SF 2716

3rd Engrossment - 86th Legislature (2009 - 2010) Posted on 04/27/2010 09:02am

A bill for an act
relating to education; modifying charter school provisions; creating an authority;
permitting certain charter schools to purchase facilities; authorizing the sale
of revenue bonds; appropriating money; amending Minnesota Statutes 2008,
sections 124D.11, subdivisions 1, 3, 4, 7, by adding subdivisions; 326B.103,
subdivision 11; Minnesota Statutes 2009 Supplement, sections 124D.10,
subdivisions 3, 4, 4a, 6, 8, 17, 23, 23a; 124D.11, subdivision 9; Laws 2009,
chapter 96, article 2, section 67, subdivision 2; article 7, section 3; proposing
coding for new law in Minnesota Statutes, chapter 124D; repealing Minnesota
Statutes 2008, section 124D.11, subdivision 8; Minnesota Statutes 2009
Supplement, section 124D.10, subdivision 17a.

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

Section 1.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 3,
is amended to read:

Subd. 3.

Authorizer.

(a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.

"Application" to receive approval as an authorizer means the proposal an eligible
authorizer submits to the commissioner under paragraph (c) before that authorizer is able
to submit any affidavit to charter to a school.

"Application" under subdivision 4 means the charter school business plan a
school developer submits to an authorizer for approval to establish a charter school 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 authorizer requests. The application also shall include a
"statement of assurances" of legal compliance prescribed by the commissioner.

"Affidavit" means a written statement the authorizer submits to the commissioner
for approval to establish a charter school under subdivision 4 attesting to its review and
approval process before chartering a school.

deleted text begin "Affidavit" means the form an authorizer submits to the commissioner that is a
precondition to a charter school organizing an affiliated nonprofit building corporation
under subdivision 17a.
deleted text end

(b) The following organizations may authorize one or more charter schools:

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

(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code
of 1986, excluding a nonpublic sectarian or religious institution, any person other than a
natural person that 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, that:

(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
Foundations;

(ii) is registered with the attorney general's office;

(iii) reports an end-of-year fund balance of at least $2,000,000; and

(iv) is incorporated in the state of Minnesota;

(3) a Minnesota private college, notwithstanding clause (2), 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 or
deleted text end

(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905,
and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code
of 1986, may authorize one or more charter schools if the charter school has operated
for at least three years under a different authorizer and if the nonprofit corporation has
existed for at least 25 years deleted text begin . deleted text end new text begin ; or
new text end

(5) no more than three single-purpose sponsors that are charitable, nonsectarian
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 charter schools.

new text begin A board member or employee of an eligible organization must not be an employee,
contractor, or board member of a charter school.
new text end

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. Such authorizers shall consider and approve applications
using the criteria provided in subdivision 4 and shall not limit the applications it solicits,
considers, or approves to any single curriculum, learning program, or method.

(c) An eligible authorizer under this subdivision must apply to the commissioner for
approval as an authorizer before submitting any affidavit to the commissioner to charter
a school. The application for approval as a charter school authorizer must demonstrate
the applicant's ability to implement the procedures and satisfy the criteria for chartering a
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 an authorizer. The commissioner, in establishing criteria for
approval, must consider the applicant's:

(1) capacity and infrastructure;

(2) application criteria and process;

(3) contracting process;

(4) ongoing oversight and evaluation processes; and

(5) renewal criteria and processes.

(d) The affidavit to be submitted to and evaluated by the commissioner must include
at least the following:

(1) how chartering schools is a way for the organization to carry out its mission;

(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;

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

(i) how the statutory purposes defined in subdivision 1 are addressed;

(ii) the mission, goals, program model, and student performance expectations;

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

(iv) the school's governance plan;

(v) the financial management plan; and

(vi) the administration and operations plan;

(4) a description of the type of contract it will arrange with the schools it charters
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;

(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 chartered
are complying with both the provisions of applicable law and rules, and with the contract;

(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

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

A disapproved applicant under this paragraph may resubmit an application during a
future application period.

(e) The authorizer must participate in department-approved training.

(f) An authorizer 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 an
authorizer under this section. For purposes of this paragraph, an authorizer that fails to
submit a timely application is ineligible to charter a school.

(g) The commissioner shall review an authorizer's performance every five years in
a manner and form determined by the commissioner and may review an authorizer'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
authorizer. If, consistent with this section, the commissioner finds that an authorizer
has not fulfilled the requirements of this section, the commissioner may subject the
authorizer to corrective action, which may include terminating the contract with the
charter school board of directors of a school it chartered. The commissioner must notify
the authorizer in writing of any findings that may subject the authorizer to corrective
action and the authorizer then has 15 business days to request an informal hearing before
the commissioner takes corrective action.

(h) The commissioner may at any time take corrective action against an authorizer,
including terminating an authorizer's ability to charter a school for:

(1) failing to demonstrate the criteria under paragraph (c) under which the
commissioner approved the authorizer;

(2) violating a term of the chartering contract between the authorizer and the charter
school board of directors; or

(3) unsatisfactory performance as an approved authorizer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and paragraph (b) shall apply retroactively to August 1, 2009.
new text end

Sec. 2.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4, is
amended to read:

Subd. 4.

Formation of school.

(a) An authorizer, after receiving an application from
a school developer, may charter a licensed teacher under section 122A.18, subdivision
1, or a group of individuals that includes one or more licensed teachers under section
122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the
authorizer's affidavit under paragraph (b). The school must be organized and operated
as a deleted text begin cooperative under chapter 308A or deleted text end nonprofit corporation under chapter 317A and
the provisions under the applicable chapter shall apply to the school except as provided
in this section.

Notwithstanding sections 465.717 and 465.719, a school district, subject to this
section and section 124D.11, may create a corporation for the purpose of establishing a
charter school.

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

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

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

(e) Upon the request of an individual, the charter school must make available in
a timely fashion the minutes of meetings of the board of directors, and of members
and committees having any board-delegated authority; financial statements showing all
operations and transactions affecting income, surplus, and deficit during the school's last
annual accounting period; and a balance sheet summarizing assets and liabilities on the
closing date of the accounting period. A charter school also must post on its official Web
site information identifying its authorizer and indicate how to contact that authorizer and
include that same information about its authorizer in other school materials that it makes
available to the public.

(f) Every charter school board member shall attend department-approved training
on board governance, the board's role and responsibilities, employment policies and
practices, and financial management. A board member who does not begin the required
training within six 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.

(g) The ongoing board must be elected before the school completes its third year
of operation. Board elections must be held during a time when school is in session. The
charter school board of directors shall be composed of at least five nonrelated members
and include: (i) at least one licensed teacher employed at the school or a licensed teacher
providing instruction under a contact between the charter school and a cooperative; (ii) the
parent or legal guardian of a student enrolled in the charter school; and (iii) an interested
community member who is not employed by the charter school and does not have a
child enrolled in the school. The board may be a teacher majority board composed of
teachers described in this paragraph. The chief financial officer and the chief administrator
are ex-officio nonvoting board members. Board bylaws shall outline the process and
procedures for changing the board's governance model, consistent with chapter 317A. A
board may change its governance model only:

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

(2) with the authorizer's approval.

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

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

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

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

(1) the expansion proposed by the charter school is supported by need and projected
enrollment;

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

(3) the charter school is fiscally sound and has the financial capacity to implement
the proposed expansion; and

(4) the authorizer finds that the charter school has the management capacity to
carry out its expansion.

(k) The commissioner shall have 30 business days to review and comment on the
supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in
the supplemental affidavit and the authorizer then has 30 business days to address, to the
commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school
may not expand grades or add sites until the commissioner has approved the supplemental
affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.

new text begin (l) A charter school approved and operating under this section shall not merge with
another charter school without prior approval from the commissioner. The merger shall
comply with chapter 317A and section 124D.11, subdivision 9, paragraph (g). The
commissioner shall review the proposed merger submitted by the proposed surviving
charter school and approve or disapprove the merger based on the following criteria:
new text end

new text begin (1) the financial management plan, including the transfer of assets and liabilities;
new text end

new text begin (2) the administration and operations plan;
new text end

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

new text begin (4) the academic achievement plan.
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. 3.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4a, is
amended to read:

Subd. 4a.

Conflict of interest.

(a) An individual is prohibited from serving as a
member of the charter school board of directors if the individual, an immediate family
member, or the individual's partner is an owner, employee or agent of, or a contractor
new text begin contracting new text end with a for-profit deleted text begin or deleted text end new text begin entity, a new text end nonprofit entity new text begin , or an individual new text end 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 or the charter school board of directors. A member of a charter school
board of directors who violates this prohibition is individually liable to the charter school
for any damage caused by the violation.

(b) 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:

(1) the board member, employee, officer, or agent;

(2) the immediate family of the board member, employee, officer, or agent;

(3) the partner of the board member, employee, officer, or agent; or

(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.

(c) Any employee, agent, or board member of the authorizer 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 authorizer.

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

(e) new text begin A charter school board member must not receive any remuneration such as a
fee-for-service as part of a financial transaction involving the charter school. A charter
school employee may receive remuneration such as a fee-for-service as part of a financial
transaction involving a charter school only if the services for which the remuneration is
paid are in addition to the services the employee already agreed to provide to the charter
school and the charter school board of directors formally approve the remuneration.
new text end

new text begin (f) 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 (f) deleted text end new text begin (g) 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. 4.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 6, is
amended to read:

Subd. 6.

Charter contract.

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

(1) a declaration of the purposes in subdivision 1 that the school intends to carry out
and how the school will report its implementation of those purposes;

(2) a description of the school program and the specific academic and nonacademic
outcomes that pupils must achieve;

(3) a statement of admission policies and procedures;

(4) a governance, management, and administration plan for the school;

(5) signed agreements from charter school board members to comply with all
federal and state laws governing organizational, programmatic, and financial requirements
applicable to charter schools;

(6) the criteria, processes, and procedures that the authorizer will use for ongoing
oversight of operational, financial, and academic performance;

(7) the performance evaluation that is a prerequisite for reviewing a charter contract
under subdivision 15;

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

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

(10) how the board of directors or the operators of the charter school will 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;

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 8, is
amended to read:

Subd. 8.

Federal, state, and local requirements.

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

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

(c) A school 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.

(d) 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. A charter school student must be released for religious instruction, consistent
with section 120A.22, subdivision 12, clause (3).

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

(f) The primary focus of a charter school must be to provide a comprehensive
program of instruction for at least one grade or age group from five through 18 years
of age. Instruction may be provided to people younger than five years and older than
18 years of age.

(g) A charter school may not charge tuition.

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

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

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

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

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

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

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

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

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

new text begin (q) A charter school seeking endorsement from the Charter School Facilities
Authority under section 124D.1105 for a proposed facility that requires an expenditure in
excess of $1,400,000 must comply with the requirements of section 123B.71, subdivisions
8 and 9.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 6.

Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 17, is
amended to read:

Subd. 17.

Leased space.

new text begin (a) new text end A charter school may lease space from an independent
or special school board eligible to be an authorizer, other public organization, private,
nonprofit nonsectarian organization, private property owner, or a sectarian organization if
the leased space is constructed as a school facility. new text begin A charter school may not lease space
from an organization if the primary purpose of the organization proposing to lease a
building or land to the charter school is to provide a facility for the charter school, and (1)
the organization has financed the acquisition of the school facility through rent paid by the
charter school from building lease aid under section 124D.11, subdivision 4; or (2) the
organization is maintaining the school facility on behalf of the charter school through rent
paid by the charter school's building lease aid. new text end The department must review and approve
or disapprove leases in a timely manner.

new text begin (b) Notwithstanding paragraph (a), with the approval of the commissioner of
education, a charter school that is approved to receive building lease aid under section
124D.11, subdivision 4, may lease space from a corporation or organization whose owner,
board members, employees, or related parties are not board members or employees
or related to board members or employees of the charter school, and the corporation
or organization is not otherwise directly or indirectly controlled by board members,
employees, or related parties of the charter school leasing the facility. If the commissioner
determines that a charter school is proposing to lease under this paragraph for the purpose
of purchasing a building using building lease aid, the commissioner must deny the lease.
new text end

new text begin (c) Notwithstanding paragraph (a), a charter school that is approved to receive
building lease transition aid under section 124D.11, subdivision 4d, may lease space
from an independent or special school district eligible to be an authorizer or other public
organization, private, nonprofit nonsectarian organization, private property owner, or
a sectarian organization, if the leased space is constructed as a school facility. The
department must review and approve or disapprove leases in a timely manner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 7.

Minnesota Statutes 2009 Supplement, 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 an authorizer must be for the term contained in the
contract according to subdivision 6. The authorizer may or may not renew a contract at
the end of the term for any ground listed in paragraph (b). An authorizer 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 authorizer 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
authorizer within 15 business 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 15-business-day period shall be treated as acquiescence to the proposed action. Upon
receiving a timely written request for a hearing, the authorizer shall give ten business days'
notice to the charter school's board of directors of the hearing date. The authorizer shall
conduct an informal hearing before taking final action. The authorizer shall take final
action to renew or not renew a contract no later than 20 business days before the proposed
date for terminating the contract or the end date of the contract.

(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 deleted text begin 308A or deleted text end 317A.

(c) If the sponsor and the charter school board of directors mutually agree to
terminate or not renew the contract, a change in sponsors is allowed if the commissioner
approves the transfer to a different eligible authorizer to authorize the charter school.
Both parties must jointly submit their intent in writing to the commissioner to mutually
terminate the contract. The sponsor that is a party to the existing contract at least must
inform the approved different eligible sponsor about the fiscal and operational status
and student performance of the school. Before the commissioner determines whether
to approve a transfer of authorizer, the commissioner first must determine whether the
charter school and prospective new authorizer can identify and effectively resolve those
circumstances causing the previous authorizer and the charter school to mutually agree to
terminate the contract. If no transfer of 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 authorizer, and after providing an opportunity for a public
hearing, may terminate the existing contract between the authorizer and the charter school
board if the charter school has a history of:

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

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

(3) repeated or major violations of the law.

(e) If the commissioner terminates a charter school contract under subdivision 3,
paragraph (g), the commissioner shall provide the charter school with information about
other eligible authorizers.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2009 Supplement, 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 unless the lessor is a nonprofit
corporation under chapter 317A deleted text begin or a cooperative under chapter 308A deleted text end , and the lease cost is
reasonable under section 124D.11, subdivision 4, clause (1).

(b) For purposes of this section and section 124D.11:

(1) "related party" means an affiliate or immediate relative of the other party in
question, an affiliate of an immediate relative, or an immediate relative of an affiliate;

(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;

(3) "immediate family" means an individual whose relationship by blood, marriage,
adoption, or partnering is no more remote than first cousin;

(4) "person" means an individual or entity of any kind; and

(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.

(c) 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."

(d) 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. 9.

new text begin [124D.101] VACANT BUILDING INVENTORY.
new text end

new text begin The commissioner of administration, in conjunction with the commissioner of
education, shall annually publish a list of vacant and unused buildings and vacant and
unused portions of buildings that are owned by the state or by school districts in the
state and that may be suitable for the long-term operation of a charter school. The
commissioner of education shall make the list available to applicants for charter schools
and to existing charter schools. The list shall include the address of each building, a short
description of the building, and the name of the owner of the building. Nothing in this
section requires the owner of a building on the list to sell or lease the building or a portion
of the building to a charter school or to any other school or to any other prospective buyer
or tenant. The commissioner of education may request information from school districts
to compile the vacant building list under this section. School districts must comply with
the commissioner's request.
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. 10.

Minnesota Statutes 2008, section 124D.11, subdivision 1, is amended to read:

Subdivision 1.

General education revenue.

(a) General education revenue must
be paid to a charter school as though it were a district. The general education revenue
for each adjusted marginal cost pupil unit is the state average general education revenue
per pupil unit, plus the referendum equalization aid allowance in the pupil's district of
residence, minus an amount equal to the product of the formula allowance according to
section 126C.10, subdivision 2, times .0485, calculated without basic skills revenue,
extended time revenue, alternative teacher compensation revenue, transition revenue, and
transportation sparsity revenue, plus basic skills revenue, extended time revenue, basic
alternative teacher compensation aid according to section 126C.10, subdivision 34, and
transition revenue as though the school were a school district. The general education
revenue for each extended time marginal cost pupil unit equals $4,378.

(b) Notwithstanding paragraph (a), for charter schools in the first year of operation,
general education revenue shall be computed using the number of adjusted pupil units
in the current fiscal year.

new text begin (c) Notwithstanding paragraph (a), general education revenue for a charter school
receiving facilities aid under subdivision 4a must be reduced by an amount equal to the
greater of zero or the difference between the school's facilities aid and the product of the
pupil units served times:
new text end

new text begin (1) for a school receiving building lease aid for fiscal year 2010, the lesser of $1,120
or the school's building lease aid per pupil unit served for fiscal year 2010; or
new text end

new text begin (2) for a school not receiving building lease aid for fiscal year 2010, $1,120.
new text end

Sec. 11.

Minnesota Statutes 2008, section 124D.11, subdivision 3, is amended to read:

Subd. 3.

Use of total operating capital revenue.

new text begin (a) new text end Notwithstanding section
126C.10, subdivision 14, a charter school may use total operating capital revenue for any
purpose related to the school new text begin unless the charter school has been endorsed under section
124D.1106 new text end .

new text begin (b) A charter school that has been endorsed under section 124D.1106 must reserve
at least $100 per pupil of its annual operating capital revenue for capital repairs and
replacement.
new text end

Sec. 12.

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; deleted text begin and
deleted text end

(3) the appropriateness of the proposed lease in the context of the space needs and
financial circumstances of the charter school new text begin ;
new text end

new text begin (4) for fiscal year 2011 and in later years, for the first year a lease is initiated or
modified, any other information the commissioner requests of the charter school in order
to implement this subdivision including, at a minimum, the following:
new text end

new text begin (i) the owner of the building;
new text end

new text begin (ii) a list of the lessor's current board members or principals, whichever applies;
new text end

new text begin (iii) a copy of the lessor's annual audit or annual report, whichever applies;
new text end

new text begin (iv) the terms of the proposed lease and a copy of the proposed lease;
new text end

new text begin (v) the enrollment projections of the school;
new text end

new text begin (vi) the long-range strategic and financial plan of the school;
new text end

new text begin (vii) a copy of the certificate of occupancy from the local jurisdiction; and
new text end

new text begin (viii) a copy of the state fire marshal's fire inspection report or orders and
accompanying documentation of costs associated with bringing the proposed lease site
up to code; and
new text end

new text begin (5) for fiscal year 2012 and later, for leases approved for building lease aid in the
prior fiscal year and not modified for the current fiscal year, any other information the
commissioner requests of the charter school in order to implement this subdivision,
including, at a minimum, the following:
new text end

new text begin (i) the enrollment projections of the school;
new text end

new text begin (ii) a copy of lessor's annual audit or annual report, whichever applies;
new text end

new text begin (iii) an update to the long-range strategic and financial plan of the school; and
new text end

new text begin (iv) a letter from the school's director certifying that there has been no change in any
of the other information listed in this paragraph, except as reported in the letter.
new text end

new text begin (b) If the commissioner determines that a charter school has not provided
information required under this subdivision, the commissioner must deny the charter
school's lease aid application under this subdivision.
new text end

new text begin (c) If the commissioner determines that the primary purpose of the organization
proposing to lease a building or land to the charter school is to provide a facility for the
charter school, and (1) the organization has financed the acquisition of the school facility
through rent paid by the charter school from building lease aid under this subdivision;
or (2) the organization is maintaining the school facility on behalf of the charter school
through rent paid by the charter school's lease aid under this subdivision, the commissioner
must deny the charter school's lease aid application under this subdivision new text end .

new text begin (d) Notwithstanding paragraph (c), the commissioner of education may approve
a charter school's lease aid application if the charter school is leasing space from a
corporation or organization whose owner, board members, employees, or related parties
are not board members or employees or related to board members or employees of the
charter school, and the corporation or organization is not otherwise directly or indirectly
controlled by board members, employees, or related parties of the charter school leasing
the facility. If the commissioner determines that a charter school is proposing to lease
under this paragraph for the purpose of purchasing a building using building lease aid, the
commissioner must deny the lease aid application.
new text end

new text begin (e) new text end A charter school must not use the building lease aid it receives for custodial,
maintenance service, utility, or other operating costs. The amount of building lease aid per
pupil unit served deleted text begin for a charter school deleted text end new text begin at education sites eligible for building lease aid new text end for
any year shall not exceed the lesser of deleted text begin (a) deleted text end new text begin (1) new text end 90 percent of the approved cost 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 deleted text begin the greater of 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 deleted text end $1,200. new text begin A charter
school that receives facilities aid under subdivision 4a for an education site is not eligible
for building lease aid under this subdivision for that site. A charter school that received
more than $1,200 per pupil unit in lease aid for an education site for fiscal year 2010 must
continue to receive that per pupil aid amount until June 30, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 13.

Minnesota Statutes 2008, section 124D.11, is amended by adding a
subdivision to read:

new text begin Subd. 4a. new text end

new text begin Facilities aid. new text end

new text begin (a) An endorsed charter school under section 124D.1106
that is required to make loan payments to be applied to principal or interest payments on
an outstanding debt obligation issued by the Charter School Facilities Authority under
this section is eligible to receive facilities aid in an amount equal to the amount needed
to meet when due the principal or interest payments on the obligations of the Charter
School Facilities Authority for eligible projects endorsed by the authority under section
124D.1106.
new text end

new text begin Aid received under this paragraph may be used only to pay loan payments to be
applied to the principal or interest payments due on obligations of the Charter School
Facilities Authority for eligible projects endorsed by the authority.
new text end

new text begin (b) A charter school that received facilities aid under paragraph (a) and that has
satisfied all of its debt obligation is eligible for annual facilities aid equal to $400 times its
pupil units for the current year. Aid received under this paragraph must be maintained
in a reserve account within the charter school's general fund and may be only used for
deferred capital and maintenance expenditures associated with the facility owned by
the charter school.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 14.

Minnesota Statutes 2008, section 124D.11, is amended by adding a
subdivision to read:

new text begin Subd. 4b. new text end

new text begin Charter school facilities credit enhancement account. new text end

new text begin (a) A charter
school credit enhancement account is created in the special revenue fund in the state
treasury to provide credit enhancement to charter school facilities financed with bonds
under section 124D.1108.
new text end

new text begin (b) For fiscal year 2011 and later, an annual amount equal to six percent of an
endorsed charter school's loan payments for the current bond year to be applied to
principal or interest payments on bonds issued under section 124D.1108 must be deducted
from the charter school's operating capital revenue for that year by the commissioner and
credited to the charter school facilities credit enhancement account. The total amount
credited to the charter school facilities credit enhancement account for all fiscal years shall
not exceed 100 percent of the amount of facilities aid payable to the endorsed charter
school under subdivision 4a in the current fiscal year. Amounts credited to this account
under this paragraph or any other annual appropriation shall be available for the benefit of
all endorsed charter schools that have outstanding bonds issued under section 124D.1108.
new text end

new text begin (c) The charter school facilities credit enhancement account may receive grants or
gifts and must be used for the purpose of the account under paragraph (a). Grants and gifts
received by the charter school facilities credit enhancement account must be available for
the benefit of all endorsed charter schools that have bonds issued under section 124D.1108.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 15.

Minnesota Statutes 2008, section 124D.11, is amended by adding a
subdivision to read:

new text begin Subd. 4c. new text end

new text begin Sale or transfer of assets. new text end

new text begin A charter school board must notify the
commissioner if the board intends to sell or transfer property financed by building lease
transition aid under subdivision 4d or facilities aid under subdivision 4a. Sales under this
subdivision must be made at appraised market value.
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.11, is amended by adding a
subdivision to read:

new text begin Subd. 4d. new text end

new text begin Building lease transition aid. new text end

new text begin (a) An eligible charter school may apply to
the commissioner for building lease transition aid. Building lease transition aid may be
used for the same purpose as building lease aid under subdivision 4. The commissioner
must review and either approve or deny a building lease transition aid application using
the following criteria:
new text end

new text begin (1) the reasonableness of the price based on current market values;
new text end

new text begin (2) the extent to which the lease conforms to applicable state laws and rules; and
new text end

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

new text begin (b) For fiscal year 2011 and in later years, for the first year a lease is initiated or
modified, to retain eligibility for building lease transition aid, an eligible charter school
must submit the following information to the commissioner:
new text end

new text begin (1) the owner of the building;
new text end

new text begin (2) a list of the lessor's current board members or principals, whichever applies;
new text end

new text begin (3) a copy of the lessor's annual audit or annual report, whichever applies;
new text end

new text begin (4) the terms of the proposed lease and a copy of the proposed lease;
new text end

new text begin (5) the enrollment projections of the school;
new text end

new text begin (6) the long-range strategic and financial plan of the school;
new text end

new text begin (7) a copy of the certificate of occupancy from the local jurisdiction;
new text end

new text begin (8) a copy of the state fire marshal's fire inspection report or orders; and
new text end

new text begin (9) a resolution passed by the board of the charter school acknowledging an
agreement between the charter school and the organization that has financed the acquisition
of the school facility through rent paid by the charter school from building lease transition
aid, that the ownership of the school facility will transfer to the charter school upon the
maturity of the bonds or debt instruments used to finance the school facility.
new text end

new text begin (c) For fiscal year 2012 and later, for leases approved for building lease aid in the
prior fiscal year and not modified for the current fiscal year, any other information the
commissioner requests of the charter school in order to implement this subdivision,
including, at a minimum, the following:
new text end

new text begin (1) the enrollment projections of the school;
new text end

new text begin (2) a copy of the lessor's annual audit or annual report, whichever applies;
new text end

new text begin (3) an update to the long-range strategic and financial plan of the school; and
new text end

new text begin (4) a letter from the school's director certifying that there has been no change in any
of the other information listed in this paragraph, except as reported in the letter.
new text end

new text begin (d) If the commissioner determines that a charter school that is eligible to receive
building lease transition aid has not provided information required under this subdivision,
the commissioner must deny the charter school's building lease transition aid.
new text end

new text begin (e) A charter school must not use the building lease transition aid for custodial,
maintenance service, utility, or other operating costs. The amount of building lease
transition aid per pupil unit served at education sites eligible for building lease transition
aid in 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 $1,200.
new text end

new text begin A charter school that receives building lease aid for an education site under subdivision 4,
or charter school facilities aid for an education site under subdivision 4a, is not eligible
for building lease transition aid for the same site under this subdivision. A charter school
that received more than $1,200 per pupil unit in lease aid for an education site under
subdivision 4 for fiscal year 2010 must continue to receive that per pupil unit aid amount
for education sites eligible for building lease transition aid until that charter school
receives facilities aid under subdivision 4a.
new text end

new text begin (f) A charter school is not eligible for building lease transition aid after the date
on which its original bond issue matures.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later, except that the resolution required by paragraph (b), clause (9), need not be
submitted for fiscal year 2011.
new text end

Sec. 17.

Minnesota Statutes 2008, section 124D.11, is amended by adding a
subdivision to read:

new text begin Subd. 4e. new text end

new text begin Charter school building aid. new text end

new text begin For fiscal year 2011 and later, a charter
school's building aid equals the sum of the following amounts:
new text end

new text begin (1) building lease aid, under subdivision 4;
new text end

new text begin (2) facilities aid, under subdivision 4a; and
new text end

new text begin (3) building lease transition aid, under subdivision 4d.
new text end

Sec. 18.

Minnesota Statutes 2008, section 124D.11, subdivision 7, is amended to read:

Subd. 7.

Use of state money.

Money received from the state may not be used to
purchase land or buildings new text begin unless endorsed by the Charter School Facilities Authority
under section 124D.1106 for the purpose of making loan payments on principal or interest
payments on a debt obligation new text end . The school may own land and buildings if obtained
through nonstate sources.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 19.

Minnesota Statutes 2009 Supplement, 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 shall be of an
equal amount on each of the 24 payment dates.

(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing
operation on or prior to June 30 of a school year, for the payment periods occurring after
the school ceases serving students, the commissioner shall withhold the estimated state aid
owed the school. The charter school board of directors and authorizer must submit to the
commissioner a closure plan under chapter deleted text begin 308A or deleted text end 317A, and financial information about
the school's liabilities and assets. After receiving the closure plan, financial information,
an audit of pupil counts, documentation of lease expenditures, and monitoring of 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
owed. If, based on audits and monitoring, the school received state aid in excess of the
amount owed, the commissioner shall retain aid withheld sufficient to eliminate the aid
overpayment. 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 receiving the closure plan, audit of pupil counts, monitoring of special
education expenditures, documentation of lease expenditures, and school submission of
Uniform Financial Accounting and Reporting Standards (UFARS) financial data for the
final year of operation. Final payment may be made upon receipt of audited financial
statements under section 123B.77, subdivision 3.

(c) 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.

(d) If, within the timeline under section 471.425, a charter school fails to pay the state
of Minnesota, a school district, intermediate school district, or service cooperative 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 interested state agency, school district, intermediate school district, or service
cooperative. An interested state agency, school district, intermediate school district, or
education cooperative 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.

(e) 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.

(f) 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.

(g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
school and satisfaction of creditors, cash deleted text begin and deleted text end new text begin , new text end investment balances new text begin , facilities, and all
other assets new text end remaining shall be returned to the state. new text begin For mergers approved under section
124D.10, subdivision 4, paragraph (l), a charter school may first sell at appraised market
value or transfer its assets to a school district or 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.
new text end

Sec. 20.

new text begin [124D.1105] CHARTER SCHOOL FACILITIES AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; membership; administration. new text end

new text begin (a) A state agency known
as the Charter School Facilities Authority is created. The Charter School Facilities
Authority shall consist of eight members, five of which are appointed by the governor
with the advice and consent of the senate, the commissioner of management and budget or
the commissioner's designee, and the commissioner of education or the commissioner's
designee. The governor shall appoint members of the authority described in paragraph (b).
new text end

new text begin (b) All members to be appointed by the governor shall be residents of the state. At
least two members must reside outside the metropolitan area as defined in section 473.121,
subdivision 2. At least one of the members shall be a person having skill, knowledge, and
experience in the field of state and municipal finance; at least one of the members shall
be a person having skill, knowledge, and experience in the building construction field; at
least one of the members shall be a person having skill, knowledge, and experience in the
field of school facilities finance; at least one member shall be a representative of a member
of the Minnesota Association of Charter Schools; and at least one member shall be an
expert in education finance from the Department of Education. With the exception of the
representative of the Minnesota Association of Charter Schools, each appointed member
of the authority shall be independent and not affiliated with a charter school organization
or any entity working or contracting with a charter school.
new text end

new text begin (c) The commissioner of management and budget shall administer the authority.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota School Boards Association. new text end

new text begin The president of the Minnesota
School Boards Association, or the president's designee, shall serve without compensation
as an advisory, nonvoting member of the board.
new text end

new text begin Subd. 3. new text end

new text begin Term; compensation; removal. new text end

new text begin The membership terms, compensation,
removal of members, and filling of vacancies for board members other than the
commissioner of management and budget, the commissioner of education, representative
of the Department of Education, and the president of the Minnesota School Boards
Association, shall be as provided in section 15.0575. The commissioner of management
and budget, or the commissioner's designee, shall convene the first meeting of the
authority no later than August 15, 2010. The authority shall elect a chair at its first meeting
and shall determine a rotation for the chair.
new text end

new text begin Subd. 4. new text end

new text begin Duties; applications; fees. new text end

new text begin The authority shall provide an efficient and
cost-effective method of financing charter school facilities in this state. The authority
shall adopt policies and procedures necessary to fulfill its responsibilities. The authority
shall determine which charter schools are in a financial and academic position to develop
a facility. The authority shall review applications for the issuance of bonds under
section 124D.1108 for specific projects. The authority shall accept applications from
charter schools on an annual basis and may charge a charter school an application or
administrative fee. The annual application deadline and any fees must be determined
by the authority. Charter schools may apply annually to the authority, unless otherwise
directed by the authority. The authority may hire or contract for services.
new text end

new text begin Subd. 5. new text end

new text begin Eligibility for endorsement to purchase or renovate. new text end

new text begin (a) A charter
school that has been enrolling students for five or more years may seek endorsement
from the authority to purchase an existing building or purchase and renovate an existing
building within two years of purchase.
new text end

new text begin (b) The charter school must submit to the authority the following information:
new text end

new text begin (1) evidence that, for reading and math separately, the three-year average percentage
of the school's students making medium and high growth is equal to or greater than the
percentage of students in the state making medium and high growth as defined under
section 120B.299;
new text end

new text begin (2) documentation that the school's charter has been renewed within the last 24
months;
new text end

new text begin (3) financial statements showing that the charter school has had a net positive
unreserved general fund balance as of June 30 in the preceding five fiscal years;
new text end

new text begin (4) a long-range strategic and financial plan, including the physical space needs
of the school;
new text end

new text begin (5) a feasibility study of available buildings, including an appraisal of the proposed
facility;
new text end

new text begin (6) documents showing stable or growing enrollment projections and the need to
renovate or purchase an existing facility to serve as a school prepared by an independent
third party;
new text end

new text begin (7) a statement adopted by the charter school's board of directors acknowledging
that the building and any assets will revert to the state in the event of the charter school
closing and satisfaction of creditors;
new text end

new text begin (8) a statement from the charter school authorizer indicating its support of the
charter school's proposed facility; and
new text end

new text begin (9) for projects in excess of $1,400,000, a positive review and comment from the
commissioner of education under section 123B.71.
new text end

new text begin (c) A charter school that has an approved program under section 124D.68 or
demonstrates that at least 75 percent of its students are eligible pupils under section
124D.68, subdivision 2, may apply to the commissioner of education for a waiver from
the requirements in paragraph (b), clause (1). The commissioner must grant a waiver if
the charter school demonstrates it has made sufficient progress toward the growth goal
under section 120B.299 in the last three years to demonstrate that the school is making
progress toward meeting the goal within the next two years.
new text end

new text begin Subd. 6. new text end

new text begin Eligibility for endorsement to construct. new text end

new text begin (a) A charter school that has
been enrolling students for eight or more years may seek endorsement from the authority
to construct a facility.
new text end

new text begin (b) The charter school must submit to the authority the following information:
new text end

new text begin (1) evidence that, for reading and math separately, the three-year average percentage
of the school's students making medium and high growth is equal to or greater than the
percentage of students in the state making medium and high growth as defined in section
120B.299;
new text end

new text begin (2) documentation that the school's charter has been renewed within the last 24
months;
new text end

new text begin (3) financial statements showing that the charter school has had a net positive
unreserved general fund balance as of June 30 in the preceding eight fiscal years;
new text end

new text begin (4) a long-range strategic and financial plan, including the physical needs of the
school;
new text end

new text begin (5) a feasibility study of facility options, including evidence of the lack of existing
facilities available to serve as a school;
new text end

new text begin (6) documents showing stable or growing enrollment projections and the need to
construct a new school facility;
new text end

new text begin (7) a statement adopted by the charter school's board of directors acknowledging
that the building and any assets will revert to the state in the event of the charter school
closing and satisfaction of creditors;
new text end

new text begin (8) a statement from the charter school authorizer indicating its support of the
charter school's proposed facility; and
new text end

new text begin (9) for projects in excess of $1,400,000, a positive review and comment from the
commissioner of education under section 123B.71.
new text end

new text begin (c) A charter school that has an approved program under section 124D.68 or
demonstrates that at least 75 percent of its students are eligible pupils under section
124D.68, subdivision 2, may apply to the commissioner of education for a waiver from
the requirements in paragraph (b), clause (1). The commissioner must grant a waiver if
the charter school demonstrates it has made sufficient progress toward the growth goal
under section 120B.299 in the last three years to demonstrate that the school is making
progress toward meeting the goal within the next two years.
new text end

new text begin Subd. 7. new text end

new text begin Determination. new text end

new text begin The authority may make additional requests of the charter
school to make their determination. The authority must use the criteria submitted as
required by subdivisions 5 and 6 and any additional information the authority receives
to determine whether to allow a charter school to purchase, purchase and renovate, or
construct a school facility and use debt financing to pay for the costs of a school facility.
For charter schools eligible for building lease transition aid under section 124D.11,
subdivision 4d, the authority must also consider at least the following:
new text end

new text begin (1) call dates on outstanding debt paid through building lease transition aid; and
new text end

new text begin (2) financing costs for outstanding debt paid through building lease transition aid in
relation to financing costs estimated for debt to be issued through the authority.
new text end

new text begin The authority must notify the charter school of their determination within 90
business days after the application deadline. The decision of the authority is final.
new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin The authority is permanent and the provisions of section
15.059, subdivision 5, do not apply.
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. 21.

new text begin [124D.1106] ENDORSED CHARTER SCHOOL BORROWING;
DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Endorsement. new text end

new text begin The authority shall approve a charter school to
purchase, purchase and renovate, or construct a school facility and finance that school
facility through the issuance of bonds. The authority shall only approve the sale of bonds
on behalf of charter schools that are issued through the authority. The authority shall not
approve the sale of bonds for a charter school if the reduction to general education aid
under section 124D.11, subdivision 1, paragraph (c), is projected to exceed 16 percent of
the principal and interest payments on the proposed debt obligation in any fiscal year. The
decision of the authority is final.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For the purpose of sections 124D.1106 to 124D.1109, an
"endorsed charter school" is one that has received approval to purchase, purchase and
renovate, or construct a school facility and finance that school facility through the issuance
of bonds by the authority under subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Mortgage. new text end

new text begin A charter school that receives an endorsement under
subdivision 1 must provide the authority with a mortgage on the facility that may be
assigned to a trustee for the benefit of bondholders.
new text end

new text begin Subd. 4. new text end

new text begin Use. new text end

new text begin A charter school is prohibited from using the term "endorsed"
or "endorsement" as defined in subdivision 2 in educational promotional materials or
advertising. A charter school may use the term "endorsed" or "endorsement" for the
purposes of issuing bonds through the authority.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 22.

new text begin [124D.1107] AUTHORITY TO BORROW MONEY; LIMITATIONS.
new text end

new text begin The board of an endorsed charter school, by a two-thirds majority, may vote to
acquire school facilities financed with the proceeds of bonds issued by the Charter School
Facilities Authority in the manner and subject to the limitations set forth in section
124D.1108 in anticipation of the receipt of charter school facilities aid under section
124D.11, subdivision 4a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 23.

new text begin [124D.1108] CHARTER SCHOOL BONDS; REPAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance of bonds. new text end

new text begin (a) The Charter School Facilities Authority
may sell and issue state revenue bonds, in anticipation of the collection of facilities aid
revenues under section 124D.11, subdivision 4a, from an endorsed charter school, to
finance, in whole or in part, the cost of the acquisition, acquisition and renovation, or
construction of a charter school building. The authority may enter into a loan agreement
with an endorsed charter school so that payments required to be made by the endorsed
charter school are fixed and revised as necessary to produce income and revenue sufficient
to provide for the prompt payment of principal or interest on all bonds issued when due.
The loan agreement must also provide that the endorsed charter school is required to pay
all expenses of the operation and maintenance of the charter school building, including
adequate insurance and insurance against all liability for injury to persons or property
arising from its operation, and all taxes and special assessments levied upon or with
respect to the charter school building and payable during the term of the loan agreement.
new text end

new text begin (b) The bonds must be issued, sold, and secured on the terms and conditions and
in the manner determined by resolution of the authority. The bonds may be sold at
competitive or negotiated sale. The authority may enter any agreements or pledges the
authority determines necessary or useful to sell the bonds that are not inconsistent with
sections 124D.10 to 124D.1109. Sections 16A.672 to 16A.675 apply to the bonds. The
proceeds of the bonds issued under this section must be credited to a special charter school
bond proceeds account in the state treasury and are appropriated to the authority to make
the loans and other payments authorized by this section.
new text end

new text begin (c) Bonds issued by the authority to finance a school facility and bonds issued to
refund bonds issued by the authority to finance a school facility must mature within 20
years from the date of issue of the first bonds issued to finance the school facility.
new text end

new text begin (d) The amount of total outstanding debt obligation issued under this section must
not exceed $150,000,000.
new text end

new text begin Subd. 2. new text end

new text begin Refunding bonds. new text end

new text begin The authority may issue bonds to refund outstanding
bonds issued under subdivision 1, including the payment of any redemption premiums on
the bonds and any interest accrued or to accrue to the first redemption date after delivery
of the refunding bonds. The proceeds of the refunding bonds may, in the discretion of the
authority, be applied to the purchases or payment at maturity of the bonds to be refunded,
or the redemption of the outstanding bonds on the first redemption date after delivery of
the refunding bonds and may, until so used, be placed in escrow to be applied to the
purchase, retirement, or redemption. Refunding bonds issued under this subdivision must
be issued and secured in the manner provided by the authority.
new text end

new text begin Subd. 3. new text end

new text begin No full faith and credit. new text end

new text begin Bonds issued under this section are not public
debt of the state. The full faith and credit and taxing powers of the state are not and
may not be pledged for the payment of debt obligations under this section or for any
payment the state makes under section 124D.1109. No person may compel the levy of a
tax for the payment or compel the appropriation of money of the state or the authority
for the payment of the bonds, except as specifically provided in section 124D.1109. The
payments are subject to annual appropriation by the state and may be reduced or repealed
at any time. Any bonds issued must contain a conspicuous statement to that effect.
new text end

new text begin Subd. 4. new text end

new text begin Bond validity. new text end

new text begin The validity of any bonds and the provisions made for the
security of any bonds issued under this section are not affected by any determination that
the interest on the bonds is includable in gross income for federal income tax purposes.
new text end

new text begin Subd. 5. new text end

new text begin Trustee. new text end

new text begin The authority may contract with and appoint a trustee for bond
holders. The trustee has the powers and authority vested in it by the authority under the
bond and trust indentures.
new text end

new text begin Subd. 6. new text end

new text begin Pledges. new text end

new text begin Any pledge made by the authority is valid and binding from
the time the pledge is made. The money or property pledged and later received by the
authority is immediately subject to the lien of the pledge without any physical delivery
of the property or money or further act, and the lien of any pledge is valid and binding
as against all parties having claims of any kind in tort, contract, or otherwise against the
authority, whether or not those parties have notice of the lien or pledge. Neither the order
nor any other instrument by which a pledge is created need be recorded.
new text end

new text begin Subd. 7. new text end

new text begin Bonds; purchase and cancellation. new text end

new text begin The authority, subject to agreements
with bondholders that may then exist, may, out of any money available for the purpose,
purchase bonds of the authority at a price not exceeding (1) if the bonds are then
redeemable, the redemption price then applicable plus accrued interest to the next interest
payment date thereon, or (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the bonds become subject to
redemption plus accrued interest to that date.
new text end

new text begin Subd. 8. new text end

new text begin State pledge against impairment of contracts. new text end

new text begin The state pledges and
agrees with the holders of any bonds that the state will not limit or alter the rights vested in
the authority to fulfill the terms of any agreements made with the bondholders, or in any
way impair the rights and remedies of the holders until the bonds, together with interest on
them, with interest on any unpaid installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of the bondholders, are fully met
and discharged. The authority may include this pledge and agreement of the state in any
agreement with the holders of bonds issued under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 24.

new text begin [124D.1109] STATE PAYMENT OF ENDORSED CHARTER SCHOOL
DEBT OBLIGATION UPON POTENTIAL DEFAULT; REPAYMENT; STATE
OBLIGATION NOT DEBT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section and sections 124D.10
and 124D.11, the term "debt obligation" means bonds issued by the Charter School
Facilities Authority under section 124D.1108.
new text end

new text begin Subd. 2. new text end

new text begin Notifications; payment; appropriation. new text end

new text begin (a) If an endorsed charter school
believes that it may be unable to pay the amount sufficient to permit the Charter School
Facilities Authority to make a principal or interest payment on an outstanding debt
obligation on the date that payment is due, it must notify the commissioner of education
as soon as possible, but not less than 15 business days before the date that principal or
interest payment is due. The notice must include the name of the endorsed charter school,
an identification of the debt obligation issue in question, the date the payment is due,
the amount of principal or interest due on the payment date, the amount of principal or
interest that the endorsed charter school will be unable to repay on that date, the trustee
or paying agent for the debt obligation, the wire transfer instructions to transfer funds to
that trustee or paying agent, and an indication whether a payment is being requested
by the endorsed charter school under this section. If a trustee or paying agent becomes
aware of a potential default, it shall immediately inform the commissioner of education
of that fact. After receipt of a notice that requests a payment under this section, after
consultation with the endorsed charter school and the trustee or paying agent, and after
verification of the accuracy of the information provided, the commissioner of education
shall notify the commissioner of management and budget of the potential default. The
notice must include a statement of the amount due that the endorsed charter school will be
unable to repay on the date due.
new text end

new text begin (b) Except as provided in subdivision 6, upon receipt of this notice from the
commissioner of education, the commissioner of management and budget shall issue a
warrant and authorize the commissioner of education to pay to the trustee or paying agent
for the debt obligation the specified amount on or before the date due. The amounts
needed for the purposes of this subdivision are annually appropriated to the commissioner
of education from the charter school credit enhancement account in the special revenue
fund in the state treasury.
new text end

new text begin (c) The commissioners of education and management and budget must jointly
develop detailed procedures for endorsed charter schools to notify the state that they
have obligated themselves to be bound by the provisions of this section, procedures for
endorsed charter schools and trustees and paying agents to notify the state of potential
defaults and to request state payment under this section, and procedures for the state to
expedite payments to prevent defaults. The procedures are not subject to chapter 14.
new text end

new text begin Subd. 3. new text end

new text begin Endorsed charter school bound; interest rate on state-paid amount. new text end

new text begin If,
at the request of an endorsed charter school, the state has paid part or all of the principal or
interest due on an endorsed charter school's debt obligation on a specific date, the endorsed
charter school is bound by all provisions of this section and the amount paid shall bear
taxable interest from the date paid until the date of repayment at the invested cash rate as it
is certified by the commissioner of management and budget. Interest shall only accrue
on the amounts paid and outstanding, less the reduction in aid under subdivision 4, and
other payments received from the endorsed charter school.
new text end

new text begin Subd. 4. new text end

new text begin Aid reduction for repayment. new text end

new text begin (a) Except as provided in this subdivision,
the commissioner must reduce the state aid payable to the endorsed charter school under
section 124D.11 by the amount paid by the commissioner under this section on behalf
of the endorsed charter school, plus the interest due on it, and the commissioner of
management and budget shall transfer the amount reduced from the appropriate account
to the charter school facilities credit enhancement account. No federal aid payments
shall be reduced.
new text end

new text begin (b) If, after review of the financial situation of the endorsed charter school, the
commissioner of education advises the commissioner of management and budget that a
total reduction of aids would cause an undue hardship on or an undue disruption of the
educational program of the endorsed charter school, the commissioner of education, with
the approval of the commissioner of management and budget, may establish a different
schedule for reduction of aids to repay the state. The amount of aids to be reduced is
decreased by any amounts repaid to the state by the endorsed charter school from other
revenue sources.
new text end

new text begin Subd. 5. new text end

new text begin Mandatory plan; technical assistance. new text end

new text begin If the commissioner makes
payments on behalf of an endorsed charter school under this section or the endorsed
charter school defaults in the payment of principal or interest on an outstanding debt
obligation, it must submit a plan to the commissioner of education for approval specifying
the measures it intends to implement to resolve the issues that led to its inability to make
the payment and to prevent further defaults. The commissioners must provide technical
assistance to the endorsed charter school in preparing its plan.
new text end

new text begin Subd. 6. new text end

new text begin State bond rating. new text end

new text begin If the commissioner of management and budget
determines that issuing warrants under subdivision 2 would adversely affect the credit
rating of the state, the commissioner of management and budget shall not issue warrants
for the payment of principal or interest on debt obligations under this section.
new text end

new text begin Subd. 7. new text end

new text begin Continuing disclosure agreements. new text end

new text begin The commissioner of management
and budget may enter into written agreements or contracts relating to the continuing
disclosure of information with respect to bonds issued to finance the school facilities of
endorsed charter schools according to federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations, section
240.15c2-12. The agreements or contracts may be in any form the commissioner of
management and budget deems reasonable and in the state's best interests.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2011
and later.
new text end

Sec. 25.

Minnesota Statutes 2008, section 326B.103, subdivision 11, is amended to
read:

Subd. 11.

Public building.

"Public building" means a building and its grounds the
cost of which is paid for by the state or a state agency regardless of its cost, and a new text begin public
new text end school deleted text begin district deleted text end building project the cost of which is $100,000 or more.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Laws 2009, chapter 96, article 2, section 67, subdivision 2, is amended to read:

Subd. 2.

Charter school building lease aid.

For building lease aid under Minnesota
Statutes, section 124D.11, subdivision 4:

	$	40,453,000	.....	2010
	$	deleted text begin 44,775,000 deleted text end new text begin 4,264,000 new text end	.....	2011

The 2010 appropriation includes $3,704,000 for 2009 and $36,749,000 for 2010.

The 2011 appropriation includes deleted text begin $4,083,000 deleted text end new text begin $4,264,000 new text end for 2010 and deleted text begin $40,692,000 deleted text end new text begin
$0 new text end for 2011.

Sec. 27.

Laws 2009, chapter 96, article 7, section 3, is amended to read:

Sec. 3. APPROPRIATIONS.

Subdivision 1.

Department of Education.

Unless otherwise indicated, the sums
indicated in this section are appropriated from the general fund to the Department of
Education for the fiscal years designated.

Subd. 2.

Department.

(a) For the Department of Education:

	$	20,943,000	.....	2010
	$	deleted text begin 20,943,000 deleted text end new text begin 20,951,000 new text end	.....	2011

Any balance in the first year does not cancel but is available in the second year.

(b) $260,000 each year is for the Minnesota Children's Museum.

(c) $41,000 each year is for the Minnesota Academy of Science.

(d) $632,000 each year is for the Board of Teaching. Any balance in the first year
does not cancel but is available in the second year.

(e) $171,000 each year is for the Board of School Administrators. Any balance in
the first year does not cancel but is available in the second year.

(f) $40,000 each year is for an early hearing loss intervention coordinator under
Minnesota Statutes, section 125A.63, subdivision 5. If the department expends federal
funds to employ a hearing loss coordinator under Minnesota Statutes, section 125A.63,
subdivision 5, then the appropriation under this paragraph is reallocated for purposes of
employing a world languages coordinator.

(g) $50,000 each year is for the Duluth Children's Museum.

(h) None of the amounts appropriated under this subdivision may be used for
Minnesota's Washington, D.C., office.

(i) The expenditures of federal grants and aids as shown in the biennial budget
document and its supplements are approved and appropriated and shall be spent as
indicated. The commissioner must provide, to the K-12 Education Finance Division in
the house of representatives and the E-12 Budget Division in the senate, details about the
distribution of state incentive grants, education technology state grants, teacher incentive
funds, and statewide data system funds as outlined in the supplemental federal funds
submission dated March 25, 2009.

new text begin (j) $8,000 in fiscal year 2011 is for a vacant buildings' list.
new text end

new text begin (k) The base appropriation for fiscal year 2012 and later is $20,947,000.
new text end

Subd. 3.

Board of Teaching; licensure by portfolio.

For the Board of Teaching
for licensure by portfolio:

	$	30,000	.....	2010
	$	30,000	.....	2011

This appropriation is from the education licensure portfolio account of the special
revenue fund.

new text begin Subd. 4. new text end

new text begin Department, Minnesota Management and Budget. new text end

new text begin For the Charter
School Facilities Authority under Minnesota Statutes, section 124D.1105.
new text end

new text begin $ new text end

new text begin 392,000 new text end

new text begin ..... new text end

new text begin 2011 new text end

new text begin The base appropriation for fiscal year 2012 and later is $147,000.
new text end

Sec. 28. new text begin TRANSITION ELIGIBILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin The following charter schools are eligible to apply to
the commissioner of education for approval to receive building lease transition aid under
Minnesota Statutes, section 124D.11, subdivision 4d:
new text end

new text begin (1) Charter School No. 4001, Bluffview Montessori;
new text end

new text begin (2) Charter School No. 4005, Metro Deaf;
new text end

new text begin (3) Charter School No. 4007, Minnesota New Country School;
new text end

new text begin (4) Charter School No. 4008, Pact Charter School;
new text end

new text begin (5) Charter School No. 4015, Community of Peace;
new text end

new text begin (6) Charter School No. 4016, World Learner;
new text end

new text begin (7) Charter School No. 4017, Minnesota Transitions;
new text end

new text begin (8) Charter School No. 4018, Achieve Language Academy;
new text end

new text begin (9) Charter School No. 4026, E.C.H.O. Charter School;
new text end

new text begin (10) Charter School No. 4027, Higher Ground Academy;
new text end

new text begin (11) Charter School No. 4029, New Spirit;
new text end

new text begin (12) Charter School No. 4043, Math and Science Academy;
new text end

new text begin (13) Charter School No. 4057, El Colegio Charter;
new text end

new text begin (14) Charter School No. 4067, Aurora School:
new text end

new text begin (15) Charter School No. 4068, Excell Academy Charter;
new text end

new text begin (16) Charter School No. 4070, Hope Community Academy;
new text end

new text begin (17) Charter School No. 4074, Agricultural and Food Sciences Academy;
new text end

new text begin (18) Charter School No. 4083, Ridgeway Community School;
new text end

new text begin (19) Charter School No. 4100, Great Expectations;
new text end

new text begin (20) Charter School No. 4103, Hmong Academy;
new text end

new text begin (21) Charter School No. 4105, Great River School;
new text end

new text begin (22) Charter School No. 4112, St. Paul Conservatory for Performing Artists;
new text end

new text begin (23) Charter School No. 4116, Lakes International Language Academy;
new text end

new text begin (24) Charter School No. 4118, Kaleidoscope Charter School;
new text end

new text begin (25) Charter School No. 4120, St. Croix Preparatory Academy;
new text end

new text begin (26) Charter School No. 4126, Prairie Seeds Academy;
new text end

new text begin (27) Charter School No. 4137, Swan River;
new text end

new text begin (28) Charter School No. 4140, Yinghua Academy;
new text end

new text begin (29) Charter School No. 4146, Northern Lights;
new text end

new text begin (30) Charter School No. 4164, Laura Jeffrey Academy Charter; and
new text end

new text begin (31) Charter School No. 4170, Hiawatha Leadership Academy.
new text end

new text begin Subd. 2. new text end

new text begin Program management. new text end

new text begin Notwithstanding Minnesota Statutes, section
124D.11, subdivisions 4a and 4d, the commissioner may adjust payments for a charter
school's eligibility for building lease transition aid and facilities aid in the fiscal year in
which the charter school is changing eligibility between programs to ensure efficient
management.
new text end

new text begin Subd. 3. new text end

new text begin Affiliated nonprofit building corporation. new text end

new text begin An affiliated nonprofit
building corporation must:
new text end

new text begin (1) be incorporated under Minnesota Statutes, chapter 317A, and comply with
applicable Internal Revenue Service regulations;
new text end

new text begin (2) submit to the commissioner each fiscal year a list of current board members
and a copy of its annual audit; and
new text end

new text begin (3) comply with government data practices law under Minnesota Statutes, chapter 13.
new text end

new text begin The state is immune from liability resulting from a contract between a charter school and
an affiliated nonprofit building corporation.
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. 29. new text begin CHARTER SCHOOL STARTUP AID.
new text end

new text begin Notwithstanding Minnesota Statutes, section 124D.11, subdivision 8, for fiscal year
2012, a charter school in its first year of operation is not eligible for charter school startup
aid under Minnesota Statutes, section 124D.11, subdivision 8.
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. 30. new text begin CHARTER SCHOOL FACILITIES CREDIT ENHANCEMENT
ACCOUNT; INITIAL CAPITALIZATION.
new text end

new text begin $258,000 in fiscal year 2012 and $608,000 in fiscal year 2013 is appropriated from
the general fund to the Department of Management and Budget to initially capitalize the
charter school facilities credit enhancement account under Minnesota Statutes, section
124D.11, subdivision 4d. The commissioner of the Department of Management and
Budget shall credit the amounts appropriated in this section to the charter school facilities
credit enhancement account.
new text end

Sec. 31. new text begin EDUCATION SITE CALCULATION.
new text end

new text begin For a charter school with one or more education sites qualifying for building lease
aid for fiscal year 2011 under Minnesota Statutes, section 124D.11, subdivision 4, and
one or more sites qualifying for building lease transition aid for fiscal year 2011 under
Minnesota Statutes, section 124D.11, subdivision 4d, the commissioner shall determine
the fiscal year 2010 building lease aid per pupil unit served at each site by apportioning
the total building lease aid among sites based on the approved lease cost for each site, and
dividing the apportioned lease aid for each site by the pupil units served at that site.
new text end

Sec. 32. new text begin EXTENSION OF BUILDING LEASE AID FORMULA; FISCAL YEAR
2012.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin For fiscal year 2012 only, if a charter school that received
building lease aid in excess of $1,200 per pupil unit in fiscal year 2011 is unable to
renegotiate its lease so that its building lease aid in fiscal year 2012 is $1,200 per pupil
unit served or less, the charter school is eligible to receive an extension of its building
lease aid formula allowance under this section, with the approval of the commissioner
under subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner approval. new text end

new text begin An eligible charter school may apply to
the commissioner to extend its building lease aid formula for fiscal year 2012. The
commissioner may grant approval under this section if the commissioner is satisfied that
the charter school has attempted to renegotiate its lease with the owner of the school's
leased building, but has not been successful.
new text end

new text begin Subd. 3. new text end

new text begin Extension allowance. new text end

new text begin The extension allowance equals the difference
between a charter school's building lease aid per pupil unit served for fiscal year 2011
and $1,200 times 0.5.
new text end

new text begin Subd. 4. new text end

new text begin Formula. new text end

new text begin Notwithstanding Minnesota Statutes, section 124D.11,
subdivision 4, paragraph (d), at the commissioner's discretion, an eligible charter school's
building lease aid per pupil unit served for a charter school for fiscal year 2012 only shall
not exceed the lesser of (1) 90 percent of the approved cost, or (2) the product of the
pupil units served for the current school year times the sum of $1,200 and the school's
extension allowance under subdivision 3.
new text end

Sec. 33. new text begin TRANSITION ELIGIBILITY; DULUTH PUBLIC ACADEMY.
new text end

new text begin Charter School No. 4020, Duluth Public Schools Academy, is eligible to apply to
the commissioner of education for approval to receive building lease transition aid under
Minnesota Statutes, section 124D.11, subdivision 4d, if the charter school has received a
positive review and comment from the Department of Education on its K-8 school project
by July 15, 2010, and the bonds to construct the K-8 school project have been sold by
September 1, 2010.
new text end

Sec. 34. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin Unless otherwise indicated, the sums
indicated in this section are appropriated from the general fund to the Department of
Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Charter school building aid. new text end

new text begin For charter school building aid under
Minnesota Statutes, section 124D.11, subdivision 4e:
new text end

new text begin $ new text end

new text begin 34,672,000 new text end

new text begin ..... new text end

new text begin 2011 new text end

new text begin The 2011 appropriation includes $0 for 2010 and $34,672,000 for 2011.
new text end

Sec. 35. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 17a, new text end new text begin is
repealed effective the day following final enactment.
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new text begin (b) Minnesota Statutes 2008, section 124D.11, subdivision 8, new text end new text begin is repealed effective
for revenue for fiscal year 2013.
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