Bill Text: MN SF55 | 2011-2012 | 87th Legislature | Engrossed

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Bill Title: Charter school authorizer approval deadline modification

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2011-05-21 - House conferees Woodard; Kelly; Slocum [SF55 Detail]

Download: Minnesota-2011-SF55-Engrossed.html

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A bill for an act

relating to education; modifying charter school provisions;amending Minnesota
Statutes 2010, sections 120B.30, subdivision 3; 124D.10; 124D.11, subdivision 9.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2010, section 120B.30, subdivision 3, is amended to read:
    Subd. 3. Reporting. The commissioner shall report test data 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. 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. The commissioner
shall disseminate to charter school authorizers a more comprehensive report containing
testing information that contains anonymized data where cell count data are sufficient to
protect student identity and that meets the authorizer's needs in fulfilling its obligations
under section 124D.10.

    Sec. 2. Minnesota Statutes 2010, section 124D.10, is amended to read:
124D.10 CHARTER SCHOOLS.
    Subdivision 1. Purposes. (a) The purpose of this section is to:
(1) improve pupil learning and student achievement;
(2) increase learning opportunities for pupils;
(3) encourage the use of different and innovative teaching methods;
(4) measure learning outcomes and create different and innovative forms of
measuring outcomes;
(5) establish new forms of accountability for schools; and
(6) create new professional opportunities for teachers, including the opportunity to
be responsible for the learning program at the school site.
(b) This section does not provide a means to keep open a school that otherwise would
be closed or to reestablish a school that has been closed. Applicants in these circumstances
bear the burden of proving that conversion to a charter school or establishment of a new
charter school fulfills the purposes specified in this subdivision, independent of the
school's closing a school board decides to close. However, a school board may endorse
or authorize the establishing of a charter school to replace the school the board decided
to close. Applicants seeking a charter under this circumstance must demonstrate to the
authorizer that the charter sought is substantially different in purpose and program from
the school the board closed and that the proposed charter satisfies the requirements of this
subdivision. If the school board that closed the school authorizes the charter, it must
document in its affidavit to the commissioner that the charter is substantially different in
program and purpose from the school it closed.
An authorizer shall not approve an application submitted by a charter school
developer under subdivision 4, paragraph (a), if the application does not comply with this
subdivision. The commissioner shall not approve an affidavit submitted by an authorizer
under subdivision 4, paragraph (b), if the affidavit does not comply with this subdivision.
    Subd. 2. Applicability. This section applies only to charter schools formed and
operated under this section.
    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, without an
affidavit approved by the commissioner before July 1, 2009, and 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; and
(iii) reports an end-of-year fund balance of at least $2,000,000; and
(iv) is incorporated in the state of Minnesota and has been operating continuously
for at least five years but does not operate a charter school;
(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) no more than three 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 45 business days of the application deadline. If the commissioner disapproves
the application, the commissioner must notify the applicant of the specific deficiencies
in writing and the applicant then has 20 business days to address the deficiencies to the
commissioner's satisfaction. After the 20 business days expire, the commissioner has 15
business days to make a final decision to approve or disapprove the application. 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 affidavit to be submitted to and evaluated by An applicant must include in
its application to the commissioner must include to be an approved authorizer 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) a description of the criteria and process the authorizer will use to grant expanded
applications under subdivision 4, paragraph (j);
(7) 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) (8) an assurance specifying that the organization is committed to serving as
an authorizer for the full five-year term.
(e) A disapproved applicant under this paragraph section may resubmit an
application during a future application period.
(f) If the governing board of an approved authorizer that has chartered multiple
schools votes to withdraw as an approved authorizer for a reason unrelated to any
cause under subdivision 23, the authorizer must notify all its chartered schools and the
commissioner in writing by July 15 of its intent to withdraw as an authorizer on June 30 in
the next calendar year. The commissioner may approve the transfer of a charter school
to a new authorizer under this paragraph after the new authorizer submits an affidavit to
the commissioner.
(e) (g) The authorizer must participate in department-approved training.
(f) (h) An authorizer that chartered a school before August 1, 2009, must apply by
June 30, 2011 September 7, 2011, 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 for commissioner approval is ineligible
to charter authorize a school.
(g) (i) 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. If the commissioner terminates a contract between
an authorizer and a charter school under this paragraph, the commissioner may assist the
charter school in acquiring a new authorizer.
(h) (j) 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; or
(4) any good cause shown that provides the commissioner a legally sufficient reason
to take corrective action against an authorizer.
    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 ongoing
training throughout the member's term on board governance, including training on the
board's role and responsibilities, employment policies and practices, and financial
management. A board member who does not begin the required initial training within six
months of after being seated and complete the required that 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 at a time during a time when the school is in
session year but may not be conducted on days when the school is closed for holidays
or vacations. The charter school board of directors shall be composed of at least five
nonrelated members and include: (i) at least one licensed teacher employed and serving
as a teacher at the school or a licensed teacher providing instruction under a contact
contract between the charter school and a cooperative; (ii) the parent or legal guardian
of a student enrolled in the charter school who is not an employee of the charter school;
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 are may only serve as ex-officio nonvoting board members and may
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. 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 document that:
    (1) the expansion proposed by the charter school is supported by expansion plan
demonstrates 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 financially sound and has the financial capacity the
financing needed to implement the proposed expansion exists; and
    (4) the authorizer finds that the charter school has the governance structure and
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 20 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.
    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving as a
member of the charter school board of directors if the individual, an immediate family
member, or the individual's partner is an owner, employee or agent of, or a contractor
with a for-profit or nonprofit entity or individual with whom the charter school contracts,
directly or indirectly, for professional services, goods, or facilities. A violation of this
prohibition renders a contract voidable at the option of the commissioner or the charter
school board of directors. A member of a charter school board of directors who violates
this prohibition is individually liable to the charter school for any damage caused by
the violation.
(b) No member of the board of directors, employee, officer, or agent of a charter
school shall participate in selecting, awarding, or administering a contract if a conflict
of interest exists. A conflict exists when:
(1) the board member, employee, officer, or agent;
(2) the immediate family of the board member, employee, officer, or agent;
(3) the partner of the board member, employee, officer, or agent; or
(4) an organization that employs, or is about to employ any individual in clauses
(1) to (3),
has a financial or other interest in the entity with which the charter school is contracting.
A violation of this prohibition renders the contract void.
(c) Any employee, agent, or board member of the authorizer who participates
in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
nonrenewal process or decision is ineligible to serve on the board of directors of a school
chartered by that authorizer.
(d) An individual may serve as a member of the board of directors if no conflict of
interest under paragraph (a) exists.
(e) The conflict of interest provisions under this subdivision do not apply to
compensation paid to a teacher employed by the charter school who also serves as a
member of the board of directors.
(f) The conflict of interest provisions under this subdivision do not apply to a teacher
who provides services to a charter school through a cooperative formed under chapter
308A when the teacher also serves on the charter school board of directors.
    Subd. 5. Conversion of existing schools. A board of an independent or special
school district may convert one or more of its existing schools to charter schools under
this section if 60 percent of the full-time teachers at the school sign a petition seeking
conversion. The conversion must occur at the beginning of an academic year.
    Subd. 6. Charter contract. The authorization for a charter school must be in the
form of a written contract signed by the authorizer and the board of directors of the charter
school. The contract must be completed within 45 business days of the commissioner's
approval of the authorizer's affidavit. The authorizer shall submit to the commissioner a
copy of the signed charter contract within ten business days of its execution. The contract
for a charter school must be in writing and contain at least the following:
(1) a declaration of the purposes in subdivision 1 that the school intends to carry out
and how the school will report its implementation of those purposes;
(2) a description of the school program and the specific academic and nonacademic
outcomes that pupils must achieve;
(3) a statement of admission policies and procedures;
(4) a governance, management, and administration plan for the school;
(5) signed agreements from charter school board members to comply with all
federal and state laws governing organizational, programmatic, and financial requirements
applicable to charter schools;
(6) the criteria, processes, and procedures that the authorizer will use for ongoing
oversight of operational, financial, and academic performance;
(7) the performance evaluation that is a prerequisite for reviewing a charter contract
under subdivision 15;
(8) types and amounts of insurance liability coverage to be obtained by the charter
school;
(9) a provision to indemnify and hold harmless the commissioner and the authorizer,
and their officers, agents, and employees from any suit, claim, or liability arising under
the contract or from the operation of the charter school;
(10) the term of the contract, which may be up to three years for an initial contract
plus an additional preoperational planning year, and up to five years for a renewed contract
if warranted by the school's academic, financial, and operational performance;
(10) (11) how the board of directors or the operators of the charter school will
provide special instruction and services for children with a disability under sections
125A.03 to 125A.24, and 125A.65, a description of the financial parameters within
which the charter school will operate to provide the special instruction and services to
children with a disability;
(11) (12) the process and criteria the authorizer intends to use to monitor and
evaluate the fiscal and student performance of the charter school, consistent with
subdivision 15; and
(12) (13) the plan for an orderly closing of the school under chapter 308A or 317A,
if the closure is a termination for cause, a voluntary termination, or a nonrenewal of
the contract, and that includes establishing the responsibilities of the school board of
directors and the authorizer and notifying the commissioner, authorizer, school district in
which the charter school is located, and parents of enrolled students about the closure,
the transfer of student records to students' resident districts, and procedures for closing
financial operations.
    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 finds 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. 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 and authorizer upon request.
    Subd. 7. Public status; exemption from statutes and rules. A charter school is
a public school and is part of the state's system of public education. A charter school is
exempt from all statutes and rules applicable to a school, school board, or school district
unless a statute or rule is made specifically applicable to a charter school or is included
in this section.
    Subd. 8. Federal, state, and local requirements. (a) A charter school shall meet all
federal, state, and local health and safety requirements applicable to school districts.
(b) A school must comply with statewide accountability requirements governing
standards and assessments in chapter 120B.
(c) A school authorized by a school board may be located in any district, unless the
school board of the district of the proposed location disapproves by written resolution.
(d) A charter school must be nonsectarian in its programs, admission policies,
employment practices, and all other operations. An authorizer may not authorize a charter
school or program that is affiliated with a nonpublic sectarian school or a religious
institution. A charter school student must be released for religious instruction, consistent
with section 120A.22, subdivision 12, clause (3).
(e) Charter schools must not be used as a method of providing education or
generating revenue for students who are being home-schooled.
(f) The primary focus of a charter school must be to provide a comprehensive
program of instruction for at least one grade or age group from five through 18 years
of age. Instruction may be provided to people younger than five years and older than
18 years of age.
(g) A charter school may not charge tuition.
(h) A charter school is subject to and must comply with chapter 363A and section
121A.04 .
(i) A charter school is subject to and must comply with the Pupil Fair Dismissal
Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
123B.34 to 123B.39.
(j) A charter school is subject to the same financial audits, audit procedures, and
audit requirements as a district. Audits must be conducted in compliance with generally
accepted governmental auditing standards, the federal Single Audit Act, if applicable,
and section 6.65. A charter school is subject to and must comply with sections 15.054;
118A.01 ; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 471.38; 471.391; 471.392; and
471.425 . The audit must comply with the requirements of sections 123B.75 to 123B.83,
except to the extent deviations are necessary because of the program at the school.
Deviations must be approved by the commissioner and authorizer. The Department of
Education, state auditor, legislative auditor, or authorizer may conduct financial, program,
or compliance audits. A charter school determined to be in statutory operating debt under
sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4.
(k) A charter school is a district for the purposes of tort liability under chapter 466.
(l) A charter school must comply with chapters 13 and 13D; and sections 120A.22,
subdivision 7 ; 121A.75; and 260B.171, subdivisions 3 and 5.
(m) A charter school is subject to the Pledge of Allegiance requirement under
section 121A.11, subdivision 3.
(n) A charter school offering online courses or programs must comply with section
124D.095 .
(o) A charter school and charter school board of directors are subject to chapter 181.
(p) A charter school must comply with section 120A.22, subdivision 7, governing
the transfer of students' educational records and sections 138.163 and 138.17 governing
the management of local records.
(q) A charter school that provides early childhood health and developmental
screening must comply with sections 121A.16 to 121A.19.
    Subd. 8a. Aid reduction. The commissioner may reduce a charter school's state aid
under section 127A.42 or 127A.43 if the charter school board fails to correct a violation
under this section.
    Subd. 8b. Aid reduction for violations. The commissioner may reduce a charter
school's state aid by an amount not to exceed 60 percent of the charter school's basic
revenue for the period of time that a violation of law occurs.
    Subd. 9. Admission requirements. A charter school may limit admission to:
(1) pupils within an age group or grade level;
(2) pupils who are eligible to participate in the graduation incentives program under
section 124D.68; or
(3) residents of a specific geographic area in which the school is located when the
majority of students served by the school are members of underserved populations.
A charter school shall enroll an eligible pupil who submits a timely application,
unless the number of applications exceeds the capacity of a program, class, grade level, or
building. In this case, pupils must be accepted by lot. The charter school must develop
and publish a lottery policy and process that it must use when accepting pupils by lot.
A charter school shall give enrollment preference for enrollment to a sibling of an
enrolled pupil and to a foster child of that pupil's parents and may give preference for
enrolling children of the school's teachers before accepting other pupils by lot.
A charter school may not limit admission to pupils on the basis of intellectual ability,
measures of achievement or aptitude, or athletic ability and may not establish any criteria
or requirements for admission that are inconsistent with this subdivision.
The charter school shall not distribute any services or goods of value to students,
parents, or guardians as an inducement, term, or condition of enrolling a student in a
charter school.
    Subd. 10. Pupil performance. A charter school must design its programs to at
least meet the outcomes adopted by the commissioner for public school students. In
the absence of the commissioner's requirements, the school must meet the outcomes
contained in the contract with the authorizer. The achievement levels of the outcomes
contained in the contract may exceed the achievement levels of any outcomes adopted by
the commissioner for public school students.
    Subd. 11. Employment and other operating matters. (a) A charter school must
employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
who hold valid licenses to perform the particular service for which they are employed in
the school. The charter school's state aid may be reduced under section 127A.43 if the
school employs a teacher who is not appropriately licensed or approved by the board of
teaching. The school may employ necessary employees who are not required to hold
teaching licenses to perform duties other than teaching and may contract for other services.
The school may discharge teachers and nonlicensed employees. The charter school board
is subject to section 181.932. When offering employment to a prospective employee, a
charter school must give that employee a written description of the terms and conditions
of employment and the school's personnel policies.
(b) A person, without holding a valid administrator's license, may perform
administrative, supervisory, or instructional leadership duties. The board of directors shall
establish qualifications for persons that hold administrative, supervisory, or instructional
leadership roles. The qualifications shall include at least the following areas: instruction
and assessment; human resource and personnel management; financial management;
legal and compliance management; effective communication; and board, authorizer, and
community relationships. The board of directors shall use those qualifications as the basis
for job descriptions, hiring, and performance evaluations of those who hold administrative,
supervisory, or instructional leadership roles. The board of directors and an individual
who does not hold a valid administrative license and who serves in an administrative,
supervisory, or instructional leadership position shall develop a professional development
plan. Documentation of the implementation of the professional development plan of these
persons shall be included in the school's annual report.
(c) The board of directors also shall decide matters related to the operation of the
school, including budgeting, curriculum and operating procedures.
    Subd. 12. Pupils with a disability. A charter school must comply with sections
125A.02 , 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils
with a disability as though it were a district.
    Subd. 13. Length of school year. A charter school must provide instruction
each year for at least the number of days required by section 120A.41. It may provide
instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
    Subd. 14. Annual public reports. A charter school must publish an annual report
approved by the board of directors. The annual report must at least include information
on school enrollment, student attrition, governance and management, staffing, finances,
academic performance, operational performance, innovative practices and implementation,
and future plans. A charter school must distribute the annual report by publication, mail,
or electronic means to the commissioner, authorizer, school employees, and parents and
legal guardians of students enrolled in the charter school and must also post the report on
the charter school's official Web site. The reports are public data under chapter 13.
    Subd. 15. Review and comment. (a) The authorizer shall provide a formal written
evaluation of the school's performance before the authorizer renews the charter contract.
The department must review and comment on the authorizer's evaluation process at the
time the authorizer submits its application for approval and each time the authorizer
undergoes its five-year review under subdivision 3, paragraph (e).
(b) An authorizer shall monitor and evaluate the fiscal, operational, and student
performance of the school, and may for this purpose annually assess a charter school
a fee according to paragraph (c). The agreed-upon fee structure must be stated in the
charter school contract.
(c) The fee that each charter school pays to an authorizer each year is the greater of:
(1) the basic formula allowance for that year; or
(2) the lesser of:
(i) the maximum fee factor times the basic formula allowance for that year; or
(ii) the fee factor times the basic formula allowance for that year times the charter
school's adjusted marginal cost pupil units for that year. The fee factor equals .005 in fiscal
year 2010, .01 in fiscal year 2011, .013 in fiscal year 2012, and .015 in fiscal years 2013
and later. The maximum fee factor equals 1.5 in fiscal year 2010, 2.0 in fiscal year 2011,
3.0 in fiscal year 2012, and 4.0 in fiscal years 2013 and later.
(d) The department and any charter school it charters must not assess or pay a fee
under paragraphs (b) and (c).
(e) For the preoperational planning period, the authorizer may assess a charter school
a fee equal to the basic formula allowance.
(f) By September 30 of each year, an authorizer shall submit to the commissioner
a statement of expenditures related to chartering activities during the previous school
year ending June 30. A copy of the statement shall be given to all schools chartered by
the authorizer.
    Subd. 16. Transportation. (a) A charter school after its first fiscal year of operation
by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of
operation must notify the district in which the school is located and the Department of
Education if it will provide its own transportation or use the transportation services of the
district in which it is located for the fiscal year.
(b) If a charter school elects to provide transportation for pupils, the transportation
must be provided by the charter school within the district in which the charter school is
located. The state must pay transportation aid to the charter school according to section
124D.11, subdivision 2 .
For pupils who reside outside the district in which the charter school is located, the
charter school is not required to provide or pay for transportation between the pupil's
residence and the border of the district in which the charter school is located. A parent
may be reimbursed by the charter school for costs of transportation from the pupil's
residence to the border of the district in which the charter school is located if the pupil is
from a family whose income is at or below the poverty level, as determined by the federal
government. The reimbursement may not exceed the pupil's actual cost of transportation
or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for
more than 250 miles per week.
At the time a pupil enrolls in a charter school, the charter school must provide the
parent or guardian with information regarding the transportation.
(c) If a charter school does not elect to provide transportation, transportation for
pupils enrolled at the school must be provided by the district in which the school is
located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a
pupil residing in the same district in which the charter school is located. Transportation
may be provided by the district in which the school is located, according to sections
123B.88, subdivision 6 , and 124D.03, subdivision 8, for a pupil residing in a different
district. If the district provides the transportation, the scheduling of routes, manner and
method of transportation, control and discipline of the pupils, and any other matter relating
to the transportation of pupils under this paragraph shall be within the sole discretion,
control, and management of the district.
    Subd. 17. Leased space. A charter school may lease space from an independent
or special school board eligible to be an authorizer, other public organization, private,
nonprofit nonsectarian organization, private property owner, or a sectarian organization
if the leased space is constructed as a school facility. The department must review and
approve or disapprove leases in a timely manner.
    Subd. 17a. Affiliated nonprofit building corporation. (a) Before a charter school
may organize an affiliated nonprofit building corporation (i) to renovate or purchase an
existing facility to serve as a school or (ii) to construct a new school facility, an authorizer
must submit an affidavit to the commissioner for approval in the form and manner the
commissioner prescribes, and consistent with paragraphs (b) and (c) or (d).
(b) An affiliated nonprofit building corporation under this subdivision must:
(1) be incorporated under section 317A and comply with applicable Internal
Revenue Service regulations;
(2) submit to the commissioner each fiscal year a list of current board members
and a copy of its annual audit; and
(3) comply with government data practices law under chapter 13.
An affiliated nonprofit building corporation must not serve as the leasing agent for
property or facilities it does not own. A charter school that leases a facility from an
affiliated nonprofit building corporation that does not own the leased facility is ineligible
to receive charter school lease aid. The state is immune from liability resulting from a
contract between a charter school and an affiliated nonprofit building corporation.
(c) A charter school may organize an affiliated nonprofit building corporation to
renovate or purchase an existing facility to serve as a school if the charter school:
(1) has been operating for at least five consecutive school years and the school's
charter has been renewed for a five-year term;
(2) has had a net positive unreserved general fund balance as of June 30 in the
preceding five fiscal years;
(3) has a long-range strategic and financial plan;
(4) completes a feasibility study of available buildings; and
(5) documents sustainable enrollment projections and the need to use an affiliated
building corporation to renovate or purchase an existing facility to serve as a school.
(d) A charter school may organize an affiliated nonprofit building corporation to
construct a new school facility if the charter school:
(1) demonstrates the lack of facilities available to serve as a school;
(2) has been operating for at least eight consecutive school years;
(3) has had a net positive unreserved general fund balance as of June 30 in the
preceding eight fiscal years;
(4) completes a feasibility study of facility options;
(5) has a long-range strategic and financial plan that includes sustainable enrollment
projections and demonstrates the need for constructing a new school facility; and
(6) has a positive review and comment from the commissioner under section
123B.71 .
    Subd. 19. Disseminate information. (a) The authorizer, the operators, and the
department must disseminate information to the public on how to form and operate
a charter school. Charter schools must disseminate information about how to use
the offerings of a charter school. Targeted groups include low-income families and
communities, students of color, and students who are at risk of academic failure.
(b) Authorizers, operators, and the department also may disseminate information
about the successful best practices in teaching and learning demonstrated by charter
schools.
    Subd. 20. Leave to teach in a charter school. If a teacher employed by a district
makes a written request for an extended leave of absence to teach at a charter school,
the district must grant the leave. The district must grant a leave not to exceed a total of
five years. Any request to extend the leave shall be granted only at the discretion of the
school board. The district may require that the request for a leave or extension of leave
be made before February 1 in the school year preceding the school year in which the
teacher intends to leave, or February 1 of the calendar year in which the teacher's leave is
scheduled to terminate. Except as otherwise provided in this subdivision and except for
section 122A.46, subdivision 7, the leave is governed by section 122A.46, including, but
not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
During a leave, the teacher may continue to aggregate benefits and credits in the
Teachers' Retirement Association account under chapters 354 and 354A, consistent with
subdivision 22.
    Subd. 21. Collective bargaining. Employees of the board of directors of a charter
school may, if otherwise eligible, organize under chapter 179A and comply with its
provisions. The board of directors of a charter school is a public employer, for the
purposes of chapter 179A, upon formation of one or more bargaining units at the school.
Bargaining units at the school must be separate from any other units within an authorizing
district, except that bargaining units may remain part of the appropriate unit within an
authorizing district, if the employees of the school, the board of directors of the school,
the exclusive representative of the appropriate unit in the authorizing district, and the
board of the authorizing district agree to include the employees in the appropriate unit of
the authorizing district.
    Subd. 22. Teacher and other employee retirement. (a) Teachers in a charter
school must be public school teachers for the purposes of chapters 354 and 354a.
(b) Except for teachers under paragraph (a), employees in a charter school must be
public employees for the purposes of chapter 353.
    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a)
The duration of the contract with an authorizer must be for the term contained in the
contract according to subdivision 6. The authorizer may or may not renew a contract at
the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally
terminate a contract during the term of the contract for any ground listed in paragraph (b).
At least 60 business days before not renewing or terminating a contract, the authorizer
shall notify the board of directors of the charter school of the proposed action in writing.
The notice shall state the grounds for the proposed action in reasonable detail and that the
charter school's board of directors may request in writing an informal hearing before the
authorizer within 15 business days of receiving notice of nonrenewal or termination of
the contract. Failure by the board of directors to make a written request for a an informal
hearing within the 15-business-day period shall be treated as acquiescence to the proposed
action. Upon receiving a timely written request for a hearing, the authorizer shall give ten
business days' notice to the charter school's board of directors of the hearing date. The
authorizer shall conduct an informal hearing before taking final action. The authorizer
shall take final action to renew or not renew a contract no later than 20 business days
before the proposed date for terminating the contract or the end date of the contract.
(b) A contract may be terminated or not renewed upon any of the following grounds:
(1) failure to meet the requirements for pupil performance contained in the contract;
(2) failure to meet generally accepted standards of fiscal management;
(3) violations of law; or
(4) other good cause shown.
If a contract is terminated or not renewed under this paragraph, the school must be
dissolved according to the applicable provisions of chapter 308A or 317A.
(c) If the authorizer and the charter school board of directors mutually agree to
terminate or not renew the contract, a change in transfer of authorizers is allowed if the
commissioner approves the transfer to a different eligible authorizer to authorize the
charter school. Both parties must jointly submit their intent in writing to the commissioner
to mutually terminate the contract. The authorizer that is a party to the existing contract
at least must inform the approved different eligible proposed authorizer about the fiscal
and operational status and student performance of the school. Before the commissioner
determines whether to approve a transfer of authorizer, the commissioner first proposed
authorizer must determine whether the charter school and prospective new authorizer can
identify and effectively resolve those circumstances causing the previous authorizer and
the charter school to mutually agree to terminate the contract identify and mitigate any
outstanding issues in the proposed charter contract that were unresolved in the previous
charter contract. If no transfer of authorizer is approved, the school must be dissolved
according to applicable law and the terms of the contract.
(d) The commissioner, after providing reasonable notice to the board of directors of
a charter school and the existing authorizer, and after providing an opportunity for a public
hearing, may terminate the existing contract between the authorizer and the charter school
board if the charter school has a history of:
(1) failure failed to meet pupil performance requirements contained in the contract
consistent with state law;
(2) displayed financial mismanagement or failure to meet generally accepted
standards of fiscal management; or
(3) repeated or major committed multiple violations of the law; or
(4) committed a major violation of the law, including a violation of the Minnesota or
United States Constitution, among other major violations.
    (e) If the commissioner terminates a charter school contract under subdivision 3,
paragraph (g), the commissioner shall provide the charter school with information about
other eligible authorizers.
    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
entering a lease of real property with a related party unless the lessor is a nonprofit
corporation under chapter 317A or a cooperative under chapter 308A, and the lease cost is
reasonable under section 124D.11, subdivision 4, clause (1).
    (b) For purposes of this section and section 124D.11:
(1) "related party" means an affiliate or immediate relative of the other party in
question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
(2) "affiliate" means a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with another person;
(3) "immediate family" means an individual whose relationship by blood, marriage,
adoption, or partnering is no more remote than first cousin;
(4) "person" means an individual or entity of any kind; and
(5) "control" means the ability to affect the management, operations, or policy
actions or decisions of a person, whether through ownership of voting securities, by
contract, or otherwise.
(c) A lease of real property to be used for a charter school, not excluded in paragraph
(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
section 124D.10, subdivision 23a."
    (d) If a charter school enters into as lessee a lease with a related party and the
charter school subsequently closes, the commissioner has the right to recover from the
lessor any lease payments in excess of those that are reasonable under section 124D.11,
subdivision 4 , clause (1).
    Subd. 24. Pupil enrollment upon nonrenewal or termination of charter school
contract. If a contract is not renewed or is terminated according to subdivision 23, a
pupil who attended the school, siblings of the pupil, or another pupil who resides in the
same place as the pupil may enroll in the resident district or may submit an application
to a nonresident district according to section 124D.03 at any time. Applications and
notices required by section 124D.03 must be processed and provided in a prompt manner.
The application and notice deadlines in section 124D.03 do not apply under these
circumstances. The closed charter school must transfer the student's educational records
within ten business days of closure to the student's school district of residence where the
records must be retained or transferred under section 120A.22, subdivision 7.
    Subd. 25. Extent of specific legal authority. (a) The board of directors of a charter
school may sue and be sued.
(b) The board may not levy taxes or issue bonds.
(c) The commissioner, an authorizer, members of the board of an authorizer in
their official capacity, and employees of an authorizer are immune from civil or criminal
liability with respect to all activities related to a charter school they approve or authorize.
The charter school shall assume full liability for its activities and indemnify and hold
harmless the commissioner and the authorizer, and their officers, agents, and employees
from any suit, claim, or liability arising under the contract or from the operation of the
charter school. The board of directors shall obtain at least the amount of and types of
insurance up to the applicable tort liability limits under chapter 466. The charter school
board must submit a copy of the insurance policy to its authorizer and the commissioner
before starting operations. The charter school board must submit changes in its insurance
carrier or policy to notify its authorizer and the commissioner of a change in insurance
carrier or policy amount limits within 20 business days of the change. A charter school
is not required to indemnify or hold harmless a state employee if the state would not be
required to indemnify and hold the employee harmless under section 3.736, subdivision 9.

    Sec. 3. 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.
(h) A charter school must have a valid, signed contract under section 124D.10,
subdivision 6, on file at the department at least 15 days before the date the department
makes the first state aid payment for the fiscal year.

    Sec. 4. TRANSITIONAL AUTHORIZER.
(a) Notwithstanding other law to the contrary, an authorizer that chartered a school
before August 1, 2009, and is ineligible to authorize a charter school under Minnesota
Statutes, section 124D.10, subdivision 3, paragraph (c) or (f), after September 7, 2011,
because:
(1) the education commissioner did not approve the authorizer's application;
(2) the authorizer did not apply to the commissioner for approval as an authorizer; or
(3) the authorizer did not submit a timely application for approval as an authorizer
may continue to authorize that charter school until June 30, 2012.
(b) A charter school operating under a contract with an authorizer described in
paragraph (a) after September 7, 2011, must enter into another charter school contract with
an eligible approved authorizer by June 30, 2012, or cease operating. As a condition of
continuing to authorize a charter school under this section, an authorizer under paragraph
(a) must direct the charter school to notify the parents of students enrolled in the charter
school and the school district in which the charter school is located within 14 days after the
effective date of this section that the authorizer is currently able to continue to authorize
the charter school only until June 30, 2012. A charter school that continues to operate
after June 30, 2012, with an authorizer under paragraph (a) commits a major violation of
law under Minnesota Statutes, section 124D.10, subdivision 23, paragraph (d), clause (4).
EFFECTIVE DATE.This section is effective the day following final enactment.