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
2.4process for approving, reviewing, and correcting 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 educational innovation, effectiveness,
2.8accountability, and 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 school developer's mission statement,
2.23school purposes, program design, financial plan, governance and management structure,
2.24and background 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 the authorizer submits to the commissioner
2.28for approval under subdivision 4 attesting to its review and approval of a school charter.
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 incorporated in the state of Minnesota;
3.6(3) a Minnesota private college, notwithstanding clause (2), that grants two- or
3.7four-year degrees and is registered with the Minnesota Office of Higher Education under
3.8chapter 136A; community college, state university, or technical college, governed by the
3.9Board of Trustees of the Minnesota State Colleges and Universities; or the University of
3.10Minnesota may sponsor one or more 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 the application deadline. 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. Failing to address the deficiencies to the commissioner's satisfaction makes
3.25an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for
3.26approval, must consider the applicant's:
3.27(1) capacity and infrastructure;
3.28(2) application criteria and process;
3.29(3) contracting process;
3.30(4) ongoing oversight and evaluation processes; and
3.31(5) renewal criteria and processes.
3.32A disapproved applicant under this paragraph may resubmit an application during a
3.33future application period.
3.34(d) The authorizer must participate in ongoing department-approved training.
3.35(e) An authorizer that chartered a school before August 1, 2009, must apply by
3.36June 30, 2012, to the commissioner for approval under paragraph (c) to continue as an
4.1authorizer under this section. For purposes of this paragraph, an authorizer that fails to
4.2submit a timely application is ineligible to charter a school.
4.3(f) The commissioner shall review an authorizer's performance every five years in a
4.4manner and form determined by the commissioner. The commissioner, after completing
4.5the review, shall transmit a report with findings to the authorizer. If, consistent with
4.6this section, the commissioner finds that an authorizer has not performed satisfactorily,
4.7the commissioner may subject the authorizer to corrective action, which may include
4.8terminating the contract with the board of a school it chartered. The commissioner must
4.9notify the authorizer in writing of any findings that may subject the authorizer to corrective
4.10action and the authorizer then has 15 business days to request an informal hearing before
4.11the commissioner takes corrective action.
4.12(g) The commissioner may take corrective action against an authorizer, including
4.13terminating an authorizer's eligibility to charter a school for:
4.14(1) failing to satisfy the criteria under which the commissioner approved the
4.15authorizer;
4.16(2) failing to perform satisfactorily as an approved authorizer; or
4.17(3) violating a term of the chartering contract between the authorizer and charter
4.18school board.
4.19(h) As of June 30, 2012, the department's authority as an authorizer expires for those
4.20schools it chartered before June 30, 2009.
4.21    Subd. 4. Formation of school. (a) A sponsor An authorizer may authorize charter
4.22a licensed teacher under section 122A.18, subdivision 1, or a group of individuals that
4.23includes one or more licensed teachers under section 122A.18, subdivision 1, to operate a
4.24charter school subject to approval by the commissioner. A board must vote on charter
4.25school application for sponsorship no later than 90 days after receiving the application.
4.26The school must be organized and operated as a cooperative under chapter 308A or
4.27nonprofit corporation under chapter 317A and the provisions under the applicable chapter
4.28shall apply to the school except as provided in this section. Notwithstanding sections
4.29465.717 and 465.719, a school district, subject to this section and section 124D.11, may
4.30create a corporation for the purpose of creating establishing a charter school.
4.31    (b) Before the operators may form establish and operate a school, the sponsor
4.32authorizer must file an affidavit with the commissioner stating its intent to authorize a
4.33charter a school. An authorizer must file a separate affidavit for each school it intends
4.34to charter. The affidavit must state the terms and conditions under which the sponsor
4.35authorizer would authorize a charter a school and how the sponsor authorizer intends
4.36to oversee the fiscal and student performance of the charter school and to comply with
5.1the terms of the written contract between the sponsor authorizer and the charter school
5.2board of directors under subdivision 6. The commissioner must approve or disapprove
5.3the sponsor's proposed authorization authorizer's affidavit within 90 60 business days of
5.4receipt of the affidavit. If the commissioner disapproves the affidavit, the commissioner
5.5shall notify the authorizer of the deficiencies in the affidavit and the authorizer then has 20
5.6business days to address the deficiencies. If the authorizer does not address deficiencies to
5.7the commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain
5.8commissioner approval precludes a sponsor an authorizer from authorizing chartering the
5.9charter school that was is the subject of the this affidavit.
5.10    (c) The authorizer may prevent an approved charter school from opening for
5.11operation if, among other grounds, the charter school violates this section or does not meet
5.12the ready-to-open standards that are part of the authorizer's oversight and evaluation
5.13process or are stipulated in the charter school contract.
5.14(d) The operators authorized to organize and operate a school, before entering into
5.15a contract or other agreement for professional or other services, goods, or facilities,
5.16must incorporate as a cooperative under chapter 308A or as a nonprofit corporation
5.17under chapter 317A and must establish a board of directors composed of at least five
5.18members who are not related parties until a timely election for members of the ongoing
5.19charter school board of directors is held according to the school's articles and bylaws
5.20under paragraph (f). A charter school board of directors must be composed of at least
5.21five members who are not related parties. Any Staff members who are employed at the
5.22school, including teachers providing instruction under a contract with a cooperative, and
5.23all parents or legal guardians of children enrolled in the school may participate in the
5.24election for are the voters eligible to elect the members of the school's board of directors.
5.25Licensed teachers employed at the school, including teachers providing instruction under
5.26a contract with a cooperative, must be a majority of the members of the board of directors
5.27before the school completes its third year of operation, unless the commissioner waives
5.28the requirement for a majority of licensed teachers on the board. A charter school must
5.29notify eligible voters of the school board election dates at least 30 days before the election.
5.30 Board of director meetings must comply with chapter 13D.
5.31    (d) (e) Upon the request of an individual, the charter school must make available
5.32in a timely fashion the minutes of meetings of the board of directors, and of members
5.33and committees having any board-delegated authority, financial statements showing all
5.34operations and transactions affecting income and surplus during the school's last annual
5.35accounting period, and a balance sheet summarizing assets and liabilities on the closing
5.36date of the accounting period.
6.1(f) Every charter school board member shall attend department-approved training
6.2on board governance, the board's role and responsibilities, employment policies and
6.3practices, and financial management. A board member who does not complete the
6.4required training within 12 months of being seated on the board is ineligible to continue to
6.5serve as a board member.
6.6    (g) The ongoing board must be elected before the school completes its third year
6.7of operation. The board of directors shall be (i) a teacher majority board made up of
6.8licensed teachers employed at the school or (ii) a board having at least 20 percent of its
6.9members as licensed teachers employed at the school and must include charter school
6.10parents or guardians and interested community members. Licensed teachers employed
6.11by the school, or those providing instruction under a contract with a cooperative may be
6.12members of the board of directors. The chief financial officer and chief administrator are
6.13nonvoting board members. Board bylaws shall outline the internal process and procedures
6.14for changing the board's governance model. A board may change its governance model
6.15only with approval from the authorizer and a voting majority of the board of directors and
6.16the licensed teachers employed at the school, including teachers providing instruction
6.17under a contract with a cooperative.
6.18(h) The granting or renewal of a charter by a sponsoring entity an authorizer must
6.19not be conditioned upon the bargaining unit status of the employees of the school.
6.20(e) A sponsor (i) The granting or renewal of a charter school by an authorizer must
6.21not be contingent on the charter school being required to contract, lease, or purchase
6.22services from the authorizer. Any potential contract, lease, or purchase of service from
6.23an authorizer must be disclosed to the commissioner, accepted through an open bidding
6.24process, and be a separate contract from the charter contract. The school must document
6.25the open bidding process. An authorizer must not enter into a contract to provide
6.26management and financial services for a school that it authorizes, unless the school
6.27documents that it received at least two competitive bids.
6.28(j) The charter school shall not offer any services or goods of value to students,
6.29parents, or guardians as an inducement, term, or condition of enrolling a student in a
6.30charter school.
6.31    (k) An authorizer may authorize permit the operators board of directors of a charter
6.32school to expand the operation of the charter school to additional sites or to add additional
6.33grades at the school beyond those described in the sponsor's application authorizer's
6.34original affidavit as approved by the commissioner only after submitting a supplemental
6.35application affidavit for approval to the commissioner in a form and manner prescribed by
7.1the commissioner. The supplemental application affidavit must provide evidence show
7.2that:
7.3    (1) the expansion of proposed by the charter school is supported by need and
7.4projected enrollment;
7.5(2) the charter school expansion is warranted, at a minimum, by longitudinal data
7.6demonstrating students' improved academic performance and growth on statewide
7.7assessments under chapter 120B;
7.8    (2) (3) the charter school is fiscally sound and has the financial capacity to implement
7.9the proposed expansion; and
7.10    (3) (4) the sponsor supports the the authorizer finds that the charter school has the
7.11management capacity to carry out its expansion; and.
7.12    (4) the building of the additional site meets all health and safety requirements to
7.13be eligible for lease aid.
7.14    (f) The commissioner annually must provide timely financial management training
7.15to newly elected members of a charter school board of directors and ongoing training to
7.16other members of a charter school board of directors. Training must address ways to:
7.17    (1) proactively assess opportunities for a charter school to maximize all available
7.18revenue sources;
7.19    (2) establish and maintain complete, auditable records for the charter school;
7.20    (3) establish proper filing techniques;
7.21    (4) document formal actions of the charter school, including meetings of the charter
7.22school board of directors;
7.23    (5) properly manage and retain charter school and student records;
7.24    (6) comply with state and federal payroll record-keeping requirements; and
7.25    (7) address other similar factors that facilitate establishing and maintaining complete
7.26records on the charter school's operations.
7.27    (l) The commissioner shall have 30 business days to review and comment on the
7.28supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies
7.29in the supplemental affidavit and the authorizer then has 30 business days to address
7.30to the commissioner's satisfaction any deficiencies in the supplemental affidavit. The
7.31school may not expand grades or add sites until the commissioner has reviewed and
7.32commented on the supplemental affidavit. The commissioner's approval or disapproval of
7.33a supplemental affidavit is final.
7.34    Subd. 4a. Conflict of interest. (a) A member of a charter school board of directors
7.35An individual is prohibited from serving as a member of the charter school board of
7.36directors or as if the individual, an immediate family member, or the individual's partner is
8.1an owner, employee or agent of or a contractor with a for-profit or nonprofit entity with
8.2whom the charter school contracts, directly or indirectly, for professional services, goods,
8.3or facilities. A violation of this prohibition renders a contract voidable at the option of the
8.4commissioner void. A member of a charter school board of directors who violates this
8.5prohibition shall be is individually liable to the charter school for any damage caused by
8.6the violation.
8.7(b) No employee, officer, or agent of a charter school shall participate in selecting,
8.8awarding, or administering a contract if a conflict of interest exists. A conflict exists
8.9when (1) the employee, officer, or agent, (2) the immediate family of the employee,
8.10officer, or agent, (3) the partner of the employee, officer, or agent, or (4) an organization
8.11that employs, or is about to employ any individual in clauses (1) to (3), has a financial
8.12or other interest in the entity with which the charter school is contracting. A violation of
8.13this prohibition renders the contract void.
8.14(c) Any employee, agent, or board member of the authorizer who participates
8.15in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
8.16nonrenewal process or decision is ineligible to serve on the board of directors of a school
8.17chartered by that authorizer.
8.18(b) (d) An individual may serve as a member of the board of directors if no conflict
8.19of interest under paragraph (a) exists.
8.20(c) A member of a charter school board of directors that serves as a member of the
8.21board of directors or as an employee or agent of or a contractor with a nonprofit entity
8.22with whom the charter school contracts, directly or indirectly, for professional services,
8.23goods, or facilities, must disclose all potential conflicts to the commissioner.
8.24(d) (e) The conflict of interest provisions under this subdivision do not apply to
8.25compensation paid to a teacher employed by the charter school who also serves as a
8.26member of the board of directors.
8.27(e) (f) The conflict of interest provisions under this subdivision do not apply to a
8.28teacher who provides services to a charter school through a cooperative formed under
8.29chapter 308A when the teacher also serves on the charter school board of directors.
8.30    Subd. 5. Conversion of existing schools. A board of an independent or special
8.31school district may convert one or more of its existing schools to charter schools under
8.32this section if 60 percent of the full-time teachers at the school sign a petition seeking
8.33conversion. The conversion must occur at the beginning of an academic year.
8.34    Subd. 6. Charter contract. The sponsor's authorization for a charter school must
8.35be in the form of a written contract signed by the sponsor authorizer and the board of
8.36directors of the charter school. The contract must be completed within 90 45 business
9.1days of the commissioner's approval of the sponsor's proposed authorization authorizer's
9.2affidavit. The authorizer shall submit to the commissioner a copy of the signed charter
9.3contract within ten business days of its execution. The contract for a charter school must
9.4be in writing and contain at least the following:
9.5(1) a description of a program that carries out one or more of the purposes
9.6declaration of the purposes in subdivision 1 that the school intends to carry out and how
9.7the school will report its implementation of those purposes;
9.8(2) a description of the school program and the specific academic and nonacademic
9.9outcomes that pupils are to must achieve under subdivision 10;
9.10(3) a statement of admission policies and procedures;
9.11(4) a governance, management, and administration of plan for the school;
9.12(5) signed agreements from charter school board members to comply with all federal
9.13and state laws governing organizational, programmatic, and financial requirements and
9.14procedures for program and financial audits applicable to charter schools;
9.15(6) how the school will comply with subdivisions 8, 13, 16, and 23 the criteria,
9.16processes, and procedures that the authorizer will use for ongoing oversight of operational,
9.17financial, and academic performance;
9.18(7) assumption of liability by the charter school the performance evaluation that is a
9.19prerequisite for reviewing a charter contract under subdivision 15;
9.20(8) types and amounts of insurance liability coverage to be obtained by the charter
9.21school;
9.22(9) the term of the contract, which may be up to three years for an initial contract
9.23plus an additional pre-operational planning year, and up to five years for a renewed
9.24contract if warranted by the school's academic, financial, and operational performance;
9.25(10) if how the board of directors or the operators of the charter school will provide
9.26special instruction and services for children with a disability under sections 125A.03
9.27to 125A.24, and 125A.65, a description of the financial parameters within which the
9.28charter school will operate to provide the special instruction and services to children
9.29with a disability; and
9.30(11) the process and criteria the sponsor authorizer intends to use to monitor
9.31and evaluate the fiscal and student performance of the charter school, consistent with
9.32subdivision 15.; and
9.33(12) the plan for an orderly closing of the school under chapter 308A or 317A, if
9.34the closure is a termination for cause, a voluntary termination, or a nonrenewal of the
9.35contract, and that includes establishing the responsibilities of the school board of directors
9.36and the authorizer and notifying the commissioner, authorizer, and parents of enrolled
10.1students about the closure, the transfer of student records to students' resident district, and
10.2procedures for closing financial operations.
10.3    Subd. 6a. Audit report. (a) The charter school must submit an audit report to the
10.4commissioner and its authorizer by December 31 each year. The commissioner may
10.5withhold the charter school's state aid if the charter school does not submit an audit by
10.6January 31.
10.7(b) The charter school, with the assistance of the auditor conducting the audit, must
10.8include with the report a copy of all charter school agreements for corporate management
10.9services. If the entity that provides the professional services to the charter school is
10.10exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity
10.11must file with the commissioner by February 15 a copy of the annual return required under
10.12section 6033 of the Internal Revenue Code of 1986.
10.13(c) If the commissioner receives as part of the an audit report a management letter
10.14indicating that a material weakness exists in the financial reporting systems of a charter
10.15school, the charter school must submit a written report to the commissioner explaining
10.16how the material weakness will be resolved.
10.17 Upon the request of an individual, the charter school must make available in a timely
10.18fashion the minutes of meetings of members, the board of directors, and committees
10.19having any of the authority of the board of directors, and statements showing the financial
10.20result of all operations and transactions affecting income and surplus during the school's
10.21last annual accounting period and a balance sheet containing a summary of its assets and
10.22liabilities as of the closing date of the accounting period.
10.23    Subd. 7. Public status; exemption from statutes and rules. A charter school is a
10.24public school and is part of the state's system of public education. Except as provided in
10.25this section, a charter school is exempt from all statutes and rules applicable to a school, a
10.26board, or a district, although it may elect to comply with one or more provisions of statutes
10.27or rules. A charter school is exempt from all statutes and rules applicable to a school,
10.28school board, or school district unless a statute or rule is made specifically applicable to a
10.29charter school or is included in this section.
10.30    Subd. 8. State and local requirements. (a) A charter school shall meet all
10.31applicable federal, state, and local health and safety requirements applicable to school
10.32districts.
10.33(b) A school must comply with statewide education accountability requirements
10.34governing standards and assessments in chapter 120B.
11.1(c) A school sponsored authorized by a school board may be located in any district,
11.2unless the school board of the district of the proposed location disapproves by written
11.3resolution.
11.4(c) (d) A charter school must be nonsectarian in its programs, admission policies,
11.5employment practices, and all other operations. A sponsor An authorizer may not
11.6authorize a charter a school or program that is affiliated with a nonpublic sectarian
11.7school or a religious institution. A charter school student must be released for religious
11.8instruction, consistent with section 120A.22, subdivision 12, clause (3).
11.9(d) (e) Charter schools must not be used as a method of providing education or
11.10generating revenue for students who are being home-schooled.
11.11(e) (f) The primary focus of a charter school must be to provide a comprehensive
11.12program of instruction for at least one grade or age group from five through 18 years
11.13of age. Instruction may be provided to people younger than five years and older than
11.1418 years of age.
11.15(f) (g) A charter school may not charge tuition to students who reside in Minnesota.
11.16(g) (h) A charter school is subject to and must comply with chapter 363A and
11.17section 121A.04.
11.18(h) (i) A charter school is subject to and must comply with the Pupil Fair Dismissal
11.19Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
11.20123B.34 to 123B.39.
11.21(i) (j) A charter school is subject to the same financial audits, audit procedures, and
11.22audit requirements as a district. Audits must be conducted in compliance with generally
11.23accepted governmental auditing standards, the Federal Single Audit Act, if applicable,
11.24and section 6.65. A charter school is subject to and must comply with sections 15.054;
11.25118A.01 ; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 123B.52, subdivision 5;
11.26471.38 ; 471.391; 471.392; and 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6,
11.2712, 13, and 15 ; 471.881; and 471.89. The audit must comply with the requirements of
11.28sections 123B.75 to 123B.83, except to the extent deviations are necessary because of the
11.29program at the school. Deviations must be approved by the commissioner and authorizer.
11.30The Department of Education, state auditor, or legislative auditor, or authorizer may
11.31conduct financial, program, or compliance audits. A charter school determined to be in
11.32statutory operating debt under sections 123B.81 to 123B.83 must submit a plan under
11.33section 123B.81, subdivision 4.
11.34(j) (k) A charter school is a district for the purposes of tort liability under chapter 466.
11.35(k) (l) A charter school must comply with chapters 13 and 13D; and sections 13.32;
11.36120A.22, subdivision 7 ; 121A.75; and 260B.171, subdivisions 3 and 5.
12.1(l) (m) A charter school is subject to the Pledge of Allegiance requirement under
12.2section 121A.11, subdivision 3.
12.3(n) A charter school is subject to chapter 181.
12.4    Subd. 8a. Aid reduction. The commissioner may reduce a charter school's state aid
12.5under section 127A.42 or 127A.43 if the charter school board fails to correct a violation
12.6under this section.
12.7    Subd. 8b. Aid reduction for violations. The commissioner may reduce a charter
12.8school's state aid by an amount not to exceed 60 percent of the charter school's basic
12.9revenue for the period of time that a violation of law occurs.
12.10    Subd. 9. Admission requirements. A charter school may limit admission to:
12.11(1) pupils within an age group or grade level; or
12.12(2) people who are eligible to participate in the graduation incentives program
12.13under section 124D.68; or
12.14(3) residents of a specific geographic area where the percentage of the population
12.15of non-Caucasian people of that area is greater than the percentage of the non-Caucasian
12.16population in the congressional district in which the geographic area is located, and as
12.17long as the school reflects the racial and ethnic diversity of the specific area.
12.18A charter school shall enroll an eligible pupil who submits a timely application,
12.19unless the number of applications exceeds the capacity of a program, class, grade level,
12.20or building. In this case, pupils must be accepted by lot. If a charter school is the only
12.21school located in a town serving pupils within a particular grade level, then pupils that
12.22are residents of the town must be given preference for enrollment before accepting pupils
12.23by lot. If a pupil lives within two miles of a charter school and the next closest public
12.24school is more than five miles away, the charter school must give those pupils preference
12.25for enrollment before accepting other pupils by lot. The charter school must develop and
12.26publish a lottery policy and process that it must use when accepting pupils by lot.
12.27A charter school shall give preference for enrollment to a sibling of an enrolled pupil
12.28and to a foster child of that pupil's parents and may give preference for enrolling children
12.29of the school's employees before accepting other pupils by lot.
12.30A charter school may not limit admission to pupils on the basis of intellectual ability,
12.31measures of achievement or aptitude, or athletic ability and may not establish any criteria
12.32or requirements for admission that are inconsistent with this subdivision.
12.33    Subd. 10. Pupil performance. A charter school must design its programs to at
12.34least meet the outcomes adopted by the commissioner for public school students. In the
12.35absence of the commissioner's requirements, the school must meet the outcomes contained
12.36in the contract with the sponsor authorizer. The achievement levels of the outcomes
13.1contained in the contract may exceed the achievement levels of any outcomes adopted by
13.2the commissioner for public school students.
13.3    Subd. 11. Employment and other operating matters. A charter school must
13.4employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
13.5who hold valid licenses to perform the particular service for which they are employed in
13.6the school. The charter school's state aid may be reduced under section 127A.42 127A.43
13.7if the school employs a teacher who is not appropriately licensed or approved by the
13.8board of teaching. The school may employ necessary employees who are not required to
13.9hold teaching licenses to perform duties other than teaching and may contract for other
13.10services. The school may discharge teachers and nonlicensed employees. The charter
13.11school board is subject to section 181.932. When offering employment to a prospective
13.12employee, a charter school must give that employee a written description of the terms and
13.13conditions of employment and the school's personnel policies. A person, without holding
13.14a valid administrator's license, may perform administrative, supervisory, or instructional
13.15leadership duties.
13.16The board of directors also shall decide matters related to the operation of the school,
13.17including budgeting, curriculum and operating procedures.
13.18    Subd. 12. Pupils with a disability. A charter school must comply with sections
13.19125A.02 , 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils
13.20with a disability as though it were a district.
13.21    Subd. 13. Length of school year. A charter school must provide instruction
13.22each year for at least the number of days required by section 120A.41. It may provide
13.23instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
13.24    Subd. 14. Annual public reports. A charter school must publish an annual report at
13.25least annually to its sponsor and the commissioner the information required by the sponsor
13.26or the commissioner approved by the charter school board of directors. The annual report
13.27must at least include information on school enrollment, governance and management,
13.28staffing, finances, academic performance, operational performance, innovative practices
13.29and implementation, and future plans. A charter school must distribute the annual
13.30report by publication, mail or electronic means to the commissioner, authorizer, school
13.31employees, and parents and legal guardians of students enrolled in the charter school. The
13.32reports are public data under chapter 13.
13.33    Subd. 15. Review and comment. (a) The department must review and comment on
13.34the evaluation, by the sponsor, of the performance of a charter school before the charter
13.35school's contract is renewed for another contract term. The sponsor must submit to
14.1the commissioner timely information for the review and comment. The commissioner
14.2must review and comment on the authorizer's performance evaluation process at the
14.3time the authorizer submits its application for approval as an authorizer and each time
14.4the authorizer undergoes its five-year review under subdivision 3, paragraph (f). Before
14.5renewing a charter contract, the authorizer shall provide the commissioner with a formal,
14.6written evaluation of the school's performance.
14.7(b) A sponsor shall monitor and evaluate the fiscal and student performance of the
14.8school, and may for this purpose annually assess a charter school: (1) in its first, second,
14.9or third year of operation up to $30 per student up to a maximum of $10,000; and (2) in
14.10its fourth or a subsequent year of operation up to $10 per student up to a maximum of
14.11$3,500 a fee according to paragraph (c).
14.12(c) The minimum fee that each charter school must pay to an authorizer is the basic
14.13formula allowance for that year. The maximum fee is four times the formula allowance
14.14for that year. Each charter school's fee, subject to the minimum and maximum fees,
14.15equals the product of .015, the formula allowance for that year, and the charter school's
14.16adjusted marginal cost pupil units for that year.
14.17(d) Notwithstanding paragraph (c), the following charter school fees apply, subject
14.18to the minimum and maximum fees:
14.19(1) for fiscal year 2010 only, the product of .01, the formula allowance for that year,
14.20and the charter school's adjusted marginal cost pupil units for that year;
14.21for fiscal year 2011 only, the product of .012, the formula allowance for that year,
14.22and the charter school's adjusted marginal cost pupil units for that year;
14.23for fiscal year 2012 only, the product of .013, the formula allowance for that year,
14.24and the charter school's adjusted marginal cost pupil units for that year;
14.25    Subd. 16. Transportation. (a) A charter school after its first fiscal year of operation
14.26by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of
14.27operation must notify the district in which the school is located and the Department of
14.28Education if it will provide its own transportation or use the transportation services of the
14.29district in which it is located for the fiscal year.
14.30(b) If a charter school elects to provide transportation for pupils, the transportation
14.31must be provided by the charter school within the district in which the charter school is
14.32located. The state must pay transportation aid to the charter school according to section
14.33124D.11, subdivision 2 .
14.34For pupils who reside outside the district in which the charter school is located, the
14.35charter school is not required to provide or pay for transportation between the pupil's
14.36residence and the border of the district in which the charter school is located. A parent
15.1may be reimbursed by the charter school for costs of transportation from the pupil's
15.2residence to the border of the district in which the charter school is located if the pupil is
15.3from a family whose income is at or below the poverty level, as determined by the federal
15.4government. The reimbursement may not exceed the pupil's actual cost of transportation
15.5or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for
15.6more than 250 miles per week.
15.7At the time a pupil enrolls in a charter school, the charter school must provide the
15.8parent or guardian with information regarding the transportation.
15.9(c) If a charter school does not elect to provide transportation, transportation for
15.10pupils enrolled at the school must be provided by the district in which the school is
15.11located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a
15.12pupil residing in the same district in which the charter school is located. Transportation
15.13may be provided by the district in which the school is located, according to sections
15.14123B.88, subdivision 6 , and 124D.03, subdivision 8, for a pupil residing in a different
15.15district. If the district provides the transportation, the scheduling of routes, manner and
15.16method of transportation, control and discipline of the pupils, and any other matter relating
15.17to the transportation of pupils under this paragraph shall be within the sole discretion,
15.18control, and management of the district.
15.19    Subd. 17. Leased space. (a) A charter school may lease space from a an independent
15.20school board eligible to be a sponsor or an authorizer, other public or organization, private,
15.21nonprofit nonsectarian organization, private property owner, or a sectarian organization
15.22if the leased space is constructed as a school facility. The department must review and
15.23approve or disapprove leases in a timely manner. If a charter school is unable to lease
15.24appropriate space from an eligible board or other public or private nonprofit nonsectarian
15.25organization, the school may lease space from another nonsectarian organization if
15.26the Department of Education, in consultation with the Department of Administration,
15.27approves the lease. If the school is unable to lease appropriate space from public or private
15.28nonsectarian organizations, the school may lease space from a sectarian organization if
15.29the leased space is constructed as a school facility and the Department of Education, in
15.30consultation with the Department of Administration, approves the lease.
15.31(b) Upon approval of the authorizer, a charter school that has operated at least five
15.32consecutive years may form a separate affiliated nonprofit building company to provide a
15.33school facility. The authorizer shall submit a supplemental affidavit to the commissioner
15.34stating that the authorizer has reviewed:
15.35(1) the school's feasibility study on facility options;
16.1(2) documents showing the school's need and projected enrollment for such a
16.2facility; and
16.3(3) the school's financial plan and financial status.
16.4The school is prohibited from organizing the nonprofit building company until the
16.5authorizer files a supplementary affidavit with the commissioner.
16.6    Subd. 18. Authority to raise initial working capital. A sponsor may authorize
16.7a charter school before the applicant has secured its space, equipment, facilities, and
16.8personnel if the applicant indicates the authority is necessary for it to raise working
16.9capital. A sponsor may not authorize a school before the commissioner has approved the
16.10authorization.
16.11    Subd. 19. Disseminate information. The sponsor authorizer, the operators, and the
16.12Department of Education department must disseminate information to the public on how
16.13to form and operate a charter school and. Charter schools must disseminate information
16.14about how to utilize use the offerings of a charter school. particularTargeted groups to
16.15be targeted include low-income families and communities, and students of color, and
16.16students who are at-risk of academic failure.
16.17    Subd. 20. Leave to teach in a charter school. If a teacher employed by a district
16.18makes a written request for an extended leave of absence to teach at a charter school,
16.19the district must grant the leave. The district must grant a leave not to exceed a total of
16.20five years. Any request to extend the leave shall be granted only at the discretion of the
16.21school board. The district may require that the request for a leave or extension of leave
16.22be made up to 90 days before the teacher would otherwise have to report for duty before
16.23February 1 in the school year preceding the school year in which the teacher intends
16.24to leave, or February 1 of the calendar year in which the teacher's leave is scheduled
16.25to terminate. Except as otherwise provided in this subdivision and except for section
16.26122A.46, subdivision 7 , the leave is governed by section 122A.46, including, but not
16.27limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
16.28During a leave, the teacher may continue to aggregate benefits and credits in the
16.29Teachers' Retirement Association account by paying both the employer and employee
16.30contributions based upon the annual salary of the teacher for the last full pay period before
16.31the leave began. The retirement association may impose reasonable requirements to
16.32efficiently administer this subdivision under chapters 354 and 354A, consistent with
16.33subdivision 22.
16.34    Subd. 21. Collective bargaining. Employees of the board of directors of a charter
16.35school may, if otherwise eligible, organize under chapter 179A and comply with its
16.36provisions. The board of directors of a charter school is a public employer, for the
17.1purposes of chapter 179A, upon formation of one or more bargaining units at the school.
17.2Bargaining units at the school must be separate from any other units within the sponsoring
17.3an authorizing district, except that bargaining units may remain part of the appropriate
17.4unit within the sponsoring an authorizing district, if the employees of the school, the
17.5board of directors of the school, the exclusive representative of the appropriate unit in the
17.6sponsoring authorizing district, and the board of the sponsoring authorizing district agree
17.7to include the employees in the appropriate unit of the sponsoring authorizing district.
17.8    Subd. 22. Teacher and other employee retirement. (a) Teachers in a charter
17.9school must be public school teachers for the purposes of chapters 354 and 354a.
17.10(b) Except for teachers under paragraph (a), employees in a charter school must be
17.11public employees for the purposes of chapter 353.
17.12    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a)
17.13The duration of the contract with a sponsor authorizer must be for the term contained in
17.14the contract according to subdivision 6. The sponsor authorizer may or may not renew a
17.15contract at the end of the term for any ground listed in paragraph (b). A sponsor authorizer
17.16may unilaterally terminate a contract during the term of the contract for any ground
17.17listed in paragraph (b). At least 60 days before not renewing or terminating a contract,
17.18the sponsor authorizer shall notify the board of directors of the charter school of the
17.19proposed action in writing. The notice shall state the grounds for the proposed action in
17.20reasonable detail and that the charter school's board of directors may request in writing an
17.21informal hearing before the sponsor authorizer within 14 15 business days of receiving
17.22notice of nonrenewal or termination of the contract. Failure by the board of directors to
17.23make a written request for a hearing within the 14-day 15 business-day period shall be
17.24treated as acquiescence to the proposed action. Upon receiving a timely written request
17.25for a hearing, the sponsor authorizer shall give reasonable ten business days' notice to
17.26the charter school's board of directors of the hearing date. The sponsor authorizer shall
17.27conduct an informal hearing before taking final action. The sponsor authorizer shall take
17.28final action to renew or not renew a contract by the last day of classes in the school year.
17.29If the sponsor is a local board, the school's board of directors may appeal the sponsor's
17.30decision to the commissioner no later than 20 business days before the proposed date for
17.31terminating the contract or the end date of the contract.
17.32(b) A contract may be terminated or not renewed upon any of the following grounds:
17.33(1) failure to meet the requirements for pupil performance contained in the contract;
17.34(2) failure to meet generally accepted standards of fiscal management;
17.35(3) violations of law; or
17.36(4) other good cause shown.
18.1If a contract is terminated or not renewed under this paragraph, the school must be
18.2dissolved according to the applicable provisions of chapter 308A or 317A, except when
18.3the commissioner approves the decision of a different eligible sponsor to authorize the
18.4charter school.
18.5(c) If at the end of a contract term, either the sponsor or authorizer and the charter
18.6school board of directors wants mutually agree to voluntarily terminate or not renew
18.7the contract, a change in sponsors authorizers is allowed if the commissioner approves
18.8the decision of transfer to a different eligible sponsor approved authorizer to authorize
18.9charter the charter school. The party intending to terminate the contract must notify the
18.10other party and the commissioner of its intent at least 90 days before the date on which the
18.11contract ends. Both parties jointly must submit their intent in writing to the commissioner
18.12to mutually terminate the contract. The sponsor authorizer that is a party to the existing
18.13contract at least must inform the approved different eligible sponsor new authorizer about
18.14the fiscal and operational status, and student performance of the school. If no different
18.15eligible sponsor transfer of authorizer is approved, the school must be dissolved according
18.16to applicable law and the terms of the contract.
18.17(d) The commissioner, after providing reasonable notice to the board of directors of
18.18a charter school and the existing sponsor authorizer, and after providing an opportunity for
18.19a public hearing, may terminate the existing sponsorial relationship contract between the
18.20authorizer and the charter school board if the charter school has a history of:
18.21(1) failure to meet pupil performance requirements contained in the contract;
18.22(2) financial mismanagement or failure to meet generally accepted standards of
18.23fiscal management; or
18.24(2) (3) repeated or major violations of the law.
18.25    (e) If the commissioner terminates a charter school contract because the authorizer
18.26fails to comply with subdivision 3, paragraph (g), the commissioner shall provide the
18.27charter school with information about other eligible authorizers.
18.28    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
18.29entering a lease of real property with a related party as defined in subdivision 26, unless
18.30the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter
18.31308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).
18.32    (b) For purposes of this section and section 124D.11:
18.33(1) "related party" means an affiliate or immediate relative of the other party in
18.34question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
18.35(2) "affiliate" means a person that directly or indirectly, through one or more
18.36intermediaries, controls, is controlled by, or is under common control with another person;
19.1(3) "immediate family" means an individual whose relationship by blood, marriage,
19.2adoption, or partnering is no more remote than first cousin;
19.3(4) "person" means an individual or entity of any kind; and
19.4(5) "control" means the ability to affect the management, operations, or policy
19.5actions or decisions of a person, whether through ownership of voting securities, by
19.6contract, or otherwise.
19.7(c) A lease of real property to be used for a charter school, not excluded in paragraph
19.8(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
19.9section 124D.10, subdivision 23a."
19.10    (c) (d) If a charter school enters into as lessee a lease with a related party and the
19.11charter school subsequently closes, the commissioner has the right to recover from the
19.12lessor any lease payments in excess of those that are reasonable under section 124D.11,
19.13subdivision 4 , clause (1).
19.14    Subd. 24. Pupil enrollment upon nonrenewal or termination of charter school
19.15contract. If a contract is not renewed or is terminated according to subdivision 23, a
19.16pupil who attended the school, siblings of the pupil, or another pupil who resides in the
19.17same place as the pupil may enroll in the resident district or may submit an application
19.18to a nonresident district according to section 124D.03 at any time. Applications and
19.19notices required by section 124D.03 must be processed and provided in a prompt manner.
19.20The application and notice deadlines in section 124D.03 do not apply under these
19.21circumstances. The closed charter school must transfer the student's educational records
19.22within ten business days of closure to the student's school district of residence where the
19.23records must be retained or transferred under section 120A.22, subdivision 7.
19.24    Subd. 25. Extent of specific legal authority. (a) The board of directors of a charter
19.25school may sue and be sued.
19.26(b) The board may not levy taxes or issue bonds.
19.27(c) The commissioner, a sponsor an authorizer, members of the board of a sponsor
19.28an authorizer in their official capacity, and employees of a sponsor an authorizer are
19.29immune from civil or criminal liability with respect to all activities related to a charter
19.30school they approve or sponsor authorize. The board of directors shall obtain at least
19.31the amount of and types of insurance required by the contract, according to subdivision
19.326. up to the applicable tort liability limits under chapter 466. The charter school board
19.33must submit a copy of the insurance policy to its authorizer before starting operations.
19.34The charter school board must submit changes in its insurance carrier or policy to its
19.35authorizer within 20 business days of the change.
19.36    Subd. 26. Definitions. For purposes of this section and section 124D.11:
20.1    (1) A "Related party" is an affiliate or close relative of the other party in question, an
20.2affiliate of a close relative, or a close relative of an affiliate.
20.3    (2) "Affiliate" means a person that directly, or indirectly through one or more
20.4intermediaries, controls, or is controlled by, or is under common control with, another
20.5person.
20.6    (3) "Close relative" means an individual whose relationship by blood, marriage, or
20.7adoption to another individual is no more remote than first cousin.
20.8    (4) "Person" means an individual or entity of any kind.
20.9    (5) "Control" includes the terms "controlling," "controlled by," and "under common
20.10control with" and means the possession, direct or indirect, of the power to direct or cause
20.11the direction of the management, operations, or policies of a person, whether through the
20.12ownership of voting securities, by contract, or otherwise.

20.13    Sec. 2. Minnesota Statutes 2008, section 124D.11, subdivision 9, is amended to read:
20.14    Subd. 9. Payment of aids to charter schools. (a) Notwithstanding section
20.15127A.45, subdivision 3 , aid payments for the current fiscal year to a charter school not in
20.16its first year of operation shall be of an equal amount on each of the 23 24 payment dates.
20.17A charter school in its first year of operation shall receive, on its first payment date, ten
20.18percent of its cumulative amount guaranteed for the year and 22 payments of an equal
20.19amount thereafter the sum of which shall equal the current year aid payment percentage
20.20multiplied by the cumulative amount guaranteed.
20.21(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing
20.22operation on or prior to the end of a school year, the current year aid payment percentage
20.23multiplied by the amount due for the school year may be paid to the school after audit
20.24of prior fiscal year and current fiscal year pupil counts. June 30 of a school year, for the
20.25payment periods occurring after the school ceases serving students, the commissioner shall
20.26withhold the estimated state aid owed the school. The charter school board of directors and
20.27authorizer must submit to the commissioner a closure plan under chapter 308A or 317A,
20.28and financial information about the school's liabilities and assets. After receiving the
20.29closure plan, financial information, an audit of pupil counts, and documentation of lease
20.30expenditures, and monitoring of special education expenditures, the commissioner may
20.31release cash withheld and may continue regular payments up to the current year payment
20.32percentages if further amounts are owed. If, based on audits and monitoring, the school
20.33received state aid in excess of the amount owed, the commissioner shall retain aid withheld
20.34sufficient to eliminate the aid overpayment. For a charter school ceasing operations
20.35prior to, or at the end of, a school year, notwithstanding section 127A.45, subdivision
21.13, preliminary final payments may be made after receiving the closure plan, audit of
21.2pupil counts, monitoring of special education expenditures, and documentation of lease
21.3expenditures, and school submission of Uniform Financial Accounting and Reporting
21.4Standards (UFARS) financial data for the final year of operation. Final payment may be
21.5made upon receipt of audited financial statements under section 123B.77, subdivision 3.
21.6(c) If a charter school fails to comply with the commissioner's directive to return, for
21.7cause, federal or state grant funds administered by the department, the commissioner may
21.8withhold an amount of state aid sufficient to satisfy the directive.
21.9(d) If, within the timeline under section 471.425, a charter school fails to pay the state
21.10of Minnesota, a school district, intermediate school district or service cooperative after
21.11receiving an undisputed invoice for goods and services, the commissioner may withhold
21.12an amount of state aid sufficient to satisfy the claim and shall distribute the withheld
21.13aid to the interested state agency, school district, intermediate school district, or service
21.14cooperative. An interested state agency, school district, intermediate school district, or
21.15education cooperative shall notify the commissioner when a charter school fails to pay an
21.16undisputed invoice within 75 business days of when it received the original invoice.
21.17(d) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent
21.18of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day
21.19of student attendance for that school year.
21.20(d) (e) In order to receive state aid payments under this subdivision, a charter school
21.21in its first three years of operation must submit a school calendar in the form and manner
21.22requested by the department and a quarterly report to the Department of Education. The
21.23report must list each student by grade, show the student's start and end dates, if any,
21.24with the charter school, and for any student participating in a learning year program,
21.25the report must list the hours and times of learning year activities. The report must be
21.26submitted not more than two weeks after the end of the calendar quarter to the department.
21.27The department must develop a Web-based reporting form for charter schools to use
21.28when submitting enrollment reports. A charter school in its fourth and subsequent year of
21.29operation must submit a school calendar and enrollment information to the department in
21.30the form and manner requested by the department.
21.31(e) (f) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
21.32school and satisfaction of creditors, cash and investment balances remaining shall be
21.33returned to the state.

21.34    Sec. 3. REVIVAL AND REENACTMENT.
21.35Minnesota Statutes, section 124D.10, subdivision 2a, is revived and reenacted
21.36effective retroactively and without interruption from June 30, 2007.

22.1    Sec. 4. EFFECTIVE DATE.
22.2This act is effective the day following final enactment and applies beginning August
22.31, 2009."