1.1 	A bill for an act
1.2 	relating to education finance; providing for
1.3 	principled pay practices; site-based achievement
1.4 	contracts; appropriating money; amending Minnesota
1.5 	Statutes 2004, sections 122A.413; proposing coding for
1.6 	new law in Minnesota Statutes, chapters 120B; 122A;
1.7 	repealing Minnesota Statutes 2004, sections 122A.414;
1.8 	122A.415.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	ARTICLE 1
1.11 	PRINCIPLED PAY PRACTICES

1.12 	Section 1. Minnesota Statutes 2004, section 122A.413, is
1.13 	amended to read:
1.14 	122A.413 EDUCATIONAL IMPROVEMENT PLAN.
1.15 		Subdivision 1.Qualifying plan. A district may develop
1.16 	an educational improvement plan for the purpose of qualifying
1.17 	for ~~alternative teacher compensation~~ principled pay practices 
1.18 	aid under ~~sections 122A.414 and 122A.415~~section 122A.4142.  The
1.19 	plan must include measures for improving school district, school
1.20 	site, teacher, and individual student performance.
1.21 		Subd. 2.Plan components. The educational improvement
1.22 	plan must be approved by the school board and have at least
1.23 	these elements:
1.24 	(1) assessment and evaluation tools to measure student
1.25 	performance and progress;
1.26 	(2) performance goals and benchmarks for improvement;
1.27 	(3) measures of student attendance and completion rates;
2.1 	(4) a rigorous professional development system, consistent
2.2 	with section 122A.60,that is aligned with educational
2.3 	improvement, designed to achieve teaching quality improvement,
2.4 	and consistent with clearly defined research-based standards;
2.5 	(5) measures of student, family, and community involvement
2.6 	and satisfaction;
2.7 	(6) a data system about students and their academic
2.8 	progress that provides parents and the public with
2.9 	understandable information; ~~and~~ 
2.10 	(7) a teacher induction and mentoring program for
2.11 	probationary teachers that provides continuous learning and
2.12 	sustained teacher support~~.  The process for developing the plan~~
2.13 	~~must involve district teachers~~ ; and 
2.14 	(8) substantial teacher participation in developing the
2.15 	plan, including teachers selected by the exclusive
2.16 	representative of the teachers.
2.17 		Subd. 3.School site accountability. A district that
2.18 	develops a plan under subdivisions 1 and 2 must ensure that each
2.19 	school site develops a board-approved educational improvement
2.20 	plan that is aligned with the district educational improvement
2.21 	plan under subdivision 2 and developed with teacher
2.22 	participation consistent with subdivision 2, clause (8).  While
2.23 	a site plan must be consistent with the district educational
2.24 	improvement plan, it may establish performance goals and
2.25 	benchmarks that meet or exceed those of the district. ~~The~~
2.26 	~~process for developing the plan must involve site teachers.~~

2.27 	Sec. 2. [122A.4142] PRINCIPLED PAY PRACTICES FOR
2.28 	TEACHERS.
2.29 		Subdivision 1.Principled pay practices system. A school
2.30 	district and the exclusive representative of the teachers may
2.31 	adopt, by agreement, principled pay practices under subdivision
2.32 	2 to provide incentives to attract and retain high-quality
2.33 	teachers, encourage high-quality teachers to accept difficult
2.34 	assignments, encourage teachers to improve their knowledge and
2.35 	skills, and support teachers' roles in improving students'
2.36 	educational achievement.
3.1 		Subd. 2.Eligibility for principled pay practices
3.2 	aid. (a) To be eligible for principled pay practices aid, a
3.3 	school district must submit to the department:
3.4 	(1) a districtwide or site-based educational improvement
3.5 	plan as described in section 122A.413;
3.6 	(2) an executed collective bargaining agreement that
3.7 	contains at least the following elements:
3.8 	(i) a description of the conditions or actions necessary
3.9 	for career advancement and additional compensation;
3.10 	(ii) compensation provisions that base at least 60 percent
3.11 	of any increase in compensation on performance and not on years
3.12 	of service or the attainment of additional education or
3.13 	training;
3.14 	(iii) career advancement options for teachers retaining
3.15 	primary roles in student instruction and for other members of
3.16 	the bargaining unit;
3.17 	(iv) incentives for teachers' continuous improvement in
3.18 	content knowledge, pedagogy, and use of best practices;
3.19 	(v) an objective evaluation program, including classroom or
3.20 	performance observation, that is aligned with the district's or
3.21 	site's educational improvement plan, and is a component of
3.22 	determining performance;
3.23 	(vi) provisions preventing any teacher's compensation from
3.24 	being reduced as a result of implementing principled pay
3.25 	practices;
3.26 	(vii) provisions enabling any teacher in the district if
3.27 	the principled pay practices are applied districtwide, or at a
3.28 	site, if the practices apply only to a site, to participate in
3.29 	the principled pay practices without limitations by quota or
3.30 	other restrictions;
3.31 	(viii) provisions encouraging collaboration among teachers
3.32 	rather than competition; and 
3.33 	(ix) provisions for participation by all teachers in a
3.34 	district, all teachers at a site, or at least 25 percent of the
3.35 	teachers in a district.
3.36 	(b) An agreement may contain different compensation
4.1 	provisions for separate classifications of employees.
4.2 		Subd. 3.Commissioner approval. (a) Before concluding a
4.3 	collective bargaining agreement, a district may submit a
4.4 	proposed agreement and educational improvement plan for review,
4.5 	comment, and preliminary approval by the commissioner.  If the
4.6 	plan and agreement are executed in the same form as
4.7 	preliminarily approved by the commissioner, the plan and
4.8 	agreement must be approved without further review.
4.9 	(b) The application to the commissioner must contain a
4.10 	formally adopted collective bargaining agreement, memorandum of
4.11 	understanding, or other binding agreement that implements
4.12 	principled pay practices consistent with this section.
4.13 	(c) The commissioner's approval must be based on the
4.14 	requirements established in subdivision 2.  If the commissioner
4.15 	does not approve an application, the notice to the school
4.16 	district must provide details regarding the commissioner's
4.17 	reason for rejecting the application.
4.18 	(d) A school district that intends to apply for principled
4.19 	pay practices aid for the first time must notify the
4.20 	commissioner in writing by November 1 prior to the academic year
4.21 	for which they intend to seek aid.  The commissioner must
4.22 	approve initial applications for school districts qualifying
4.23 	under subdivision 4, paragraph (b), clause (1), by January 15 of
4.24 	each year.
4.25 		Subd. 4.Aid amount. (a) A school district that meets
4.26 	the conditions of this section, as approved by the commissioner,
4.27 	is eligible for principled pay practices aid.
4.28 	(b) Principled pay practices aid for a qualifying school
4.29 	district, site, or portion of a district or school site is as
4.30 	follows:
4.31 	(1) for a school district in which the school board and the
4.32 	exclusive representative of the teachers agree to place all
4.33 	teachers in the district or at the site in the principled pay
4.34 	practices system, aid equals $150 times the district's or the
4.35 	site's number of pupils enrolled on October 1 of the previous
4.36 	fiscal year; or 
5.1 	(2) for a district in which the school board and the
5.2 	exclusive representative of the teachers agree that at least 25
5.3 	percent of the district's licensed teachers will be paid under
5.4 	the principled pay practices system, aid equals $150 times the
5.5 	percentage of participating teachers times the district's number
5.6 	of pupils enrolled as of October 1 of the previous fiscal year.
5.7 		Subd. 5.Percentage of teachers. For purposes of
5.8 	subdivision 4, the percentage of teachers participating in the
5.9 	principled pay practices system equals the ratio of the number
5.10 	of licensed teachers who are working at least 60 percent of a
5.11 	full-time teacher's hours and agree to participate in the
5.12 	principled pay practices system to the total number of licensed
5.13 	teachers who are working at least 60 percent of a full-time
5.14 	teacher's hours.
5.15 		Subd. 6.Aid timing. Districts or sites with approved
5.16 	applications must receive principled pay practices aid for each
5.17 	school year that the district or site participates in the
5.18 	program.
5.19 		Subd. 7.Annual aid appropriation. The amount necessary
5.20 	for this purpose is appropriated annually from the general fund
5.21 	to the commissioner of education for principled pay practices
5.22 	aid under this section.
5.23 	
EFFECTIVE DATE. This section is effective for fiscal year
5.24 	2006 and thereafter.

5.25 	Sec. 3. [122A.4143] CLOSED CONTRACT.
5.26 	A district and the exclusive representative of the teachers
5.27 	may agree jointly to reopen a collective bargaining agreement in
5.28 	order to enter into a principled pay practices system consistent
5.29 	with section 122A.4142 and an educational improvement plan under
5.30 	section 122A.413.

5.31 	Sec. 4. APPROPRIATION.
 5.32 	$....... is appropriated in fiscal years 2006 and 2007 from
5.33 	the general fund to the commissioner of education for principled
5.34 	pay practices aid.

5.35 	Sec. 5. REPEALER.
 5.36 	Minnesota Statutes 2004, sections 122A.414 and 122A.415,
6.1 	are repealed.

6.2 	ARTICLE 2
6.3 	SITE-BASED ACHIEVEMENT CONTRACTS

6.4 	Section 1. [120B.362] GRANTS FOR SITE-BASED ACHIEVEMENT
6.5 	CONTRACTS.
6.6 		Subdivision 1.Eligible schools. (a) The commissioner of
6.7 	education shall award grants to public school sites to increase
6.8 	student achievement and eliminate the achievement gap at the
6.9 	school site.
6.10 	(b) The commissioner shall select sites that meet the
6.11 	following criteria:
6.12 	(1) have at least 75 percent of enrollment eligible for
6.13 	free or reduced-price lunch;
6.14 	(2) have an enrollment where at least 75 percent of the
6.15 	students are students of color; and 
6.16 	(3) have failed to meet adequate yearly progress for at
6.17 	least two consecutive years.
6.18 	(c) In order to be eligible for a grant under this section,
6.19 	a public school site shall have an approved site decision-making
6.20 	agreement under section 123B.04, including an achievement
6.21 	contract under section 123B.04, subdivision 4.  The site
6.22 	decision-making team shall include the principal of the school
6.23 	site.
6.24 	(d) The site team shall have a plan approved by the school
6.25 	board and shall also have an agreement with the exclusive
6.26 	bargaining unit of the district to participate in this grant
6.27 	program.
6.28 		Subd. 2.Application. (a) The applicant shall submit a
6.29 	plan that will result in at least 80 percent of the students at
6.30 	the site testing at a proficient level for their grade by the
6.31 	end of the grant period of six years, with at least 60 percent
6.32 	of the students testing at a proficient level for their grade at
6.33 	the midpoint of the grant period.
6.34 	(b) The site team shall include in its application a
6.35 	detailed plan for using multiple objective and measurable
6.36 	methods for tracking student achievement during the duration of
7.1 	the grant and shall also include curriculum and academic
7.2 	requirements that are rigorous and challenging for all
7.3 	students.  The site shall have the ability to return timely test
7.4 	data to teachers and have a plan that demonstrates that the
7.5 	teachers at the site can use the data to help improve curriculum
7.6 	as well as monitor student achievement.
7.7 	(c) The applicant shall have in its site-based plan an
7.8 	agreement between the district and the exclusive bargaining unit
7.9 	of the district that would give the site-based team increased
7.10 	stability in the placement of teachers at the site.  The
7.11 	applicant shall include other innovative site-based personnel
7.12 	decision-making items in its agreement that may include, but are
7.13 	not limited to:  hiring bonuses, additional ongoing
7.14 	collaborative preparation time, on-site staff development,
7.15 	hiring additional staff, and performance-based incentives.
7.16 	(d) The site team shall also include in its application a
7.17 	plan for a greater involvement of parents and the community in
7.18 	the school, a plan for ensuring that each student at the site
7.19 	can develop a meaningful relationship with at least one teacher
7.20 	at the school site, and a clear approach to school safety,
7.21 	including promoting respect for students and teachers.
7.22 		Subd. 3.Grant awards. (a) The commissioner shall award
7.23 	grants to a school site in three parts:
7.24 	(1) one-third of the total grant amount is awarded at the
7.25 	beginning of the grant agreement;
7.26 	(2) one-third is awarded at the midpoint of the grant
7.27 	agreement if the site has met the achievement goals established
7.28 	in subdivision 2, paragraph (a); and 
7.29 	(3) one-third is awarded upon the completion of the grant
7.30 	agreement if the site has met the achievement goals established
7.31 	in subdivision 2, paragraph (a).
7.32 	(b) The total grant award for a school site shall be at
7.33 	least $150,000 and shall not exceed $500,000.  The commissioner
7.34 	shall determine the grant amount based on the number of students
7.35 	enrolled at the site.
7.36 	(c) The commissioner shall determine all other aspects of
8.1 	the application and grant award process consistent with this
8.2 	section.
8.3 		Subd. 4.Report. The commissioner shall report annually
8.4 	by March 1 during the program, with a final report due by
8.5 	January 15, 2011, to the house of representatives and senate
8.6 	committees having jurisdiction over education on the progress of
8.7 	the program, including at least improvement in student
8.8 	achievement, the effect of innovative personnel decision making
8.9 	on closing the achievement gap, and the characteristics of
8.10 	highly effective teachers.
8.11 	
EFFECTIVE DATE. This section is effective the day
8.12 	following final enactment and applies to the 2005-2006 through
8.13 	2011-2012 school years.

8.14 	Sec. 2. APPROPRIATION.
 8.15 	$500,000 is appropriated in fiscal years 2006 and 2007 from
8.16 	the general fund to the commissioner of education for site-based
8.17 	achievement contracts.