1.1                          A bill for an act 
  1.2             relating to education; modifying certain charter 
  1.3             school provisions; appropriating money; amending 
  1.4             Minnesota Statutes 1999 Supplement, sections 124D.10, 
  1.5             subdivisions 3, 4, 6, 8, 11, 14, 15, and 23; 124D.11, 
  1.6             subdivisions 4 and 6; and 126C.05, subdivision 3; Laws 
  1.7             1999, chapter 241, article 5, section 18, subdivisions 
  1.8             5 and 6. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.11  124D.10, subdivision 3, is amended to read: 
  1.12     Subd. 3.  [SPONSOR.] A school board, intermediate school 
  1.13  district school board, education districts district organized 
  1.14  under sections 123A.15 to 123A.19, private college, that grants 
  1.15  two- or four-year degrees and is registered with the higher 
  1.16  education services office under chapter 136A, community college, 
  1.17  state university, technical college, or the University of 
  1.18  Minnesota may sponsor one or more charter schools. 
  1.19     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  1.20  124D.10, subdivision 4, is amended to read: 
  1.21     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
  1.22  authorize one or more licensed teachers under section 122A.18, 
  1.23  subdivision 1, to operate a charter school subject to approval 
  1.24  by the commissioner.  A school board must vote on charter school 
  1.25  application for sponsorship no later than 90 days after 
  1.26  receiving the application.  After 90 days, the applicant may 
  1.27  apply to the commissioner.  If a school board elects not to 
  2.1   sponsor a charter school, the applicant may appeal the school 
  2.2   board's decision to the commissioner.  If the commissioner 
  2.3   authorizes the school, the commissioner must sponsor the school 
  2.4   according to this section.  The school must be organized and 
  2.5   operated as a cooperative under chapter 308A or nonprofit 
  2.6   corporation under chapter 317A.  
  2.7      (b) Before the operators may form and operate a school, the 
  2.8   sponsor must file an affidavit with the commissioner stating its 
  2.9   intent to authorize a charter school.  The affidavit must state 
  2.10  the terms and conditions under which the sponsor would authorize 
  2.11  a charter school.  The commissioner must approve or disapprove 
  2.12  may comment on the sponsor's proposed authorization within 60 
  2.13  days of receipt of the affidavit.  Failure to obtain 
  2.14  commissioner approval precludes a sponsor from authorizing the 
  2.15  charter school that was the subject of the affidavit.  
  2.16     (c) The operators authorized to organize and operate a 
  2.17  school must hold an election for members of the school's board 
  2.18  of directors in a timely manner after the school is operating.  
  2.19  Any staff members who are employed at the school, including 
  2.20  teachers providing instruction under a contract with a 
  2.21  cooperative, and all parents of children enrolled in the school 
  2.22  may participate in the election.  Licensed teachers employed at 
  2.23  the school, including teachers providing instruction under a 
  2.24  contract with a cooperative, must be a majority of the members 
  2.25  of the board of directors, unless the commissioner waives the 
  2.26  requirement for the school.  A provisional board may operate 
  2.27  before the election of the school's board of directors.  Board 
  2.28  of director meetings must comply with section 471.705. 
  2.29     (d) The granting or renewal of a charter by a sponsoring 
  2.30  entity must not be conditioned upon the bargaining unit status 
  2.31  of the employees of the school.  
  2.32     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  2.33  124D.10, subdivision 6, is amended to read: 
  2.34     Subd. 6.  [CONTRACT.] The sponsor's authorization for a 
  2.35  charter school must be in the form of a written contract signed 
  2.36  by the sponsor and the board of directors of the charter 
  3.1   school.  The contract must be completed within 90 days of the 
  3.2   commissioner's approval of the sponsor's proposed authorization 
  3.3   60 day comment period.  The contract for a charter school must 
  3.4   be in writing and contain at least the following: 
  3.5      (1) a description of a program that carries out one or more 
  3.6   of the purposes in subdivision 1; 
  3.7      (2) specific outcomes pupils are to achieve under 
  3.8   subdivision 10; 
  3.9      (3) admission policies and procedures; 
  3.10     (4) management and administration of the school; 
  3.11     (5) requirements and procedures for program and financial 
  3.12  audits; 
  3.13     (6) how the school will comply with subdivisions 8, 13, 16, 
  3.14  and 23; 
  3.15     (7) assumption of liability by the charter school; 
  3.16     (8) types and amounts of insurance coverage to be obtained 
  3.17  by the charter school; 
  3.18     (9) the term of the contract, which may be up to three 
  3.19  years for the first term and may be renewed for up to five years 
  3.20  for subsequent terms; and 
  3.21     (10) if the board of directors or the operators of the 
  3.22  charter school provide special instruction and services for 
  3.23  children with a disability under sections 125A.03 to 125A.24, 
  3.24  and 125A.65, a description of the financial parameters within 
  3.25  which the charter school will operate to provide the special 
  3.26  instruction and services to children with a disability. 
  3.27     Sec. 4.  Minnesota Statutes 1999 Supplement, section 
  3.28  124D.10, subdivision 8, is amended to read: 
  3.29     Subd. 8.  [STATE AND LOCAL REQUIREMENTS.] (a) A charter 
  3.30  school shall meet all applicable state and local health and 
  3.31  safety requirements. 
  3.32     (b) A school sponsored by a school board may be located in 
  3.33  any district, unless the school board of the district of the 
  3.34  proposed location disapproves by written resolution.  If such a 
  3.35  board denies a request to locate within its boundaries a charter 
  3.36  school sponsored by another school board, the sponsoring school 
  4.1   board may appeal to the commissioner.  If the commissioner 
  4.2   authorizes the school, the commissioner must sponsor the school. 
  4.3      (c) A charter school must be nonsectarian in its programs, 
  4.4   admission policies, employment practices, and all other 
  4.5   operations.  A sponsor may not authorize a charter school or 
  4.6   program that is affiliated with a nonpublic sectarian school or 
  4.7   a religious institution. 
  4.8      (d) Charter schools must not be used as a method of 
  4.9   providing education or generating revenue for students who are 
  4.10  being home-schooled. 
  4.11     (e) The primary focus of a charter school must be to 
  4.12  provide a comprehensive program of instruction for at least one 
  4.13  grade or age group from five through 18 years of age.  
  4.14  Instruction may be provided to people younger than five years 
  4.15  and older than 18 years of age. 
  4.16     (f) A charter school may not charge tuition. 
  4.17     (g) A charter school is subject to and must comply with 
  4.18  chapter 363 and section 121A.04. 
  4.19     (h) A charter school is subject to and must comply with The 
  4.20  Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the 
  4.21  Minnesota Public School Fee law, sections 123B.34 to 123B.39. 
  4.22     (i) A charter school is subject to the same financial 
  4.23  audits, audit procedures, and audit requirements as a district.  
  4.24  The audit must be consistent in compliance with the requirements 
  4.25  of sections 123B.75 to 123B.83, except to the extent deviations 
  4.26  are necessary because of the program at the school.  The 
  4.27  department of children, families, and learning, state auditor, 
  4.28  or legislative auditor may conduct financial, program, or 
  4.29  compliance audits. 
  4.30     (j) A charter school is a district for the purposes of tort 
  4.31  liability under chapter 466. 
  4.32     Sec. 5.  Minnesota Statutes 1999 Supplement, section 
  4.33  124D.10, subdivision 11, is amended to read: 
  4.34     Subd. 11.  [EMPLOYMENT AND OTHER OPERATING MATTERS.] A 
  4.35  charter school must employ or contract with necessary teachers, 
  4.36  as defined by section 122A.15, subdivision 1, who hold valid 
  5.1   licenses to perform the particular service for which they are 
  5.2   employed in the school.  The charter school's state aid may be 
  5.3   reduced under section 127A.42 if the school employs a teacher 
  5.4   who does not hold a valid teaching license or permit in a public 
  5.5   school or is not otherwise approved by the board of teaching.  
  5.6   The school may employ necessary employees who are not required 
  5.7   to hold teaching licenses to perform duties other than teaching 
  5.8   and may contract for other services.  The school may discharge 
  5.9   teachers and nonlicensed employees.  A person, without holding a 
  5.10  valid administrator's license, may perform administrative, 
  5.11  supervisory, or instructional leadership duties. 
  5.12     The board of directors also shall decide matters related to 
  5.13  the operation of the school, including budgeting, curriculum and 
  5.14  operating procedures.  
  5.15     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
  5.16  124D.10, subdivision 14, is amended to read: 
  5.17     Subd. 14.  [ANNUAL PUBLIC REPORTS.] A charter school must 
  5.18  report at least annually to its sponsor and the commissioner the 
  5.19  information required by the sponsor or the commissioner.  The 
  5.20  reports are public data under chapter 13.  
  5.21     Sec. 7.  Minnesota Statutes 1999 Supplement, section 
  5.22  124D.10, subdivision 15, is amended to read: 
  5.23     Subd. 15.  [REVIEW AND COMMENT.] The department must review 
  5.24  and comment on the evaluation, by the chartering school 
  5.25  district, of the performance of a charter school before the 
  5.26  charter school's contract is renewed.  A sponsor shall monitor 
  5.27  and evaluate the fiscal and student performance of the school, 
  5.28  and may for this purpose annually assess the school up to $10 
  5.29  per student up to a maximum of $3,500.  The information from for 
  5.30  the review and comment shall be reported by the sponsor to the 
  5.31  commissioner of children, families, and learning in a timely 
  5.32  manner.  Periodically, the commissioner shall report trends or 
  5.33  suggestions based on the evaluation of charter school contracts 
  5.34  to the education committees of the state legislature.  
  5.35     Sec. 8.  Minnesota Statutes 1999 Supplement, section 
  5.36  124D.10, subdivision 23, is amended to read: 
  6.1      Subd. 23.  [CAUSES FOR NONRENEWAL OR TERMINATION OF CHARTER 
  6.2   SCHOOL CONTRACT.] (a) The duration of the contract with a 
  6.3   sponsor must be for the term contained in the contract according 
  6.4   to subdivision 6.  The sponsor may or may not renew a contract 
  6.5   at the end of the term for any ground listed in paragraph (b).  
  6.6   A sponsor may unilaterally terminate a contract during the term 
  6.7   of the contract for any ground listed in paragraph (b).  At 
  6.8   least 60 days before not renewing or terminating a contract, the 
  6.9   sponsor shall notify the board of directors of the charter 
  6.10  school of the proposed action in writing.  The notice shall 
  6.11  state the grounds for the proposed action in reasonable detail 
  6.12  and that the charter school's board of directors may request in 
  6.13  writing an informal hearing before the sponsor within 14 days of 
  6.14  receiving notice of nonrenewal or termination of the contract.  
  6.15  Failure by the board of directors to make a written request for 
  6.16  a hearing within the 14-day period shall be treated as 
  6.17  acquiescence to the proposed action.  Upon receiving a timely 
  6.18  written request for a hearing, the sponsor shall give reasonable 
  6.19  notice to the charter school's board of directors of the hearing 
  6.20  date.  The sponsor shall conduct an informal hearing before 
  6.21  taking final action.  The sponsor shall take final action to 
  6.22  renew or not renew a contract by the last day of classes in the 
  6.23  school year.  If the sponsor is a local board, the school's 
  6.24  board of directors may appeal the sponsor's decision to the 
  6.25  commissioner. 
  6.26     (b) A contract may be terminated or not renewed upon any of 
  6.27  the following grounds: 
  6.28     (1) failure to meet the requirements for pupil performance 
  6.29  contained in the contract; 
  6.30     (2) failure to meet generally accepted standards of fiscal 
  6.31  management; 
  6.32     (3) violations of law; or 
  6.33     (4) other good cause shown. 
  6.34     If a contract is terminated or not renewed, the school must 
  6.35  be dissolved according to the applicable provisions of chapter 
  6.36  308A or 317A, except when the commissioner approves the decision 
  7.1   of a different eligible sponsor to authorize the charter school. 
  7.2      Sec. 9.  Minnesota Statutes 1999 Supplement, section 
  7.3   124D.11, subdivision 4, is amended to read: 
  7.4      Subd. 4.  [BUILDING LEASE AID.] When a charter school finds 
  7.5   it economically advantageous to rent or lease a building or land 
  7.6   for any instructional purposes and it determines that the total 
  7.7   operating capital revenue under section 126C.10, subdivision 13, 
  7.8   is insufficient for this purpose, it may apply to the 
  7.9   commissioner for building lease aid for this purpose.  Criteria 
  7.10  for aid approval and revenue uses shall be as defined for the 
  7.11  building lease levy in section 126C.40, subdivision 1, 
  7.12  paragraphs (a) and (b).  A charter school is eligible for 
  7.13  building lease aid.  Buildings leased by charter schools must 
  7.14  meet all local and state building codes, state health and safety 
  7.15  requirements, and federal Americans with Disabilities Act 
  7.16  requirements.  The amount of building lease aid per pupil unit 
  7.17  served for a charter school for any year shall not exceed the 
  7.18  lesser of (a) 90 percent of the approved lease cost or (b) the 
  7.19  product of the pupil units served for the current school year 
  7.20  times $1,500. Existing charter schools must apply by January 15 
  7.21  of the current year in which the lease applies to be considered 
  7.22  for this program.  The application must include the cost of the 
  7.23  lease and confirmation that a certificate of occupancy has been 
  7.24  issued for the building. 
  7.25     Sec. 10.  Minnesota Statutes 1999 Supplement, section 
  7.26  124D.11, subdivision 6, is amended to read: 
  7.27     Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
  7.28  school is eligible to receive other aids, grants, and revenue 
  7.29  according to chapters 120A to 129C, as though it were a district.
  7.30     (b) Notwithstanding paragraph (a), a charter school may not 
  7.31  receive aid, a grant, or revenue if a levy is required to obtain 
  7.32  the money, except as otherwise provided in this section.  
  7.33     (c) Federal aid received by the state must be paid to the 
  7.34  school, if it qualifies for the aid as though it were a school 
  7.35  district. 
  7.36     (d) A charter school may receive money from any source for 
  8.1   capital facilities needs.  In the year-end report to the 
  8.2   commissioner of children, families, and learning, the charter 
  8.3   school shall report the total amount of funds received from 
  8.4   grants and other outside sources. 
  8.5      (e) Notwithstanding paragraph (a) or (b), a charter school 
  8.6   is eligible may apply for a grant to receive the aid portion of 
  8.7   integration revenue under section 124D.86, subdivision 3, for 
  8.8   enrolled students who are residents of a district that is 
  8.9   eligible for integration revenue if the enrollment of the pupil 
  8.10  in the charter school contributes to desegregation or 
  8.11  integration purposes.  The commissioner shall determine grant 
  8.12  recipients and may adopt application guidelines.  The grants 
  8.13  must be competitively determined and must demonstrate that the 
  8.14  enrollment of pupils in the charter school contributes to 
  8.15  desegregation or integration purposes as determined by the 
  8.16  commissioner.  If the charter school has elected not to provide 
  8.17  transportation under section 124D.10, subdivision 16, the aid 
  8.18  shall be reduced by the amount per pupil unit specified for the 
  8.19  district where the charter school is located under section 
  8.20  123B.92, subdivision 8. 
  8.21     Sec. 11.  Minnesota Statutes 1999 Supplement, section 
  8.22  126C.05, subdivision 3, is amended to read: 
  8.23     Subd. 3.  [COMPENSATION REVENUE PUPIL UNITS.] Compensation 
  8.24  revenue pupil units for fiscal year 1998 and thereafter must be 
  8.25  computed according to this subdivision.  
  8.26     (a) The compensation revenue concentration percentage for 
  8.27  each building in a district equals the product of 100 times the 
  8.28  ratio of:  
  8.29     (1) the sum of the number of pupils enrolled in the 
  8.30  building eligible to receive free lunch plus one-half of the 
  8.31  pupils eligible to receive reduced priced lunch on October 1 of 
  8.32  the previous fiscal year; to 
  8.33     (2) the number of pupils enrolled in the building on 
  8.34  October 1 of the previous fiscal year. 
  8.35     (b) The compensation revenue pupil weighting factor for a 
  8.36  building equals the lesser of one or the quotient obtained by 
  9.1   dividing the building's compensation revenue concentration 
  9.2   percentage by 80.0.  
  9.3      (c) The compensation revenue pupil units for a building 
  9.4   equals the product of:  
  9.5      (1) the sum of the number of pupils enrolled in the 
  9.6   building eligible to receive free lunch and one-half of the 
  9.7   pupils eligible to receive reduced priced lunch on October 1 of 
  9.8   the previous fiscal year; times 
  9.9      (2) the compensation revenue pupil weighting factor for the 
  9.10  building; times 
  9.11     (3) .60. 
  9.12     (d) Notwithstanding paragraphs (a) to (c), for charter 
  9.13  schools and contracted alternative programs in the first year of 
  9.14  operation, or for any year of operation when the number of 
  9.15  pupils eligible for free or reduced lunch in the current year is 
  9.16  more than 20 percent greater than in the previous year, 
  9.17  compensation revenue pupil units shall be computed using data 
  9.18  for the current fiscal year.  If the charter school or 
  9.19  contracted alternative program begins operation after October 1, 
  9.20  compensatory revenue pupil units shall be computed based on 
  9.21  pupils enrolled on an alternate date determined by the 
  9.22  commissioner, and the compensation revenue pupil units shall be 
  9.23  prorated based on the ratio of the number of days of student 
  9.24  instruction to 170 days. 
  9.25     (e) The percentages in this subdivision must be based on 
  9.26  the count of individual pupils and not on a building average or 
  9.27  minimum. 
  9.28     Sec. 12.  Laws 1999, chapter 241, article 5, section 18, 
  9.29  subdivision 5, is amended to read: 
  9.30     Subd. 5.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
  9.31  lease aid according to Minnesota Statutes, section 124D.11, 
  9.32  subdivision 4: 
  9.33       $2,992,000 $6,952,000  ..... 2000
  9.34       $3,616,000 $10,176,000 ..... 2001
  9.35     The 2000 appropriation includes $194,000 for 1999 and 
  9.36  $2,798,000 $6,758,000 for 2000. 
 10.1      The 2001 appropriation includes $311,000 $751,000 for 2000 
 10.2   and $3,305,000 $9,425,000 for 2001.  
 10.3      Sec. 13.  Laws 1999, chapter 241, article 5, section 18, 
 10.4   subdivision 6, is amended to read: 
 10.5      Subd. 6.  [CHARTER SCHOOL START-UP GRANTS.] For charter 
 10.6   school start-up cost aid under Minnesota Statutes, section 
 10.7   124D.11: 
 10.8        $1,789,000 $1,839,000  ..... 2000
 10.9        $1,876,000 $2,976,000  ..... 2001
 10.10     The 2000 appropriation includes $100,000 for 1999 and 
 10.11  $1,689,000 $1,789,000 for 2000.  
 10.12     The 2001 appropriation includes $188,000 for 1999 2000 and 
 10.13  $1,688,000 $2,788,000 for 2001. 
 10.14     Any balance in the first year does not cancel but is 
 10.15  available in the second year.  This appropriation may also be 
 10.16  used for grants to convert existing schools into charter schools.
 10.17     Sec. 14.  [EFFECTIVE DATE.] 
 10.18     Sections 1 to 6, 8, 10, 12, and 13 are effective the day 
 10.19  following final enactment.