HF 822

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:42am

A bill for an act
relating to education; reforming financial and academic requirements for charter
schools; providing for civil and criminal penalties; amending Minnesota Statutes
2008, sections 122A.25, subdivision 2; 124D.10, subdivisions 3, 4, 4a, 6, 6a, 11,
15, by adding a subdivision; 609.455.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 122A.25, subdivision 2, is amended to
read:

Subd. 2.

Applications; criteria.

The school district or charter school shall apply
to the Board of Teaching for approval to hire nonlicensed teaching personnel from the
community. new text begin The Board of Teaching shall not approve the hiring of a community expert
for more than a one-year period. An individual may only be approved as a community
expert once. The Board of Teaching may not grant any variance from the requirements
of this subdivision. new text end In approving or disapproving the application for each community
expert, the board shall consider:

(1) the qualifications of the community person whom the district or charter school
proposes to employ;

(2) the reasons for the need for a variance from the teacher licensure requirements;

(3) the district's efforts to obtain licensed teachers, who are acceptable to the school
board, for the particular course or subject area or the charter school's efforts to obtain
licensed teachers for the particular course or subject area;

(4) the amount of teaching time for which the community expert would be hired;

(5) the extent to which the district or charter school is utilizing other nonlicensed
community experts under this section;

(6) the nature of the community expert's proposed teaching responsibility; and

(7) the proposed level of compensation to the community expert.

Sec. 2.

Minnesota Statutes 2008, section 124D.10, subdivision 3, is amended to read:

Subd. 3.

Sponsor.

(a) A school board; intermediate school district school board;
education district organized under sections 123A.15 to 123A.19; charitable organization
under section 501(c)(3) of the Internal Revenue Code of 1986 that is a member of the
Minnesota Council of Nonprofits or the Minnesota Council on Foundations, registered
with the attorney general's office, and reports an end-of-year deleted text begin fund deleted text end new text begin cash new text end balance of at
least $2,000,000; Minnesota private college that grants two- or four-year degrees and is
registered with the Minnesota Office of Higher Education under chapter 136A; community
college, state university, or technical college, governed by the Board of Trustees of the
Minnesota State Colleges and Universities; or the University of Minnesota may sponsor
one or more charter schools.

(b) A nonprofit corporation subject to chapter 317A, described in section 317A.905,
and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code
of 1986, may sponsor one or more charter schools if the charter school has operated for
at least three years under a different sponsor and if the nonprofit corporation has existed
for at least 25 years.

new text begin (c) An agent of the sponsor that falsifies any professional credential, asset, or other
material fact relating to the sponsor or a sponsor's charter school is guilty of a gross
misdemeanor. All money collected under this subdivision must be deposited in the general
fund of the state treasury.
new text end

Sec. 3.

Minnesota Statutes 2008, section 124D.10, subdivision 4, is amended to read:

Subd. 4.

Formation of school.

(a) A sponsor may authorize one or more licensed
teachers under section 122A.18, subdivision 1, to operate a charter school subject to
approval by the commissioner. A board must vote on charter school application for
sponsorship no later than 90 days after receiving the application. The school must be
organized and operated as a cooperative under chapter 308A or nonprofit corporation
under chapter 317A and the provisions under the applicable chapter shall apply to the
school except as provided in this section. Notwithstanding sections 465.717 and 465.719,
a school district may create a corporation for the purpose of creating a charter school.

(b) new text begin The commissioner shall establish process standards for sponsors in school
contracting, monitoring of academic performance, and ongoing oversight and evaluation.
The commissioner shall establish minimum criteria for sponsor capacity and infrastructure,
initial application, and renewal. new text end Before the operators may form and operate a school, the
sponsor must file an affidavit with the commissioner stating its intent to authorize a charter
school. The affidavit must state the terms and conditions under which the sponsor would
authorize a charter school deleted text begin and deleted text end new text begin , new text end how the sponsor intends to oversee the fiscal and student
performance of the charter school and to comply with the terms of the written contract
between the sponsor and the charter school board of directors under subdivision 6 new text begin , the
differences between the sponsor's processes and those established by the commissioner,
and the effect of those differences new text end . The commissioner must approve or disapprove the
sponsor's proposed authorization within 90 days of receipt of the affidavit new text begin using the
established minimum criteria new text end . Failure to obtain commissioner approval precludes a
sponsor from authorizing the charter school that was the subject of the affidavit.

(c) The operators authorized to organize and operate a school, before entering into
a contract or other agreement for professional or other services, goods, or facilities,
must incorporate as a cooperative under chapter 308A or as a nonprofit corporation
under chapter 317A and must establish a board of directors composed of at least five
members until a timely election for members of the charter school board of directors is
held according to the school's articles and bylaws. A charter school board of directors
must be composed of at least five members. Any staff members who are employed at the
school, including teachers providing instruction under a contract with a cooperative, and
all parents of children enrolled in the school may participate in the election for members
of the school's board of directors. Licensed teachers employed at the school, including
teachers providing instruction under a contract with a cooperative, must be a majority
of the members of the board of directors before the school completes its third year of
operation, unless the commissioner waives the requirement for a majority of licensed
teachers on the board. Board of director meetings must comply with chapter 13D.

(d) The granting or renewal of a charter by a sponsoring entity must not be
conditioned upon the bargaining unit status of the employees of the school.

(e) A sponsor may authorize the operators of a charter school to expand the
operation of the charter school to additional sites or to add additional grades at the school
beyond those described in the sponsor's application as approved by the commissioner only
after submitting a supplemental application to the commissioner in a form and manner
prescribed by the commissioner. The supplemental application must provide evidence that:

(1) the expansion of the charter school is supported by need and projected enrollment;

(2) the charter school is fiscally sound;

(3) the sponsor supports the expansion; and

(4) the building of the additional site meets all health and safety requirements to
be eligible for lease aid.

(f) The commissioner annually must provide timely financial management training
to newly elected members of a charter school board of directors and ongoing training to
other members of a charter school board of directors. Training must address ways to:

(1) proactively assess opportunities for a charter school to maximize all available
revenue sources;

(2) establish and maintain complete, auditable records for the charter school;

(3) establish proper filing techniques;

(4) document formal actions of the charter school, including meetings of the charter
school board of directors;

(5) properly manage and retain charter school and student records;

(6) comply with state and federal payroll record-keeping requirements; and

(7) address other similar factors that facilitate establishing and maintaining complete
records on the charter school's operations.

Sec. 4.

Minnesota Statutes 2008, section 124D.10, subdivision 4a, is amended to read:

Subd. 4a.

Conflict of interest.

(a) A member of a charter school board of directors
is prohibited from serving as a member of the board of directors or as an employee or agent
of or a contractor with a for-profit entity with whom the charter school contracts, directly
or indirectly, for professional services, goods, or facilities. A violation of this prohibition
renders a contract deleted text begin voidable at the option of the commissioner deleted text end new text begin void new text end . new text begin The commissioner
may reduce a charter school's aid under section 127A.42 or 127A.43 if the charter school
fails to correct a violation under this subdivision in a timely manner. new text end A member of a
charter school board of directors who violates this prohibition shall be individually liable
to the charter school for any damage caused by the violation.

(b) An individual may serve as a member of the board of directors if no conflict of
interest under paragraph (a) exists.

(c) A member of a charter school board of directors that serves as a member of the
board of directors or as an employee or agent of or a contractor with a nonprofit entity
with whom the charter school contracts, directly or indirectly, for professional services,
goods, or facilities, must disclose all potential conflicts to the commissioner.

(d) The conflict of interest provisions under this subdivision do not apply to
compensation paid to a teacher employed by the charter school who also serves as a
member of the board of directors.

(e) The conflict of interest provisions under this subdivision do not apply to a teacher
who provides services to a charter school through a cooperative formed under chapter
308A when the teacher also serves on the charter school board of directors.

Sec. 5.

Minnesota Statutes 2008, section 124D.10, subdivision 6, is amended to read:

Subd. 6.

Contract.

new text begin (a) new text end The sponsor's authorization for a charter school must be
in the form of a written contract signed by the sponsor and the board of directors of the
charter school. The contract must be completed within 90 days of the commissioner's
approval of the sponsor's proposed authorization. The contract for a charter school must
be in writing and contain at least the following:

(1) a description of a program that carries out one or more of the purposes in
subdivision 1;

(2) specific outcomes pupils are to achieve under subdivision 10;

(3) admission policies and procedures;

(4) management and administration of the school;

(5) requirements and procedures for program and financial audits;

(6) how the school will comply with subdivisions 8, 13, 16, and 23;

(7) assumption of liability by the charter school;

(8) types and amounts of insurance coverage to be obtained by the charter school;

(9) the term of the contract, which may be up to deleted text begin three deleted text end new text begin five new text end years;

(10) if the board of directors or the operators of the charter school provide special
instruction and services for children with a disability under sections 125A.03 to 125A.24,
and 125A.65, a description of the financial parameters within which the charter school will
operate to provide the special instruction and services to children with a disability; and

(11) the process and criteria the sponsor intends to use to monitor and evaluate the
fiscal and student performance of the charter school, consistent with subdivision 15.

new text begin (b) At the end of the contract period, the board of directors of the charter school must
demonstrate to the sponsor that the charter school continues to serve at least one of the
purposes in subdivision 1 before the contract may be renewed.
new text end

Sec. 6.

Minnesota Statutes 2008, section 124D.10, subdivision 6a, is amended to read:

Subd. 6a.

Audit report.

new text begin (a) new text end The charter school must submit an audit report to the
commissioner by December 31 each year. The charter school, with the assistance of the
auditor conducting the audit, must include with the report a copy of all charter school
agreements for corporate management services. If the entity that provides the professional
services to the charter school is exempt from taxation under section 501 of the Internal
Revenue Code of 1986, that entity must file with the commissioner by February 15 a
copy of the annual return required under section 6033 of the Internal Revenue Code
of 1986. If the commissioner receives as part of the audit report a management letter
indicating that a material weakness exists in the financial reporting systems of a charter
school, the charter school must submit a written report to the commissioner explaining
how the material weakness will be resolved. Upon the request of an individual, the charter
school must make available in a timely fashion the minutes of meetings of members, the
board of directors, and committees having any of the authority of the board of directors,
and statements showing the financial result of all operations and transactions affecting
income and surplus during the school's last annual accounting period and a balance sheet
containing a summary of its assets and liabilities as of the closing date of the accounting
period.

new text begin (b) A charter school that does not submit the report required in paragraph (a) is
subject to a civil penalty up to $100,000. All money collected under this subdivision must
be deposited in the general fund of the state treasury.
new text end

Sec. 7.

Minnesota Statutes 2008, section 124D.10, is amended by adding a subdivision
to read:

new text begin Subd. 6b. new text end

new text begin School board approval. new text end

new text begin (a) By February 1 of each year, a charter
school must select a reviewing school board for the next school year. A charter school
must submit the required administrative contracts, budget, and curriculum to either: (1)
the school board for the district that the charter school is physically located in; or (2) the
district in which the plurality of its students resided on the first day of student contact
in the preceding school year. For a charter school that provides only online learning,
the reviewing board is the district's board in which the plurality of the school's students
resided. A charter school in its first year of operation may estimate the district where the
plurality of its students will reside.
new text end

new text begin (b) Before approval of any administrative contract for the purchase of goods or
services in excess of $10,000, a charter school must submit the contract to its reviewing
school board for approval. The reviewing school board must approve or disapprove any
submitted contracts within 30 days of receipt.
new text end

new text begin (c) By March 1 of each year, a charter school must submit its budget to its reviewing
school board. The reviewing school board must approve or disapprove the charter school
budget by April 1 of that year. If the reviewing school board disapproves the budget, the
board must report the reasons for the disapproval and propose changes to the budget.
The board must make a determination on subsequent proposed budgets within 30 days
of receipt.
new text end

new text begin (d) By March 1 of each year, a charter school must submit its curriculum to its
reviewing school board. The reviewing school board must approve or disapprove
the charter school curriculum by April 1 of that year. If the reviewing school board
disapproves the curriculum, the board must report the reasons for the disapproval and
propose changes to the curriculum. The board must make a determination on subsequent
proposed curriculum within 30 days of receipt.
new text end

Sec. 8.

Minnesota Statutes 2008, section 124D.10, subdivision 11, is amended to read:

Subd. 11.

Employment and other operating matters.

A charter school must
employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
who hold valid licenses to perform the particular service for which they are employed in
the school. The charter school's state aid may be reduced under section 127A.42 if the
school employs a teacher who is not appropriately licensed or approved by the board of
teaching. new text begin The school must employ or contract with administrators who hold valid licenses
to perform the particular service for which they are employed by the school. new text end The school
may employ necessary employees who are not required to hold teaching new text begin or administration
new text end licenses to perform duties other than teaching and may contract for other services. The
school may discharge teachers new text begin , administrators, new text end and nonlicensed employees. deleted text begin A person,
without holding a valid administrator's license, may perform administrative, supervisory,
or instructional leadership duties. deleted text end

The board of directors also shall decide matters related to the operation of the school,
including budgeting, curriculum and operating procedures.

Sec. 9.

Minnesota Statutes 2008, section 124D.10, subdivision 15, is amended to read:

Subd. 15.

Review and comment.

(a) The department must review and comment on
the evaluation, by the sponsor, of the performance of a charter school before the charter
school's contract is renewed for another contract term. The sponsor must submit to the
commissioner timely information for the review and comment. new text begin The department must
review the collective performance of the sponsor's charter schools at least once every five
years. The commissioner shall terminate a contract between a sponsor and a charter school
for failing to meet minimum criteria established under subdivision 4, paragraph (b).
new text end

(b) A sponsor shall monitor and evaluate the fiscal and student performance of the
school, and may for this purpose annually assess a charter school: (1) in its first, second,
or third year of operation up to $30 per student up to a maximum of $10,000; and (2) in its
fourth or a subsequent year of operation up to $10 per student up to a maximum of $3,500.

Sec. 10.

Minnesota Statutes 2008, section 609.455, is amended to read:

609.455 PERMITTING FALSE CLAIMS AGAINST GOVERNMENT.

new text begin (a) new text end A public officer or employee who audits, allows, or pays any claim or demand
made upon the state or subdivision thereof or other governmental instrumentality within
the state which the public officer or employee knows new text begin or has reason to know new text end is false or
fraudulent in whole or in part, may be sentenced to imprisonment for not more than five
years or to payment of a fine of not more than $10,000, or both.

new text begin (b) A school district whose school board approves the curriculum and budget
of a charter school over which it is the reviewing school board under section 124D.10,
subdivision 6b, without reviewing the curriculum and budget, may be sentenced to
payment of a fine of not more than $100,000.
new text end

Sec. 11. new text begin CHARTER SCHOOL MORATORIUM.
new text end

new text begin Notwithstanding section 124D.10, subdivision 4, the commissioner of education
may not approve any new charter schools until July 1, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end