1.1 	A bill for an act
1.2 	relating to education; providing for prekindergarten through grade 12 education, 
1.3 	including general education, education excellence, special programs, and early 
1.4 	childhood education;amending Minnesota Statutes 2008, sections 11A.16, 
1.5 	subdivision 5; 120B.15; 121A.16; 121A.17, subdivision 5; 122A.16; 123B.75, 
1.6 	subdivision 5; 124D.091, subdivisions 2, 3; 124D.15, by adding a subdivision; 
1.7 	124D.20, subdivision 8; 125A.21, subdivisions 3, 5, 7; 125A.79, subdivision 1; 
1.8 	127A.42, subdivision 2; 127A.43; Minnesota Statutes 2009 Supplement, sections 
1.9 	120B.30, subdivisions 1, 3, 4; 120B.31, subdivision 4; 124D.10, subdivisions 
1.10 	3, 4, 6a, 8, 23, by adding a subdivision; 124D.15, subdivision 3; 125A.02, 
1.11 	subdivision 1; 125A.63, subdivisions 2, 4; 126C.41, subdivision 2; 126C.44; 
1.12 	proposing coding for new law in Minnesota Statutes, chapter 124D; repealing 
1.13 	Minnesota Statutes 2008, section 125A.54.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	GENERAL EDUCATION

1.17 	Section 1. Minnesota Statutes 2008, section 11A.16, subdivision 5, is amended to read:
1.18 		Subd. 5.Calculation of income. As of the end of each fiscal year, the state 
1.19 	board shall calculate the investment income earned by the permanent school fund. The 
1.20 	investment income earned by the fund shall equal the amount of interest on debt securities 
1.21 	and, dividends on equity securities, and interest earned on certified monthly earnings prior 
1.22 	to the transfer to the Department of Education. Gains and losses arising from the sale of 
1.23 	securities shall be apportioned as follows:
1.24 	(a) If the sale of securities results in a net gain during a fiscal year, the gain shall 
1.25 	be apportioned in equal installments over the next ten fiscal years to offset net losses in 
1.26 	those years. If any portion of an installment is not needed to recover subsequent losses 
1.27 	identified in paragraph (b) it shall be added to the principal of the fund.
2.1 	(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall 
2.2 	be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these 
2.3 	gains are insufficient, any remaining net loss shall be recovered from interest and dividend 
2.4 	income in equal installments over the following ten fiscal years.

2.5 	Sec. 2. Minnesota Statutes 2008, section 123B.75, subdivision 5, is amended to read:
2.6 		Subd. 5.Levy recognition. (a) "School district tax settlement revenue" means the 
2.7 	current, delinquent, and manufactured home property tax receipts collected by the county 
2.8 	and distributed to the school district.
2.9 	(b) For fiscal year 2004 and later years, in June of each year, the school district must 
2.10 	recognize as revenue, in the fund for which the levy was made, the lesser of:
2.11 	(1) the sum of May, June, and July school district tax settlement revenue received in 
2.12 	that calendar year, plus general education aid according to section 126C.13, subdivision 
2.13 	4, received in July and August of that calendar year; or
2.14 	(2) the sum of:
2.15 	(i) 31 percent of the referendum levy certified according to section 126C.17, in 
2.16 	calendar year 2000; and
2.17 	(ii) the entire amount of the levy certified in the prior calendar year according to 
2.18 	section 124D.86, subdivision 4, for school districts receiving revenue under sections 
2.19 	124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph 
2.20 	(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457; and 126C.48, 
2.21 	subdivision 6.

2.22 	Sec. 3. Minnesota Statutes 2008, section 125A.79, subdivision 1, is amended to read:
2.23 		Subdivision 1.Definitions. For the purposes of this section, the definitions in this 
2.24 	subdivision apply.
2.25 	(a) "Unreimbursed special education cost" means the sum of the following:
2.26 	(1) expenditures for teachers' salaries, contracted services, supplies, equipment, and 
2.27 	transportation services eligible for revenue under section 125A.76; plus
2.28 	(2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and 
2.29 	125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus
2.30 	(3) revenue for teachers' salaries, contracted services, supplies, equipment, and 
2.31 	transportation services under section 125A.76; minus
2.32 	(4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services 
2.33 	eligible for revenue under section 125A.76, subdivision 2.
3.1 	(b) "General revenue" for a school district means the sum of the general education 
3.2 	revenue according to section 126C.10, subdivision 1, excluding alternative teacher 
3.3 	compensation revenue, plus the total qualifying referendum revenue specified in paragraph 
3.4 	(e) minus transportation sparsity revenue minus total operating capital revenue. "General 
3.5 	revenue" for a charter school means the sum of the general education revenue according to 
3.6 	section 124D.11, subdivision 1, and transportation revenue according to section 124D.11, 
3.7 	subdivision 2, excluding alternative teacher compensation revenue, minus referendum 
3.8 	equalization aid minus transportation sparsity revenue minus operating capital revenue.
3.9 	(c) "Average daily membership" has the meaning given it in section 126C.05.
3.10 	(d) "Program growth factor" means 1.02 for fiscal year 2012 and later.
3.11 	(e) "Total qualifying referendum revenue" means two-thirds of the district's total 
3.12 	referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs 
3.13 	(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal 
3.14 	year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.

3.15 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.16 	Sec. 4. Minnesota Statutes 2009 Supplement, section 126C.41, subdivision 2, is 
3.17 	amended to read:
3.18 		Subd. 2.Retired employee health benefits. (a) A district may levy an amount up 
3.19 	to the amount the district is required by the collective bargaining agreement in effect 
3.20 	on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for 
3.21 	licensed and nonlicensed employees who have terminated services in the employing 
3.22 	district and withdrawn from active teaching service or other active service, as applicable, 
3.23 	before July 1, 1992, and to pay for health insurance or unreimbursed medical expenses 
3.24 	for licensed and nonlicensed employees who have terminated services in the employing 
3.25 	district and withdrawn from active teaching service or other active service, as applicable 
3.26 	before July 1, 1998, only if a sunset clause is in effect for the current collective bargaining 
3.27 	agreement. The total amount of the levy each year may not exceed $600,000.
3.28 	(b) In addition to the levy authority granted under paragraph (a), a school district 
3.29 	may levy for other postemployment benefits expenses actually paid during the previous 
3.30 	fiscal year. For purposes of this subdivision, "postemployment benefits" means benefits 
3.31 	giving rise to a liability under Statement No. 45 of the Government Accounting Standards 
3.32 	Board. A district seeking levy authority under this subdivision must:
3.33 	(1) create or have created an actuarial liability to pay postemployment benefits to 
3.34 	employees or officers after their termination of service;
4.1 	(2) have a sunset clause in effect for the current collective bargaining agreement as 
4.2 	required by paragraph (a); and
4.3 	(3) apply for the authority in the form and manner required by the commissioner 
4.4 	of education.
4.5 	If the total levy authority requested under this paragraph exceeds the amount established 
4.6 	in paragraph (c), the commissioner must proportionately reduce each district's maximum 
4.7 	levy authority under this subdivision. The commissioner may subsequently adjust each 
4.8 	district's levy authority under this subdivision so long as the total levy authority does not 
4.9 	exceed the maximum levy authority for that year.
4.10 	(c) The maximum levy authority under paragraph (b) must not exceed the following 
4.11 	amounts:
4.12 	(1) $9,242,000 for taxes payable in 2010;
4.13 	(2) $29,863,000 for taxes payable in 2011; and
4.14 	(3) for taxes payable in 2012 and later, the maximum levy authority must not exceed 
4.15 	the sum of the previous year's authority and $14,000,000.

4.16 	Sec. 5. Minnesota Statutes 2009 Supplement, section 126C.44, is amended to read:
4.17 	126C.44 SAFE SCHOOLS LEVY.
4.18 	(a) Each district may make a levy on all taxable property located within the district 
4.19 	for the purposes specified in this section. The maximum amount which may be levied 
4.20 	for all costs under this section shall be equal to $30 multiplied by the district's adjusted 
4.21 	marginal cost pupil units for the school year. The proceeds of the levy must be reserved and 
4.22 	used for directly funding the following purposes or for reimbursing the cities and counties 
4.23 	who contract with the district for the following purposes: (1) to pay the costs incurred for 
4.24 	the salaries, benefits, and transportation costs of peace officers and sheriffs for liaison in 
4.25 	services in the district's schools; (2) to pay the costs for a drug abuse prevention program 
4.26 	as defined in section 609.101, subdivision 3, paragraph (e), in the elementary schools; 
4.27 	(3) to pay the costs for a gang resistance education training curriculum in the district's 
4.28 	schools; (4) to pay the costs for security in the district's schools and on school property; (5) 
4.29 	to pay the costs for other crime prevention, drug abuse, student and staff safety, voluntary 
4.30 	opt-in suicide prevention tools, and violence prevention measures taken by the school 
4.31 	district; or (6) to pay costs for licensed school counselors, licensed school nurses, licensed 
4.32 	school social workers, licensed school psychologists, and licensed alcohol and chemical 
4.33 	dependency counselors to help provide early responses to problems. For expenditures 
4.34 	under clause (1), the district must initially attempt to contract for services to be provided 
4.35 	by peace officers or sheriffs with the police department of each city or the sheriff's 
5.1 	department of the county within the district containing the school receiving the services. If 
5.2 	a local police department or a county sheriff's department does not wish to provide the 
5.3 	necessary services, the district may contract for these services with any other police or 
5.4 	sheriff's department located entirely or partially within the school district's boundaries.
5.5 	(b) A school district that is a member of an intermediate school district may 
5.6 	include in its authority under this section the costs associated with safe schools activities 
5.7 	authorized under paragraph (a) for intermediate school district programs. This authority 
5.8 	must not exceed $10 times the adjusted marginal cost pupil units of the member districts. 
5.9 	This authority is in addition to any other authority authorized under this section. Revenue 
5.10 	raised under this paragraph must be transferred to the intermediate school district.
5.11 	(c) A school district must set aside at least $3 per adjusted marginal cost pupil 
5.12 	unit of the safe schools levy proceeds for the purposes authorized under paragraph (a), 
5.13 	clause (6). The district must annually certify either that: (1) its total spending on services 
5.14 	provided by the employees listed in paragraph (a), clause (6), is not less than the sum of 
5.15 	its expenditures for these purposes, excluding amounts spent under this section, in the 
5.16 	previous year plus the amount spent under this section; or (2) that the district's full-time 
5.17 	equivalent number of employees listed in paragraph (a), clause (6), is not less than the 
5.18 	number for the previous year.

5.19 	EFFECTIVE DATE. This section is effective the day following final enactment 
5.20 	and applies to certifications for fiscal year 2010.

5.21 	ARTICLE 2
5.22 	EDUCATION EXCELLENCE

5.23 	Section 1. Minnesota Statutes 2008, section 120B.15, is amended to read:
5.24 	120B.15 GIFTED AND TALENTED STUDENTS PROGRAMS.
5.25 	(a) School districts and charter schools may identify students, locally develop 
5.26 	programs addressing instructional and affective needs, provide staff development, and 
5.27 	evaluate programs to provide gifted and talented students with challenging and appropriate 
5.28 	educational programs.
5.29 	(b) School districts and charter schools may adopt guidelines for assessing and 
5.30 	identifying students for participation in gifted and talented programs. The guidelines 
5.31 	should include the use of:
5.32 	(1) multiple and objective criteria; and
5.33 	(2) assessments and procedures that are valid and reliable, fair, and based on 
5.34 	current theory and research addressing the use of tools and methods that are sensitive 
6.1 	to underrepresented groups, including, but not limited to, low income, minority, 
6.2 	twice-exceptional, and English language learners.
6.3 	(c) School districts and charter schools must adopt procedures for the academic 
6.4 	acceleration of gifted and talented students. These procedures must include how the 
6.5 	district will:
6.6 	(1) assess a student's readiness and motivation for acceleration; and
6.7 	(2) match the level, complexity, and pace of the curriculum to a student to achieve 
6.8 	the best type of academic acceleration for that student.

6.9 	Sec. 2. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 1, is 
6.10 	amended to read:
6.11 		Subdivision 1.Statewide testing.  (a) The commissioner, with advice from experts 
6.12 	with appropriate technical qualifications and experience and stakeholders, consistent with 
6.13 	subdivision 1a, shall include in the comprehensive assessment system, for each grade 
6.14 	level to be tested, state-constructed tests developed from and aligned with the state's 
6.15 	required academic standards under section 120B.021, include multiple choice questions, 
6.16 	and be administered annually to all students in grades 3 through 8. State-developed 
6.17 	high school tests aligned with the state's required academic standards under section 
6.18 	120B.021 and administered to all high school students in a subject other than writing 
6.19 	must include multiple choice questions. The commissioner shall establish one or more 
6.20 	months during which schools shall administer the tests to students each school year. 
6.21 	Schools that the commissioner identifies for stand-alone field testing or other national 
6.22 	sampling must participate as directed. Superintendents or charter school directors may 
6.23 	appeal in writing to the commissioner for an exemption from a field test based on undue 
6.24 	hardship. The commissioner's decision regarding the appeal is final. For students enrolled 
6.25 	in grade 8 before the 2005-2006 school year, Minnesota basic skills tests in reading, 
6.26 	mathematics, and writing shall fulfill students' basic skills testing requirements for a 
6.27 	passing state notation. The passing scores of basic skills tests in reading and mathematics 
6.28 	are the equivalent of 75 percent correct for students entering grade 9 based on the first 
6.29 	uniform test administered in February 1998. Students who have not successfully passed 
6.30 	a Minnesota basic skills test by the end of the 2011-2012 school year must pass the 
6.31 	graduation-required assessments for diploma under paragraph (b).
6.32 	(b) The state assessment system must be aligned to the most recent revision of 
6.33 	academic standards as described in section 120B.023 in the following manner:
6.34 	(1) mathematics;
6.35 	(i) grades 3 through 8 beginning in the 2010-2011 school year; and
7.1 	(ii) high school level beginning in the 2013-2014 school year;
7.2 	(2) science; grades 5 and 8 and at the high school level beginning in the 2011-2012 
7.3 	school year; and
7.4 	(3) language arts and reading; grades 3 through 8 and high school level beginning in 
7.5 	the 2012-2013 school year.
7.6 	(c) For students enrolled in grade 8 in the 2005-2006 school year and later, only the 
7.7 	following options shall fulfill students' state graduation test requirements:
7.8 	(1) for reading and mathematics:
7.9 	(i) obtaining an achievement level equivalent to or greater than proficient as 
7.10 	determined through a standard setting process on the Minnesota comprehensive 
7.11 	assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing 
7.12 	score as determined through a standard setting process on the graduation-required 
7.13 	assessment for diploma in grade 10 for reading and grade 11 for mathematics or 
7.14 	subsequent retests;
7.15 	(ii) achieving a passing score as determined through a standard setting process on the 
7.16 	state-identified language proficiency test in reading and the mathematics test for English 
7.17 	language learners or the graduation-required assessment for diploma equivalent of those 
7.18 	assessments for students designated as English language learners;
7.19 	(iii) achieving an individual passing score on the graduation-required assessment 
7.20 	for diploma as determined by appropriate state guidelines for students with an individual 
7.21 	education plan or 504 plan;
7.22 	(iv) obtaining achievement level equivalent to or greater than proficient as 
7.23 	determined through a standard setting process on the state-identified alternate assessment 
7.24 	or assessments in grade 10 for reading and grade 11 for mathematics for students with 
7.25 	an individual education plan; or
7.26 	(v) achieving an individual passing score on the state-identified alternate assessment 
7.27 	or assessments as determined by appropriate state guidelines for students with an 
7.28 	individual education plan; and
7.29 	(2) for writing:
7.30 	(i) achieving a passing score on the graduation-required assessment for diploma;
7.31 	(ii) achieving a passing score as determined through a standard setting process on 
7.32 	the state-identified language proficiency test in writing for students designated as English 
7.33 	language learners;
7.34 	(iii) achieving an individual passing score on the graduation-required assessment 
7.35 	for diploma as determined by appropriate state guidelines for students with an individual 
7.36 	education plan or 504 plan; or
8.1 	(iv) achieving an individual passing score on the state-identified alternate assessment 
8.2 	or assessments as determined by appropriate state guidelines for students with an 
8.3 	individual education plan.
8.4 	(d) Students enrolled in grade 8 in any school year from the 2005-2006 school 
8.5 	year to the 2009-2010 school year who do not pass the mathematics graduation-required 
8.6 	assessment for diploma under paragraph (b) are eligible to receive a high school diploma 
8.7 	with a passing state notation if they:
8.8 	(1) complete with a passing score or grade all state and local coursework and credits 
8.9 	required for graduation by the school board granting the students their diploma;
8.10 	(2) participate in district-prescribed academic remediation in mathematics; and
8.11 	(3) fully participate in at least two retests of the mathematics GRAD test or until 
8.12 	they pass the mathematics GRAD test, whichever comes first. A school, district, or 
8.13 	charter school must place on the high school transcript a student's highestcurrent pass 
8.14 	status for each subject that has a required graduation assessment score for each of the 
8.15 	following assessments on the student's high school transcript: the mathematics Minnesota 
8.16 	Comprehensive Assessment, reading Minnesota Comprehensive Assessment, and writing 
8.17 	Graduation-Required Assessment for Diploma, and when applicable, the mathematics 
8.18 	Graduation-Required Assessment for Diploma and reading Graduation-Required 
8.19 	Assessment for Diploma.
8.20 	In addition, the school board granting the students their diplomas may formally 
8.21 	decide to include a notation of high achievement on the high school diplomas of those 
8.22 	graduating seniors who, according to established school board criteria, demonstrate 
8.23 	exemplary academic achievement during high school.
8.24 	(e) The 3rd through 8th grade and high school test results shall be available to 
8.25 	districts for diagnostic purposes affecting student learning and district instruction and 
8.26 	curriculum, and for establishing educational accountability. The commissioner must 
8.27 	disseminate to the public the high school test results upon receiving those results.
8.28 	(f) The 3rd through 8th grade and high school tests must be aligned with state 
8.29 	academic standards. The commissioner shall determine the testing process and the order 
8.30 	of administration. The statewide results shall be aggregated at the site and district level, 
8.31 	consistent with subdivision 1a.
8.32 	(g) In addition to the testing and reporting requirements under this section, the 
8.33 	commissioner shall include the following components in the statewide public reporting 
8.34 	system:
9.1 	(1) uniform statewide testing of all students in grades 3 through 8 and at the high 
9.2 	school level that provides appropriate, technically sound accommodations or alternate 
9.3 	assessments;
9.4 	(2) educational indicators that can be aggregated and compared across school 
9.5 	districts and across time on a statewide basis, including average daily attendance, high 
9.6 	school graduation rates, and high school drop-out rates by age and grade level;
9.7 	(3) state results on the American College Test; and
9.8 	(4) state results from participation in the National Assessment of Educational 
9.9 	Progress so that the state can benchmark its performance against the nation and other 
9.10 	states, and, where possible, against other countries, and contribute to the national effort 
9.11 	to monitor achievement.

9.12 	Sec. 3. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 3, is 
9.13 	amended to read:
9.14 		Subd. 3.Reporting. The commissioner shall report test data results publicly and 
9.15 	to stakeholders, including the performance achievement levels developed from students' 
9.16 	unweighted test scores in each tested subject and a listing of demographic factors that 
9.17 	strongly correlate with student performance. The test results must not include personally 
9.18 	identifiable information as defined in Code of Federal Regulations, title 34, section 99.3.
9.19 	The commissioner shall also report data that compares performance results among school 
9.20 	sites, school districts, Minnesota and other states, and Minnesota and other nations. The 
9.21 	commissioner shall disseminate to schools and school districts a more comprehensive 
9.22 	report containing testing information that meets local needs for evaluating instruction 
9.23 	and curriculum.

9.24 	Sec. 4. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 4, is 
9.25 	amended to read:
9.26 		Subd. 4.Access to tests. Notwithstanding section 13.34, the commissioner must 
9.27 	adopt and publish a policy to provide public and parental access for review of basic skills 
9.28 	tests, Minnesota Comprehensive Assessments, or any other such statewide test and 
9.29 	assessment which would not compromise the objectivity or fairness of the testing or 
9.30 	examination process. Upon receiving a written request, the commissioner must make 
9.31 	available to parents or guardians a copy of their student's actual responses to the test 
9.32 	questions for their review.

10.1 	Sec. 5. Minnesota Statutes 2009 Supplement, section 120B.31, subdivision 4, is 
10.2 	amended to read:
10.3 		Subd. 4.Statistical adjustments; Student performance data. In developing 
10.4 	policies and assessment processes to hold schools and districts accountable for high levels 
10.5 	of academic standards under section 120B.021, the commissioner shall aggregate student 
10.6 	data over time to report student performance and growth levels measured at the school, 
10.7 	school district, and statewide level. When collecting and reporting the performance data, 
10.8 	the commissioner shall: (1) acknowledge the impact of significant demographic factors 
10.9 	such as residential instability, the number of single parent families, parents' level of 
10.10 	education, and parents' income level on school outcomes; and (2) organize and report the 
10.11 	data so that state and local policy makers can understand the educational implications 
10.12 	of changes in districts' demographic profiles over time. Any report the commissioner 
10.13 	disseminates containing summary data on student performance must integrate student 
10.14 	performance and the demographic factors that strongly correlate with that performance.

10.15 	Sec. 6. Minnesota Statutes 2008, section 122A.16, is amended to read:
10.16 	122A.16 HIGHLY QUALIFIED TEACHER DEFINED.
10.17 	(a) A qualified teacher is one holding a valid license, under this chapter, to perform 
10.18 	the particular service for which the teacher is employed in a public school.
10.19 	(b) For the purposes of the federal No Child Left Behind Act, a highly qualified 
10.20 	teacher is one who holds a valid license under this chapter to perform the particular service 
10.21 	for which the teacher is employed in a public school or who meets the requirements of a 
10.22 	highly objective uniform state standard of evaluation (HOUSSE).
10.23 	All Minnesota teachers teaching in a core academic subject area, as defined by the 
10.24 	federal No Child Left Behind Act, in which they are not fully licensed may complete the 
10.25 	following HOUSSE process in the core subject area for which the teacher is requesting 
10.26 	highly qualified status by completing an application, in the form and manner described by 
10.27 	the commissioner, that includes:
10.28 	(1) documentation of student achievement as evidenced by norm-referenced test 
10.29 	results that are objective and psychometrically valid and reliable;
10.30 	(2) evidence of local, state, or national activities, recognition, or awards for 
10.31 	professional contribution to achievement;
10.32 	(3) description of teaching experience in the teachers' core subject area in a public 
10.33 	school under a waiver, variance, limited license or other exception; nonpublic school; and 
10.34 	postsecondary institution;
10.35 	(4) test results from the Praxis IIsubject area content test;
11.1 	(5) evidence of advanced certification from the National Board for Professional 
11.2 	Teaching Standards;
11.3 	(6) evidence of the successful completion of course work or pedagogy courses; and
11.4 	(7) evidence of the successful completion of high quality professional development 
11.5 	activities.
11.6 	Districts must assign a school administrator to serve as a HOUSSE reviewer to 
11.7 	meet with teachers under this paragraph and, where appropriate, certify the teachers' 
11.8 	applications. Teachers satisfy the definition of highly qualified when the teachers receive 
11.9 	at least 100 of the total number of points used to measure the teachers' content expertise 
11.10 	under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1) 
11.11 	to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified 
11.12 	for more than one subject area.
11.13 	(c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher 
11.14 	must obtain permission from the Board of Teaching in order to teach in a public school.

11.15 	Sec. 7. Minnesota Statutes 2008, section 124D.091, subdivision 2, is amended to read:
11.16 		Subd. 2.Eligibility. A district that offers a concurrent enrollment course according 
11.17 	to an agreement under section 124D.09, subdivision 10, is eligible to receive aid for the 
11.18 	costs of providing postsecondary courses at the high school. Beginning in fiscal year 2011, 
11.19 	districts only are eligible for aid if the college or university concurrent enrollment courses 
11.20 	offered by the district are accredited by the National Alliance of Concurrent Enrollment 
11.21 	Partnership, in the process of being accredited, or are shown by clear evidence to be of 
11.22 	comparable standard to accredited courses, or are technical courses within a recognized 
11.23 	career and technical education program of study approved by the commissioner of 
11.24 	education and the chancellor of the Minnesota State Colleges and Universities.

11.25 	Sec. 8. Minnesota Statutes 2008, section 124D.091, subdivision 3, is amended to read:
11.26 		Subd. 3.Aid. An eligible district shall receive up to $150 per pupil enrolled in a
11.27 	an eligible concurrent enrollment course. The money must be used to defray the cost of 
11.28 	delivering the course at the high school. The commissioner shall establish application 
11.29 	procedures, eligibility criteria to receive funding, and deadlines for receipt of aid payments.

11.30 	Sec. 9. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 3, is 
11.31 	amended to read:
11.32 		Subd. 3.Authorizer. (a) For purposes of this section, the terms defined in this 
11.33 	subdivision have the meanings given them.
12.1 	"Application" to receive approval as an authorizer means the proposal an eligible 
12.2 	authorizer submits to the commissioner under paragraph (c) before that authorizer is able 
12.3 	to submit any affidavit to charter to a school.
12.4 	"Application" under subdivision 4 means the charter school business plan a 
12.5 	school developer submits to an authorizer for approval to establish a charter school that 
12.6 	documents the school developer's mission statement, school purposes, program design, 
12.7 	financial plan, governance and management structure, and background and experience, 
12.8 	plus any other information the authorizer requests. The application also shall include a 
12.9 	"statement of assurances" of legal compliance prescribed by the commissioner.
12.10 	"Affidavit" means a written statement the authorizer submits to the commissioner 
12.11 	for approval to establish a charter school under subdivision 4 attesting to its review and 
12.12 	approval process before chartering a school.
12.13 	"Affidavit" means the form an authorizer submits to the commissioner that is a 
12.14 	precondition to a charter school organizing an affiliated nonprofit building corporation 
12.15 	under subdivision 17a.
12.16 	(b) The following organizations may authorize one or more charter schools:
12.17 	(1) a school board; intermediate school district school board; education district 
12.18 	organized under sections 123A.15 to 123A.19;
12.19 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue 
12.20 	Code of 1986, excluding a nonpublic sectarian or religious institution, without an 
12.21 	approved affidavit by the commissioner prior to July 1, 2009, and any person other than a 
12.22 	natural person that directly or indirectly, through one or more intermediaries, controls, 
12.23 	is controlled by, or is under common control with the nonpublic sectarian or religious 
12.24 	institution, and any other charitable organization under this clause that in the federal IRS 
12.25 	Form 1023, Part IV, describes activities indicating a religious purpose, that:
12.26 	(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 
12.27 	Foundations;
12.28 	(ii) is registered with the attorney general's office;
12.29 	(iii) reports an end-of-year fund balance of at least $2,000,000; and
12.30 	(iv) is incorporated in the state of Minnesota;
12.31 	(3) a Minnesota private college, notwithstanding clause (2), that grants two- or 
12.32 	four-year degrees and is registered with the Minnesota Office of Higher Education under 
12.33 	chapter 136A; community college, state university, or technical college governed by the 
12.34 	Board of Trustees of the Minnesota State Colleges and Universities; or the University of 
12.35 	Minnesota; or
13.1 	(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905, 
13.2 	and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 
13.3 	of 1986, may authorize one or more charter schools if the charter school has operated 
13.4 	for at least three years under a different authorizer and if the nonprofit corporation has 
13.5 	existed for at least 25 years.
13.6 	(5) no more than three single-purpose sponsors that are charitable, nonsectarian 
13.7 	organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and 
13.8 	incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible 
13.9 	organizations interested in being approved as a sponsor under this paragraph must submit a 
13.10 	proposal to the commissioner that includes the provisions of paragraph (c) and a five-year 
13.11 	financial plan. Such authorizers shall consider and approve applications using the criteria 
13.12 	provided in subdivision 4 and shall not limit the applications it solicits, considers, or 
13.13 	approves to any single curriculum, learning program, or method.
13.14 	(c) An eligible authorizer under this subdivision must apply to the commissioner for 
13.15 	approval as an authorizer before submitting any affidavit to the commissioner to charter 
13.16 	a school. The application for approval as a charter school authorizer must demonstrate 
13.17 	the applicant's ability to implement the procedures and satisfy the criteria for chartering a 
13.18 	school under this section. The commissioner must approve or disapprove an application 
13.19 	within 60 business days of the application deadline. If the commissioner disapproves 
13.20 	the application, the commissioner must notify the applicant of the deficiencies and the 
13.21 	applicant then has 20 business days to address the deficiencies to the commissioner's 
13.22 	satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes 
13.23 	an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for 
13.24 	approval, must consider the applicant's:
13.25 	(1) capacity and infrastructure;
13.26 	(2) application criteria and process;
13.27 	(3) contracting process;
13.28 	(4) ongoing oversight and evaluation processes; and
13.29 	(5) renewal criteria and processes.
13.30 	(d) The affidavit application for approval to be submitted to and evaluated by the 
13.31 	commissioner must include at least the following:
13.32 	(1) how chartering schools is a way for the organization to carry out its mission;
13.33 	(2) a description of the capacity of the organization to serve as a sponsor, including 
13.34 	the personnel who will perform the sponsoring duties, their qualifications, the amount of 
13.35 	time they will be assigned to this responsibility, and the financial resources allocated 
13.36 	by the organization to this responsibility;
14.1 	(3) a description of the application and review process the authorizer will use to make 
14.2 	decisions regarding the granting of charters, which will include at least the following:
14.3 	(i) how the statutory purposes defined in subdivision 1 are addressed;
14.4 	(ii) the mission, goals, program model, and student performance expectations;
14.5 	(iii) an evaluation plan for the school that includes criteria for evaluating educational, 
14.6 	organizational, and fiscal plans;
14.7 	(iv) the school's governance plan;
14.8 	(v) the financial management plan; and
14.9 	(vi) the administration and operations plan;
14.10 	(4) a description of the type of contract it will arrange with the schools it charters 
14.11 	that meets the provisions of subdivision 6 and defines the rights and responsibilities of the 
14.12 	charter school for governing its educational program, controlling its funds, and making 
14.13 	school management decisions;
14.14 	(5) the process to be used for providing ongoing oversight of the school consistent 
14.15 	with the contract expectations specified in clause (4) that assures that the schools chartered 
14.16 	are complying with both the provisions of applicable law and rules, and with the contract;
14.17 	(6) the process for making decisions regarding the renewal or termination of 
14.18 	the school's charter based on evidence that demonstrates the academic, organizational, 
14.19 	and financial competency of the school, including its success in increasing student 
14.20 	achievement and meeting the goals of the charter school agreement; and
14.21 	(7) an assurance specifying that the organization is committed to serving as a 
14.22 	sponsor for the full five-year term.
14.23 	A disapproved applicant under this paragraph may resubmit an application during a 
14.24 	future application period.
14.25 	(e) The authorizer must participate in department-approved training.
14.26 	(f) An authorizer that chartered a school before August 1, 2009, must apply by 
14.27 	June 30, 2011, to the commissioner for approval, under paragraph (c), to continue as an 
14.28 	authorizer under this section. For purposes of this paragraph, an authorizer that fails to 
14.29 	submit a timely application is ineligible to charter a school.
14.30 	(g) The commissioner shall review an authorizer's performance every five years in 
14.31 	a manner and form determined by the commissioner and may review an authorizer's 
14.32 	performance more frequently at the commissioner's own initiative or at the request of a 
14.33 	charter school operator, charter school board member, or other interested party. The 
14.34 	commissioner, after completing the review, shall transmit a report with findings to the 
14.35 	authorizer. If, consistent with this section, the commissioner finds that an authorizer 
14.36 	has not fulfilled the requirements of this section, the commissioner may subject the 
15.1 	authorizer to corrective action, which may include terminating the contract with the 
15.2 	charter school board of directors of a school it chartered. The commissioner must notify 
15.3 	the authorizer in writing of any findings that may subject the authorizer to corrective 
15.4 	action and the authorizer then has 15 business days to request an informal hearing before 
15.5 	the commissioner takes corrective action.
15.6 	(h) The commissioner may at any time take corrective action against an authorizer, 
15.7 	including terminating an authorizer's ability to charter a school for:
15.8 	(1) failing to demonstrate the criteria under paragraph (c) under which the 
15.9 	commissioner approved the authorizer;
15.10 	(2) violating a term of the chartering contract between the authorizer and the charter 
15.11 	school board of directors; or
15.12 	(3) unsatisfactory performance as an approved authorizer.

15.13 	Sec. 10. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4, is 
15.14 	amended to read:
15.15 		Subd. 4.Formation of school. (a) An authorizer, after receiving an application from 
15.16 	a school developer, may charter a licensed teacher under section 122A.18, subdivision 
15.17 	1, or a group of individuals that includes one or more licensed teachers under section 
15.18 	122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the 
15.19 	authorizer's affidavit under paragraph (b). The school must be organized and operated 
15.20 	as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and 
15.21 	the provisions under the applicable chapter shall apply to the school except as provided 
15.22 	in this section.
15.23 	Notwithstanding sections 465.717 and 465.719, a school district, subject to this 
15.24 	section and section 124D.11, may create a corporation for the purpose of establishing a 
15.25 	charter school.
15.26 	(b) Before the operators may establish and operate a school, the authorizer must file 
15.27 	an affidavit with the commissioner stating its intent to charter a school. An authorizer 
15.28 	must file a separate affidavit for each school it intends to charter. The affidavit must 
15.29 	state the terms and conditions under which the authorizer would charter a school and 
15.30 	how the authorizer intends to oversee the fiscal and student performance of the charter 
15.31 	school and to comply with the terms of the written contract between the authorizer 
15.32 	and the charter school board of directors under subdivision 6. The commissioner must 
15.33 	approve or disapprove the authorizer's affidavit within 60 business days of receipt of the 
15.34 	affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify 
15.35 	the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business 
16.1 	days to address the deficiencies. If the authorizer does not address deficiencies to the 
16.2 	commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain 
16.3 	commissioner approval precludes an authorizer from chartering the school that is the 
16.4 	subject of this affidavit.
16.5 	(c) The authorizer may prevent an approved charter school from opening for 
16.6 	operation if, among other grounds, the charter school violates this section or does not meet 
16.7 	the ready-to-open standards that are part of the authorizer's oversight and evaluation 
16.8 	process or are stipulated in the charter school contract.
16.9 	(d) The operators authorized to organize and operate a school, before entering into a 
16.10 	contract or other agreement for professional or other services, goods, or facilities, must 
16.11 	incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 
16.12 	chapter 317A and must establish a board of directors composed of at least five members 
16.13 	who are not related parties until a timely election for members of the ongoing charter 
16.14 	school board of directors is held according to the school's articles and bylaws under 
16.15 	paragraph (f). A charter school board of directors must be composed of at least five 
16.16 	members who are not related parties. Staff members employed at the school, including 
16.17 	teachers providing instruction under a contract with a cooperative, and all parents or legal 
16.18 	guardians of children enrolled in the school are the voters eligible to elect the members 
16.19 	of the school's board of directors. A charter school must notify eligible voters of the 
16.20 	school board election dates at least 30 days before the election. Board of director meetings 
16.21 	must comply with chapter 13D.
16.22 	(e) Upon the request of an individual, the charter school must make available in 
16.23 	a timely fashion the minutes of meetings of the board of directors, and of members 
16.24 	and committees having any board-delegated authority; financial statements showing all 
16.25 	operations and transactions affecting income, surplus, and deficit during the school's last 
16.26 	annual accounting period; and a balance sheet summarizing assets and liabilities on the 
16.27 	closing date of the accounting period. A charter school also must post on its official Web 
16.28 	site information identifying its authorizer and indicate how to contact that authorizer and 
16.29 	include that same information about its authorizer in other school materials that it makes 
16.30 	available to the public.
16.31 	(f) Every charter school board member shall attend department-approved training 
16.32 	on board governance, the board's role and responsibilities, employment policies and 
16.33 	practices, and financial management. A board member who does not begin the required 
16.34 	training within six months of being seated and complete the required training within 12 
16.35 	months of being seated on the board is ineligible to continue to serve as a board member.
17.1 	(g) The ongoing board must be elected before the school completes its third year 
17.2 	of operation. Board elections must be held during a time when school is in session. The 
17.3 	charter school board of directors shall be composed of at least five nonrelated members 
17.4 	and include: (i) at least one licensed teacher employed and serving as a teacher at the 
17.5 	school or a licensed teacher providing instruction under a contact contract between the 
17.6 	charter school and a cooperative; (ii) the parent or legal guardian of a student enrolled 
17.7 	in the charter school who is not employed by the charter school; and (iii) an interested 
17.8 	community member who is not employed by the charter school and does not have a child 
17.9 	enrolled in the school. The board may be a teacher majority board composed of teachers 
17.10 	described in this paragraph. The chief financial officer and the chief administrator are may 
17.11 	only serve as ex-officio nonvoting board members and shall not serve as a voting member 
17.12 	of the board. Charter school employees or contractors shall not serve on the board unless 
17.13 	the employee is a licensed teacher for purposes of item (i) or clause (1). Board bylaws 
17.14 	shall outline the process and procedures for changing the board's governance model, 
17.15 	consistent with chapter 317A. A board may change its governance model only:
17.16 	(1) by a majority vote of the board of directors and the licensed teachers employed 
17.17 	by the school, including licensed teachers providing instruction under a contract between 
17.18 	the school and a cooperative; and
17.19 	(2) with the authorizer's approval.
17.20 	Any change in board governance must conform with the board structure established 
17.21 	under this paragraph.
17.22 	(h) The granting or renewal of a charter by an authorizer must not be conditioned 
17.23 	upon the bargaining unit status of the employees of the school.
17.24 	(i) The granting or renewal of a charter school by an authorizer must not be 
17.25 	contingent on the charter school being required to contract, lease, or purchase services 
17.26 	from the authorizer. Any potential contract, lease, or purchase of service from an 
17.27 	authorizer must be disclosed to the commissioner, accepted through an open bidding 
17.28 	process, and be a separate contract from the charter contract. The school must document 
17.29 	the open bidding process. An authorizer must not enter into a contract to provide 
17.30 	management and financial services for a school that it authorizes, unless the school 
17.31 	documents that it received at least two competitive bids.
17.32 	(j) An authorizer may permit the board of directors of a charter school to expand 
17.33 	the operation of the charter school to additional sites or to add additional grades at the 
17.34 	school beyond those described in the authorizer's original affidavit as approved by 
17.35 	the commissioner only after submitting a supplemental affidavit for approval to the 
18.1 	commissioner in a form and manner prescribed by the commissioner. The supplemental 
18.2 	affidavit must show that:
18.3 	(1) the expansion proposed by the charter school is supported by need and projected 
18.4 	enrollment;
18.5 	(2) the charter school expansion is warranted, at a minimum, by longitudinal data 
18.6 	demonstrating students' improved academic performance and growth on statewide 
18.7 	assessments under chapter 120B;
18.8 	(3) the charter school is fiscally sound and has the financial capacity to implement 
18.9 	the proposed expansion; and
18.10 	(4) the authorizer finds that the charter school has the management capacity to 
18.11 	carry out its expansion.
18.12 	(k) The commissioner shall have 30 business days to review and comment on the 
18.13 	supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in 
18.14 	the supplemental affidavit and the authorizer then has 30 business days to address, to the 
18.15 	commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school 
18.16 	may not expand grades or add sites until the commissioner has approved the supplemental 
18.17 	affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.
18.18 	(l) A charter school approved and operating under this section shall not merge with 
18.19 	another charter school without prior approval from the commissioner. The merger shall 
18.20 	comply with chapter 317A and section 124D.11, subdivision 9, paragraph (g). The 
18.21 	commissioner shall review the proposed merger submitted by the proposed surviving 
18.22 	charter school and approve or disapprove the merger based on the following criteria:
18.23 	(i) the financial management plan, including the transfer of assets and liabilities;
18.24 	(ii) the administration and operations plan;
18.25 	(iii) the school's governance plan; and
18.26 	(iv) the academic achievement plan.

18.27 	Sec. 11. Minnesota Statutes 2009 Supplement, section 124D.10, is amended by adding 
18.28 	a subdivision to read:
18.29 		Subd. 4b.Replication of high-performing charter schools. (a) The commissioner 
18.30 	may approve up to five charter or school models proven to emulate highly effective 
18.31 	practices and significantly improve student academic growth and proficiency as measured 
18.32 	by the statewide accountability system under chapter 120B or another state's federally 
18.33 	approved accountability system under the Elementary and Secondary Education Act. 
18.34 	An approved authorizer must submit an application to the commissioner to replicate 
18.35 	high-performing charter schools as a separate new school under an existing or new 
19.1 	charter. The commissioner must evaluate the application under this subdivision against 
19.2 	the following criteria:
19.3 	(1) the financial management plan;
19.4 	(2) the administration and operations plan;
19.5 	(3) the school's governance plan;
19.6 	(4) the academic achievement plan, including targeting at-risk students; and
19.7 	(5) conformity with federal and state law.
19.8 	(b) Replication models approved by the commissioner under this subdivision are 
19.9 	exempt from subdivision 4, paragraph (g), items (i) to (iii), and may operate separate 
19.10 	charter schools under the direction of one single board. The charter school board must 
19.11 	hold elections as outlined in this section and consistent with the charter school board's 
19.12 	bylaws. Each charter school operated under this subdivision must conduct a separate 
19.13 	lottery and enrollment process. Charter schools approved under this subdivision are 
19.14 	eligible to receive state charter school start-up aid as one eligible site and must not receive 
19.15 	start-up aid for multiple sites. The commissioner may only approve up to five charter 
19.16 	sites. An approved applicant must resubmit a new application to the commissioner under 
19.17 	this subdivision to replicate more than five charter school sites. The commissioner shall 
19.18 	have 60 business days to review the application. The commissioner shall notify the 
19.19 	authorizer of any deficiencies in the application and the authorizer will have 20 business 
19.20 	days to address, to the commissioner's satisfaction, any deficiencies in the application. 
19.21 	The commissioner's decision is final.

19.22 	Sec. 12. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 6a, 
19.23 	is amended to read:
19.24 		Subd. 6a.Audit report. (a) The charter school must submit an audit report to the 
19.25 	commissioner and its authorizer by December 31 each year.
19.26 	(b) The charter school, with the assistance of the auditor conducting the audit, must 
19.27 	include with the report a copy of all charter school agreements for corporate management 
19.28 	services. If the entity that provides the professional services to the charter school is 
19.29 	exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 
19.30 	must file with the commissioner by February 15 a copy of the annual return required under 
19.31 	section 6033 of the Internal Revenue Code of 1986.
19.32 	(c) If the commissioner receives an audit report indicating that a material weakness 
19.33 	exists in the financial reporting systems of a charter school, the charter school must submit 
19.34 	a written report to the commissioner explaining how the material weakness will be 
20.1 	resolved. The entity that provides professional services to the charter school must provide 
20.2 	information about the school's financial audit to the commissioner upon request.

20.3 	Sec. 13. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 23, 
20.4 	is amended to read:
20.5 		Subd. 23.Causes for nonrenewal or termination of charter school contract. (a) 
20.6 	The duration of the contract with an authorizer must be for the term contained in the 
20.7 	contract according to subdivision 6. The authorizer may or may not renew a contract at 
20.8 	the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally 
20.9 	terminate a contract during the term of the contract for any ground listed in paragraph 
20.10 	(b). At least 60 days before not renewing or terminating a contract, the authorizer shall 
20.11 	notify the board of directors of the charter school of the proposed action in writing. The 
20.12 	notice shall state the grounds for the proposed action in reasonable detail and that the 
20.13 	charter school's board of directors may request in writing an informal hearing before the 
20.14 	authorizer within 15 business days of receiving notice of nonrenewal or termination of the 
20.15 	contract. Failure by the board of directors to make a written request for a hearing within 
20.16 	the 15-business-day period shall be treated as acquiescence to the proposed action. Upon 
20.17 	receiving a timely written request for a hearing, the authorizer shall give ten business days' 
20.18 	notice to the charter school's board of directors of the hearing date. The authorizer shall 
20.19 	conduct an informal hearing before taking final action. The authorizer shall take final 
20.20 	action to renew or not renew a contract no later than 20 business days before the proposed 
20.21 	date for terminating the contract or the end date of the contract.
20.22 	(b) A contract may be terminated or not renewed upon any of the following grounds:
20.23 	(1) failure to meet the requirements for pupil performance contained in the contract;
20.24 	(2) failure to meet generally accepted standards of fiscal management;
20.25 	(3) violations of law; or
20.26 	(4) other good cause shown.
20.27 	If a contract is terminated or not renewed under this paragraph, the school must be 
20.28 	dissolved according to the applicable provisions of chapter 308A or 317A.
20.29 	(c) If the sponsor and the charter school board of directors mutually agree to 
20.30 	terminate or not renew the contract, a change in sponsors is allowed if the commissioner 
20.31 	approves the transfer to a different eligible authorizer to authorize the charter school. 
20.32 	Both parties must jointly submit their intent in writing to the commissioner to mutually 
20.33 	terminate the contract. The sponsor that is a party to the existing contract at least must 
20.34 	inform the approved different eligible sponsor about the fiscal and operational status 
20.35 	and student performance of the school. Before the commissioner determines whether 
21.1 	to approve a transfer of authorizer, the commissioner first must determine whether the 
21.2 	charter school and prospective new authorizer can identify and effectively resolve those 
21.3 	circumstances causing the previous authorizer and the charter school to mutually agree to 
21.4 	terminate the contract. If no transfer of sponsor is approved, the school must be dissolved 
21.5 	according to applicable law and the terms of the contract.
21.6 	(d) The commissioner, after providing reasonable notice to the board of directors of 
21.7 	a charter school and the existing authorizer, and after providing an opportunity for a public 
21.8 	hearing, may terminate the existing contract between the authorizer and the charter school 
21.9 	board if the charter school has a history of:
21.10 	(1) failure to meet pupil performance requirements contained in the contract
21.11 	consistent with state law;
21.12 	(2) financial mismanagement or failure to meet generally accepted standards of 
21.13 	fiscal management; or
21.14 	(3) repeated or major violations of the law.
21.15 	(e) If the commissioner terminates a charter school contract under subdivision 3, 
21.16 	paragraph (g), the commissioner shall provide the charter school with information about 
21.17 	other eligible authorizers.

21.18 	Sec. 14. Minnesota Statutes 2008, section 127A.42, subdivision 2, is amended to read:
21.19 		Subd. 2.Violations of law. The commissioner may reduce or withhold the district's 
21.20 	state aid for any school year whenever the board of the district authorizes or permits 
21.21 	violations of law within the district by:
21.22 	(1) employing a teacher who does not hold a valid teaching license or permit in a 
21.23 	public school;
21.24 	(2) noncompliance with a mandatory rule of general application promulgated by the 
21.25 	commissioner in accordance with statute, unless special circumstances make enforcement 
21.26 	inequitable, impose an extraordinary hardship on the district, or the rule is contrary to 
21.27 	the district's best interests;
21.28 	(3) the district's continued performance of a contract made for the rental of rooms 
21.29 	or buildings for school purposes or for the rental of any facility owned or operated by or 
21.30 	under the direction of any private organization, if the contract has been disapproved, the 
21.31 	time for review of the determination of disapproval has expired, and no proceeding for 
21.32 	review is pending;
21.33 	(4) any practice which is a violation of sections 1 and 2 of article 13 of the 
21.34 	Constitution of the state of Minnesota;
22.1 	(5) failure to reasonably provide for a resident pupil's school attendance under 
22.2 	Minnesota Statutes;
22.3 	(6) noncompliance with state laws prohibiting discrimination because of race, 
22.4 	color, creed, religion, national origin, sex, age, marital status, status with regard to 
22.5 	public assistance or disability, as defined in sections 363A.08 to 363A.19 and 363A.28, 
22.6 	subdivision 10; or 
22.7 	(7) using funds contrary to the statutory purpose of the funds.
22.8 	The reduction or withholding must be made in the amount and upon the procedure 
22.9 	provided in this section, or, in the case of the violation stated in clause (1), upon the 
22.10 	procedure provided in section 127A.43.

22.11 	Sec. 15. Minnesota Statutes 2008, section 127A.43, is amended to read:
22.12 	127A.43 DISTRICT EMPLOYMENT OF UNLICENSED TEACHERS; AID 
22.13 	REDUCTION.
22.14 	When a district employs one or more teachers who do not hold a valid teaching 
22.15 	license, state aid shall be withheld reduced in the proportion that the number of such 
22.16 	teachers is to the total number of teachers employed by the district, multiplied by 60 
22.17 	percent of the basic revenue, as defined in section 126C.10, subdivision 2, of the district 
22.18 	for the year in which the employment occurred.  

22.19 	ARTICLE 3
22.20 	SPECIAL PROGRAMS

22.21 	Section 1. Minnesota Statutes 2009 Supplement, section 125A.02, subdivision 1, 
22.22 	is amended to read:
22.23 		Subdivision 1.Child with a disability. "Child with a disability" means a child 
22.24 	identified under federal and state special education law as having a hearing impairment
22.25 	who meets the criteria for deaf and hard-of-hearing, blindness, visual disability blind 
22.26 	or visually impaired, speech or language impairment impairments, physical disability
22.27 	physically impaired, other health impairment disabilities, mental developmental cognitive
22.28 	disability, emotional/behavioral disorder emotional or behavioral disorders, specific 
22.29 	learning disability, autism spectrum disorders, traumatic brain injury, multiple disabilities
22.30 	severely multiply impaired, or deafblind disability and who needs special education 
22.31 	and related services, as determined by the rules of the commissioner, is a child with a 
22.32 	disability. A licensed physician, an advanced practice nurse, or a licensed psychologist is 
23.1 	qualified to make a diagnosis and determination of attention deficit disorder or attention 
23.2 	deficit hyperactivity disorder for purposes of identifying a child with a disability.

23.3 	Sec. 2. Minnesota Statutes 2008, section 125A.21, subdivision 3, is amended to read:
23.4 		Subd. 3.Use of reimbursements. Of the reimbursements received, districts may:
23.5 	(1) retain an amount sufficient to compensate the district for its administrative costs 
23.6 	of obtaining reimbursements;
23.7 	(2) regularly obtain from education- and health-related entities training and other 
23.8 	appropriate technical assistance designed to improve the district's ability to determine 
23.9 	which services are reimbursable and to seek timely reimbursement in a cost-effective 
23.10 	manner access third-party payments for individualized education program health-related 
23.11 	services; or
23.12 	(3) reallocate reimbursements for the benefit of students with special needs
23.13 	individualized education programs or individual family service plans in the district.

23.14 	Sec. 3. Minnesota Statutes 2008, section 125A.21, subdivision 5, is amended to read:
23.15 		Subd. 5.Informed consent. When obtaining informed consent, consistent with 
23.16 	sections 13.05, subdivision 4, paragraph (d); and 256B.77, subdivision 2, paragraph (p), 
23.17 	and Code of Federal Regulations, title 34, parts 99 and 300, to bill health plans for covered 
23.18 	services, the school district must notify the legal representative (1) that the cost of the 
23.19 	person's private health insurance premium may increase due to providing the covered 
23.20 	service in the school setting, (2) that the school district may pay certain enrollee health 
23.21 	plan costs, including but not limited to, co-payments, coinsurance, deductibles, premium 
23.22 	increases or other enrollee cost-sharing amounts for health and related services required 
23.23 	by an individual service plan, or individual family service plan, and (3) that the school's 
23.24 	billing for each type of covered service may affect service limits and prior authorization 
23.25 	thresholds. The informed consent may be revoked in writing at any time by the person 
23.26 	authorizing the billing of the health plan.  

23.27 	Sec. 4. Minnesota Statutes 2008, section 125A.21, subdivision 7, is amended to read:
23.28 		Subd. 7.District disclosure of information. A school district may disclose 
23.29 	information contained in a student's individual education plan, consistent with section 
23.30 	13.32, subdivision 3, paragraph (a), and Code of Federal Regulations, title 34, part 99;
23.31 	including records of the student's diagnosis and treatment, to a health plan company only 
23.32 	with the signed and dated consent of the student's parent, or other legally authorized 
23.33 	individual. The school district shall disclose only that information necessary for the health 
24.1 	plan company to decide matters of coverage and payment. A health plan company may 
24.2 	use the information only for making decisions regarding coverage and payment, and for 
24.3 	any other use permitted by law.  

24.4 	Sec. 5. Minnesota Statutes 2009 Supplement, section 125A.63, subdivision 2, is 
24.5 	amended to read:
24.6 		Subd. 2.Programs. The Department of Education, through the resource centers 
24.7 	must offer summer institutes or other training programs and other educational strategies
24.8 	throughout the state for deaf or hard-of-hearing, blind or visually impaired, and multiply 
24.9 	disabled pupils. The resource centers must also offer workshops for teachers, and 
24.10 	leadership development for teachers.
24.11 	A program offered through the resource centers must promote and develop education 
24.12 	programs offered by school districts or other organizations. The program must assist 
24.13 	school districts or other organizations to develop innovative programs.

24.14 	Sec. 6. Minnesota Statutes 2009 Supplement, section 125A.63, subdivision 4, is 
24.15 	amended to read:
24.16 		Subd. 4.Advisory committees. (a) The commissioner shall establish an 
24.17 	advisory committee for each resource center. The advisory committees shall develop 
24.18 	recommendations regarding the resource centers and submit an annual report to the 
24.19 	commissioner on the form and in the manner prescribed by the commissioner.
24.20 	(b) The advisory committee for the Resource Center for the Deaf and Hard of 
24.21 	Hearing shall meet periodically at least four times per year and submit an annual report 
24.22 	to the commissioner, the education policy and finance committees of the legislature, 
24.23 	and the Commission of Deaf, DeafBlind, and Hard of Hearing Minnesotans. The report 
24.24 	must, at least:
24.25 	(1) identify and report the aggregate, data-based education outcomes for children 
24.26 	with the primary disability classification of deaf and hard of hearing, consistent with the 
24.27 	commissioner's child count reporting practices, the commissioner's state and local outcome 
24.28 	data reporting system by district and region, and the school performance report cards under 
24.29 	section 120B.36, subdivision 1, and relevant IDEA Part B mandated reporting data; and
24.30 	(2) describe the implementation of a data-based plan for improving the education 
24.31 	outcomes of deaf and hard of hearing children that is premised on evidence-based best 
24.32 	practices, and provide a cost estimate for ongoing implementation of the plan.

24.33 	Sec. 7. REVISOR'S INSTRUCTION.
 25.1 	The revisor of statutes shall substitute the term "individualized education program" 
25.2 	or similar terms for "individual education plan" or similar terms wherever they appear 
25.3 	in Minnesota Statutes and Minnesota Rules referring to the requirements relating to 
25.4 	the federal Individuals with Disabilities Education Act. The revisor shall also make 
25.5 	grammatical changes related to the changes in terms.

25.6 	Sec. 8.  REPEALER.
 25.7 	Minnesota Statutes 2008, section 125A.54, is repealed.

25.8 	ARTICLE 4
25.9 	EARLY CHILDHOOD EDUCATION

25.10 	Section 1. Minnesota Statutes 2008, section 121A.16, is amended to read:
25.11 	121A.16 EARLY CHILDHOOD HEALTH AND DEVELOPMENT 
25.12 	SCREENING; PURPOSE.
25.13 	The legislature finds that early detection of children's health and developmental 
25.14 	problems can reduce their later need for costly care, minimize their physical and 
25.15 	educational disabilities, and aid in their rehabilitation. The purpose of sections 121A.16
25.16 	to 121A.19 is to assist parents and communities in improving the health of Minnesota 
25.17 	children and in planning educational and health programs. Charter schools that elect to 
25.18 	provide a screening program must comply with the requirements of sections 121A.16 to 
25.19 	121A.19.

25.20 	Sec. 2. Minnesota Statutes 2008, section 121A.17, subdivision 5, is amended to read:
25.21 		Subd. 5.Developmental screening program information. The board must inform 
25.22 	each resident family with a child eligible to participate in the developmental screening 
25.23 	program, and a charter school that provides screening must inform families that apply 
25.24 	for admission to the charter school, about the availability of the program and the state's 
25.25 	requirement that a child receive a developmental screening or provide health records 
25.26 	indicating that the child received a comparable developmental screening from a public or 
25.27 	private health care organization or individual health care provider not later than 30 days 
25.28 	after the first day of attending kindergarten in a public school. A school district must 
25.29 	inform all resident families with eligible children under age seven that their children may 
25.30 	receive a developmental screening conducted either by the school district or by a public or 
25.31 	private health care organization or individual health care provider and that the screening 
25.32 	is not required if a statement signed by the child's parent or guardian is submitted to the 
26.1 	administrator or other person having general control and supervision of the school that 
26.2 	the child has not been screened.

26.3 	Sec. 3. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 8, is 
26.4 	amended to read:
26.5 		Subd. 8.Federal, state, and local requirements. (a) A charter school shall meet all 
26.6 	federal, state, and local health and safety requirements applicable to school districts.
26.7 	(b) A school must comply with statewide accountability requirements governing 
26.8 	standards and assessments in chapter 120B.
26.9 	(c) A school sponsored by a school board may be located in any district, unless the 
26.10 	school board of the district of the proposed location disapproves by written resolution.
26.11 	(d) A charter school must be nonsectarian in its programs, admission policies, 
26.12 	employment practices, and all other operations. A sponsor may not authorize a charter 
26.13 	school or program that is affiliated with a nonpublic sectarian school or a religious 
26.14 	institution. A charter school student must be released for religious instruction, consistent 
26.15 	with section 120A.22, subdivision 12, clause (3).
26.16 	(e) Charter schools must not be used as a method of providing education or 
26.17 	generating revenue for students who are being home-schooled.
26.18 	(f) The primary focus of a charter school must be to provide a comprehensive 
26.19 	program of instruction for at least one grade or age group from five through 18 years 
26.20 	of age. Instruction may be provided to people younger than five years and older than 
26.21 	18 years of age.
26.22 	(g) A charter school may not charge tuition.
26.23 	(h) A charter school is subject to and must comply with chapter 363A and section 
26.24 	121A.04.
26.25 	(i) A charter school is subject to and must comply with the Pupil Fair Dismissal 
26.26 	Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections 
26.27 	123B.34 to 123B.39.
26.28 	(j) A charter school is subject to the same financial audits, audit procedures, and 
26.29 	audit requirements as a district. Audits must be conducted in compliance with generally 
26.30 	accepted governmental auditing standards, the Federal Single Audit Act, if applicable, 
26.31 	and section 6.65. A charter school is subject to and must comply with sections 15.054; 
26.32 	118A.01; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 471.38; 471.391; 471.392; and 
26.33 	471.425. The audit must comply with the requirements of sections 123B.75 to 123B.83, 
26.34 	except to the extent deviations are necessary because of the program at the school. 
26.35 	Deviations must be approved by the commissioner and authorizer. The Department of 
27.1 	Education, state auditor, legislative auditor, or authorizer may conduct financial, program, 
27.2 	or compliance audits. A charter school determined to be in statutory operating debt under 
27.3 	sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4.
27.4 	(k) A charter school is a district for the purposes of tort liability under chapter 466.
27.5 	(l) A charter school must comply with chapters 13 and 13D; and sections 120A.22, 
27.6 	subdivision 7; 121A.75; and 260B.171, subdivisions 3 and 5.
27.7 	(m) A charter school is subject to the Pledge of Allegiance requirement under 
27.8 	section 121A.11, subdivision 3.
27.9 	(n) A charter school offering online courses or programs must comply with section 
27.10 	124D.095.
27.11 	(o) A charter school and charter school board of directors are subject to chapter 181.
27.12 	(p) A charter school must comply with section 120A.22, subdivision 7, governing 
27.13 	the transfer of students' educational records and sections 138.163 and 138.17 governing 
27.14 	the management of local records.
27.15 	(q) A charter school that provides early childhood health and developmental 
27.16 	screening must comply with sections 121A.16 to 121A.19.

27.17 	Sec. 4. [124D.145] EARLY LEARNING AND CARE SYSTEM.
27.18 	The early learning and care system is defined to be a coherent structure of 
27.19 	research-based curriculum content, instructional practice, child and program assessments, 
27.20 	and performance-based child and programmatic standards as well as family supports, 
27.21 	professional development, engagement and outreach, accountability, financing, and 
27.22 	governance efforts that contribute to all aspects of children's development and prepare 
27.23 	all children for kindergarten. This includes children's readiness for success in meeting 
27.24 	Minnesota's kindergarten academic standards under section 120B.021. The system is 
27.25 	delivered through a variety of public and private child care, preschool, Head Start, and 
27.26 	school-based programs and services.

27.27 	Sec. 5. Minnesota Statutes 2009 Supplement, section 124D.15, subdivision 3, is 
27.28 	amended to read:
27.29 		Subd. 3.Program requirements. A school readiness program provider must:
27.30 	(1) assess each child's cognitive skills with a comprehensive child assessment 
27.31 	instrument when the child enters and again before the child leaves the program to inform 
27.32 	program planning and parents and promote kindergarten readiness;
27.33 	(2) provide comprehensive program content and intentional instructional practice 
27.34 	aligned with the state early childhood learning guidelines and kindergarten standards and 
28.1 	based on early childhood research and professional practice that is focused on children's 
28.2 	cognitive, social, emotional, and physical skills and development and prepares children 
28.3 	for the transition to kindergarten, including early literacy skills;
28.4 	(3) coordinate appropriate kindergarten transition with parents and kindergarten 
28.5 	teachers;
28.6 	(4) arrange for early childhood screening and appropriate referral;
28.7 	(5) (4) involve parents in program planning and decision making;
28.8 	(6) (5) coordinate with relevant community-based services;
28.9 	(7) (6) cooperate with adult basic education programs and other adult literacy 
28.10 	programs;
28.11 	(8) (7) ensure staff-child ratios of one-to-ten and maximum group size of 20 children 
28.12 	with the first staff required to be a teacher; and
28.13 	(9) (8) have teachers knowledgeable in early childhood curriculum content, 
28.14 	assessment, and instruction.

28.15 	Sec. 6. Minnesota Statutes 2008, section 124D.15, is amended by adding a subdivision 
28.16 	to read:
28.17 		Subd. 15.Eligibility. (a) A child is eligible to participate in a school readiness 
28.18 	program if the child:
28.19 	(1) is at least three years old on September 1;
28.20 	(2) has completed health and developmental screening under sections 121A.16 to 
28.21 	121A.19; and
28.22 	(3) has one or more of the following risk factors:
28.23 	(i) qualifies for free or reduced-price lunch;
28.24 	(ii) is an English language learning child;
28.25 	(iii) is homeless;
28.26 	(iv) has an individualized education program (IEP) or an individual interagency 
28.27 	intervention plan (IIIP);
28.28 	(v) is identified, through health and developmental screenings under sections 
28.29 	121A.16 to 121A.19, with a potential risk factor that may influence learning; or
28.30 	(vi) is defined as at risk by the school district.
28.31 	(b) Children who do not meet the eligibility requirements may participate in a school 
28.32 	readiness program on a fee-for-service basis.

28.33 	Sec. 7. Minnesota Statutes 2008, section 124D.20, subdivision 8, is amended to read:
29.1 		Subd. 8.Uses of general revenue. (a) General community education revenue 
29.2 	may be used for:
29.3 	(1) nonvocational, recreational, and leisure time activities and programs;
29.4 	(2) programs for adults with disabilities, if the programs and budgets are approved 
29.5 	by the department;
29.6 	(3) adult basic education programs, according to section 124D.52; 
29.7 	(4) summer programs for elementary and secondary pupils;
29.8 	(5) implementation of a youth development plan;
29.9 	(6) implementation of a youth service program;
29.10 	(7) early childhood family education programs, according to section 124D.13; and
29.11 	(8) school readiness programs, according to section 124D.15; and
29.12 	(9) extended day programs, according to section 124D.19, subdivision 11. 
29.13 	(9)(b) In addition to money from other sources, a district may use up to ten percent 
29.14 	of its community education revenue for equipment that is used exclusively in community 
29.15 	education programs. This revenue may be used only for the following purposes:
29.16 	(i) (1) to purchase or lease computers and related materials;
29.17 	(ii) (2) to purchase or lease equipment for instructional programs; and
29.18 	(iii) (3) to purchase textbooks and library books.
29.19 	(b) (c) General community education revenue must not be used to subsidize the 
29.20 	direct activity costs for adult enrichment programs. Direct activity costs include, but 
29.21 	are not limited to, the cost of the activity leader or instructor, cost of materials, or 
29.22 	transportation costs.