HF 3047

as introduced - 89th Legislature (2015 - 2016) Posted on 03/14/2016 03:29pm

A bill for an act
relating to education; requiring a trustee to oversee the closure of a charter
school; amending Minnesota Statutes 2015 Supplement, section 124E.10, by
adding a subdivision.

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

Section 1.

Minnesota Statutes 2015 Supplement, 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 their 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 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. 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.
new text end

new text begin (f) A charter school closure fund shall be established and managed by the Department
of Administration small agency resource team. The Department of Administration may
charge the fund a management fee commensurate with the annual activity in the fund. The
Department of Administration 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 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. 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