1.1.................... moves to amend H.F. No. 935 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2008, section 124D.10, is amended to read:
1.4124D.10 CHARTER SCHOOLS.
1.5    Subdivision 1. Purposes. (a) The purpose of this section is to:
1.6(1) improve pupil learning and achievement;
1.7(2) increase learning opportunities for pupils;
1.8(3) encourage the use of different and innovative teaching methods;
1.9(4) require the measurement of measure learning outcomes and create through the
1.10creation and use of different and innovative forms of measuring outcomes;
1.11(5) establish new forms of accountability for schools; or
1.12(6) create new professional opportunities for teachers, including the opportunity to
1.13be responsible for the learning program at the school site.
1.14(b) This section does not provide a means to keep open a school that otherwise
1.15would be closed. Applicants in these circumstances bear the burden of proving that
1.16conversion to a charter school fulfills a purpose specified in this subdivision, independent
1.17of the school's closing.
1.18    Subd. 2. Applicability. This section applies only to charter schools formed and
1.19operated under this section.
1.20    Subd. 2a. Charter School Advisory Council. (a) A Charter School Advisory
1.21Council is established under section 15.059 except that and the term for each council
1.22member shall be three years. The advisory council is composed of seven nine members
1.23from throughout the state who have demonstrated experience with or interest in which
1.24represent charter school authorizers, administrators, board members, teachers, and parents,
1.25and nonprofit organizations that provide support to charter schools. The members of the
1.26council shall be appointed by the commissioner. The advisory council shall bring to the
2.1attention of advise the commissioner any on matters related to charter schools that the
2.2council deems necessary and shall and authorization of charter schools including:
2.3(1) encourage school boards to make full use of charter school opportunities the
2.4guidelines and policies for the approval, review, and discipline processes for authorizers;
2.5(2) encourage the creation of innovative schools;
2.6(3) provide leadership and support for charter school sponsors to increase the
2.7innovation in and the (2) initiatives to support innovation, effectiveness, accountability,
2.8and fiscal soundness of charter schools;
2.9(4) serve an ombudsman function in facilitating the operations of new and existing
2.10charter schools;
2.11(5) promote timely (3) the financial management training program for newly elected
2.12members of a charter school board of directors and ongoing training for other members
2.13of a charter school board of directors; and
2.14(6) (4) facilitate compliance with auditing and other reporting requirements; and
2.15(5) the process for reviewing affidavits. The advisory council shall refer all its
2.16proposals to the commissioner who shall provide time for reports from the council.
2.17(b) The Charter School Advisory Council under this subdivision expires June 30,
2.182007 2015.
2.19    Subd. 3. Sponsor Authorizer. (a) For purposes of this section, the terms defined in
2.20this subdivision have the meaning given them.
2.21"Application" means the charter school business plan a school developer submits
2.22to an authorizer for approval that documents the mission statement, school purposes,
2.23program design, finances, governance and management structure, school developers'
2.24background and experience, plus any other information the authorizer requests. The
2.25application also shall include a "statement of assurances" of legal compliance prescribed
2.26by the commissioner.
2.27"Affidavit" means a written statement by the authorizer attesting to its review
2.28process and findings that the authorizer submits to the commissioner under subdivision 4.
2.29(b) The following organizations may authorize one or more charter schools:
2.30(1) a school board; intermediate school district school board; education district
2.31organized under sections 123A.15 to 123A.19;
2.32(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code
2.33of 1986, excluding a house of worship and any person other than a natural person that
2.34directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
2.35under common control with the house of worship, that:
3.1(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
3.2Foundations,;
3.3(ii) is registered with the attorney general's office, and;
3.4(iii) reports an end-of-year fund balance of at least $2,000,000; and
3.5(iv) is domiciled in the state of Minnesota;
3.6(3) a Minnesota private college that grants two- or four-year degrees and is registered
3.7with the Minnesota Office of Higher Education under chapter 136A; community college,
3.8state university, or technical college, governed by the Board of Trustees of the Minnesota
3.9State Colleges and Universities; or the University of Minnesota may sponsor one or
3.10more charter schools.; or
3.11(b) (4) a nonprofit corporation subject to chapter 317A, described in section
3.12317A.905 , and exempt from federal income tax under section 501(c)(6) of the Internal
3.13Revenue Code of 1986, may sponsor authorize one or more charter schools if the charter
3.14school has operated for at least three years under a different sponsor authorizer and if the
3.15nonprofit corporation has existed for at least 25 years.
3.16(c) An eligible authorizer under this subdivision must apply to the commissioner for
3.17approval as an authorizer before submitting any affidavit to the commissioner to charter
3.18a school. The application for approval as a charter school authorizer must demonstrate
3.19the applicant's ability to implement the procedures and satisfy the criteria for chartering a
3.20school under this section. The commissioner must approve or disapprove an application
3.21within 60 business days of receiving the application. If the commissioner disapproves
3.22the application, the commissioner must notify the applicant of the deficiencies and the
3.23applicant then has 20 business days to address the deficiencies to the commissioner's
3.24satisfaction. The commissioner, in establishing criteria for approval, must consider the
3.25applicant's:
3.26(1) capacity and infrastructure;
3.27(2) application criteria and process;
3.28(3) contracting process;
3.29(4) ongoing oversight and evaluation processes; and
3.30(5) renewal criteria and processes.
3.31(d) The authorizer must participate in ongoing department-approved training.
3.32(e) An authorizer that chartered a school before August 1, 2009, must apply by June
3.3330, 2012, to the commissioner for approval to continue as an authorizer under this section.
3.34For purposes of this paragraph, an authorizer that fails to submit a timely application
3.35is ineligible to charter a school.
4.1(f) The commissioner shall review an authorizer's performance every five years in
4.2a manner and form determined by the commissioner. The commissioner shall issue a
4.3report to the authorizer upon completing the review. If, consistent with this section, the
4.4commissioner finds that an authorizer has not performed satisfactorily, the commissioner
4.5may subject the authorizer to corrective action, which may include terminating a
4.6chartering agreement with the board of a school it authorized. The commissioner must
4.7notify the authorizer in writing of any findings that may subject the authorizer to corrective
4.8action and the authorizer then has 15 business days to request an informal hearing before
4.9the commissioner takes corrective action.
4.10(g) The commissioner may take corrective action against an authorizer or terminate
4.11an authorizer's eligibility to charter a school for:
4.12(1) failing to satisfy the criteria under which the authorizer was approved;
4.13(2) failing to perform satisfactorily as an approved authorizer; or
4.14(3) violating a term of the chartering agreement between the authorizer and charter
4.15school board.
4.16(h) The authority of the department to authorize schools it authorized before June
4.1730, 2009, expires on June 30, 2012.
4.18    Subd. 4. Formation of school. (a) A sponsor An authorizer may authorize charter
4.19a licensed teacher under section 122A.18, subdivision 1, or a group of individuals that
4.20includes one or more licensed teachers under section 122A.18, subdivision 1, to operate a
4.21charter school subject to approval by the commissioner. A board must vote on charter
4.22school application for sponsorship no later than 90 days after receiving the application.
4.23The school must be organized and operated as a cooperative under chapter 308A or
4.24nonprofit corporation under chapter 317A and the provisions under the applicable chapter
4.25shall apply to the school except as provided in this section. Notwithstanding sections
4.26465.717 and 465.719, a school district, subject to this section and section 124D.11, may
4.27create a corporation for the purpose of creating a charter school.
4.28    (b) Before the operators may form establish and operate a school, the sponsor
4.29authorizer must file an affidavit with the commissioner stating its intent to authorize a
4.30charter a school. An authorizer must file a separate affidavit for each school it intends
4.31to charter. The affidavit must state the terms and conditions under which the sponsor
4.32authorizer would authorize a charter a school and how the sponsor authorizer intends to
4.33oversee the fiscal and student performance of the charter school and to comply with the
4.34terms of the written contract between the sponsor authorizer and the charter school board
4.35of directors under subdivision 6. The commissioner must approve or disapprove the
4.36sponsor's proposed authorization authorizer's proposed affidavit within 90 60 business
5.1days of receipt of the affidavit. If the commissioner disapproves the affidavit, the
5.2commissioner shall notify the authorizer of the deficiencies in the affidavit. The authorizer
5.3then has 20 business days to address the deficiencies. If the authorizer does not address
5.4deficiencies to the satisfaction of the commissioner, the commissioner's disapproval is
5.5final. Failure to obtain commissioner approval precludes a sponsor an authorizer from
5.6authorizing chartering the charter school that was the subject of the affidavit.
5.7    (c) The authorizer may prevent an approved charter school from opening for
5.8operation if, among other grounds, the charter school violates this section or does not meet
5.9the ready-to-open standards that are part of the authorizer's oversight and evaluation
5.10process or are stipulated in the charter school contract.
5.11(d) The operators authorized to organize and operate a school, before entering into a
5.12contract or other agreement for professional or other services, goods, or facilities, must
5.13incorporate as a cooperative under chapter 308A or as a nonprofit corporation under
5.14chapter 317A and must establish a board of directors composed of at least five members
5.15who are not related parties as defined in this section until a timely election for members
5.16of the ongoing charter school board of directors is held according to the school's articles
5.17and bylaws under paragraph (f). A charter school board of directors must be composed
5.18of at least five members who are not related parties as defined in this section. Any staff
5.19members who are employed at the school, including teachers providing instruction under a
5.20contract with a cooperative, and all parents or legal guardians of children enrolled in the
5.21school may participate in the election for are the voters eligible to elect the members of the
5.22school's board of directors. Licensed teachers employed at the school, including teachers
5.23providing instruction under a contract with a cooperative, must be a majority of the
5.24members of the board of directors before the school completes its third year of operation,
5.25unless the commissioner waives the requirement for a majority of licensed teachers on the
5.26board. A charter school must notify eligible voters of the election dates at least 30 days
5.27before the election. Board of director meetings must comply with chapter 13D.
5.28    (d) (e) Upon the request of an individual, the charter school must make available
5.29in a timely fashion the minutes of meetings of members, the board of directors, and
5.30committees having any board-delegated authority, statements showing the financial results
5.31of all operations and transactions affecting income and surplus during the school's last
5.32annual accounting period, and a balance sheet summarizing assets and liabilities on the
5.33closing date of the accounting period.
5.34(f) Every charter school board member shall attend department-approved training
5.35on board governance, board role and responsibilities, school standards and practices,
5.36employment policies and practices, and financial management. A board member who
6.1does not complete the required training within 12 months of being seated on the board is
6.2ineligible to continue serving on the board.
6.3    (g) The ongoing board must be elected before the school completes its third
6.4year of operation. The board of directors shall be: (1) a teacher majority board, (2) a
6.5board composed of an equal number of teachers, parents, and community members, or
6.6(3) a board having at least 20 percent of its members as licensed teachers. Licensed
6.7teachers employed by the school, or those providing instruction under a contract with a
6.8cooperative may be members of the board of directors. The chief financial officer and
6.9chief administrator are nonvoting board members. The bylaws of the board shall outline
6.10the internal process and procedures for changing the model of board governance. A board
6.11may change its model of governance only upon the authorizer's approval and with the
6.12majority votes of the board of directors and the licensed teachers employed at the school,
6.13including teachers providing instruction under a contract with a cooperative.
6.14(h) The granting or renewal of a charter by a sponsoring entity an authorizer must
6.15not be conditioned upon the bargaining unit status of the employees of the school.
6.16(e) A sponsor (i) The granting or renewal of a charter school by an authorizer must
6.17not be contingent on the charter school being required to contract, lease, or purchase
6.18services from the authorizer. Any potential contract, lease, or purchase of service from an
6.19authorizer must be disclosed to the commissioner, done through an open bidding process,
6.20and must be a separate contract from the charter. The school must document the open
6.21bidding process. An authorizer must not enter into a contract to provide management
6.22and financial services for a school that it authorizes, unless the school documents that
6.23it received at least two competitive bids.
6.24(j) The charter school shall not offer any services or goods of value to students,
6.25parents, or guardians as an inducement, term, or condition of enrolling a student in a
6.26charter school.
6.27    (k) An authorizer may authorize permit the operators board of directors of a charter
6.28school to expand the operation of the charter school to additional sites or to add additional
6.29grades at the school beyond those described in the sponsor's application authorizer's
6.30original affidavit as approved by the commissioner only after submitting a supplemental
6.31application affidavit for approval to the commissioner in a form and manner prescribed by
6.32the commissioner. The supplemental application affidavit must provide evidence show
6.33that:
6.34    (1) the expansion of proposed by the charter school is supported by need and
6.35projected enrollment;
7.1(2) the charter school expansion is warranted, at a minimum, by longitudinal data
7.2demonstrating students' improved academic performance and growth on statewide
7.3assessments under chapter 120B;
7.4    (2) (3) the charter school is fiscally sound and has the financial capacity to implement
7.5the proposed expansion; and
7.6    (3) (4) the sponsor supports the the authorizer finds that the charter school has the
7.7management capacity to carry out its expansion; and.
7.8    (4) the building of the additional site meets all health and safety requirements to
7.9be eligible for lease aid.
7.10    (f) The commissioner annually must provide timely financial management training
7.11to newly elected members of a charter school board of directors and ongoing training to
7.12other members of a charter school board of directors. Training must address ways to:
7.13    (1) proactively assess opportunities for a charter school to maximize all available
7.14revenue sources;
7.15    (2) establish and maintain complete, auditable records for the charter school;
7.16    (3) establish proper filing techniques;
7.17    (4) document formal actions of the charter school, including meetings of the charter
7.18school board of directors;
7.19    (5) properly manage and retain charter school and student records;
7.20    (6) comply with state and federal payroll record-keeping requirements; and
7.21    (7) address other similar factors that facilitate establishing and maintaining complete
7.22records on the charter school's operations.
7.23    (l) The commissioner shall have 30 business days to review and comment on the
7.24supplementary affidavit. The commissioner shall notify the authorizer of any deficiencies
7.25in the supplementary affidavit and the authorizer then has 30 business days to address
7.26to the commissioner's satisfaction any deficiencies in the supplementary affidavit. The
7.27school may not expand grades or add sites until the commissioner has reviewed and
7.28commented on the supplementary affidavit. The commissioner's decision to approve or
7.29disapprove a supplementary affidavit is final.
7.30    Subd. 4a. Conflict of interest. (a) A member of a charter school board of directors
7.31An individual is prohibited from serving as a member of the charter school board of
7.32directors or as if the individual, an immediate family member, or the individual's partner is
7.33an owner, employee or agent of or a contractor with a for-profit or nonprofit entity with
7.34whom the charter school contracts, directly or indirectly, for professional services, goods,
7.35or facilities. A violation of this prohibition renders a contract voidable at the option of the
7.36commissioner void. A member of a charter school board of directors who violates this
8.1prohibition shall be individually liable to the charter school for any damage caused by
8.2the violation.
8.3(b) No employee, officer, or agent of a charter school shall participate in selecting,
8.4awarding, or administering a contract if a conflict of interest exists. A conflict exists
8.5when: (1) the employee, officer, or agent, (2) the immediate family of the employee,
8.6officer, or agent, (3) the partner of the employee, officer, or agent, or (4) an organization
8.7that employs, or is about to employ, any individual in clauses (1) to (3), has a financial
8.8or other interest in the entity with which the charter school is contracting. A violation of
8.9this prohibition renders the contract void.
8.10(c) Any employee, agent, or board member of the authorizer who participates
8.11in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
8.12nonrenewal process or decision is ineligible to serve on the board of directors of a school
8.13chartered by that authorizer.
8.14(b) (d) An individual may serve as a member of the board of directors if no conflict
8.15of interest under paragraph (a) exists.
8.16(c) A member of a charter school board of directors that serves as a member of the
8.17board of directors or as an employee or agent of or a contractor with a nonprofit entity
8.18with whom the charter school contracts, directly or indirectly, for professional services,
8.19goods, or facilities, must disclose all potential conflicts to the commissioner.
8.20(d) (e) The conflict of interest provisions under this subdivision do not apply to
8.21compensation paid to a teacher employed by the charter school who also serves as a
8.22member of the board of directors.
8.23(e) (f) The conflict of interest provisions under this subdivision do not apply to a
8.24teacher who provides services to a charter school through a cooperative formed under
8.25chapter 308A when the teacher also serves on the charter school board of directors.
8.26    Subd. 5. Conversion of existing schools. A board of an independent or special
8.27school district may convert one or more of its existing schools to charter schools under
8.28this section if 60 percent of the full-time teachers at the school sign a petition seeking
8.29conversion. The conversion must occur at the beginning of an academic year.
8.30    Subd. 6. Charter contract. The sponsor's authorization for a charter school must
8.31be in the form of a written contract signed by the sponsor authorizer and the board of
8.32directors of the charter school. The contract must be completed within 90 45 business
8.33days of the commissioner's approval of the sponsor's proposed authorization authorizer's
8.34affidavit. The authorizer shall submit to the commissioner a copy of the signed contract
8.35within ten business days of its execution. The contract for a charter school must be in
8.36writing and contain at least the following:
9.1(1) a description of a program that carries out one or more of the purposes declaration
9.2of the purposes in subdivision 1 that the school is going to carry out and the way in which
9.3the school will report how it implemented those purposes;
9.4(2) a clear description of the school program and the specific academic and
9.5nonacademic outcomes that pupils are to must achieve under subdivision 10;
9.6(3) a statement of admission policies and procedures;
9.7(4) a governance, management, and administration of plan for the school;
9.8(5) signed agreements from charter school board members to comply with all federal
9.9and state laws governing organizational, programmatic, and financial requirements and
9.10procedures for program and financial audits applicable to charter schools;
9.11(6) how the school will comply with subdivisions 8, 13, 16, and 23 the criteria,
9.12processes, and procedures that the authorizer will use for ongoing oversight of operational
9.13and academic performance;
9.14(7) assumption of liability by the charter school the performance evaluation for
9.15charter renewal decisions under subdivision 15;
9.16(8) types and amounts of insurance liability coverage to be obtained by the charter
9.17school;
9.18(9) the term of the contract, which may be up to three years for an initial contract
9.19plus an additional pre-operational planning year, and up to five years for a renewed
9.20contract if warranted by the school's academic, financial, and operational performance;
9.21(10) if how the board of directors or the operators of the charter school will provide
9.22special instruction and services for children with a disability under sections 125A.03
9.23to 125A.24, and 125A.65, a description of the financial parameters within which the
9.24charter school will operate to provide the special instruction and services to children
9.25with a disability; and
9.26(11) the process and criteria the sponsor authorizer intends to use to monitor
9.27and evaluate the fiscal and student performance of the charter school, consistent with
9.28subdivision 15.; and
9.29(12) the plan for an orderly closing of the school under chapter 308A or 317A,
9.30if the closure is a termination for cause, a voluntary termination, or a nonrenewal of
9.31the contract, and that includes: establishing the responsibilities of the school board of
9.32directors and the authorizer and notice to the commissioner, authorizer, and parents of
9.33enrolled students about the closure, the transfer of student records to students' resident
9.34district, and procedures for closing financial operations.
9.35    Subd. 6a. Audit report. (a) The charter school must submit an audit report to the
9.36commissioner and its authorizer by December 31 each year. The commissioner may
10.1withhold the charter school's state aid if the charter school does not submit an audit by
10.2January 31.
10.3(b) The charter school, with the assistance of the auditor conducting the audit, must
10.4include with the report a copy of all charter school agreements for corporate management
10.5services. If the entity that provides the professional services to the charter school is
10.6exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity
10.7must file with the commissioner by February 15 a copy of the annual return required under
10.8section 6033 of the Internal Revenue Code of 1986.
10.9(c) If the commissioner receives as part of the an audit report a management letter
10.10indicating that a material weakness exists in the financial reporting systems of a charter
10.11school, the charter school must submit a written report to the commissioner explaining
10.12how the material weakness will be resolved.
10.13 Upon the request of an individual, the charter school must make available in a timely
10.14fashion the minutes of meetings of members, the board of directors, and committees
10.15having any of the authority of the board of directors, and statements showing the financial
10.16result of all operations and transactions affecting income and surplus during the school's
10.17last annual accounting period and a balance sheet containing a summary of its assets and
10.18liabilities as of the closing date of the accounting period.
10.19    Subd. 7. Public status; exemption from statutes and rules. A charter school is a
10.20public school and is part of the state's system of public education. Except as provided in
10.21this section, a charter school is exempt from all statutes and rules applicable to a school, a
10.22board, or a district, although it may elect to comply with one or more provisions of statutes
10.23or rules. A charter school is exempt from all statutes and rules applicable to a school,
10.24school board, or school district unless a statute or rule is made specifically applicable to a
10.25charter school or is included in this section.
10.26    Subd. 8. State and local requirements. (a) A charter school shall meet all
10.27applicable federal, state, and local health and safety requirements applicable to school
10.28districts.
10.29(b) A school must comply with statewide education accountability requirements
10.30governing standards and assessments in chapter 120B.
10.31(c) A school sponsored authorized by a school board may be located in any district,
10.32unless the school board of the district of the proposed location disapproves by written
10.33resolution.
10.34(c) (d) A charter school must be nonsectarian in its programs, admission policies,
10.35employment practices, and all other operations. A sponsor An authorizer may not
10.36authorize a charter a school or program that is affiliated with a nonpublic sectarian
11.1school or a religious institution. A charter school student must be released for religious
11.2instruction, consistent with section 120A.22, subdivision 12, clause (3).
11.3(d) (e) Charter schools must not be used as a method of providing education or
11.4generating revenue for students who are being home-schooled.
11.5(e) (f) The primary focus of a charter school must be to provide a comprehensive
11.6program of instruction for at least one grade or age group from five through 18 years
11.7of age. Instruction may be provided to people younger than five years and older than
11.818 years of age.
11.9(f) (g) A charter school may not charge tuition to students who reside in Minnesota.
11.10(g) (h) A charter school is subject to and must comply with chapter 363A and
11.11section 121A.04.
11.12(h) (i) A charter school is subject to and must comply with the Pupil Fair Dismissal
11.13Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
11.14123B.34 to 123B.39.
11.15(i) (j) A charter school is subject to the same financial audits, audit procedures, and
11.16audit requirements as a district. Audits must be conducted in compliance with generally
11.17accepted governmental auditing standards, the Federal Single Audit Act, if applicable,
11.18and section 6.65. A charter school is subject to and must comply with sections 15.054;
11.19118A.01 ; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 123B.52, subdivision 5;
11.20471.38 ; 471.391; 471.392; and 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6,
11.2112, 13, and 15 ; 471.881; and 471.89. The audit must comply with the requirements of
11.22sections 123B.75 to 123B.83, except to the extent deviations are necessary because of the
11.23program at the school. Deviations must be approved by the commissioner and authorizer.
11.24The Department of Education, state auditor, or legislative auditor, or authorizer may
11.25conduct financial, program, or compliance audits. A charter school determined to be in
11.26statutory operating debt under sections 123B.81 to 123B.83 must submit a plan under
11.27section 123B.81, subdivision 4.
11.28(j) (k) A charter school is a district for the purposes of tort liability under chapter 466.
11.29(k) (l) A charter school must comply with chapters 13 and 13D; and sections 13.32;
11.30120A.22, subdivision 7 ; 121A.75; and 260B.171, subdivisions 3 and 5.
11.31(l) (m) A charter school is subject to the Pledge of Allegiance requirement under
11.32section 121A.11, subdivision 3.
11.33(n) A charter school is subject to chapter 181.
11.34    Subd. 8a. Aid reduction. The commissioner may reduce a charter school's state aid
11.35under section 127A.42 or 127A.43 if the charter school board fails to correct a violation
11.36under this section.
12.1    Subd. 8b. Aid reduction for violations. The commissioner may reduce a charter
12.2school's state aid by an amount not to exceed 60 percent of the charter school's basic
12.3revenue for the period of time that violation of law occurs.
12.4    Subd. 9. Admission requirements. A charter school may limit admission to:
12.5(1) pupils within an age group or grade level; or
12.6(2) people who are eligible to participate in the graduation incentives program
12.7under section 124D.68; or
12.8(3) residents of a specific geographic area where the percentage of the population
12.9of non-Caucasian people of that area is greater than the percentage of the non-Caucasian
12.10population in the congressional district in which the geographic area is located, and as
12.11long as the school reflects the racial and ethnic diversity of the specific area.
12.12A charter school shall enroll an eligible pupil who submits a timely application,
12.13unless the number of applications exceeds the capacity of a program, class, grade level,
12.14or building. In this case, pupils must be accepted by lot. If a charter school is the only
12.15school located in a town serving pupils within a particular grade level, then pupils that
12.16are residents of the town must be given preference for enrollment before accepting pupils
12.17by lot. If a pupil lives within two miles of a charter school and the next closest public
12.18school is more than five miles away, the charter school must give those pupils preference
12.19for enrollment before accepting other pupils by lot. The charter school must develop and
12.20publish a lottery policy and process that it must use when accepting pupils by lot.
12.21A charter school shall give preference for enrollment to a sibling of an enrolled pupil
12.22and to a foster child of that pupil's parents and may give preference for enrolling children
12.23of the school's employees before accepting other pupils by lot.
12.24A charter school may not limit admission to pupils on the basis of intellectual ability,
12.25measures of achievement or aptitude, or athletic ability and may not establish any criteria
12.26or requirements for admission that are inconsistent with this subdivision.
12.27    Subd. 10. Pupil performance. A charter school must design its programs to at
12.28least meet the outcomes adopted by the commissioner for public school students. In the
12.29absence of the commissioner's requirements, the school must meet the outcomes contained
12.30in the contract with the sponsor authorizer. The achievement levels of the outcomes
12.31contained in the contract may exceed the achievement levels of any outcomes adopted by
12.32the commissioner for public school students.
12.33    Subd. 11. Employment and other operating matters. A charter school must
12.34employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
12.35who hold valid licenses to perform the particular service for which they are employed in
12.36the school. The charter school's state aid may be reduced under section 127A.42 127A.43
13.1if the school employs a teacher who is not appropriately licensed or approved by the
13.2board of teaching. The school may employ necessary employees who are not required to
13.3hold teaching licenses to perform duties other than teaching and may contract for other
13.4services. The school may discharge teachers and nonlicensed employees. The charter
13.5school board is subject to section 181.932. When offering employment to a prospective
13.6employee, a charter school must give that employee a written description of the terms and
13.7conditions of employment and the school's personnel policies. A person, without holding
13.8a valid administrator's license, may perform administrative, supervisory, or instructional
13.9leadership duties.
13.10The board of directors also shall decide matters related to the operation of the school,
13.11including budgeting, curriculum and operating procedures.
13.12    Subd. 12. Pupils with a disability. A charter school must comply with sections
13.13125A.02 , 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils
13.14with a disability as though it were a district.
13.15    Subd. 13. Length of school year. A charter school must provide instruction
13.16each year for at least the number of days required by section 120A.41. It may provide
13.17instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
13.18    Subd. 14. Annual public reports. A charter school must publish an annual report at
13.19least annually to its sponsor and the commissioner the information required by the sponsor
13.20or the commissioner approved by the charter school board of directors. The annual report
13.21must at least include information on enrollment, governance and management, staffing,
13.22finances, academic performance, operational performance, innovative practices and
13.23implementation, and future plans. A charter school must distribute the annual report by
13.24publication, mail or electronic means to the commissioner, authorizer, school employees,
13.25and parents and legal guardians of students enrolled in the charter school. The reports
13.26are public data under chapter 13.
13.27    Subd. 15. Review and comment. (a) The department must review and comment on
13.28the evaluation, by the sponsor, of the performance of a charter school before the charter
13.29school's contract is renewed for another contract term. The sponsor must submit to the
13.30commissioner timely information for the review and comment. Before reviewing a
13.31charter contract for renewal, the authorizer shall provide the department a formal, written
13.32evaluation of the school's performance. The department must review and comment on
13.33the authorizer's evaluation process at the time the authorizer submits its affidavit for
13.34approval and each time the authorizer undergoes its five-year review under subdivision 3,
13.35paragraph (f).
14.1(b) A sponsor An authorizer shall monitor and evaluate the fiscal and student
14.2performance of the school, and may for this purpose annually assess a charter school: (1)
14.3in its first, second, or third year of operation up to $30 per student up to a maximum of
14.4$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up to
14.5a maximum of $3,500 the greater of (1) the basic formula allowance for that year, or (2)
14.6the lesser of (i) four times the basic formula allowance for that year or (ii) the product
14.7of .015 of the basic formula allowance for that year and the charter school's pupil units
14.8for that year; except for the school year ending June 30, 2010, the product of .01 of the
14.9basic formula allowance for that year and the charter school's pupil units for that year;
14.10except for the school year ending June 30, 2011, the product of .012 of the basic formula
14.11allowance for that year and the charter school's pupil units for that year; except for the
14.12school year ending June 30, 2012, the product of .013 of the basic formula allowance for
14.13that year and the charter school's pupil units for that year; and except for the school year
14.14ending June 30, 2013, the product of .014 of the basic formula allowance for that year and
14.15the charter school's pupil units for that year.
14.16(c) For the pre-operational planning period, the authorizer may assess a charter
14.17school the formula allowance for one pupil unit.
14.18(d) Each year by September 30, an authorizer shall submit to the commissioner a
14.19statement of expenditures related to authorizing activities during the previous school year
14.20ending on June 30. The authorizer must transmit a copy of the statement to all schools
14.21chartered by the authorizer.
14.22    Subd. 16. Transportation. (a) A charter school after its first fiscal year of operation
14.23by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of
14.24operation must notify the district in which the school is located and the Department of
14.25Education if it will provide its own transportation or use the transportation services of the
14.26district in which it is located for the fiscal year.
14.27(b) If a charter school elects to provide transportation for pupils, the transportation
14.28must be provided by the charter school within the district in which the charter school is
14.29located. The state must pay transportation aid to the charter school according to section
14.30124D.11, subdivision 2 .
14.31For pupils who reside outside the district in which the charter school is located, the
14.32charter school is not required to provide or pay for transportation between the pupil's
14.33residence and the border of the district in which the charter school is located. A parent
14.34may be reimbursed by the charter school for costs of transportation from the pupil's
14.35residence to the border of the district in which the charter school is located if the pupil is
14.36from a family whose income is at or below the poverty level, as determined by the federal
15.1government. The reimbursement may not exceed the pupil's actual cost of transportation
15.2or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for
15.3more than 250 miles per week.
15.4At the time a pupil enrolls in a charter school, the charter school must provide the
15.5parent or guardian with information regarding the transportation.
15.6(c) If a charter school does not elect to provide transportation, transportation for
15.7pupils enrolled at the school must be provided by the district in which the school is
15.8located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a
15.9pupil residing in the same district in which the charter school is located. Transportation
15.10may be provided by the district in which the school is located, according to sections
15.11123B.88, subdivision 6 , and 124D.03, subdivision 8, for a pupil residing in a different
15.12district. If the district provides the transportation, the scheduling of routes, manner and
15.13method of transportation, control and discipline of the pupils, and any other matter relating
15.14to the transportation of pupils under this paragraph shall be within the sole discretion,
15.15control, and management of the district.
15.16    Subd. 17. Leased space. (a) A charter school may lease space from a an independent
15.17school board eligible to be a sponsor or an authorizer, other public or organization, private,
15.18nonprofit nonsectarian organization, private property owner, or a sectarian organization
15.19if the leased space is constructed as a school facility. The department must review and
15.20approve or disapprove leases in a timely manner. If a charter school is unable to lease
15.21appropriate space from an eligible board or other public or private nonprofit nonsectarian
15.22organization, the school may lease space from another nonsectarian organization if
15.23the Department of Education, in consultation with the Department of Administration,
15.24approves the lease. If the school is unable to lease appropriate space from public or private
15.25nonsectarian organizations, the school may lease space from a sectarian organization if
15.26the leased space is constructed as a school facility and the Department of Education, in
15.27consultation with the Department of Administration, approves the lease.
15.28(b) Upon approval of the authorizer, a charter school that has operated at least five
15.29consecutive years may form a separate affiliated nonprofit building company to provide a
15.30school facility. The authorizer shall submit a supplementary affidavit to the commissioner
15.31stating that the authorizer has reviewed:
15.32(1) the school's feasibility study on facility options;
15.33(2) documents showing the school's need and projected enrollment for such a
15.34facility; and
15.35(3) the school's financial plan and financial status.
16.1The school is prohibited from organizing the nonprofit building company until the
16.2authorizer files a supplementary affidavit with the commissioner.
16.3    Subd. 18. Authority to raise initial working capital. A sponsor may authorize
16.4a charter school before the applicant has secured its space, equipment, facilities, and
16.5personnel if the applicant indicates the authority is necessary for it to raise working
16.6capital. A sponsor may not authorize a school before the commissioner has approved the
16.7authorization.
16.8    Subd. 19. Disseminate information. The sponsor authorizer, the operators, and the
16.9Department of Education must disseminate information to the public on how to form and
16.10operate a charter school and how to utilize the offerings of a charter school. Particular
16.11groups to be targeted include low-income families and communities, and students of color.
16.12    Subd. 20. Leave to teach in a charter school. If a teacher employed by a district
16.13makes a written request for an extended leave of absence to teach at a charter school,
16.14the district must grant the leave. The district must grant a leave not to exceed a total of
16.15five years. Any request to extend the leave shall be granted only at the discretion of the
16.16school board. The district may require that the request for a leave or extension of leave
16.17be made up to 90 days before the teacher would otherwise have to report for duty before
16.18February 1 in the school year preceding the school year in which the teacher intends
16.19to leave, or February 1 of the calendar year in which the teacher's leave is scheduled
16.20to terminate. Except as otherwise provided in this subdivision and except for section
16.21122A.46, subdivision 7 , the leave is governed by section 122A.46, including, but not
16.22limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
16.23During a leave, the teacher may continue to aggregate benefits and credits in the
16.24Teachers' Retirement Association account by paying both the employer and employee
16.25contributions based upon the annual salary of the teacher for the last full pay period before
16.26the leave began. The retirement association may impose reasonable requirements to
16.27efficiently administer this subdivision under chapters 354 and 354A, consistent with
16.28subdivision 22.
16.29    Subd. 21. Collective bargaining. Employees of the board of directors of a charter
16.30school may, if otherwise eligible, organize under chapter 179A and comply with its
16.31provisions. The board of directors of a charter school is a public employer, for the
16.32purposes of chapter 179A, upon formation of one or more bargaining units at the school.
16.33Bargaining units at the school must be separate from any other units within the sponsoring
16.34an authorizing district, except that bargaining units may remain part of the appropriate
16.35unit within the sponsoring an authorizing district, if the employees of the school, the
16.36board of directors of the school, the exclusive representative of the appropriate unit in the
17.1sponsoring authorizing district, and the board of the sponsoring authorizing district agree
17.2to include the employees in the appropriate unit of the sponsoring authorizing district.
17.3    Subd. 22. Teacher and other employee retirement. (a) Teachers in a charter
17.4school must be public school teachers for the purposes of chapters 354 and 354a.
17.5(b) Except for teachers under paragraph (a), employees in a charter school must be
17.6public employees for the purposes of chapter 353.
17.7    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a)
17.8The duration of the contract with a sponsor authorizer must be for the term contained in
17.9the contract according to subdivision 6. The sponsor authorizer may or may not renew a
17.10contract at the end of the term for any ground listed in paragraph (b). A sponsor authorizer
17.11may unilaterally terminate a contract during the term of the contract for any ground
17.12listed in paragraph (b). At least 60 days before not renewing or terminating a contract,
17.13the sponsor authorizer shall notify the board of directors of the charter school of the
17.14proposed action in writing. The notice shall state the grounds for the proposed action in
17.15reasonable detail and that the charter school's board of directors may request in writing an
17.16informal hearing before the sponsor authorizer within 14 15 business days of receiving
17.17notice of nonrenewal or termination of the contract. Failure by the board of directors to
17.18make a written request for a hearing within the 14-day 15 business-day period shall be
17.19treated as acquiescence to the proposed action. Upon receiving a timely written request
17.20for a hearing, the sponsor authorizer shall give reasonable ten business days' notice to
17.21the charter school's board of directors of the hearing date. The sponsor authorizer shall
17.22conduct an informal hearing before taking final action. The sponsor authorizer shall take
17.23final action to renew or not renew a contract by the last day of classes in the school year.
17.24If the sponsor is a local board, the school's board of directors may appeal the sponsor's
17.25decision to the commissioner no later than 20 business days before the proposed date for
17.26terminating the contract or the end date of the contract.
17.27(b) A contract may be terminated or not renewed upon any of the following grounds:
17.28(1) failure to meet the requirements for pupil performance contained in the contract;
17.29(2) failure to meet generally accepted standards of fiscal management;
17.30(3) violations of law; or
17.31(4) other good cause shown.
17.32If a contract is terminated or not renewed under this paragraph, the school must be
17.33dissolved according to the applicable provisions of chapter 308A or 317A, except when
17.34the commissioner approves the decision of a different eligible sponsor to authorize the
17.35charter school.
18.1(c) If at the end of a contract term, either the sponsor or authorizer and the charter
18.2school board of directors wants mutually agree to voluntarily terminate or not renew the
18.3contract, a change in sponsors authorizers is allowed if the commissioner approves the
18.4decision of transfer to a different eligible sponsor approved authorizer to authorize the
18.5charter school. The party intending to terminate the contract must notify the other party
18.6and the commissioner of its intent at least 90 days before the date on which the contract
18.7ends. Both parties jointly must submit their intent in writing to the commissioner to
18.8mutually terminate the contract. The sponsor authorizer that is a party to the existing
18.9contract at least must inform the approved different eligible sponsor new authorizer about
18.10the fiscal and operational status, and student performance of the school. If no different
18.11eligible sponsor transfer of authorizer is approved, the school must be dissolved according
18.12to applicable law and the terms of the contract.
18.13(d) The commissioner, after providing reasonable notice to the board of directors of
18.14a charter school and the existing sponsor authorizer, and after providing an opportunity for
18.15a public hearing, may terminate the existing sponsorial relationship contract between the
18.16authorizer and the charter school board if the charter school has a history of:
18.17(1) failure to meet pupil performance requirements contained in the contract;
18.18(2) financial mismanagement or failure to meet generally accepted standards of
18.19fiscal management; or
18.20(2) (3) repeated or major violations of the law.
18.21    (e) If the commissioner terminates a charter school contract because the authorizer
18.22fails to comply with subdivision 3, paragraph (g), the commissioner shall assist a school in
18.23finding a new authorizer.
18.24    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
18.25entering a lease of real property with a related party as defined in subdivision 26, unless
18.26the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter
18.27308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).
18.28    (b) For purposes of this section and section 124D.11:
18.29(1) "related party" means an affiliate or immediate relative of the other party in
18.30question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
18.31(2) "affiliate" means a person that directly or indirectly, through one or more
18.32intermediaries, controls, is controlled by, or is under common control with another person;
18.33(3) "immediate family" means an individual whose relationship by blood, marriage,
18.34adoption, or partnering is no more remote than first cousin;
18.35(4) "person" means an individual or entity of any kind; and
19.1(5) "control" means the ability to affect the management, operations, or policy
19.2actions or decisions of a person, whether through ownership of voting securities, by
19.3contract, or otherwise.
19.4(c) A lease of real property to be used for a charter school, not excluded in paragraph
19.5(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
19.6section 124D.10, subdivision 23a."
19.7    (c) (d) If a charter school enters into as lessee a lease with a related party and the
19.8charter school subsequently closes, the commissioner has the right to recover from the
19.9lessor any lease payments in excess of those that are reasonable under section 124D.11,
19.10subdivision 4 , clause (1).
19.11    Subd. 24. Pupil enrollment upon nonrenewal or termination of charter school
19.12contract. If a contract is not renewed or is terminated according to subdivision 23, a
19.13pupil who attended the school, siblings of the pupil, or another pupil who resides in the
19.14same place as the pupil may enroll in the resident district or may submit an application
19.15to a nonresident district according to section 124D.03 at any time. Applications and
19.16notices required by section 124D.03 must be processed and provided in a prompt manner.
19.17The application and notice deadlines in section 124D.03 do not apply under these
19.18circumstances. The closed charter school must transfer the student's educational records
19.19within ten business days of closure to the student's school district of residence where the
19.20records must be retained or transferred under section 120A.22, subdivision 7.
19.21    Subd. 25. Extent of specific legal authority. (a) The board of directors of a charter
19.22school may sue and be sued.
19.23(b) The board may not levy taxes or issue bonds.
19.24(c) The commissioner, a sponsor an authorizer, members of the board of a sponsor
19.25an authorizer in their official capacity, and employees of a sponsor an authorizer are
19.26immune from civil or criminal liability with respect to all activities related to a charter
19.27school they approve or sponsor authorize. The board of directors shall obtain at least
19.28the amount of and types of insurance required by the contract, according to subdivision
19.296. up to the applicable tort liability limits under chapter 466. The charter school board
19.30must submit a copy of the insurance policy to its authorizer before starting operations.
19.31The charter school board must submit changes in its insurance carrier or policy to its
19.32authorizer within 20 business days of the change.
19.33    Subd. 26. Definitions. For purposes of this section and section 124D.11:
19.34    (1) A "Related party" is an affiliate or close relative of the other party in question, an
19.35affiliate of a close relative, or a close relative of an affiliate.
20.1    (2) "Affiliate" means a person that directly, or indirectly through one or more
20.2intermediaries, controls, or is controlled by, or is under common control with, another
20.3person.
20.4    (3) "Close relative" means an individual whose relationship by blood, marriage, or
20.5adoption to another individual is no more remote than first cousin.
20.6    (4) "Person" means an individual or entity of any kind.
20.7    (5) "Control" includes the terms "controlling," "controlled by," and "under common
20.8control with" and means the possession, direct or indirect, of the power to direct or cause
20.9the direction of the management, operations, or policies of a person, whether through the
20.10ownership of voting securities, by contract, or otherwise.

20.11    Sec. 2. Minnesota Statutes 2008, section 124D.11, subdivision 9, is amended to read:
20.12    Subd. 9. Payment of aids to charter schools. (a) Notwithstanding section
20.13127A.45, subdivision 3 , aid payments for the current fiscal year to a charter school not in
20.14its first year of operation shall be of an equal amount on each of the 23 24 payment dates.
20.15A charter school in its first year of operation shall receive, on its first payment date, ten
20.16percent of its cumulative amount guaranteed for the year and 22 payments of an equal
20.17amount thereafter the sum of which shall equal the current year aid payment percentage
20.18multiplied by the cumulative amount guaranteed.
20.19(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing
20.20operation on or prior to the end of a school year, the current year aid payment percentage
20.21multiplied by the amount due for the school year may be paid to the school after audit
20.22of prior fiscal year and current fiscal year pupil counts. June 30 of a school year, for the
20.23payment periods occurring after the school ceases serving students, the commissioner shall
20.24withhold the estimated state aid owed the school. The charter school board of directors and
20.25authorizer must submit to the commissioner a closure plan under chapter 308A or 317A,
20.26and financial information about the school's liabilities and assets. After receiving the
20.27closure plan, financial information, an audit of pupil counts, and documentation of lease
20.28expenditures, and monitoring of special education expenditures, the commissioner may
20.29release cash withheld and may continue regular payments up to the current year payment
20.30percentages if further amounts are owed. If, based on audits and monitoring, the school
20.31received state aid in excess of the amount owed, the commissioner shall retain aid withheld
20.32sufficient to eliminate the aid overpayment. For a charter school ceasing operations
20.33prior to, or at the end of, a school year, notwithstanding section 127A.45, subdivision
20.343, preliminary final payments may be made after receiving the closure plan, audit of
20.35pupil counts, monitoring of special education expenditures, and documentation of lease
21.1expenditures, and school submission of Uniform Financial Accounting and Reporting
21.2Standards (UFARS) financial data for the final year of operation. Final payment may be
21.3made upon receipt of audited financial statements under section 123B.77, subdivision 3.
21.4(c) If a charter school fails to comply with the commissioner's directive to return, for
21.5cause, federal or state grant funds administered by the department, the commissioner may
21.6withhold an amount of state aid sufficient to satisfy the directive.
21.7(d) If, within the timeline under section 471.425, a charter school fails to pay the state
21.8of Minnesota, a school district, intermediate school district or service cooperative after
21.9receiving an undisputed invoice for goods and services, the commissioner may withhold
21.10an amount of state aid sufficient to satisfy the claim and shall distribute the withheld
21.11aid to the interested state agency, school district, intermediate school district, or service
21.12cooperative. An interested state agency, school district, intermediate school district, or
21.13education cooperative shall notify the commissioner when a charter school fails to pay an
21.14undisputed invoice within 75 business days of when it received the original invoice.
21.15(d) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent
21.16of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day
21.17of student attendance for that school year.
21.18(d) (e) In order to receive state aid payments under this subdivision, a charter school
21.19in its first three years of operation must submit a school calendar in the form and manner
21.20requested by the department and a quarterly report to the Department of Education. The
21.21report must list each student by grade, show the student's start and end dates, if any,
21.22with the charter school, and for any student participating in a learning year program,
21.23the report must list the hours and times of learning year activities. The report must be
21.24submitted not more than two weeks after the end of the calendar quarter to the department.
21.25The department must develop a Web-based reporting form for charter schools to use
21.26when submitting enrollment reports. A charter school in its fourth and subsequent year of
21.27operation must submit a school calendar and enrollment information to the department in
21.28the form and manner requested by the department.
21.29(e) (f) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
21.30school and satisfaction of creditors, cash and investment balances remaining shall be
21.31returned to the state.

21.32    Sec. 3. REVIVAL AND REENACTMENT.
21.33Minnesota Statutes, section 124D.10, subdivision 2a, is revived and reenacted
21.34effective retroactively and without interruption from June 30, 2007.
22.1EFFECTIVE DATE.This section is effective the day following final enactment
22.2and applies beginning August 1, 2009."