SF 1167

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/06/2012 02:55pm

A bill for an act
relating to education; providing for policy for prekindergarten through grade 12
education, including general education, education excellence, special programs,
facilities and technology, and student transportation; amending Minnesota
Statutes 2010, sections 11A.16, subdivision 5; 120B.30, subdivisions 1, 3, 4;
120B.31, subdivision 4; 120B.36, subdivisions 1, 2; 122A.16, as amended;
123B.41, subdivisions 2, 5; 123B.57; 123B.63, subdivision 3; 123B.71,
subdivision 5; 123B.72, subdivision 3; 123B.75, subdivision 5; 123B.92,
subdivision 5; 124D.091, subdivision 2; 124D.10, subdivisions 3, 4, 6a; 124D.11,
subdivision 9; 125A.02, subdivision 1; 125A.15; 125A.51; 125A.79, subdivision
1; 126C.10, subdivision 8a; 126C.41, subdivision 2; 127A.42, subdivision 2;
127A.43; 127A.45, by adding a subdivision; repealing Minnesota Statutes 2010,
sections 125A.54; 126C.457.

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

ARTICLE 1

GENERAL EDUCATION

Section 1.

Minnesota Statutes 2010, section 11A.16, subdivision 5, is amended to read:

Subd. 5.

Calculation of income.

As of the end of each fiscal year, the state
board shall calculate the investment income earned by the permanent school fund. The
investment income earned by the fund shall equal the amount of interest on debt securities
deleted text begin and deleted text end new text begin , new text end dividends on equity securities new text begin , and interest earned on certified monthly earnings prior
to the transfer to the Department of Education new text end . Gains and losses arising from the sale of
securities shall be apportioned as follows:

(a) If the sale of securities results in a net gain during a fiscal year, the gain shall
be apportioned in equal installments over the next ten fiscal years to offset net losses in
those years. If any portion of an installment is not needed to recover subsequent losses
identified in paragraph (b) it shall be added to the principal of the fund.

(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall
be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these
gains are insufficient, any remaining net loss shall be recovered from interest and dividend
income in equal installments over the following ten fiscal years.

Sec. 2.

Minnesota Statutes 2010, section 123B.41, subdivision 2, is amended to read:

Subd. 2.

Textbook.

"Textbook" means any book or book substitute new text begin , including
electronic books as well as other printed materials delivered electronically, new text end which a
pupil uses as a text or text substitute in a particular class or program in the school
regularly attended and a copy of which is expected to be available for the individual use
of each pupil in this class or program. The term shall be limited to books, workbooks,
or manuals, whether bound or in loose-leaf form, new text begin as well as electronic books and other
printed materials delivered electronically, new text end intended for use as a principal source of study
material for a given class or a group of students. The term includes only such secular,
neutral and nonideological textbooks as are available, used by, or of benefit to Minnesota
public school pupils.

Sec. 3.

Minnesota Statutes 2010, section 123B.41, subdivision 5, is amended to read:

Subd. 5.

Individualized instructional or cooperative learning materials.

"Individualized instructional or cooperative learning materials" means educational
materials which:

(a) are designed primarily for individual pupil use or use by pupils in a cooperative
learning group in a particular class or program in the school the pupil regularly attends;

(b) are secular, neutral, nonideological and not capable of diversion for religious
use; and

(c) are available, used by, or of benefit to Minnesota public school pupils.

Subject to the requirements in clauses (a), (b), and (c), "individualized instructional
or cooperative learning materials" include, but are not limited to, the following if they
do not fall within the definition of "textbook" in subdivision 2: published materials;
periodicals; documents; pamphlets; photographs; reproductions; pictorial or graphic
works; prerecorded video programs; prerecorded tapes, cassettes and other sound
recordings; manipulative materials; desk charts; games; study prints and pictures; desk
maps; models; learning kits; blocks or cubes; flash cards; individualized multimedia
systems; prepared instructional computer software programs; choral and band sheet music;
new text begin electronic books and other printed materials delivered electronically; new text end and CD-Rom.

"Individualized instructional or cooperative learning materials" do not include
instructional equipment, instructional hardware, or ordinary daily consumable classroom
supplies.

Sec. 4.

Minnesota Statutes 2010, section 123B.63, subdivision 3, is amended to read:

Subd. 3.

Capital project levy referendum.

A district may levy the local tax
rate approved by a majority of the electors voting on the question to provide funds for
an approved project. The election must take place no more than five years before the
estimated date of commencement of the project. The referendum must be held on a date
set by the board. new text begin A district must meet the requirements of section 123B.71 for projects
funded under this section. If a review and comment is required under section 123B.71,
subdivision 8, new text end a referendum for a project not receiving a positive review and comment by
the commissioner deleted text begin under section 123B.71 deleted text end must be approved by at least 60 percent of the
voters at the election. The referendum may be called by the school board and may be held:

(1) separately, before an election for the issuance of obligations for the project
under chapter 475; or

(2) in conjunction with an election for the issuance of obligations for the project
under chapter 475; or

(3) notwithstanding section 475.59, as a conjunctive question authorizing both the
capital project levy and the issuance of obligations for the project under chapter 475. Any
obligations authorized for a project may be issued within five years of the date of the
election.

The ballot must provide a general description of the proposed project, state the
estimated total cost of the project, state whether the project has received a positive or
negative review and comment from the commissioner, state the maximum amount of the
capital project levy as a percentage of net tax capacity, state the amount that will be raised
by that local tax rate in the first year it is to be levied, and state the maximum number of
years that the levy authorization will apply.

The ballot must contain a textual portion with the information required in this
section and a question stating substantially the following:

"Shall the capital project levy proposed by the board of .......... School District
No. .......... be approved?"

If approved, the amount provided by the approved local tax rate applied to the net
tax capacity for the year preceding the year the levy is certified may be certified for the
number of years, not to exceed ten, approved.

In the event a conjunctive question proposes to authorize both the capital project
levy and the issuance of obligations for the project, appropriate language authorizing the
issuance of obligations must also be included in the question.

The district must notify the commissioner of the results of the referendum.

Sec. 5.

Minnesota Statutes 2010, section 123B.75, subdivision 5, is amended to read:

Subd. 5.

Levy recognition.

(a) For fiscal years 2009 and 2010, in June of each
year, the school district must recognize as revenue, in the fund for which the levy was
made, the lesser of:

(1) the sum of May, June, and July school district tax settlement revenue received in
that calendar year, plus general education aid according to section 126C.13, subdivision
4, received in July and August of that calendar year; or

(2) the sum of:

(i) 31 percent of the referendum levy certified according to section 126C.17, in
calendar year 2000; and

(ii) the entire amount of the levy certified in the prior calendar year according to
section 124D.86, subdivision 4, for school districts receiving revenue under sections
124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph
(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457; and 126C.48,
subdivision 6; plus

(iii) zero percent of the amount of the levy certified in the prior calendar year for the
school district's general and community service funds, plus or minus auditor's adjustments,
not including the levy portions that are assumed by the state, that remains after subtracting
the referendum levy certified according to section 126C.17 and the amount recognized
according to item (ii).

(b) For fiscal year 2011 and later years, in June of each year, the school district must
recognize as revenue, in the fund for which the levy was made, the lesser of:

(1) the sum of May, June, and July school district tax settlement revenue received in
that calendar year, plus general education aid according to section 126C.13, subdivision
4, received in July and August of that calendar year; or

(2) the sum of:

(i) the greater of 48.6 percent of the referendum levy certified according to section
126C.17 in the prior calendar year, or 31 percent of the referendum levy certified
according to section 126C.17 in calendar year 2000; plus

(ii) the entire amount of the levy certified in the prior calendar year according to
section new text begin 124D.4531, new text end 124D.86, subdivision 4, for school districts receiving revenue under
sections 124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2,
paragraph (a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; deleted text begin 126C.457; deleted text end
and 126C.48, subdivision 6; plus

(iii) 48.6 percent of the amount of the levy certified in the prior calendar year for the
school district's general and community service funds, plus or minus auditor's adjustments,
not including the levy portions that are assumed by the state, that remains after subtracting
the referendum levy certified according to section 126C.17 and the amount recognized
according to item (ii).

Sec. 6.

Minnesota Statutes 2010, section 125A.79, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For the purposes of this section, the definitions in this
subdivision apply.

(a) "Unreimbursed special education cost" means the sum of the following:

(1) expenditures for teachers' salaries, contracted services, supplies, equipment, and
transportation services eligible for revenue under section 125A.76; plus

(2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and
125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus

(3) revenue for teachers' salaries, contracted services, supplies, equipment, and
transportation services under section 125A.76; minus

(4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services
eligible for revenue under section 125A.76, subdivision 2.

(b) "General revenue" new text begin for a school district new text end means the sum of the general education
revenue according to section 126C.10, subdivision 1, excluding alternative teacher
compensation revenue, deleted text begin plus the total qualifying referendum revenue specified in paragraph
(e) deleted text end minus transportation sparsity revenue minus total operating capital revenue. new text begin "General
revenue" for a charter school means the sum of the general education revenue according to
section 124D.11, subdivision 1, and transportation revenue according to section 124D.11,
subdivision 2, excluding alternative teacher compensation revenue, minus referendum
equalization aid minus transportation sparsity revenue minus operating capital revenue.
new text end

(c) "Average daily membership" has the meaning given it in section 126C.05.

(d) "Program growth factor" means 1.02 for fiscal year 2012 and later.

deleted text begin (e) "Total qualifying referendum revenue" means two-thirds of the district's total
referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs
(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal
year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.
deleted 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. 7.

Minnesota Statutes 2010, section 126C.10, subdivision 8a, is amended to read:

Subd. 8a.

Sparsity revenue for school districts that close facilities.

A school
district that closes a school facility is eligible for elementary and secondary sparsity
revenue equal to the greater of the amounts calculated under subdivisions 6, 7, and 8 or
the total amount of sparsity revenue for the previous fiscal year if the school board of the
district has adopted a written resolution stating that the district intends to close the school
facility, but cannot proceed with the closure without the adjustment to sparsity revenue
authorized by this subdivision. The written resolution must be new text begin approved by the school
board and new text end filed with the commissioner of education deleted text begin at least 60 days deleted text end prior to the start of the
fiscal year for which aid under this subdivision is first requested.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for board resolutions approved by
the school board in fiscal year 2011 and later for sparsity revenue calculations in fiscal
year 2012 and later.
new text end

Sec. 8.

Minnesota Statutes 2010, section 126C.41, subdivision 2, is amended to read:

Subd. 2.

Retired employee health benefits.

(a) A district may levy an amount up
to the amount the district is required by the collective bargaining agreement in effect
on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for
licensed and nonlicensed employees who have terminated services in the employing
district and withdrawn from active teaching service or other active service, as applicable,
before July 1, 1992, and to pay for health insurance or unreimbursed medical expenses
for licensed and nonlicensed employees who have terminated services in the employing
district and withdrawn from active teaching service or other active service, as applicable
before July 1, 1998, only if a sunset clause is in effect for the current collective bargaining
agreement. The total amount of the levy each year may not exceed $600,000.

(b) In addition to the levy authority granted under paragraph (a), a school district
may levy for other postemployment benefits expenses new text begin actually paid during the previous
fiscal year new text end . For purposes of this subdivision, "postemployment benefits" means benefits
giving rise to a liability under Statement No. 45 of the Government Accounting Standards
Board. A district seeking levy authority under this subdivision must:

(1) create or have created an actuarial liability to pay postemployment benefits to
employees or officers after their termination of service;

(2) have a sunset clause in effect for the current collective bargaining agreement as
required by paragraph (a); and

(3) apply for the authority in the form and manner required by the commissioner
of education.

If the total levy authority requested under this paragraph exceeds the amount established
in paragraph (c), the commissioner must proportionately reduce each district's maximum
levy authority under this subdivision. new text begin The commissioner may subsequently adjust each
district's levy authority under this subdivision so long as the total levy authority does not
exceed the maximum levy authority for that year.
new text end

(c) The maximum levy authority under paragraph (b) must not exceed the following
amounts:

(1) $9,242,000 for taxes payable in 2010;

(2) $29,863,000 for taxes payable in 2011; and

(3) for taxes payable in 2012 and later, the maximum levy authority must not exceed
the sum of the previous year's authority and $14,000,000.

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 126C.457, new text end new text begin is repealed.
new text end

ARTICLE 2

EDUCATION EXCELLENCE

Section 1.

Minnesota Statutes 2010, section 120B.30, subdivision 1, is amended to read:

Subdivision 1.

Statewide testing.

(a) The commissioner, with advice from experts
with appropriate technical qualifications and experience and stakeholders, consistent with
subdivision 1a, shall include in the comprehensive assessment system, for each grade
level to be tested, state-constructed tests developed from and aligned with the state's
required academic standards under section 120B.021, include multiple choice questions,
and be administered annually to all students in grades 3 through 8. State-developed high
school tests aligned with the state's required academic standards under section 120B.021
and administered to all high school students in a subject other than writing must include
multiple choice questions. The commissioner shall establish one or more months during
which schools shall administer the tests to students each school year. For students enrolled
in grade 8 before the 2005-2006 school year, Minnesota basic skills tests in reading,
mathematics, and writing shall fulfill students' basic skills testing requirements for a
passing state notation. The passing scores of basic skills tests in reading and mathematics
are the equivalent of 75 percent correct for students entering grade 9 based on the first
uniform test administered in February 1998. Students who have not successfully passed
a Minnesota basic skills test by the end of the 2011-2012 school year must pass the
graduation-required assessments for diploma under paragraph (c).

(b) The state assessment system must be aligned to the most recent revision of
academic standards as described in section 120B.023 in the following manner:

(1) mathematics;

(i) grades 3 through 8 beginning in the 2010-2011 school year; and

(ii) high school level beginning in the 2013-2014 school year;

(2) science; grades 5 and 8 and at the high school level beginning in the 2011-2012
school year; and

(3) language arts and reading; grades 3 through 8 and high school level beginning in
the 2012-2013 school year.

(c) For students enrolled in grade 8 in the 2005-2006 school year and later, only the
following options shall fulfill students' state graduation test requirements:

(1) for reading and mathematics:

(i) obtaining an achievement level equivalent to or greater than proficient as
determined through a standard setting process on the Minnesota comprehensive
assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing
score as determined through a standard setting process on the graduation-required
assessment for diploma in grade 10 for reading and grade 11 for mathematics or
subsequent retests;

(ii) achieving a passing score as determined through a standard setting process on the
state-identified language proficiency test in reading and the mathematics test for English
language learners or the graduation-required assessment for diploma equivalent of those
assessments for students designated as English language learners;

(iii) achieving an individual passing score on the graduation-required assessment
for diploma as determined by appropriate state guidelines for students with an individual
education plan or 504 plan;

(iv) obtaining achievement level equivalent to or greater than proficient as
determined through a standard setting process on the state-identified alternate assessment
or assessments in grade 10 for reading and grade 11 for mathematics for students with
an individual education plan; or

(v) achieving an individual passing score on the state-identified alternate assessment
or assessments as determined by appropriate state guidelines for students with an
individual education plan; and

(2) for writing:

(i) achieving a passing score on the graduation-required assessment for diploma;

(ii) achieving a passing score as determined through a standard setting process on
the state-identified language proficiency test in writing for students designated as English
language learners;

(iii) achieving an individual passing score on the graduation-required assessment
for diploma as determined by appropriate state guidelines for students with an individual
education plan or 504 plan; or

(iv) achieving an individual passing score on the state-identified alternate assessment
or assessments as determined by appropriate state guidelines for students with an
individual education plan.

(d) Students enrolled in grade 8 in any school year from the 2005-2006 school
year to the 2009-2010 school year who do not pass the mathematics graduation-required
assessment for diploma under paragraph (c) are eligible to receive a high school diploma
if they:

(1) complete with a passing score or grade all state and local coursework and credits
required for graduation by the school board granting the students their diploma;

(2) participate in district-prescribed academic remediation in mathematics; and

(3) fully participate in at least two retests of the mathematics GRAD test or until
they pass the mathematics GRAD test, whichever comes first. A school, district, or
charter school must place new text begin on the high school transcript new text end a student's deleted text begin highest deleted text end new text begin current pass
status for each subject that has a required graduation new text end assessment deleted text begin score for each of the
following assessments on the student's high school transcript: the mathematics Minnesota
Comprehensive Assessment, reading Minnesota Comprehensive Assessment, and writing
Graduation-Required Assessment for Diploma, and when applicable, the mathematics
Graduation-Required Assessment for Diploma and reading Graduation-Required
Assessment for Diploma deleted text end .

In addition, the school board granting the students their diplomas may formally
decide to include a notation of high achievement on the high school diplomas of those
graduating seniors who, according to established school board criteria, demonstrate
exemplary academic achievement during high school.

(e) The 3rd through 8th grade and high school test results shall be available to
districts for diagnostic purposes affecting student learning and district instruction and
curriculum, and for establishing educational accountability. The commissioner must
disseminate to the public the high school test results upon receiving those results.

(f) The 3rd through 8th grade and high school tests must be aligned with state
academic standards. The commissioner shall determine the testing process and the order
of administration. The statewide results shall be aggregated at the site and district level,
consistent with subdivision 1a.

(g) In addition to the testing and reporting requirements under this section, the
commissioner shall include the following components in the statewide public reporting
system:

(1) uniform statewide testing of all students in grades 3 through 8 and at the high
school level that provides appropriate, technically sound accommodations or alternate
assessments;

(2) educational indicators that can be aggregated and compared across school
districts and across time on a statewide basis, including average daily attendance, high
school graduation rates, and high school drop-out rates by age and grade level;

(3) state results on the American College Test; and

(4) state results from participation in the National Assessment of Educational
Progress so that the state can benchmark its performance against the nation and other
states, and, where possible, against other countries, and contribute to the national effort
to monitor achievement.

Sec. 2.

Minnesota Statutes 2010, section 120B.30, subdivision 3, is amended to read:

Subd. 3.

Reporting.

The commissioner shall report test deleted text begin data deleted text end new text begin results new text end publicly and
to stakeholders, including the performance achievement levels developed from students'
unweighted test scores in each tested subject and a listing of demographic factors that
strongly correlate with student performance. new text begin The test results must not include personally
identifiable information as defined in Code of Federal Regulations, title 34, section 99.3. new text end
The commissioner shall also report data that compares performance results among school
sites, school districts, Minnesota and other states, and Minnesota and other nations. The
commissioner shall disseminate to schools and school districts a more comprehensive
report containing testing information that meets local needs for evaluating instruction
and curriculum.

Sec. 3.

Minnesota Statutes 2010, section 120B.30, subdivision 4, is amended to read:

Subd. 4.

Access to tests.

new text begin Consistent with section 13.34, new text end the commissioner must
adopt and publish a policy to provide public and parental access for review of basic skills
tests, Minnesota Comprehensive Assessments, or any other such statewide test and
assessment new text begin which would not compromise the objectivity or fairness of the testing or
examination process new text end . Upon receiving a written request, the commissioner must make
available to parents or guardians a copy of their student's actual responses to the test
questions for their review.

Sec. 4.

Minnesota Statutes 2010, section 120B.31, subdivision 4, is amended to read:

Subd. 4.

deleted text begin Statistical adjustments; deleted text end Student performance data.

In developing
policies and assessment processes to hold schools and districts accountable for high levels
of academic standards under section 120B.021, the commissioner shall aggregate student
data over time to report student performance and growth levels measured at the school,
school district, and statewide level. When collecting and reporting the performance data,
the commissioner shall deleted text begin : (1) acknowledge the impact of significant demographic factors
such as residential instability, the number of single parent families, parents' level of
education, and parents' income level on school outcomes; and (2) deleted text end organize and report the
data so that state and local policy makers can understand the educational implications
of changes in districts' demographic profiles over time. Any report the commissioner
disseminates containing summary data on student performance must integrate student
performance and the demographic factors that strongly correlate with that performance.

Sec. 5.

Minnesota Statutes 2010, section 120B.36, subdivision 1, is amended to read:

Subdivision 1.

School performance report cards.

(a) The commissioner
shall report student academic performance under section 120B.35, subdivision 2; the
percentages of students showing low, medium, and high growth under section 120B.35,
subdivision 3, paragraph (b); school safety and student engagement and connection
under section 120B.35, subdivision 3, paragraph (d); rigorous coursework under section
120B.35, subdivision 3, paragraph (c); two separate student-to-teacher ratios that clearly
indicate the definition of teacher consistent with sections 122A.06 and 122A.15 for
purposes of determining these ratios; staff characteristics excluding salaries; student
enrollment demographics; district mobility; and extracurricular activities. The report also
must indicate a school's adequate yearly progress status, and must not set any designations
applicable to high- and low-performing schools due solely to adequate yearly progress
status.

(b) The commissioner shall develop, annually update, and post on the department
Web site school performance report cards.

(c) The commissioner must make available performance report cards by the
beginning of each school year.

(d) A school or district may appeal its adequate yearly progress status in writing to
the commissioner within 30 days of receiving the notice of its status. The commissioner's
decision to uphold or deny an appeal is final.

(e) School performance report card data are nonpublic data under section 13.02,
subdivision 9, until deleted text begin not later than ten days after the appeal procedure described in
paragraph (d) concludes deleted text end new text begin the commissioner publicly releases the data new text end . The deleted text begin department deleted text end new text begin
commissioner new text end shall annually post school performance report cards to deleted text begin its deleted text end new text begin the department's new text end
public web site no later than September 1 new text begin , except that in years when the report card
reflects new performance standards, the commissioner shall post the school performance
report cards no later than October 1 new text end .

Sec. 6.

Minnesota Statutes 2010, section 120B.36, subdivision 2, is amended to read:

Subd. 2.

Adequate yearly progress and other data.

All data the department
receives, collects, or creates to determine adequate yearly progress status under Public
Law 107-110, section 1116, set state growth targets, and determine student growth are
nonpublic data under section 13.02, subdivision 9, until deleted text begin not later than ten days after the
appeal procedure described in subdivision 1, paragraph (d), concludes deleted text end new text begin the commissioner
publicly releases the data new text end . Districts must provide parents sufficiently detailed summary
data to permit parents to appeal under Public Law 107-110, section 1116(b)(2). The
deleted text begin department deleted text end new text begin commissioner new text end shall annually post federal adequate yearly progress data and
state student growth data to deleted text begin its deleted text end new text begin the department's new text end public Web site no later than September
1 new text begin , except that in years when adequate yearly progress reflects new performance standards,
the commissioner shall post federal adequate yearly progress data and state student growth
data no later than October 1 new text end .

Sec. 7.

Minnesota Statutes 2010, section 122A.16, as amended by Laws 2011, chapter
5, section 2, is amended to read:

122A.16 HIGHLY QUALIFIED TEACHER DEFINED.

(a) A qualified teacher is one holding a valid license, under this chapter, to perform
the particular service for which the teacher is employed in a public school.

(b) For the purposes of the federal No Child Left Behind Act, a highly qualified
teacher is one who holds a valid license under this chapter, including under section
122A.245, among other sections deleted text begin , to perform the particular service for which the teacher is
employed in a public school or who meets the requirements of a highly objective uniform
state standard of evaluation (HOUSSE) deleted text end new text begin and is determined by local administrators as
having highly qualified status in accordance with the approved Minnesota highly qualified
plan. Teachers delivering core content instruction must be deemed highly qualified at the
local level and reported to the state via the staff automated reporting system new text end .

deleted text begin All Minnesota teachers teaching in a core academic subject area, as defined by the
federal No Child Left Behind Act, in which they are not fully licensed may complete the
following HOUSSE process in the core subject area for which the teacher is requesting
highly qualified status by completing an application, in the form and manner described by
the commissioner, that includes:
deleted text end

deleted text begin (1) documentation of student achievement as evidenced by norm-referenced test
results that are objective and psychometrically valid and reliable;
deleted text end

deleted text begin (2) evidence of local, state, or national activities, recognition, or awards for
professional contribution to achievement;
deleted text end

deleted text begin (3) description of teaching experience in the teachers' core subject area in a public
school under a waiver, variance, limited license or other exception; nonpublic school; and
postsecondary institution;
deleted text end

deleted text begin (4) test results from the Praxis II content test;
deleted text end

deleted text begin (5) evidence of advanced certification from the National Board for Professional
Teaching Standards;
deleted text end

deleted text begin (6) evidence of the successful completion of course work or pedagogy courses; and
deleted text end

deleted text begin (7) evidence of the successful completion of high quality professional development
activities.
deleted text end

deleted text begin Districts must assign a school administrator to serve as a HOUSSE reviewer to
meet with teachers under this paragraph and, where appropriate, certify the teachers'
applications. Teachers satisfy the definition of highly qualified when the teachers receive
at least 100 of the total number of points used to measure the teachers' content expertise
under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1)
to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified
for more than one subject area.
deleted text end

deleted text begin (c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher
must obtain permission from the Board of Teaching in order to teach in a public school.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2011-2012 school year and
later.
new text end

Sec. 8.

Minnesota Statutes 2010, section 124D.091, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

A district that offers a concurrent enrollment course according
to an agreement under section 124D.09, subdivision 10, is eligible to receive aid for the
costs of providing postsecondary courses at the high school. Beginning in fiscal year 2011,
districts only are eligible for aid if the college or university concurrent enrollment courses
offered by the district are accredited by the National Alliance of Concurrent Enrollment
Partnership, in the process of being accredited, or are shown by clear evidence to be of
comparable standard to accredited courses new text begin , or are technical courses within a recognized
career and technical education program of study approved by the commissioner of
education and the chancellor of the Minnesota State Colleges and Universities new text end .

Sec. 9.

Minnesota Statutes 2010, 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.

"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.

(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 new text begin without an approved affidavit
by the commissioner prior to July 1, 2009 new text end , new text begin and new text end 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; new text begin and
new text end

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

deleted text begin (iv) deleted text end is incorporated in the state of Minnesota new text begin and has been operating continuously
for at least five years but does not operate a charter school new text end ;

(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; or

(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.

(5) deleted text begin no more than three deleted text end single-purpose authorizers 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. Eligible
organizations interested in being approved as an authorizer 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 deleted text begin affidavit deleted text end new text begin application for approval new text end 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 an authorizer,
including the personnel who will perform the authorizing 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 an
authorizer 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, deleted text begin 2011 deleted text end new text begin 2012 new text end , 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.
new text end

Sec. 10.

Minnesota Statutes 2010, 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 cooperative under chapter 308A or nonprofit corporation under chapter 317A and
the provisions under the applicable chapter shall apply to the school except as provided
in this section.

Notwithstanding sections 465.717 and 465.719, a school district, 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 as a cooperative under chapter 308A or as a nonprofit corporation under
chapter 317A and must establish a board of directors composed of at least five members
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 new text begin and serving as a teacher new text end at the
school or a licensed teacher providing instruction under a deleted text begin contact deleted text end new text begin contract new text end between the
charter school and a cooperative; (ii) the parent or legal guardian of a student enrolled
in the charter school new text begin who is not employed by the charter school new text end ; 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 deleted text begin are deleted text end new text begin may
only serve as new text end ex-officio nonvoting board members new text begin and shall not serve as a voting member
of the board. Charter school employees shall not serve on the board unless item (i) applies.
Contractors providing facilities, goods, or services to a charter school shall not serve on
the board of directors of the charter school new text end . 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.

Sec. 11.

Minnesota Statutes 2010, section 124D.10, subdivision 6a, is amended to read:

Subd. 6a.

Audit report.

(a) The charter school must submit an audit report to the
commissioner and its authorizer by December 31 each year.

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

(c) If the commissioner receives an audit report indicating that a material weakness
exists in the financial reporting systems of a charter school, the charter school must
submit a written report to the commissioner explaining how the material weakness will
be resolved. new text begin An entity, as a condition of providing financial services to a charter school,
must agree to make available information about a charter school's financial audit to the
commissioner upon request.
new text end

Sec. 12.

Minnesota Statutes 2010, 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 308A or 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 and investment balances remaining shall be
returned to the state.

new text begin (h) A charter school must have a valid, signed contract under section 124D.10,
subdivision 6, on file at the Department of Education at least 15 days prior to the date of
first payment of state aid for the fiscal year.
new text end

new text begin (i) State aid entitlements shall be computed for a charter school only for the
portion of a school year for which it has a valid, signed contract under section 124D.10,
subdivision 6.
new text end

ARTICLE 3

SPECIAL PROGRAMS

Section 1.

Minnesota Statutes 2010, section 125A.02, subdivision 1, is amended to
read:

Subdivision 1.

Child with a disability.

"Child with a disability" means a child
identified under federal and state special education law as deleted text begin having a hearing impairment,
blindness, visual disability, deleted text end new text begin deaf or hard-of-hearing, blind or visually impaired, deafblind,
or having a new text end speech or language impairment, new text begin a new text end physical deleted text begin disability deleted text end new text begin impairment new text end , other health
deleted text begin impairment deleted text end new text begin disability new text end , deleted text begin mental deleted text end new text begin developmental cognitive new text end disability, deleted text begin emotional/behavioral deleted text end new text begin an
emotional or behavioral new text end disorder, specific learning disability, autism new text begin spectrum disorder new text end ,
traumatic brain injury, new text begin or severe new text end multiple deleted text begin disabilities deleted text end new text begin impairments new text end , deleted text begin or deafblind disability deleted text end new text begin
and new text end who needs special education and related services, as determined by the rules of the
commissioner deleted text begin , is a child with a disability deleted text end . A licensed physician, an advanced practice
nurse, or a licensed psychologist is qualified to make a diagnosis and determination
of attention deficit disorder or attention deficit hyperactivity disorder for purposes of
identifying a child with a disability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2011.
new text end

Sec. 2.

Minnesota Statutes 2010, section 125A.15, is amended to read:

125A.15 PLACEMENT IN ANOTHER DISTRICT; RESPONSIBILITY.

The responsibility for special instruction and services for a child with a disability
temporarily placed in another district for care and treatment shall be determined in the
following manner:

(a) The district of residence of a child shall be the district in which the child's parent
resides, if living, or the child's guardian deleted text begin , or the district designated by the commissioner
if neither parent nor guardian is living within the state deleted text end . new text begin If there is a dispute between
school districts regarding residency, the district of residence is the district designated by
the commissioner.
new text end

(b) If a district other than the resident district places a pupil for care and treatment,
the district placing the pupil must notify and give the resident district an opportunity to
participate in the placement decision. When an immediate emergency placement of a
pupil is necessary and time constraints foreclose a resident district from participating in
the emergency placement decision, the district in which the pupil is temporarily placed
must notify the resident district of the emergency placement within 15 days. The resident
district has up to five business days after receiving notice of the emergency placement
to request an opportunity to participate in the placement decision, which the placing
district must then provide.

(c) When a child is temporarily placed for care and treatment in a day program
located in another district and the child continues to live within the district of residence
during the care and treatment, the district of residence is responsible for providing
transportation to and from the care and treatment program and an appropriate educational
program for the child. The resident district may establish reasonable restrictions on
transportation, except if a Minnesota court or agency orders the child placed at a day care
and treatment program and the resident district receives a copy of the order, then the
resident district must provide transportation to and from the program unless the court or
agency orders otherwise. Transportation shall only be provided by the resident district
during regular operating hours of the resident district. The resident district may provide the
educational program at a school within the district of residence, at the child's residence, or
in the district in which the day treatment center is located by paying tuition to that district.

(d) When a child is temporarily placed in a residential program for care and
treatment, the nonresident district in which the child is placed is responsible for providing
an appropriate educational program for the child and necessary transportation while the
child is attending the educational program; and must bill the district of the child's residence
for the actual cost of providing the program, as outlined in section 125A.11, except as
provided in paragraph (e). However, the board, lodging, and treatment costs incurred in
behalf of a child with a disability placed outside of the school district of residence by the
commissioner of human services or the commissioner of corrections or their agents, for
reasons other than providing for the child's special educational needs must not become the
responsibility of either the district providing the instruction or the district of the child's
residence. For the purposes of this section, the state correctional facilities operated on a
fee-for-service basis are considered to be residential programs for care and treatment.

(e) A privately owned and operated residential facility may enter into a contract
to obtain appropriate educational programs for special education children and services
with a joint powers entity. The entity with which the private facility contracts for special
education services shall be the district responsible for providing students placed in that
facility an appropriate educational program in place of the district in which the facility is
located. If a privately owned and operated residential facility does not enter into a contract
under this paragraph, then paragraph (d) applies.

(f) The district of residence shall pay tuition and other program costs, not including
transportation costs, to the district providing the instruction and services. The district of
residence may claim general education aid for the child as provided by law. Transportation
costs must be paid by the district responsible for providing the transportation and the state
must pay transportation aid to that district.

Sec. 3.

Minnesota Statutes 2010, section 125A.51, is amended to read:

125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES;
EDUCATION AND TRANSPORTATION.

The responsibility for providing instruction and transportation for a pupil without a
disability who has a short-term or temporary physical or emotional illness or disability, as
determined by the standards of the commissioner, and who is temporarily placed for care
and treatment for that illness or disability, must be determined as provided in this section.

(a) The school district of residence of the pupil is the district in which the pupil's
parent or guardian resides new text begin . If there is a dispute between school districts regarding
residency, the district of residence is the district designated by the commissioner new text end .

(b) When parental rights have been terminated by court order, the legal residence
of a child placed in a residential or foster facility for care and treatment is the district in
which the child resides.

(c) Before the placement of a pupil for care and treatment, the district of residence
must be notified and provided an opportunity to participate in the placement decision.
When an immediate emergency placement is necessary and time does not permit
resident district participation in the placement decision, the district in which the pupil is
temporarily placed, if different from the district of residence, must notify the district
of residence of the emergency placement within 15 days of the placement. When a
nonresident district makes an emergency placement without first consulting with the
resident district, the resident district has up to five business days after receiving notice
of the emergency placement to request an opportunity to participate in the placement
decision, which the placing district must then provide.

(d) When a pupil without a disability is temporarily placed for care and treatment
in a day program and the pupil continues to live within the district of residence during
the care and treatment, the district of residence must provide instruction and necessary
transportation to and from the care and treatment program for the pupil. The resident
district may establish reasonable restrictions on transportation, except if a Minnesota court
or agency orders the child placed at a day care and treatment program and the resident
district receives a copy of the order, then the resident district must provide transportation
to and from the program unless the court or agency orders otherwise. Transportation shall
only be provided by the resident district during regular operating hours of the resident
district. The resident district may provide the instruction at a school within the district of
residence, at the pupil's residence, or in the case of a placement outside of the resident
district, in the district in which the day treatment program is located by paying tuition to
that district. The district of placement may contract with a facility to provide instruction
by teachers licensed by the state Board of Teaching.

(e) When a pupil without a disability is temporarily placed in a residential program
for care and treatment, the district in which the pupil is placed must provide instruction
for the pupil and necessary transportation while the pupil is receiving instruction, and in
the case of a placement outside of the district of residence, the nonresident district must
bill the district of residence for the actual cost of providing the instruction for the regular
school year and for summer school, excluding transportation costs.

(f) Notwithstanding paragraph (e), if the pupil is homeless and placed in a public or
private homeless shelter, then the district that enrolls the pupil under section 127A.47,
subdivision 2, shall provide the transportation, unless the district that enrolls the pupil
and the district in which the pupil is temporarily placed agree that the district in which
the pupil is temporarily placed shall provide transportation. When a pupil without a
disability is temporarily placed in a residential program outside the district of residence,
the administrator of the court placing the pupil must send timely written notice of the
placement to the district of residence. The district of placement may contract with a
residential facility to provide instruction by teachers licensed by the state Board of
Teaching. For purposes of this section, the state correctional facilities operated on a
fee-for-service basis are considered to be residential programs for care and treatment.

(g) The district of residence must include the pupil in its residence count of pupil
units and pay tuition as provided in section 123A.488 to the district providing the
instruction. Transportation costs must be paid by the district providing the transportation
and the state must pay transportation aid to that district. For purposes of computing state
transportation aid, pupils governed by this subdivision must be included in the disabled
transportation category if the pupils cannot be transported on a regular school bus route
without special accommodations.

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 125A.54, new text end new text begin is repealed.
new text end

ARTICLE 4

FACILITIES AND TECHNOLOGY

Section 1.

Minnesota Statutes 2010, section 123B.57, is amended to read:

123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.

Subdivision 1.

Health and safety deleted text begin program deleted text end new text begin revenue application new text end .

(a) To receive
health and safety revenue for any fiscal year a district must submit to the commissioner
deleted text begin an deleted text end new text begin a capital expenditure health and safety revenue new text end application deleted text begin for aid and levy deleted text end by the
date determined by the commissioner. deleted text begin The application may be for hazardous substance
removal, fire and life safety code repairs, labor and industry regulated facility and
equipment violations, and health, safety, and environmental management, including
indoor air quality management. deleted text end The application must include a health and safety deleted text begin program deleted text end new text begin
budget new text end adopted new text begin and confirmed new text end by the school district board new text begin as being consistent with the
district's health and safety policy under subdivision 2 new text end . The deleted text begin program deleted text end new text begin budget new text end must include
the estimated cost deleted text begin , per building, deleted text end of the program new text begin per Uniform Financial Accounting and
Reporting Standards (UFARS) finance code, new text end by fiscal year. Upon approval through the
adoption of a resolution by each of an intermediate district's member school district
boards and the approval of the Department of Education, a school district may include
its proportionate share of the costs of health and safety projects for an intermediate
district in its application.

(b) Health and safety projects with an estimated cost of $500,000 or more per
site are not eligible for health and safety revenue. Health and safety projects with an
estimated cost of $500,000 or more per site that meet all other requirements for health and
safety funding, are eligible for alternative facilities bonding and levy revenue according
to section 123B.59. A school board shall not separate portions of a single project into
components to qualify for health and safety revenue, and shall not combine unrelated
projects into a single project to qualify for alternative facilities bonding and levy revenue.

new text begin (c) The commissioner of education shall not make eligibility for health and safety
revenue contingent on a district's compliance status, level of program development, or
training. The commissioner shall not mandate additional performance criteria such as
training, certifications, or compliance evaluations as a prerequisite for levy approval.
new text end

Subd. 2.

deleted text begin Contents of program deleted text end new text begin Health and safety policy new text end .

new text begin To qualify for health
and safety revenue, new text end a deleted text begin district deleted text end new text begin school board new text end must adopt a health and safety deleted text begin program deleted text end new text begin policy new text end .
The deleted text begin program deleted text end new text begin policy new text end must include deleted text begin plans, where applicable, for hazardous substance
removal, fire and life safety code repairs, regulated facility and equipment violations,
and deleted text end new text begin provisions for implementing a health and safety program that complies with new text end health,
safety, and environmental deleted text begin management, deleted text end new text begin regulations and best practices new text end including indoor
air quality management.

deleted text begin (a) A hazardous substance plan must contain provisions for the removal or
encapsulation of asbestos from school buildings or property, asbestos-related repairs,
cleanup and disposal of polychlorinated biphenyls found in school buildings or property,
and cleanup, removal, disposal, and repairs related to storing heating fuel or transportation
fuels such as alcohol, gasoline, fuel, oil, and special fuel, as defined in section 296A.01.
If a district has already developed a plan for the removal or encapsulation of asbestos as
required by the federal Asbestos Hazard Emergency Response Act of 1986, the district
may use a summary of that plan, which includes a description and schedule of response
actions, for purposes of this section. The plan must also contain provisions to make
modifications to existing facilities and equipment necessary to limit personal exposure
to hazardous substances, as regulated by the federal Occupational Safety and Health
Administration under Code of Federal Regulations, title 29, part 1910, subpart Z; or is
determined by the commissioner to present a significant risk to district staff or student
health and safety as a result of foreseeable use, handling, accidental spill, exposure, or
contamination.
deleted text end

deleted text begin (b) A fire and life safety plan must contain a description of the current fire and life
safety code violations, a plan for the removal or repair of the fire and life safety hazard,
and a description of safety preparation and awareness procedures to be followed until the
hazard is fully corrected.
deleted text end

deleted text begin (c) A facilities and equipment violation plan must contain provisions to correct
health and safety hazards as provided in Department of Labor and Industry standards
pursuant to section 182.655.
deleted text end

deleted text begin (d) A health, safety, and environmental management plan must contain a description
of training, record keeping, hazard assessment, and program management as defined
in section 123B.56.
deleted text end

deleted text begin (e) A plan to test for and mitigate radon produced hazards.
deleted text end

deleted text begin (f) A plan to monitor and improve indoor air quality.
deleted text end

Subd. 3.

Health and safety revenue.

A district's health and safety revenue
for a fiscal year equals the district's alternative facilities levy under section 123B.59,
subdivision 5, paragraph (b), plus the greater of zero or:

(1) the sum of (a) the total approved cost of the district's hazardous substance
plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's
health and safety program for fiscal year 1990 through the fiscal year to which the levy
is attributable, excluding expenditures funded with bonds issued under section 123B.59
or 123B.62, or chapter 475; certificates of indebtedness or capital notes under section
123B.61; levies under section 123B.58, 123B.59, 123B.63, or 126C.40, subdivision 1 or
6; and other federal, state, or local revenues, minus

(2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years
1985 through 1989 under sections 124.245 and 275.125, subdivision 11c, plus (b) the
district's health and safety revenue under this subdivision, for years before the fiscal year
to which the levy is attributable.

Subd. 4.

Health and safety levy.

To receive health and safety revenue, a district
may levy an amount equal to the district's health and safety revenue as defined in
subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by
dividing the adjusted net tax capacity of the district for the year preceding the year the
levy is certified by the adjusted marginal cost pupil units in the district for the school year
to which the levy is attributable, to $2,935.

Subd. 5.

Health and safety aid.

A district's health and safety aid is the difference
between its health and safety revenue and its health and safety levy. If a district does not
levy the entire amount permitted, health and safety aid must be reduced in proportion to
the actual amount levied. Health and safety aid may not be reduced as a result of reducing
a district's health and safety levy according to section 123B.79.

Subd. 6.

Uses of health and safety revenue.

deleted text begin (a) deleted text end Health and safety revenue may be
used only for approved expenditures necessary deleted text begin to correct deleted text end new text begin for the correction of new text end fire and life
safety hazards deleted text begin , or for the deleted text end new text begin ; design, purchase, installation, maintenance, and inspection of
fire protection and alarm equipment; purchase or construction of appropriate facilities for
the storage of combustible and flammable materials; inventories and facility modifications
not related to a remodeling project to comply with lab safety requirements under section
121A.31; inspection, testing, repair, new text end removal or encapsulation new text begin , and disposal new text end of deleted text begin asbestos
from school buildings or property owned or being acquired by the district, asbestos-related
repairs, deleted text end new text begin asbestos-containing building materials; new text end cleanup and disposal of polychlorinated
biphenyls deleted text begin found in school buildings or property owned or being acquired by the district,
or the deleted text end new text begin ; cleanup and disposal of hazardous and infectious wastes; new text end cleanup, removal,
disposal, and repairs related to storing heating fuel or transportation fuels such as alcohol,
gasoline, fuel oil, and special fuel, as defined in section 296A.01 deleted text begin , Minnesota deleted text end new text begin ; correction of new text end
occupational safety and health administration regulated deleted text begin facility and equipment deleted text end hazards deleted text begin , deleted text end new text begin ; new text end
indoor air quality new text begin inspections, investigations, and testing; new text end mold abatement deleted text begin , deleted text end new text begin ; new text end upgrades or
replacement of mechanical ventilation systems to meet American Society of Heating,
Refrigerating and Air Conditioning Engineers standards and State Mechanical Code deleted text begin , deleted text end new text begin ;
design, materials, and installation of local exhaust ventilation systems, including required
make-up air for controlling regulated hazardous substances; correction of new text end Department
of Health Food Code deleted text begin and deleted text end new text begin violations; correction of new text end swimming pool hazards excluding
depth correction deleted text begin , deleted text end new text begin ; playground safety inspections, the repair of unsafe outdoor playground
equipment, and the installation of impact surfacing materials; bleacher repair or rebuilding
to comply with the order of a building code inspector under section 326B.112; testing and
mitigation of elevated radon hazards; lead testing; copper in water testing; cleanup after
major weather-related disasters or flooding; reduction of excessive organic and inorganic
levels in wells and capping of abandoned wells; installation and testing of boiler backflow
valves to prevent contamination of potable water; vaccinations, titers, and preventative
supplies for bloodborne pathogen compliance; costs to comply with the Janet B. Johnson
Parents' Right to Know Act; automated external defibrillators and other emergency plan
equipment and supplies specific to the district's emergency action plan; new text end and health, safety,
and environmental management new text begin costs associated with implementing the district's health
and safety program including costs to establish and operate safety committees, in school
buildings or property owned or being acquired by the district new text end . Testing and calibration
activities are permitted for existing mechanical ventilation systems at intervals no less than
every five years. deleted text begin Health and safety revenue must not be used to finance a lease purchase
agreement, installment purchase agreement, or other deferred payments agreement. Health
and safety revenue must not be used for the construction of new facilities or the purchase
of portable classrooms, for interest or other financing expenses, or for energy efficiency
projects under section 123B.65. The revenue may not be used for a building or property or
part of a building or property used for postsecondary instruction or administration or for a
purpose unrelated to elementary and secondary education.
deleted text end

new text begin Subd. 6a. new text end

new text begin Restrictions on health and safety revenue. new text end

deleted text begin (b) deleted text end Notwithstanding
deleted text begin paragraph (a) deleted text end new text begin subdivision 6 new text end , health and safety revenue must not be used new text begin :
new text end

new text begin (1) to finance a lease purchase agreement, installment purchase agreement, or other
deferred payments agreement;
new text end

new text begin (2) for the construction of new facilities, remodeling of existing facilities, or the
purchase of portable classrooms;
new text end

new text begin (3) for interest or other financing expenses;
new text end

new text begin (4) for energy efficiency projects under section 123B.65, for a building or property
or part of a building or property used for postsecondary instruction or administration or for
a purpose unrelated to elementary and secondary education;
new text end

new text begin (5) new text end for replacement of building materials or facilities including roof, walls, windows,
internal fixtures and flooring, nonhealth and safety costs associated with demolition of
facilities, structural repair or replacement of facilities due to unsafe conditions, violence
prevention and facility security, ergonomics deleted text begin , deleted text end new text begin ; or
new text end

new text begin (6) public announcement systems and emergency communication devices, or for
new text end building and heating, ventilating and air conditioning supplies, maintenance, and cleaning
activities. All assessments, investigations, inventories, and support equipment not leading
to the engineering or construction of a project shall be included in the health, safety, and
environmental management costs in subdivision 8, paragraph (a).

new text begin Subd. 6b. new text end

new text begin Health and safety projects. new text end

new text begin (a) Health and safety revenue applications
defined in subdivision 1 must be accompanied by a description of each project for which
funding is being requested. Project descriptions must provide enough detail for an auditor
to determine if the work qualifies for revenue. For projects other than fire and life
safety projects, playground projects, and health, safety, and environmental management
activities, a project description does not need to include itemized details such as material
types, room locations, square feet, names, or license numbers. The commissioner
may request supporting information and shall approve only projects that comply with
subdivisions 6 and 8, as defined by the Department of Education.
new text end

new text begin (b) Districts may request funding for allowable projects based on self-assessments,
safety committee recommendations, insurance inspections, management assistance
reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph
(b), and subdivision 8, paragraph (b), for projects under $500,000, individual project
size for projects authorized by this subdivision is not limited and may include related
work in multiple facilities. Health and safety management costs from subdivision 8 may
be reported as a single project.
new text end

new text begin (c) All costs directly related to a project shall be reported in the appropriate Uniform
Financial Accounting and Reporting Standards (UFARS) finance code.
new text end

new text begin (d) For fire and life safety egress and all other projects exceeding $20,000, cited
under Minnesota Fire Code, a fire marshal plan review is required.
new text end

new text begin (e) Districts shall update project estimates with actual expenditures for each
fiscal year. If a project's final cost is significantly higher than originally approved, the
commissioner may request additional supporting information.
new text end

new text begin Subd. 6c. new text end

new text begin Appeals process. new text end

new text begin In the event a district is denied funding approval for
a project the district believes complies with subdivisions 6 and 8, and is not otherwise
excluded, a district may appeal the decision. All such requests must be in writing. The
commissioner shall respond in writing. A written request must contain the following:
project number; description and amount; reason for denial; unresolved questions for
consideration; reasons for reconsideration; and a specific statement of what action the
district is requesting.
new text end

Subd. 7.

Proration.

In the event that the health and safety aid available for any year
is prorated, a district having its aid prorated may levy an additional amount equal to the
amount not paid by the state due to proration.

Subd. 8.

Health, safety, and environmental management cost.

(a) new text begin "Health, safety,
and environmental management" is defined in section 123B.56.
new text end

new text begin (b) new text end A district's cost for health, safety, and environmental management is limited to
the lesser of:

(1) actual cost to implement their plan; or

(2) an amount determined by the commissioner, based on enrollment, building
age, and size.

deleted text begin (b) deleted text end new text begin (c) new text end The department may contract with regional service organizations, private
contractors, Minnesota Safety Council, or state agencies to provide management
assistance to school districts for health and safety capital projects. Management assistance
is the development of written programs for the identification, recognition and control of
hazards, and prioritization and scheduling of district health and safety capital projects.
The deleted text begin department deleted text end new text begin commissioner new text end shall not new text begin mandate management assistance or new text end exclude
private contractors from the opportunity to provide any health and safety services to
school districts.

deleted text begin (c) Notwithstanding paragraph (b), the department may approve revenue, up to
the limit defined in paragraph (a) for districts having an approved health, safety, and
environmental management plan that uses district staff to accomplish coordination and
provided services.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2011.
new text end

Sec. 2.

Minnesota Statutes 2010, section 123B.71, subdivision 5, is amended to read:

Subd. 5.

Final plans.

If a construction contract has not been awarded within two
years of approval, the approval shall not be valid. After approval, final plans and the
approval shall be deleted text begin filed with deleted text end new text begin made available, if requested, to new text end the commissioner of education.
If substantial changes are made to new text begin the initial new text end approved plans, documents reflecting
the changes shall be submitted to the commissioner for approval. Upon completing a
project, the school board shall certify to the commissioner that the project was completed
according to the approved plans.

Sec. 3.

Minnesota Statutes 2010, section 123B.72, subdivision 3, is amended to read:

Subd. 3.

Certification.

Prior to occupying or reoccupying a school facility affected
by this section, a school board or its designee shall submit a document prepared by a
system inspector to the building official or to the commissioner, verifying that the facility's
heating, ventilation, and air conditioning system has been installed and operates according
to design specifications and code, according to section 123B.71, subdivision 9, clause
deleted text begin (11) deleted text end new text begin (12) new text end . A systems inspector shall also verify that the facility's design will provide
the ability for monitoring of outdoor airflow and total airflow of ventilation systems in
new school facilities and that any heating, ventilation, or air conditioning system that is
installed or modified for a project subject to this section must provide a filtration system
with a current ASHRAE standard.

Sec. 4. new text begin HEALTH AND SAFETY POLICY.
new text end

new text begin Notwithstanding Minnesota Statutes, section 123B.57, subdivision 2, a school board
that has not yet adopted a health and safety policy by September 30, 2011, may submit an
application for health and safety revenue for taxes payable in 2012 in the form and manner
specified by the commissioner of education.
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

ARTICLE 5

ACCOUNTING

Section 1.

Minnesota Statutes 2010, section 127A.42, subdivision 2, is amended to
read:

Subd. 2.

Violations of law.

The commissioner may reduce or withhold the district's
state aid for any school year whenever the board of the district authorizes or permits
violations of law within the district by:

(1) employing a teacher who does not hold a valid teaching license or permit in a
public school;

(2) noncompliance with a mandatory rule of general application promulgated by the
commissioner in accordance with statute, unless special circumstances make enforcement
inequitable, impose an extraordinary hardship on the district, or the rule is contrary to
the district's best interests;

(3) the district's continued performance of a contract made for the rental of rooms
or buildings for school purposes or for the rental of any facility owned or operated by or
under the direction of any private organization, if the contract has been disapproved, the
time for review of the determination of disapproval has expired, and no proceeding for
review is pending;

(4) any practice which is a violation of sections 1 and 2 of article 13 of the
Constitution of the state of Minnesota;

(5) failure to reasonably provide for a resident pupil's school attendance under
Minnesota Statutes;

(6) noncompliance with state laws prohibiting discrimination because of race,
color, creed, religion, national origin, sex, age, marital status, status with regard to
public assistance or disability, as defined in sections 363A.08 to 363A.19 and 363A.28,
subdivision 10; or

(7) using funds contrary to the statutory purpose of the funds.

The reduction or withholding must be made in the amount and upon the procedure
provided in this section new text begin , or, in the case of the violation stated in clause (1), upon the
procedure provided in section 127A.43 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2011.
new text end

Sec. 2.

Minnesota Statutes 2010, section 127A.43, is amended to read:

127A.43 DISTRICT EMPLOYMENT OF UNLICENSED TEACHERS; AID
REDUCTION.

When a district employs one or more teachers who do not hold a valid teaching
license, state aid shall be deleted text begin withheld deleted text end new text begin reduced new text end in the proportion that the number of such
teachers is to the total number of teachers employed by the district, multiplied by 60
percent of the basic revenue, as defined in section 126C.10, subdivision 2, of the district
for the year in which the employment occurred.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2011.
new text end

Sec. 3.

Minnesota Statutes 2010, section 127A.45, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Payment to creditors. new text end

new text begin Except where otherwise specifically authorized,
state education aid payments shall be made only to the school district, charter school, or
other education organization earning state aid revenues as a result of providing education
services.
new text end

ARTICLE 6

STUDENT TRANSPORTATION

Section 1.

Minnesota Statutes 2010, section 123B.92, subdivision 5, is amended to read:

Subd. 5.

District reports.

(a) Each district must report data to the department as
required by the department to account for transportation expenditures.

(b) Salaries and fringe benefits of district employees whose primary duties are
other than transportation, including central office administrators and staff, building
administrators and staff, teachers, social workers, school nurses, and instructional aides,
must not be included in a district's transportation expenditures, except that a district may
include salaries and benefits according to paragraph (c) for (1) an employee designated
as the district transportation director, (2) an employee providing direct support to the
transportation director, or (3) an employee providing direct transportation services such as
a bus driver or bus aide.

(c) Salaries and fringe benefits of the district employees listed in paragraph (b),
clauses (1), (2), and (3), who work part time in transportation and part time in other areas
must not be included in a district's transportation expenditures unless the district maintains
documentation of the employee's time spent on pupil transportation matters in the form
and manner prescribed by the department.

(d) Pupil transportation expenditures, excluding expenditures for capital outlay,
leased buses, student board and lodging, crossing guards, and aides on buses, must be
allocated among transportation categories based on cost-per-mile deleted text begin , deleted text end new text begin or new text end cost-per-student deleted text begin ,
cost-per-hour, or cost-per-route, deleted text end regardless of whether the transportation services are
provided on district-owned or contractor-owned school buses. Expenditures for school
bus driver salaries and fringe benefits may either be directly charged to the appropriate
transportation category or may be allocated among transportation categories based
on cost-per-mile deleted text begin , deleted text end new text begin or new text end cost-per-student deleted text begin , cost-per-hour, or cost-per-route deleted text end . Expenditures
by private contractors or individuals who provide transportation exclusively in one
transportation category must be charged directly to the appropriate transportation category.
Transportation services provided by contractor-owned school bus companies incorporated
under different names but owned by the same individual or group of individuals must be
treated as the same company for cost allocation purposes.

new text begin (e) Notwithstanding paragraph (d), districts contracting for transportation services
are exempt from the standard cost allocation method for authorized and nonauthorized
transportation categories if the district: (1) bids its contracts separately for authorized
and nonauthorized transportation categories and for special transportation separate from
regular and excess transportation; (2) receives bids or quotes from more than one vendor
for these transportation categories; and (3) the district's cost-per-mile does not vary
more than ten percent among categories, excluding salaries and fringe benefits of bus
aides. If the costs reported by the district for contractor-owned operations vary by more
than ten percent among categories, the department shall require the district to reallocate
its transportation costs, excluding salaries and fringe benefits of bus aides, among all
categories.
new text end