1.1                          A bill for an act 
  1.2             relating to education; providing for expanded charter 
  1.3             school law; appropriating money; amending Minnesota 
  1.4             Statutes 1996, sections 120.064, subdivisions 3, 4, 
  1.5             4a, 5, and 8; and 124.248, subdivisions 1, 4, and by 
  1.6             adding a subdivision; proposing coding for new law in 
  1.7             Minnesota Statutes, chapter 124. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 120.064, 
  1.10  subdivision 3, is amended to read: 
  1.11     Subd. 3.  [SPONSOR.] A school board, community college, 
  1.12  state university, technical college, the state board of 
  1.13  education, or the University of Minnesota may sponsor one or 
  1.14  more charter schools.  A private college or university may 
  1.15  sponsor one or more nonsectarian charter schools. 
  1.16     No more than a total of 40 charter schools may be 
  1.17  authorized not more than three of which may be sponsored by 
  1.18  public post-secondary institutions.  The state board of 
  1.19  education shall advise potential sponsors when the maximum 
  1.20  number of charter schools has been authorized. 
  1.21     Sec. 2.  Minnesota Statutes 1996, section 120.064, 
  1.22  subdivision 4, is amended to read: 
  1.23     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
  1.24  authorize one or more licensed teachers under section 125.05, 
  1.25  subdivision 1, or a person, governmental body, or nonprofit 
  1.26  organization, to operate a charter school subject to, for a 
  2.1   sponsor other than the state board, approval by the state board 
  2.2   of education.  If a school board or post-secondary institution 
  2.3   elects not to sponsor a charter school, the applicant may appeal 
  2.4   the school board's that decision to the state board of education 
  2.5   if two members of the school board voted to sponsor the school.  
  2.6   If the state board authorizes the school, the state board shall 
  2.7   sponsor the school according to this section.  The school shall 
  2.8   be organized and operated as a cooperative under chapter 308A or 
  2.9   nonprofit corporation under chapter 317A.  
  2.10     (b) Before the operators may form and operate as a school, 
  2.11  the a sponsor, other than the state board, must file an 
  2.12  affidavit with the state board of education stating its intent 
  2.13  to authorize a charter school.  The affidavit must state the 
  2.14  terms and conditions under which the sponsor would authorize a 
  2.15  charter school.  The state board must approve or disapprove the 
  2.16  sponsor's proposed authorization within 60 days of receipt of 
  2.17  the affidavit.  Failure to obtain state board approval precludes 
  2.18  a sponsor from authorizing the charter school that was the 
  2.19  subject of the affidavit.  
  2.20     (c) The operators authorized to organize and operate a 
  2.21  school shall hold an election for members of the school's board 
  2.22  of directors in a timely manner after the school is operating.  
  2.23  Any staff members who are employed at the school, including 
  2.24  teachers providing instruction under a contract with a 
  2.25  cooperative, and all parents of children enrolled in the school 
  2.26  may participate in the election.  Licensed teachers employed At 
  2.27  least one teacher at the school, including teachers a teacher 
  2.28  providing instruction under a contract with a cooperative, must 
  2.29  be a majority of the members of representative on the board of 
  2.30  directors.  A provisional board may operate before the election 
  2.31  of the school's board of directors.  Board of director meetings 
  2.32  must comply with section 471.705. 
  2.33     (d) The granting or renewal of a charter by a sponsoring 
  2.34  entity shall not be conditioned upon the bargaining unit status 
  2.35  of the employees of the school. 
  2.36     Sec. 3.  Minnesota Statutes 1996, section 120.064, 
  3.1   subdivision 4a, is amended to read: 
  3.2      Subd. 4a.  [CONVERSION OF EXISTING SCHOOLS.] (a) A school 
  3.3   board may, on its own motion, convert one or more, or all, of 
  3.4   its existing schools to charter schools. 
  3.5      (b) A school board may convert one or more of its existing 
  3.6   schools to charter schools under this section if 90 percent a 
  3.7   majority of the full-time teachers at the school sign a petition 
  3.8   seeking conversion.  The conversion must occur at the beginning 
  3.9   of an academic year. 
  3.10     Sec. 4.  Minnesota Statutes 1996, section 120.064, 
  3.11  subdivision 5, is amended to read: 
  3.12     Subd. 5.  [CONTRACT.] The sponsor's authorization for a 
  3.13  charter school shall be in the form of a written contract signed 
  3.14  by the sponsor and the board of directors of the charter 
  3.15  school.  The contract for a charter school shall be in writing 
  3.16  and contain at least the following: 
  3.17     (1) a description of a program that carries out one or more 
  3.18  of the purposes in subdivision 1; 
  3.19     (2) specific outcomes pupils are to achieve under 
  3.20  subdivision 10; 
  3.21     (3) admission policies and procedures; 
  3.22     (4) management and administration of the school; 
  3.23     (5) requirements and procedures for program and financial 
  3.24  audits; 
  3.25     (6) how the school will comply with subdivisions 8, 13, 15, 
  3.26  and 21; 
  3.27     (7) assumption of liability by the charter school; 
  3.28     (8) types and amounts of insurance coverage to be obtained 
  3.29  by the charter school; and 
  3.30     (9) the term of the contract, which may be up to shall be 
  3.31  three years. 
  3.32     Sec. 5.  Minnesota Statutes 1996, section 120.064, 
  3.33  subdivision 8, is amended to read: 
  3.34     Subd. 8.  [REQUIREMENTS.] (a) A charter school shall meet 
  3.35  all applicable state and local health and safety requirements. 
  3.36     (b) The A school must sponsored by a school district may be 
  4.1   located in the sponsoring any district, unless another the 
  4.2   school board agrees to locate a charter school sponsored by 
  4.3   another district in its boundaries of the district of the 
  4.4   proposed location disapproves and has not adopted a resolution 
  4.5   under section 120.062, subdivision 2.  If such a school board 
  4.6   denies a request to locate within its boundaries a charter 
  4.7   school sponsored by another district, the sponsoring district 
  4.8   may appeal to the state board of education.  If the state board 
  4.9   authorizes the school, the state board shall sponsor the 
  4.10  school.  A school sponsored by a post-secondary institution may 
  4.11  be located at any place the institution considers convenient.  
  4.12  Prior to agreeing to sponsor a charter school, a post-secondary 
  4.13  institution which sponsors a charter school shall notify the 
  4.14  school district of its intent to locate a charter school in that 
  4.15  district. 
  4.16     (c) A charter school must be nonsectarian in its programs, 
  4.17  admission policies, employment practices, and all other 
  4.18  operations.  A sponsor may not authorize a charter school or 
  4.19  program that is affiliated with a nonpublic sectarian school or 
  4.20  a religious institution. 
  4.21     (d) Charter schools shall not be used as a method of 
  4.22  providing education or generating revenue for students who are 
  4.23  being home schooled. 
  4.24     (e) The primary focus of a charter school must be to 
  4.25  provide a comprehensive program of instruction for at least one 
  4.26  grade or age group from five through 18 years of age.  
  4.27  Instruction may be provided to people younger than five years 
  4.28  and older than 18 years of age. 
  4.29     (f) A charter school may not charge tuition. 
  4.30     (g) A charter school is subject to and shall comply with 
  4.31  chapter 363 and section 126.21. 
  4.32     (h) A charter school is subject to and shall comply with 
  4.33  the pupil fair dismissal act, sections 127.26 to 127.39, and the 
  4.34  Minnesota public school fee law, sections 120.71 to 120.76. 
  4.35     (i) A charter school is subject to the same financial 
  4.36  audits, audit procedures, and audit requirements as a school 
  5.1   district.  The audit must be consistent with the requirements of 
  5.2   sections 121.904 to 121.917, except to the extent deviations are 
  5.3   necessary because of the program at the school.  The department 
  5.4   of children, families, and learning, state auditor, or 
  5.5   legislative auditor may conduct financial, program, or 
  5.6   compliance audits. 
  5.7      (j) A charter school is a school district for the purposes 
  5.8   of tort liability under chapter 466. 
  5.9      Sec. 6.  Minnesota Statutes 1996, section 124.248, 
  5.10  subdivision 1, is amended to read: 
  5.11     Subdivision 1.  [GENERAL EDUCATION AND REFERENDUM 
  5.12  REVENUE.] (a) General education revenue and referendum revenue 
  5.13  shall be paid to a charter school as though it were a school 
  5.14  district. 
  5.15     (b) The general education revenue for each pupil unit is 
  5.16  the state average general education revenue per pupil unit minus 
  5.17  $170, calculated without compensatory basic skills revenue, 
  5.18  transportation sparsity revenue, and the transportation portion 
  5.19  of the transition revenue adjustment, plus compensatory basic 
  5.20  skills revenue as though the school were a school district. 
  5.21     (c) The referendum revenue for each pupil unit is the 
  5.22  referendum equalization revenue per pupil unit in the resident 
  5.23  district according to section 124A.03, subdivision 1f, if 
  5.24  approved or renewed after July 1, 1997. 
  5.25     Sec. 7.  Minnesota Statutes 1996, section 124.248, is 
  5.26  amended by adding a subdivision to read: 
  5.27     Subd. 2a.  [BUILDING LEASE AID.] When a charter school 
  5.28  finds it economically advantageous to rent or lease a building 
  5.29  or land for any instructional purposes and it determines that 
  5.30  the total operating capital revenue under section 124A.22, 
  5.31  subdivision 10, is insufficient for this purpose, it may apply 
  5.32  to the commissioner for building lease aid for this purpose.  
  5.33  Criteria for aid approval and revenue uses shall be as defined 
  5.34  for the building lease levy in section 124.91, subdivision 1.  
  5.35  The amount of building lease aid per pupil unit for a charter 
  5.36  school for any year shall not exceed the lesser of (a) 80 
  6.1   percent of the approved cost or (b) the product of the actual 
  6.2   pupil units for the current school year times the sum of the 
  6.3   state average debt redemption fund revenue plus capital revenue, 
  6.4   according to section 124.91, per actual pupil unit for the 
  6.5   current fiscal year. 
  6.6      Sec. 8.  Minnesota Statutes 1996, section 124.248, 
  6.7   subdivision 4, is amended to read: 
  6.8      Subd. 4.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
  6.9   school is eligible to receive other aids, grants, and revenue 
  6.10  according to chapters 120 to 129, as though it were a school 
  6.11  district except that, notwithstanding section 124.195, 
  6.12  subdivision 3, the payments shall be of an equal amount on each 
  6.13  of the 23 payment dates unless a charter school is in its first 
  6.14  year of operation in which case it shall receive on its first 
  6.15  payment date 15 percent of its cumulative amount guaranteed for 
  6.16  the year and 22 payments of an equal amount thereafter the sum 
  6.17  of which shall be 85 percent of the cumulative amount 
  6.18  guaranteed.  However, it may not receive aid, a grant, or 
  6.19  revenue if a levy is required to obtain the money, except as 
  6.20  otherwise provided in this section.  Federal aid received by the 
  6.21  state must be paid to the school, if it qualifies for the aid as 
  6.22  though it were a school district. 
  6.23     (b) Any revenue received from any source, other than 
  6.24  revenue that is specifically allowed for operational, 
  6.25  maintenance, capital facilities revenue under paragraph (c), and 
  6.26  capital expenditure equipment costs under this section, may be 
  6.27  used only for the planning and operational start-up costs of a 
  6.28  charter school.  Any unexpended revenue from any source under 
  6.29  this paragraph must be returned to that revenue source or 
  6.30  conveyed to the sponsoring school district, at the discretion of 
  6.31  the revenue source. 
  6.32     (c) A charter school may receive money from any source for 
  6.33  capital facilities needs.  Any unexpended capital facilities 
  6.34  revenue must be reserved and shall be expended only for future 
  6.35  capital facilities purposes. 
  6.36     Sec. 9.  [124.253] [CHARTER SCHOOL START-UP LOAN FUND.] 
  7.1      (a) A charter school start-up loan fund is created in the 
  7.2   general fund in the state treasury.  $2,600,000 shall be 
  7.3   deposited in the fund on July 1, 1997, for initial 
  7.4   capitalization.  On July 1, 1998, and each year thereafter, an 
  7.5   additional $1,500,000 shall be deposited in the fund.  Any 
  7.6   interest earned on the principal of the fund shall be retained 
  7.7   by the fund and available for distribution.  At the end of every 
  7.8   fiscal year, any balance in the fund in excess of $5,000,000 
  7.9   shall not cancel. 
  7.10     (b) A charter school operating under section 120.064 or a 
  7.11  program which has been granted a charter under section 120.064 
  7.12  may apply to the commissioner of children, families, and 
  7.13  learning for a loan from the charter school facilities fund. 
  7.14     (c) Loans shall be used for curriculum planning, budget 
  7.15  planning, development of information for students and parents, 
  7.16  purchasing equipment and other uses approved by the commissioner 
  7.17  of children, families, and learning.  The funds shall not be 
  7.18  used for acquisition, renting, or leasing of facilities. 
  7.19     (d) All loan agreements between a charter school and the 
  7.20  department of children, families, and learning must include a 
  7.21  plan for repayment of the funds over a maximum period of five 
  7.22  years.  Additional repayment terms shall be determined by the 
  7.23  department of children, families, and learning in consultation 
  7.24  with the department of finance.  
  7.25     (e) In the event that the repayment terms are violated, the 
  7.26  department of children, families, and learning may modify the 
  7.27  terms of repayment and require a plan for repayment under the 
  7.28  procedures specified in section 124.755, subdivision 8, or 
  7.29  recover the funds through the procedures specified in section 
  7.30  124.755, subdivision 5.  In the event that the charter school 
  7.31  ceases to operate, any assets of the charter school may be 
  7.32  claimed and auctioned by the commissioner as payment against the 
  7.33  loan. 
  7.34     Sec. 10.  [124.254] [CHARTER SCHOOL START-UP GRANTS.] 
  7.35     (a) A program that has been granted a charter under section 
  7.36  120.064, but has not yet begun operation, may apply to the 
  8.1   commissioner for a planning grant. 
  8.2      (b) These grants may be used for curriculum planning, 
  8.3   budget planning, development of information for students and 
  8.4   parents, staff recruitment, and other uses approved by the 
  8.5   department.  The funds may not be used for expenses related to 
  8.6   the acquisition, improvement, renting, or leasing of capital 
  8.7   facilities. 
  8.8      (c) Grant criteria and amounts shall be determined by the 
  8.9   commissioner. 
  8.10     Sec. 11.  [APPROPRIATIONS.] 
  8.11     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
  8.12  LEARNING.] The sums indicated in this section are appropriated 
  8.13  from the general fund to the department of children, families, 
  8.14  and learning for the fiscal years designated. 
  8.15     Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
  8.16  lease aid according to section 124.248, subdivision 2a: 
  8.17       $1,078,000     .....     1998 
  8.18       $1,577,000     .....     1999 
  8.19     The 1999 appropriation includes $120,000 for 1998 and 
  8.20  $1,457,000 for 1999. 
  8.21     Subd. 3.  [CHARTER SCHOOL START-UP GRANTS.] For charter 
  8.22  school start-up grants under Minnesota Statutes, section 124.254:
  8.23       $3,200,000     .....     1998 
  8.24     Any balance in the first year does not cancel but is 
  8.25  available in the second year.  This appropriation may also be 
  8.26  used for grants to convert existing schools into charter schools.
  8.27     Sec. 12.  [EFFECTIVE DATE.] 
  8.28     Section 6 is effective for revenue for fiscal year 1999.