1.1.................... moves to amend H.F. No. 3176 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 3,
1.4is amended to read:
1.5    Subd. 3. Authorizer. (a) For purposes of this section, the terms defined in this
1.6subdivision have the meanings given them.
1.7"Application" to receive approval as an authorizer means the proposal an eligible
1.8authorizer submits to the commissioner under paragraph (c) before that authorizer is able
1.9to submit any affidavit to charter to a school.
1.10"Application" under subdivision 4 means the charter school business plan a
1.11school developer submits to an authorizer for approval to establish a charter school that
1.12documents the school developer's mission statement, school purposes, program design,
1.13financial plan, governance and management structure, and background and experience,
1.14plus any other information the authorizer requests. The application also shall include a
1.15"statement of assurances" of legal compliance prescribed by the commissioner.
1.16"Affidavit" means a written statement the authorizer submits to the commissioner
1.17for approval to establish a charter school under subdivision 4 attesting to its review and
1.18approval process before chartering a school.
1.19"Affidavit" means the form an authorizer submits to the commissioner that is a
1.20precondition to a charter school organizing an affiliated nonprofit building corporation
1.21under subdivision 17a.
1.22(b) The following organizations may authorize one or more charter schools:
1.23(1) a school board; intermediate school district school board; education district
1.24organized under sections 123A.15 to 123A.19;
1.25(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code
1.26of 1986, excluding a nonpublic sectarian or religious institution, any person other than a
1.27natural person that directly or indirectly, through one or more intermediaries, controls,
2.1is controlled by, or is under common control with the nonpublic sectarian or religious
2.2institution, and any other charitable organization under this clause that in the federal IRS
2.3Form 1023, Part IV, describes activities indicating a religious purpose, that:
2.4(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on
2.5Foundations;
2.6(ii) is registered with the attorney general's office;
2.7(iii) reports an end-of-year fund balance of at least $2,000,000; and
2.8(iv) is incorporated in the state of Minnesota;
2.9(3) a Minnesota private college, notwithstanding clause (2), that grants two- or
2.10four-year degrees and is registered with the Minnesota Office of Higher Education under
2.11chapter 136A; community college, state university, or technical college governed by the
2.12Board of Trustees of the Minnesota State Colleges and Universities; or the University of
2.13Minnesota; or
2.14(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905,
2.15and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code
2.16of 1986, may authorize one or more charter schools if the charter school has operated
2.17for at least three years under a different authorizer and if the nonprofit corporation has
2.18existed for at least 25 years.
2.19(5) no more than three single-purpose sponsors that are charitable, nonsectarian
2.20organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and
2.21incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible
2.22organizations interested in being approved as a sponsor under this paragraph must submit a
2.23proposal to the commissioner that includes the provisions of paragraph (c) and a five-year
2.24financial plan. Such authorizers shall consider and approve applications using the criteria
2.25provided in subdivision 4 and shall not limit the applications it solicits, considers, or
2.26approves to any single curriculum, learning program, or method.
2.27(c) An eligible authorizer under this subdivision must apply to the commissioner for
2.28approval as an authorizer before submitting any affidavit to the commissioner to charter
2.29a school. The application for approval as a charter school authorizer must demonstrate
2.30the applicant's ability to implement the procedures and satisfy the criteria for chartering a
2.31school under this section. The commissioner must approve or disapprove an application
2.32within 60 business days of the application deadline. If the commissioner disapproves
2.33the application, the commissioner must notify the applicant of the deficiencies and the
2.34applicant then has 20 business days to address the deficiencies to the commissioner's
2.35satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes
3.1an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for
3.2approval, must consider the applicant's:
3.3(1) capacity and infrastructure;
3.4(2) application criteria and process;
3.5(3) contracting process;
3.6(4) ongoing oversight and evaluation processes; and
3.7(5) renewal criteria and processes.
3.8(d) The affidavit to be submitted to and evaluated by the commissioner must include
3.9at least the following:
3.10(1) how chartering schools is a way for the organization to carry out its mission;
3.11(2) a description of the capacity of the organization to serve as a sponsor, including
3.12the personnel who will perform the sponsoring duties, their qualifications, the amount of
3.13time they will be assigned to this responsibility, and the financial resources allocated
3.14by the organization to this responsibility;
3.15(3) a description of the application and review process the authorizer will use to make
3.16decisions regarding the granting of charters, which will include at least the following:
3.17(i) how the statutory purposes defined in subdivision 1 are addressed;
3.18(ii) the mission, goals, program model, and student performance expectations;
3.19(iii) an evaluation plan for the school that includes criteria for evaluating educational,
3.20organizational, and fiscal plans;
3.21(iv) the school's governance plan;
3.22(v) the financial management plan; and
3.23(vi) the administration and operations plan;
3.24(4) a description of the type of contract it will arrange with the schools it charters
3.25that meets the provisions of subdivision 6 and defines the rights and responsibilities of the
3.26charter school for governing its educational program, controlling its funds, and making
3.27school management decisions;
3.28(5) the process to be used for providing ongoing oversight of the school consistent
3.29with the contract expectations specified in clause (4) that assures that the schools chartered
3.30are complying with both the provisions of applicable law and rules, and with the contract;
3.31(6) the process for making decisions regarding the renewal or termination of
3.32the school's charter based on evidence that demonstrates the academic, organizational,
3.33and financial competency of the school, including its success in increasing student
3.34achievement and meeting the goals of the charter school agreement; and
3.35(7) an assurance specifying that the organization is committed to serving as a
3.36sponsor for the full five-year term.
4.1A disapproved applicant under this paragraph may resubmit an application during a
4.2future application period.
4.3(e) The authorizer must participate in department-approved training.
4.4(f) An authorizer that chartered a school before August 1, 2009, must apply by
4.5June 30, 2011, to the commissioner for approval, under paragraph (c), to continue as an
4.6authorizer under this section. For purposes of this paragraph, an authorizer that fails to
4.7submit a timely application is ineligible to charter a school.
4.8(g) The commissioner shall review an authorizer's performance every five years in
4.9a manner and form determined by the commissioner and may review an authorizer's
4.10performance more frequently at the commissioner's own initiative or at the request of a
4.11charter school operator, charter school board member, or other interested party. The
4.12commissioner, after completing the review, shall transmit a report with findings to the
4.13authorizer. If, consistent with this section, the commissioner finds that an authorizer
4.14has not fulfilled the requirements of this section, the commissioner may subject the
4.15authorizer to corrective action, which may include terminating the contract with the
4.16charter school board of directors of a school it chartered. The commissioner must notify
4.17the authorizer in writing of any findings that may subject the authorizer to corrective
4.18action and the authorizer then has 15 business days to request an informal hearing before
4.19the commissioner takes corrective action.
4.20(h) The commissioner may at any time take corrective action against an authorizer,
4.21including terminating an authorizer's ability to charter a school for:
4.22(1) failing to demonstrate the criteria under paragraph (c) under which the
4.23commissioner approved the authorizer;
4.24(2) violating a term of the chartering contract between the authorizer and the charter
4.25school board of directors; or
4.26(3) unsatisfactory performance as an approved authorizer.
4.27EFFECTIVE DATE.This section is effective the day following final enactment.

4.28    Sec. 2. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4, is
4.29amended to read:
4.30    Subd. 4. Formation of school. (a) An authorizer, after receiving an application from
4.31a school developer, may charter a licensed teacher under section 122A.18, subdivision
4.321 , or a group of individuals that includes one or more licensed teachers under section
4.33122A.18, subdivision 1 , to operate a school subject to the commissioner's approval of the
4.34authorizer's affidavit under paragraph (b). The school must be organized and operated
4.35as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and
5.1the provisions under the applicable chapter shall apply to the school except as provided
5.2in this section.
5.3Notwithstanding sections 465.717 and 465.719, a school district, subject to this
5.4section and section 124D.11, may create a corporation for the purpose of establishing a
5.5charter school.
5.6    (b) Before the operators may establish and operate a school, the authorizer must file
5.7an affidavit with the commissioner stating its intent to charter a school. An authorizer
5.8must file a separate affidavit for each school it intends to charter. The affidavit must
5.9state the terms and conditions under which the authorizer would charter a school and
5.10how the authorizer intends to oversee the fiscal and student performance of the charter
5.11school and to comply with the terms of the written contract between the authorizer
5.12and the charter school board of directors under subdivision 6. The commissioner must
5.13approve or disapprove the authorizer's affidavit within 60 business days of receipt of the
5.14affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify
5.15the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business
5.16days to address the deficiencies. If the authorizer does not address deficiencies to the
5.17commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain
5.18commissioner approval precludes an authorizer from chartering the school that is the
5.19subject of this affidavit.
5.20    (c) The authorizer may prevent an approved charter school from opening for
5.21operation if, among other grounds, the charter school violates this section or does not meet
5.22the ready-to-open standards that are part of the authorizer's oversight and evaluation
5.23process or are stipulated in the charter school contract.
5.24(d) The operators authorized to organize and operate a school, before entering into a
5.25contract or other agreement for professional or other services, goods, or facilities, must
5.26incorporate as a cooperative under chapter 308A or as a nonprofit corporation under
5.27chapter 317A and must establish a board of directors composed of at least five members
5.28who are not related parties until a timely election for members of the ongoing charter
5.29school board of directors is held according to the school's articles and bylaws under
5.30paragraph (f). A charter school board of directors must be composed of at least five
5.31members who are not related parties. Staff members employed at the school, including
5.32teachers providing instruction under a contract with a cooperative, and all parents or legal
5.33guardians of children enrolled in the school are the voters eligible to elect the members
5.34of the school's board of directors. A charter school must notify eligible voters of the
5.35school board election dates at least 30 days before the election. Board of director meetings
5.36must comply with chapter 13D.
6.1    (e) Upon the request of an individual, the charter school must make available in
6.2a timely fashion the minutes of meetings of the board of directors, and of members
6.3and committees having any board-delegated authority; financial statements showing all
6.4operations and transactions affecting income, surplus, and deficit during the school's last
6.5annual accounting period; and a balance sheet summarizing assets and liabilities on the
6.6closing date of the accounting period. A charter school also must post on its official Web
6.7site information identifying its authorizer and indicate how to contact that authorizer and
6.8include that same information about its authorizer in other school materials that it makes
6.9available to the public.
6.10(f) Every charter school board member shall attend department-approved training
6.11on board governance, the board's role and responsibilities, employment policies and
6.12practices, and financial management. A board member who does not begin the required
6.13training within six months of being seated and complete the required training within 12
6.14months of being seated on the board is ineligible to continue to serve as a board member.
6.15(g) The ongoing board must be elected before the school completes its third year
6.16of operation. Board elections must be held during a time when school is in session. The
6.17charter school board of directors shall be composed of at least five nonrelated members
6.18and include: (i) at least one licensed teacher employed at the school or a licensed teacher
6.19providing instruction under a contact between the charter school and a cooperative; (ii) the
6.20parent or legal guardian of a student enrolled in the charter school; and (iii) an interested
6.21community member who is not employed by the charter school and does not have a
6.22child enrolled in the school. The board may be a teacher majority board composed of
6.23teachers described in this paragraph. The chief financial officer and the chief administrator
6.24are ex-officio nonvoting board members. Board bylaws shall outline the process and
6.25procedures for changing the board's governance model, consistent with chapter 317A. A
6.26board may change its governance model only:
6.27(1) by a majority vote of the board of directors and the licensed teachers employed
6.28by the school, including licensed teachers providing instruction under a contract between
6.29the school and a cooperative; and
6.30(2) with the authorizer's approval.
6.31Any change in board governance must conform with the board structure established
6.32under this paragraph.
6.33(h) The granting or renewal of a charter by an authorizer must not be conditioned
6.34upon the bargaining unit status of the employees of the school.
6.35(i) The granting or renewal of a charter school by an authorizer must not be
6.36contingent on the charter school being required to contract, lease, or purchase services
7.1from the authorizer. Any potential contract, lease, or purchase of service from an
7.2authorizer must be disclosed to the commissioner, accepted through an open bidding
7.3process, and be a separate contract from the charter contract. The school must document
7.4the open bidding process. An authorizer must not enter into a contract to provide
7.5management and financial services for a school that it authorizes, unless the school
7.6documents that it received at least two competitive bids.
7.7    (j) An authorizer may permit the board of directors of a charter school to expand
7.8the operation of the charter school to additional sites or to add additional grades at the
7.9school beyond those described in the authorizer's original affidavit as approved by
7.10the commissioner only after submitting a supplemental affidavit for approval to the
7.11commissioner in a form and manner prescribed by the commissioner. The supplemental
7.12affidavit must show that:
7.13    (1) the expansion proposed by the charter school is supported by need and projected
7.14enrollment;
7.15(2) the charter school expansion is warranted, at a minimum, by longitudinal data
7.16demonstrating students' improved academic performance and growth on statewide
7.17assessments under chapter 120B;
7.18    (3) the charter school is fiscally sound and has the financial capacity to implement
7.19the proposed expansion; and
7.20    (4) the authorizer finds that the charter school has the management capacity to
7.21carry out its expansion.
7.22    (k) The commissioner shall have 30 business days to review and comment on the
7.23supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in
7.24the supplemental affidavit and the authorizer then has 30 business days to address, to the
7.25commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school
7.26may not expand grades or add sites until the commissioner has approved the supplemental
7.27affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.
7.28EFFECTIVE DATE.This section is effective the day following final enactment.

7.29    Sec. 3. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4a, is
7.30amended to read:
7.31    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving as a
7.32member of the charter school board of directors if the individual, an immediate family
7.33member, or the individual's partner is an owner, employee or agent of, or a contractor with
7.34a for-profit or nonprofit entity or an individual with whom the charter school contracts,
7.35directly or indirectly, for professional services, goods, or facilities. A violation of this
8.1prohibition renders a contract voidable at the option of the commissioner or the charter
8.2school board of directors. A member of a charter school board of directors who violates
8.3this prohibition is individually liable to the charter school for any damage caused by
8.4the violation.
8.5(b) No member of the board of directors, employee, officer, or agent of a charter
8.6school shall participate in selecting, awarding, or administering a contract if a conflict
8.7of interest exists. A conflict exists when:
8.8(1) the board member, employee, officer, or agent;
8.9(2) the immediate family of the board member, employee, officer, or agent;
8.10(3) the partner of the board member, employee, officer, or agent; or
8.11(4) an organization that employs, or is about to employ any individual in clauses
8.12(1) to (3),
8.13has a financial or other interest in the entity with which the charter school is contracting.
8.14A violation of this prohibition renders the contract void.
8.15(c) Any employee, agent, or board member of the authorizer who participates
8.16in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
8.17nonrenewal process or decision is ineligible to serve on the board of directors of a school
8.18chartered by that authorizer.
8.19(d) An individual may serve as a member of the board of directors if no conflict of
8.20interest under paragraph (a) exists.
8.21(e) A charter school board member or employee must not receive any remuneration
8.22in conjunction with a financial transaction involving the charter school.
8.23(f) The conflict of interest provisions under this subdivision do not apply to
8.24compensation paid to a teacher employed by the charter school who also serves as a
8.25member of the board of directors.
8.26(f) (g) The conflict of interest provisions under this subdivision do not apply to a
8.27teacher who provides services to a charter school through a cooperative formed under
8.28chapter 308A when the teacher also serves on the charter school board of directors.
8.29EFFECTIVE DATE.This section is effective the day following final enactment.

8.30    Sec. 4. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 6, is
8.31amended to read:
8.32    Subd. 6. Charter contract. The authorization for a charter school must be in the
8.33form of a written contract signed by the authorizer and the board of directors of the charter
8.34school. The contract must be completed within 45 business days of the commissioner's
8.35approval of the authorizer's affidavit. The authorizer shall submit to the commissioner a
9.1copy of the signed charter contract within ten business days of its execution. The contract
9.2for a charter school must be in writing and contain at least the following:
9.3(1) a declaration of the purposes in subdivision 1 that the school intends to carry out
9.4and how the school will report its implementation of those purposes;
9.5(2) a description of the school program and the specific academic and nonacademic
9.6outcomes that pupils must achieve;
9.7(3) a statement of admission policies and procedures;
9.8(4) a governance, management, and administration plan for the school;
9.9(5) signed agreements from charter school board members to comply with all
9.10federal and state laws governing organizational, programmatic, and financial requirements
9.11applicable to charter schools;
9.12(6) the criteria, processes, and procedures that the authorizer will use for ongoing
9.13oversight of operational, financial, and academic performance;
9.14(7) the performance evaluation that is a prerequisite for reviewing a charter contract
9.15under 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 preoperational planning year, and up to five years for a renewed contract
9.20if warranted by the school's academic, financial, and operational performance;
9.21(10) 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;
9.26(11) the process and criteria the authorizer intends to use to monitor and evaluate the
9.27fiscal and student performance of the charter school, consistent with subdivision 15; and
9.28(12) the plan for an orderly closing of the school under chapter 308A or 317A, if the
9.29closure is a termination for cause, a voluntary termination, or a nonrenewal of the contract,
9.30and that includes establishing the responsibilities of the school board of directors and the
9.31authorizer and notifying the commissioner, authorizer, school district in which the charter
9.32school is located, and parents of enrolled students about the closure, the transfer of student
9.33records to students' resident districts, and procedures for closing financial operations.
9.34EFFECTIVE DATE.This section is effective the day following final enactment.

10.1    Sec. 5. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 8, is
10.2amended to read:
10.3    Subd. 8. Federal, state, and local requirements. (a) A charter school shall meet all
10.4federal, state, and local health and safety requirements applicable to school districts.
10.5(b) A school must comply with statewide accountability requirements governing
10.6standards and assessments in chapter 120B.
10.7(c) A school sponsored by a school board may be located in any district, unless the
10.8school board of the district of the proposed location disapproves by written resolution.
10.9(d) A charter school must be nonsectarian in its programs, admission policies,
10.10employment practices, and all other operations. A sponsor may not authorize a charter
10.11school or program that is affiliated with a nonpublic sectarian school or a religious
10.12institution. A charter school student must be released for religious instruction, consistent
10.13with section 120A.22, subdivision 12, clause (3).
10.14(e) Charter schools must not be used as a method of providing education or
10.15generating revenue for students who are being home-schooled.
10.16(f) The primary focus of a charter school must be to provide a comprehensive
10.17program of instruction for at least one grade or age group from five through 18 years
10.18of age. Instruction may be provided to people younger than five years and older than
10.1918 years of age.
10.20(g) A charter school may not charge tuition.
10.21(h) A charter school is subject to and must comply with chapter 363A and section
10.22121A.04 .
10.23(i) A charter school is subject to and must comply with the Pupil Fair Dismissal
10.24Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections
10.25123B.34 to 123B.39.
10.26(j) A charter school is subject to the same financial audits, audit procedures, and
10.27audit requirements as a district. Audits must be conducted in compliance with generally
10.28accepted governmental auditing standards, the Federal Single Audit Act, if applicable,
10.29and section 6.65. A charter school is subject to and must comply with sections 15.054;
10.30118A.01 ; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 471.38; 471.391; 471.392; and
10.31471.425 . The audit must comply with the requirements of sections 123B.75 to 123B.83,
10.32except to the extent deviations are necessary because of the program at the school.
10.33Deviations must be approved by the commissioner and authorizer. The Department of
10.34Education, state auditor, legislative auditor, or authorizer may conduct financial, program,
10.35or compliance audits. A charter school determined to be in statutory operating debt under
10.36sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4.
11.1(k) A charter school is a district for the purposes of tort liability under chapter 466.
11.2(l) A charter school must comply with chapters 13 and 13D; and sections 120A.22,
11.3subdivision 7 ; 121A.75; and 260B.171, subdivisions 3 and 5.
11.4(m) A charter school is subject to the Pledge of Allegiance requirement under
11.5section 121A.11, subdivision 3.
11.6(n) A charter school offering online courses or programs must comply with section
11.7124D.095 .
11.8(o) A charter school and charter school board of directors are subject to chapter 181.
11.9(p) A charter school must comply with section 120A.22, subdivision 7, governing
11.10the transfer of students' educational records and sections 138.163 and 138.17 governing
11.11the management of local records.
11.12(q) A charter school eligible to seek endorsement from the Charter School Facilities
11.13Authority under section 124D.1105 must receive a positive review and comment under
11.14section 123B.71, subdivision 8, for facilities projects in excess of $1,400,000 and must
11.15submit a proposal to the commissioner that contains the information required under
11.16section 123B.71, subdivision 9, to be eligible to issue bonds under section 124D.1108.
11.17EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
11.18and later.

11.19    Sec. 6. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 17, is
11.20amended to read:
11.21    Subd. 17. Leased space. (a) A charter school may lease space from an independent
11.22or special school board eligible to be an authorizer, other public organization, private,
11.23nonprofit nonsectarian organization, private property owner, or a sectarian organization if
11.24the leased space is constructed as a school facility. A charter school may not lease space
11.25from any organization whose primary purpose is to provide a facility for the charter school
11.26or which has financed the acquisition of the school facility through rent paid by the charter
11.27school from building lease aid under section 124D.11, subdivision 4. The department must
11.28review and approve or disapprove leases in a timely manner.
11.29(b) If an independent or special school board finds it advantageous to enter into a
11.30lease agreement with a charter school, it may request the Department of Education to
11.31count the charter school student data as part of the school district data for the purposes of
11.32determining adequate yearly progress. As part of the district's request to the Department
11.33of Education, it must provide the department with the resolution from the district school
11.34board and a resolution from the charter school board stating the agreement for inclusion
12.1of the charter school data into the district data for the purposes of determining adequate
12.2yearly progress.
12.3(c) Notwithstanding paragraph (a), a charter school that is eligible to receive
12.4building lease transition aid under section 124D.11, subdivision 4d, may lease space
12.5from an independent or special school board eligible to be an authorizer or other public
12.6organization, private, nonprofit nonsectarian organization, private property owner, or
12.7a sectarian organization, if the leased space is constructed as a school facility. The
12.8department must review and approve or disapprove leases in a timely manner.
12.9EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
12.10and later.

12.11    Sec. 7. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 23, is
12.12amended to read:
12.13    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a)
12.14The duration of the contract with an authorizer must be for the term contained in the
12.15contract according to subdivision 6. The authorizer may or may not renew a contract at
12.16the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally
12.17terminate a contract during the term of the contract for any ground listed in paragraph
12.18(b). At least 60 days before not renewing or terminating a contract, the authorizer shall
12.19notify the board of directors of the charter school of the proposed action in writing. The
12.20notice shall state the grounds for the proposed action in reasonable detail and that the
12.21charter school's board of directors may request in writing an informal hearing before the
12.22authorizer within 15 business days of receiving notice of nonrenewal or termination of the
12.23contract. Failure by the board of directors to make a written request for a hearing within
12.24the 15-business-day period shall be treated as acquiescence to the proposed action. Upon
12.25receiving a timely written request for a hearing, the authorizer shall give ten business days'
12.26notice to the charter school's board of directors of the hearing date. The authorizer shall
12.27conduct an informal hearing before taking final action. The authorizer shall take final
12.28action to renew or not renew a contract no later than 20 business days before the proposed
12.29date for terminating the contract or the end date of the contract.
12.30(b) A contract may be terminated or not renewed upon any of the following grounds:
12.31(1) failure to meet the requirements for pupil performance contained in the contract;
12.32(2) failure to meet generally accepted standards of fiscal management;
12.33(3) violations of law; or
12.34(4) other good cause shown.
13.1If a contract is terminated or not renewed under this paragraph, the school must be
13.2dissolved according to the applicable provisions of chapter 308A or 317A.
13.3(c) If the sponsor and the charter school board of directors mutually agree to
13.4terminate or not renew the contract, a change in sponsors is allowed if the commissioner
13.5approves the transfer to a different eligible authorizer to authorize the charter school.
13.6Both parties must jointly submit their intent in writing to the commissioner to mutually
13.7terminate the contract. The sponsor that is a party to the existing contract at least must
13.8inform the approved different eligible sponsor about the fiscal and operational status
13.9and student performance of the school. Before the commissioner determines whether
13.10to approve a transfer of authorizer, the commissioner first must determine whether the
13.11charter school and prospective new authorizer can identify and effectively resolve those
13.12circumstances causing the previous authorizer and the charter school to mutually agree to
13.13terminate the contract. If no transfer of sponsor is approved, the school must be dissolved
13.14according to applicable law and the terms of the contract.
13.15(d) The commissioner, after providing reasonable notice to the board of directors of
13.16a charter school and the existing authorizer, and after providing an opportunity for a public
13.17hearing, may terminate the existing contract between the authorizer and the charter school
13.18board if the charter school has a history of:
13.19(1) failure to meet pupil performance requirements contained in the contract;
13.20(2) financial mismanagement or failure to meet generally accepted standards of
13.21fiscal management; or
13.22(3) repeated or major violations of the law.
13.23    (e) If the commissioner terminates a charter school contract under subdivision 3,
13.24paragraph (g), the commissioner shall provide the charter school with information about
13.25other eligible authorizers.
13.26EFFECTIVE DATE.This section is effective the day following final enactment.

13.27    Sec. 8. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 23a,
13.28is amended to read:
13.29    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
13.30entering a lease of real property with a related party unless the lessor is a nonprofit
13.31corporation under chapter 317A or a cooperative under chapter 308A, and the lease cost is
13.32reasonable under section 124D.11, subdivision 4, clause (1).
13.33    (b) For purposes of this section and section 124D.11:
13.34(1) "related party" means an affiliate or immediate relative of the other party in
13.35question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
14.1(2) "affiliate" means a person that directly or indirectly, through one or more
14.2intermediaries, controls, is controlled by, or is under common control with another person;
14.3(3) "immediate family" means an individual whose relationship by blood, marriage,
14.4adoption, or partnering is no more remote than first cousin;
14.5(4) "person" means an individual or entity of any kind; and
14.6(5) "control" means the ability to affect the management, operations, or policy
14.7actions or decisions of a person, whether through ownership of voting securities, by
14.8contract, or otherwise.
14.9(c) A lease of real property to be used for a charter school, not excluded in paragraph
14.10(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
14.11section 124D.10, subdivision 23a."
14.12    (d) If a charter school enters into as lessee a lease with a related party and the
14.13charter school subsequently closes, the commissioner has the right to recover from the
14.14lessor any lease payments in excess of those that are reasonable under section 124D.11,
14.15subdivision 4 , clause (1).
14.16EFFECTIVE DATE.This section is effective the day following final enactment.

14.17    Sec. 9. [124D.101] VACANT BUILDING INVENTORY.
14.18The Department of Administration, in conjunction with the Department of
14.19Education, shall annually publish a list of vacant and unused buildings and vacant and
14.20unused portions of buildings that are owned by the state or by school districts in the state
14.21and that may be suitable for the long-term operation of a charter school. The Department
14.22of Education shall make the list available to applicants for charter schools and to existing
14.23charter schools. The list shall include the address of each building, a short description
14.24of the building, and the name of the owner of the building. Nothing in this section
14.25requires the owner of a building on the list to sell or lease the building or a portion of the
14.26building to a charter school or to any other school or to any other prospective buyer or
14.27tenant. The Department of Education may request information from school districts to
14.28compile the vacant building list under this section. School districts must comply with
14.29the department's request.
14.30EFFECTIVE DATE.This section is effective the day following final enactment.

14.31    Sec. 10. Minnesota Statutes 2008, section 124D.11, subdivision 4, is amended to read:
14.32    Subd. 4. Building lease aid. (a) When a charter school finds it economically
14.33advantageous to rent or lease a building or land for any instructional purposes and it
15.1determines that the total operating capital revenue under section 126C.10, subdivision 13,
15.2is insufficient for this purpose, it may apply to the commissioner for building lease aid
15.3for this purpose. The commissioner must review and either approve or deny a lease aid
15.4application using the following criteria:
15.5(1) the reasonableness of the price based on current market values;
15.6(2) the extent to which the lease conforms to applicable state laws and rules; and
15.7(3) the appropriateness of the proposed lease in the context of the space needs and
15.8financial circumstances of the charter school; and
15.9(4) any other information the commissioner requests of the charter school in order to
15.10implement this subdivision including, at a minimum, the following:
15.11(i) the owner of the building;
15.12(ii) a list of the lessor's current board members or principals, whichever applies;
15.13(iii) a copy of the lessor's annual audit or annual report, whichever applies;
15.14(iv) the terms of the proposed lease and a copy of the proposed lease;
15.15(v) the enrollment projections of the school;
15.16(vi) the long-range strategic and financial plan of the school;
15.17(vii) a copy of the certificate of occupancy from the local jurisdiction; and
15.18(viii) a copy of the state fire marshal's fire inspection report or orders and
15.19accompanying documentation of costs associated with bringing the proposed lease site
15.20up to code.
15.21(b) If the commissioner determines that a charter school has not provided
15.22information required under this subdivision, the commissioner must deny the charter
15.23school's lease aid application under this subdivision.
15.24(c) If the commissioner determines that the primary purpose of the organization
15.25proposing to lease a building or land to the charter school is to provide a facility for
15.26the charter school, or the organization has financed the acquisition of the school facility
15.27through rent paid by the charter school from building lease aid under this subdivision, the
15.28commissioner must deny the charter school's lease aid application under this subdivision.
15.29    (d) A charter school must not use the building lease aid it receives for custodial,
15.30maintenance service, utility, or other operating costs. The amount of building lease aid per
15.31pupil unit served for a charter school for any year shall not exceed the lesser of (a) (1) 90
15.32percent of the approved cost or (b) (2) the product of the pupil units served for the current
15.33school year times the greater of the charter school's building lease aid per pupil unit served
15.34for fiscal year 2003, excluding the adjustment under Laws 2002, chapter 392, article 6,
15.35section 4, or $1,200. A charter school that receives facilities aid under subdivision 4a is
15.36not eligible for building lease aid under this subdivision.
16.1EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
16.2and later.

16.3    Sec. 11. Minnesota Statutes 2008, section 124D.11, is amended by adding a
16.4subdivision to read:
16.5    Subd. 4a. Facilities aid. An endorsed charter school under section 124D.1106 is
16.6eligible to receive facilities aid under this subdivision in the first fiscal year in which the
16.7school must make loan payments to be applied to principal and interest payments on an
16.8outstanding debt obligation of the Charter School Facilities Authority. Facilities aid under
16.9this section shall not exceed the lesser of:
16.10(1) 84 percent of the amount needed to meet when due the principal and interest
16.11payments on the obligations of the Charter School Facilities Authority for eligible projects
16.12endorsed by the authority under section 124D.1106; or
16.13(2) the product of the pupil units served for the current school year times $1,120.
16.14Aid received under this section may be used only to pay loan payments to be applied
16.15to the principal and interest payments due on obligations of the Charter School Facilities
16.16Authority for eligible projects endorsed by the authority.
16.17EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
16.18and later.

16.19    Sec. 12. Minnesota Statutes 2008, section 124D.11, is amended by adding a
16.20subdivision to read:
16.21    Subd. 4b. Charter school facilities credit enhancement account. (a) A charter
16.22school credit enhancement account is created in the special revenue fund in the state
16.23treasury for the purpose of providing credit enhancement to charter school facilities.
16.24(b) For fiscal year 2011 and later, an amount equal to six percent of an endorsed
16.25charter school's loan payments to be applied to principal and interest payments on bonds
16.26issued under section 124D.1108 shall be credited to the charter school facilities credit
16.27enhancement account.
16.28(c) When the principal and interest payments on bonds issued under section
16.29124D.1108 to finance a school facility for an endorsed charter school have been satisfied,
16.30any remaining funds credited to the charter school facilities credit enhancement account
16.31on behalf of that specific charter school's debt obligation shall credit to the general fund.
16.32(d) The charter school facilities credit enhancement account may receive grants or
16.33gifts and must be used for the purpose of the account under paragraph (a).
17.1EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
17.2and later.

17.3    Sec. 13. Minnesota Statutes 2008, section 124D.11, is amended by adding a
17.4subdivision to read:
17.5    Subd. 4c. Sale or transfer of assets. A charter school board must notify the
17.6commissioner if the board intends to sell or transfer property financed by building
17.7lease transition aid under subdivision 4d or facilities aid under subdivision 4a. The
17.8commissioner must approve the sale or transfer of any property financed by building lease
17.9transition aid under subdivision 4d or facilities aid under subdivision 4a.
17.10EFFECTIVE DATE.This section is effective the day following final enactment.

17.11    Sec. 14. Minnesota Statutes 2008, section 124D.11, is amended by adding a
17.12subdivision to read:
17.13    Subd. 4d. Building lease transition aid. (a) For fiscal years 2011 through 2017, an
17.14eligible charter school may apply to the commissioner for building lease transition aid.
17.15Building lease transition aid may be used for the same purpose as building lease aid under
17.16subdivision 4. The commissioner must review and either approve or deny a building lease
17.17transition aid application using the following criteria:
17.18(1) the reasonableness of the price based on current market values;
17.19(2) the extent to which the lease conforms to applicable state laws and rules; and
17.20(3) the appropriateness of the proposed lease in the context of the space needs and
17.21financial circumstances of the charter school.
17.22(b) To retain eligibility for facilities lease transition aid, an eligible charter school
17.23must submit the following information to the commissioner:
17.24(1) the owner of the building;
17.25(2) a list of the lessor's current board members or principals, whichever applies;
17.26(3) a copy of the lessor's annual audit or annual report, whichever applies;
17.27(4) the terms of the proposed lease and a copy of the proposed lease;
17.28(5) the enrollment projections of the school;
17.29(6) the long-range strategic and financial plan of the school;
17.30(7) a copy of the certificate of occupancy from the local jurisdiction; and
17.31(8) a copy of the state fire marshal's fire inspection report or orders.
17.32(c) If the commissioner determines that a charter school that is eligible to receive
17.33building lease transition aid has not provided information required under this subdivision,
17.34the commissioner must deny the charter school's building lease transition aid.
18.1(d) A charter school must not use the building lease transition aid for custodial,
18.2maintenance service, utility, or other operating costs. The amount of building lease
18.3transition aid per pupil unit served for a charter school in any year shall not exceed the
18.4lesser of:
18.5(1) 90 percent of the approved cost; or
18.6(2) the product of the pupil units served for the current school year times $1,200.
18.7A charter school that receives building lease aid under subdivision 4, or charter school
18.8facilities aid under subdivision 4a, is not eligible for building lease transition aid under
18.9this subdivision.
18.10EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
18.11and later.

18.12    Sec. 15. Minnesota Statutes 2008, section 124D.11, subdivision 7, is amended to read:
18.13    Subd. 7. Use of state money. Money received from the state may not be used to
18.14purchase land or buildings unless endorsed by the Charter School Facilities Authority
18.15under section 124D.1106 for the purpose of making loan payments on principal or interest
18.16payments on a debt obligation. The school may own land and buildings if obtained
18.17through nonstate sources.
18.18EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
18.19and later.

18.20    Sec. 16. Minnesota Statutes 2009 Supplement, section 124D.11, subdivision 9, is
18.21amended to read:
18.22    Subd. 9. Payment of aids to charter schools. (a) Notwithstanding section 127A.45,
18.23subdivision 3 , aid payments for the current fiscal year to a charter school shall be of an
18.24equal amount on each of the 24 payment dates.
18.25(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing
18.26operation on or prior to June 30 of a school year, for the payment periods occurring after
18.27the school ceases serving students, the commissioner shall withhold the estimated state aid
18.28owed the school. The charter school board of directors and authorizer must submit to the
18.29commissioner a closure plan under chapter 308A or 317A, and financial information about
18.30the school's liabilities and assets. After receiving the closure plan, financial information,
18.31an audit of pupil counts, documentation of lease expenditures, and monitoring of special
18.32education expenditures, the commissioner may release cash withheld and may continue
18.33regular payments up to the current year payment percentages if further amounts are
19.1owed. If, based on audits and monitoring, the school received state aid in excess of the
19.2amount owed, the commissioner shall retain aid withheld sufficient to eliminate the aid
19.3overpayment. For a charter school ceasing operations prior to, or at the end of, a school
19.4year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may
19.5be made after receiving the closure plan, audit of pupil counts, monitoring of special
19.6education expenditures, documentation of lease expenditures, and school submission of
19.7Uniform Financial Accounting and Reporting Standards (UFARS) financial data for the
19.8final year of operation. Final payment may be made upon receipt of audited financial
19.9statements under section 123B.77, subdivision 3.
19.10(c) If a charter school fails to comply with the commissioner's directive to return,
19.11for cause, federal or state funds administered by the department, the commissioner may
19.12withhold an amount of state aid sufficient to satisfy the directive.
19.13(d) If, within the timeline under section 471.425, a charter school fails to pay the state
19.14of Minnesota, a school district, intermediate school district, or service cooperative after
19.15receiving an undisputed invoice for goods and services, the commissioner may withhold
19.16an amount of state aid sufficient to satisfy the claim and shall distribute the withheld
19.17aid to the interested state agency, school district, intermediate school district, or service
19.18cooperative. An interested state agency, school district, intermediate school district, or
19.19education cooperative shall notify the commissioner when a charter school fails to pay an
19.20undisputed invoice within 75 business days of when it received the original invoice.
19.21(e) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent
19.22of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day
19.23of student attendance for that school year.
19.24(f) In order to receive state aid payments under this subdivision, a charter school in
19.25its first three years of operation must submit a school calendar in the form and manner
19.26requested by the department and a quarterly report to the Department of Education. The
19.27report must list each student by grade, show the student's start and end dates, if any,
19.28with the charter school, and for any student participating in a learning year program,
19.29the report must list the hours and times of learning year activities. The report must be
19.30submitted not more than two weeks after the end of the calendar quarter to the department.
19.31The department must develop a Web-based reporting form for charter schools to use
19.32when submitting enrollment reports. A charter school in its fourth and subsequent year of
19.33operation must submit a school calendar and enrollment information to the department in
19.34the form and manner requested by the department.
20.1(g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter
20.2school and satisfaction of creditors, cash and, investment balances, facilities, and all other
20.3assets remaining shall be returned to the state.
20.4EFFECTIVE DATE.This section is effective the day following final enactment.

20.5    Sec. 17. [124D.1105] CHARTER SCHOOL FACILITIES AUTHORITY.
20.6    Subdivision 1. Membership. (a) The Charter School Facilities Authority shall
20.7consist of eight members, five of which are appointed by the governor with the advice and
20.8consent of the senate, the commissioner of management and budget or the commissioner's
20.9designee, and the commissioner of education or the commissioner's designee. The
20.10governor shall appoint members of the authority described in paragraph (b).
20.11(b) All members to be appointed by the governor shall be residents of the state. At
20.12least two members must reside outside the metropolitan area as defined in section 473.121,
20.13subdivision 2. At least one of the members shall be a person having skill, knowledge, and
20.14experience in the field of state and municipal finance; at least one of the members shall
20.15be a person having skill, knowledge, and experience in the building construction field; at
20.16least one of the members shall be a person having skill, knowledge, and experience in the
20.17field of school facilities finance; at least one member shall be a representative of a member
20.18of the Minnesota Association of Charter Schools; and at least one member shall be an
20.19expert in education finance from the Department of Education. With the exception of the
20.20representative of the Minnesota Association of Charter Schools, each appointed member
20.21of the authority shall be independent and not affiliated with a charter school organization
20.22or any entity working or contracting with a charter school.
20.23    Subd. 2. Minnesota School Boards Association. The president of the Minnesota
20.24School Boards Association, or the president's designee, shall serve without compensation
20.25as an advisory, nonvoting member of the board.
20.26    Subd. 3. Term; compensation; removal. The membership terms, compensation,
20.27removal of members, and filling of vacancies for board members other than the
20.28commissioner of management and budget, the commissioner of education, representative
20.29of the Department of Education, and the president of the Minnesota School Boards
20.30Association, shall be as provided in section 15.0575. The commissioner of management
20.31and budget, or the commissioner's designee, shall convene the first meeting of the
20.32authority no later than August 15, 2010. The authority shall elect a chair at its first meeting
20.33and shall determine a rotation for the chair.
20.34    Subd. 4. Duties; applications; fees. The authority shall provide an efficient and
20.35cost-effective method of financing charter school facilities in the state of Minnesota. The
21.1authority shall determine which charter schools are in a financial and academic position
21.2to develop a facility. The authority shall review applications for the issuance of bonds
21.3under section 124D.1108 for specific projects. The authority shall solicit applications
21.4from charter schools on an annual basis and may charge a charter school an application
21.5or administrative fee. The annual application deadline and any fees must be determined
21.6by the authority. Charter schools may apply annually to the authority, unless otherwise
21.7directed by the authority. The authority may hire or contract for services.
21.8    Subd. 5. Considerations of the authority; submission requirements. (a) A charter
21.9school that has been enrolling students for five or more years may seek endorsement
21.10from the authority to purchase an existing building or purchase and renovate an existing
21.11building within two years of purchase. The charter school must submit to the authority
21.12the following information:
21.13(1) a statement from the Department of Education that a satisfactory percentage of
21.14students at the school are making high growth on statewide tests under section 120B.299,
21.15subdivision 9;
21.16(2) documentation that the school's charter has been renewed;
21.17(3) financial statements showing that the charter school has had a net positive
21.18unreserved general fund balance as of June 30 in the preceding five fiscal years;
21.19(4) a long-range strategic and financial plan, including the physical space needs
21.20of the school;
21.21(5) a feasibility study of available buildings;
21.22(6) documents showing sustainable enrollment projections and the need to renovate
21.23or purchase an existing facility to serve as a school;
21.24(7) a statement adopted by the charter school's board of directors acknowledging
21.25that the building and any assets related to it will revert to the state in the event of the
21.26charter school closing;
21.27(8) a statement from the charter school authorizer indicating its support of the
21.28charter school's proposed facility; and
21.29(9) for projects in excess of $1,400,000, a positive review and comment from the
21.30commissioner of education under section 123B.71.
21.31(b) A charter school that has been enrolling students for eight or more years may
21.32seek endorsement from the authority to construct a facility. The charter school must
21.33submit to the authority the following information:
21.34(1) a statement from the Department of Education that a satisfactory percentage of
21.35students at the school are making high growth on statewide tests according to section
21.36120B.299, subdivision 9;
22.1(2) documentation that the school's charter has been renewed;
22.2(3) financial statements showing that the charter school has had a net positive
22.3unreserved general fund balance as of June 30 in the preceding eight fiscal years;
22.4(4) a long-range strategic and financial plan, including the physical needs of the
22.5school;
22.6(5) a feasibility study of facility options, including evidence of the lack of existing
22.7facilities available to serve as a school;
22.8(6) documents showing sustainable enrollment projections and the need to construct
22.9a new school facility;
22.10(7) a statement adopted by the charter school's board of directors acknowledging
22.11that the building and any assets related to it will revert to the state in the event of the
22.12charter school closing;
22.13(8) a statement from the charter school authorizer indicating its support of the
22.14charter school's proposed facility; and
22.15(9) for projects in excess of $1,400,000, a positive review and comment from the
22.16commissioner of education under section 123B.71.
22.17    Subd. 6. Determination. The authority may make additional requests of the charter
22.18school to make their determination. The authority must use the criteria submitted as
22.19required by subdivision 5 and any additional information the authority receives to make a
22.20determination about whether or not to allow a charter school to purchase, purchase and
22.21renovate, or construct a school facility and use debt financing to pay for the costs of a
22.22school facility. The authority must notify the charter school of their determination within
22.2390 business days of the application deadline. The decision of the authority is final.
22.24    Subd. 7. Expiration. The authority is permanent and the provisions of section
22.2515.059, subdivision 5, do not apply.
22.26EFFECTIVE DATE.This section is effective the day following final enactment.

22.27    Sec. 18. [124D.1106] ENDORSED CHARTER SCHOOL BORROWING;
22.28DEFINITIONS.
22.29    Subdivision 1. Endorsement. The authority shall approve a charter school to
22.30purchase, purchase and renovate, or construct a school facility and finance that school
22.31facility through the issuance of bonds. The authority shall only approve the sale of
22.32bonds on behalf of charter schools that are issued through the authority. The authority
22.33shall not approve the sale of bonds by a charter school if the projected facilities aid
22.34receivable under section 124D.11, subdivision 4a, is less than 84 percent of the principal
23.1and interest payments on the proposed debt obligation in any fiscal year. The decision
23.2of the authority is final.
23.3    Subd. 2. Definition. For the purpose of sections 124D.1106 to 124D.1109, an
23.4"endorsed charter school" is one that has received approval to purchase, purchase and
23.5renovate, or construct a school facility and finance that school facility through the issuance
23.6of bonds by the authority under subdivision 1.
23.7EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
23.8and later.

23.9    Sec. 19. [124D.1107] AUTHORITY TO BORROW MONEY; LIMITATIONS.
23.10The board of an endorsed charter school, by a two-thirds majority, may vote to
23.11acquire school facilities financed with the proceeds of bonds issued by the Charter School
23.12Facilities Authority in the manner and subject to the limitations set forth in section
23.13124D.1108 in anticipation of the receipt of charter school facilities aid under section
23.14124D.11, subdivision 4a.
23.15EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
23.16and later.

23.17    Sec. 20. [124D.1108] CHARTER SCHOOL BONDS; REPAYMENT.
23.18    Subdivision 1. Issuance of bonds. (a) The Charter School Facilities Authority may
23.19issue revenue bonds, in anticipation of the collection of facilities aid revenues under
23.20section 124D.11, subdivision 4a, from an endorsed charter school, to finance, in whole or
23.21in part, the cost of the acquisition, acquisition and renovation, or construction of a charter
23.22school building. It may enter into a loan agreement with an endorsed charter school so
23.23that payments required to be made by the endorsed charter school are fixed and revised as
23.24necessary to produce income and revenue sufficient to provide for the prompt payment of
23.25principal and interest on all bonds issued when due. The loan agreement must also provide
23.26that the endorsed charter school is required to pay all expenses of the operation and
23.27maintenance of the charter school building, including adequate insurance and insurance
23.28against all liability for injury to persons or property arising from its operation, and all taxes
23.29and special assessments levied upon or with respect to the charter school building and
23.30payable during the term of the loan agreement.
23.31(b) The Charter School Facilities Authority by resolution may exercise the powers of
23.32a municipality under sections 469.152 to 469.165, without an election, for the purposes of
23.33financing charter school buildings, including the issuance of bonds and the application
24.1of the bond proceeds and investment income pursuant to a loan or other agreement. The
24.2bonds must be issued, sold, and secured on the terms and conditions and in the manner
24.3determined by resolution of the authority. The bonds must be sold at a public sale at not
24.4less than par. Bonds issued by the Charter School Facilities Authority to finance a school
24.5facility and bonds issued to refund bonds issued by the Charter School Facilities Authority
24.6to finance a school facility must mature within 30 years from the date of issue of the first
24.7bonds issued to finance the school facility.
24.8(c) Bonds issued under this section are not general obligations of the state or the
24.9authority. The full faith and credit and taxing powers of the state and the authority are not
24.10and may not be pledged for the payment of the bonds. No person may compel the levy of
24.11a tax for the payment or compel the appropriation of money of the state or the authority
24.12for the payment of the bonds, except as specifically provided in section 124D.1109.
24.13    Subd. 2. Income tax exemption. In the issuance of bonds by the authority, the
24.14authority must comply with all federal laws and regulations governing the exemption of
24.15interest on bonds from federal income taxation. If, for any reason, whether existing at
24.16the date of issue of any bonds or thereafter, the interest on any bonds becomes subject to
24.17federal income taxes, the validity of the bonds or the provisions made for the security of
24.18those bonds is not affected.
24.19EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
24.20and later.

24.21    Sec. 21. [124D.1109] STATE PAYMENT OF ENDORSED CHARTER SCHOOL
24.22DEBT OBLIGATION UPON POTENTIAL DEFAULT; REPAYMENT; STATE
24.23OBLIGATION NOT DEBT.
24.24    Subdivision 1. Definitions. For the purposes of this section, the term "debt
24.25obligation" means bonds issued by the Charter School Facilities Authority under section
24.26124D.1108.
24.27    Subd. 2. Notifications; payment; appropriation. (a) If an endorsed charter school
24.28believes that it may be unable to pay the amount sufficient to permit the Charter School
24.29Facilities Authority to make a principal or interest payment on an outstanding debt
24.30obligation on the date that payment is due, it must notify the commissioner of education
24.31as soon as possible, but not less than 15 business days before the date that principal or
24.32interest payment is due. The notice must include the name of the endorsed charter school,
24.33an identification of the debt obligation issue in question, the date the payment is due, the
24.34amount of principal and interest due on the payment date, the amount of principal or
24.35interest that the endorsed charter school will be unable to repay on that date, the trustee or
25.1paying agent for the debt obligation, the wire transfer instructions to transfer funds to that
25.2trustee or paying agent, and an indication as to whether a payment is being requested by the
25.3endorsed charter school under this section. If a trustee or paying agent becomes aware of a
25.4potential default, it shall inform the commissioner of education of that fact. After receipt
25.5of a notice that requests a payment under this section, after consultation with the endorsed
25.6charter school and the trustee or paying agent, and after verification of the accuracy of the
25.7information provided, the commissioner of education shall notify the commissioner of
25.8management and budget of the potential default. The notice must include a statement of
25.9the amount due that the endorsed charter school will be unable to repay on the date due.
25.10(b) Except as provided in subdivision 6, upon receipt of this notice from the
25.11commissioner of education, the commissioner of management and budget shall issue a
25.12warrant and authorize the commissioner of education to pay to the trustee or paying agent
25.13for the debt obligation the specified amount on or before the date due. The amounts
25.14needed for the purposes of this subdivision are annually appropriated to the Department
25.15of Education from the charter school credit enhancement account in the special revenue
25.16fund in the state treasury.
25.17(c) The commissioners of education and management and budget must jointly
25.18develop detailed procedures for endorsed charter schools to notify the state that they
25.19have obligated themselves to be bound by the provisions of this section, procedures for
25.20endorsed charter schools and trustees and paying agents to notify the state of potential
25.21defaults and to request state payment under this section, and procedures for the state to
25.22expedite payments to prevent defaults. The procedures are not subject to chapter 14.
25.23    Subd. 3. Endorsed charter school bound; interest rate on state-paid amount. If,
25.24at the request of an endorsed charter school, the state has paid part or all of the principal or
25.25interest due on an endorsed charter school's debt obligation on a specific date, the endorsed
25.26charter school is bound by all provisions of this section and the amount paid shall bear
25.27taxable interest from the date paid until the date of repayment at the invested cash rate as it
25.28is certified by the commissioner of management and budget. Interest shall only accrue
25.29on the amounts paid and outstanding, less the reduction in aid under subdivision 4, and
25.30other payments received from the endorsed charter school.
25.31    Subd. 4. Aid reduction for repayment. (a) Except as provided in this subdivision,
25.32the state must reduce the state aid payable to the endorsed charter school under section
25.33124D.11 by the amount paid by the state under this section on behalf of the endorsed
25.34charter school, plus the interest due on it, and the amount reduced must revert from the
25.35appropriate account to the charter school facilities credit enhancement account. No federal
25.36aid payments shall be reduced.
26.1(b) If, after review of the financial situation of the endorsed charter school, the
26.2commissioner of education advises the commissioner of management and budget that a
26.3total reduction of aids would cause an undue hardship on or an undue disruption of the
26.4educational program of the endorsed charter school, the commissioner of education, with
26.5the approval of the commissioner of management and budget, may establish a different
26.6schedule for reduction of aids to repay the state. The amount of aids to be reduced is
26.7decreased by any amounts repaid to the state by the endorsed charter school from other
26.8revenue sources.
26.9    Subd. 5. Mandatory plan; technical assistance. If the state makes payments on
26.10behalf of an endorsed charter school under this section or the endorsed charter school
26.11defaults in the payment of principal or interest on an outstanding debt obligation, it must
26.12submit a plan to the commissioner of education for approval specifying the measures it
26.13intends to implement to resolve the issues that led to its inability to make the payment and
26.14to prevent further defaults. The commissioners must provide technical assistance to the
26.15endorsed charter school in preparing its plan. If the commissioner of education determines
26.16that an endorsed charter school's plan is not adequate, the commissioner shall notify the
26.17endorsed charter school that the plan has been disapproved, the reasons for the disapproval,
26.18and that the state shall not make future payments under this section for debt obligations
26.19issued after the date specified in that notice until its plan is approved. The commissioner of
26.20education may also notify the endorsed charter school that until its plan is approved, other
26.21aids due to the endorsed charter school will be withheld after a date specified in the notice.
26.22    Subd. 6. State bond rating. If the commissioner of management and budget
26.23determines that issuing warrants under subdivision 2 would adversely affect the credit
26.24rating of the state, the commissioner shall not issue warrants for the payment of principal
26.25or interest on debt obligations under this section.
26.26    Subd. 7. Continuing disclosure agreements. The commissioner of management
26.27and budget may enter into written agreements or contracts relating to the continuing
26.28disclosure of information with respect to bonds issued to finance the school facilities of
26.29endorsed charter schools according to federal securities laws, rules, and regulations,
26.30including Securities and Exchange Commission rules and regulations, section
26.31240.15c2-12. The agreements or contracts may be in any form the commissioner of
26.32management and budget deems reasonable and in the state's best interests.
26.33EFFECTIVE DATE.This section is effective for revenue for fiscal year 2011
26.34and later.

27.1    Sec. 22. Minnesota Statutes 2008, section 326B.103, subdivision 11, is amended to
27.2read:
27.3    Subd. 11. Public building. "Public building" means a building and its grounds the
27.4cost of which is paid for by the state or a state agency regardless of its cost, and a public
27.5school district building project the cost of which is $100,000 or more.
27.6EFFECTIVE DATE.This section is effective the day following final enactment.

27.7    Sec. 23. TRANSITION ELIGIBILITY.
27.8    Subdivision 1. Eligibility. A charter school under subdivision 2 is eligible to receive
27.9building lease transition aid under Minnesota Statutes, section 124D.11, subdivision
27.104d, for the fiscal years indicated.
27.11    Subd. 2. Duration. (a) The following charter schools are eligible for building lease
27.12transition aid in fiscal years 2011 and 2012:
27.13(1) Charter School No. 4018, Achieve Language Academy;
27.14(2) Charter School No. 4029, New Spirit; and
27.15(3) Charter School No. 4043, Math and Science Academy.
27.16(b) The following charter schools are eligible for building lease transition aid in
27.17fiscal years 2011 through 2014:
27.18(1) Charter School No. 4008, Pact Charter School;
27.19(2) Charter School No. 4027, Higher Ground Academy;
27.20(3) Charter School No. 4070, Hope Community Academy; and
27.21(4) Charter School No. 4116, Lakes International Language Academy.
27.22(c) The following charter schools are eligible for building lease transition aid in
27.23fiscal years 2011 through 2015:
27.24(1) Charter School No. 4074, Agricultural and Food Sciences Academy; and
27.25(2) Charter School No. 4103, Hmong Academy.
27.26(d) The following charter schools are eligible for building lease transition aid in
27.27fiscal years 2011 through 2016:
27.28(1) Charter School No. 4001, Bluffview Montessori;
27.29(2) Charter School No. 4015, Community Peace Academy; and
27.30(3) Charter School No. 4118, Kaleidoscope.
27.31(e) The following charter schools are eligible for building lease transition aid in
27.32fiscal years 2011 through 2017:
27.33(1) Charter School No. 4120, Saint Croix Preparatory Academy; and
27.34(2) Charter School No. 4126, Prairie Seeds Academy.
28.1    Subd. 3. Application requirements. Charter schools receiving building lease
28.2transition aid must submit an application to the charter school facilities authority by the
28.3application deadline prior to the end of a charter school's eligibility under subdivision 2.
28.4    Subd. 4. Approval. The charter school facilities authority must approve the
28.5applications of charter schools submitted under subdivision 3. The authority may only
28.6approve complete applications.
28.7    Subd. 5. Program management. Notwithstanding Minnesota Statutes, section
28.8124D.11, subdivisions 4a and 4d, the commissioner may adjust payments for a charter
28.9school's eligibility for building lease transition aid and facilities aid in the fiscal year in
28.10which the charter school is changing eligibility between programs to ensure efficient
28.11management.
28.12EFFECTIVE DATE.This section is effective the day following final enactment.

28.13    Sec. 24. REPEALER.
28.14Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 17a, is repealed.
28.15EFFECTIVE DATE.This section is effective the day following final enactment."