SF 867

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:16am

A bill for an act
relating to education; modifying charter school provisions; amending Minnesota
Statutes 2008, sections 124D.10, subdivisions 1, 2a, 3, 4, 4a, 5, 6, 6a, 7, 8, 9, 11,
14, 15, 17, 20, 23, 23a, 25, by adding subdivisions; 124D.11, subdivisions 4, 9;
repealing Minnesota Statutes 2008, section 124D.10, subdivisions 18, 19, 26.

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

Section 1.

Minnesota Statutes 2008, section 124D.10, subdivision 1, is amended to
read:

Subdivision 1.

Purposes.

(a) The purpose of this section is to:

(1) improve pupil learning new text begin and student achievement new text end ;

(2) increase learning opportunities for pupils;

(3) encourage the use of different and innovative teaching methods;

(4) deleted text begin require the measurement of deleted text end new text begin measure new text end learning outcomes and create different and
innovative forms of measuring outcomes;

(5) establish new forms of accountability for schools; deleted text begin or deleted text end new text begin and
new text end

(6) create new professional opportunities for teachers, including the opportunity to
be responsible for the learning program at the school site.

(b) This section does not provide a means to keep open new text begin or replace new text end a school that
otherwise would be closed. Applicants in these circumstances bear the burden of proving
that conversion to a charter school fulfills deleted text begin a purpose deleted text end new text begin the purposes new text end specified in this
subdivision, independent of the school's closing.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 124D.10, subdivision 2a, is amended to read:

Subd. 2a.

Charter School Advisory Council.

(a) A Charter School Advisory
Council is established deleted text begin under section 15.059 except that deleted text end new text begin and new text end the term for each council
member shall be three years. The advisory council is composed of deleted text begin seven deleted text end new text begin nine new text end members deleted text begin
from throughout the state who have demonstrated experience with or interest in charter
schools. The members of the council shall be appointed by the commissioner deleted text end . deleted text begin The
advisory council shall bring to the attention of the commissioner any matters related to
charter schools that the council deems necessary and shall: deleted text end new text begin The members may include
charter school sponsors, charter school personnel, public K-12 teachers, school board
members, parents of currently enrolled K-12 public school students, and school district
representatives. The commissioner shall appoint the council members. The commissioner
shall consider geographic balance when making these appointments.
new text end

deleted text begin (1) encourage school boards to make full use of charter school opportunities;
deleted text end

deleted text begin (2) encourage the creation of innovative schools;
deleted text end

deleted text begin (3) provide leadership and support for charter school sponsors to increase the
innovation in and the effectiveness, accountability, and fiscal soundness of charter schools;
deleted text end

deleted text begin (4) serve an ombudsman function in facilitating the operations of new and existing
charter schools;
deleted text end

deleted text begin (5) promote timely financial management training for newly elected members of
a charter school board of directors and ongoing training for other members of a charter
school board of directors; and
deleted text end

deleted text begin (6) facilitate compliance with auditing and other reporting requirements. The
advisory council shall refer all its proposals to the commissioner who shall provide time
for reports from the council.
deleted text end

new text begin The advisory council shall advise and make recommendations to the commissioner
on sponsoring charter schools and other matters, including:
new text end

new text begin (1) approving, reviewing, and disciplining sponsors, consistent with this section;
new text end

new text begin (2) supporting charter school innovation, effectiveness, accountability, and fiscal
soundness;
new text end

new text begin (3) providing a management training program for charter school administrators
and board members;
new text end

new text begin (4) complying with auditing and other financial reporting requirements;
new text end

new text begin (5) reviewing affidavits, charter school applications, and charter school grade and
program expansion applications; and
new text end

new text begin (6) identifying models to improve communication, cooperation, and the exchange of
ideas between and among public charter and district schools.
new text end

(b) new text begin The advisory council shall recommend to the commissioner and the chairs and
ranking minority members of the legislative committees with jurisdiction over education
policy and finance by December 1, 2009, an organizational model to give state-level
leadership to new school planning, development, start-up, and successful ongoing
operation in both the district and chartered sectors of public education. The council, as
part of its recommendation, must suggest legislation necessary to implement this new
state-level organization model.
new text end

new text begin (c) new text end The Charter School Advisory Council under this subdivision expires June 30,
deleted text begin 2007 deleted text end new text begin 2015 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (c) is effective retroactively to June 30, 2007.
new text end

Sec. 3.

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

Subd. 3.

Sponsor.

(a) new text begin For the purposes of this section:
new text end

new text begin (1) "application" means the charter school business and operational plan a school
developer submits to a sponsor for approval that documents the school developer's
mission statement, school purposes, program design, financial plan, governance and
management structure, and background and experience, plus any other information the
sponsor requests. The application also shall include a "statement of assurance" of legal
compliance as prescribed by the commissioner; and
new text end

new text begin (2) "affidavit" means a written statement the sponsor submits to the commissioner
for approval under subdivision 4 attesting to its review and approval of a school charter.
new text end

new text begin (b) The following organizations may sponsor one or more charter schools:
new text end

new text begin (1) new text end a school board; intermediate school district school board; education district
organized under sections 123A.15 to 123A.19;

new text begin (2) new text end charitable organization under section 501(c)(3) of the Internal Revenue Code
of 1986 new text begin , excluding a nonpublic sectarian or religious institution, any person other than a
natural person who directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with the nonpublic sectarian or religious
institution, and any other charitable organization under this clause that in the federal IRS
Form 1023, Part IV, describes activities indicating a religious purpose, new text end that new text begin :
new text end

new text begin (i) new text end is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
Foundations deleted text begin , deleted text end new text begin ;
new text end

new text begin (ii) is new text end registered with the attorney general's office deleted text begin , and deleted text end new text begin ;
new text end

new text begin (iii) new text end reports an deleted text begin end-of-year deleted text end new text begin ongoing new text end fund balance of at least $2,000,000 new text begin for at least
four consecutive years; and
new text end

new text begin (iv) is incorporated in the state of Minnesota new text end ;

new text begin (3) a new text end Minnesota private college new text begin , notwithstanding clause (2), new text end that grants two- or
four-year degrees and is registered with the Minnesota Office of Higher Education under
chapter 136A; community college, state university, or technical college, governed by the
Board of Trustees of the Minnesota State Colleges and Universities; or the University of
Minnesota deleted text begin may sponsor one or more charter schools. deleted text end new text begin ; new text end

deleted text begin (b) deleted text end new text begin (4) new text end a nonprofit corporation subject to chapter 317A, described in section
317A.905, deleted text begin and deleted text end exempt from federal income tax under deleted text begin section deleted text end new text begin sections 501(c)(3) or
new text end 501(c)(6) of the Internal Revenue Code of 1986, may sponsor one or more charter schools
if the charter school has operated for at least three years under a different sponsor new text begin or an
organization that has previously sponsored schools under this subdivision, new text end and if the
nonprofit corporation has deleted text begin existed deleted text end new text begin been incorporated in the state of Minnesota new text end for at least
deleted text begin 25 deleted text end new text begin 20 new text end years new text begin ; or
new text end

new text begin (5) no more than two single-purpose sponsors that are charitable organizations
formed under section 501(c)(3) of the Internal Revenue Code of 1986 and incorporated
in the state of Minnesota whose sole purpose is to sponsor charter schools. Eligible
organizations interested in being approved as a sponsor under this paragraph must submit
a proposal to the commissioner that includes the provisions of paragraph (c) and a
five-year financial plan new text end .

new text begin (c) An eligible sponsor under this subdivision must apply to the commissioner
for approval as a sponsor before submitting an affidavit to the commissioner to sponsor
a charter school. The application for approval as a charter school sponsor must
demonstrate the applicant's ability to implement the procedures and satisfy the criteria
for sponsoring a charter school under this section. The commissioner must approve or
disapprove an application within 60 business days of the application deadline. If the
commissioner disapproves the application, the commissioner must notify the applicant of
the deficiencies and the applicant then has 20 business days to address the deficiencies to
the commissioner's satisfaction. Failing to address the deficiencies to the commissioner's
satisfaction makes an applicant ineligible to be a sponsor. The affidavit to be submitted to
and evaluated by the commissioner must include at least the following:
new text end

new text begin (1) how sponsoring schools is a way for the organization to carry out its mission;
new text end

new text begin (2) a description of the capacity of the organization to serve as a sponsor, including
the personnel who will perform the sponsoring duties, their qualifications, the amount of
time they will be assigned to this responsibility, and the financial resources allocated
by the organization to this responsibility;
new text end

new text begin (3) a description of the application and review process the sponsor will use to make
decisions regarding the granting of charters, which will include at least the following:
new text end

new text begin (i) how the statutory purposes defined in subdivision 1 are addressed;
new text end

new text begin (ii) the mission, goals, program model, and student performance expectations;
new text end

new text begin (iii) an evaluation plan for the school that includes criteria for evaluating educational,
organizational, and fiscal plans;
new text end

new text begin (iv) the school's governance plan;
new text end

new text begin (v) the financial management plan; and
new text end

new text begin (vi) the administration and operations plan;
new text end

new text begin (4) a description of the type of contract it will arrange with the schools it sponsors
that meets the provisions of subdivision 6 and defines the rights and responsibilities of the
charter school for governing its educational program, controlling its funds, and making
school management decisions;
new text end

new text begin (5) the process to be used for providing ongoing oversight of the school consistent
with the contract expectations specified in clause (4) that assures that the schools sponsored
are complying with both the provisions of applicable law and rules, and with the contract;
new text end

new text begin (6) the process for making decisions regarding the renewal or termination of
the school's charter based on evidence that demonstrates the academic, organizational,
and financial competency of the school, including its success in increasing student
achievement and meeting the goals of the charter school agreement; and
new text end

new text begin (7) an assurance specifying that the organization is committed to serving as a
sponsor for the full five-year term.
new text end

new text begin (d) The sponsor must participate in department-approved training.
new text end

new text begin (e) A sponsor that chartered a school before August 1, 2009, must apply by June
30, 2011, to the commissioner for approval, under paragraph (c), to continue as a sponsor
under this section. For purposes of this paragraph, a sponsor that fails to submit a timely
application is ineligible to charter a school.
new text end

new text begin (f) The commissioner shall review a sponsor's performance every five years
in a manner and form determined by the commissioner and may review a sponsor's
performance more frequently at the commissioner's own initiative or at the request of a
charter school operator, charter school board member, or other interested party. The
commissioner, after completing the review, shall transmit a report with findings to the
sponsor. If, consistent with this section, the commissioner finds that a sponsor has not
fulfilled the requirements of this section, the commissioner may subject the sponsor to
corrective action, which may include terminating the contract with the charter school
board of directors of a school it sponsored. The commissioner must notify the sponsor in
writing of any findings that may subject the sponsor to corrective action and the sponsor
then has 15 business days to request an informal hearing before the commissioner takes
corrective action.
new text end

new text begin (g) The commissioner may at any time take corrective action against a sponsor,
including terminating a sponsor's ability to charter a school for:
new text end

new text begin (1) failing to demonstrate the criteria under paragraph (c) under which the
commissioner approved the sponsor;
new text end

new text begin (2) violating a term of the chartering contract between the sponsor and the charter
school board of directors; or
new text end

new text begin (3) violations by the charter school that the sponsor authorizes and that the board of
directors fails to correct.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

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

Subd. 4.

Formation of school.

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

(b) Before the operators may deleted text begin form deleted text end new text begin establish new text end and operate a school, the sponsor must
file an affidavit with the commissioner stating its intent to authorize a charter school. new text begin A
sponsor must file a separate affidavit for each school it intends to charter. new text end The affidavit
must state the terms and conditions under which the sponsor would authorize a charter
school and how the sponsor intends to oversee the fiscal and student performance of
the charter school and to comply with the terms of the written contract between the
sponsor and the charter school board of directors under subdivision 6. The commissioner
must approve or disapprove the sponsor's deleted text begin proposed authorization deleted text end new text begin affidavit new text end within deleted text begin 90 deleted text end new text begin 60
business new text end days of receipt of the affidavit. new text begin If the commissioner disapproves the affidavit, the
commissioner shall notify the sponsor of the deficiencies in the affidavit and the sponsor
then has 20 business days to address the deficiencies. If the sponsor does not address the
deficiencies to the commissioner's satisfaction, the commissioner's disapproval is final.
new text end Failure to obtain commissioner approval precludes a sponsor from deleted text begin authorizing the charter deleted text end new text begin
chartering the new text end school that deleted text begin was deleted text end new text begin is new text end the subject of deleted text begin the deleted text end new text begin this new text end affidavit.
new text begin new text end

(c) new text begin The sponsor 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 sponsor's oversight and evaluation process or
are stipulated in the charter school contract.
new text end

new text begin (d) new text end The operators authorized to organize and operate a school, before entering into
a contract or other agreement for professional or other services, goods, or facilities,
must incorporate as a cooperative under chapter 308A or as a nonprofit corporation
under chapter 317A and must establish a board of directors composed of at least five
members new text begin who are not related parties new text end until a timely election for members of the new text begin ongoing new text end
charter school board of directors is held according to the school's articles and bylaws new text begin
under paragraph (f) new text end . deleted text begin A charter school board of directors must be composed of at least
five members. Any deleted text end Staff members deleted text begin who are deleted text end employed at the school, including teachers
providing instruction under a contract with a cooperative, and all parents new text begin or legal guardians new text end
of children enrolled in the school deleted text begin may participate in the election for deleted text end new text begin are the voters eligible
to elect the new text end members of the school's board of directors. deleted text begin Licensed teachers employed at the
school, including teachers providing instruction under a contract with a cooperative, must
be a majority of the members of the board of directors before the school completes its
third year of operation, unless the commissioner waives the requirement for a majority
of licensed teachers on the board. deleted text end new text begin A charter school must notify eligible voters of the
school board election dates at least 30 days before the election. new text end Board of director meetings
must comply with chapter 13D.

new text begin (e) Every charter school board member shall attend department-approved training
on board governance, the board's role and responsibilities, employment policies and
practices, and financial management standards and practices. A board member who does
not begin the required training within three months of being seated and complete the
required training within 12 months of being seated on the board is ineligible to continue to
serve as a board member.
new text end

new text begin (f) The ongoing board must be elected before the school completes its third year
of operation. The charter school board of directors shall be composed of at least five
members who are not related parties and shall include at least a licensed teacher employed
at the school, a charter school parent or legal guardian, and an interested community
member. The chief financial officer and the chief administrator are nonvoting board
members. Board bylaws shall outline the process and procedures for changing the board's
governance model. A board may change its governance model within the requirements of
board membership in this section and only with approval from the sponsor and a voting
majority of the board of directors and the licensed teachers employed at the school.
new text end

deleted text begin (d) deleted text end new text begin (g) new text end The granting or renewal of a charter new text begin school new text end by a deleted text begin sponsoring entity deleted text end new text begin sponsor
new text end must not be conditioned upon the bargaining unit status of the employees of the school.

new text begin (h) The granting or renewal of a charter school by a sponsor must not be contingent
on a requirement to contract, lease, or purchase services from the sponsor. A party to
such an arrangement between a sponsor and a school must disclose the arrangement to
the commissioner. The commissioner may terminate a charter school contract under this
section if the commissioner determines that the arrangement is illegal.
new text end

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

(1) the expansion deleted text begin of deleted text end new text begin proposed by new text end the charter school is supported by need and
projected enrollment;

new text begin (2) the charter school expansion is warranted, at a minimum, by longitudinal data
demonstrating sustained academic performance and growth on statewide assessments
under chapter 120B;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end the charter school is fiscally sound new text begin and has the financial capacity to implement
the proposed expansion new text end ;

deleted text begin (3) deleted text end new text begin (4) new text end the deleted text begin sponsor supports the deleted text end new text begin charter school has the potential physical capacity to
implement the proposed new text end expansion; and

deleted text begin (4) the building of the additional site meets all health and safety requirements to
be eligible for lease aid deleted text end new text begin (5) the sponsor finds that the charter school has the management
capacity to implement the proposed expansion new text end .

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

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

deleted text begin (2) establish and maintain complete, auditable records for the charter school;
deleted text end

deleted text begin (3) establish proper filing techniques;
deleted text end

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

deleted text begin (5) properly manage and retain charter school and student records;
deleted text end

deleted text begin (6) comply with state and federal payroll record-keeping requirements; and
deleted text end

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

new text begin (j) The commissioner shall have 30 business days to review and comment on the
supplemental affidavit. The commissioner shall notify the sponsor of any deficiencies in
the supplemental affidavit and the sponsor then has 30 business days to address, to the
commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school
shall 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.
new text end

new text begin (k) A new charter school must not open in a newly consolidated district under
section 123A.48 or in a district dissolved under section 123A.46 for at least 36 months
after the date of consolidation or dissolution, except under subdivision 5 in this section or
unless the school board of the school district in which the charter school would be located
gives the sponsor written approval to do so.
new text end

new text begin (l) A new charter school must not open within a one-mile radius of a public school
that has closed under section 123B.51 for at least 36 months after the date the school
closed unless the commissioner determines that the new charter school applicant does not
intend to reestablish the closed public school as a charter school, except under subdivision
5 in this section or unless the school board of the school district in which the charter
school would be located gives the sponsor written approval to do so.
new text end

new text begin (m) A sponsor may apply to the commissioner for a waiver from paragraph (k) or
paragraph (l). The commissioner must use the criteria in this section to approve or deny
the waiver within 45 business days. The commissioner's decision is final.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009.
new text end

Sec. 5.

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

Subd. 4a.

Conflict of interest.

(a) deleted text begin A member of a charter school board of directors deleted text end new text begin
An individual new text end is prohibited from serving as a member of the new text begin charter school new text end board of
directors deleted text begin or as deleted text end new text begin if the individual, an immediate family member, or the individual's partner is new text end
an new text begin owner, new text end employee or agent of or a contractor with a for-profit new text begin or nonprofit new text end entity with
whom the charter school contracts, directly or indirectly, for professional services, goods,
or facilities. A violation of this prohibition renders a contract voidable at the option of
the commissioner new text begin or the charter school board of directors new text end . A member of a charter school
board of directors who violates this prohibition deleted text begin shall be deleted text end new text begin is new text end individually liable to the charter
school for any damage caused by the violation.

(b) new text begin No member of the board of directors, employee, officer, or agent of a charter
school shall participate in selecting, awarding, or administering a contract if a conflict
of interest exists. A conflict exists when:
new text end

new text begin (1) the board member, employee, officer, or agent;
new text end

new text begin (2) the immediate family of the board member, employee, officer, or agent;
new text end

new text begin (3) the partner of the board member, employee, officer, or agent; or
new text end

new text begin (4) an organization that employs, or is about to employ any individual in clauses
(1) to (3), has a financial or other interest in the entity with which the charter school is
contracting. A violation of this prohibition renders the contract void.
new text end

new text begin (c) Any employee, agent, or board member of the sponsor who participates in
the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
nonrenewal process or decision is ineligible to serve on the board of directors of a school
chartered by that sponsor.
new text end

new text begin (d) new text end An individual may serve as a member of the board of directors if no conflict of
interest under paragraph (a) exists.

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 124D.10, subdivision 5, is amended to read:

Subd. 5.

Conversion of existing schools.

A board new text begin of an independent or special
school district new text end may convert one or more of its existing schools to charter schools under
this section if 60 percent of the full-time teachers at the school sign a petition seeking
conversion. The conversion must occur at the beginning of an academic year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

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

Subd. 6.

new text begin Charter new text end contract.

The sponsor's authorization for a charter school must
be in the form of a written contract signed by the sponsor and the board of directors of
the charter school. The contract must be completed within deleted text begin 90 deleted text end new text begin 45 business new text end days of the
commissioner's approval of the sponsor's deleted text begin proposed authorization deleted text end new text begin affidavit. The sponsor
shall submit a copy of the signed contract to the commissioner within ten days of its
execution new text end . The contract for a charter school must be in writing and contain at least the
following:

(1) a description of deleted text begin a deleted text end new text begin how the new text end program deleted text begin that deleted text end carries out deleted text begin one or more of deleted text end the purposes
in subdivision 1;

(2) new text begin a description of the new text end specific new text begin academic and nonacademic new text end outcomes new text begin that new text end pupils
deleted text begin are to deleted text end new text begin must new text end achieve deleted text begin under subdivision 10 deleted text end ;

(3) new text begin a statement of new text end admission policies and procedures;

(4) new text begin a governance, new text end management and administration deleted text begin of deleted text end new text begin plan for new text end the school;

(5) new text begin signed agreements from charter school board members to comply with all federal
and state laws governing all organizational, programmatic, and financial new text end requirements deleted text begin and
procedures for program and financial audits deleted text end new text begin applicable to charter schools new text end ;

(6) deleted text begin how the school will comply with subdivisions 8, 13, 16, and 23 deleted text end new text begin the criteria,
processes, and procedures that the sponsor will use for ongoing oversight of operational,
financial, and academic performance new text end ;

(7) deleted text begin assumption of liability by the charter school deleted text end new text begin the performance evaluation that is a
prerequisite for reviewing a charter school contract under subdivision 15 new text end ;

(8) types and amounts of insurance new text begin liability new text end coverage to be obtained by the charter
school;

(9) the term of the contract, which may be up to three years new text begin for an initial contract,
plus a preoperational planning year and up to five years for a renewed contract if warranted
by the school's academic, financial, and operational performance new text end ;

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

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

new text begin (12) the plan for an orderly closing of the school under chapter 308A or chapter
317A, if the closure is a termination for cause, voluntary termination, or nonrenewal of
the contract that includes establishing the responsibilities of the charter school board of
directors and the sponsor, and notifying the commissioner, sponsor, the school district in
which the charter school is located, and parents of enrolled students about the closure, the
transfer of student records to the students' resident districts, and procedures for closing
financial operations new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

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

Subd. 6a.

Audit report.

new text begin (a) new text end The charter school must submit an audit report to the
commissioner new text begin and its sponsor new text end by December 31 each year.

new text begin (b) new text end The charter school, with the assistance of the auditor conducting the audit, must
include with the report a copy of all charter school agreements for corporate management
services. If the entity that provides the professional services to the charter school is
exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity
must file with the commissioner by February 15 a copy of the annual return required under
section 6033 of the Internal Revenue Code of 1986.

new text begin (c) new text end If the commissioner receives deleted text begin as part of the deleted text end new text begin an new text end audit report deleted text begin a management letter deleted text end
indicating that a material weakness exists in the financial reporting systems of a charter
school, the charter school must submit a written report to the commissioner explaining
how the material weakness will be resolved.

new text begin (d) new text end Upon the request of an individual, the charter school must make available in a
timely fashion the minutes of meetings of members, the board of directors, and committees
having any of the authority of the board of directors, and statements showing the financial
result of all operations and transactions affecting income and surplus during the school's
last annual accounting period and a balance sheet containing a summary of its assets and
liabilities as of the closing date of the accounting period.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2008, section 124D.10, subdivision 7, is amended to read:

Subd. 7.

Public status; exemption from statutes and rules.

A charter school is a
public school and is part of the state's system of public education. deleted text begin Except as provided in
this section, a charter school is exempt from all statutes and rules applicable to a school, a
board, or a district, although it may elect to comply with one or more provisions of statutes
or rules deleted text end new text begin A charter school is exempt from all statutes and rules applicable to a school,
school board, or school district unless a statute or rule is made specifically applicable to a
charter school or is included in this section new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 124D.10, subdivision 8, is amended to read:

Subd. 8.

new text begin Federal, new text end state new text begin , new text end and local requirements.

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

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

new text begin (c) new text end A school sponsored 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.

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

deleted text begin (d) deleted text end new text begin (e) new text end Charter schools must not be used as a method of providing education or
generating revenue for students who are being home-schooled.

deleted text begin (e) deleted text end new text begin (f) new text end 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 five through 18 years
of age. Instruction may be provided to people younger than five years and older than
18 years of age.

deleted text begin (f) deleted text end new text begin (g) new text end A charter school may not charge tuition.

deleted text begin (g) deleted text end new text begin (h) new text end A charter school is subject to and must comply with chapter 363A and
section 121A.04.

deleted text begin (h) deleted text end new text begin (i) new text end 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.

deleted text begin (i) deleted text end new text begin (j) new text end A charter school is subject to the same financial audits, audit procedures, and
audit requirements as a district. 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; deleted text begin 123B.52, subdivision 5; deleted text end
471.38; 471.391; 471.392; new text begin and new text end 471.425 deleted text begin ; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6,
12, 13, and 15; 471.881; and 471.89 deleted text end . 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 new text begin and sponsor new text end .
The Department of Education, state auditor, deleted text begin or deleted text end legislative auditor new text begin or sponsor new text end 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.

deleted text begin (j) deleted text end new text begin (k) new text end A charter school is a district for the purposes of tort liability under chapter 466.

deleted text begin (k) deleted text end new text begin (l) new text end A charter school must comply with deleted text begin sections 13.32 deleted text end new text begin chapters 13 and 13D new text end ; new text begin and
sections new text end 120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3 and 5.

deleted text begin (l) deleted text end new text begin (m) new text end A charter school is subject to the Pledge of Allegiance requirement under
section 121A.11, subdivision 3.

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

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

new text begin Subd. 8a. new text end

new text begin Aid reduction. new text end

new text begin The commissioner must reduce a charter school's state
aid according to section 127A.42, if the charter school board fails to correct a violation
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2008, section 124D.10, subdivision 9, is amended to read:

Subd. 9.

Admission requirements.

A charter school may limit admission to:

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

(2) deleted text begin people deleted text end new text begin pupils new text end who are eligible to participate in the graduation incentives program
under section 124D.68; or

(3) residents of a specific geographic area deleted text begin where the percentage of the population
of non-Caucasian people of that area is greater than the percentage of the non-Caucasian
population in the congressional district in which the geographic area is located, and as
long as the school reflects the racial and ethnic diversity of the specific area deleted text end new text begin when the
school serves low-income students at risk of academic failure new text end .

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. deleted text begin If a charter school is the only
school located in a town serving pupils within a particular grade level, then pupils that
are residents of the town must be given preference for enrollment before accepting pupils
by lot. If a pupil lives within two miles of a charter school and the next closest public
school is more than five miles away, the charter school must give those pupils preference
for enrollment before accepting other pupils by lot. deleted text end new text begin The charter school must develop and
publish a lottery policy and process that it must use when accepting pupils by lot.
new text end

A charter school shall give preference for enrollment to a sibling of an enrolled pupil
and to a foster child of that pupil's parents before accepting other pupils by lot.

A charter school may not limit admission to pupils on the basis of intellectual ability,
measures of achievement or aptitude, or athletic ability new text begin and may not establish any criteria
or requirements for admission that are inconsistent with this subdivision new text end .

new text begin 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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to the 2010-2011 school year.
new text end

Sec. 13.

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

Subd. 11.

Employment and other operating matters.

new text begin (a) new text end A charter school must
employ or contract with necessary teachers, as defined by section 122A.15, subdivision
1, who hold valid licenses to perform the particular service for which they are employed
in the school. The charter school's state aid may be reduced under section deleted text begin 127A.42 deleted text end new text begin
127A.43 new text end if the school employs a teacher who is not appropriately licensed or approved
by the board of teaching. The school may employ necessary employees who are not
required to hold teaching licenses to perform duties other than teaching and may contract
for other services. The school may discharge teachers and nonlicensed employees. new text begin The
charter school board of directors must comply with section 181.932 and a school shall not
discharge, discipline, threaten or discriminate against, or penalize an employee regarding
the employee's compensation, terms or conditions of work location or privileges of
employment because the employee, or person acting on the employee's behalf, in good
faith transmits to the department, the state of Minnesota or a local law enforcement
agency information about the school's financial circumstances, educational performance, a
conflict of interest, or other violation of law or school policy. The charter school board
of directors must enter into a written contract with each teacher that outlines the terms
and conditions of employment. new text end

new text begin (b) new text end A person, without holding a valid administrator's license, may perform
administrative, supervisory, or instructional leadership duties. new text begin The board of directors shall
establish qualifications for persons that hold administrative, supervisory, or instructional
leadership roles. The qualifications shall include at least the following areas: instruction
and assessment; human resource and personnel management; financial management;
legal and compliance management; effective communication; and board, sponsor, and
community relationships. The board of directors shall use those qualifications as the basis
for job descriptions, hiring, and performance evaluations of those who hold administrative,
supervisory, or instructional leadership roles. The board of directors and an individual
who does not hold a valid administrative license and who serves in an administrative,
supervisory, or instructional leadership position shall develop a professional development
plan. Documentation of the implementation of the professional development plan of these
persons shall be included in the school's annual report.
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2008, section 124D.10, subdivision 14, is amended to read:

Subd. 14.

Annual public reports.

A charter school must new text begin publish an annual new text end report deleted text begin at
least annually to its sponsor and the commissioner the information required by the sponsor
or the commissioner deleted text end new text begin approved by the board of directors. The annual report must at least
include information on school enrollment, student attrition, governance and management,
staffing, finances, academic performance, operational performance, innovative practices
and implementation, and future plans. A charter school must distribute the annual report
by publication, mail, or electronic means to the commissioner, sponsor, school employees,
and parents and legal guardians of students enrolled in the charter school and must also
post the report on the charter school's official Web site new text end . The reports are public data under
chapter 13.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

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

Subd. 15.

Review and comment.

(a) deleted text begin The department must review and comment on
the evaluation, by the sponsor, of the performance of a charter school before the charter
school's contract is renewed for another contract term. The sponsor must submit to the
commissioner timely information for the review and comment deleted text end new text begin The sponsor shall provide
a formal written evaluation of the school's performance before the sponsor renews the
charter contract. The department must review and comment on the sponsor's evaluation
process at the time the sponsor submits its application for approval and each time the
sponsor undergoes its five-year review under subdivision 3, paragraph (e) new text end .

(b) A sponsor shall monitor and evaluate the fiscal new text begin , operational, new text end and student
performance of the school, and may for this purpose annually assess a charter school deleted text begin : (1)
in its first, second, or third year of operation up to $30 per student up to a maximum of
$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up to
a maximum of $3,500 deleted text end new text begin a fee according to paragraph (c). The agreed upon fee structure
must be stated in the charter school contract new text end .

new text begin (c) The fee that each charter school pays to a sponsor each year is the greater of:
new text end

new text begin (1) the basic formula allowance for that year; or
new text end

new text begin (2) the lesser of:
new text end

new text begin (i) the maximum fee factor times the basic formula allowance for that year; or
new text end

new text begin (ii) 1.0 percent of the basic formula allowance for that year times the charter school's
adjusted marginal cost pupil units for that year. The maximum fee factor equals 1.5 in
fiscal year 2010, 2.0 in fiscal year 2011, 3.0 in fiscal year 2012, and 4.0 in fiscal years
2013 and later.
new text end

new text begin (d) The department and any charter school it sponsors must not assess or pay a
fee under paragraphs (b) and (c).
new text end

new text begin (e) For the preoperational planning period, the sponsor may assess a charter school a
fee equal to the basic formula allowance.
new text end

new text begin (f) By September 30 of each year, a sponsor shall submit to the commissioner a
statement of expenditures related to sponsoring activities during the previous school year
ending June 30. A copy of the statement shall be given to all schools chartered by the
sponsor.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2008, section 124D.10, subdivision 17, is amended to read:

Subd. 17.

Leased space.

A charter school may lease space from deleted text begin a deleted text end new text begin an independent
or special school new text end board eligible to be a sponsor or other public or private nonprofit
nonsectarian organization. new text begin The department must review and approve or disapprove the
lease agreement within 60 business days of receiving an application for lease aid. new text end If
a charter school is unable to lease appropriate space from an eligible board or other
public or private nonprofit nonsectarian organization, the school may lease space from
another nonsectarian organization if the Department of Education, in consultation with
the Department of Administration, approves the lease. If the school is unable to lease
appropriate space from public or private nonsectarian organizations, the school may lease
space from a sectarian organization if the leased space is constructed as a school facility
and the Department of Education, in consultation with the Department of Administration,
approves the lease.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

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

new text begin Subd. 17a. new text end

new text begin Building corporation. new text end

new text begin (a) A charter school is prohibited from
organizing the nonprofit building corporation until the sponsor files a supplementary
affidavit with and receives approval from the commissioner.
new text end

new text begin (b) Upon approval by the sponsor and the commissioner, a charter school that has
operated for at least three consecutive years and is not currently in statutory operating debt
may form a separate affiliated nonprofit building corporation to purchase or renovate
an existing facility. The nonprofit building corporation must elect a board of directors.
Members of the building corporation board of directors must not be members of the
charter school board of directors. The state is immune from any liability as a result of the
contractual arrangement and the facility. The sponsor shall submit a supplemental affidavit
to the commissioner stating that the sponsor has reviewed:
new text end

new text begin (1) the school's feasibility study on facility options;
new text end

new text begin (2) documents showing the school's need and projected enrollment for such a
facility; and
new text end

new text begin (3) the school's financial plan and financial status.
new text end

new text begin (c) Upon approval by the sponsor and the commissioner, a charter school that has
operated for at least eight consecutive years and is not currently in statutory operating
debt may form a separate affiliated nonprofit building corporation to construct a school
facility. The nonprofit building corporation must elect a board of directors. Members of
the building corporation board of directors must not be members of the charter school
board of directors. The state is immune from any liability as a result of the contractual
arrangement and the facility. The sponsor shall submit a supplemental affidavit to the
commissioner stating that the sponsor has reviewed:
new text end

new text begin (1) the school's feasibility study on facility options;
new text end

new text begin (2) documents showing the school's need and projected enrollment for such a facility;
new text end

new text begin (3) the school's financial plan and financial status; and
new text end

new text begin (4) the lack of other available existing facilities that could be renovated or purchased.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to building corporations formed after July 1, 2009.
new text end

Sec. 18.

Minnesota Statutes 2008, section 124D.10, subdivision 20, is amended to read:

Subd. 20.

Leave to teach in a charter school.

If a teacher employed by a district
makes a written request for an extended leave of absence to teach at a charter school,
the district must grant the leave. The district must grant a leave not to exceed a total of
five years. Any request to extend the leave shall be granted only at the discretion of the
school board. The district may require that the request for a leave or extension of leave
be made deleted text begin up to 90 days before the teacher would otherwise have to report for duty deleted text end new text begin before
February 1 in the school year preceding the school year in which the teacher wishes
to begin the leave, or February 1 of the calendar year in which the teacher's leave is
scheduled to terminate new text end . Except as otherwise provided in this subdivision and except for
section 122A.46, subdivision 7, the leave is governed by section 122A.46, including, but
not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.

During a leave, the teacher may continue to aggregate benefits and credits in the
Teachers' Retirement Association account deleted text begin by paying both the employer and employee
contributions based upon the annual salary of the teacher for the last full pay period before
the leave began. The retirement association may impose reasonable requirements to
efficiently administer this subdivision deleted text end new text begin according to chapters 354 and 354A new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2008, section 124D.10, subdivision 23, is amended to read:

Subd. 23.

Causes for nonrenewal or termination of charter school contract.

(a) The duration of the contract with a sponsor must be for the term contained in the
contract according to subdivision 6. The sponsor may or may not renew a contract at
the end of the term for any ground listed in paragraph (b). A sponsor may unilaterally
terminate a contract during the term of the contract for any ground listed in paragraph (b).
At least 60 days before not renewing or terminating a contract, the sponsor shall notify
the board of directors of the charter school of the proposed action in writing. The notice
shall state the grounds for the proposed action in reasonable detail and that the charter
school's board of directors may request in writing an informal hearing before the sponsor
within deleted text begin 14 deleted text end new text begin 15 business new text end days of receiving notice of nonrenewal or termination of the
contract. Failure by the board of directors to make a written request for a hearing within
the deleted text begin 14-day deleted text end new text begin 15-business-day new text end period shall be treated as acquiescence to the proposed action.
Upon receiving a timely written request for a hearing, the sponsor shall give deleted text begin reasonable deleted text end new text begin
ten business days new text end notice to the charter school's board of directors of the hearing date.
The sponsor shall conduct an informal hearing before taking final action. The sponsor
shall take final action to renew or not renew a contract deleted text begin by the last day of classes in the
school year. If the sponsor is a local board, the school's board of directors may appeal the
sponsor's decision to the commissioner deleted text end new text begin no later than 20 business days before the proposed
date for terminating the contract or the end date of the contract new text end .

(b) A contract may be terminated or not renewed upon any of the following grounds:

(1) failure to meet the requirements for pupil performance contained in the contract;

(2) failure to meet generally accepted standards of fiscal management;

(3) violations of law; or

(4) other good cause shown.

If a contract is terminated or not renewed under this paragraph, the school must be
dissolved according to the applicable provisions of chapter 308A or 317A deleted text begin , except when
the commissioner approves the decision of a different eligible sponsor to authorize the
charter school deleted text end .

(c) If deleted text begin at the end of a contract term, either deleted text end the sponsor deleted text begin or deleted text end new text begin and new text end the charter school board
of directors deleted text begin wants deleted text end new text begin mutually agree new text end to deleted text begin voluntarily deleted text end terminate new text begin or not renew new text end the contract, a
change in sponsors is allowed if the commissioner approves the deleted text begin decision of deleted text end new text begin transfer to new text end a
different eligible sponsor to authorize the charter school. deleted text begin The party intending to terminate
the contract must notify the other party and the commissioner of its intent at least 90 days
before the date on which the contract ends deleted text end new text begin Both parties must jointly submit their intent
in writing to the commissioner to mutually terminate the contract new text end . The sponsor that is a
party to the existing contract at least must inform the approved different eligible sponsor
about the fiscal new text begin and operational status new text end and student performance of the school. new text begin Before the
commissioner determines whether to approve a transfer of sponsor, the commissioner first
must determine whether the charter school and prospective new sponsor can identify and
effectively resolve those circumstances causing the previous sponsor and the charter
school to mutually agree to terminate the contract. new text end If no deleted text begin different eligible deleted text end new text begin transfer of new text end
sponsor is approved, the school must be dissolved according to applicable law and the
terms of the contract.

(d) The commissioner, after providing reasonable notice to the board of directors of
a charter school and the existing sponsor, and after providing an opportunity for a public
hearing, may terminate the existing deleted text begin sponsorial relationship deleted text end new text begin contract between the sponsor
and the charter school new text end if the charter school has a history of:

(1) new text begin sustained failure to meet pupil performance requirements contained in the
contract;
new text end

new text begin (2) new text end financial mismanagement new text begin or failure to meet generally accepted standards of
financial management new text end ; or

deleted text begin (2) deleted text end new text begin (3) new text end repeated new text begin or major new text end violations of the law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2008, section 124D.10, subdivision 23a, is amended to
read:

Subd. 23a.

Related party lease costs.

(a) A charter school is prohibited from
entering a lease of real property with a related party deleted text begin as defined in subdivision 26, deleted text end unless
the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter
308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).

(b) new text begin For purposes of this section and section 124D.11:
new text end

new text begin (1) "related party" means an affiliate or a close relative of the other party in question,
an affiliate of a close relative, or a close relative of an affiliate;
new text end

new text begin (2) "affiliate" means a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with another person;
new text end

new text begin (3) "close relative" means an individual whose relationship by blood, marriage, or
adoption to another individual is no more remote than first cousin;
new text end

new text begin (4) "person" means an individual or entity of any kind; and
new text end

new text begin (5) "control" means the ability to affect the management, operations, or policy
actions or decisions of a person, whether through ownership of voting securities, by
contract or otherwise.
new text end

new text begin (c) new text end A lease of real property to be used for a charter school, not excluded in paragraph
(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
section 124D.10, subdivision 23a."

deleted text begin (c) deleted text end new text begin (d) new text end If a charter school enters into as lessee a lease with a related party and the
charter school subsequently closes, the commissioner has the right to recover from the
lessor any lease payments in excess of those that are reasonable under section 124D.11,
subdivision 4, clause (1).

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2008, section 124D.10, subdivision 25, is amended to read:

Subd. 25.

Extent of specific legal authority.

(a) The board of directors of a charter
school may sue and be sued.

(b) The board may not levy taxes or issue bonds.

(c) The commissioner, a sponsor, members of the board of a sponsor in their official
capacity, and employees of a sponsor are immune from civil or criminal liability with
respect to all activities related to a charter school they approve or sponsor. The board
of directors shall obtain at least the amount of and types of insurance deleted text begin required by the
contract, according to subdivision 6 deleted text end new text begin up to the applicable tort liability limits under chapter
466. The charter school board must submit a copy of the insurance policy to its sponsor
and the commissioner before starting operations. The charter school board must submit
changes in its insurance carrier or policy to its sponsor and the commissioner within
20 business days of the change new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009.
new text end

Sec. 22.

Minnesota Statutes 2008, section 124D.11, subdivision 4, is amended to read:

Subd. 4.

Building lease aid.

new text begin (a) new text end When a charter school finds it economically
advantageous to rent or lease a building or land for any instructional purposes and it
determines that the total operating capital revenue under section 126C.10, subdivision 13,
is insufficient for this purpose, it may apply to the commissioner for building lease aid
for this purpose. The commissioner must review and either approve or deny a lease aid
application using the following criteria:

(1) the reasonableness of the price based on current market values;

(2) the extent to which the lease conforms to applicable state laws and rules; and

(3) the appropriateness of the proposed lease in the context of the space needs and
financial circumstances of the charter school.

A charter school must not use the building lease aid it receives for custodial, maintenance
service, utility, or other operating costs.

new text begin (b) For a charter school without a separate affiliated nonprofit building corporation,
new text end the amount of building lease aid per pupil unit served for a charter school for any year
shall not exceed the lesser of new text begin : new text end

deleted text begin (a) deleted text end new text begin (1) new text end 90 percent of the approved cost new text begin ; new text end or

deleted text begin (b) deleted text end new text begin (2) new text end the product of the pupil units served for the current school year times the
greater of new text begin :
new text end

new text begin (i) new text end the charter school's building lease aid per pupil unit served for fiscal year 2003,
excluding the adjustment under Laws 2002, chapter 392, article 6, section 4 deleted text begin , deleted text end new text begin ; new text end or

new text begin (ii) new text end $1,200.

new text begin (c) For charter schools with a separate affiliated nonprofit building corporation under
section 124D.10, subdivision 17a, the amount of building lease aid per pupil unit served
for a charter school for any year shall not exceed the lesser of:
new text end

new text begin (1) 90 percent of the approved cost; or
new text end

new text begin (2) the product of the pupil units served for the current school year times the greater
of:
new text end

new text begin (i) the charter school's building lease aid per pupil unit served for fiscal year 2003,
excluding the adjustment under Laws 2002, chapter 392, article 6, section 4; or
new text end

new text begin (ii) $1,200.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2010, and later.
new text end

Sec. 23.

Minnesota Statutes 2008, section 124D.11, subdivision 9, is amended to read:

Subd. 9.

Payment of aids to charter schools.

(a) Notwithstanding section
127A.45, subdivision 3, aid payments for the current fiscal year to a charter school deleted text begin not in
its first year of operation deleted text end shall be of an equal amount on each of the deleted text begin 23 deleted text end new text begin 24 new text end payment dates.
deleted text begin A charter school in its first year of operation shall receive, on its first payment date, ten
percent of its cumulative amount guaranteed for the year and 22 payments of an equal
amount thereafter the sum of which shall equal the current year aid payment percentage
multiplied by the cumulative amount guaranteed. deleted text end

(b) Notwithstanding paragraph (a) new text begin and section 127A.45 new text end , for a charter school ceasing
operation new text begin on or new text end prior to deleted text begin the end of a school year, the current year aid payment percentage
multiplied by the amount due for the school year may be paid to the school after audit
of prior fiscal year and current fiscal year pupil counts deleted text end new text begin June 30 of a school year, for the
payment periods occurring after the school has ceased serving students, the commissioner
shall withhold state aid due to the school based on estimated state aid entitlements. The
charter school board of directors and sponsor must provide the commissioner with a
closure plan under chapter 308A or 317A, and financial information that details the
school's liabilities and assets. After receiving the closure plan, financial information, an
audit of pupil counts, and documentation of lease expenditures, and monitoring special
education expenditures, the commissioner may release cash withheld and may continue
regular payments up to the current year payment percentages if further amounts are
due. If, based on audits and monitoring, the school received state aid in excess of the
amount due, the commissioner shall retain cash withheld sufficient to eliminate the aid
overpayment new text end . For a charter school ceasing operations prior to, or at the end of, a school
year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may
be made after new text begin receiving the closure plan, new text end audit of pupil counts, monitoring of special
education expenditures, deleted text begin and deleted text end documentation of lease expenditures new text begin , and school submission
of Uniform Financial Accounting and Reporting Standards (UFARS) financial data new text end for
the final year of operation. Final payment may be made upon receipt of audited financial
statements under section 123B.77, subdivision 3.

(c) new text begin If a charter school fails to comply with the commissioner's directive to return,
for cause, federal or state funds administered by the department, the commissioner may
withhold an amount of state aid sufficient to satisfy the directive.
new text end

new text begin (d) If a charter school, within the timeline under section 471.425, fails to pay a
school district, intermediate school district, education cooperative, or the state after
receiving an undisputed invoice for goods and services, the commissioner may withhold
an amount of state aid sufficient to satisfy the claim and shall distribute the withheld aid to
the school district, intermediate school district, or service cooperative. A school district,
intermediate school district, education cooperative, or a representative of the state shall
notify the commissioner when a charter school fails to pay an undisputed invoice within
75 business days of when it received the original invoice.
new text end

new text begin (e) new text end Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent
of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day
of student attendance for that school year.

deleted text begin (d) deleted text end new text begin (f) new text end In order to receive state aid payments under this subdivision, a charter school
in its first three years of operation must submit a school calendar in the form and manner
requested by the department and a quarterly report to the Department of Education. The
report must list each student by grade, show the student's start and end dates, if any,
with the charter school, and for any student participating in a learning year program,
the report must list the hours and times of learning year activities. The report must be
submitted not more than two weeks after the end of the calendar quarter to the department.
The department must develop a Web-based reporting form for charter schools to use
when submitting enrollment reports. A charter school in its fourth and subsequent year of
operation must submit a school calendar and enrollment information to the department in
the form and manner requested by the department.

deleted text begin (e) deleted text end new text begin (g) new text end Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
school and satisfaction of creditors, cash and investment balances remaining shall be
returned to the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2010 and later.
new text end

Sec. 24. new text begin SINGLE-PURPOSE SPONSOR.
new text end

new text begin The commissioner shall approve at least one but no more than two charitable
organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 whose
sole purpose is to sponsor charter schools, consistent with Minnesota Statutes, section
124D.10, subdivision 3, paragraph (b), clause (5), by June 30, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 25. new text begin APPOINTMENTS TO CHARTER SCHOOL ADVISORY COUNCIL.
new text end

new text begin The commissioner shall complete the appointments required under Minnesota
Statutes, section 124D.10, subdivision 2a, no later than September 1, 2009. The
commissioner's designee shall convene the first meeting of the council no later than
October 1, 2009.
new text end

Sec. 26. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 124D.10, subdivisions 18, 19, and 26, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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