.28 	that calendar year, plus general education aid according to section 126C.13, subdivision 
4.29 	4, received in July and August of that calendar year; or
4.30 	(2) the sum of:
4.31 	(i) the greater of 48.6 percent of the referendum levy certified according to section 
4.32 	126C.17 in the prior calendar year, or 31 percent of the referendum levy certified 
4.33 	according to section 126C.17 in calendar year 2000; plus
4.34 	(ii) the entire amount of the levy certified in the prior calendar year according to 
4.35 	section 124D.4531, 124D.86, subdivision 4, for school districts receiving revenue under 
5.1 	sections 124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, 
5.2 	paragraph (a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457;
5.3 	and 126C.48, subdivision 6; plus
5.4 	(iii) 48.6 percent of the amount of the levy certified in the prior calendar year for the 
5.5 	school district's general and community service funds, plus or minus auditor's adjustments, 
5.6 	not including the levy portions that are assumed by the state, that remains after subtracting 
5.7 	the referendum levy certified according to section 126C.17 and the amount recognized 
5.8 	according to item (ii).

5.9 	Sec. 6. Minnesota Statutes 2010, section 125A.79, subdivision 1, is amended to read:
5.10 		Subdivision 1.Definitions. For the purposes of this section, the definitions in this 
5.11 	subdivision apply.
5.12 	(a) "Unreimbursed special education cost" means the sum of the following:
5.13 	(1) expenditures for teachers' salaries, contracted services, supplies, equipment, and 
5.14 	transportation services eligible for revenue under section 125A.76; plus
5.15 	(2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and 
5.16 	125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus
5.17 	(3) revenue for teachers' salaries, contracted services, supplies, equipment, and 
5.18 	transportation services under section 125A.76; minus
5.19 	(4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services 
5.20 	eligible for revenue under section 125A.76, subdivision 2.
5.21 	(b) "General revenue" for a school district means the sum of the general education 
5.22 	revenue according to section 126C.10, subdivision 1, excluding alternative teacher 
5.23 	compensation revenue, plus the total qualifying referendum revenue specified in paragraph 
5.24 	(e) minus transportation sparsity revenue minus total operating capital revenue. "General 
5.25 	revenue" for a charter school means the sum of the general education revenue according to 
5.26 	section 124D.11, subdivision 1, and transportation revenue according to section 124D.11, 
5.27 	subdivision 2, excluding alternative teacher compensation revenue, minus referendum 
5.28 	equalization aid minus transportation sparsity revenue minus operating capital revenue.
5.29 	(c) "Average daily membership" has the meaning given it in section 126C.05.
5.30 	(d) "Program growth factor" means 1.02 for fiscal year 2012 and later.
5.31 	(e) "Total qualifying referendum revenue" means two-thirds of the district's total 
5.32 	referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs 
5.33 	(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal 
5.34 	year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.

5.35 	EFFECTIVE DATE. This section is effective the day following final enactment.

6.1 	Sec. 7. Minnesota Statutes 2010, section 126C.10, subdivision 8a, is amended to read:
6.2 		Subd. 8a.Sparsity revenue for school districts that close facilities. A school 
6.3 	district that closes a school facility is eligible for elementary and secondary sparsity 
6.4 	revenue equal to the greater of the amounts calculated under subdivisions 6, 7, and 8 or 
6.5 	the total amount of sparsity revenue for the previous fiscal year if the school board of the 
6.6 	district has adopted a written resolution stating that the district intends to close the school 
6.7 	facility, but cannot proceed with the closure without the adjustment to sparsity revenue 
6.8 	authorized by this subdivision. The written resolution must be approved by the school 
6.9 	board and filed with the commissioner of education at least 60 days prior to the start of the 
6.10 	fiscal year for which aid under this subdivision is first requested.

6.11 	EFFECTIVE DATE. This section is effective for board resolutions approved by 
6.12 	the school board in fiscal year 2011 and later for sparsity revenue calculations in fiscal 
6.13 	year 2012 and later.

6.14 	Sec. 8. Minnesota Statutes 2010, section 126C.41, subdivision 2, is amended to read:
6.15 		Subd. 2.Retired employee health benefits. (a) A district may levy an amount up 
6.16 	to the amount the district is required by the collective bargaining agreement in effect 
6.17 	on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for 
6.18 	licensed and nonlicensed employees who have terminated services in the employing 
6.19 	district and withdrawn from active teaching service or other active service, as applicable, 
6.20 	before July 1, 1992, and to pay for health insurance or unreimbursed medical expenses 
6.21 	for licensed and nonlicensed employees who have terminated services in the employing 
6.22 	district and withdrawn from active teaching service or other active service, as applicable 
6.23 	before July 1, 1998, only if a sunset clause is in effect for the current collective bargaining 
6.24 	agreement. The total amount of the levy each year may not exceed $600,000.
6.25 	(b) In addition to the levy authority granted under paragraph (a), a school district 
6.26 	may levy for other postemployment benefits expenses actually paid during the previous 
6.27 	fiscal year. For purposes of this subdivision, "postemployment benefits" means benefits 
6.28 	giving rise to a liability under Statement No. 45 of the Government Accounting Standards 
6.29 	Board. A district seeking levy authority under this subdivision must:
6.30 	(1) create or have created an actuarial liability to pay postemployment benefits to 
6.31 	employees or officers after their termination of service;
6.32 	(2) have a sunset clause in effect for the current collective bargaining agreement as 
6.33 	required by paragraph (a); and
6.34 	(3) apply for the authority in the form and manner required by the commissioner 
6.35 	of education.
7.1 	If the total levy authority requested under this paragraph exceeds the amount established 
7.2 	in paragraph (c), the commissioner must proportionately reduce each district's maximum 
7.3 	levy authority under this subdivision. The commissioner may subsequently adjust each 
7.4 	district's levy authority under this subdivision so long as the total levy authority does not 
7.5 	exceed the maximum levy authority for that year.
7.6 	(c) The maximum levy authority under paragraph (b) must not exceed the following 
7.7 	amounts:
7.8 	(1) $9,242,000 for taxes payable in 2010;
7.9 	(2) $29,863,000 for taxes payable in 2011; and
7.10 	(3) for taxes payable in 2012 and later, the maximum levy authority must not exceed 
7.11 	the sum of the previous year's authority and $14,000,000.

7.12 	Sec. 9.  REPEALER.
 7.13 	Minnesota Statutes 2010, section 126C.457, is repealed.

7.14 	ARTICLE 2
7.15 	EDUCATION EXCELLENCE

7.16 	Section 1. Minnesota Statutes 2010, section 120B.30, subdivision 1, is amended to read:
7.17 		Subdivision 1.Statewide testing.  (a) The commissioner, with advice from experts 
7.18 	with appropriate technical qualifications and experience and stakeholders, consistent with 
7.19 	subdivision 1a, shall include in the comprehensive assessment system, for each grade 
7.20 	level to be tested, state-constructed tests developed from and aligned with the state's 
7.21 	required academic standards under section 120B.021, include multiple choice questions, 
7.22 	and be administered annually to all students in grades 3 through 8. State-developed high 
7.23 	school tests aligned with the state's required academic standards under section 120B.021 
7.24 	and administered to all high school students in a subject other than writing must include 
7.25 	multiple choice questions. The commissioner shall establish one or more months during 
7.26 	which schools shall administer the tests to students each school year. For students enrolled 
7.27 	in grade 8 before the 2005-2006 school year, Minnesota basic skills tests in reading, 
7.28 	mathematics, and writing shall fulfill students' basic skills testing requirements for a 
7.29 	passing state notation. The passing scores of basic skills tests in reading and mathematics 
7.30 	are the equivalent of 75 percent correct for students entering grade 9 based on the first 
7.31 	uniform test administered in February 1998. Students who have not successfully passed 
7.32 	a Minnesota basic skills test by the end of the 2011-2012 school year must pass the 
7.33 	graduation-required assessments for diploma under paragraph (c).
8.1 	(b) The state assessment system must be aligned to the most recent revision of 
8.2 	academic standards as described in section 120B.023 in the following manner:
8.3 	(1) mathematics;
8.4 	(i) grades 3 through 8 beginning in the 2010-2011 school year; and
8.5 	(ii) high school level beginning in the 2013-2014 school year;
8.6 	(2) science; grades 5 and 8 and at the high school level beginning in the 2011-2012 
8.7 	school year; and
8.8 	(3) language arts and reading; grades 3 through 8 and high school level beginning in 
8.9 	the 2012-2013 school year.
8.10 	(c) For students enrolled in grade 8 in the 2005-2006 school year and later, only the 
8.11 	following options shall fulfill students' state graduation test requirements:
8.12 	(1) for reading and mathematics:
8.13 	(i) obtaining an achievement level equivalent to or greater than proficient as 
8.14 	determined through a standard setting process on the Minnesota comprehensive 
8.15 	assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing 
8.16 	score as determined through a standard setting process on the graduation-required 
8.17 	assessment for diploma in grade 10 for reading and grade 11 for mathematics or 
8.18 	subsequent retests;
8.19 	(ii) achieving a passing score as determined through a standard setting process on the 
8.20 	state-identified language proficiency test in reading and the mathematics test for English 
8.21 	language learners or the graduation-required assessment for diploma equivalent of those 
8.22 	assessments for students designated as English language learners;
8.23 	(iii) achieving an individual passing score on the graduation-required assessment 
8.24 	for diploma as determined by appropriate state guidelines for students with an individual 
8.25 	education plan or 504 plan;
8.26 	(iv) obtaining achievement level equivalent to or greater than proficient as 
8.27 	determined through a standard setting process on the state-identified alternate assessment 
8.28 	or assessments in grade 10 for reading and grade 11 for mathematics for students with 
8.29 	an individual education plan; or
8.30 	(v) achieving an individual passing score on the state-identified alternate assessment 
8.31 	or assessments as determined by appropriate state guidelines for students with an 
8.32 	individual education plan; and
8.33 	(2) for writing:
8.34 	(i) achieving a passing score on the graduation-required assessment for diploma;
9.1 	(ii) achieving a passing score as determined through a standard setting process on 
9.2 	the state-identified language proficiency test in writing for students designated as English 
9.3 	language learners;
9.4 	(iii) achieving an individual passing score on the graduation-required assessment 
9.5 	for diploma as determined by appropriate state guidelines for students with an individual 
9.6 	education plan or 504 plan; or
9.7 	(iv) achieving an individual passing score on the state-identified alternate assessment 
9.8 	or assessments as determined by appropriate state guidelines for students with an 
9.9 	individual education plan.
9.10 	(d) Students enrolled in grade 8 in any school year from the 2005-2006 school 
9.11 	year to the 2009-2010 school year who do not pass the mathematics graduation-required 
9.12 	assessment for diploma under paragraph (c) are eligible to receive a high school diploma 
9.13 	if they:
9.14 	(1) complete with a passing score or grade all state and local coursework and credits 
9.15 	required for graduation by the school board granting the students their diploma;
9.16 	(2) participate in district-prescribed academic remediation in mathematics; and
9.17 	(3) fully participate in at least two retests of the mathematics GRAD test or until 
9.18 	they pass the mathematics GRAD test, whichever comes first. A school, district, or 
9.19 	charter school must place on the high school transcript a student's highest current pass 
9.20 	status for each subject that has a required graduation assessment score for each of the 
9.21 	following assessments on the student's high school transcript: the mathematics Minnesota 
9.22 	Comprehensive Assessment, reading Minnesota Comprehensive Assessment, and writing 
9.23 	Graduation-Required Assessment for Diploma, and when applicable, the mathematics 
9.24 	Graduation-Required Assessment for Diploma and reading Graduation-Required 
9.25 	Assessment for Diploma.
9.26 	In addition, the school board granting the students their diplomas may formally 
9.27 	decide to include a notation of high achievement on the high school diplomas of those 
9.28 	graduating seniors who, according to established school board criteria, demonstrate 
9.29 	exemplary academic achievement during high school.
9.30 	(e) The 3rd through 8th grade and high school test results shall be available to 
9.31 	districts for diagnostic purposes affecting student learning and district instruction and 
9.32 	curriculum, and for establishing educational accountability. The commissioner must 
9.33 	disseminate to the public the high school test results upon receiving those results.
9.34 	(f) The 3rd through 8th grade and high school tests must be aligned with state 
9.35 	academic standards. The commissioner shall determine the testing process and the order 
10.1 	of administration. The statewide results shall be aggregated at the site and district level, 
10.2 	consistent with subdivision 1a.
10.3 	(g) In addition to the testing and reporting requirements under this section, the 
10.4 	commissioner shall include the following components in the statewide public reporting 
10.5 	system:
10.6 	(1) uniform statewide testing of all students in grades 3 through 8 and at the high 
10.7 	school level that provides appropriate, technically sound accommodations or alternate 
10.8 	assessments;
10.9 	(2) educational indicators that can be aggregated and compared across school 
10.10 	districts and across time on a statewide basis, including average daily attendance, high 
10.11 	school graduation rates, and high school drop-out rates by age and grade level;
10.12 	(3) state results on the American College Test; and
10.13 	(4) state results from participation in the National Assessment of Educational 
10.14 	Progress so that the state can benchmark its performance against the nation and other 
10.15 	states, and, where possible, against other countries, and contribute to the national effort 
10.16 	to monitor achievement.

10.17 	Sec. 2. Minnesota Statutes 2010, section 120B.30, subdivision 3, is amended to read:
10.18 		Subd. 3.Reporting. The commissioner shall report test data results publicly and 
10.19 	to stakeholders, including the performance achievement levels developed from students' 
10.20 	unweighted test scores in each tested subject and a listing of demographic factors that 
10.21 	strongly correlate with student performance. The test results must not include personally 
10.22 	identifiable information as defined in Code of Federal Regulations, title 34, section 99.3.
10.23 	The commissioner shall also report data that compares performance results among school 
10.24 	sites, school districts, Minnesota and other states, and Minnesota and other nations. The 
10.25 	commissioner shall disseminate to schools and school districts a more comprehensive 
10.26 	report containing testing information that meets local needs for evaluating instruction 
10.27 	and curriculum.

10.28 	Sec. 3. Minnesota Statutes 2010, section 120B.30, subdivision 4, is amended to read:
10.29 		Subd. 4.Access to tests. Consistent with section 13.34, the commissioner must 
10.30 	adopt and publish a policy to provide public and parental access for review of basic skills 
10.31 	tests, Minnesota Comprehensive Assessments, or any other such statewide test and 
10.32 	assessment which would not compromise the objectivity or fairness of the testing or 
10.33 	examination process. Upon receiving a written request, the commissioner must make 
11.1 	available to parents or guardians a copy of their student's actual responses to the test 
11.2 	questions for their review.

11.3 	Sec. 4. Minnesota Statutes 2010, section 120B.31, subdivision 4, is amended to read:
11.4 		Subd. 4.Statistical adjustments; Student performance data. In developing 
11.5 	policies and assessment processes to hold schools and districts accountable for high levels 
11.6 	of academic standards under section 120B.021, the commissioner shall aggregate student 
11.7 	data over time to report student performance and growth levels measured at the school, 
11.8 	school district, and statewide level. When collecting and reporting the performance data, 
11.9 	the commissioner shall: (1) acknowledge the impact of significant demographic factors 
11.10 	such as residential instability, the number of single parent families, parents' level of 
11.11 	education, and parents' income level on school outcomes; and (2) organize and report the 
11.12 	data so that state and local policy makers can understand the educational implications 
11.13 	of changes in districts' demographic profiles over time. Any report the commissioner 
11.14 	disseminates containing summary data on student performance must integrate student 
11.15 	performance and the demographic factors that strongly correlate with that performance.

11.16 	Sec. 5. Minnesota Statutes 2010, section 120B.36, subdivision 1, is amended to read:
11.17 		Subdivision 1.School performance report cards. (a) The commissioner 
11.18 	shall report student academic performance under section 120B.35, subdivision 2; the 
11.19 	percentages of students showing low, medium, and high growth under section 120B.35, 
11.20 	subdivision 3, paragraph (b); school safety and student engagement and connection 
11.21 	under section 120B.35, subdivision 3, paragraph (d); rigorous coursework under section 
11.22 	120B.35, subdivision 3, paragraph (c); two separate student-to-teacher ratios that clearly 
11.23 	indicate the definition of teacher consistent with sections 122A.06 and 122A.15 for 
11.24 	purposes of determining these ratios; staff characteristics excluding salaries; student 
11.25 	enrollment demographics; district mobility; and extracurricular activities. The report also 
11.26 	must indicate a school's adequate yearly progress status, and must not set any designations 
11.27 	applicable to high- and low-performing schools due solely to adequate yearly progress 
11.28 	status.
11.29 	(b) The commissioner shall develop, annually update, and post on the department 
11.30 	Web site school performance report cards.
11.31 	(c) The commissioner must make available performance report cards by the 
11.32 	beginning of each school year.
12.1 	(d) A school or district may appeal its adequate yearly progress status in writing to 
12.2 	the commissioner within 30 days of receiving the notice of its status. The commissioner's 
12.3 	decision to uphold or deny an appeal is final.
12.4 	(e) School performance report card data are nonpublic data under section 13.02, 
12.5 	subdivision 9, until not later than ten days after the appeal procedure described in 
12.6 	paragraph (d) concludes the commissioner publicly releases the data. The department
12.7 	commissioner shall annually post school performance report cards to its the department's
12.8 	public web site no later than September 1, except that in years when the report card 
12.9 	reflects new performance standards, the commissioner shall post the school performance 
12.10 	report cards no later than October 1.

12.11 	Sec. 6. Minnesota Statutes 2010, section 120B.36, subdivision 2, is amended to read:
12.12 		Subd. 2.Adequate yearly progress and other data. All data the department 
12.13 	receives, collects, or creates to determine adequate yearly progress status under Public 
12.14 	Law 107-110, section 1116, set state growth targets, and determine student growth are 
12.15 	nonpublic data under section 13.02, subdivision 9, until not later than ten days after the 
12.16 	appeal procedure described in subdivision 1, paragraph (d), concludes the commissioner 
12.17 	publicly releases the data. Districts must provide parents sufficiently detailed summary 
12.18 	data to permit parents to appeal under Public Law 107-110, section 1116(b)(2). The 
12.19 	department commissioner shall annually post federal adequate yearly progress data and 
12.20 	state student growth data to its the department's public Web site no later than September 
12.21 	1, except that in years when adequate yearly progress reflects new performance standards, 
12.22 	the commissioner shall post federal adequate yearly progress data and state student growth 
12.23 	data no later than October 1.

12.24 	Sec. 7. Minnesota Statutes 2010, section 122A.16, as amended by Laws 2011, chapter 
12.25 	5, section 2, is amended to read:
12.26 	122A.16 HIGHLY QUALIFIED TEACHER DEFINED.
12.27 	(a) A qualified teacher is one holding a valid license, under this chapter, to perform 
12.28 	the particular service for which the teacher is employed in a public school.
12.29 	(b) For the purposes of the federal No Child Left Behind Act, a highly qualified 
12.30 	teacher is one who holds a valid license under this chapter, including under section 
12.31 	122A.245, among other sections, to perform the particular service for which the teacher is 
12.32 	employed in a public school or who meets the requirements of a highly objective uniform 
12.33 	state standard of evaluation (HOUSSE) and is determined by local administrators as 
12.34 	having highly qualified status in accordance with the approved Minnesota highly qualified 
13.1 	plan. Teachers delivering core content instruction must be deemed highly qualified at the 
13.2 	local level and reported to the state via the staff automated reporting system.
13.3 	All Minnesota teachers teaching in a core academic subject area, as defined by the 
13.4 	federal No Child Left Behind Act, in which they are not fully licensed may complete the 
13.5 	following HOUSSE process in the core subject area for which the teacher is requesting 
13.6 	highly qualified status by completing an application, in the form and manner described by 
13.7 	the commissioner, that includes:
13.8 	(1) documentation of student achievement as evidenced by norm-referenced test 
13.9 	results that are objective and psychometrically valid and reliable;
13.10 	(2) evidence of local, state, or national activities, recognition, or awards for 
13.11 	professional contribution to achievement;
13.12 	(3) description of teaching experience in the teachers' core subject area in a public 
13.13 	school under a waiver, variance, limited license or other exception; nonpublic school; and 
13.14 	postsecondary institution;
13.15 	(4) test results from the Praxis II content test;
13.16 	(5) evidence of advanced certification from the National Board for Professional 
13.17 	Teaching Standards;
13.18 	(6) evidence of the successful completion of course work or pedagogy courses; and
13.19 	(7) evidence of the successful completion of high quality professional development 
13.20 	activities.
13.21 	Districts must assign a school administrator to serve as a HOUSSE reviewer to 
13.22 	meet with teachers under this paragraph and, where appropriate, certify the teachers' 
13.23 	applications. Teachers satisfy the definition of highly qualified when the teachers receive 
13.24 	at least 100 of the total number of points used to measure the teachers' content expertise 
13.25 	under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1) 
13.26 	to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified 
13.27 	for more than one subject area.
13.28 	(c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher 
13.29 	must obtain permission from the Board of Teaching in order to teach in a public school.

13.30 	EFFECTIVE DATE. This section is effective for the 2011-2012 school year and 
13.31 	later.

13.32 	Sec. 8. Minnesota Statutes 2010, section 124D.091, subdivision 2, is amended to read:
13.33 		Subd. 2.Eligibility. A district that offers a concurrent enrollment course according 
13.34 	to an agreement under section 124D.09, subdivision 10, is eligible to receive aid for the 
13.35 	costs of providing postsecondary courses at the high school. Beginning in fiscal year 2011, 
14.1 	districts only are eligible for aid if the college or university concurrent enrollment courses 
14.2 	offered by the district are accredited by the National Alliance of Concurrent Enrollment 
14.3 	Partnership, in the process of being accredited, or are shown by clear evidence to be of 
14.4 	comparable standard to accredited courses, or are technical courses within a recognized 
14.5 	career and technical education program of study approved by the commissioner of 
14.6 	education and the chancellor of the Minnesota State Colleges and Universities.

14.7 	Sec. 9. Minnesota Statutes 2010, section 124D.10, subdivision 3, is amended to read:
14.8 		Subd. 3.Authorizer. (a) For purposes of this section, the terms defined in this 
14.9 	subdivision have the meanings given them.
14.10 	"Application" to receive approval as an authorizer means the proposal an eligible 
14.11 	authorizer submits to the commissioner under paragraph (c) before that authorizer is able 
14.12 	to submit any affidavit to charter to a school.
14.13 	"Application" under subdivision 4 means the charter school business plan a 
14.14 	school developer submits to an authorizer for approval to establish a charter school that 
14.15 	documents the school developer's mission statement, school purposes, program design, 
14.16 	financial plan, governance and management structure, and background and experience, 
14.17 	plus any other information the authorizer requests. The application also shall include a 
14.18 	"statement of assurances" of legal compliance prescribed by the commissioner.
14.19 	"Affidavit" means a written statement the authorizer submits to the commissioner 
14.20 	for approval to establish a charter school under subdivision 4 attesting to its review and 
14.21 	approval process before chartering a school.
14.22 	"Affidavit" means the form an authorizer submits to the commissioner that is a 
14.23 	precondition to a charter school organizing an affiliated nonprofit building corporation 
14.24 	under subdivision 17a.
14.25 	(b) The following organizations may authorize one or more charter schools:
14.26 	(1) a school board; intermediate school district school board; education district 
14.27 	organized under sections 123A.15 to 123A.19;
14.28 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code of 
14.29 	1986, excluding a nonpublic sectarian or religious institution without an approved affidavit 
14.30 	by the commissioner prior to July 1, 2009, and any person other than a natural person that 
14.31 	directly or indirectly, through one or more intermediaries, controls, is controlled by, or 
14.32 	is under common control with the nonpublic sectarian or religious institution, and any 
14.33 	other charitable organization under this clause that in the federal IRS Form 1023, Part 
14.34 	IV, describes activities indicating a religious purpose, that:
15.1 	(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 
15.2 	Foundations;
15.3 	(ii) is registered with the attorney general's office; and
15.4 	(iii) reports an end-of-year fund balance of at least $2,000,000; and
15.5 	(iv) is incorporated in the state of Minnesota and has been operating continuously 
15.6 	for at least five years but does not operate a charter school;
15.7 	(3) a Minnesota private college, notwithstanding clause (2), that grants two- or 
15.8 	four-year degrees and is registered with the Minnesota Office of Higher Education under 
15.9 	chapter 136A; community college, state university, or technical college governed by the 
15.10 	Board of Trustees of the Minnesota State Colleges and Universities; or the University of 
15.11 	Minnesota; or
15.12 	(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905, 
15.13 	and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 
15.14 	of 1986, may authorize one or more charter schools if the charter school has operated 
15.15 	for at least three years under a different authorizer and if the nonprofit corporation has 
15.16 	existed for at least 25 years.
15.17 	(5) no more than three single-purpose authorizers that are charitable, nonsectarian 
15.18 	organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and 
15.19 	incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible 
15.20 	organizations interested in being approved as an authorizer under this paragraph must 
15.21 	submit a proposal to the commissioner that includes the provisions of paragraph (c) and 
15.22 	a five-year financial plan. Such authorizers shall consider and approve applications 
15.23 	using the criteria provided in subdivision 4 and shall not limit the applications it solicits, 
15.24 	considers, or approves to any single curriculum, learning program, or method.
15.25 	(c) An eligible authorizer under this subdivision must apply to the commissioner for 
15.26 	approval as an authorizer before submitting any affidavit to the commissioner to charter 
15.27 	a school. The application for approval as a charter school authorizer must demonstrate 
15.28 	the applicant's ability to implement the procedures and satisfy the criteria for chartering a 
15.29 	school under this section. The commissioner must approve or disapprove an application 
15.30 	within 60 business days of the application deadline. If the commissioner disapproves 
15.31 	the application, the commissioner must notify the applicant of the deficiencies and the 
15.32 	applicant then has 20 business days to address the deficiencies to the commissioner's 
15.33 	satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes 
15.34 	an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for 
15.35 	approval, must consider the applicant's:
15.36 	(1) capacity and infrastructure;
16.1 	(2) application criteria and process;
16.2 	(3) contracting process;
16.3 	(4) ongoing oversight and evaluation processes; and
16.4 	(5) renewal criteria and processes.
16.5 	(d) The affidavit application for approval to be submitted to and evaluated by the 
16.6 	commissioner must include at least the following:
16.7 	(1) how chartering schools is a way for the organization to carry out its mission;
16.8 	(2) a description of the capacity of the organization to serve as an authorizer, 
16.9 	including the personnel who will perform the authorizing duties, their qualifications, the 
16.10 	amount of time they will be assigned to this responsibility, and the financial resources 
16.11 	allocated by the organization to this responsibility;
16.12 	(3) a description of the application and review process the authorizer will use to make 
16.13 	decisions regarding the granting of charters, which will include at least the following:
16.14 	(i) how the statutory purposes defined in subdivision 1 are addressed;
16.15 	(ii) the mission, goals, program model, and student performance expectations;
16.16 	(iii) an evaluation plan for the school that includes criteria for evaluating educational, 
16.17 	organizational, and fiscal plans;
16.18 	(iv) the school's governance plan;
16.19 	(v) the financial management plan; and
16.20 	(vi) the administration and operations plan;
16.21 	(4) a description of the type of contract it will arrange with the schools it charters 
16.22 	that meets the provisions of subdivision 6 and defines the rights and responsibilities of the 
16.23 	charter school for governing its educational program, controlling its funds, and making 
16.24 	school management decisions;
16.25 	(5) the process to be used for providing ongoing oversight of the school consistent 
16.26 	with the contract expectations specified in clause (4) that assures that the schools chartered 
16.27 	are complying with both the provisions of applicable law and rules, and with the contract;
16.28 	(6) the process for making decisions regarding the renewal or termination of 
16.29 	the school's charter based on evidence that demonstrates the academic, organizational, 
16.30 	and financial competency of the school, including its success in increasing student 
16.31 	achievement and meeting the goals of the charter school agreement; and
16.32 	(7) an assurance specifying that the organization is committed to serving as an 
16.33 	authorizer for the full five-year term.
16.34 	A disapproved applicant under this paragraph may resubmit an application during a 
16.35 	future application period.
16.36 	(e) The authorizer must participate in department-approved training.
17.1 	(f) An authorizer that chartered a school before August 1, 2009, must apply by June 
17.2 	30, 2011 2012, to the commissioner for approval, under paragraph (c), to continue as an 
17.3 	authorizer under this section. For purposes of this paragraph, an authorizer that fails to 
17.4 	submit a timely application is ineligible to charter a school.
17.5 	(g) The commissioner shall review an authorizer's performance every five years in 
17.6 	a manner and form determined by the commissioner and may review an authorizer's 
17.7 	performance more frequently at the commissioner's own initiative or at the request of a 
17.8 	charter school operator, charter school board member, or other interested party. The 
17.9 	commissioner, after completing the review, shall transmit a report with findings to the 
17.10 	authorizer. If, consistent with this section, the commissioner finds that an authorizer 
17.11 	has not fulfilled the requirements of this section, the commissioner may subject the 
17.12 	authorizer to corrective action, which may include terminating the contract with the 
17.13 	charter school board of directors of a school it chartered. The commissioner must notify 
17.14 	the authorizer in writing of any findings that may subject the authorizer to corrective 
17.15 	action and the authorizer then has 15 business days to request an informal hearing before 
17.16 	the commissioner takes corrective action.
17.17 	(h) The commissioner may at any time take corrective action against an authorizer, 
17.18 	including terminating an authorizer's ability to charter a school for:
17.19 	(1) failing to demonstrate the criteria under paragraph (c) under which the 
17.20 	commissioner approved the authorizer;
17.21 	(2) violating a term of the chartering contract between the authorizer and the charter 
17.22 	school board of directors; or
17.23 	(3) unsatisfactory performance as an approved authorizer.

17.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

17.25 	Sec. 10. Minnesota Statutes 2010, section 124D.10, subdivision 4, is amended to read:
17.26 		Subd. 4.Formation of school. (a) An authorizer, after receiving an application from 
17.27 	a school developer, may charter a licensed teacher under section 122A.18, subdivision 
17.28 	1, or a group of individuals that includes one or more licensed teachers under section 
17.29 	122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the 
17.30 	authorizer's affidavit under paragraph (b). The school must be organized and operated 
17.31 	as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and 
17.32 	the provisions under the applicable chapter shall apply to the school except as provided 
17.33 	in this section.
18.1 	Notwithstanding sections 465.717 and 465.719, a school district, subject to this 
18.2 	section and section 124D.11, may create a corporation for the purpose of establishing a 
18.3 	charter school.
18.4 	(b) Before the operators may establish and operate a school, the authorizer must file 
18.5 	an affidavit with the commissioner stating its intent to charter a school. An authorizer 
18.6 	must file a separate affidavit for each school it intends to charter. The affidavit must 
18.7 	state the terms and conditions under which the authorizer would charter a school and 
18.8 	how the authorizer intends to oversee the fiscal and student performance of the charter 
18.9 	school and to comply with the terms of the written contract between the authorizer 
18.10 	and the charter school board of directors under subdivision 6. The commissioner must 
18.11 	approve or disapprove the authorizer's affidavit within 60 business days of receipt of the 
18.12 	affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify 
18.13 	the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business 
18.14 	days to address the deficiencies. If the authorizer does not address deficiencies to the 
18.15 	commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain 
18.16 	commissioner approval precludes an authorizer from chartering the school that is the 
18.17 	subject of this affidavit.
18.18 	(c) The authorizer may prevent an approved charter school from opening for 
18.19 	operation if, among other grounds, the charter school violates this section or does not meet 
18.20 	the ready-to-open standards that are part of the authorizer's oversight and evaluation 
18.21 	process or are stipulated in the charter school contract.
18.22 	(d) The operators authorized to organize and operate a school, before entering into a 
18.23 	contract or other agreement for professional or other services, goods, or facilities, must 
18.24 	incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 
18.25 	chapter 317A and must establish a board of directors composed of at least five members 
18.26 	who are not related parties until a timely election for members of the ongoing charter 
18.27 	school board of directors is held according to the school's articles and bylaws under 
18.28 	paragraph (f). A charter school board of directors must be composed of at least five 
18.29 	members who are not related parties. Staff members employed at the school, including 
18.30 	teachers providing instruction under a contract with a cooperative, and all parents or legal 
18.31 	guardians of children enrolled in the school are the voters eligible to elect the members 
18.32 	of the school's board of directors. A charter school must notify eligible voters of the 
18.33 	school board election dates at least 30 days before the election. Board of director meetings 
18.34 	must comply with chapter 13D.
18.35 	(e) Upon the request of an individual, the charter school must make available in 
18.36 	a timely fashion the minutes of meetings of the board of directors, and of members 
19.1 	and committees having any board-delegated authority; financial statements showing all 
19.2 	operations and transactions affecting income, surplus, and deficit during the school's last 
19.3 	annual accounting period; and a balance sheet summarizing assets and liabilities on the 
19.4 	closing date of the accounting period. A charter school also must post on its official Web 
19.5 	site information identifying its authorizer and indicate how to contact that authorizer and 
19.6 	include that same information about its authorizer in other school materials that it makes 
19.7 	available to the public.
19.8 	(f) Every charter school board member shall attend department-approved training 
19.9 	on board governance, the board's role and responsibilities, employment policies and 
19.10 	practices, and financial management. A board member who does not begin the required 
19.11 	training within six months of being seated and complete the required training within 12 
19.12 	months of being seated on the board is ineligible to continue to serve as a board member.
19.13 	(g) The ongoing board must be elected before the school completes its third year 
19.14 	of operation. Board elections must be held during a time when school is in session. The 
19.15 	charter school board of directors shall be composed of at least five nonrelated members 
19.16 	and include: (i) at least one licensed teacher employed and serving as a teacher at the 
19.17 	school or a licensed teacher providing instruction under a contact contract between the 
19.18 	charter school and a cooperative; (ii) the parent or legal guardian of a student enrolled 
19.19 	in the charter school who is not employed by the charter school; and (iii) an interested 
19.20 	community member who is not employed by the charter school and does not have a child 
19.21 	enrolled in the school. The board may be a teacher majority board composed of teachers 
19.22 	described in this paragraph. The chief financial officer and the chief administrator are may 
19.23 	only serve as ex-officio nonvoting board members and shall not serve as a voting member 
19.24 	of the board. Charter school employees shall not serve on the board unless item (i) applies. 
19.25 	Contractors providing facilities, goods, or services to a charter school shall not serve on 
19.26 	the board of directors of the charter school. Board bylaws shall outline the process and 
19.27 	procedures for changing the board's governance model, consistent with chapter 317A. A 
19.28 	board may change its governance model only:
19.29 	(1) by a majority vote of the board of directors and the licensed teachers employed 
19.30 	by the school, including licensed teachers providing instruction under a contract between 
19.31 	the school and a cooperative; and
19.32 	(2) with the authorizer's approval.
19.33 	Any change in board governance must conform with the board structure established 
19.34 	under this paragraph.
19.35 	(h) The granting or renewal of a charter by an authorizer must not be conditioned 
19.36 	upon the bargaining unit status of the employees of the school.
20.1 	(i) The granting or renewal of a charter school by an authorizer must not be 
20.2 	contingent on the charter school being required to contract, lease, or purchase services 
20.3 	from the authorizer. Any potential contract, lease, or purchase of service from an 
20.4 	authorizer must be disclosed to the commissioner, accepted through an open bidding 
20.5 	process, and be a separate contract from the charter contract. The school must document 
20.6 	the open bidding process. An authorizer must not enter into a contract to provide 
20.7 	management and financial services for a school that it authorizes, unless the school 
20.8 	documents that it received at least two competitive bids.
20.9 	(j) An authorizer may permit the board of directors of a charter school to expand 
20.10 	the operation of the charter school to additional sites or to add additional grades at the 
20.11 	school beyond those described in the authorizer's original affidavit as approved by 
20.12 	the commissioner only after submitting a supplemental affidavit for approval to the 
20.13 	commissioner in a form and manner prescribed by the commissioner. The supplemental 
20.14 	affidavit must show that:
20.15 	(1) the expansion proposed by the charter school is supported by need and projected 
20.16 	enrollment;
20.17 	(2) the charter school expansion is warranted, at a minimum, by longitudinal data 
20.18 	demonstrating students' improved academic performance and growth on statewide 
20.19 	assessments under chapter 120B;
20.20 	(3) the charter school is fiscally sound and has the financial capacity to implement 
20.21 	the proposed expansion; and
20.22 	(4) the authorizer finds that the charter school has the management capacity to 
20.23 	carry out its expansion.
20.24 	(k) The commissioner shall have 30 business days to review and comment on the 
20.25 	supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in 
20.26 	the supplemental affidavit and the authorizer then has 30 business days to address, to the 
20.27 	commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school 
20.28 	may not expand grades or add sites until the commissioner has approved the supplemental 
20.29 	affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.

20.30 	Sec. 11. Minnesota Statutes 2010, section 124D.10, subdivision 6a, is amended to read:
20.31 		Subd. 6a.Audit report. (a) The charter school must submit an audit report to the 
20.32 	commissioner and its authorizer by December 31 each year.
20.33 	(b) The charter school, with the assistance of the auditor conducting the audit, must 
20.34 	include with the report a copy of all charter school agreements for corporate management 
20.35 	services. If the entity that provides the professional services to the charter school is 
21.1 	exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 
21.2 	must file with the commissioner by February 15 a copy of the annual return required under 
21.3 	section 6033 of the Internal Revenue Code of 1986.
21.4 	(c) If the commissioner receives an audit report indicating that a material weakness 
21.5 	exists in the financial reporting systems of a charter school, the charter school must 
21.6 	submit a written report to the commissioner explaining how the material weakness will 
21.7 	be resolved. An entity, as a condition of providing financial services to a charter school, 
21.8 	must agree to make available information about a charter school's financial audit to the 
21.9 	commissioner upon request.

21.10 	Sec. 12. Minnesota Statutes 2010, section 124D.11, subdivision 9, is amended to read:
21.11 		Subd. 9.Payment of aids to charter schools. (a) Notwithstanding section 127A.45, 
21.12 	subdivision 3, aid payments for the current fiscal year to a charter school shall be of an 
21.13 	equal amount on each of the 24 payment dates.
21.14 	(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing 
21.15 	operation on or prior to June 30 of a school year, for the payment periods occurring after 
21.16 	the school ceases serving students, the commissioner shall withhold the estimated state aid 
21.17 	owed the school. The charter school board of directors and authorizer must submit to the 
21.18 	commissioner a closure plan under chapter 308A or 317A, and financial information about 
21.19 	the school's liabilities and assets. After receiving the closure plan, financial information, 
21.20 	an audit of pupil counts, documentation of lease expenditures, and monitoring of special 
21.21 	education expenditures, the commissioner may release cash withheld and may continue 
21.22 	regular payments up to the current year payment percentages if further amounts are 
21.23 	owed. If, based on audits and monitoring, the school received state aid in excess of the 
21.24 	amount owed, the commissioner shall retain aid withheld sufficient to eliminate the aid 
21.25 	overpayment. For a charter school ceasing operations prior to, or at the end of, a school 
21.26 	year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may 
21.27 	be made after receiving the closure plan, audit of pupil counts, monitoring of special 
21.28 	education expenditures, documentation of lease expenditures, and school submission of 
21.29 	Uniform Financial Accounting and Reporting Standards (UFARS) financial data for the 
21.30 	final year of operation. Final payment may be made upon receipt of audited financial 
21.31 	statements under section 123B.77, subdivision 3.
21.32 	(c) If a charter school fails to comply with the commissioner's directive to return, 
21.33 	for cause, federal or state funds administered by the department, the commissioner may 
21.34 	withhold an amount of state aid sufficient to satisfy the directive.
22.1 	(d) If, within the timeline under section 471.425, a charter school fails to pay the state 
22.2 	of Minnesota, a school district, intermediate school district, or service cooperative after 
22.3 	receiving an undisputed invoice for goods and services, the commissioner may withhold 
22.4 	an amount of state aid sufficient to satisfy the claim and shall distribute the withheld 
22.5 	aid to the interested state agency, school district, intermediate school district, or service 
22.6 	cooperative. An interested state agency, school district, intermediate school district, or 
22.7 	education cooperative shall notify the commissioner when a charter school fails to pay an 
22.8 	undisputed invoice within 75 business days of when it received the original invoice.
22.9 	(e) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent 
22.10 	of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day 
22.11 	of student attendance for that school year.
22.12 	(f) In order to receive state aid payments under this subdivision, a charter school in 
22.13 	its first three years of operation must submit a school calendar in the form and manner 
22.14 	requested by the department and a quarterly report to the Department of Education. The 
22.15 	report must list each student by grade, show the student's start and end dates, if any, 
22.16 	with the charter school, and for any student participating in a learning year program, 
22.17 	the report must list the hours and times of learning year activities. The report must be 
22.18 	submitted not more than two weeks after the end of the calendar quarter to the department. 
22.19 	The department must develop a Web-based reporting form for charter schools to use 
22.20 	when submitting enrollment reports. A charter school in its fourth and subsequent year of 
22.21 	operation must submit a school calendar and enrollment information to the department in 
22.22 	the form and manner requested by the department.
22.23 	(g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter 
22.24 	school and satisfaction of creditors, cash and investment balances remaining shall be 
22.25 	returned to the state.
22.26 	(h) A charter school must have a valid, signed contract under section 124D.10, 
22.27 	subdivision 6, on file at the Department of Education at least 15 days prior to the date of 
22.28 	first payment of state aid for the fiscal year.
22.29 	(i) State aid entitlements shall be computed for a charter school only for the 
22.30 	portion of a school year for which it has a valid, signed contract under section 124D.10, 
22.31 	subdivision 6.

22.32 	ARTICLE 3
22.33 	SPECIAL PROGRAMS

22.34 	Section 1. Minnesota Statutes 2010, section 125A.02, subdivision 1, is amended to 
22.35 	read:
23.1 		Subdivision 1.Child with a disability. "Child with a disability" means a child 
23.2 	identified under federal and state special education law as having a hearing impairment, 
23.3 	blindness, visual disability, deaf or hard-of-hearing, blind or visually impaired, deafblind, 
23.4 	or having a speech or language impairment, a physical disability impairment, other health 
23.5 	impairment disability, mental developmental cognitive disability, emotional/behavioral an 
23.6 	emotional or behavioral disorder, specific learning disability, autism spectrum disorder, 
23.7 	traumatic brain injury, or severe multiple disabilities impairments, or deafblind disability
23.8 	and who needs special education and related services, as determined by the rules of the 
23.9 	commissioner, is a child with a disability. A licensed physician, an advanced practice 
23.10 	nurse, or a licensed psychologist is qualified to make a diagnosis and determination 
23.11 	of attention deficit disorder or attention deficit hyperactivity disorder for purposes of 
23.12 	identifying a child with a disability.

23.13 	EFFECTIVE DATE. This section is effective July 1, 2011.

23.14 	Sec. 2. Minnesota Statutes 2010, section 125A.15, is amended to read:
23.15 	125A.15 PLACEMENT IN ANOTHER DISTRICT; RESPONSIBILITY.
23.16 	The responsibility for special instruction and services for a child with a disability 
23.17 	temporarily placed in another district for care and treatment shall be determined in the 
23.18 	following manner:
23.19 	(a) The district of residence of a child shall be the district in which the child's parent 
23.20 	resides, if living, or the child's guardian, or the district designated by the commissioner 
23.21 	if neither parent nor guardian is living within the state. If there is a dispute between 
23.22 	school districts regarding residency, the district of residence is the district designated by 
23.23 	the commissioner.
23.24 	(b) If a district other than the resident district places a pupil for care and treatment, 
23.25 	the district placing the pupil must notify and give the resident district an opportunity to 
23.26 	participate in the placement decision. When an immediate emergency placement of a 
23.27 	pupil is necessary and time constraints foreclose a resident district from participating in 
23.28 	the emergency placement decision, the district in which the pupil is temporarily placed 
23.29 	must notify the resident district of the emergency placement within 15 days. The resident 
23.30 	district has up to five business days after receiving notice of the emergency placement 
23.31 	to request an opportunity to participate in the placement decision, which the placing 
23.32 	district must then provide.
23.33 	(c) When a child is temporarily placed for care and treatment in a day program 
23.34 	located in another district and the child continues to live within the district of residence 
24.1 	during the care and treatment, the district of residence is responsible for providing 
24.2 	transportation to and from the care and treatment program and an appropriate educational 
24.3 	program for the child. The resident district may establish reasonable restrictions on 
24.4 	transportation, except if a Minnesota court or agency orders the child placed at a day care 
24.5 	and treatment program and the resident district receives a copy of the order, then the 
24.6 	resident district must provide transportation to and from the program unless the court or 
24.7 	agency orders otherwise. Transportation shall only be provided by the resident district 
24.8 	during regular operating hours of the resident district. The resident district may provide the 
24.9 	educational program at a school within the district of residence, at the child's residence, or 
24.10 	in the district in which the day treatment center is located by paying tuition to that district.
24.11 	(d) When a child is temporarily placed in a residential program for care and 
24.12 	treatment, the nonresident district in which the child is placed is responsible for providing 
24.13 	an appropriate educational program for the child and necessary transportation while the 
24.14 	child is attending the educational program; and must bill the district of the child's residence 
24.15 	for the actual cost of providing the program, as outlined in section 125A.11, except as 
24.16 	provided in paragraph (e). However, the board, lodging, and treatment costs incurred in 
24.17 	behalf of a child with a disability placed outside of the school district of residence by the 
24.18 	commissioner of human services or the commissioner of corrections or their agents, for 
24.19 	reasons other than providing for the child's special educational needs must not become the 
24.20 	responsibility of either the district providing the instruction or the district of the child's 
24.21 	residence. For the purposes of this section, the state correctional facilities operated on a 
24.22 	fee-for-service basis are considered to be residential programs for care and treatment.
24.23 	(e) A privately owned and operated residential facility may enter into a contract 
24.24 	to obtain appropriate educational programs for special education children and services 
24.25 	with a joint powers entity. The entity with which the private facility contracts for special 
24.26 	education services shall be the district responsible for providing students placed in that 
24.27 	facility an appropriate educational program in place of the district in which the facility is 
24.28 	located. If a privately owned and operated residential facility does not enter into a contract 
24.29 	under this paragraph, then paragraph (d) applies.
24.30 	(f) The district of residence shall pay tuition and other program costs, not including 
24.31 	transportation costs, to the district providing the instruction and services. The district of 
24.32 	residence may claim general education aid for the child as provided by law. Transportation 
24.33 	costs must be paid by the district responsible for providing the transportation and the state 
24.34 	must pay transportation aid to that district.

25.1 	Sec. 3. Minnesota Statutes 2010, section 125A.51, is amended to read:
25.2 	125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES; 
25.3 	EDUCATION AND TRANSPORTATION.
25.4 	The responsibility for providing instruction and transportation for a pupil without a 
25.5 	disability who has a short-term or temporary physical or emotional illness or disability, as 
25.6 	determined by the standards of the commissioner, and who is temporarily placed for care 
25.7 	and treatment for that illness or disability, must be determined as provided in this section.
25.8 	(a) The school district of residence of the pupil is the district in which the pupil's 
25.9 	parent or guardian resides. If there is a dispute between school districts regarding 
25.10 	residency, the district of residence is the district designated by the commissioner.
25.11 	(b) When parental rights have been terminated by court order, the legal residence 
25.12 	of a child placed in a residential or foster facility for care and treatment is the district in 
25.13 	which the child resides.
25.14 	(c) Before the placement of a pupil for care and treatment, the district of residence 
25.15 	must be notified and provided an opportunity to participate in the placement decision. 
25.16 	When an immediate emergency placement is necessary and time does not permit 
25.17 	resident district participation in the placement decision, the district in which the pupil is 
25.18 	temporarily placed, if different from the district of residence, must notify the district 
25.19 	of residence of the emergency placement within 15 days of the placement. When a 
25.20 	nonresident district makes an emergency placement without first consulting with the 
25.21 	resident district, the resident district has up to five business days after receiving notice 
25.22 	of the emergency placement to request an opportunity to participate in the placement 
25.23 	decision, which the placing district must then provide.
25.24 	(d) When a pupil without a disability is temporarily placed for care and treatment 
25.25 	in a day program and the pupil continues to live within the district of residence during 
25.26 	the care and treatment, the district of residence must provide instruction and necessary 
25.27 	transportation to and from the care and treatment program for the pupil. The resident 
25.28 	district may establish reasonable restrictions on transportation, except if a Minnesota court 
25.29 	or agency orders the child placed at a day care and treatment program and the resident 
25.30 	district receives a copy of the order, then the resident district must provide transportation 
25.31 	to and from the program unless the court or agency orders otherwise. Transportation shall 
25.32 	only be provided by the resident district during regular operating hours of the resident 
25.33 	district. The resident district may provide the instruction at a school within the district of 
25.34 	residence, at the pupil's residence, or in the case of a placement outside of the resident 
25.35 	district, in the district in which the day treatment program is located by paying tuition to 
26.1 	that district. The district of placement may contract with a facility to provide instruction 
26.2 	by teachers licensed by the state Board of Teaching.
26.3 	(e) When a pupil without a disability is temporarily placed in a residential program 
26.4 	for care and treatment, the district in which the pupil is placed must provide instruction 
26.5 	for the pupil and necessary transportation while the pupil is receiving instruction, and in 
26.6 	the case of a placement outside of the district of residence, the nonresident district must 
26.7 	bill the district of residence for the actual cost of providing the instruction for the regular 
26.8 	school year and for summer school, excluding transportation costs.
26.9 	(f) Notwithstanding paragraph (e), if the pupil is homeless and placed in a public or 
26.10 	private homeless shelter, then the district that enrolls the pupil under section 127A.47, 
26.11 	subdivision 2, shall provide the transportation, unless the district that enrolls the pupil 
26.12 	and the district in which the pupil is temporarily placed agree that the district in which 
26.13 	the pupil is temporarily placed shall provide transportation. When a pupil without a 
26.14 	disability is temporarily placed in a residential program outside the district of residence, 
26.15 	the administrator of the court placing the pupil must send timely written notice of the 
26.16 	placement to the district of residence. The district of placement may contract with a 
26.17 	residential facility to provide instruction by teachers licensed by the state Board of 
26.18 	Teaching. For purposes of this section, the state correctional facilities operated on a 
26.19 	fee-for-service basis are considered to be residential programs for care and treatment.
26.20 	(g) The district of residence must include the pupil in its residence count of pupil 
26.21 	units and pay tuition as provided in section 123A.488 to the district providing the 
26.22 	instruction. Transportation costs must be paid by the district providing the transportation 
26.23 	and the state must pay transportation aid to that district. For purposes of computing state 
26.24 	transportation aid, pupils governed by this subdivision must be included in the disabled 
26.25 	transportation category if the pupils cannot be transported on a regular school bus route 
26.26 	without special accommodations.

26.27 	Sec. 4.  REPEALER.
 26.28 	Minnesota Statutes 2010, section 125A.54, is repealed.

26.29 	ARTICLE 4
26.30 	FACILITIES AND TECHNOLOGY

26.31 	Section 1. Minnesota Statutes 2010, section 123B.57, is amended to read:
26.32 	123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.
27.1 		Subdivision 1.Health and safety program revenue application. (a) To receive 
27.2 	health and safety revenue for any fiscal year a district must submit to the commissioner 
27.3 	an a capital expenditure health and safety revenue application for aid and levy by the 
27.4 	date determined by the commissioner. The application may be for hazardous substance 
27.5 	removal, fire and life safety code repairs, labor and industry regulated facility and 
27.6 	equipment violations, and health, safety, and environmental management, including 
27.7 	indoor air quality management. The application must include a health and safety program
27.8 	budget adopted and confirmed by the school district board as being consistent with the 
27.9 	district's health and safety policy under subdivision 2. The program budget must include 
27.10 	the estimated cost, per building, of the program per Uniform Financial Accounting and 
27.11 	Reporting Standards (UFARS) finance code, by fiscal year. Upon approval through the 
27.12 	adoption of a resolution by each of an intermediate district's member school district 
27.13 	boards and the approval of the Department of Education, a school district may include 
27.14 	its proportionate share of the costs of health and safety projects for an intermediate 
27.15 	district in its application.
27.16 	(b) Health and safety projects with an estimated cost of $500,000 or more per 
27.17 	site are not eligible for health and safety revenue. Health and safety projects with an 
27.18 	estimated cost of $500,000 or more per site that meet all other requirements for health and 
27.19 	safety funding, are eligible for alternative facilities bonding and levy revenue according 
27.20 	to section 123B.59. A school board shall not separate portions of a single project into 
27.21 	components to qualify for health and safety revenue, and shall not combine unrelated 
27.22 	projects into a single project to qualify for alternative facilities bonding and levy revenue.
27.23 	(c) The commissioner of education shall not make eligibility for health and safety 
27.24 	revenue contingent on a district's compliance status, level of program development, or 
27.25 	training. The commissioner shall not mandate additional performance criteria such as 
27.26 	training, certifications, or compliance evaluations as a prerequisite for levy approval.
27.27 		Subd. 2.Contents of program Health and safety policy. To qualify for health 
27.28 	and safety revenue, a district school board must adopt a health and safety program policy. 
27.29 	The program policy must include plans, where applicable, for hazardous substance 
27.30 	removal, fire and life safety code repairs, regulated facility and equipment violations, 
27.31 	and provisions for implementing a health and safety program that complies with health, 
27.32 	safety, and environmental management, regulations and best practices including indoor 
27.33 	air quality management.
27.34 	(a) A hazardous substance plan must contain provisions for the removal or 
27.35 	encapsulation of asbestos from school buildings or property, asbestos-related repairs, 
27.36 	cleanup and disposal of polychlorinated biphenyls found in school buildings or property, 
28.1 	and cleanup, removal, disposal, and repairs related to storing heating fuel or transportation 
28.2 	fuels such as alcohol, gasoline, fuel, oil, and special fuel, as defined in section 296A.01. 
28.3 	If a district has already developed a plan for the removal or encapsulation of asbestos as 
28.4 	required by the federal Asbestos Hazard Emergency Response Act of 1986, the district 
28.5 	may use a summary of that plan, which includes a description and schedule of response 
28.6 	actions, for purposes of this section. The plan must also contain provisions to make 
28.7 	modifications to existing facilities and equipment necessary to limit personal exposure 
28.8 	to hazardous substances, as regulated by the federal Occupational Safety and Health 
28.9 	Administration under Code of Federal Regulations, title 29, part 1910, subpart Z; or is 
28.10 	determined by the commissioner to present a significant risk to district staff or student 
28.11 	health and safety as a result of foreseeable use, handling, accidental spill, exposure, or 
28.12 	contamination.
28.13 	(b) A fire and life safety plan must contain a description of the current fire and life 
28.14 	safety code violations, a plan for the removal or repair of the fire and life safety hazard, 
28.15 	and a description of safety preparation and awareness procedures to be followed until the 
28.16 	hazard is fully corrected.
28.17 	(c) A facilities and equipment violation plan must contain provisions to correct 
28.18 	health and safety hazards as provided in Department of Labor and Industry standards 
28.19 	pursuant to section 182.655.
28.20 	(d) A health, safety, and environmental management plan must contain a description 
28.21 	of training, record keeping, hazard assessment, and program management as defined 
28.22 	in section 123B.56.
28.23 	(e) A plan to test for and mitigate radon produced hazards.
28.24 	(f) A plan to monitor and improve indoor air quality.
28.25 		Subd. 3.Health and safety revenue. A district's health and safety revenue 
28.26 	for a fiscal year equals the district's alternative facilities levy under section 123B.59, 
28.27 	subdivision 5, paragraph (b), plus the greater of zero or:
28.28 	(1) the sum of (a) the total approved cost of the district's hazardous substance 
28.29 	plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's 
28.30 	health and safety program for fiscal year 1990 through the fiscal year to which the levy 
28.31 	is attributable, excluding expenditures funded with bonds issued under section 123B.59 
28.32 	or 123B.62, or chapter 475; certificates of indebtedness or capital notes under section 
28.33 	123B.61; levies under section 123B.58, 123B.59, 123B.63, or 126C.40, subdivision 1 or 
28.34 	6; and other federal, state, or local revenues, minus
28.35 	(2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years 
28.36 	1985 through 1989 under sections 124.245 and 275.125, subdivision 11c, plus (b) the 
29.1 	district's health and safety revenue under this subdivision, for years before the fiscal year 
29.2 	to which the levy is attributable.
29.3 		Subd. 4.Health and safety levy. To receive health and safety revenue, a district 
29.4 	may levy an amount equal to the district's health and safety revenue as defined in 
29.5 	subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by 
29.6 	dividing the adjusted net tax capacity of the district for the year preceding the year the 
29.7 	levy is certified by the adjusted marginal cost pupil units in the district for the school year 
29.8 	to which the levy is attributable, to $2,935.
29.9 		Subd. 5.Health and safety aid. A district's health and safety aid is the difference 
29.10 	between its health and safety revenue and its health and safety levy. If a district does not 
29.11 	levy the entire amount permitted, health and safety aid must be reduced in proportion to 
29.12 	the actual amount levied. Health and safety aid may not be reduced as a result of reducing 
29.13 	a district's health and safety levy according to section 123B.79.
29.14 		Subd. 6.Uses of health and safety revenue. (a) Health and safety revenue may be 
29.15 	used only for approved expenditures necessary to correct for the correction of fire and life 
29.16 	safety hazards, or for the; design, purchase, installation, maintenance, and inspection of 
29.17 	fire protection and alarm equipment; purchase or construction of appropriate facilities for 
29.18 	the storage of combustible and flammable materials; inventories and facility modifications 
29.19 	not related to a remodeling project to comply with lab safety requirements under section 
29.20 	121A.31; inspection, testing, repair, removal or encapsulation, and disposal of asbestos 
29.21 	from school buildings or property owned or being acquired by the district, asbestos-related 
29.22 	repairs, asbestos-containing building materials; cleanup and disposal of polychlorinated 
29.23 	biphenyls found in school buildings or property owned or being acquired by the district, 
29.24 	or the; cleanup and disposal of hazardous and infectious wastes; cleanup, removal, 
29.25 	disposal, and repairs related to storing heating fuel or transportation fuels such as alcohol, 
29.26 	gasoline, fuel oil, and special fuel, as defined in section 296A.01, Minnesota; correction of
29.27 	occupational safety and health administration regulated facility and equipment hazards,;
29.28 	indoor air quality inspections, investigations, and testing; mold abatement,; upgrades or 
29.29 	replacement of mechanical ventilation systems to meet American Society of Heating, 
29.30 	Refrigerating and Air Conditioning Engineers standards and State Mechanical Code,; 
29.31 	design, materials, and installation of local exhaust ventilation systems, including required 
29.32 	make-up air for controlling regulated hazardous substances; correction of Department 
29.33 	of Health Food Code and violations; correction of swimming pool hazards excluding 
29.34 	depth correction,; playground safety inspections, the repair of unsafe outdoor playground 
29.35 	equipment, and the installation of impact surfacing materials; bleacher repair or rebuilding 
29.36 	to comply with the order of a building code inspector under section 326B.112; testing and 
30.1 	mitigation of elevated radon hazards; lead testing; copper in water testing; cleanup after 
30.2 	major weather-related disasters or flooding; reduction of excessive organic and inorganic 
30.3 	levels in wells and capping of abandoned wells; installation and testing of boiler backflow 
30.4 	valves to prevent contamination of potable water; vaccinations, titers, and preventative 
30.5 	supplies for bloodborne pathogen compliance; costs to comply with the Janet B. Johnson 
30.6 	Parents' Right to Know Act; automated external defibrillators and other emergency plan 
30.7 	equipment and supplies specific to the district's emergency action plan; and health, safety, 
30.8 	and environmental management costs associated with implementing the district's health 
30.9 	and safety program including costs to establish and operate safety committees, in school 
30.10 	buildings or property owned or being acquired by the district. Testing and calibration 
30.11 	activities are permitted for existing mechanical ventilation systems at intervals no less than 
30.12 	every five years. Health and safety revenue must not be used to finance a lease purchase 
30.13 	agreement, installment purchase agreement, or other deferred payments agreement. Health 
30.14 	and safety revenue must not be used for the construction of new facilities or the purchase 
30.15 	of portable classrooms, for interest or other financing expenses, or for energy efficiency 
30.16 	projects under section 123B.65. The revenue may not be used for a building or property or 
30.17 	part of a building or property used for postsecondary instruction or administration or for a 
30.18 	purpose unrelated to elementary and secondary education.
30.19 		Subd. 6a.Restrictions on health and safety revenue. (b) Notwithstanding 
30.20 	paragraph (a) subdivision 6, health and safety revenue must not be used:
30.21 	(1) to finance a lease purchase agreement, installment purchase agreement, or other 
30.22 	deferred payments agreement;
30.23 	(2) for the construction of new facilities, remodeling of existing facilities, or the 
30.24 	purchase of portable classrooms;
30.25 	(3) for interest or other financing expenses;
30.26 	(4) for energy efficiency projects under section 123B.65, for a building or property 
30.27 	or part of a building or property used for postsecondary instruction or administration or for 
30.28 	a purpose unrelated to elementary and secondary education;
30.29 	(5) for replacement of building materials or facilities including roof, walls, windows, 
30.30 	internal fixtures and flooring, nonhealth and safety costs associated with demolition of 
30.31 	facilities, structural repair or replacement of facilities due to unsafe conditions, violence 
30.32 	prevention and facility security, ergonomics,; or
30.33 	(6) public announcement systems and emergency communication devices, or for 
30.34 	 building and heating, ventilating and air conditioning supplies, maintenance, and cleaning 
30.35 	activities. All assessments, investigations, inventories, and support equipment not leading 
31.1 	to the engineering or construction of a project shall be included in the health, safety, and 
31.2 	environmental management costs in subdivision 8, paragraph (a).
31.3 		Subd. 6b.Health and safety projects. (a) Health and safety revenue applications 
31.4 	defined in subdivision 1 must be accompanied by a description of each project for which 
31.5 	funding is being requested. Project descriptions must provide enough detail for an auditor 
31.6 	to determine if the work qualifies for revenue. For projects other than fire and life 
31.7 	safety projects, playground projects, and health, safety, and environmental management 
31.8 	activities, a project description does not need to include itemized details such as material 
31.9 	types, room locations, square feet, names, or license numbers. The commissioner 
31.10 	may request supporting information and shall approve only projects that comply with 
31.11 	subdivisions 6 and 8, as defined by the Department of Education.
31.12 	(b) Districts may request funding for allowable projects based on self-assessments, 
31.13 	safety committee recommendations, insurance inspections, management assistance 
31.14 	reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph 
31.15 	(b), and subdivision 8, paragraph (b), for projects under $500,000, individual project 
31.16 	size for projects authorized by this subdivision is not limited and may include related 
31.17 	work in multiple facilities. Health and safety management costs from subdivision 8 may 
31.18 	be reported as a single project.
31.19 	(c) All costs directly related to a project shall be reported in the appropriate Uniform 
31.20 	Financial Accounting and Reporting Standards (UFARS) finance code.
31.21 	(d) For fire and life safety egress and all other projects exceeding $20,000, cited 
31.22 	under Minnesota Fire Code, a fire marshal plan review is required.
31.23 	(e) Districts shall update project estimates with actual expenditures for each 
31.24 	fiscal year. If a project's final cost is significantly higher than originally approved, the 
31.25 	commissioner may request additional supporting information.
31.26 		Subd. 6c.Appeals process. In the event a district is denied funding approval for 
31.27 	a project the district believes complies with subdivisions 6 and 8, and is not otherwise 
31.28 	excluded, a district may appeal the decision. All such requests must be in writing. The 
31.29 	commissioner shall respond in writing. A written request must contain the following: 
31.30 	project number; description and amount; reason for denial; unresolved questions for 
31.31 	consideration; reasons for reconsideration; and a specific statement of what action the 
31.32 	district is requesting.
31.33 		Subd. 7.Proration. In the event that the health and safety aid available for any year 
31.34 	is prorated, a district having its aid prorated may levy an additional amount equal to the 
31.35 	amount not paid by the state due to proration.
32.1 		Subd. 8.Health, safety, and environmental management cost. (a) "Health, safety, 
32.2 	and environmental management" is defined in section 123B.56.
32.3 	(b) A district's cost for health, safety, and environmental management is limited to 
32.4 	the lesser of:
32.5 	(1) actual cost to implement their plan; or
32.6 	(2) an amount determined by the commissioner, based on enrollment, building 
32.7 	age, and size.
32.8 	(b) (c) The department may contract with regional service organizations, private 
32.9 	contractors, Minnesota Safety Council, or state agencies to provide management 
32.10 	assistance to school districts for health and safety capital projects. Management assistance 
32.11 	is the development of written programs for the identification, recognition and control of 
32.12 	hazards, and prioritization and scheduling of district health and safety capital projects. 
32.13 	The department commissioner shall not mandate management assistance or exclude 
32.14 	private contractors from the opportunity to provide any health and safety services to 
32.15 	school districts.
32.16 	(c) Notwithstanding paragraph (b), the department may approve revenue, up to 
32.17 	the limit defined in paragraph (a) for districts having an approved health, safety, and 
32.18 	environmental management plan that uses district staff to accomplish coordination and 
32.19 	provided services.

32.20 	EFFECTIVE DATE. This section is effective July 1, 2011.

32.21 	Sec. 2. Minnesota Statutes 2010, section 123B.71, subdivision 5, is amended to read:
32.22 		Subd. 5.Final plans. If a construction contract has not been awarded within two 
32.23 	years of approval, the approval shall not be valid. After approval, final plans and the 
32.24 	approval shall be filed with made available, if requested, to the commissioner of education. 
32.25 	If substantial changes are made to the initial approved plans, documents reflecting 
32.26 	the changes shall be submitted to the commissioner for approval. Upon completing a 
32.27 	project, the school board shall certify to the commissioner that the project was completed 
32.28 	according to the approved plans.

32.29 	Sec. 3. Minnesota Statutes 2010, section 123B.72, subdivision 3, is amended to read:
32.30 		Subd. 3.Certification. Prior to occupying or reoccupying a school facility affected 
32.31 	by this section, a school board or its designee shall submit a document prepared by a 
32.32 	system inspector to the building official or to the commissioner, verifying that the facility's 
32.33 	heating, ventilation, and air conditioning system has been installed and operates according 
32.34 	to design specifications and code, according to section 123B.71, subdivision 9, clause 
33.1 	(11) (12). A systems inspector shall also verify that the facility's design will provide 
33.2 	the ability for monitoring of outdoor airflow and total airflow of ventilation systems in 
33.3 	new school facilities and that any heating, ventilation, or air conditioning system that is 
33.4 	installed or modified for a project subject to this section must provide a filtration system 
33.5 	with a current ASHRAE standard. 

33.6 	Sec. 4. HEALTH AND SAFETY POLICY.
 33.7 	Notwithstanding Minnesota Statutes, section 123B.57, subdivision 2, a school board 
33.8 	that has not yet adopted a health and safety policy by September 30, 2011, may submit an 
33.9 	application for health and safety revenue for taxes payable in 2012 in the form and manner 
33.10 	specified by the commissioner of education.

33.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.12 	ARTICLE 5
33.13 	ACCOUNTING

33.14 	Section 1. Minnesota Statutes 2010, section 127A.42, subdivision 2, is amended to 
33.15 	read:
33.16 		Subd. 2.Violations of law. The commissioner may reduce or withhold the district's 
33.17 	state aid for any school year whenever the board of the district authorizes or permits 
33.18 	violations of law within the district by:
33.19 	(1) employing a teacher who does not hold a valid teaching license or permit in a 
33.20 	public school;
33.21 	(2) noncompliance with a mandatory rule of general application promulgated by the 
33.22 	commissioner in accordance with statute, unless special circumstances make enforcement 
33.23 	inequitable, impose an extraordinary hardship on the district, or the rule is contrary to 
33.24 	the district's best interests;
33.25 	(3) the district's continued performance of a contract made for the rental of rooms 
33.26 	or buildings for school purposes or for the rental of any facility owned or operated by or 
33.27 	under the direction of any private organization, if the contract has been disapproved, the 
33.28 	time for review of the determination of disapproval has expired, and no proceeding for 
33.29 	review is pending;
33.30 	(4) any practice which is a violation of sections 1 and 2 of article 13 of the 
33.31 	Constitution of the state of Minnesota;
33.32 	(5) failure to reasonably provide for a resident pupil's school attendance under 
33.33 	Minnesota Statutes;
34.1 	(6) noncompliance with state laws prohibiting discrimination because of race, 
34.2 	color, creed, religion, national origin, sex, age, marital status, status with regard to 
34.3 	public assistance or disability, as defined in sections 363A.08 to 363A.19 and 363A.28, 
34.4 	subdivision 10; or
34.5 	(7) using funds contrary to the statutory purpose of the funds.
34.6 	The reduction or withholding must be made in the amount and upon the procedure 
34.7 	provided in this section, or, in the case of the violation stated in clause (1), upon the 
34.8 	procedure provided in section 127A.43.

34.9 	EFFECTIVE DATE. This section is effective July 1, 2011.

34.10 	Sec. 2. Minnesota Statutes 2010, section 127A.43, is amended to read:
34.11 	127A.43 DISTRICT EMPLOYMENT OF UNLICENSED TEACHERS; AID 
34.12 	REDUCTION.
34.13 	When a district employs one or more teachers who do not hold a valid teaching 
34.14 	license, state aid shall be withheld reduced in the proportion that the number of such 
34.15 	teachers is to the total number of teachers employed by the district, multiplied by 60 
34.16 	percent of the basic revenue, as defined in section 126C.10, subdivision 2, of the district 
34.17 	for the year in which the employment occurred. 

34.18 	EFFECTIVE DATE. This section is effective July 1, 2011.

34.19 	Sec. 3. Minnesota Statutes 2010, section 127A.45, is amended by adding a subdivision 
34.20 	to read:
34.21 		Subd. 17.Payment to creditors. Except where otherwise specifically authorized, 
34.22 	state education aid payments shall be made only to the school district, charter school, or 
34.23 	other education organization earning state aid revenues as a result of providing education 
34.24 	services.

34.25 	ARTICLE 6
34.26 	STUDENT TRANSPORTATION

34.27 	Section 1. Minnesota Statutes 2010, section 123B.92, subdivision 5, is amended to read:
34.28 		Subd. 5.District reports. (a) Each district must report data to the department as 
34.29 	required by the department to account for transportation expenditures.
34.30 	(b) Salaries and fringe benefits of district employees whose primary duties are 
34.31 	other than transportation, including central office administrators and staff, building 
35.1 	administrators and staff, teachers, social workers, school nurses, and instructional aides, 
35.2 	must not be included in a district's transportation expenditures, except that a district may 
35.3 	include salaries and benefits according to paragraph (c) for (1) an employee designated 
35.4 	as the district transportation director, (2) an employee providing direct support to the 
35.5 	transportation director, or (3) an employee providing direct transportation services such as 
35.6 	a bus driver or bus aide.
35.7 	(c) Salaries and fringe benefits of the district employees listed in paragraph (b), 
35.8 	clauses (1), (2), and (3), who work part time in transportation and part time in other areas 
35.9 	must not be included in a district's transportation expenditures unless the district maintains 
35.10 	documentation of the employee's time spent on pupil transportation matters in the form 
35.11 	and manner prescribed by the department.
35.12 	(d) Pupil transportation expenditures, excluding expenditures for capital outlay, 
35.13 	leased buses, student board and lodging, crossing guards, and aides on buses, must be 
35.14 	allocated among transportation categories based on cost-per-mile, or cost-per-student, 
35.15 	cost-per-hour, or cost-per-route, regardless of whether the transportation services are 
35.16 	provided on district-owned or contractor-owned school buses. Expenditures for school 
35.17 	bus driver salaries and fringe benefits may either be directly charged to the appropriate 
35.18 	transportation category or may be allocated among transportation categories based 
35.19 	on cost-per-mile, or cost-per-student, cost-per-hour, or cost-per-route. Expenditures 
35.20 	by private contractors or individuals who provide transportation exclusively in one 
35.21 	transportation category must be charged directly to the appropriate transportation category. 
35.22 	Transportation services provided by contractor-owned school bus companies incorporated 
35.23 	under different names but owned by the same individual or group of individuals must be 
35.24 	treated as the same company for cost allocation purposes.
35.25 	(e) Notwithstanding paragraph (d), districts contracting for transportation services 
35.26 	are exempt from the standard cost allocation method for authorized and nonauthorized 
35.27 	transportation categories if the district: (1) bids its contracts separately for authorized 
35.28 	and nonauthorized transportation categories and for special transportation separate from 
35.29 	regular and excess transportation; (2) receives bids or quotes from more than one vendor 
35.30 	for these transportation categories; and (3) the district's cost-per-mile does not vary 
35.31 	more than ten percent among categories, excluding salaries and fringe benefits of bus 
35.32 	aides. If the costs reported by the district for contractor-owned operations vary by more 
35.33 	than ten percent among categories, the department shall require the district to reallocate 
35.34 	its transportation costs, excluding salaries and fringe benefits of bus aides, among all 
35.35 	categories.