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Office of the Revisor of Statutes

HF 2706

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2014 09:38am

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

Bill Text Versions

Engrossments
Introduction Posted on 03/03/2014

Current Version - as introduced

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A bill for an act
relating to education; modifying certain charter school provisions; amending
Minnesota Statutes 2013 Supplement, section 124D.10, subdivisions 4, 6a, 8,
9, 17a, 17b.

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

Section 1.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 4,
is amended to read:


Subd. 4.

Formation of school.

(a) An authorizer, after receiving an application from
a school developer, may charter a licensed teacher under section 122A.18, subdivision
1
, or a group of individuals that includes one or more licensed teachers under section
122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the
authorizer's affidavit under paragraph (b). The school must be organized and operated as a
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, subject to this
section and section 124D.11, may create a corporation for the purpose of establishing a
charter school.

(b) Before the operators may establish and operate a school, the authorizer must file
an affidavit with the commissioner stating its intent to charter a school. An authorizer
must file a separate affidavit for each school it intends to charter. The affidavit must state
the terms and conditions under which the authorizer would charter a school and how the
authorizer intends to oversee the fiscal and student performance of the charter school and to
comply with the terms of the written contract between the authorizer and the charter school
board of directors under subdivision 6. The commissioner must approve or disapprove the
authorizer's affidavit within 60 business days of receipt of the affidavit. If the commissioner
disapproves the affidavit, the commissioner shall notify the authorizer of the deficiencies in
the affidavit and the authorizer then has 20 business days to address the deficiencies. new text beginUpon
receipt of the authorizer's response to the deficiencies in the affidavit, the commissioner
must notify the authorizer of the final approval or disapproval within 15 business days.
new text endIf the authorizer does not address deficiencies to the commissioner's satisfaction, the
commissioner's disapproval is final. Failure to obtain commissioner approval precludes an
authorizer from chartering the school that is the subject of this affidavit.

(c) The authorizer may prevent an approved charter school from opening for
operation if, among other grounds, the charter school violates this section or does not meet
the ready-to-open standards that are part of the authorizer's oversight and evaluation
process or are stipulated in the charter school contract.

(d) 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 nonprofit corporation under chapter 317A and must establish a
board of directors composed of at least five members who are not related parties until a
timely election for members of the ongoing charter school board of directors is held
according to the school's articles and bylaws under paragraph (f). A charter school board
of directors must be composed of at least five members who are not related parties.
Staff members employed at the school, including teachers providing instruction under a
contract with a cooperative, members of the board of directors, and all parents or legal
guardians of children enrolled in the school are the voters eligible to elect the members
of the school's board of directors. A charter school must notify eligible voters of the
school board election dates at least 30 days before the election. Board of director meetings
must comply with chapter 13D.

(e) A charter school shall publish and maintain on the school's official Web site: (1)
the minutes of meetings of the board of directors, and of members and committees having
any board-delegated authority, for at least one calendar year from the date of publication;
(2) directory information for members of the board of directors and committees having
board-delegated authority; and (3) identifying and contact information for the school's
authorizer. Identifying and contact information for the school's authorizer must be
included in other school materials made available to the public. Upon request of an
individual, the charter school must also make available in a timely fashion financial
statements showing all operations and transactions affecting income, surplus, and deficit
during the school's last annual accounting period; and a balance sheet summarizing assets
and liabilities on the closing date of the accounting period. A charter school also must
include that same information about its authorizer in other school materials that it makes
available to the public.

(f) Every charter school board member shall attend annual training throughout the
member's term on the board. All new board members shall attend initial training on
the board's role and responsibilities, employment policies and practices, and financial
management. A new board member who does not begin the required initial training within
six months after being seated and complete that training within 12 months of being seated
on the board is automatically ineligible to continue to serve as a board member. The
school shall include in its annual report the training attended by each board member
during the previous year.

(g) The ongoing board must be elected before the school completes its third year of
operation. Board elections must be held during the school year but may not be conducted
on days when the school is closed for holidays, breaks, or vacations. The charter school
board of directors shall be composed of at least five nonrelated members and include: (i)
at least one licensed teacher employed as a teacher at the school or providing instruction
under contract between the charter school and a cooperative; (ii) at least one parent or
legal guardian of a student enrolled in the charter school who is not an employee of
the charter school; and (iii) at least one interested community member who resides in
Minnesota and is not employed by the charter school and does not have a child enrolled
in the school. The board may include a majority of teachers described in this paragraph
or parents or community members, or it may have no clear majority. The chief financial
officer and the chief administrator may only serve as ex-officio nonvoting board members.
No charter school employees shall serve on the board other than teachers under item (i).
Contractors providing facilities, goods, or services to a charter school shall not serve on
the board of directors of the charter school. Board bylaws shall outline the process and
procedures for changing the board's governance structure, consistent with chapter 317A.
A board may change its governance structure only:

(1) by a majority vote of the board of directors and a majority vote of the licensed
teachers employed by the school as teachers, including licensed teachers providing
instruction under a contract between the school and a cooperative; and

(2) with the authorizer's approval.

Any change in board governance structure must conform with the composition of
the board established under this paragraph.

(h) The granting or renewal of a charter by an authorizer must not be conditioned
upon the bargaining unit status of the employees of the school.

(i) The granting or renewal of a charter school by an authorizer must not be
contingent on the charter school being required to contract, lease, or purchase services
from the authorizer. Any potential contract, lease, or purchase of service from an
authorizer must be disclosed to the commissioner, accepted through an open bidding
process, and be a separate contract from the charter contract. The school must document
the open bidding process. An authorizer must not enter into a contract to provide
management and financial services for a school that it authorizes, unless the school
documents that it received at least two competitive bids.

deleted text begin (j) An authorizer may permit the board of directors of a charter school to expand the
operation of the charter school to additional sites or grades at the school beyond those
described in the authorizer's original affidavit as approved by the commissioner only
after submitting a supplemental affidavit for approval to the commissioner in a form and
manner prescribed by the commissioner. The supplemental affidavit must document that:
deleted text end

deleted text begin (1) the proposed expansion plan demonstrates need and projected enrollment;
deleted text end

deleted text begin (2) the expansion is warranted, at a minimum, by longitudinal data demonstrating
students' improved academic performance and growth on statewide assessments under
chapter 120B;
deleted text end

deleted text begin (3) the charter school is financially sound and the financing it needs to implement
the proposed expansion exists; and
deleted text end

deleted text begin (4) the charter school has the governance structure and management capacity to
carry out its expansion.
deleted text end

new text begin (j) A charter school may apply to the authorizer to amend the school charter to
expand the operation of the school to additional grades beyond those defined in the original
charter as approved by the commissioner. Upon approval of the school's application, the
authorizer shall submit a supplementary affidavit in the form and manner prescribed
by the commissioner. The supplementary affidavit must document that the school has
demonstrated to the satisfaction of the authorizer the following:
new text end

new text begin (1) the need for the expansion with supporting long-range enrollment projections;
new text end

new text begin (2) a record of demonstrated longitudinal student academic performance and growth
on statewide assessments under chapter 120B or on other academic assessments that
measure longitudinal student performance and growth approved by the charter school's
board of directors and agreed upon with the authorizer;
new text end

new text begin (3) a sound history of school finances and a finance plan to implement the expansion
that will not imperil the school's sustainability; and
new text end

new text begin (4) a plan for the administrative and management capacity to implement the
expansion.
new text end

(k) The commissioner shall have 30 business days to review and comment on the
supplemental affidavit. The commissioner shall notify the authorizer new text beginin writing new text endof any
deficiencies in the supplemental affidavit and the authorizer then has 20 business days
to address, to the commissioner's satisfaction, any deficiencies in the supplemental
affidavit. new text beginUpon receipt of the authorizer's response to the deficiencies in the affidavit, the
commissioner must notify the authorizer of the final approval or disapproval with 15
business days.
new text endThe school may not expand grades or add sites until the commissioner has
approved the supplemental affidavit. The commissioner's approval or disapproval of
a supplemental affidavit is final.

Sec. 2.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 6a, is
amended to read:


Subd. 6a.

Audit report.

(a) The charter school must submit an audit report to the
commissioner and its authorizer by December 31 each year.

(b) The charter school, with the assistance of the auditor conducting the audit,
must include with the report, as supplemental information, a copy of deleted text beginall charter school
agreements for corporate management services, including parent company or other
administrative, financial, and staffing services
deleted text endnew text begin management agreements with a charter
management organization, or an educational management organization
new text end. new text beginThe agreements
must detail the terms of the agreement, including the services provided and the annual
costs for those services.
new text endIf 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.

(c) A charter school independent audit report shall include audited financial data of
an affiliated building corporation or other component unit.

(d) If the audit report finds 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. An auditor, as a
condition of providing financial services to a charter school, must agree to make available
information about a charter school's financial audit to the commissioner and authorizer
upon request.

Sec. 3.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 8, is
amended to read:


Subd. 8.

Federal, state, and local requirements.

(a) A charter school shall meet all
federal, state, and local health and safety requirements applicable to school districts.

(b) A school must comply with statewide accountability requirements governing
standards and assessments in chapter 120B.

(c) A school authorized by a school board may be located in any district, unless the
school board of the district of the proposed location disapproves by written resolution.

(d) A charter school must be nonsectarian in its programs, admission policies,
employment practices, and all other operations. An authorizer may not authorize a charter
school or program that is affiliated with a nonpublic sectarian school or a religious
institution. A charter school student must be released for religious instruction, consistent
with section 120A.22, subdivision 12, clause (3).

(e) Charter schools must not be used as a method of providing education or
generating revenue for students who are being home-schooled. This paragraph does not
apply to shared time aid under section 126C.19.

(f) The primary focus of a charter school must be to provide a comprehensive
program of instruction for at least one grade or age group from deleted text beginfivedeleted text endnew text begin prekindergarten
new text end through 18 years of age. new text beginOnce a student is enrolled in the school, the student is considered
enrolled in the school until the student formally withdraws or enrollment is revoked under
the Pupil Fair Dismissal Act in sections 121A.40 to 121A.56.
new text endInstruction may be provided
to people deleted text beginyounger than five years anddeleted text end older than 18 years of age.

(g) A charter school may not charge tuition.

(h) A charter school is subject to and must comply with chapter 363A and section
121A.04.

(i) A charter school is subject to and must comply with the Pupil Fair Dismissal
Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
123B.34 to 123B.39.

(j) A charter school is subject to the same financial audits, audit procedures, and
audit requirements as a district, except as required under subdivision 6a. Audits must be
conducted in compliance with generally accepted governmental auditing standards, the
federal Single Audit Act, if applicable, and section 6.65. A charter school is subject
to and must comply with sections 15.054; 118A.01; 118A.02; 118A.03; 118A.04;
118A.05; 118A.06; 471.38; 471.391; 471.392; and 471.425. The audit must comply with
the requirements of sections 123B.75 to 123B.83, except to the extent deviations are
necessary because of the program at the school. Deviations must be approved by the
commissioner and authorizer. The Department of Education, state auditor, legislative
auditor, or authorizer may conduct financial, program, or compliance audits. A charter
school determined to be in statutory operating debt under sections 123B.81 to 123B.83
must submit a plan under section 123B.81, subdivision 4.

(k) A charter school is a district for the purposes of tort liability under chapter 466.

(l) A charter school must comply with chapters 13 and 13D; and sections 120A.22,
subdivision 7
; 121A.75; and 260B.171, subdivisions 3 and 5.

(m) A charter school is subject to the Pledge of Allegiance requirement under
section 121A.11, subdivision 3.

(n) A charter school offering online courses or programs must comply with section
124D.095.

(o) A charter school and charter school board of directors are subject to chapter 181.

(p) A charter school must comply with section 120A.22, subdivision 7, governing
the transfer of students' educational records and sections 138.163 and 138.17 governing
the management of local records.

(q) A charter school that provides early childhood health and developmental
screening must comply with sections 121A.16 to 121A.19.

(r) A charter school that provides school-sponsored youth athletic activities must
comply with section 121A.38.

(s) A charter school is subject to and must comply with continuing truant notification
under section 260A.03.

(t) A charter school must develop and implement a teacher evaluation and peer review
process under section 122A.40, subdivision 8, paragraph (b), clauses deleted text begin(2) to (12)deleted text endnew text begin (3) to (11)new text end.

(u) A charter school must adopt a policy, plan, budget, and process, consistent with
section 120B.11, to review curriculum, instruction, and student achievement and strive
for the world's best workforce.

Sec. 4.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 9, is
amended to read:


Subd. 9.

Admission requirements.

(a) A charter school may limit admission to:

(1) pupils within an age group or grade level;

(2) pupils who are eligible to participate in the graduation incentives program under
section 124D.68; or

(3) residents of a specific geographic area in which the school is located when the
majority of students served by the school are members of underserved populations.

(b) A charter school shall enroll an eligible pupil who submits a timely application,
unless the number of applications exceeds the capacity of a program, class, grade level, or
building. In this case, pupils must be accepted by lot. The charter school must develop
and publish, including on its Web site, a lottery policy and process that it must use when
accepting pupils by lot.

(c) A charter school shall give enrollment preference to a sibling of an enrolled pupil
and to a foster child of that pupil's parents and may give preference for enrolling children
of the school's staff before accepting other pupils by lot.new text begin A charter school shall give
enrollment preference to an enrolled prekindergarten student who enrolls in kindergarten
if the prekindergarten student is a sibling of an enrolled pupil and to a foster child of that
pupil's parents and may also give preference for enrolling children of the school's staff
before accepting other pupils by lot.
new text end

(d) A person shall not be admitted to a charter school (1) as a kindergarten pupil,
unless the pupil is at least five years of age on September 1 of the calendar year in which
the school year for which the pupil seeks admission commences; or (2) as a first grade
student, unless the pupil is at least six years of age on September 1 of the calendar year in
which the school year for which the pupil seeks admission commences or has completed
kindergarten; except that a charter school may establish and publish on its Web site a
policy for admission of selected pupils at an earlier age, consistent with the enrollment
process in paragraphs (b) and (c).

(e) Except as permitted in paragraph (d), a charter school may not limit admission
to pupils on the basis of intellectual ability, measures of achievement or aptitude, or
athletic ability and may not establish any criteria or requirements for admission that are
inconsistent with this subdivision.

(f) The charter school shall not distribute any services or goods of value to students,
parents, or guardians as an inducement, term, or condition of enrolling a student in a
charter school.

Sec. 5.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 17a,
is amended to read:


Subd. 17a.

Affiliated nonprofit building corporation.

(a) deleted text beginBeforedeleted text end A charter school
may organize an affiliated nonprofit building corporation deleted text begin(i)deleted text endnew text begin (1)new text end to deleted text beginrenovate ordeleted text end purchase
new text beginand renovate new text endan existing facility to serve as a school or deleted text begin(ii)deleted text endnew text begin (2)new text end to deleted text beginexpand an existing
building or
deleted text end construct a new school facilitydeleted text begin, an authorizer must submit an affidavit to the
commissioner for approval in the form and manner the commissioner prescribes, and
consistent with paragraphs (b) and (c) or (d).
deleted text endnew text begin if the charter school:
new text end

new text begin (i) has been in operation for at least six years;
new text end

new text begin (ii) has a net unreserved general fund balance as of June 30 in the preceding three
years;
new text end

new text begin (iii) has long-range strategic and financial plans that include enrollment projections
for at least five years;
new text end

new text begin (iv) completes a feasibility study of facility options that outlines the benefits and
costs of the options; and
new text end

new text begin (v) has a plan for the purchase, renovation, or new construction which describes
the parameters and budget for the project.
new text end

(b) An affiliated nonprofit building corporation under this subdivision must:

(1) be incorporated under section 317A;

(2) comply with applicable Internal Revenue Service regulations, including
regulations for "supporting organizations" as defined by the Internal Revenue Service;

new text begin (3) post on the school Web site the name, mailing address, bylaws, minutes of board
meetings, and the names of the current board of directors of the affiliated nonprofit
building corporation;
new text end

deleted text begin (3)deleted text endnew text begin (4)new text end submit to the commissioner deleted text begineach fiscal year a list of current board members
and
deleted text end a copy of its annual auditnew text begin by December 31 of each yearnew text end; and

deleted text begin (4)deleted text endnew text begin (5)new text end comply with government data practices law under chapter 13.

new text begin (c) new text endAn affiliated nonprofit building corporation must not serve as the leasing agent
for property or facilities it does not own. A charter school that leases a facility from an
affiliated nonprofit building corporation that does not own the leased facility is ineligible
to receive charter school lease aid. The state is immune from liability resulting from a
contract between a charter school and an affiliated nonprofit building corporation.

deleted text begin (c) A charter school may organize an affiliated nonprofit building corporation to
renovate or purchase an existing facility to serve as a school if the charter school:
deleted text end

deleted text begin (1) has been operating for at least five consecutive school years;
deleted text end

deleted text begin (2) has had a net positive unreserved general fund balance as of June 30 in the
preceding five fiscal years;
deleted text end

deleted text begin (3) has a long-range strategic and financial plan;
deleted text end

deleted text begin (4) completes a feasibility study of available buildings;
deleted text end

deleted text begin (5) documents enrollment projections and the need to use an affiliated building
corporation to renovate or purchase an existing facility to serve as a school; and
deleted text end

deleted text begin (6) has a plan for the renovation or purchase, which describes the parameters and
budget for the project.
deleted text end

deleted text begin (d) A charter school may organize an affiliated nonprofit building corporation to
expand an existing school facility or construct a new school facility if the charter school:
deleted text end

deleted text begin (1) demonstrates the lack of facilities available to serve as a school;
deleted text end

deleted text begin (2) has been operating for at least eight consecutive school years;
deleted text end

deleted text begin (3) has had a net positive unreserved general fund balance as of June 30 in the
preceding five fiscal years;
deleted text end

deleted text begin (4) completes a feasibility study of facility options;
deleted text end

deleted text begin (5) has a long-range strategic and financial plan that includes enrollment projections
and demonstrates the need for constructing a new school facility; and
deleted text end

deleted text begin (6) has a plan for the expansion or new school facility, which describes the
parameters and budget for the project.
deleted text end

new text begin (d) Upon the incorporation of an affiliated nonprofit building corporation under
this subdivision, the authorizer of the school has the responsibility to monitor that the
school's board of directors is ensuring that the affiliated nonprofit building corporation
is complying with all legal requirements of the affiliated nonprofit building corporation.
Failure of the school's board of directors to ensure that the affiliated nonprofit building
corporation is in compliance shall be considered a violation of the school board of
director's responsibilities and be a factor in the evaluation of the school by the authorizer.
new text end

Sec. 6.

Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 17b,
is amended to read:


Subd. 17b.

Positive review and comment.

deleted text begin A charter school or an affiliated
nonprofit building corporation organized by a charter school must not initiate an
installment contract for purchase, or a lease agreement, or solicit bids for new construction,
expansion, or remodeling of an educational facility that requires an expenditure in
excess of $1,400,000, unless it meets the criteria in subdivision 17a, paragraph (b) and
paragraph (c) or (d), as applicable, and receives a positive review and comment from the
commissioner under section 123B.71.
deleted text end new text begin A charter school or its affiliated nonprofit building
corporation may not finalize any purchase agreement or construction contract that requires
an expenditure in excess of the amount specified in section 123B.71 prior to receiving a
positive review and comment of the commissioner. A purchase agreement or construction
contract finalized before a positive review and comment is null and void.
new text end