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Minnesota Legislature

Office of the Revisor of Statutes

HF 1681

as introduced - 90th Legislature (2017 - 2018) Posted on 02/27/2017 04:11pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to education; requiring a trustee to oversee the closure of a charter school;
amending Minnesota Statutes 2016, section 124E.10, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2016, section 124E.10, is amended by adding a subdivision
to read:


new text begin Subd. 7. new text end

new text begin School closures. new text end

new text begin (a) Upon the final decision to close a charter school, whether
by voluntary action of the charter school's board of directors, nonrenewal or termination of
the charter contract by the authorizer, or termination of the charter contract by the
commissioner, the board of directors shall appoint a school closure trustee, approved by the
authorizer, within 15 business days of the final decision. The board of directors or the
authorizer may require the trustee to post a bond, in a sum and nature reflective of the
school's current condition and situation.
new text end

new text begin (b) The trustee must be a resident of Minnesota, possess a bachelor's or postgraduate
degree in accounting, law, nonprofit management, educational administration, or other
appropriate field, and have at least five years of work experience in the degree area. The
trustee must submit to a state and federal criminal background check, must not have been
convicted of a felony or other crime involving moral turpitude, and must not have been
found liable in a civil court for fraud, breach of fiduciary duty, civil theft, or similar
misconduct. The trustee must not be under investigation or pending criminal prosecution
for a felony or other crime. The trustee must not have a history of wage garnishment by the
Internal Revenue Service or the state and must not have filed for bankruptcy.
new text end

new text begin (c) The trustee must not have been an employee or contractor of the charter school during
the previous five years and must not have an immediate family member who is an employee
or contractor of the charter school or who serves on the charter school's board of directors.
The trustee must be independent and have no material interest adverse to the school.
new text end

new text begin (d) The trustee shall have the responsibility to activate and execute the closure plan for
the charter school outlined in the school's charter contract, including the transfer of student
records required by subdivision 6, and the reporting of financial and student data to the
department necessary for the release of final aid payments under section 124E.25, subdivision
1a. Upon the appointment of the trustee, the trustee must approve all school expenditures
before payment and shall be a required signatory on all school accounts and payments made
by the school. The trustee has the authority to void and seek reimbursement of any and all
extraordinary payments of the school to individuals, contractors, or corporations made
within 90 business days of the final decision to close. If during the closure process it is
determined by the charter school's board of directors or the authorizer that the trustee is not
performing the closure duties in an efficient and effective manner, the authorizer may appoint
a new trustee.
new text end

new text begin (e) The trustee shall be entitled to immunity provided by common law for acts or
omissions within the scope of the trustee's appointment. The trustee is not exempt from an
illegal or criminal act, nor any act that is a result of malfeasance or misfeasance.
new text end

new text begin (f) A charter school closure fund shall be established and managed by the Department
of Education. The Department of Education may charge the fund a management fee
commensurate with the annual activity in the fund. The Department of Education must issue
an annual report on the income and expenditures of the fund by September 30 to the
commissioner of education and all charter schools. The fund shall be financed by a per
capita pupil fee paid by all charter schools. Until the fund reaches a cap of $200,000, the
per capita pupil fee shall be $1 per pupil annually. Upon the fund reaching the $200,000
cap, the annual per capita pupil fee shall equal the per pupil amount needed to maintain the
fund at $200,000. The Department of Education shall have the power to deduct the annual
fee from a charter school aid payment in the month of February based on the number of
pupils enrolled in charter schools on October 1 of the previous year, and transfer the funding
to the charter school closure fund. When an authorizer ceases to authorize schools, the
authorizer shall transfer any remaining balance from authorizer fees to the fund.
new text end

new text begin (g) Funds from the charter school closure fund may only be authorized and used for the
following expenses: the cost of the external audits necessary for the school closure process;
the cost of liability insurance for the school corporation during the closure process; legal
costs for the dissolution of the school corporation; and the trustee's fee, negotiated upon
appointment. The charter school closure fund shall not be used for any other expenses related
to the closed school and may only be requested after all other school funds and assets of
the closed school have been expended. No more than $70,000 may be expended from the
fund for an individual school closure process. The trustee may request funding to cover the
authorized expenditures, except for the trustee's fee, which must be requested by the charter
school's board of directors or the authorizer if the board of directors is nonoperative.
new text end

new text begin (h) If a charter school board of directors files for bankruptcy upon the final decision to
close the school, the bankruptcy trustee appointed by the bankruptcy court shall have the
authority to activate and execute the closure plan in the charter school contract.
new text end