1.1 	A bill for an act
1.2 	relating to education; providing for alternative
1.3 	compensation for teachers and staff development;
1.4 	amending Minnesota Statutes 2004, sections 122A.413;
1.5 	122A.414; 122A.415, subdivisions 1, 3; 122A.61,
1.6 	subdivision 1; 126C.10, by adding subdivisions;
1.7 	proposing coding for new law in Minnesota Statutes,
1.8 	chapter 122A; repealing Minnesota Statutes 2004,
1.9 	section 122A.60.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

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

2.22 	Sec. 2. Minnesota Statutes 2004, section 122A.414, is
2.23 	amended to read:
2.24 	122A.414 ALTERNATIVE TEACHER COMPENSATION.
2.25 		Subdivision 1.Restructured pay system. A restructured
2.26 	teacher compensation system is established under subdivision 2
2.27 	to provide incentives for teachers to improve their knowledge
2.28 	and skills and for school districts and charter schools to
2.29 	recruit and retain highly qualified teachers, and to support
2.30 	teachers' roles in improving students' educational achievement.
2.31 		Subd. 2.Alternative teacher professional pay system.
 2.32 	(a) To participate in this program, a school district or charter
2.33 	school must have an educational improvement plan as described in
2.34 	section 122A.413 and an alternative teacher professional pay
2.35 	system as described in paragraph (b).
2.36 	(b) The alternative teacher professional pay system must:
3.1 	(1) describe the conditions necessary for how teachers can
3.2 	achieve career advancement and additional compensation;
3.3 	(2) describe how the school district will provide career
3.4 	advancement options for teachers retaining which allow them to
3.5 	retain primary roles in student instruction.  These options
3.6 	shall include positions that provide multiple career paths such
3.7 	as master and mentor teaching positions to help peers increase
3.8 	their teaching skills;
3.9 	(3) use a professional pay system that replaces the step 
3.10 	lockstep steps and lane lanes salary schedule and is not based
3.11 	on years of service system and allows school districts and
3.12 	charter schools to compensate teachers for satisfactory service
3.13 	and completion of annual performance goals;
3.14 	(4) include performance compensation for teachers in
3.15 	districts or charter schools based on, at a minimum:
3.16 	(i) student achievement gains and school achievement gains
3.17 	under section 120B.35, locally selected standardized
3.18 	assessments, or both; and 
3.19 	(ii) results of individual teacher evaluations based on
3.20 	classroom observations by a locally selected evaluation team;
3.21 	(4) encourage teachers' continuous improvement in content
3.22 	knowledge, pedagogy, and use of best practices (5) provide staff
3.23 	development for teachers that:
3.24 	(i) utilize best practice research;
3.25 	(ii) are integrated and collaborative;
3.26 	(iii) provide for ongoing site-based and teacher-led
3.27 	professional growth activities aligned with student needs as
3.28 	outlined in sections 122A.413 and 122A.601; and 
3.29 	(iv) focus on the identified needs of students, which may
3.30 	include skill development in reading strategies, methods to
3.31 	align curriculum with learning standards, intervention with
3.32 	students not meeting proficiency level, and use of state and
3.33 	local assessment data; and
3.34 	(5) (6) implement an objective a teacher performance 
3.35 	evaluation system that is a comprehensive system based on
3.36 	scientifically based education research and on specific
4.1 	performance and accountability goals aligned with the
4.2 	district's, the charter school's, or the site's educational
4.3 	improvement plan as described in section 122A.413 and the staff
4.4 	development plan described in section 122A.601.  The evaluation
4.5 	shall include the locally selected evaluation team.  The
4.6 	evaluation of each teacher's performance in the school shall
4.7 	occur several times during the school year, including classroom
4.8 	observation, that is aligned with the district's or the site's
4.9 	educational improvement plan as described in section 122A.413.
4.10 		Subd. 3.Report. Participating districts, charter
4.11 	schools,and school sites must report on the implementation and
4.12 	effectiveness of the alternative teacher compensation plan,
4.13 	particularly addressing each requirement under subdivision 2 and
4.14 	make biennial recommendations by January 1 to their school
4.15 	boards.  The school boards shall transmit a copy of the report
4.16 	with a summary of the findings and recommendations of their
4.17 	district or charter school to the commissioner of education.

4.18 	Sec. 3. Minnesota Statutes 2004, section 122A.415,
4.19 	subdivision 1, is amended to read:
4.20 		Subdivision 1.aid revenue amount.  (a) A school district
4.21 	or charter school that meets the conditions of section 122A.414
4.22 	and submits an application approved by the commissioner is
4.23 	eligible for alternative compensation aid revenue.
4.24 	(b) The commissioner must consider only applications
4.25 	submitted jointly by a school district and the exclusive
4.26 	representative of the teachers for participation in the
4.27 	program.  The application must contain a formally adopted
4.28 	collective bargaining agreement, memorandum of understanding, or
4.29 	other binding agreement that implements an alternative teacher
4.30 	professional pay system consistent with section 122A.414, is in
4.31 	compliance with the Public Employment Labor Relations Act under
4.32 	chapter 179A,and includes all teachers in a district,or all
4.33 	teachers at a school site, or at least 25 percent of the
4.34 	teachers in a district. The commissioner, in approving
4.35 	applications, may give preference to applications involving
4.36 	entire districts or sites or to applications that align measures
5.1 	of teacher performance with student academic achievement and
5.2 	progress under section 120B.35, subdivision 1.
5.3 	(b) Alternative compensation aid revenue for a qualifying
5.4 	school district,or site, or portion of a district or school
5.5 	site is as follows:
5.6 	(1) for a school district in which the school board and the
5.7 	exclusive representative of the teachers agree to place all
5.8 	teachers in the district or at the site on the alternative
5.9 	compensation schedule, alternative compensation aid revenue 
5.10 	equals $150 $225 times the district's or the site's number of
5.11 	pupils enrolled on October 1 of the previous fiscal year; or 
5.12 	(2) for a district in which the school board and the
5.13 	exclusive representative of the teachers agree that at least 25
5.14 	percent of the district's licensed teachers will be paid on the
5.15 	alternative compensation schedule, alternative compensation aid
5.16 	equals $150 times the percentage of participating teachers times
5.17 	the district's number of pupils enrolled as of October 1 of the
5.18 	previous fiscal year.
5.19 	(c) Charter school applications must be submitted by the
5.20 	chair of the charter school board of directors and must
5.21 	contain:  (1) an agreement that implements an alternative
5.22 	teacher compensation program consistent with section 122A.414;
5.23 	(2) a resolution by the charter school board of directors
5.24 	adopting the agreement; and (3) documentation of a vote of the
5.25 	teachers showing that at least 70 percent of the teachers
5.26 	supporting the agreement that implements the alternative teacher
5.27 	compensation program.
5.28 	Alternative compensation revenue for a qualifying charter
5.29 	school must be calculated under section 126C.10, subdivision 34,
5.30 	paragraph (b).

5.31 	Sec. 4. Minnesota Statutes 2004, section 122A.415,
5.32 	subdivision 3, is amended to read:
5.33 		Subd. 3.aid revenue timing.  (a) Districts or , school 
5.34 	sites, or charter schools with approved applications must
5.35 	receive alternative compensation aid revenue for each school
5.36 	year that the district or , school site, or charter school,
6.1 	participates in the program as described in this subdivision.
6.2 	Districts or , school sites, or charter schools with applications
6.3 	received approved by the commissioner before June 1 of the first
6.4 	year of a two-year contract shall receive alternative
6.5 	compensation aid revenue for both the school years of the
6.6 	contract.  Districts or sites with applications received by the
6.7 	commissioner after June 1 of the first year of a two-year
6.8 	contract shall receive alternative compensation aid only for the
6.9 	second year of the contract in which the alternative teacher
6.10 	compensation program is implemented for the full school
6.11 	year. For fiscal year 2007 and later,a qualifying district or ,
6.12 	school site, or charter school that received alternative
6.13 	compensation aid revenue for the previous fiscal year must
6.14 	receive at least an amount of alternative compensation revenue 
6.15 	equal to the lesser of the amount it received for the previous
6.16 	fiscal year or its proportionate share of the previous year's
6.17 	appropriation the amount it qualifies for under subdivision 1
6.18 	for the current fiscal year if the district, charter school,or
6.19 	site submits a timely application and the commissioner
6.20 	determines that the district, charter school,or site continues
6.21 	to implement an alternative teacher professional pay system,
6.22 	consistent with its application under this section. The
6.23 	commissioner must approve initial applications for school
6.24 	districts qualifying under subdivision 1, paragraph (b), clause
6.25 	(1), by January 15 of each year.  If any money remains, the
6.26 	commissioner must approve aid amounts for school districts
6.27 	qualifying under subdivision 1, paragraph (b), clause (2), by
6.28 	February 15 of each year.
6.29 	(b) The commissioner shall select applicants that qualify
6.30 	for this program, notify school districts, charter schools,and
6.31 	school sites about the program, develop and disseminate
6.32 	application materials, and carry out other activities needed to
6.33 	implement this section.

6.34 	Sec. 5. [122A.601] STAFF DEVELOPMENT PROGRAM.
6.35 		Subdivision 1.Requirement. Each school district must
6.36 	implement a staff development program that improves the quality
7.1 	of teaching and increases the achievement of all students.
7.2 	Staff development must be a part of each district and site
7.3 	improvement plan and must be aligned with state and federal
7.4 	requirements.  A school board must use the revenue authorized in
7.5 	section 122A.61 for staff development that addresses areas
7.6 	identified for improvement by the district advisory committee
7.7 	and site teams, or for violence prevention training authorized
7.8 	in section 120B.22, subdivision 2.
7.9 		Subd. 2.District staff development advisory
7.10 	committee. (a) The school board must appoint a district staff
7.11 	development advisory committee.  A majority of the advisory
7.12 	committee must be teachers representing various grade levels,
7.13 	subject areas, and special education.  The district committee
7.14 	must also include personnel who work with federal programs,
7.15 	nonteaching staff, parents, paraprofessionals, and
7.16 	administrators including the superintendent or superintendent's
7.17 	designee.
7.18 	(b) The district staff development advisory committee shall:
7.19 	(1) analyze student achievement and other kinds of
7.20 	district-related data;
7.21 	(2) establish districtwide staff development goals and
7.22 	learning outcomes based on the analysis of data, including the
7.23 	goal of eliminating achievement gaps among students;
7.24 	(3) review the site team staff development plans for
7.25 	alignment with district goals;
7.26 	(4) review the site team staff development plans for
7.27 	alignment with applications for federal funding;
7.28 	(5) approve the site team plans or consult with site teams
7.29 	as needed to align with district goals and applications for
7.30 	federal funding;
7.31 	(6) forward the approved site team plans and district staff
7.32 	development goals and learning outcomes to the superintendent
7.33 	and to the school board for approval prior to implementation.
7.34 		Subd. 3.Staff development school site team. (a) Each
7.35 	school site in a district must establish a staff development
7.36 	school site team that must include the principal.  A majority of
8.1 	the site team must be teachers representing various grade
8.2 	levels, subject areas, and special education.  The site team may
8.3 	also include nonteaching staff, personnel who work with federal
8.4 	programs, parents, and paraprofessionals.  Kindergarten through
8.5 	grade 12 sites may function with a single committee that serves
8.6 	as both the site team and the district advisory committee.
8.7 	(b) The staff development site team shall create a staff
8.8 	development plan for the site that improves instruction and
8.9 	student achievement.  The plan shall:
8.10 	(1) analyze student achievement and other kinds of
8.11 	site-related data;
8.12 	(2) establish staff development goals and learning outcomes
8.13 	for the site based on the analysis of data, including the goal
8.14 	of eliminating achievement gaps among groups of students;
8.15 	(3) identify procedures at each site for annually assessing
8.16 	and evaluating progress toward meeting the goals and outcomes;
8.17 	(4) specify the staff development activities needed to
8.18 	increase the content knowledge and instructional skills of
8.19 	staff; and 
8.20 	(5) specify the staff development activities needed to
8.21 	enhance the leadership skills of principals to support
8.22 	instruction.
8.23 		Subd. 4.Effective staff development activities. Staff
8.24 	development activities must:
8.25 	(1) focus on the school classroom and research-based
8.26 	strategies that improve student learning;
8.27 	(2) provide opportunities for teachers to practice and
8.28 	improve their skills over time;
8.29 	(3) provide opportunities for teachers to use data to
8.30 	increase student achievement as part of their daily work;
8.31 	(4) enhance teacher content knowledge and instructional
8.32 	skills;
8.33 	(5) align with state and local academic standards; and 
8.34 	(6) provide opportunities to build professional
8.35 	relationships, foster collaboration among principals and staff
8.36 	who provide instruction, and provide opportunities for
9.1 	teacher-to-teacher mentoring.
9.2 	Staff development activities may include curriculum development
9.3 	and curriculum training programs, and activities that provide
9.4 	teachers and other members of site-based teams training to
9.5 	enhance team performance.  In addition, the school district may
9.6 	implement other staff development activities as required by law
9.7 	and those associated with alternative teacher compensation
9.8 	models.  Release time provided for teachers to supervise
9.9 	students on field trips and school activities, or independent
9.10 	tasks not associated with enhancing the teacher's knowledge and
9.11 	skills, such as preparing report cards, calculating grades, or
9.12 	organizing classroom materials, may not be counted as staff
9.13 	development time that is financed with staff development
9.14 	reserved revenue under section 122A.61.
9.15 		Subd. 5.Staff development report. (a) By October 15 of
9.16 	each year, the district and site staff development committees
9.17 	shall write and submit a report of staff development activities
9.18 	and expenditures for the previous year, in the form and manner
9.19 	determined by the commissioner.  The report must include
9.20 	assessment and evaluation data indicating progress toward
9.21 	district and site staff development goals based on teaching and
9.22 	learning outcomes, including the percentage of teachers
9.23 	participating in effective staff development activities under
9.24 	subdivision 4.
9.25 	(b) The report must provide a breakdown of expenditures for:
9.26 	(1) curriculum development and curriculum training
9.27 	programs; and 
9.28 	(2) staff development training models, workshops, and
9.29 	conferences, and the cost of releasing teachers or providing
9.30 	substitute teachers for staff development purposes.
9.31 	The report must also include whether the expenditures were
9.32 	incurred at the district level or the school site level, and
9.33 	whether the school site expenditures were made possible by
9.34 	grants to school sites that demonstrate exemplary use of
9.35 	allocated staff development revenue.  These expenditures must be
9.36 	reported using the Uniform Financial and Accounting and
10.1 	Reporting Standards.
10.2 	(c) The commissioner shall report the staff development
10.3 	progress and expenditure data to the house of representatives
10.4 	and senate committees having jurisdiction over education by
10.5 	February 15 each year.

10.6 	Sec. 6. Minnesota Statutes 2004, section 122A.61,
10.7 	subdivision 1, is amended to read:
10.8 		Subdivision 1.Staff development revenue.  A district is
10.9 	required to reserve an amount equal to at least two percent of
10.10 	the basic revenue under section 126C.10, subdivision 2, for
10.11 	in-service staff development education for programs under
10.12 	section 120B.22, subdivision 2, for district and site staff
10.13 	development plans, including plans for challenging instructional
10.14 	activities and experiences under planning and implementation of
10.15 	staff development activities consistent with section
10.16 	122A.60, and for curriculum development and programs, other
10.17 	in-service education, teachers' workshops, teacher conferences,
10.18 	the cost of substitute teachers for staff development purposes,
10.19 	preservice and in-service education for special education
10.20 	professionals and paraprofessionals, other staff in the district
10.21 	plan,and other related costs for staff development efforts as
10.22 	specified in the district plan. The school district must use
10.23 	staff development revenue for activities under section 122A.60.
10.24 	A district may reduce the amount reserved for the current year
10.25 	by the amount expended for these purposes in the current fiscal
10.26 	year from its reserved for staff development fund balance.
10.27 	Prior to the end of the reporting school year,a district
10.28 	may annually waive the annual requirement to reserve their two
10.29 	percent of its basic revenue or some portion for the next school
10.30 	year,under this section if by a majority vote of the licensed
10.31 	teachers in the district and a majority vote of the school board
10.32 	agree to a resolution to waive the requirement.  A district in
10.33 	statutory operating debt is exempt from reserving basic revenue
10.34 	according to this section, but must develop district plans, site
10.35 	plans, and the annual report under section 122A.60.  Districts
10.36 	may expend an additional amount of unreserved revenue for staff
11.1 	development based on their needs.  With the exception of amounts
11.2 	reserved for staff development from revenues allocated directly
11.3 	to school sites, the board must initially allocate 50 percent of
11.4 	the reserved revenue to each school site sites in the district
11.5 	on a per teacher basis, which must be retained by the school
11.6 	site until used with a proportionate amount per site based on
11.7 	the number of teachers.  The board may retain 25 up to 50 
11.8 	percent to be used for district wide staff development efforts,
11.9 	for grants to sites for staff development, or both. The
11.10 	remaining 25 percent of the revenue must be used to make grants
11.11 	to school sites for best practices methods.  A grant may be used
11.12 	for any purpose authorized under section 120B.22, subdivision 2,
11.13 	122A.60, or for the costs of curriculum development and
11.14 	programs, other in-service education, teachers' workshops,
11.15 	teacher conferences, substitute teachers for staff development
11.16 	purposes, and other staff development efforts, and determined by
11.17 	the site professional development team.  The site professional
11.18 	development team must demonstrate to the school board the extent
11.19 	to which staff at the site have met the outcomes of the
11.20 	program.The board may withhold a portion of initial allocation
11.21 	of revenue if the staff development goals are not being
11.22 	addressed or if the learning outcomes are not being met.

11.23 	Sec. 7. Minnesota Statutes 2004, section 126C.10, is
11.24 	amended by adding a subdivision to read:
11.25 		Subd. 34.Basic alternative compensation aid. (a) For
11.26 	fiscal year 2006, the basic alternative compensation aid for a
11.27 	district or charter school with an alternative compensation plan
11.28 	approved under section 122A.415 equals the alternative
11.29 	compensation revenue according to section 122A.415, subdivision
11.30 	1.
11.31 	(b) For fiscal year 2007 and later, the basic alternative
11.32 	compensation aid for a district with an alternative compensation
11.33 	plan approved under section 122A.415 equals 68.9 percent of the
11.34 	alternative compensation revenue according to section 122A.415,
11.35 	subdivision 1.  The basic alternative compensation aid for a
11.36 	charter school with an alternative compensation plan approved
12.1 	under section 122A.415 equals the school's alternative
12.2 	compensation revenue according to section 122A.415, subdivision
12.3 	1, times the ratio of the sum of the alternative compensation
12.4 	aid and alternative compensation levy for all participating
12.5 	school districts to the maximum alternative compensation revenue
12.6 	for those districts according to section 122A.415, subdivision 1.
12.7 	(c) Notwithstanding paragraphs (a) and (b) and section
12.8 	122A.415, subdivision 1, the state total basic alternative
12.9 	compensation aid entitlement must not exceed $16,727,000 for
12.10 	fiscal year 2006 and $61,871,000 for fiscal year 2007 and
12.11 	later.  The commissioner must limit the amount of alternative
12.12 	compensation revenue approved under section 122A.415, so as not
12.13 	to exceed these limits.

12.14 	Sec. 8. Minnesota Statutes 2004, section 126C.10, is
12.15 	amended by adding a subdivision to read:
12.16 		Subd. 35.Alternative compensation levy. For fiscal year
12.17 	2007 and later, the alternative compensation levy for a district
12.18 	receiving basic alternative compensation aid equals the product
12.19 	of (1) the difference between the district's alternative
12.20 	compensation revenue and the district's basic alternative
12.21 	compensation aid times (2) the lesser of one or the ratio of the
12.22 	district's adjusted net tax capacity per adjusted pupil unit to
12.23 	$6,900.

12.24 	Sec. 9. Minnesota Statutes 2004, section 126C.10, is
12.25 	amended by adding a subdivision to read:
12.26 		Subd. 36.Alternative compensation aid. (a) For fiscal
12.27 	year 2007 and later, a district's alternative compensation
12.28 	equalization aid equals the district's alternative compensation
12.29 	revenue minus the district's basic alternative compensation aid
12.30 	minus the district's alternative compensation levy.  If a
12.31 	district does not levy the entire amount permitted, the
12.32 	alternative compensation equalization aid must be reduced in
12.33 	proportion to the actual amount levied.
12.34 	(b) A district's alternative compensation aid equals the
12.35 	sum of the district's basic alternative compensation aid and the
12.36 	district's alternative compensation equalization aid.

13.1 	Sec. 10. REPEALER.
 13.2 	Minnesota Statutes 2004, section 122A.60, is repealed.