1.1 	A bill for an act
1.2 	relating to education; providing state facilities aid
1.3 	to charter schools to lease, purchase, renovate, or
1.4 	construct school buildings or rent, lease, or purchase
1.5 	land; amending Minnesota Statutes 2004, section
1.6 	124D.11, subdivisions 4, 7, by adding a subdivision.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 124D.11,
1.9 	subdivision 4, is amended to read:
1.10 		Subd. 4.~~building lease~~ state facilities aid.  When a
1.11 	charter school finds it economically advantageous to rent ~~or~~ ,
1.12 	lease, purchase, renovate, or construct a building or rent,
1.13 	lease, or purchase land for any instructional purposes and it
1.14 	determines that the total operating capital revenue under
1.15 	section 126C.10, subdivision 13, is insufficient for this
1.16 	purpose, it may apply to the commissioner for ~~building lease~~ 
1.17 	state facilities aid for this purpose.  The commissioner must
1.18 	review and either approve or deny a ~~lease~~ state facilities aid
1.19 	application using the following criteria:
1.20 	(1) the reasonableness of the lease, purchase, renovation,
1.21 	or construction price based on current market values;
1.22 	(2) the extent to which the lease, purchase, renovation, or
1.23 	construction conforms to applicable state laws and rules; and
1.24 	(3) the appropriateness of the proposed lease, purchase,
1.25 	renovation, or construction in the context of the space needs
1.26 	and financial circumstances of the charter school.
2.1 	A charter school must not use the ~~building lease~~ state
2.2 	facilities aid it receives for custodial, maintenance service,
2.3 	utility, or other operating costs.  The amount of ~~building lease~~ 
2.4 	state facilities aid per pupil unit served for a charter school
2.5 	for any year shall not exceed the lesser of (a) 90 percent of
2.6 	the approved cost or (b) the product of the pupil units served
2.7 	for the current school year times the greater of the charter
2.8 	school's ~~building lease~~ state facilities aid per pupil unit
2.9 	served for fiscal year 2003, excluding the adjustment under Laws
2.10 	2002, chapter 392, article 6, section 4, or $1,200.

2.11 	Sec. 2. Minnesota Statutes 2004, section 124D.11,
2.12 	subdivision 7, is amended to read:
2.13 		Subd. 7.Use of state money.  Money received from the
2.14 	state may ~~not~~ be used to purchase land or buildings, under the
2.15 	provisions of subdivision 4 and, unless a waiver has been
2.16 	granted by the commissioner, after a charter school has its
2.17 	charter agreement renewed by its sponsor following the school's
2.18 	initial three-year term. ~~The~~ Any charter school may own land
2.19 	and buildings if obtained through nonstate sources.

2.20 	Sec. 3. Minnesota Statutes 2004, section 124D.11, is
2.21 	amended by adding a subdivision to read:
2.22 		Subd. 7a.Disposition of assets, sale of charter school
2.23 	buildings, and use of equity in charter school buildings. (a)
2.24 	In the event that a charter school closes, either voluntarily or
2.25 	by an act of its sponsor, disposition of any remaining assets of
2.26 	the school, other than any remaining equity in its building,
2.27 	shall be subject to section 124D.10, subdivision 23.
2.28 	(b) If a charter school wishes to sell its building in
2.29 	order to purchase another building that better meets its needs,
2.30 	the charter school shall use any equity it has accumulated in
2.31 	the building it is selling as part of its down payment on the
2.32 	building it is purchasing.
2.33 	(c) If a charter school is closed, either voluntarily or by
2.34 	an act of its sponsor, ownership of the building shall be
2.35 	transferred to the Department of Administration.  The building
2.36 	may then be sold or leased by the department to any party,
3.1 	including another charter school, and any income generated from
3.2 	the transactions shall revert to the state for current or future
3.3 	state facilities aid payments to charter schools.
3.4 	(d) Any equity in a charter school's facility may be used
3.5 	by that charter school as collateral in loan or other
3.6 	transactions used to finance capital improvements or to purchase
3.7 	equipment or other depreciable assets.  Any equity in a charter
3.8 	school's facility may not be used as collateral in loan or other
3.9 	transactions used to finance operating expenses of the charter
3.10 	school.